1.1 	A bill for an act
1.2 	relating to retirement; Minnesota State Retirement System, Public Employees 
1.3 	Retirement Association, and former local police and paid firefighter relief 
1.4 	associations; authorizing investments in swaps; clarifying language; removing 
1.5 	obsolete language; revising outdated requirements; revising contribution 
1.6 	rate revision procedures; revising disability standards and disability benefit 
1.7 	administration procedures; merging the elected state officers retirement plan into 
1.8 	the legislators retirement plan; revising pension commission standards provision; 
1.9 	revising pension plan financial report contents provision; clarifying coverage of 
1.10 	student employees and extending duration of excluded work-study positions; 
1.11 	revising military service credit purchase provision for consistency with federal 
1.12 	code; clarifying average salary for benefit purposes; clarifying MERF division 
1.13 	benefit eligibility; adding Lake County Sunrise Home to privatization chapter; 
1.14 	removing legislative approval requirements for privatizations; modifying 
1.15 	legislative notification requirements for privatizations; clarifying privatized 
1.16 	public hospital pension benefit eligibility; making various administrative 
1.17 	changes; eliminating the PERA Social Security leveling optional annuity; 
1.18 	revising and repealing various statutes to reflect the recent mergers of local police 
1.19 	and salaried firefighter relief associations and consolidation accounts with the 
1.20 	public employees police and fire retirement plan; streamlining amortization state 
1.21 	aid programs; extending the deadline for participation in the voluntary statewide 
1.22 	lump-sum volunteer firefighter retirement plan; requiring municipal approval 
1.23 	for deferred service pension interest rate changes by volunteer firefighter relief 
1.24 	association boards of trustees; authorizing a resumption of the payment of a 
1.25 	death benefit to estates of certain White Bear Lake volunteer firefighter relief 
1.26 	association retirees; including Minnesota Association of Professional Employees 
1.27 	in MSRS-General plan coverage; authorizing the termination of nonspousal 
1.28 	survival designations in optional annuity form elections in certain instances; 
1.29 	authorizing certain service credit purchases; providing instructions to the revisor 
1.30 	of statutes;amending Minnesota Statutes 2012, sections 3.85, subdivision 10; 
1.31 	3A.011; 3A.03, subdivision 3; 3A.07; 3A.115; 3A.13; 3A.15; 6.495, subdivisions 
1.32 	1, 3; 6.67; 11A.24, subdivision 1; 13D.01, subdivision 1; 69.011, subdivisions 1, 
1.33 	2, 3, 4; 69.021, subdivisions 1, 2, 3, 4, 5, 7, 7a, 8, 9, 10, 11; 69.031, subdivisions 
1.34 	1, 3, 5; 69.041; 69.051, subdivisions 1, 1a, 1b, 2, 3, 4; 69.33; 69.77, subdivisions 
1.35 	1, 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 69.771, subdivision 1; 69.774, subdivision 
1.36 	1; 69.80; 275.70, subdivision 5; 297I.10, subdivision 1; 345.381; 352.01, 
1.37 	subdivisions 2a, 17b; 352.029, subdivisions 1, 2a, 2b, 3, 5; 352.03, subdivisions 
1.38 	4, 8; 352.045, by adding subdivisions; 352.113, subdivisions 4, 6, 8, by adding 
1.39 	subdivisions; 352.115, subdivision 3; 352.22, subdivision 3; 352.87, subdivision 
2.1 	3; 352.93, subdivision 2; 352.95, subdivision 1; 352.955, subdivisions 1, 3; 
2.2 	352B.011, subdivision 13; 352B.08, subdivision 2; 352B.10, subdivision 1, by 
2.3 	adding a subdivision; 352D.04, subdivision 2; 353.01, subdivisions 2a, 2b, 6, 10, 
2.4 	16, 17a, 29; 353.03, subdivision 3; 353.27, subdivision 7; 353.29, subdivision 
2.5 	3; 353.34, subdivisions 1, 2; 353.50, subdivisions 3, 6; 353.64, subdivision 1a; 
2.6 	353.651, subdivision 3; 353.656, subdivisions 1, 1a, 3a; 353.657, subdivisions 2, 
2.7 	2a, 3; 353.659; 353.665, subdivisions 1, 5, 8; 353.71, subdivision 1; 353E.04, 
2.8 	subdivision 3; 353E.06, subdivision 1; 353F.02, subdivisions 3, 4, 6, by adding a 
2.9 	subdivision; 353F.025, subdivisions 1, 2; 353F.03; 353F.04; 353F.05; 353F.051, 
2.10 	subdivision 1; 353F.052; 353F.06; 353F.07; 353F.08; 353G.05, subdivision 
2.11 	2; 354.07, subdivision 1; 354.44, subdivision 6; 354A.021, subdivision 2; 
2.12 	354A.31, subdivisions 4, 4a; 356.20, subdivisions 2, 4; 356.214, subdivision 1; 
2.13 	356.215, subdivisions 1, 8, 18; 356.216; 356.219, subdivisions 1, 2, 8; 356.30, 
2.14 	subdivisions 1, 3; 356.315, subdivision 9; 356.401, subdivision 3; 356.406, 
2.15 	subdivision 1; 356.415, subdivisions 1, 1a, 1b, 2; 356.48, subdivision 1; 356.635, 
2.16 	subdivision 1; 356A.01, subdivision 19; 356A.06, subdivision 4; 356A.07, 
2.17 	subdivision 2; 423A.02, subdivisions 1, 1b, 2, 3, 3a, 4, 5; 424A.001, subdivision 
2.18 	4, by adding a subdivision; 424A.01, subdivision 6; 424A.015, subdivisions 1, 
2.19 	4; 424A.016, subdivision 6; 424A.02, subdivisions 7, 9; 424A.10, subdivisions 
2.20 	1, 2; 475.52, subdivision 6; 490.121, subdivision 22; 490.124, subdivision 
2.21 	1; proposing coding for new law in Minnesota Statutes, chapters 3A; 6; 
2.22 	353F; 356; repealing Minnesota Statutes 2012, sections 3A.02, subdivision 3; 
2.23 	69.021, subdivision 6; 69.77, subdivision 3; 352.955, subdivision 2; 352C.001; 
2.24 	352C.091, subdivision 1; 352C.10; 353.29, subdivision 6; 353.64, subdivision 3; 
2.25 	353.665, subdivisions 2, 3, 4, 6, 7, 9, 10; 353.667; 353.668; 353.669; 353.6691; 
2.26 	353A.01; 353A.02; 353A.03; 353A.04; 353A.05; 353A.06; 353A.07; 353A.08; 
2.27 	353A.081; 353A.083; 353A.09; 353A.10; 353B.01; 353B.02; 353B.03; 353B.04; 
2.28 	353B.05; 353B.06; 353B.07; 353B.08; 353B.09; 353B.10; 353B.11; 353B.12; 
2.29 	353B.13; 353B.14; 353F.02, subdivisions 4, 5; 353F.025, subdivision 3; 356.315, 
2.30 	subdivisions 1, 1a, 2, 2a, 2b, 3, 4, 5, 5a, 6, 7, 8; 423A.01; 423A.02, subdivision 
2.31 	1a; 423A.04; 423A.05; 423A.07; 423A.10; 423A.11; 423A.12; 423A.13; 
2.32 	423A.14; 423A.15; 423A.16; 423A.17; 423A.171; 423A.18; 423A.19; 423A.20; 
2.33 	423A.21; 423A.22; 424A.10, subdivision 5.
2.34 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.35 	ARTICLE 1
2.36 	STATE BOARD OF INVESTMENT PROVISIONS

2.37 	Section 1. Minnesota Statutes 2012, section 11A.24, subdivision 1, is amended to read:
2.38 		Subdivision 1.Securities generally. (a) The state board is authorized to purchase, 
2.39 	sell, lend, and exchange the securities specified in this section, for funds or accounts 
2.40 	specifically made subject to this section, including puts and call options and, future 
2.41 	contracts, and swap contracts that are traded on a contract market regulated by a 
2.42 	governmental agency or by a financial institution regulated by a governmental agency. 
2.43 	These securities may be owned directly or through shares in exchange-traded or mutual 
2.44 	funds, or as units in commingled trusts, subject to any limitations as specified in this section.
2.45 	(b) Any agreement to lend securities must be concurrently collateralized with cash 
2.46 	or securities with a market value of not less than 100 percent of the market value of the 
2.47 	loaned securities at the time of the agreement. Any agreement for put and call options 
3.1 	and futures contracts may only be entered into with a fully offsetting amount of cash or 
3.2 	securities. Only securities authorized by this section, excluding those under subdivision 6, 
3.3 	paragraph (a), clauses (1) to (3), may be accepted as collateral or offsetting securities.

3.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.5 	ARTICLE 2
3.6 	MSRS ADMINISTRATIVE PROVISIONS

3.7 	Section 1. Minnesota Statutes 2012, section 3.85, subdivision 10, is amended to read:
3.8 		Subd. 10.Standards for pension valuations and cost estimates. The commission 
3.9 	shall adopt standards prescribing specific detailed methods to calculate, evaluate, and 
3.10 	display current and proposed law liabilities, costs, and actuarial equivalents of all public 
3.11 	employee pension plans in Minnesota. These standards shall be consistent with chapter 
3.12 	356 and be updated annually. At a minimum, the standards must notshall contain a 
3.13 	valuation requirementrequirements that is inconsistentcomply with generally accepted 
3.14 	accounting principles applicable to government pension plans. The standards may include 
3.15 	additional financial, funding, or valuation requirements that are not required under 
3.16 	generally accepted accounting principles applicable to government pension plans.

3.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.18 	Sec. 2. Minnesota Statutes 2012, section 3A.011, is amended to read:
3.19 	3A.011 ADMINISTRATION OF PLAN PLANS.
3.20 	The executive director and the board of directors of the Minnesota State Retirement 
3.21 	System shall administer the legislators retirement planplans specified in accordancethis 
3.22 	chapter consistent with this chapter and chapterchapters 356 and 356A.

3.23 	EFFECTIVE DATE. This section is effective July 1, 2013.

3.24 	Sec. 3. Minnesota Statutes 2012, section 3A.03, subdivision 3, is amended to read:
3.25 		Subd. 3.Legislators retirement fund. (a) The legislators retirement fund, a special 
3.26 	retirement fund, is created within the state treasury and must be credited with assets equal 
3.27 	to the participation of the legislators retirement plan in the Minnesota postretirement 
3.28 	investment fund as of June 30, 2009, and any investment proceeds on those assets. The 
3.29 	legislators retirement fund must be credited with any investment proceeds on the assets of 
3.30 	the retirement fund.
4.1 	(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated 
4.2 	from the legislators retirement fund.

4.3 	EFFECTIVE DATE. This section is effective July 1, 2013.

4.4 	Sec. 4. Minnesota Statutes 2012, section 3A.07, is amended to read:
4.5 	3A.07 APPLICATION.
4.6 	(a) Except as provided in paragraph (b) and section 3A.17, this chapter applies 
4.7 	to members of the legislature in service after July 1, 1965, who otherwise meet the 
4.8 	requirements of this chapter.
4.9 	(b) Members of the legislature who were elected for the first time after June 30, 
4.10 	1997, or members of the legislature who were elected before July 1, 1997, and who, after 
4.11 	July 1, 1998, elect not to be members of the plan established by this chapter are covered 
4.12 	by the unclassified employees retirement program governed by chapter 352D.
4.13 	(c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable 
4.14 	and must be made on a form prescribed by the director. The second chance referendum 
4.15 	election under Laws 2002, chapter 392, article 15, also is irrevocable.

4.16 	EFFECTIVE DATE. This section is effective July 1, 2013.

4.17 	Sec. 5. Minnesota Statutes 2012, section 3A.115, is amended to read:
4.18 	3A.115 RETIREMENT ALLOWANCE APPROPRIATION; 
4.19 	POSTRETIREMENT ADJUSTMENT.
4.20 	(a) The amount necessary to fund the retirement allowance granted under this 
4.21 	chapter to a former legislator retiring after June 30, 2003, or to that legislator's survivor, 
4.22 	and the retirement allowance granted under section 3A.17 to a former constitutional 
4.23 	officer or the survivor of that constitutional officer is appropriated from the general fund to 
4.24 	the director to pay pension obligations due to the retiree.
4.25 	(b) The amount necessary to fund the retirement allowance granted under this 
4.26 	chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators 
4.27 	retirement fund created under section 3A.03, subdivision 3, until the assets of the fund 
4.28 	are exhausted and at that time, the amount necessary to fund the retirement allowances 
4.29 	under this paragraph is appropriated from the general fund to the director to pay pension 
4.30 	obligations to the retiree and survivor.
4.31 	(c) Retirement allowances payable to retired legislators and their survivors under 
4.32 	this chapter must be adjusted as provided in sections 3A.02, subdivision 6, and 356.415.

5.1 	EFFECTIVE DATE. This section is effective July 1, 2013.

5.2 	Sec. 6. Minnesota Statutes 2012, section 3A.13, is amended to read:
5.3 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH 
5.4 	PREMIUM DEDUCTION.
5.5 	(a) The provisions of section 356.401 apply to the legislators retirement plan plans 
5.6 	specified in this chapter.
5.7 	(b) The executive director of the Minnesota State Retirement System must, at the 
5.8 	request of a retired legislator or constitutional officer who is enrolled in a health insurance 
5.9 	plan covering state employees, deduct the person's health insurance premiums from the 
5.10 	person's annuity and transfer the amount of the premium to a health insurance carrier 
5.11 	covering state employees.

5.12 	EFFECTIVE DATE. This section is effective July 1, 2013.

5.13 	Sec. 7. Minnesota Statutes 2012, section 3A.15, is amended to read:
5.14 	3A.15 COORDINATED PROGRAMPROGRAMS OF THE LEGISLATORS 
5.15 	RETIREMENT PLAN.
5.16 	The coordinated program of the legislators retirement plan is created. The provisions 
5.17 	of sections 3A.01 to 3A.13 apply to the coordinated program and basic programs of the 
5.18 	legislators retirement plan.

5.19 	EFFECTIVE DATE. This section is effective July 1, 2013.

5.20 	Sec. 8. [3A.17] CONSTITUTIONAL OFFICERS.
5.21 		Subdivision 1.Application. (a) This section specifies the retirement plan applicable 
5.22 	to a former constitutional officer who was first elected to a constitutional office after July 
5.23 	1, 1967, and before July 1, 1997. The plan includes the applicable portions of chapters 
5.24 	352C and 356 in effect on the date on which the person terminated active service as a 
5.25 	constitutional officer.
5.26 	(b) Nothing in this section, this act, or Laws 2006, chapter 271, article 10, section 
5.27 	33, subdivision 2, is intended to increase or reduce the benefits of former constitutional 
5.28 	officers or their survivors or to adversely modify their eligibility for benefits in effect 
5.29 	as of June 30, 2012.
5.30 		Subd. 2.Benefit adjustments. Retirement allowances payable to retired 
5.31 	constitutional officers and surviving spouse benefits payable must be adjusted under 
5.32 	section 356.415.

6.1 	EFFECTIVE DATE. This section is effective July 1, 2013.

6.2 	Sec. 9. Minnesota Statutes 2012, section 352.01, subdivision 17b, is amended to read:
6.3 		Subd. 17b.Duty disability, physical or psychological. "Duty disability, physical 
6.4 	or psychological," for a correctional employee, means an occupational disability that is 
6.5 	the direct result of an injury incurred during, or a disease arising out of, the performance 
6.6 	of normal duties or the performance of less frequent duties either of which arepresent 
6.7 	inherent dangers specific to the correctional employee.

6.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

6.9 	Sec. 10. Minnesota Statutes 2012, section 352.03, subdivision 8, is amended to read:
6.10 		Subd. 8.Medical adviser. The state commissioner of health or otherexecutive 
6.11 	director may contract with an accredited independent organization specializing in 
6.12 	disability determinations, licensed physicianphysicians, or physicians on the staff of the 
6.13 	commissioner of health as designated by the commissioner may designate shall, to be the 
6.14 	medical adviser ofto the director system.

6.15 	EFFECTIVE DATE. This section is effective the day following final enactment.

6.16 	Sec. 11. Minnesota Statutes 2012, section 352.045, is amended by adding a subdivision 
6.17 	to read:
6.18 		Subd. 3a.Contribution rate revision; general state employees retirement plan.
 6.19 	(a) Notwithstanding the contribution rates stated in plan law, the employee and employer 
6.20 	contribution rates for the general state employees retirement plan must be adjusted:
6.21 	(1) if the regular actuarial valuation of the plan under section 356.215 indicates that 
6.22 	there is a contribution sufficiency greater than one percent of covered payroll and that the 
6.23 	sufficiency has existed for at least two consecutive years, the employee and employer 
6.24 	contribution rates must be decreased as determined under paragraph (b) to a level such 
6.25 	that the sufficiency is no greater than one percent of covered payroll based on the most 
6.26 	recent actuarial valuation; or
6.27 	(2) if the regular actuarial valuation of the plan under section 356.215 indicates that 
6.28 	there is a contribution deficiency equal to or greater than 0.5 percent of covered payroll 
6.29 	and that the deficiency has existed for at least two consecutive years, the employee and 
6.30 	employer contribution rates must be increased as determined under paragraph (c) to a level 
6.31 	such that no deficiency exists based on the most recent actuarial valuation.
7.1 	(b) If the actuarially required contribution of the plan is less than the total support 
7.2 	provided by the combined employee and employer contribution rates by more than one 
7.3 	percent of covered payroll, the plan employee and employer contribution rates must be 
7.4 	decreased incrementally over one or more years by no more than 0.25 percent of pay 
7.5 	each for employee and employer contribution rates to a level such that there remains a 
7.6 	contribution sufficiency of at least one percent of covered payroll. No contribution rate 
7.7 	decrease may be made until at least two years have elapsed since any adjustment under 
7.8 	this paragraph has been fully implemented.
7.9 	(c) If the actuarially required contribution exceeds the total support provided by the 
7.10 	employee and employer contribution rates, the employee and employer contribution rates 
7.11 	must be increased equally to eliminate that contribution deficiency. If the contribution 
7.12 	deficiency is:
7.13 	(1) less than two percent, the incremental increase may be up to 0.25 percent each 
7.14 	for the employee and employer contribution rates;
7.15 	(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase 
7.16 	may be up to 0.5 percent each for the employee and employer contribution rates; or
7.17 	(3) greater than four percent, the incremental increase may be up to 0.75 percent 
7.18 	each for the employee and employer contribution.
7.19 	(d) Any recommended adjustment to the contribution rates must be reported to 
7.20 	the chair and the executive director of the Legislative Commission on Pensions and 
7.21 	Retirement by January 15 following receipt of the most recent annual actuarial valuation 
7.22 	prepared under section 356.215. The report must include draft legislation to revise the 
7.23 	employee and employer contributions stated in plan law. If the Legislative Commission 
7.24 	on Pensions and Retirement does not recommend against the rate change or does not 
7.25 	recommend a modification in the rate change, the recommended adjustment becomes 
7.26 	effective on the first day of the first full payroll period in the fiscal year following receipt 
7.27 	of the most recent actuarial valuation that gave rise to the adjustment.
7.28 	(e) A contribution sufficiency of up to one percent of covered payroll must be held 
7.29 	in reserve to be used to offset any future actuarially required contributions that are more 
7.30 	than the total combined employee and employer contributions.
7.31 	(f) Before any reduction in contributions to eliminate a sufficiency in excess of one 
7.32 	percent of covered pay may be recommended, the executive director must review any 
7.33 	need for a change in actuarial assumptions, as recommended by the actuary retained under 
7.34 	section 356.214 in the most recent experience study of the general employees retirement 
7.35 	plan prepared under section 356.215 and the standards for actuarial work promulgated by 
7.36 	the Legislative Commission on Pensions and Retirement that may result in an increase 
8.1 	in the actuarially required contribution and must report to the Legislative Commission 
8.2 	on Pensions and Retirement any recommendation by the board to use the sufficiency 
8.3 	exceeding one percent of covered payroll to offset the impact of an actuarial assumption 
8.4 	change recommended by the actuary retained under section 356.214, subdivision 1, and 
8.5 	reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
8.6 	(g) No contribution sufficiency in excess of one percent of covered pay may be 
8.7 	proposed to be used to increase benefits, and no benefit increase may be proposed that 
8.8 	would initiate an automatic adjustment to increase contributions under this subdivision. 
8.9 	Any proposed benefit improvement must include a recommendation, prepared by the 
8.10 	actuary retained under section 356.214, subdivision 1, and reviewed by the actuary 
8.11 	retained by the Legislative Commission on Pensions and Retirement as provided under 
8.12 	section 356.214, subdivision 4, on how the benefit modification will be funded.

8.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

8.14 	Sec. 12. Minnesota Statutes 2012, section 352.045, is amended by adding a subdivision 
8.15 	to read:
8.16 		Subd. 3b.Contribution rate revision; correctional state employees retirement 
8.17 	plan and State Patrol retirement plan. (a) Subdivision 3a applies to the correctional 
8.18 	state employees retirement plan under this chapter and to the State Patrol retirement plan 
8.19 	established under chapter 352B, except as stated in this subdivision.
8.20 	(b) Any limitations on the amount of contribution rate changes stated in subdivision 
8.21 	3a apply only to the amount of the employee contribution revision. The employer 
8.22 	contribution for the correctional state employees retirement plan or the State Patrol 
8.23 	retirement plan, whichever is applicable, must be adjusted so that the employer 
8.24 	contribution is equal to 60 percent of the sum of employee plus employer contributions.
8.25 	(c) For the State Patrol retirement plan, a contribution sufficiency of up to two 
8.26 	percent of covered payroll, rather than one percent, may be held in reserves without taking 
8.27 	action to reduce employee and employer contributions.

8.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

8.29 	Sec. 13. Minnesota Statutes 2012, section 352.113, subdivision 4, is amended to read:
8.30 		Subd. 4.Medical or psychological examinations; authorization for payment of 
8.31 	benefit. (a) Any physician, psychologist, chiropractor, or physician assistant providing 
8.32 	any service specified in this section must be licensed.
9.1 	(b) An applicant shall provide medical, chiropractic, or psychological a detailed 
9.2 	report signed by a physician, and at least one additional report signed by a physician, 
9.3 	chiropractor, psychologist, or physician assistant with  evidence to support an application 
9.4 	for total and permanent disability.
9.5 	(b) The director shall have the employee examined by at least one additional 
9.6 	licensed chiropractor, physician, or psychologist designated by the medical adviser. The 
9.7 	chiropractors, physicians, or psychologists shall make written reports to the director 
9.8 	concerning the employee's disability includingmust include an expert opinions as to
9.9 	opinion regarding whether the employee is permanently and totally disabled within 
9.10 	the meaning of section 352.01, subdivision 17, and that the disability arose before the 
9.11 	employee was placed on any paid or unpaid leave of absence or terminated public service.
9.12 	(c) If there is medical evidence that supports the expectation that at some point 
9.13 	the person applying for the disability benefit will no longer be disabled, the decision 
9.14 	granting the disability benefit may provide for a termination date upon which the total and 
9.15 	permanent disability can be expected to no longer exist. When a termination date is part 
9.16 	of the decision granting benefits, prior to the benefit termination the executive director 
9.17 	shall review any evidence provided by the disabled employee to show that the disabling 
9.18 	condition for which benefits were initially granted continues. If the benefits cease, the 
9.19 	disabled employee may follow the appeal procedures described in section 356.96 or may 
9.20 	reapply for disability benefits using the process described in this subdivision.
9.21 	(d) Any claim to disability must be supported by a report from the employer 
9.22 	indicating that there is no available work that the employee can perform with the disabling 
9.23 	condition and that all reasonable accommodations have been considered. Upon request of 
9.24 	the executive director, an employer shall provide evidence of the steps the employer has 
9.25 	taken to attempt to provide reasonable accommodations and continued employment to 
9.26 	the claimant.
9.27 	(c)(e) The director shall also obtain written certification from the employer 
9.28 	stating whether the employment has ceased or whether the employee is on sick leave of 
9.29 	absence because of a disability that will prevent further service to the employer and as a 
9.30 	consequencethat the employee is not entitled to compensation from the employer.
9.31 	(d)(f) The medical adviser shall consider the reports of the physicians, physician 
9.32 	assistants, psychologists, and chiropractors and any other evidence supplied by the 
9.33 	employee or other interested parties. If the medical adviser finds the employee totally and 
9.34 	permanently disabled, the adviser shall make appropriate recommendation to the director 
9.35 	in writing together with the date from which the employee has been totally disabled. The 
9.36 	director shall then determine if the disability occurred within 18 months of filing the 
10.1 	application, while still in the employment of the state, and the propriety of authorizing 
10.2 	payment of a disability benefit as provided in this section.
10.3 	(e)(g) A terminated employee may apply for a disability benefit within 18 months of 
10.4 	termination as long as the disability occurred while in the employment of the state. The 
10.5 	fact that an employee is placed on leave of absence without compensation because of 
10.6 	disability does not bar that employee from receiving a disability benefit.
10.7 	(f)(h) Unless the payment of a disability benefit has terminated because the 
10.8 	employee is no longer totally disabled, or because the employee has reached normal 
10.9 	retirement age as provided in this section, the disability benefit must cease with the last 
10.10 	payment received by the disabled employee or which had accrued during the lifetime of the 
10.11 	employee unless there is a spouse surviving. In that event, the surviving spouse is entitled 
10.12 	to the disability benefit for the calendar month in which the disabled employee died.

10.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.14 	Sec. 14. Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision 
10.15 	to read:
10.16 		Subd. 4a.Independent medical examination or vocational rehabilitation 
10.17 	counseling. Any individual applying for or receiving disability benefits shall submit 
10.18 	to an independent medical examination or an assessment by a certified rehabilitation 
10.19 	counselor if requested by the executive director or designee. The examination must be 
10.20 	paid for by the system.

10.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.22 	Sec. 15. Minnesota Statutes 2012, section 352.113, subdivision 6, is amended to read:
10.23 		Subd. 6.Regular medical or psychological examinations. At least once each 
10.24 	year during the first five years following the allowance of a disability benefit to any 
10.25 	employee, and at least once in every three-year period thereafter, the director may require 
10.26 	any disabled employee to undergo aprovide medical, chiropractic, or psychological 
10.27 	examination evidence to support the continuation of the total and permanent disability. 
10.28 	The examination must be made at the place of residence of the employee, or at any place 
10.29 	mutually agreed upon,evidence must be in a form and manner prescribed by the executive 
10.30 	director for review by an expert or experts designated by the medical adviser and engaged 
10.31 	by the director. If any examination indicatesthe medical information provided to the 
10.32 	medical adviser indicates that the employee is no longer permanently and totally disabled, 
10.33 	or is engaged in or can engage in a gainful occupation, payments of the disability benefit 
11.1 	by the fund must be discontinued. The payments must be discontinued as soon as the 
11.2 	employee is reinstated to the payroll following a sick leave of absence, but in no case may 
11.3 	payment be made for more than 60 days after the medical adviser finds that the employee 
11.4 	is no longer permanently and totally disabled.

11.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

11.6 	Sec. 16. Minnesota Statutes 2012, section 352.113, subdivision 8, is amended to read:
11.7 		Subd. 8.Refusal of examination. If a disabled employeeperson applying for a 
11.8 	disability benefit refuses to submit to an experta medical or psychological examination, 
11.9 	the disability application shall be rejected. If a disability benefit recipient refuses to submit 
11.10 	to a medical or psychological examination as required, payments by the fund must be 
11.11 	discontinued and the director shall revoke all rights of the employee in any disability benefit.

11.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

11.13 	Sec. 17. Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision 
11.14 	to read:
11.15 		Subd. 14.Disabilitant earnings reports. Disability benefit recipients must report 
11.16 	all earnings from reemployment and income from workers' compensation to the system 
11.17 	annually by May 15 in a format prescribed by the executive director. If the form is not 
11.18 	submitted by June 15, benefits must be suspended effective July 1. If the form deemed 
11.19 	acceptable by the executive director is received after the June 15 deadline, benefits shall 
11.20 	be reinstated retroactive to July 1.

11.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

11.22 	Sec. 18. Minnesota Statutes 2012, section 352.22, subdivision 3, is amended to read:
11.23 		Subd. 3.Deferred annuity. (a) An employee who has at least three years of 
11.24 	allowable service if employed before July 1, 2010, or who has at least five years of 
11.25 	allowable service if employed after June 30, 2010, when termination occurs may elect 
11.26 	to leave the accumulated contributions in the fund and thereby be entitled to a deferred 
11.27 	retirement annuity. The annuity must be computed under the law in effect when state 
11.28 	service terminated, on the basis of the allowable service credited to the person before 
11.29 	the termination of service.
11.30 	(b) An employee on layoff or on leave of absence without pay, except a leave of 
11.31 	absence for health reasons, and who does not return to state service must have an annuity, 
12.1 	deferred annuity, or other benefit to which the employee may become entitled computed 
12.2 	under the law in effect on the employee's last working day.
12.3 	(c) No application for a deferred annuity may be made more than 60 days before 
12.4 	the time the former employee reaches the required age for entitlement to the payment of 
12.5 	the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date 
12.6 	the application is filed in the office of the system, but not (1) before the date on which 
12.7 	the employee reaches the required age for entitlement to the annuity nor (2) before the 
12.8 	day following the termination of state service in a position which is not covered by the 
12.9 	retirement system.
12.10 	(d) Application for the accumulated contributions left on deposit with the fund may 
12.11 	be made at any time following the date of the termination of service.
12.12 	(e) Deferred annuities must be augmented as provided in section 352.72, subdivision 
12.13 	2.

12.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

12.15 	Sec. 19. Minnesota Statutes 2012, section 352.955, subdivision 1, is amended to read:
12.16 		Subdivision 1.Election to transfer prior MSRS-general service credit. (a) An 
12.17 	eligible employee described in paragraph (b) may elect to transfer service credit in the 
12.18 	general state employees retirement plan of the Minnesota State Retirement System to the 
12.19 	correctional state employees retirement plan for eligible prior correctional employment.
12.20 	(b) An eligible employee is a person who is covered by Laws 2007, chapter 134, 
12.21 	article 3, section 6, or who became eligible for retirement coverage by the correctional 
12.22 	state employees retirement plan of the Minnesota State Retirement System under Laws 
12.23 	2006, chapter 271, article 2, Laws 2007, chapter 134, article 3, or legislation implementing 
12.24 	the recommendations under section 352.91, subdivision 4a.
12.25 	(c) Eligible prior correctional employment is employment covered correctional 
12.26 	service defined in Laws 2007, chapter 134, article 3, section 6, or is employment by the 
12.27 	Department of Corrections or by the Department of Human Services that preceded the 
12.28 	effective date of the retirement coverage transfer under Laws 2006, chapter 271, article 
12.29 	2, Laws 2007, chapter 134, article 3, or legislation implementing the recommendations 
12.30 	under section 352.91, subdivision 4a by the general state employees retirement plan of 
12.31 	the Minnesota State Retirement System, is continuous service, and is certified by the 
12.32 	commissioner of corrections and the commissioner of human services, whichever applies, 
12.33 	and by the commissioner of management and budget to the executive director of the 
12.34 	Minnesota State Retirement System as service that would qualify for correctional state 
13.1 	employees retirement plan coverage under section 352.91, if the service washad been 
13.2 	rendered after the date of coverage transfer.
13.3 	(d) The election to transfer past service credit under this section must be made in 
13.4 	writing by the applicable person on a form prescribed by the executive director of the 
13.5 	Minnesota State Retirement System and must be filed with the executive director of the 
13.6 	Minnesota State Retirement System on or before (1) January 1, 2008, or the one year 
13.7 	anniversary of the coverage transfer, whichever is later, or (2) the date of the eligible 
13.8 	employee's termination of state employment, whichever is earlier.

13.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

13.10 	Sec. 20. Minnesota Statutes 2012, section 352.955, subdivision 3, is amended to read:
13.11 		Subd. 3.Payment of additional equivalent contributions; post-June 30, 2007, 
13.12 	coverage transfers. (a) An eligible employee who is transferred to plan coverage after 
13.13 	June 30, 2007, and who elects to transfer past service credit under this section must pay 
13.14 	an additional member contribution for that prior service period. The additional member 
13.15 	contribution is the amount computed under paragraph (b), plus the greater of the amount 
13.16 	computed under paragraph (c), or 40 percent of the unfunded actuarial accrued liability 
13.17 	attributable to the past service credit transfer.
13.18 	(b) The executive director shall compute, for the most recent 12 months of service 
13.19 	credit eligible for transfer, or for the entire period eligible for transfer if less than 12 
13.20 	months, the difference between the employee contribution rate or rates for the general state 
13.21 	employees retirement plan and the employee contribution rate or rates for the correctional 
13.22 	state employees retirement plan applied to the eligible employee's salary during that 
13.23 	transfer period, plus compound interest at a monthly rate of 0.71 percent.
13.24 	(c) The executive director shall compute, for any service credit being transferred 
13.25 	on behalf of the eligible employee and not included under paragraph (b), the difference 
13.26 	between the employee contribution rate or rates for the general state employees retirement 
13.27 	plan and the employee contribution rate or rates for the correctional state employees 
13.28 	retirement plan applied to the eligible employee's salary during that transfer period, plus 
13.29 	compound interest at a monthly rate of 0.71 percent.
13.30 	(d) The executive director shall compute an amount using the process specified in 
13.31 	paragraph (b), but based on differences in employer contribution rates between the general 
13.32 	state employees retirement plan and the correctional state employees retirement plan 
13.33 	rather than employee contribution rates.
13.34 	(e) The executive director shall compute an amount using the process specified in 
13.35 	paragraph (c), but based on differences in employer contribution rates between the general 
14.1 	state employees retirement plan and the correctional state employees retirement plan 
14.2 	rather than employee contribution rates.
14.3 	(f) The additional equivalent member contribution under this subdivision must be 
14.4 	paid in a lump sum. Payment must accompany the election to transfer the prior service 
14.5 	credit. No transfer election or additional equivalent member contribution payment may be 
14.6 	made by a person or accepted by the executive director after the one year anniversary date 
14.7 	of the effective date of the retirement coverage transfer, or the date on which the eligible 
14.8 	employee terminates state employment, whichever is earlier.
14.9 	(g) If an eligible employee elects to transfer past service credit under this section 
14.10 	and pays the additional equivalent member contribution amount under paragraph (a), the 
14.11 	applicable department shall pay an additional equivalent employer contribution amount. 
14.12 	The additional employer contribution is the amount computed under paragraph (d), plus 
14.13 	the greater of the amount computed under paragraph (e), or 60 percent of the unfunded 
14.14 	actuarial accrued liability attributable to the past service credit transfer.
14.15 	(h) The unfunded actuarial accrued liability attributable to the past service credit 
14.16 	transfer is the present value of the benefit obtained by the transfer of the service credit 
14.17 	to the correctional state employees retirement plan reduced by the amount of the asset 
14.18 	transfer under subdivision 4, by the amount of the member contribution equivalent 
14.19 	payment computed under paragraph (b), and by the amount of the employer contribution 
14.20 	equivalent payment computed under paragraph (d).
14.21 	(i) The additional equivalent employer contribution under this subdivision must be 
14.22 	paid in a lump sum and must be paid within 30 days of the date on which the executive 
14.23 	director of the Minnesota State Retirement System certifies to the applicable department 
14.24 	that the employee paid the additional equivalent member contribution.

14.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

14.26 	Sec. 21. Minnesota Statutes 2012, section 352B.011, subdivision 13, is amended to read:
14.27 		Subd. 13.Surviving spouse. "Surviving spouse" means a member's or former 
14.28 	member's legally married spouse who resided with the member or former member at the 
14.29 	time of death and was married to the member or former member, for a period of at least 
14.30 	one year, during or before the time of membership.

14.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

14.32 	Sec. 22. Minnesota Statutes 2012, section 352B.10, is amended by adding a 
14.33 	subdivision to read:
15.1 		Subd. 7.Disabilitant earnings reports. Disability benefit recipients must report 
15.2 	all earnings from reemployment and income from workers' compensation to the system 
15.3 	annually by May 15 in a format prescribed by the executive director. If the form is not 
15.4 	submitted by June 15, benefits must be suspended effective July 1. If the form deemed 
15.5 	acceptable by the executive director is received after the June 15 deadline, benefits shall 
15.6 	be reinstated retroactive to July 1.

15.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.8 	Sec. 23. Minnesota Statutes 2012, section 352D.04, subdivision 2, is amended to read:
15.9 		Subd. 2.Contribution rates. (a) The money used to purchase shares under this 
15.10 	section is the employee and employer contributions provided in this subdivision.
15.11 	(b) The employee contribution is an amount equal to the percent of salary specified 
15.12 	in section 352.04, subdivision 2, or 352.045, subdivision 3 3a.
15.13 	(c) The employer contribution is an amount equal to six percent of salary.
15.14 	(d) For members of the legislature, the contributions under this subdivision also must 
15.15 	be made on per diem payments received during a regular or special legislative session, but 
15.16 	may not be made on per diem payments received outside of a regular or special legislative 
15.17 	session, on the additional compensation attributable to a leadership position under section 
15.18 	3.099, subdivision 3, living expense payments under section 3.101, or special session 
15.19 	living expense payments under section 3.103.
15.20 	(e) For a judge who is a member of the unclassified plan under section 352D.02, 
15.21 	subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent 
15.22 	of salary, and there is no employer contribution.
15.23 	(f) These contributions must be made in the manner provided in section 352.04, 
15.24 	subdivisions 4, 5, and 6.

15.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.26 	Sec. 24. Minnesota Statutes 2012, section 356.20, subdivision 4, is amended to read:
15.27 		Subd. 4.Contents of financial report. (a) The financial report required by 
15.28 	this section must contain financial statements and disclosures that indicate the financial 
15.29 	operations and position of the retirement plan and fund. The report must conform with 
15.30 	generally accepted governmental accounting principles, applied on a consistent basis. The 
15.31 	report must be audited.
15.32 	(b) The report must include, as part of its exhibits or its footnotes, an actuarial 
15.33 	disclosure item based ona statement that the actuarial valuation calculations prepared 
16.1 	by the actuary retained under section 356.214 or by the actuary retained by the 
16.2 	retirement fund or plan, whichever applies, according tocomply with applicable actuarial 
16.3 	requirements enumerated in section 356.215, and specified in the most recent standards 
16.4 	for actuarial work adopted by the Legislative Commission on Pensions and Retirement. 
16.5 	The actuarial value of assets, the actuarial accrued liabilities, including accrued reserves,
16.6 	 and the unfunded actuarial accrued liability of the fund or plan must be disclosed. The 
16.7 	disclosure itemreport must contain a declarationcertification by the actuary retained 
16.8 	under section 356.214 or the actuary retained by the fund or plan, whichever applies, 
16.9 	specifying that the required reserves for any retirement, disability, or survivornormal 
16.10 	cost and the actuarial accrued liabilities for all benefits provided under a benefit formula
16.11 	 are computed in accordance with the entry age actuarial cost method and in accordance 
16.12 	with the most recent applicable standards for actuarial work adopted by the Legislative 
16.13 	Commission on Pensions and Retirement.
16.14 	(c) The report must contain an itemized exhibit describing the administrative 
16.15 	expenses of the plan, including, but not limited to, the following items, classified on a 
16.16 	consistent basis from year to year, and with any further meaningful detail:
16.17 	(1) personnel expenses;
16.18 	(2) communication-related expenses;
16.19 	(3) office building and maintenance expenses;
16.20 	(4) professional services fees; and
16.21 	(5) other expenses.
16.22 	(d) The report must contain an itemized exhibit describing the investment expenses 
16.23 	of the plan, including, but not limited to, the following items, classified on a consistent 
16.24 	basis from year to year, and with any further meaningful detail:
16.25 	(1) internal investment-related expenses; and
16.26 	(2) external investment-related expenses.
16.27 	(e) Any additional statements or exhibits or more detailed or subdivided itemization 
16.28 	of a disclosure item that will enable the management of the plan to portray a true 
16.29 	interpretation of the plan's financial condition must be included in the additional 
16.30 	statements or exhibits.

16.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

16.32 	Sec. 25. Minnesota Statutes 2012, section 356.214, subdivision 1, is amended to read:
16.33 		Subdivision 1.Actuary retention. (a) The governing board or managing or 
16.34 	administrative official of each public pension plan and retirement fund or plan enumerated 
16.35 	in paragraph (b) shall contract with an established actuarial consulting firm to conduct 
17.1 	annual actuarial valuations and related services. The principal from the actuarial 
17.2 	consulting firm on the contract must be an approved actuary under section 356.215, 
17.3 	subdivision 1, paragraph (c).
17.4 	(b) Actuarial services must include the preparation of actuarial valuations and 
17.5 	related actuarial work for the following retirement plans:
17.6 	(1) the teachers retirement plan, Teachers Retirement Association;
17.7 	(2) the general state employees retirement plan, Minnesota State Retirement System;
17.8 	(3) the correctional employees retirement plan, Minnesota State Retirement System;
17.9 	(4) the State Patrol retirement plan, Minnesota State Retirement System;
17.10 	(5) the judges retirement plan, Minnesota State Retirement System;
17.11 	(6) the general employees retirement plan, Public Employees Retirement 
17.12 	Association, including the MERF division;
17.13 	(7) the public employees police and fire plan, Public Employees Retirement 
17.14 	Association;
17.15 	(8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund 
17.16 	Association;
17.17 	(9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund 
17.18 	Association;
17.19 	(10) the legislators retirement plan, Minnesota State Retirement System; and
17.20 	(11) the elective state officers retirement plan, Minnesota State Retirement System; 
17.21 	and
17.22 	(12)(11) the local government correctional service retirement plan, Public 
17.23 	Employees Retirement Association.
17.24 	(c) The actuarial valuation for the legislators retirement plan must include a separate 
17.25 	calculation of total plan actuarial accrued liabilities due to constitutional officer coverage 
17.26 	under section 3A.17.
17.27 	(c)(d) The contracts must require completion of the annual actuarial valuation 
17.28 	calculations on a fiscal year basis, with the contents of the actuarial valuation calculations 
17.29 	as specified in section 356.215, and in conformity with the standards for actuarial work 
17.30 	adopted by the Legislative Commission on Pensions and Retirement.
17.31 	The contracts must require completion of annual experience data collection and 
17.32 	processing and a quadrennial published experience study for the plans listed in paragraph 
17.33 	(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by 
17.34 	the commission. The experience data collection, processing, and analysis must evaluate 
17.35 	the following:
17.36 	(1) individual salary progression;
18.1 	(2) the rate of return on investments based on the current asset value;
18.2 	(3) payroll growth;
18.3 	(4) mortality;
18.4 	(5) retirement age;
18.5 	(6) withdrawal; and
18.6 	(7) disablement.
18.7 	(d)(e) The actuary shall annually prepare a report to the governing or managing 
18.8 	board or administrative official and the legislature, summarizing the results of the actuarial 
18.9 	valuation calculations. The actuary shall include with the report any recommendations 
18.10 	concerning the appropriateness of the support rates to achieve proper funding of 
18.11 	the retirement plans by the required funding dates. The actuary shall, as part of the 
18.12 	quadrennial experience study, include recommendations on the appropriateness of the 
18.13 	actuarial valuation assumptions required for evaluation in the study.
18.14 	(e)(f) If the actuarial gain and loss analysis in the actuarial valuation calculations 
18.15 	indicates a persistent pattern of sizable gains or losses, the governing or managing board 
18.16 	or administrative official shall direct the actuary to prepare a special experience study for 
18.17 	a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), (10), (11), or (12), in the 
18.18 	manner provided for in the standards for actuarial work adopted by the commission.

18.19 	EFFECTIVE DATE. This section is effective July 1, 2013.

18.20 	Sec. 26. Minnesota Statutes 2012, section 356.215, subdivision 1, is amended to read:
18.21 		Subdivision 1.Definitions. (a) For the purposes of sections 3.85 and 356.20 to 
18.22 	356.23, each of the terms in the following paragraphs has the meaning given.
18.23 	(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 
18.24 	under section 356.214 if so required under section 3.85, or otherwise, by an approved 
18.25 	actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 
18.26 	plan, according to the entry age actuarial cost method and based upon stated assumptions 
18.27 	including, but not limited to rates of interest, mortality, salary increase, disability, 
18.28 	withdrawal, and retirement and to determine the payment necessary to amortize over a 
18.29 	stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 
18.30 	valuation of the benefit plan.
18.31 	(c) "Approved actuary" means a person who is regularly engaged in the business of 
18.32 	providing actuarial services and who is a fellow in the Society of Actuaries.
18.33 	(d) "Entry age actuarial cost method" means an actuarial cost method under which 
18.34 	the actuarial present value of the projected benefits of each individual currently covered 
18.35 	by the benefit plan and included in the actuarial valuation is allocated on a level basis over 
19.1 	the service of the individual, if the benefit plan is governed by section 69.773, or over the 
19.2 	earnings of the individual, if the benefit plan is governed by any other law, between the 
19.3 	entry age and the assumed exit age, with the portion of the actuarial present value which is 
19.4 	allocated to the valuation year to be the normal cost and the portion of the actuarial present 
19.5 	value not provided for at the valuation date by the actuarial present value of future normal 
19.6 	costs to be the actuarial accrued liability, with aggregation in the calculation process to be 
19.7 	the sum of the calculated result for each covered individual and with recognition given to 
19.8 	any different benefit formulas which may apply to various periods of service.
19.9 	(e) "Experience study" means a report providing experience data and an actuarial 
19.10 	analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 
19.11 	based.
19.12 	(f) "Actuarial value of assets" means:
19.13 	(1) For the July 1, 2012, actuarial valuation, the market value of all assets as of 
19.14 	June 30, 2012, reduced by:
19.15 	(i) 20 percent of the difference between the actual net change in the market value of 
19.16 	assets other than the Minnesota postretirement investment fund between June 30, 2009, 
19.17 	and June 30, 2008, and the computed increase in the market value of assets other than the 
19.18 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
19.19 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
19.20 	assumption used in the actuarial valuation for July 1, 2008;
19.21 	(ii) 40 percent of the difference between the actual net change in the market value of 
19.22 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
19.23 	market value of total assets over that fiscal year period if the assets had earned a rate of 
19.24 	return on assets equal to the annual percentage preretirement interest rate assumption used 
19.25 	in the actuarial valuation for July 1, 2009;
19.26 	(iii) 60 percent of the difference between the actual net change in the market value 
19.27 	of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
19.28 	market value of total assets over that fiscal year period if the assets had earned a rate of 
19.29 	return on assets equal to the annual percentage preretirement interest rate assumption used 
19.30 	in the actuarial valuation for July 1, 2010;
19.31 	(iv) 80 percent of the difference between the actual net change in the market value of 
19.32 	total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 
19.33 	market value of total assets over that fiscal year period if the assets had earned a rate of 
19.34 	return on assets equal to the annual percentage preretirement interest rate assumption used 
19.35 	in the actuarial valuation for July 1, 2011; and
20.1 	(v) if applicable, 20 percent of the difference between the actual net change in the 
20.2 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
20.3 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
20.4 	year period if the assets had increased at 8.5 percent annually.
20.5 	(2) For the July 1, 2013, and following actuarial valuations, the market value of all 
20.6 	assets as of the preceding June 30, reduced by:
20.7 	(i) (1) 20 percent of the difference between the actual net change in the market value 
20.8 	of total assets between the June 30 that occurred three years earlier and the June 30 that 
20.9 	occurred four years earlier and the computed increase in the market value of total assets 
20.10 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
20.11 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
20.12 	for the July 1 that occurred four years earlier;
20.13 	(ii) (2) 40 percent of the difference between the actual net change in the market value 
20.14 	of total assets between the June 30 that occurred two years earlier and the June 30 that 
20.15 	occurred three years earlier and the computed increase in the market value of total assets 
20.16 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
20.17 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
20.18 	for the July 1 that occurred three years earlier;
20.19 	(iii) (3) 60 percent of the difference between the actual net change in the market 
20.20 	value of total assets between the June 30 that occurred one year earlier and the June 30 that 
20.21 	occurred two years earlier and the computed increase in the market value of total assets 
20.22 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
20.23 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
20.24 	for the July 1 that occurred two years earlier; and
20.25 	(iv) (4) 80 percent of the difference between the actual net change in the market 
20.26 	value of total assets between the most recent June 30 and the June 30 that occurred 
20.27 	one year earlier and the computed increase in the market value of total assets over that 
20.28 	fiscal year period if the assets had earned a rate of return on assets equal to the annual 
20.29 	percentage preretirement interest rate assumption used in the actuarial valuation for the 
20.30 	July 1 that occurred one year earlier.
20.31 	(g) "Unfunded actuarial accrued liability" means the total current and expected 
20.32 	future benefit obligations, reduced by the sum of the actuarial value of assets and the 
20.33 	present value of future normal costs.
20.34 	(h) "Pension benefit obligation" means the actuarial present value of credited 
20.35 	projected benefits, determined as the actuarial present value of benefits estimated to be 
20.36 	payable in the future as a result of employee service attributing an equal benefit amount, 
21.1 	including the effect of projected salary increases and any step rate benefit accrual rate 
21.2 	differences, to each year of credited and expected future employee service.

21.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

21.4 	Sec. 27. Minnesota Statutes 2012, section 356.215, subdivision 8, is amended to read:
21.5 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use 
21.6 	the applicable following preretirement interest assumption and the applicable following 
21.7 	postretirement interest assumption:
21.8 	(1) select and ultimate interest rate assumption

21.921.10
21.11
21.12
	plan
	ultimate 
preretirement 
interest rate 
assumption
	ultimate 
postretirement 
interest rate 
assumption
	
21.13	general state employees retirement plan
	 8.5%
	 6.0%
	
21.14	correctional state employees retirement plan
	8.5
	6.0
	
21.15	State Patrol retirement plan
	8.5
	6.0
	
21.16
21.17
21.18	legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities
	 0.0 
	-2.0 until June 30, 
2040, and -2.5 after 
June 30, 20400.0
	
21.19
21.20
21.21	elective state officers retirement plan
	0.0
	-2.0 until June 30, 
2040, and -2.5 after 
June 30, 2040 
	
21.22	judges retirement plan
	8.5
	6.0
	
21.23	general public employees retirement plan
	8.5
	6.0
	
21.24	public employees police and fire retirement plan
	8.5
	6.0
	
21.25
21.26	local government correctional service 
retirement plan
	8.5
	6.0
	
21.27	teachers retirement plan
	8.5
	6.0
	
21.28	Duluth teachers retirement plan
	8.5
	8.5
	
21.29	St. Paul teachers retirement plan
	8.5
	8.5
	
21.30 	Except for the legislators retirement plan and the elective stateconstitutional officers 
21.31 	retirement plan calculation of total plan liabilities, the select preretirement interest rate 
21.32 	assumption for the period after June 30, 2012, through June 30, 2017, is 8.0 percent. 
21.33 	Except for the legislators retirement plan and the elective stateconstitutional officers 
21.34 	retirement plan calculation of total plan liabilities, the select postretirement interest rate 
21.35 	assumption for the period after June 30, 2012, through June 30, 2017, is 5.5 percent, 
21.36 	except for the Duluth teachers retirement plan and the St. Paul teachers retirement plan, 
21.37 	each with a select postretirement interest rate assumption for the period after June 30, 
21.38 	2012, through June 30, 2017, of 8.0 percent.
21.39 	(2) single rate preretirement and postretirement interest rate assumption

22.1
22.2	plan
	interest rate 
assumption
		
22.3	Bloomington Fire Department Relief Association
	6.0
		
22.4
22.5	local monthly benefit volunteer firefighters relief 
associations
	5.0
		
22.6 	(b) The actuarial valuation must use the applicable following single rate future salary 
22.7 	increase assumption, the applicable following modified single rate future salary increase 
22.8 	assumption, or the applicable following graded rate future salary increase assumption:
22.9 	(1) single rate future salary increase assumption

22.10	plan
	future salary increase assumption
	
22.11	legislators retirement plan
		5.0%
	
22.12	judges retirement plan
		3.0 
	
22.13
22.14	Bloomington Fire Department Relief 
Association
		4.0
	
22.15 	(2) age-related future salary increase age-related select and ultimate future salary 
22.16 	increase assumption or graded rate future salary increase assumption

22.17	plan
	future salary increase assumption
	
22.18	local government correctional service retirement plan
	assumption C
	
22.19	Duluth teachers retirement plan
	assumption A
	
22.20	St. Paul teachers retirement plan
	assumption B
	
22.21 	For plans other than the Duluth teachers 
22.22 	retirement plan, the select calculation 
22.23 	is: during the designated select period, a 
22.24 	designated percentage rate is multiplied by 
22.25 	the result of the designated integer minus T, 
22.26 	where T is the number of completed years 
22.27 	of service, and is added to the applicable 
22.28 	future salary increase assumption. The 
22.29 	designated select period is ten years and the 
22.30 	designated integer is ten for all retirement 
22.31 	plans covered by this clause. The designated 
22.32 	percentage rate is 0.3 percent for the St. Paul 
22.33 	Teachers Retirement Fund Association. The 
22.34 	select calculation for the Duluth Teachers 
22.35 	Retirement Fund Association is 8.00 percent 
22.36 	per year for service years one through seven, 
22.37 	7.25 percent per year for service years seven 
23.1 	and eight, and 6.50 percent per year for 
23.2 	service years eight and nine.
23.3 	The ultimate future salary increase assumption is:

23.4	age
	A
	B
	C
		
23.5	16
	8.00%
	6.90%
	9.00%
		
23.6	17
	8.00
	6.90
	9.00
		
23.7	18
	8.00
	6.90
	9.00
		
23.8	19
	8.00
	6.90
	9.00
		
23.9	20
	6.90
	6.90
	9.00
		
23.10	21
	6.90
	6.90
	8.75
		
23.11	22
	6.90
	6.90
	8.50
		
23.12	23
	6.85
	6.85
	8.25
		
23.13	24
	6.80
	6.80
	8.00
		
23.14	25
	6.75
	6.75
	7.75
		
23.15	26
	6.70
	6.70
	7.50
		
23.16	27
	6.65
	6.65
	7.25
		
23.17	28
	6.60
	6.60
	7.00
		
23.18	29
	6.55
	6.55
	6.75
		
23.19	30
	6.50
	6.50
	6.75
		
23.20	31
	6.45
	6.45
	6.50
		
23.21	32
	6.40
	6.40
	6.50
		
23.22	33
	6.35
	6.35
	6.50
		
23.23	34
	6.30
	6.30
	6.25
		
23.24	35
	6.25
	6.25
	6.25
		
23.25	36
	6.20
	6.20
	6.00
		
23.26	37
	6.15
	6.15
	6.00
		
23.27	38
	6.10
	6.10
	6.00
		
23.28	39
	6.05
	6.05
	5.75
		
23.29	40
	6.00
	6.00
	5.75
		
23.30	41
	5.90
	5.95
	5.75
		
23.31	42
	5.80
	5.90
	5.50
		
23.32	43
	5.70
	5.85
	5.25
		
23.33	44
	5.60
	5.80
	5.25
		
23.34	45
	5.50
	5.75
	5.00
		
23.35	46
	5.40
	5.70
	5.00
		
23.36	47
	5.30
	5.65
	5.00
		
23.37	48
	5.20
	5.60
	5.00
		
23.38	49
	5.10
	5.55
	5.00
		
23.39	50
	5.00
	5.50
	5.00
		
23.40	51
	4.90
	5.45
	5.00
		
23.41	52
	4.80
	5.40
	5.00
		
23.42	53
	4.70
	5.35
	5.00
		
23.43	54
	4.60
	5.30
	5.00
		
24.1	55
	4.50
	5.25
	4.75
		
24.2	56
	4.40
	5.20
	4.75
		
24.3	57
	4.30
	5.15
	4.50
		
24.4	58
	4.20
	5.10
	4.25
		
24.5	59
	4.10
	5.05
	4.25
		
24.6	60
	4.00
	5.00
	4.25
		
24.7	61
	3.90
	5.00
	4.25
		
24.8	62
	3.80
	5.00
	4.25
		
24.9	63
	3.70
	5.00
	4.25
		
24.10	64
	3.60
	5.00
	4.25
		
24.11	65
	3.50
	5.00
	4.00
		
24.12	66
	3.50
	5.00
	4.00
		
24.13	67
	3.50
	5.00
	4.00
		
24.14	68
	3.50
	5.00
	4.00
		
24.15	69
	3.50
	5.00
	4.00
		
24.16	70
	3.50
	5.00
	4.00
		
24.17 	(3) service-related ultimate future salary increase assumption

24.18
24.19	general state employees retirement plan of the 
Minnesota State Retirement System
	assumption A
	
24.20
24.21	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
24.22	Teachers Retirement Association
	assumption C
	
24.23	public employees police and fire retirement plan
	assumption D
	
24.24	State Patrol retirement plan
	assumption E
	
24.25
24.26	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

24.27
24.28	service 
length
	A
	B
	C
	D
	E
	F
	
24.29	1
	10.50%
	12.03%
	12.00%
	13.00%
	8.00%
	6.00%
	
24.30	2
	8.10
	8.90
	9.00
	11.00
	7.50
	5.85
	
24.31	3
	6.90
	7.46
	8.00
	9.00
	7.00
	5.70
	
24.32	4
	6.20
	6.58
	7.50
	8.00
	6.75
	5.55
	
24.33	5
	5.70
	5.97
	7.25
	6.50
	6.50
	5.40
	
24.34	6
	5.30
	5.52
	7.00
	6.10
	6.25
	5.25
	
24.35	7
	5.00
	5.16
	6.85
	5.80
	6.00
	5.10
	
24.36	8
	4.70
	4.87
	6.70
	5.60
	5.85
	4.95
	
24.37	9
	4.50
	4.63
	6.55
	5.40
	5.70
	4.80
	
24.38	10
	4.40
	4.42
	6.40
	5.30
	5.55
	4.65
	
24.39	11
	4.20
	4.24
	6.25
	5.20
	5.40
	4.55
	
24.40	12
	4.10
	4.08
	6.00
	5.10
	5.25
	4.45
	
24.41	13
	4.00
	3.94
	5.75
	5.00
	5.10
	4.35
	
24.42	14
	3.80
	3.82
	5.50
	4.90
	4.95
	4.25
	
24.43	15
	3.70
	3.70
	5.25
	4.80
	4.80
	4.15
	
25.1	16
	3.60
	3.60
	5.00
	4.80
	4.65
	4.05
	
25.2	17
	3.50
	3.51
	4.75
	4.80
	4.50
	3.95
	
25.3	18
	3.50
	3.50
	4.50
	4.80
	4.35
	3.85
	
25.4	19
	3.50
	3.50
	4.25
	4.80
	4.20
	3.75
	
25.5	20
	3.50
	3.50
	4.00
	4.80
	4.05
	3.75
	
25.6	21
	3.50
	3.50
	3.90
	4.70
	4.00
	3.75
	
25.7	22
	3.50
	3.50
	3.80
	4.60
	4.00
	3.75
	
25.8	23
	3.50
	3.50
	3.70
	4.50
	4.00
	3.75
	
25.9	24
	3.50
	3.50
	3.60
	4.50
	4.00
	3.75
	
25.10	25
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.11	26
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.12	27
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.13	28
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.14	29
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.15
25.16	30 or 
more
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
25.17 	(c) The actuarial valuation must use the applicable following payroll growth 
25.18 	assumption for calculating the amortization requirement for the unfunded actuarial 
25.19 	accrued liability where the amortization retirement is calculated as a level percentage 
25.20 	of an increasing payroll:

25.21	plan
	payroll growth assumption
	
25.22
25.23	general state employees retirement plan of the 
Minnesota State Retirement System
	3.75%
	
25.24	correctional state employees retirement plan
	3.75
	
25.25	State Patrol retirement plan
	3.75
	
25.26	judges retirement plan
	3.00
	
25.27
25.28	general employees retirement plan of the Public 
Employees Retirement Association
	3.75
	
25.29	public employees police and fire retirement plan
	3.75
	
25.30	local government correctional service retirement plan
	3.75
	
25.31	teachers retirement plan
	3.75
	
25.32	Duluth teachers retirement plan
	4.50
	
25.33	St. Paul teachers retirement plan
	5.00
	
25.34 	(d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a 
25.35 	different salary assumption or a different payroll increase assumption:
25.36 	(1) has been proposed by the governing board of the applicable retirement plan;
25.37 	(2) is accompanied by the concurring recommendation of the actuary retained under 
25.38 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
25.39 	most recent actuarial valuation report if section 356.214 does not apply; and
25.40 	(3) has been approved or deemed approved under subdivision 18.

26.1 	EFFECTIVE DATE. This section is effective July 1, 2013.

26.2 	Sec. 28. Minnesota Statutes 2012, section 356.30, subdivision 3, is amended to read:
26.3 		Subd. 3.Covered plans. This section applies to the following retirement plans:
26.4 	(1) the general state employees retirement plan of the Minnesota State Retirement 
26.5 	System, established under chapter 352;
26.6 	(2) the correctional state employees retirement plan of the Minnesota State 
26.7 	Retirement System, established under chapter 352;
26.8 	(3) the unclassified employees retirement program, established under chapter 352D;
26.9 	(4) the State Patrol retirement plan, established under chapter 352B;
26.10 	(5) the legislators retirement plan, established under chapter 3A, including 
26.11 	constitutional officers as specified in that chapter;
26.12 	(6) the elective state officers retirement plan, established under chapter 352C;
26.13 	(7)(6) the general employees retirement plan of the Public Employees Retirement 
26.14 	Association, established under chapter 353, including the MERF division of the Public 
26.15 	Employees Retirement Association;
26.16 	(8)(7) the public employees police and fire retirement plan of the Public Employees 
26.17 	Retirement Association, established under chapter 353;
26.18 	(9)(8) the local government correctional service retirement plan of the Public 
26.19 	Employees Retirement Association, established under chapter 353E;
26.20 	(10) (9) the Teachers Retirement Association, established under chapter 354;
26.21 	(11)(10) the St. Paul Teachers Retirement Fund Association, established under 
26.22 	chapter 354A;
26.23 	(12)(11) the Duluth Teachers Retirement Fund Association, established under 
26.24 	chapter 354A; and
26.25 	(13)(12) the judges retirement fund, established by chapter 490.

26.26 	EFFECTIVE DATE. This section is effective July 1, 2013.

26.27 	Sec. 29. Minnesota Statutes 2012, section 356.401, subdivision 3, is amended to read:
26.28 		Subd. 3.Covered retirement plans. The provisions of this section apply to the 
26.29 	following retirement plans:
26.30 	(1) the legislators retirement plan, established by chapter 3A, including constitutional 
26.31 	officers as specified in that chapter;
26.32 	(2) the general state employees retirement plan of the Minnesota State Retirement 
26.33 	System, established by chapter 352;
27.1 	(3) the correctional state employees retirement plan of the Minnesota State 
27.2 	Retirement System, established by chapter 352;
27.3 	(4) the State Patrol retirement plan, established by chapter 352B;
27.4 	(5) the elective state officers retirement plan, established by chapter 352C;
27.5 	(6)(5) the unclassified state employees retirement program, established by chapter 
27.6 	352D;
27.7 	(7)(6) the general employees retirement plan of the Public Employees Retirement 
27.8 	Association, established by chapter 353, including the MERF division of the Public 
27.9 	Employees Retirement Association;
27.10 	(8)(7) the public employees police and fire plan of the Public Employees Retirement 
27.11 	Association, established by chapter 353;
27.12 	(9)(8) the public employees defined contribution plan, established by chapter 353D;
27.13 	(10)(9) the local government correctional service retirement plan of the Public 
27.14 	Employees Retirement Association, established by chapter 353E;
27.15 	(11)(10) the voluntary statewide lump-sum volunteer firefighter retirement plan, 
27.16 	established by chapter 353G;
27.17 	(12)(11) the Teachers Retirement Association, established by chapter 354;
27.18 	(13)(12) the Duluth Teachers Retirement Fund Association, established by chapter 
27.19 	354A;
27.20 	(14)(13) the St. Paul Teachers Retirement Fund Association, established by chapter 
27.21 	354A;
27.22 	(15)(14) the individual retirement account plan, established by chapter 354B;
27.23 	(16)(15) the higher education supplemental retirement plan, established by chapter 
27.24 	354C; and
27.25 	(17)(16) the judges retirement fund, established by chapter 490.

27.26 	EFFECTIVE DATE. This section is effective July 1, 2013.

27.27 	Sec. 30. Minnesota Statutes 2012, section 356.415, subdivision 1a, is amended to read:
27.28 		Subd. 1a.Annual postretirement adjustments; Minnesota State Retirement 
27.29 	System plans other than State Patrol retirement plan. (a) Retirement annuity, disability 
27.30 	benefit, or survivor benefit recipients of the legislators retirement plan plans, including 
27.31 	constitutional officers as specified in chapter 3A, the general state employees retirement 
27.32 	plan, the correctional state employees retirement plan, the elected state officers retirement 
27.33 	plan, the unclassified state employees retirement program, and the judges retirement plan 
27.34 	are entitled to a postretirement adjustment annually on January 1, as follows:
28.1 	(1) a postretirement increase of two percent must be applied each year, effective 
28.2 	on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 
28.3 	who has been receiving an annuity or a benefit for at least 18 full months before the 
28.4 	January 1 increase; and
28.5 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
28.6 	a benefit for at least six full months, an annual postretirement increase of 1/12 of two 
28.7 	percent for each month that the person has been receiving an annuity or benefit must be 
28.8 	applied, effective January 1, following the calendar year in which the person has been 
28.9 	retired for at least six months, but has been retired for less than 18 months.
28.10 	(b) The increases provided by this subdivision commence on January 1, 2011. 
28.11 	Increases under this subdivision for the general state employees retirement plan, the 
28.12 	correctional state employees retirement plan, or the judges retirement plan terminate 
28.13 	on December 31 of the calendar year in which the actuarial valuation prepared by the 
28.14 	approved actuary under sections 356.214 and 356.215 and the standards for actuarial work 
28.15 	promulgated by the Legislative Commission on Pensions and Retirement indicates that the 
28.16 	market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial 
28.17 	accrued liability of the retirement plan and increases under subdivision 1 recommence 
28.18 	after that date. Increases under this subdivision for the legislators retirement plan or the 
28.19 	elected state officers retirement plan terminate on December 31 of the calendar year in 
28.20 	which the actuarial valuation prepared by the approved actuary under sections 356.214 and 
28.21 	356.215 and the standards for actuarial work promulgated by the Legislative Commission 
28.22 	on Pensions and Retirement indicates that the market value of assets of the general state 
28.23 	employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability 
28.24 	of the retirement plan and increases under subdivision 1 recommence after that date.
28.25 	(c) An increase in annuity or benefit payments under this subdivision must be made 
28.26 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
28.27 	executive director of the applicable covered retirement plan requesting that the increase 
28.28 	not be made.

28.29 	EFFECTIVE DATE. This section is effective July 1, 2013.

28.30 	Sec. 31. Minnesota Statutes 2012, section 356.415, subdivision 2, is amended to read:
28.31 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
28.32 	following retirement plans:
28.33 	(1) the legislators retirement plan established under chapter 3A, including 
28.34 	constitutional officers as specified in that chapter;
29.1 	(2) the correctional state employees retirement plan of the Minnesota State 
29.2 	Retirement System established under chapter 352;
29.3 	(3) the general state employees retirement plan of the Minnesota State Retirement 
29.4 	System established under chapter 352;
29.5 	(4) the State Patrol retirement plan established under chapter 352B;
29.6 	(5) the elective state officers retirement plan established under chapter 352C;
29.7 	(6)(5) the general employees retirement plan of the Public Employees Retirement 
29.8 	Association established under chapter 353, including the MERF division of the Public 
29.9 	Employees Retirement Association;
29.10 	(7)(6) the public employees police and fire retirement plan of the Public Employees 
29.11 	Retirement Association established under chapter 353;
29.12 	(8)(7) the local government correctional employees retirement plan of the Public 
29.13 	Employees Retirement Association established under chapter 353E;
29.14 	(9)(8) the teachers retirement plan established under chapter 354; and
29.15 	(10)(9) the judges retirement plan established under chapter 490.

29.16 	EFFECTIVE DATE. This section is effective July 1, 2013.

29.17 	Sec. 32. APPLICATION AND INTENT.
 29.18 	This article merges the remaining provisions of the elective state officers retirement 
29.19 	plan into the legislators retirement plan chapter to achieve administrative savings, 
29.20 	including reduced cost for actuarial calculations. Nothing in this article should be 
29.21 	interpreted as modifying benefits or benefit eligibility compared to law in effect 
29.22 	immediately before the effective date of this section.

29.23 	EFFECTIVE DATE. This section is effective July 1, 2013.

29.24 	Sec. 33.  REPEALER.
 29.25 	(a) Minnesota Statutes 2012, sections 3A.02, subdivision 3; 352C.001; 352C.091, 
29.26 	subdivision 1; and 352C.10, are repealed.
29.27 	(b) Minnesota Statutes 2012, section 352.955, subdivision 2, is repealed.

29.28 	EFFECTIVE DATE. Paragraph (a) is effective July 1, 2013. Paragraph (b) is 
29.29 	effective the day following final enactment.

30.1 	ARTICLE 3
30.2 	PERA ADMINISTRATIVE PROVISIONS

30.3 	Section 1. Minnesota Statutes 2012, section 353.01, subdivision 2b, is amended to read:
30.4 		Subd. 2b.Excluded employees. (a) The following public employees are not eligible 
30.5 	to participate as members of the association with retirement coverage by the general 
30.6 	employees retirement plan, the local government correctional employees retirement plan 
30.7 	under chapter 353E, or the public employees police and fire retirement plan:
30.8 	(1) persons whose salary from one governmental subdivision never exceeds $425 in 
30.9 	a month;
30.10 	(2) public officers who are elected to a governing body, city mayors, or persons who 
30.11 	are appointed to fill a vacancy in an elective office of a governing body, whose term of office 
30.12 	commences on or after July 1, 2002, for the service to be rendered in that elective position;
30.13 	(3) election officers or election judges;
30.14 	(4) patient and inmate personnel who perform services for a governmental 
30.15 	subdivision;
30.16 	(5) except as otherwise specified in subdivision 12a, employees who are hired for 
30.17 	a temporary position as defined under subdivision 12a, and employees who resign from 
30.18 	a nontemporary position and accept a temporary position within 30 days in the same 
30.19 	governmental subdivision;
30.20 	(6) employees who are employed by reason of work emergency caused by fire, 
30.21 	flood, storm, or similar disaster;
30.22 	(7) employees who by virtue of their employment in one governmental subdivision 
30.23 	are required by law to be a member of and to contribute to any of the plans or funds 
30.24 	administered by the Minnesota State Retirement System, the Teachers Retirement 
30.25 	Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 
30.26 	Retirement Fund Association, or any police or firefighters relief association governed by 
30.27 	section 69.77 that has not consolidated with the Public Employees Retirement Association, 
30.28 	or any local police or firefighters consolidation account who have not elected the type of 
30.29 	benefit coverage provided by the public employees police and fire fund under sections 
30.30 	353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4, 5, or 6, 
30.31 	who have not elected public employees police and fire plan benefit coverage. This clause 
30.32 	must not be construed to prevent a person from being a member of and contributing to 
30.33 	the Public Employees Retirement Association and also belonging to and contributing to 
30.34 	another public pension plan or fund for other service occurring during the same period 
30.35 	of time. A person who meets the definition of "public employee" in subdivision 2 by 
31.1 	virtue of other service occurring during the same period of time becomes a member of the 
31.2 	association unless contributions are made to another public retirement fund on the salary 
31.3 	based on the other service or to the Teachers Retirement Association by a teacher as 
31.4 	defined in section 354.05, subdivision 2;
31.5 	(8) persons who are members of a religious order and are excluded from coverage 
31.6 	under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 
31.7 	performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 
31.8 	as amended through January 1, 1987, if no irrevocable election of coverage has been made 
31.9 	under section 3121(r) of the Internal Revenue Code of 1954, as amended;
31.10 	(9) employees of a governmental subdivision who have not reached the age of 
31.11 	23 and are enrolled on a full-time basis to attend or are attending classes on a full-time 
31.12 	basis at an accredited school, college, or university in an undergraduate, graduate, or 
31.13 	professional-technical program, or a public or charter high school;
31.14 	(10) resident physicians, medical interns, and pharmacist residents and pharmacist 
31.15 	interns who are serving in a degree or residency program in public hospitals or clinics;
31.16 	(11) students who are serving for up to five years in an internship or residency program 
31.17 	sponsored by a governmental subdivision, including an accredited educational institution;
31.18 	(12) persons who hold a part-time adult supplementary technical college license who 
31.19 	render part-time teaching service in a technical college;
31.20 	(13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., 
31.21 	foreign citizens who are employed by a governmental subdivision under a work permit, or 
31.22 	an H-1b visa initially issued or extended for a combined period less than three years of 
31.23 	employment. Upon extension of the employment beyond the three-year period, the foreign 
31.24 	citizens must be reported for membership beginning the first of the month thereafter 
31.25 	provided the monthly earnings threshold as provided under subdivision 2a is met;
31.26 	(14) public hospital employees who elected not to participate as members of the 
31.27 	association before 1972 and who did not elect to participate from July 1, 1988, to October 
31.28 	1, 1988;
31.29 	(15) except as provided in section 353.86, volunteer ambulance service personnel, as 
31.30 	defined in subdivision 35, but persons who serve as volunteer ambulance service personnel 
31.31 	may still qualify as public employees under subdivision 2 and may be members of the 
31.32 	Public Employees Retirement Association and participants in the general employees 
31.33 	retirement plan or the public employees police and fire plan, whichever applies, on the 
31.34 	basis of compensation received from public employment service other than service as 
31.35 	volunteer ambulance service personnel;
32.1 	(16) except as provided in section 353.87, volunteer firefighters, as defined in 
32.2 	subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, 
32.3 	but a person who is a volunteer firefighter may still qualify as a public employee under 
32.4 	subdivision 2 and may be a member of the Public Employees Retirement Association and 
32.5 	a participant in the general employees retirement plan or the public employees police 
32.6 	and fire plan, whichever applies, on the basis of compensation received from public 
32.7 	employment activities other than those as a volunteer firefighter;
32.8 	(17) pipefitters and associated trades personnel employed by Independent School 
32.9 	District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 
32.10 	pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 
32.11 	if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 
32.12 	241, article 2, section 12;
32.13 	(18) electrical workers, plumbers, carpenters, and associated trades personnel who 
32.14 	are employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 
32.15 	who have retirement coverage under a collective bargaining agreement by the Electrical 
32.16 	Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 
32.17 	or the pension plan applicable to Carpenters Local 87 who were either first employed after 
32.18 	May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under 
32.19 	Laws 2000, chapter 461, article 7, section 5;
32.20 	(19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 
32.21 	painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul 
32.22 	or Independent School District No. 625, St. Paul, with coverage under a collective 
32.23 	bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 
32.24 	the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 
32.25 	pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 
32.26 	Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 
32.27 	first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 
32.28 	Session chapter 10, article 10, section 6;
32.29 	(20) plumbers who are employed by the Metropolitan Airports Commission, with 
32.30 	coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan, 
32.31 	who either were first employed after May 1, 2001, or if first employed before May 2, 
32.32 	2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 
32.33 	10, section 6;
32.34 	(21) employees who are hired after June 30, 2002, to fill seasonal positions under 
32.35 	subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 
32.36 	days or less in each year of employment with the governmental subdivision;
33.1 	(22) persons who are provided supported employment or work-study positions by a 
33.2 	governmental subdivision and who participate in an employment or industries program 
33.3 	maintained for the benefit of these persons where the governmental subdivision limits 
33.4 	the position's duration up to threefive years or less, including persons participating in a 
33.5 	federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 
33.6 	unemployment relief program where the training or work experience is not provided as a 
33.7 	part of, or for, future permanent public employment;
33.8 	(23) independent contractors and the employees of independent contractors;
33.9 	(24) reemployed annuitants of the association during the course of that 
33.10 	reemployment; and
33.11 	(25) persons appointed to serve on a board or commission of a governmental 
33.12 	subdivision or an instrumentality thereof.
33.13 	(b) Any person performing the duties of a public officer in a position defined in 
33.14 	subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an 
33.15 	employee of an independent contractor.

33.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.17 	Sec. 2. Minnesota Statutes 2012, section 353.01, subdivision 16, is amended to read:
33.18 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" 
33.19 	means:
33.20 	(1) service during years of actual membership in the course of which employee 
33.21 	deductions were withheld from salary and contributions were made at the applicable rates 
33.22 	under section 353.27, 353.65, or 353E.03;
33.23 	(2) periods of service covered by payments in lieu of salary deductions under 
33.24 	sections 353.27, subdivision 12, and 353.35;
33.25 	(3) service in years during which the public employee was not a member but for 
33.26 	which the member later elected, while a member, to obtain credit by making payments to 
33.27 	the fund as permitted by any law then in effect;
33.28 	(4) a period of authorized leave of absence with pay from which deductions for 
33.29 	employee contributions are made, deposited, and credited to the fund;
33.30 	(5) a period of authorized personal, parental, or medical leave of absence without 
33.31 	pay, including a leave of absence covered under the federal Family Medical Leave Act, 
33.32 	that does not exceed one year, and for which a member obtained service credit for each 
33.33 	month in the leave period by payment under section 353.0161 to the fund made in place of 
33.34 	salary deductions. An employee must return to public service and render a minimum of 
33.35 	three months of allowable service in order to be eligible to make payment under section 
34.1 	353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 
34.2 	employee must be granted allowable service credit for the purchased period;
34.3 	(6) a periodic, repetitive leave that is offered to all employees of a governmental 
34.4 	subdivision. The leave program may not exceed 208 hours per annual normal work cycle 
34.5 	as certified to the association by the employer. A participating member obtains service 
34.6 	credit by making employee contributions in an amount or amounts based on the member's 
34.7 	average salary, excluding overtime pay, that would have been paid if the leave had not been 
34.8 	taken. The employer shall pay the employer and additional employer contributions on 
34.9 	behalf of the participating member. The employee and the employer are responsible to pay 
34.10 	interest on their respective shares at the rate of 8.5 percent a year, compounded annually, 
34.11 	from the end of the normal cycle until full payment is made. An employer shall also make 
34.12 	the employer and additional employer contributions, plus 8.5 percent interest, compounded 
34.13 	annually, on behalf of an employee who makes employee contributions but terminates 
34.14 	public service. The employee contributions must be made within one year after the end of 
34.15 	the annual normal working cycle or within 30 days after termination of public service, 
34.16 	whichever is sooner. The executive director shall prescribe the manner and forms to be 
34.17 	used by a governmental subdivision in administering a periodic, repetitive leave. Upon 
34.18 	payment, the member must be granted allowable service credit for the purchased period;
34.19 	(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 
34.20 	months allowable service per authorized temporary or seasonal layoff in one calendar year. 
34.21 	An employee who has received the maximum service credit allowed for an authorized 
34.22 	temporary or seasonal layoff must return to public service and must obtain a minimum of 
34.23 	three months of allowable service subsequent to the layoff in order to receive allowable 
34.24 	service for a subsequent authorized temporary or seasonal layoff;
34.25 	(8) a period during which a member is absent from employment by a governmental 
34.26 	subdivision by reason of service in the uniformed services, as defined in United States 
34.27 	Code, title 38, section 4303(13), if the member returns to public service with the same 
34.28 	governmental subdivision upon discharge from service in the uniformed service within the 
34.29 	time frames required under United States Code, title 38, section 4312(e), provided that 
34.30 	the member did not separate from uniformed service with a dishonorable or bad conduct 
34.31 	discharge or under other than honorable conditions. The service must be credited if the 
34.32 	member pays into the fund equivalent employee contributions based upon the contribution 
34.33 	rate or rates in effect at the time that the uniformed service was performed multiplied 
34.34 	by the full and fractional years being purchased and applied to the annual salary rate. 
34.35 	The annual salary rate is the average annual salary, excluding overtime pay, during the 
34.36 	purchase period that the member would have received if the member had continued to 
35.1 	be employed in covered employment rather than to provide uniformed service, or, if 
35.2 	the determination of that rate is not reasonably certain, the annual salary rate is the 
35.3 	member's average salary rate, excluding overtime pay, during the 12-month period of 
35.4 	covered employment rendered immediately preceding the period of the uniformed service. 
35.5 	Payment of the member equivalent contributions must be made during a period that begins 
35.6 	with the date on which the individual returns to public employment and that is three times 
35.7 	the length of the military leave period, or within five years of the date of discharge from 
35.8 	the military service, whichever is less. If the determined payment period is less than 
35.9 	one year, the contributions required under this clause to receive service credit may be 
35.10 	made within one year of the discharge date. Payment may not be accepted following 30 
35.11 	days after termination of public service under subdivision 11a. If the member equivalent 
35.12 	contributions provided for in this clause are not paid in full, the member's allowable 
35.13 	service credit must be prorated by multiplying the full and fractional number of years of 
35.14 	uniformed service eligible for purchase by the ratio obtained by dividing the total member 
35.15 	contributions received by the total member contributions otherwise required under this 
35.16 	clause. The equivalent employer contribution, and, if applicable, the equivalent additional 
35.17 	employer contribution must be paid by the governmental subdivision employing the 
35.18 	member if the member makes the equivalent employee contributions. The employer 
35.19 	payments must be made from funds available to the employing unit, using the employer 
35.20 	and additional employer contribution rate or rates in effect at the time that the uniformed 
35.21 	service was performed, applied to the same annual salary rate or rates used to compute the 
35.22 	equivalent member contribution. The governmental subdivision involved may appropriate 
35.23 	money for those payments. The amount of service credit obtainable under this section may 
35.24 	not exceed five years unless a longer purchase period is required under United States Code, 
35.25 	title 38, section 4312. The employing unit shall pay interest on all equivalent member and 
35.26 	employer contribution amounts payable under this clause. Interest must be computed at a 
35.27 	rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the 
35.28 	break in service to the end of the month in which the payment is received. Upon payment, 
35.29 	the employee must be granted allowable service credit for the purchased period; or
35.30 	(9) a period specified under section 353.0162.
35.31 	(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 
35.32 	state officers and employees displaced by the Community Corrections Act, chapter 401, 
35.33 	and transferred into county service under section 401.04, "allowable service" means the 
35.34 	combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 
35.35 	section 352.01, subdivision 11.
36.1 	(c) For a public employee who has prior service covered by a local police or 
36.2 	firefighters relief association that has consolidated with the Public Employees Retirement 
36.3 	Association under chapter 353A or to which section 353.665 applies, and who has 
36.4 	elected the type of benefit coverage provided by the public employees police and fire 
36.5 	fund either under section 353A.08 following the consolidation or under section 353.665, 
36.6 	subdivision 4, "allowable service" is a period of service credited by the local police or 
36.7 	firefighters relief association as of the effective date of the consolidation based on law 
36.8 	and on bylaw provisions governing the relief association on the date of the initiation 
36.9 	of the consolidation procedure.
36.10 	(d) No member may receive more than 12 months of allowable service credit in a 
36.11 	year either for vesting purposes or for benefit calculation purposes. For an active member 
36.12 	who was an active member of the former Minneapolis Firefighters Relief Association 
36.13 	on December 29, 2011, "allowable service" is the period of service credited by the 
36.14 	Minneapolis Firefighters Relief Association as reflected in the transferred records of the 
36.15 	association up to December 30, 2011, and the period of service credited under paragraph 
36.16 	(a), clause (1), after December 30, 2011. For an active member who was an active member 
36.17 	of the former Minneapolis Police Relief Association on December 29, 2011, "allowable 
36.18 	service" is the period of service credited by the Minneapolis Police Relief Association as 
36.19 	reflected in the transferred records of the association up to December 30, 2011, and the 
36.20 	period of service credited under paragraph (a), clause (1), after December 30, 2011.
36.21 	(e) MS 2002 [Expired]

36.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

36.23 	Sec. 3. Minnesota Statutes 2012, section 353.01, subdivision 17a, is amended to read:
36.24 		Subd. 17a.Average salary. (a) "Average salary," for purposes of calculating a 
36.25 	retirement annuity under section 353.29, subdivision 3 unless otherwise specified, means 
36.26 	an amount equivalent to the average of the highest salary of the member, police officer, 
36.27 	or firefighter, whichever applies, upon which employee contributions were paid for any 
36.28 	five successive years of allowable service, based on dates of salary periods as listed on 
36.29 	salary deduction reports. Average salary must be based upon all allowable service if 
36.30 	this service is less than five years.
36.31 	(b) "Average salary" may not include any reduced salary paid during a period 
36.32 	in which the employee is entitled to benefit payments from workers' compensation for 
36.33 	temporary disability, unless the average salary is higher, including this period.
36.34 	(c) "Average salary," for purposes of calculating benefits for a surviving spouse or 
36.35 	dependent children under section 353.657, subdivision 2 or 3, means the average of the 
37.1 	full-time monthly base salary rate in effect during the last six months of allowable service. 
37.2 	If the employment during the last six months of allowable service was part-time, the 
37.3 	average salary must be prorated based on the actual number of hours worked.

37.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

37.5 	Sec. 4. Minnesota Statutes 2012, section 353.01, subdivision 29, is amended to read:
37.6 		Subd. 29.Designated beneficiary. "Designated beneficiary" means the person or,
37.7 	 organization, trust, or estate designated by a member, former member, disabilitant, or 
37.8 	retired member in writing, signed and filed with the association before the death of the 
37.9 	member, former member, disabilitant, or retired member,or a person legally authorized 
37.10 	to act on behalf of the member or former member to receive a refund of the balance of 
37.11 	the member's or former member's accumulated deductions after death. A beneficiary 
37.12 	designation is valid if it is made in the form prescribed by the executive director and 
37.13 	is received by the association on or before the date of death of the member or former 
37.14 	member. If a beneficiary designation is deemed to be invalid for any reason, any remaining 
37.15 	balance of the member's or former member's accumulated deductions are subject to the 
37.16 	provisions of section 353.32, subdivisions 4 and 5.

37.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

37.18 	Sec. 5. Minnesota Statutes 2012, section 353.27, subdivision 7, is amended to read:
37.19 		Subd. 7.Adjustment for erroneous receipts or disbursements. (a) Except 
37.20 	as provided in paragraph (b), erroneous employee deductions and erroneous employer 
37.21 	contributions and additional employer contributions to the general employees retirement 
37.22 	plan of the Public Employees Retirement Association or to the public employees police 
37.23 	and fire retirement plan for a person who otherwise does not qualify for membership 
37.24 	under this chapter, are considered:
37.25 	(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 
37.26 	determination of the error by the association, the person may continue membership in the 
37.27 	association while employed in the same position for which erroneous deductions were 
37.28 	taken, or file a written election to terminate membership and apply for a refund upon 
37.29 	termination of public service or defer an annuity under section 353.34; or
37.30 	(2) invalid, if the initial erroneous employee deduction began on or after January 1, 
37.31 	1990. Upon determination of the error, the association shall refund all erroneous employee 
37.32 	deductions and all erroneous employer contributions as specified in paragraph (e). No 
38.1 	person may claim a right to continued or past membership in the association based on 
38.2 	erroneous deductions which began on or after January 1, 1990.
38.3 	(b) Erroneous deductions taken from the salary of a person who did not qualify 
38.4 	for membership in the general employees retirement plan of the Public Employees 
38.5 	Retirement Association or in the public employees police and fire retirement plan by 
38.6 	virtue of concurrent employment before July 1, 1978, which required contributions to 
38.7 	another retirement fund or relief association established for the benefit of officers and 
38.8 	employees of a governmental subdivision, are invalid. Upon discovery of the error, 
38.9 	allowable service credit for all invalid service if forfeited and, upon termination of public 
38.10 	service, the association shall refund all erroneous employee deductions to the person, with 
38.11 	interest as determined under section 353.34, subdivision 2, and all erroneous employer 
38.12 	contributions without interest to the employer. This paragraph has both retroactive and 
38.13 	prospective application.
38.14 	(c) Adjustments to correct employer contributions and employee deductions taken 
38.15 	in error from amounts which are not salary under section 353.01, subdivision 10, must 
38.16 	be made as specified in paragraph (e). The period of adjustment must be limited to the 
38.17 	fiscal year in which the error is discovered by the association and the immediate two 
38.18 	preceding fiscal years.
38.19 	(d) If there is evidence of fraud or other misconduct on the part of the employee or 
38.20 	the employer, the board of trustees may authorize adjustments to the account of a member 
38.21 	or former member to correct erroneous employee deductions and employer contributions 
38.22 	on invalid salary and the recovery of any overpayments for a period longer than provided 
38.23 	for under paragraph (c).
38.24 	(e) Upon discovery of the receipt of erroneous employee deductions and employer 
38.25 	contributions under paragraph (a), clause (2), or paragraph (c), the association must require 
38.26 	the employer to discontinue the erroneous employee deductions and erroneous employer 
38.27 	contributions reported on behalf of a member. Upon discontinuation, the association must:
38.28 	(1) for a member, provide a refund in the amount of the invalid employee deductions 
38.29 	with interest on the invalid employee deductions at the rate specified under section 353.34, 
38.30 	subdivision 2, from the received date of each invalid salary transaction through the date 
38.31 	the credit or refund is made;
38.32 	(2) for a former member who:
38.33 	(i) is not receiving a retirement annuity or benefit, return the erroneous employee 
38.34 	deductions to the former member through a refund with interest at the rate specified under 
38.35 	section 353.34, subdivision 2, from the received date of each invalid salary transaction 
38.36 	through the date the credit or refund is made; or
39.1 	(ii) is receiving a retirement annuity or disability benefit, or a person who is 
39.2 	receiving an optional annuity or survivor benefit, for whom it has been determined an 
39.3 	overpayment must be recovered, adjust the payment amount and recover the overpayments 
39.4 	as provided under this section; and
39.5 	(3) return the invalid employer contributions reported on behalf of a member or 
39.6 	former member to the employer by providing a credit against future contributions payable 
39.7 	by the employer.
39.8 	(f) In the event that a salary warrant or check from which a deduction for the 
39.9 	retirement fund was taken has been canceled or the amount of the warrant or check 
39.10 	returned to the funds of the department making the payment, a refund of the sum 
39.11 	deducted, or any portion of it that is required to adjust the deductions, must be made 
39.12 	to the department or institution.
39.13 	(g) If the accrual date of anyassociation discovers that a retirement annuity, survivor 
39.14 	benefit, or disability benefit is within the limitation period specified in paragraph (c), and 
39.15 	an overpayment has resultedhas been incorrectly calculated by using invalid service or 
39.16 	salary, or due to any erroneous calculation procedure, the association must recalculate 
39.17 	the annuity or benefit payable and recover anybegin payment of the corrected annuity or 
39.18 	benefit effective the first of the month following discovery of the error. Any overpayment 
39.19 	resulting from the incorrect calculation must be recovered as provided under subdivision 
39.20 	7b, if the accrual date, or any adjustment in the amount of the annuity or benefit calculated 
39.21 	after the accrual date, except adjustments required under section 353.656, subdivision 4, 
39.22 	falls within the current fiscal year and the two immediate previous fiscal years.
39.23 	(h) Notwithstanding the provisions of this subdivision, the association may apply 
39.24 	the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 
39.25 	Compliance Resolution System and not issue a refund of erroneous employee deductions 
39.26 	and employer contributions or not recover a small overpayment of benefits if the cost to 
39.27 	correct the error would exceed the amount of the member refund or overpayment.
39.28 	(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 
39.29 	failure by an employer to follow the statutory requirements for reporting eligible members 
39.30 	and salary must be paid by the employer.

39.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

39.32 	Sec. 6. Minnesota Statutes 2012, section 353.34, subdivision 1, is amended to read:
39.33 		Subdivision 1.Refund or deferred annuity. (a) A former member is entitled to 
39.34 	either a refund of accumulated employee deductions under subdivision 2, or to a deferred 
39.35 	annuity under subdivision 3. Application for a refund may not be made before the date of 
40.1 	termination of public service. Except as specified in paragraph (b), A refund must be paid 
40.2 	within 120 days following receipt of the application unless the applicant has again become 
40.3 	a public employee required to be covered by the association.
40.4 	(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c, 
40.5 	a refund is not payable before termination of service under section 353.01, subdivision 11a.
40.6 	(c) An individual who terminates public service covered by the Public Employees 
40.7 	Retirement Association general employees retirement plan, the MERF division, the Public 
40.8 	Employees Retirement Association police and fire retirement plan, or the public employees 
40.9 	local government correctional service retirement plan, and who is employed by a different 
40.10 	employer and who becomes an active member covered by one of the other two plans, may 
40.11 	receive a refund of employee contributions plus annual compound interest from the plan 
40.12 	from which the member terminated service at the applicable rate specified in subdivision 2.

40.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

40.14 	Sec. 7. Minnesota Statutes 2012, section 353.34, subdivision 2, is amended to read:
40.15 		Subd. 2.Refund with interest. (a) Except as provided in subdivision 1, any person 
40.16 	who ceases to be a public employee is entitled to receive a refund in an amount equal to 
40.17 	accumulated deductions with annual compound interest to the first day of the month 
40.18 	in which the refund is processed.
40.19 	(b) For a person who ceases to be a public employee before July 1, 2011, the refund 
40.20 	interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after 
40.21 	June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the 
40.22 	refund interest is at the rate of four percent.
40.23 	(c) If a person repays a refund and subsequently applies for another refund, the 
40.24 	repayment amount, including interest, is added to the fiscal year balance in which the 
40.25 	repayment was made.
40.26 	(d) If the refund payable to a member is based on employee deductions that are 
40.27 	determined to be invalid under section 353.27, subdivision 7, the interest payable on the 
40.28 	invalid employee deductions is four percent.

40.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

40.30 	Sec. 8. Minnesota Statutes 2012, section 353.50, subdivision 3, is amended to read:
40.31 		Subd. 3.Service credit and benefit liability transfer. (a) All allowable service 
40.32 	credit and salary credit of the members of the Minneapolis Employees Retirement Fund 
40.33 	as specified in the records of the Minneapolis Employees Retirement Fund through June 
41.1 	30, 2010, are transferred to the MERF division of the Public Employees Retirement 
41.2 	Association and are credited by the MERF division. Annuities or benefits of persons 
41.3 	who are active members of the former Minneapolis Employees Retirement Fund on 
41.4 	June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11; 
41.5 	422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16; 
41.6 	422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic 
41.7 	postretirement adjustments after December 31, 2010, under section 356.415.
41.8 	(b) The liability for the payment of annuities and benefits of the Minneapolis 
41.9 	Employees Retirement Fund retirees and benefit recipients as specified in the records of 
41.10 	the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the 
41.11 	MERF division of the Public Employees Retirement Association on June 30, 2010.

41.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

41.13 	Sec. 9. Minnesota Statutes 2012, section 353.50, subdivision 6, is amended to read:
41.14 		Subd. 6.Benefits. (a) Retired, disabled, deferred, and inactive member benefits. 
41.15 	The annuities and benefits of, or attributable to, retired, disabled, deferred, or inactive 
41.16 	Minneapolis Employees Retirement Fund members with that status as of June 30, 2010, 
41.17 	with the exception of post-December 31, 2010, postretirement adjustments, which 
41.18 	are governed by paragraph (b), as calculated under Minnesota Statutes 2008, sections 
41.19 	422A.11; 422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 
41.20 	422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, continue in force after the 
41.21 	administrative consolidation under Laws 2010, chapter 359, article 11.
41.22 	(b) Benefits; benefit eligibility for June 30, 2010, active members. Persons who 
41.23 	were active members of the former Minneapolis Employees Retirement Fund on June 
41.24 	30, 2010, upon satisfying eligibility requirements stated in the applicable sections of 
41.25 	Minnesota Statutes 2008 specified in paragraph (a), are entitled to annuities or benefits 
41.26 	specified in those sections. Eligibility for a formula retirement annuity includes the 
41.27 	requirement in Minnesota Statutes 2008, sections 422A.13 and 422A.16, that the 
41.28 	terminating member has attained retirement age, which is age 60 if the person has at least 
41.29 	ten years of service credit, or any age if the person has 30 or more years of service credit.
41.30 	(b)(c) Postretirement adjustments.After December 31, 2010, annuities and 
41.31 	benefits from the MERF division are eligible for annual automatic postretirement 
41.32 	adjustments solely under section 356.415.

41.33 	EFFECTIVE DATE. This section is effective the day following final enactment.

42.1 	Sec. 10. Minnesota Statutes 2012, section 353.657, subdivision 2, is amended to read:
42.2 		Subd. 2.Benefit amount. (a) The spouse of a deceased member is entitled to 
42.3 	receive a monthly benefit for life equal to the following percentage of the member's 
42.4 	average full-time monthly salary rate, as defined in section 353.01, subdivision 17a, 
42.5 	paragraph (c),  as a member of the police and fire plan in effect over the last six months of 
42.6 	allowable service preceding the month in which death occurred:
42.7 	(1) if the death was a line of duty death, 60 percent of the stated average salary 
42.8 	is payable; and
42.9 	(2) if the death was not a line of duty death or if death occurred while receiving 
42.10 	disability benefits that accrued before July 1, 2007, 50 percent of the stated average salary 
42.11 	is payable.
42.12 	(b) If the member was a part-time employee in the position for which the employee 
42.13 	qualified for participation in the police and fire plan, the monthly survivor benefit is based 
42.14 	on the salary rate in effect for that member's part-time service during the last six months 
42.15 	of allowable service. If the member's status changed from full time to part time fordue 
42.16 	to health reasons during the last year12 months of employment, notwithstanding the 
42.17 	definition of average salary in section 353.01, subdivision 17a, paragraph (c), the average 
42.18 	salary used to compute the monthly survivor benefit ismust be based on the full-time 
42.19 	salary rate of the position held as a member of the police and fire plan in effect over the 
42.20 	last six months of allowable service preceding the month in which the death occurred.

42.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

42.22 	Sec. 11. Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:
42.23 		Subd. 2a.Death while eligible survivor benefit. (a) If a member or former member 
42.24 	who has attained the age of at least 50 years and either who is vested under section 
42.25 	353.01, subdivision 47, or who has credit for at least 30 years of allowable service, 
42.26 	regardless of age attained, dies before the annuity or disability benefit becomes payable, 
42.27 	notwithstanding any designation of beneficiary to the contrary, the surviving spouse may 
42.28 	elect to receive a death while eligible survivor benefit.
42.29 	(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 
42.30 	20, a former spouse of the member, if any, is entitled to a portion of the death while 
42.31 	eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 
42.32 	filed with the association. If there is no surviving spouse or child or children, a former 
42.33 	spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 
42.34 	1, if provided for in a marriage dissolution decree but not a death while eligible survivor 
42.35 	benefit despite the terms of a marriage dissolution decree filed with the association.
43.1 	(c) The benefit may be elected instead of a refund with interest under section 353.32, 
43.2 	subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and 
43.3 	2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 
43.4 	which the member could have qualified for on the date of death, computed as provided in 
43.5 	sections 353.651, subdivisions 2 andsubdivision 3, and 353.30, subdivision 3.
43.6 	(d) The surviving spouse may apply for the annuity at any time after the date 
43.7 	on which the deceased employee would have attained the required age for retirement 
43.8 	based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71, 
43.9 	subdivision 2, apply to a deferred annuity payable under this subdivision.
43.10 	(e) No payment accrues beyond the end of the month in which entitlement to 
43.11 	such annuity has terminated. An amount equal to the excess, if any, of the accumulated 
43.12 	contributions which were credited to the account of the deceased employee over and 
43.13 	above the total of the annuities paid and payable to the surviving spouse must be paid to 
43.14 	the deceased member's last designated beneficiary or, if none, to the legal representative of 
43.15 	the estate of such deceased member.
43.16 	(f) Any member may request in writing, with the signed consent of the spouse, that 
43.17 	this subdivision not apply and that payment be made only to the designated beneficiary, as 
43.18 	otherwise provided by this chapter.
43.19 	(g) For a member who is employed as a full-time firefighter by the Department of 
43.20 	Military Affairs of the state of Minnesota, allowable service as a full-time state Military 
43.21 	Affairs Department firefighter credited by the Minnesota State Retirement System may be 
43.22 	used in meeting the minimum allowable service requirement of this subdivision.

43.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

43.24 	Sec. 12. Minnesota Statutes 2012, section 353.657, subdivision 3, is amended to read:
43.25 		Subd. 3.Dependent children. (a) A dependent child, as defined in section 353.01, 
43.26 	subdivision 15, is entitled to receive a monthly benefit equal to ten percent of the member's 
43.27 	average full-time monthly salary rate, as defined in section 353.01, subdivision 17a, 
43.28 	paragraph (c),  as a member of the police and fire plan in effect over the last six months of 
43.29 	allowable service preceding the month in which death occurred.
43.30 	(b) If the member's status changed from full-time to part-time due to health reasons 
43.31 	during the last 12 months of employment, notwithstanding the definition of average salary 
43.32 	in section 353.01, subdivision 17a, paragraph (c), the average salary used to compute the 
43.33 	monthly dependent child benefit must be based on the full-time salary rate of the position 
43.34 	held as a member of the police and fire plan in effect over the last six months of allowable 
43.35 	service preceding the month in which the death occurred.
44.1 	(c) Payments for the benefit of a dependent child must be made to the surviving 
44.2 	parent, or to the legal guardian of the child or to any adult person with whom the child 
44.3 	may at the time be living, provided only that the parent or other person to whom any 
44.4 	amount is to be paid advises the board in writing that the amount will be held or used in 
44.5 	trust for the benefit of the child.

44.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

44.7 	Sec. 13. Minnesota Statutes 2012, section 353F.02, subdivision 3, is amended to read:
44.8 		Subd. 3.Effective date of privatization. "Effective date of privatization" means 
44.9 	the date that the operation of thea medical facility or other public employing unit is 
44.10 	assumed by another employer or the date that thea medical facility or other public 
44.11 	employing unit is purchased by another employer and active membership in the Public 
44.12 	Employees Retirement Association consequently terminates.

44.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

44.14 	Sec. 14. Minnesota Statutes 2012, section 353F.02, subdivision 4, is amended to read:
44.15 		Subd. 4.Medical facility. "Medical facility" means:
44.16 	(1) Bridges Medical Services;
44.17 	(2) Cedarview Care Center in Steele County;
44.18 	(3) the City of Cannon Falls Hospital;
44.19 	(4) the Chris Jenson Health and Rehabilitation Center in St. Louis County;
44.20 	(5) Cornerstone Nursing and Rehabilitation Center in Clearwater County Memorial 
44.21 	Hospital doing business as Clearwater Health Services in Bagley;
44.22 	(6) the Dassel Lakeside Community Home;
44.23 	(7) the Douglas County Hospital, with respect to the Mental Health Unit;
44.24 	(8) the Fair Oaks Lodge, Wadena;
44.25 	(9) the Glencoe Area Health Center;
44.26 	(10) Hutchinson Area Health Care;
44.27 	(11) Lake County Sunrise Home;
44.28 	(11)(12) the Lakefield Nursing Home;
44.29 	(12)(13) the Lakeview Nursing Home in Gaylord;
44.30 	(13)(14) the Luverne Public Hospital;
44.31 	(14)(15) the Oakland Park Nursing Home;
44.32 	(15)(16) the RenVilla Nursing Home;
45.1 	(16)(17) the Rice Memorial Hospital in Willmar, with respect to the Department 
45.2 	of Radiology and the Department of Radiation/Oncology;
45.3 	(17)(18) the St. Peter Community Health Care Center;
45.4 	(18)(19) the Traverse Care Center in Traverse County;
45.5 	(19)(20) the Waconia-Ridgeview Medical Center;
45.6 	(20)(21) the Weiner Memorial Medical Center, Inc.;
45.7 	(21)(22) the Wheaton Community Hospital; and
45.8 	(22)(23) the Worthington Regional Hospital.

45.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

45.10 	Sec. 15. Minnesota Statutes 2012, section 353F.02, is amended by adding a subdivision 
45.11 	to read:
45.12 		Subd. 4a.Privatized former public employer. "Privatized former public employer" 
45.13 	means a medical facility or other employing unit formerly included in the definition of 
45.14 	governmental subdivision under section 353.01, subdivision 6, that is privatized and 
45.15 	whose employees are certified for participation under this chapter.

45.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

45.17 	Sec. 16. Minnesota Statutes 2012, section 353F.02, subdivision 6, is amended to read:
45.18 		Subd. 6.Terminated medical facility or otherPrivatized former public 
45.19 	employing unit employee. "Terminated medical facility or other(a) "Privatized former 
45.20 	public employing unit employee" means a person who:
45.21 	(1) was employed by the privatized former public employer on the day before the 
45.22 	effective date by the medical facility or other public employing unit of privatization; or
45.23 	(2) terminated employment with the medical facility or otherprivatized former 
45.24 	public employing unitemployer on the day before the effective date; and
45.25 	(3) was a participant in the general employees retirement plan of the Public 
45.26 	Employees Retirement Association at the time of termination of employment with the 
45.27 	medical facility or otherprivatized former public employing unit employer.
45.28 	(b) Privatized former public employee does not mean a person who, on the day 
45.29 	before the effective date of privatization, was simultaneously employed with the privatized 
45.30 	former public employer and by a governmental subdivision under section 353.01, 
45.31 	subdivision 6, and who, after the effective date of privatization, continues to accrue 
45.32 	service credit under section 353.01, subdivision 16, through simultaneous employment 
45.33 	with a governmental subdivision.

46.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

46.2 	Sec. 17. Minnesota Statutes 2012, section 353F.025, subdivision 1, is amended to read:
46.3 		Subdivision 1.Eligibility determination. (a) The chief clerical officer of a 
46.4 	governmental subdivision may submit a resolution from the governing body to the 
46.5 	executive director of the Public Employees Retirement Association which supports 
46.6 	providing coverage under this chapter for employees of that governmental subdivision 
46.7 	who are privatized, and which states that the governing body will pay for actuarial 
46.8 	calculations, as further specified in paragraph (c).
46.9 	(b) The governing body must also provide a copy of any applicable purchase or 
46.10 	lease agreement and any other information requested by the executive director to allow the 
46.11 	executive director to verify that under the proposed employer change, the new employer 
46.12 	does not qualify as a governmental subdivision under section 353.01, subdivision 6, 
46.13 	making the employees ineligible for continued coverage as active members of the general 
46.14 	employees retirement plan of the Public Employees Retirement Association.
46.15 	(c) Following receipt of a resolution and a determination by the executive director 
46.16 	that the new employer is not a governmental subdivision, the executive director shall 
46.17 	direct the consulting actuary retained under section 356.214 to determine whether the 
46.18 	general employees retirement plan of the Public Employees Retirement Association, if 
46.19 	coverage under this chapter is provided, is expected to receive a net gain or a net loss if 
46.20 	privatization occurs. A net gain is expected if the actuarial liability of the special benefit 
46.21 	coverage provided under this chapter, if extended to the applicable employees under the 
46.22 	privatization, is less than the actuarial gain otherwise to accrue to the plan. A net loss is 
46.23 	expected if the actuarial accrued liability of the special benefit coverage provided under 
46.24 	this chapter, if extended to the applicable employees under the privatization, is more than 
46.25 	the actuarial gain otherwise to accrue to the plan. The date of the actuarial calculations 
46.26 	used to make this determination must be within one year of the effective date, as defined 
46.27 	in section 353F.02, subdivision 3 of privatization.

46.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

46.29 	Sec. 18. Minnesota Statutes 2012, section 353F.025, subdivision 2, is amended to read:
46.30 		Subd. 2.Recommendation to legislature Reporting privatizations. (a) If the 
46.31 	actuarial calculations under subdivision 1, paragraph (c), indicate thatprivatization can 
46.32 	be approved because a net gain to the general employees retirement plan of the Public 
46.33 	Employees Retirement Association is expected due to the privatization, or if paragraph (c)
46.34 	(b) applies, the executive director shall, following acceptance of the actuarial calculations 
47.1 	by the board of trustees,  forward a recommendationnotice and supporting documentation, 
47.2 	including a copy of the actuary's report and findings,  to the chair of the Legislative 
47.3 	Commission on Pensions and Retirement, the chair of the Governmental Operations, 
47.4 	Reform, Technology and Elections Committee of the house of representatives, the chair 
47.5 	of the State and Local Government Operations and Oversight Committee of the senate,
47.6 	 and the executive director of the Legislative Commission on Pensions and Retirement
47.7 	 and the chairs and the ranking minority members of the committees with jurisdiction over 
47.8 	governmental operations in the house of representatives and senate. The recommendation 
47.9 	must be in the form of an addition to the definition of "medical facility" under section 
47.10 	353F.02, subdivision 4, or to "other public employing unit" under section 353F.02, 
47.11 	subdivision 5, whichever is applicable. The recommendation must be forwarded to the 
47.12 	legislature before January 15 for the recommendation to be considered in that year's 
47.13 	legislative session. The recommendation may be included as part of public pension 
47.14 	administrative legislation under section 356B.05.
47.15 	(b) If a medical facility or other public employing unit listed under section 353F.02, 
47.16 	subdivision 4 or 5, fails to privatize within one year of the final enactment date of the 
47.17 	legislation adding the entity to the applicable definition, its inclusion under this chapter is 
47.18 	voided, and the executive director shall include in the subsequent proposed legislation under 
47.19 	paragraph (a) a recommendation that the applicable entity be stricken from the definition.
47.20 	(c)(b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the 
47.21 	executive director shall forward a recommendationrecommend to the board of trustees 
47.22 	that the privatization be included as an addition under paragraph (a)approved if the chief 
47.23 	clerical officer of the applicable governmental subdivision submits a resolution from 
47.24 	the governing body specifying that a lump sum payment will be made to the executive 
47.25 	directorPublic Employees Retirement Association equal to the net loss, plus interest. 
47.26 	The interest must be computed using the applicable ultimate preretirement interest rate 
47.27 	assumption under section 356.215, subdivision 8, expressed as a monthly rate, from the 
47.28 	date of the actuarial valuation from which the actuarial accrued liability data was used to 
47.29 	determine the net loss in the actuarial study under subdivision 1, to the date of payment, 
47.30 	with annual compounding. Payment must be made on or after the effective date defined 
47.31 	under section 353F.02 of privatization.
47.32 	(c) The Public Employees Retirement Association must maintain a list that includes 
47.33 	the names of all privatized former public employers in the association's comprehensive 
47.34 	annual financial report and on the association's Web site. Annually by March 1, the 
47.35 	association must submit to the executive director of the Legislative Commission on 
48.1 	Pensions and Retirement the names of any privatized former public employers approved 
48.2 	since the publication of the previous fiscal year's comprehensive annual financial report.

48.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

48.4 	Sec. 19. Minnesota Statutes 2012, section 353F.03, is amended to read:
48.5 	353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
48.6 	Notwithstanding any provision of chapter 353 to the contrary, a terminated medical 
48.7 	facility or otherprivatized former public employing unit employee is eligible to receive a 
48.8 	retirement annuity under section 353.29 of the edition of Minnesota Statutes published 
48.9 	in the year before the year in which the privatization occurred, without regard to the 
48.10 	requirement specified in section 353.01, subdivision 47.

48.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

48.12 	Sec. 20. Minnesota Statutes 2012, section 353F.04, is amended to read:
48.13 	353F.04 AUGMENTATION INTEREST RATES FOR TERMINATED 
48.14 	MEDICAL OR OTHERPRIVATIZED FORMER PUBLIC EMPLOYING UNIT 
48.15 	FACILITY EMPLOYEES.
48.16 		Subdivision 1.Enhanced augmentation rates. (a) The deferred annuity of a 
48.17 	terminated medical facility or otherprivatized former public employing unit employee is 
48.18 	subject to augmentation under section 353.71, subdivision 2, of the edition of Minnesota 
48.19 	Statutes published in the year in which the privatization occurred, except that the rate of 
48.20 	augmentation is as specified in this subdivision.
48.21 	(b) This paragraph applies if the legislation adding the medical facility or other 
48.22 	employing unit to section 353F.02, subdivision 4 or 5, as applicable,effective date of 
48.23 	privatization was enacted before July 26, 2005, and became effective before January 1, 
48.24 	2008, for the Hutchinson Area Health Careon or before January 1, 2007, for all other 
48.25 	medical facilities and all other employing units and also applies to Hutchinson Area Health 
48.26 	Care with a privatization effective date of January 1, 2008. For a terminated medical 
48.27 	facility or otherprivatized former public employing unit employee, the augmentation 
48.28 	rate is 5.5 percent compounded annually until January 1 following the year in which the 
48.29 	person attains age 55. From that date to the effective date of retirement, the augmentation 
48.30 	rate is 7.5 percent compounded annually.
48.31 	(c) If paragraph (b) is not applicable, and if the effective date of the privatization is 
48.32 	before January 1, 2011, the augmentation rate is four percent compounded annually until 
49.1 	January 1, following the year in which the person attains age 55. From that date to the 
49.2 	effective date of retirement, the augmentation rate is six percent compounded annually.
49.3 	(d) If the effective date of the privatization is after December 31, 2010, the applicable 
49.4 	augmentation rate depends on the result of computations specified in section 353F.025, 
49.5 	subdivision 1. If those computations indicate no loss or a net gain to the fund of the 
49.6 	general employees retirement plan of the Public Employees Retirement Association, the 
49.7 	augmentation rate is 2.0 percent compounded annually until the effective date of retirement. 
49.8 	If the computations under that subdivision indicate a net loss to the fund if a 2.0 percent 
49.9 	augmentation rate is used, but a net gain or no loss if a 1.0 percent rate is used, then the 
49.10 	augmentation rate is 1.0 percent compounded annually until the effective date of retirement.
49.11 	(e) The term "effective date of the privatization" as used in this subdivision means 
49.12 	the "effective date" as defined in section 353F.02, subdivision 3.
49.13 		Subd. 2.Exceptions. The increased augmentation rates specified in subdivision 
49.14 	1 do not apply if the terminated medical facility or otherto a privatized former public 
49.15 	employing unit employee:
49.16 	(1) beginning the first of the month in which the privatized former public employee 
49.17 	becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3, if 
49.18 	the employee continues to be covered and accrues at least six months of credited service; or
49.19 	(2) beginning the first of the month after a privatized former public employee 
49.20 	terminates service with the successor entity; or
49.21 	(2)(3) if the person begins receipt of a retirement annuity while employed by 
49.22 	the employer which assumed operations of or purchased the medical facility or other
49.23 	privatized former public employing unit or purchased the medical facility or other public 
49.24 	employing unit employer.

49.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

49.26 	Sec. 21. Minnesota Statutes 2012, section 353F.05, is amended to read:
49.27 	353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE 
49.28 	FOR EARLY RETIREMENT PURPOSES.
49.29 	(a) For the purpose of determining eligibility for early retirement benefits provided 
49.30 	under section 353.30, subdivision 1a, of the edition of Minnesota Statutes published in 
49.31 	the year before the year in which the privatization occurred, and notwithstanding any 
49.32 	provision of chapter 353, to the contrary, the years of allowable service for a terminated 
49.33 	medical facility or otherprivatized former public employing unit employee who transfers 
49.34 	employment on the effective date of privatization and does not apply for a refund of 
50.1 	contributions under section 353.34, subdivision 1, of the edition of Minnesota Statutes 
50.2 	published in the year before the year in which the privatization occurred, or any similar 
50.3 	provision, includes service with the successor employer to the medical facility or other
50.4 	privatized former public employing unitemployer following the effective date. The 
50.5 	successor employer shall provide any reports that the executive director of the Public 
50.6 	Employees Retirement Association may reasonably request to permit calculation of 
50.7 	benefits.
50.8 	(b) To be eligible for early retirement benefits under this section, the individual must 
50.9 	separate from service with the successor to the privatized former public employer to the 
50.10 	medical facility. The terminated eligible individual privatized former public employee, or 
50.11 	an individual authorized to act on behalf of that individual employee, may apply for an 
50.12 	annuity following application procedures under section 353.29, subdivision 4.

50.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

50.14 	Sec. 22. Minnesota Statutes 2012, section 353F.051, subdivision 1, is amended to read:
50.15 		Subdivision 1.Eligibility. A terminated medical facility or otherprivatized former 
50.16 	public employing unit employee who is totally and permanently disabled under Minnesota 
50.17 	Statutes 1998, section 353.01, subdivision 19, and who had a medically documented 
50.18 	preexisting condition of the disability before the termination of coverage, may apply for 
50.19 	a disability benefit.

50.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

50.21 	Sec. 23. Minnesota Statutes 2012, section 353F.052, is amended to read:
50.22 	353F.052 APPLICATION OF SURVIVING SPOUSE, DEPENDENT CHILD 
50.23 	PROVISION.
50.24 	Notwithstanding any provisions of law to the contrary, subdivisions within section 
50.25 	353.32 of the edition of Minnesota Statutes published in the year before the year in which 
50.26 	a privatization occurred, applicable to the surviving spouse or dependent children of a 
50.27 	former member as defined in section 353.01, subdivision 7a, apply to the survivors of a 
50.28 	terminated medical facility or otherprivatized former public employing unit employee.

50.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

50.30 	Sec. 24. [353F.057] TERMINATION FROM SERVICE REQUIREMENT.
51.1 	Upon termination of service from the privatized former public employer or any 
51.2 	successor entity after the effective date of privatization, a privatized former public 
51.3 	employee must separate from any employment relationship with the privatized former 
51.4 	public employer or any successor entity for at least 30 days to qualify to receive a 
51.5 	retirement annuity under this chapter.

51.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

51.7 	Sec. 25. Minnesota Statutes 2012, section 353F.06, is amended to read:
51.8 	353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 
51.9 	LIMITATIONS.
51.10 	If a privatized former public employee satisfies the separation from service 
51.11 	requirement in section 353F.057 and thereafter resumes employment with the privatized 
51.12 	former public employer or any successor entity or a governmental subdivision under 
51.13 	section 353.01, subdivision 6, the reemployed annuitant earnings limitations of section 
51.14 	353.37 apply to any service by a terminated medical facility or other public employing 
51.15 	unit employee as an employee of the successor employer to the medical facility.

51.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

51.17 	Sec. 26. Minnesota Statutes 2012, section 353F.07, is amended to read:
51.18 	353F.07 EFFECT ON REFUND.
51.19 	Notwithstanding any provision of chapter 353 to the contrary, terminated medical 
51.20 	facility or otherprivatized former public employing unit employees may receive a refund 
51.21 	of employee accumulated contributions plus interest as provided in section 353.34, 
51.22 	subdivision 2, at any time after the transfer of employment to the successor employer of 
51.23 	the terminated medical facility or otherprivatized former public employing unit employer. 
51.24 	If a terminated medical facility or otherprivatized former public employing unit employee 
51.25 	has received a refund from a pension plan listed in section 356.30, subdivision 3, the 
51.26 	person may not repay that refund unless the person again becomes a member of one of 
51.27 	those listed plans and complies with section 356.30, subdivision 2.

51.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

51.29 	Sec. 27. Minnesota Statutes 2012, section 353F.08, is amended to read:
51.30 	353F.08 COUNSELING SERVICES.
52.1 	The medical facility or otherprivatized former public employing unitemployer and 
52.2 	the executive director of the Public Employees Retirement Association shall provide 
52.3 	terminated medical facility or otherprivatized former public employing unit employees 
52.4 	with counseling on their benefits available under the general employees retirement plan 
52.5 	of the Public Employees Retirement Association during the 90 days followinga period 
52.6 	mutually agreed upon before or after the effective date of privatization.

52.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

52.8 	Sec. 28. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:
52.9 		Subdivision 1.Annual postretirement adjustments; generally. (a) Except as 
52.10 	otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, retirement annuity, disability 
52.11 	benefit, or survivor benefit recipients of a covered retirement plan are entitled to a 
52.12 	postretirement adjustment annually on January 1, as follows:
52.13 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
52.14 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
52.15 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
52.16 	increase; and
52.17 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
52.18 	benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 
52.19 	percent for each month that the person has been receiving an annuity or benefit must be 
52.20 	applied, effective on January 1 following the calendar year in which the person has been 
52.21 	retired for less than 12 months.
52.22 	(b) The increases provided by this subdivision commence on January 1, 2010.
52.23 	(c) An increase in annuity or benefit payments under this section must be made 
52.24 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
52.25 	executive director of the covered retirement plan requesting that the increase not be made.
52.26 	(d) The retirement annuity payable to a person who retires before becoming eligible 
52.27 	for Social Security benefits and who has elected the optional payment as provided in 
52.28 	section 353.29, subdivision 6, must be treated as the sum of a period certain retirement 
52.29 	annuity and a life retirement annuity for the purposes of any postretirement adjustment. 
52.30 	The period certain retirement annuity plus the life retirement annuity must be the 
52.31 	annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 
52.32 	adjustment granted on the period certain retirement annuity must terminate when the 
52.33 	period certain retirement annuity terminates.

52.34 	EFFECTIVE DATE. This section is effective January 1, 2014.

53.1 	Sec. 29. Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:
53.2 		Subd. 1b.Annual postretirement adjustments; PERA; general employees 
53.3 	retirement plan and local government correctional retirement plan. (a) Retirement 
53.4 	annuity, disability benefit, or survivor benefit recipients of the general employees 
53.5 	retirement plan of the Public Employees Retirement Association and the local government 
53.6 	correctional service retirement plan are entitled to a postretirement adjustment annually 
53.7 	on January 1, as follows:
53.8 	(1) for January 1, 2011, and each successive January 1 until funding stability is 
53.9 	restored for the applicable retirement plan, a postretirement increase of one percent must 
53.10 	be applied each year, effective on January 1, to the monthly annuity or benefit amount of 
53.11 	each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 
53.12 	12 full months as of the current June 30;
53.13 	(2) for January 1, 2011, and each successive January 1 until funding stability is 
53.14 	restored for the applicable retirement plan, for each annuitant or benefit recipient who has 
53.15 	been receiving an annuity or a benefit for at least one full month, but less than 12 full 
53.16 	months as of the current June 30, an annual postretirement increase of 1/12 of one percent 
53.17 	for each month the person has been receiving an annuity or benefit must be applied;
53.18 	(3) for each January 1 following the restoration of funding stability for the applicable 
53.19 	retirement plan, a postretirement increase of 2.5 percent must be applied each year, 
53.20 	effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 
53.21 	recipient who has been receiving an annuity or benefit for at least 12 full months as of 
53.22 	the current June 30; and
53.23 	(4) for each January 1 following restoration of funding stability for the applicable 
53.24 	retirement plan, for each annuity or benefit recipient who has been receiving an annuity or 
53.25 	a benefit for at least one full month, but less than 12 full months as of the current June 
53.26 	30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person 
53.27 	has been receiving an annuity or benefit must be applied.
53.28 	(b) Funding stability is restored when the market value of assets of the applicable 
53.29 	retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 
53.30 	applicable plan in the most recent prior actuarial valuation prepared under section 356.215
53.31 	and the standards for actuarial work by the approved actuary retained by the Public 
53.32 	Employees Retirement Association under section 356.214.
53.33 	(c) If, after applying the increase as provided for in paragraph (a), clauses (3) 
53.34 	and (4), the market value of the applicable retirement plan is determined in the next 
53.35 	subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent 
53.36 	of the actuarial accrued liability of any of the applicable Public Employees Retirement 
54.1 	Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be 
54.2 	applied as of the next successive January until funding stability is again restored.
54.3 	(d) An increase in annuity or benefit payments under this section must be made 
54.4 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
54.5 	executive director of the Public Employees Retirement Association requesting that the 
54.6 	increase not be made.
54.7 	(e) The retirement annuity payable to a person who retires before becoming eligible 
54.8 	for Social Security benefits and who has elected the optional payment, as provided in 
54.9 	section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement 
54.10 	annuity and a life retirement annuity for the purposes of any postretirement adjustment. 
54.11 	The period-certain retirement annuity plus the life retirement annuity must be the 
54.12 	annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 
54.13 	adjustment granted on the period-certain retirement annuity must terminate when the 
54.14 	period-certain retirement annuity terminates.

54.15 	EFFECTIVE DATE. This section is effective January 1, 2014.

54.16 	Sec. 30. Minnesota Statutes 2012, section 356.635, subdivision 1, is amended to read:
54.17 		Subdivision 1.Retirement benefit commencement. (a) The retirement benefit of a 
54.18 	member who has terminated employment must begin no later than the later of April 1 of 
54.19 	the calendar year following the calendar year that the member attains the federal minimum 
54.20 	distribution age under section 401(a)(9) of the Internal Revenue Code or April 1 of the 
54.21 	calendar year following the calendar year in which the member terminated employment.
54.22 	(b) The consent requirements of section 411(a)(11) of the Internal Revenue Code do 
54.23 	not apply to the extent that a distribution is required to satisfy the requirements of section 
54.24 	401(a)(9) of the Internal Revenue Code.

54.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

54.26 	Sec. 31.  REPEALER.
 54.27 	(a) Minnesota Statutes 2012, sections 353F.02, subdivisions 4 and 5; and 353F.025, 
54.28 	subdivision 3, are repealed.
54.29 	(b) Minnesota Statutes 2012, section 353.29, subdivision 6, is repealed.

54.30 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
54.31 	Paragraph (b) is effective January 1, 2014.

55.1 	ARTICLE 4
55.2 	BENEFIT ACCRUAL RATE SPECIFICATION

55.3 	Section 1. Minnesota Statutes 2012, section 352.115, subdivision 3, is amended to read:
55.4 		Subd. 3.Retirement annuity formula. (a) This paragraph, in conjunction with 
55.5 	section 352.116, subdivision 1, applies to a person who became a covered employee or a 
55.6 	member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, 
55.7 	unless paragraph (b), in conjunction with section 352.116, subdivision 1a, produces a 
55.8 	higher annuity amount, in which case paragraph (b) will apply applies. The employee's 
55.9 	average salary, as defined in section 352.01, subdivision 14a, multiplied by the1.2 percent 
55.10 	specified in section 356.315, subdivision 1, per year of allowable service for the first ten 
55.11 	years and the1.7 percent specified in section 356.315, subdivision 2, for each later year of 
55.12 	allowable service and pro rata for completed months less than a full year shall determine
55.13 	determines the amount of the retirement annuity to which the employee is entitled.
55.14 	(b) This paragraph applies to a person who has become at least 55 years old and 
55.15 	first became a covered employee after June 30, 1989, and to any other covered employee 
55.16 	who has become at least 55 years old and whose annuity amount, when calculated under 
55.17 	this paragraph and in conjunction with section 352.116, subdivision 1a, is higher than it is 
55.18 	when calculated under paragraph (a), in conjunction with section 352.116, subdivision 1. 
55.19 	The employee's average salary, as defined in section 352.01, subdivision 14a, multiplied 
55.20 	by the1.7 percent specified in section 356.315, subdivision 2, for each year of allowable 
55.21 	service and pro rata for months less than a full year shall determinedetermines the amount 
55.22 	of the retirement annuity to which the employee is entitled.

55.23 	Sec. 2. Minnesota Statutes 2012, section 352.87, subdivision 3, is amended to read:
55.24 		Subd. 3.Retirement annuity formula. A person specified in subdivision 1 is 
55.25 	entitled to receive a retirement annuity applicable for allowable service credit under this 
55.26 	section calculated by multiplying the employee's average salary, as defined in section 
55.27 	352.01, subdivision 14a, by the2.0 percent specified in section 356.315, subdivision 2a,
55.28 	 for each year or portions of a year of allowable service credit. No reduction for retirement 
55.29 	before the normal retirement age, as specified in section 352.01, subdivision 25, applies 
55.30 	to service to which this section applies.

55.31 	Sec. 3. Minnesota Statutes 2012, section 352.93, subdivision 2, is amended to read:
55.32 		Subd. 2.Calculating monthly annuity. The monthly annuity under this section 
55.33 	must be determined by multiplying the average monthly salary by the number of years, or 
56.1 	completed months, of covered correctional service by the2.4 percent specified in section 
56.2 	356.315, subdivision 5 if employed as a correctional state employee before July 1, 2010, 
56.3 	or 2.2 percent if employed as a correctional state employee after June 30, 2010.

56.4 	Sec. 4. Minnesota Statutes 2012, section 352.95, subdivision 1, is amended to read:
56.5 		Subdivision 1.Duty disability; computation of benefit. A covered correctional 
56.6 	employee who is determined to have a duty disability, physical or psychological, as 
56.7 	defined under section 352.01, subdivision 17b, is entitled to a duty disability benefit. The 
56.8 	duty disability benefit must be based on covered correctional service only. The duty 
56.9 	disability benefit amount is 50 percent of the average salary defined in section 352.93, 
56.10 	plus an additional 2.4 percent equal to that specified in section 356.315, subdivision 5, if 
56.11 	employed as a correctional state employee before July 1, 2010, or 2.2 percent if employed 
56.12 	as a correctional state employee after June 30, 2010, for each year of covered correctional 
56.13 	service in excess of 20 years, ten months, prorated for completed months.

56.14 	Sec. 5. Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:
56.15 		Subd. 2.Normal retirement annuity. The annuity must be paid in monthly 
56.16 	installments. The annuity shall beis equal to the amount determined by multiplying the 
56.17 	average monthly salary of the member by the3.0 percent specified in section 356.315, 
56.18 	subdivision 6, for each year and pro rata for completed months of service.

56.19 	Sec. 6. Minnesota Statutes 2012, section 352B.10, subdivision 1, is amended to read:
56.20 		Subdivision 1.Duty disability. A member who is determined to qualify for duty 
56.21 	disability as defined in section 352B.011, subdivision 7, is entitled to receive a duty 
56.22 	disability benefit while disabled. The benefits must be paid monthly. The duty disability 
56.23 	benefit is an amount equal to the member's average monthly salary multiplied by 60 percent, 
56.24 	plus an additional 3.0 percent equal to that specified in section 356.315, subdivision 6, for 
56.25 	each year and pro rata for completed months of service in excess of 20 years, if any.

56.26 	Sec. 7. Minnesota Statutes 2012, section 353.29, subdivision 3, is amended to read:
56.27 		Subd. 3.Retirement annuity formula. (a) This paragraph, in conjunction with 
56.28 	section 353.30, subdivisions 1a, 1b, and 1c, applies to any member who first became a 
56.29 	public employee or a member of a pension fund listed in section 356.30, subdivision 3, 
56.30 	before July 1, 1989, unless paragraph (b), in conjunction with section 353.30, subdivision 
56.31 	5, produces a higher annuity amount, in which case paragraph (b) will apply applies. The 
56.32 	average salary as defined in section 353.01, subdivision 17a, multiplied by the2.2 percent 
57.1 	specified in section 356.315, subdivision 3, for each year of allowable service for the 
57.2 	first ten years and thereafter by the2.7 percent specified in section 356.315, subdivision 
57.3 	4, per year of allowable service and completed months less than a full year for a basic 
57.4 	member, and the1.2 percent specified in section 356.315, subdivision 1, for each year 
57.5 	of allowable service for the first ten years and thereafter by the1.7 percent specified in 
57.6 	section 356.315, subdivision 2, per year of allowable service and completed months less 
57.7 	than a full year for a coordinated member shall determinedetermines the amount of the 
57.8 	normal retirement annuity.
57.9 	(b) This paragraph applies to a member who has become at least 55 years old and first 
57.10 	became a public employee after June 30, 1989, and to any other member whose annuity 
57.11 	amount, when calculated under this paragraph and in conjunction with section 353.30, 
57.12 	subdivision 5, is higher than it is when calculated under paragraph (a), in conjunction with 
57.13 	section 353.30, subdivisions 1a, 1b, and 1c. The average salary, as defined in section 
57.14 	353.01, subdivision 17a, multiplied by the2.7 percent specified in section 356.315, 
57.15 	subdivision 4, for each year of allowable service and completed months less than a full 
57.16 	year for a basic member and the1.7 percent specified in section 356.315, subdivision 2,
57.17 	 per year of allowable service and completed months less than a full year for a coordinated 
57.18 	member, shall determinedetermines the amount of the normal retirement annuity.

57.19 	Sec. 8. Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:
57.20 		Subd. 3.Retirement annuity formula. The average salary as defined in section 
57.21 	353.01, subdivision 17a, multiplied by the3.0 percent specified in section 356.315, 
57.22 	subdivision 6, per year of allowable service determines the amount of the normal 
57.23 	retirement annuity. If the member has earned allowable service for performing services 
57.24 	other than those of a police officer or firefighter, the annuity representing that service must 
57.25 	be computed under sections 353.29 and 353.30.

57.26 	Sec. 9. Minnesota Statutes 2012, section 353.656, subdivision 1, is amended to read:
57.27 		Subdivision 1.Duty disability; computation of benefits. (a) A member of the 
57.28 	police and fire plan, other than a firefighter covered by section 353.6511, or a police 
57.29 	officer covered by section 353.6512, who is determined to qualify for duty disability as 
57.30 	defined in section 353.01, subdivision 41, shallis entitled to receive disability benefits 
57.31 	during the period of such disability in an amount equal to 60 percent of the average salary 
57.32 	as defined in section 353.01, subdivision 17a, plus an additional percentage specified 
57.33 	under section 356.315, subdivision 6,3.0 percent of that average salary for each year 
57.34 	of service in excess of 20 years.
58.1 	(b) To be eligible for a benefit under paragraph (a), the member must have:
58.2 	(1) not met the requirements for a retirement annuity under section 353.651, 
58.3 	subdivision 1; or
58.4 	(2) met the requirements under that subdivision, but does not have at least 20 years 
58.5 	of allowable service credit.
58.6 	(c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a 
58.7 	period of 60 months from the disability benefit accrual date and at the end of that period 
58.8 	is subject to provisions of subdivision 5a.
58.9 	(d) If the disability under this subdivision occurs before the member has at least five 
58.10 	years of allowable service credit in the police and fire plan, the disability benefit must be 
58.11 	computed on the average salary from which deductions were made for contribution to 
58.12 	the police and fire fund.

58.13 	Sec. 10. Minnesota Statutes 2012, section 353.656, subdivision 1a, is amended to read:
58.14 		Subd. 1a.Total and permanent duty disability; computation of benefits. (a) A 
58.15 	member of the police and fire plan, other than a firefighter covered by section 353.6511, or 
58.16 	a police officer covered by section 353.6512, whose disabling condition is determined 
58.17 	to be a duty disability that is also a permanent and total disability as defined in section 
58.18 	353.01, subdivision 19, is entitled to receive, for life, disability benefits in an amount 
58.19 	equal to 60 percent of the average salary as defined in section 353.01, subdivision 17a, 
58.20 	plus an additional 3.0 percent specified in section 356.315, subdivision 6, of that average 
58.21 	salary for each year of service in excess of 20 years.
58.22 	(b) A disability benefit payable under paragraph (a) is subject to eligibility review 
58.23 	under section 353.33, subdivision 6, but the review may be waived if the executive 
58.24 	director receives a written statement from the association's medical advisor that no 
58.25 	improvement can be expected in the member's disabling condition that was the basis for 
58.26 	payment of the benefit under paragraph (a). A member receiving a disability benefit 
58.27 	under this subdivision who is found to no longer be permanently and totally disabled as 
58.28 	defined under section 353.01, subdivision 19, but continues to meet the definition for 
58.29 	receipt of a duty disability under section 353.01, subdivision 41, is subject to subdivision 
58.30 	1 upon written notice from the association's medical advisor that the person is no longer 
58.31 	considered permanently and totally disabled.
58.32 	(c) If a member approved for disability benefits under this subdivision dies before 
58.33 	attaining normal retirement age as defined in section 353.01, subdivision 37, paragraph 
58.34 	(b), or within 60 months of the effective date of the disability, whichever is later, 
58.35 	the surviving spouse is entitled to receive a survivor benefit under section 353.657, 
59.1 	subdivision 2, paragraph (a), clause (1), if the death is the direct result of the disabling 
59.2 	condition for which disability benefits were approved, or section 353.657, subdivision 
59.3 	2, paragraph (a), clause (2), if the death is not directly related to the disabling condition 
59.4 	for which benefits were approved under this subdivision.
59.5 	(d) If the election of an actuarial equivalent optional annuity is not made at the time 
59.6 	the permanent and total disability benefit accrues, an election must be made within 90 
59.7 	days before the member attains normal retirement age as defined under section 353.01, 
59.8 	subdivision 37, paragraph (b), or having collected total and permanent disability benefits 
59.9 	for 60 months, whichever is later. If a member receiving disability benefits who has 
59.10 	dependent children dies, subdivision 6a, paragraph (c), applies.

59.11 	Sec. 11. Minnesota Statutes 2012, section 353.656, subdivision 3a, is amended to read:
59.12 		Subd. 3a.Total and permanent regular disability; computation of benefits. (a) 
59.13 	A member of the police and fire plan, other than a firefighter covered by section 353.6511, 
59.14 	or a police officer covered by section 353.6512, whose disabling condition is determined 
59.15 	to be a regular disability under section 353.01, subdivision 46, that is also a permanent 
59.16 	and total disability as defined in section 353.01, subdivision 19, is entitled to receive, for 
59.17 	life, a disability benefit in an amount equal to 45 percent of the average salary as defined 
59.18 	in section 353.01, subdivision 17a, plus an additional 3.0 percent specified in section 
59.19 	356.315, subdivision 6, of that average salary for each year of service in excess of 15 years.
59.20 	(b) A disability benefit payable under paragraph (a) is subject to eligibility review 
59.21 	under section 353.33, subdivision 6, but the review may be waived if the executive 
59.22 	director receives a written statement from the association's medical advisor that no 
59.23 	improvement can be expected in the member's disabling condition that was the basis for 
59.24 	payment of the benefit under paragraph (a). A member receiving a disability benefit under 
59.25 	this subdivision who is found to no longer be permanently and totally disabled as defined 
59.26 	under section 353.01, subdivision 19, but continues to meet the definition for receipt 
59.27 	of a regular disability under section 353.01, subdivision 46, is subject to subdivision 3 
59.28 	upon written notice from the association's medical advisor that the person is no longer 
59.29 	considered permanently and totally disabled.
59.30 	(c) A member approved for disability benefits under this subdivision may elect 
59.31 	to receive a normal disability benefit or an actuarial equivalent optional annuity. If the 
59.32 	election of an actuarial equivalent optional annuity is not made at the time the total and 
59.33 	permanent disability benefit accrues, an election must be made within 90 days before 
59.34 	the member attains normal retirement age as defined in section 353.01, subdivision 37, 
59.35 	paragraph (b), or having collected disability benefits for 60 months, whichever is later. 
60.1 	No surviving spouse benefits are payable if the member dies during the period in which 
60.2 	a normal total and permanent disability benefit is being paid. If a member receiving 
60.3 	disability benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.

60.4 	Sec. 12. Minnesota Statutes 2012, section 353E.04, subdivision 3, is amended to read:
60.5 		Subd. 3.Annuity amount. (a) The average salary as defined in subdivision 2, 
60.6 	multiplied by the1.9 percent specified in section 356.315, subdivision 5a, for each year of 
60.7 	allowable service, determines the amount of the normal retirement annuity.
60.8 	(b) If a person has earned allowable service in the general employees retirement plan 
60.9 	of the Public Employees Retirement Association or the public employees police and fire 
60.10 	fund prior toretirement plan before participation under this chapter, the retirement annuity 
60.11 	representing such service must be computed in accordance with the formula specified in 
60.12 	sections 353.29 and 353.30 or 353.651, whichever applies.

60.13 	Sec. 13. Minnesota Statutes 2012, section 353E.06, subdivision 1, is amended to read:
60.14 		Subdivision 1.Duty disability qualification requirements. A local government 
60.15 	correctional employee who is determined to qualify for a duty disability as defined in 
60.16 	section 353E.001, subdivision 1, is entitled to a disability benefit. The disability benefit 
60.17 	must be based on covered service under this chapter only and is an amount equal to 47.5 
60.18 	percent of the average salary defined in section 353E.04, subdivision 2, plus an additional 
60.19 	1.9 percent equal to that specified in section 356.315, subdivision 5a, for each year of 
60.20 	covered service under this chapter in excess of 25 years.

60.21 	Sec. 14. Minnesota Statutes 2012, section 354.44, subdivision 6, is amended to read:
60.22 		Subd. 6.Computation of formula program retirement annuity. (a) The formula 
60.23 	retirement annuity must be computed in accordance with the applicable provisions of the 
60.24 	formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
60.25 	section 354.05, subdivision 13a, for the period of the member's formula service credit.
60.26 	(b) This paragraph, in conjunction with paragraph (c), applies to a person who first 
60.27 	became a member of the association or a member of a pension fund listed in section 
60.28 	356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with 
60.29 	paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 
60.30 	average salary as defined in section 354.05, subdivision 13a, multiplied by the following 
60.31 	percentages per year of formula service credit shall determine the amount of the annuity to 
60.32 	which the member qualifying therefor is entitled for service rendered before July 1, 2006:

61.1				Coordinated Member
		Basic Member
	
61.2
61.3
61.4		Each year of service during 
first ten
		the1.2 percent specified 
in section 356.315, 
subdivision 1, per year
		the2.2 percent specified 
in section 356.315, 
subdivision 3, per year
	
61.5
61.6
61.7		Each year of service 
thereafter
		the1.7 percent specified 
in section 356.315, 
subdivision 2, per year
		the2.7 percent specified 
in section 356.315, 
subdivision 4, per year
	
61.8 	For service rendered on or after July 1, 2006, the average salary as defined in section 
61.9 	354.05, subdivision 13a, multiplied by the following percentages per year of service credit, 
61.10 	determines the amount the annuity to which the member qualifying therefor is entitled:

61.11				Coordinated Member
		Basic Member
	
61.12
61.13
61.14		Each year of service during 
first ten
		the1.4 percent specified 
in section 356.315, 
subdivision 1a, per year
		the2.2 percent specified 
in section 356.315, 
subdivision 3, per year
	
61.15
61.16
61.17		Each year of service after 
ten years of service
		the1.9 percent specified 
in section 356.315, 
subdivision 2b, per year
		the2.7 percent specified 
in section 356.315, 
subdivision 4, per year
	
61.18 	(c)(i) This paragraph applies only to a person who first became a member of the 
61.19 	association or a member of a pension fund listed in section 356.30, subdivision 3, before 
61.20 	July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 
61.21 	conjunction with this paragraph than when calculated under paragraph (d), in conjunction 
61.22 	with paragraph (e).
61.23 	(ii) Where any member retires prior to normal retirement age under a formula 
61.24 	annuity, the member shall be paid a retirement annuity in an amount equal to the normal 
61.25 	annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 
61.26 	that the member is under normal retirement age at the time of retirement except that for 
61.27 	any member who has 30 or more years of allowable service credit, the reduction shall be 
61.28 	applied only for each month that the member is under age 62.
61.29 	(iii) Any member whose attained age plus credited allowable service totals 90 years 
61.30 	is entitled, upon application, to a retirement annuity in an amount equal to the normal 
61.31 	annuity provided in paragraph (b), without any reduction by reason of early retirement.
61.32 	(d) This paragraph applies to a member who has become at least 55 years old and 
61.33 	first became a member of the association after June 30, 1989, and to any other member 
61.34 	who has become at least 55 years old and whose annuity amount when calculated 
61.35 	under this paragraph and in conjunction with paragraph (e), is higher than it is when 
61.36 	calculated under paragraph (b), in conjunction with paragraph (c). For a basic member, 
61.37 	the average salary, as defined in section 354.05, subdivision 13a, multiplied by the2.7 
61.38 	percent specified by section 356.315, subdivision 4, for each year of service for a basic 
61.39 	member shall determinedetermines the amount of the retirement annuity to which the 
62.1 	basic member is entitled. The annuity of a basic member who was a member of the 
62.2 	former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must be 
62.3 	determined according to the annuity formula under the articles of incorporation of the 
62.4 	former Minneapolis Teachers Retirement Fund Association in effect as of that date. For a 
62.5 	coordinated member, the average salary, as defined in section 354.05, subdivision 13a, 
62.6 	multiplied by the1.7 percent specified in section 356.315, subdivision 2, for each year of 
62.7 	service rendered before July 1, 2006, and by the1.9 percent specified in section 356.315, 
62.8 	subdivision 2b, for each year of service rendered on or after July 1, 2006, determines the 
62.9 	amount of the retirement annuity to which the coordinated member is entitled.
62.10 	(e) This paragraph applies to a person who has become at least 55 years old and first 
62.11 	becomes a member of the association after June 30, 1989, and to any other member who 
62.12 	has become at least 55 years old and whose annuity is higher when calculated under 
62.13 	paragraph (d) in conjunction with this paragraph than when calculated under paragraph 
62.14 	(b), in conjunction with paragraph (c). An employee who retires under the formula annuity 
62.15 	before the normal retirement age shall be paid the normal annuity provided in paragraph 
62.16 	(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would 
62.17 	be payable to the employee if the employee deferred receipt of the annuity and the annuity 
62.18 	amount were augmented at an annual rate of three percent compounded annually from the 
62.19 	day the annuity begins to accrue until the normal retirement age if the employee became 
62.20 	an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 
62.21 	becomes an employee after June 30, 2006.
62.22 	(f) No retirement annuity is payable to a former employee with a salary that exceeds 
62.23 	95 percent of the governor's salary unless and until the salary figures used in computing 
62.24 	the highest five successive years average salary under paragraph (a) have been audited by 
62.25 	the Teachers Retirement Association and determined by the executive director to comply 
62.26 	with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

62.27 	Sec. 15. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:
62.28 		Subd. 4.Computation of normal coordinated retirement annuity; St. Paul 
62.29 	fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers 
62.30 	Retirement Fund Association.
62.31 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
62.32 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
62.33 	by the retirement annuity formula percentage.
62.34 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
62.35 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
63.1 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
63.2 	higher annuity amount, in which case paragraph (d) will apply. The retirement annuity 
63.3 	formula percentage for purposes of this paragraph is the1.2 percent specified in section 
63.4 	356.315, subdivision 1, per year for each year of coordinated service for the first ten 
63.5 	years and the1.7 percent specified in section 356.315, subdivision 2, for each year of 
63.6 	coordinated service thereafter.
63.7 	(d) This paragraph applies to a person who has become at least 55 years old and who 
63.8 	first becomes a member after June 30, 1989, and to any other member who has become 
63.9 	at least 55 years old and whose annuity amount, when calculated under this paragraph 
63.10 	and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 
63.11 	(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 
63.12 	percentage for purposes of this paragraph is the1.7 percent specified in section 356.315, 
63.13 	subdivision 2, for each year of coordinated service.

63.14 	Sec. 16. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:
63.15 		Subd. 4a.Computation of normal coordinated retirement annuity; Duluth 
63.16 	fund. (a) This subdivision applies to the new law coordinated program of the Duluth 
63.17 	Teachers Retirement Fund Association.
63.18 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
63.19 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
63.20 	by the retirement annuity formula percentage.
63.21 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
63.22 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
63.23 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
63.24 	higher annuity amount, in which case paragraph (d) applies. The retirement annuity 
63.25 	formula percentage for purposes of this paragraph is the1.2 percent specified in section 
63.26 	356.315, subdivision 1, per year for each year of coordinated service for the first ten 
63.27 	years and the1.7 percent specified in section 356.315, subdivision 2, for each subsequent 
63.28 	year of coordinated service.
63.29 	(d) This paragraph applies to a person who is at least 55 years old and who first 
63.30 	becomes a member after June 30, 1989, and to any other member who is at least 55 years 
63.31 	old and whose annuity amount, when calculated under this paragraph and in conjunction 
63.32 	with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction 
63.33 	with subdivision 6. The retirement annuity formula percentage for purposes of this 
63.34 	paragraph is the1.7 percent specified in section 356.315, subdivision 2, for each year of 
63.35 	coordinated service.

64.1 	Sec. 17. Minnesota Statutes 2012, section 356.30, subdivision 1, is amended to read:
64.2 		Subdivision 1.Eligibility; computation of annuity. (a) Notwithstanding any 
64.3 	provisions of the laws governing the retirement plans enumerated in subdivision 3, a 
64.4 	person who has met the qualifications of paragraph (b) may elect to receive a retirement 
64.5 	annuity from each enumerated retirement plan in which the person has at least one-half 
64.6 	year of allowable service, based on the allowable service in each plan, subject to the 
64.7 	provisions of paragraph (c).
64.8 	(b) A person may receive, upon retirement, a retirement annuity from each 
64.9 	enumerated retirement plan in which the person has at least one-half year of allowable 
64.10 	service, and augmentation of a deferred annuity calculated at the appropriate rate under 
64.11 	the laws governing each public pension plan or fund named in subdivision 3, based on 
64.12 	the date of the person's initial entry into public employment from the date the person 
64.13 	terminated all public service if:
64.14 	(1) the person has allowable service in any two or more of the enumerated plans;
64.15 	(2) the person has sufficient allowable service in total that equals or exceeds the 
64.16 	applicable service credit vesting requirement of the retirement plan with the longest 
64.17 	applicable service credit vesting requirement; and
64.18 	(3) the person has not begun to receive an annuity from any enumerated plan or the 
64.19 	person has made application for benefits from each applicable plan and the effective 
64.20 	dates of the retirement annuity with each plan under which the person chooses to receive 
64.21 	an annuity are within a one-year period.
64.22 	(c) The retirement annuity from each plan must be based upon the allowable service, 
64.23 	accrual rates, and average salary in the applicable plan except as further specified or 
64.24 	modified in the following clauses:
64.25 	(1) the laws governing annuities must be the law in effect on the date of termination 
64.26 	from the last period of public service under a covered retirement plan with which the person 
64.27 	earned a minimum of one-half year of allowable service credit during that employment;
64.28 	(2) the "average salary" on which the annuity from each covered plan in which 
64.29 	the employee has credit in a formula plan must be based on the employee's highest five 
64.30 	successive years of covered salary during the entire service in covered plans;
64.31 	(3) the accrual rates to be used by each plan must be those percentages prescribed by 
64.32 	each plan's formula as continued for the respective years of allowable service from one 
64.33 	plan to the next, recognizing all previous allowable service with the other covered plans;
64.34 	(4) the allowable service in all the plans must be combined in determining eligibility 
64.35 	for and the application of each plan's provisions in respect to reduction in the annuity 
64.36 	amount for retirement prior to normal retirement age; and
65.1 	(5) the annuity amount payable for any allowable service under a nonformula plan 
65.2 	of a covered plan must not be affected, but such service and covered salary must be used 
65.3 	in the above calculation.
65.4 	(d) This section does not apply to any person whose final termination from the last 
65.5 	public service under a covered plan was before May 1, 1975.
65.6 	(e) For the purpose of computing annuities under this section, the accrual rates 
65.7 	used by any covered plan, except the public employees police and fire plan, the judges 
65.8 	retirement fund, and the State Patrol retirement plan, must not exceed the2.7 percent 
65.9 	specified in section 356.315, subdivision 4, per year of service for any year of service or 
65.10 	fraction thereof. The formula percentage used by the judges retirement fund must not 
65.11 	exceed the percentage rate specified in section 356.315, subdivision 8,3.2 percent per 
65.12 	year of service for any year of service or fraction thereof. The accrual rate used by the 
65.13 	public employees police and fire plan and the State Patrol retirement plan must not exceed 
65.14 	the percentage rate specified in section 356.315, subdivision 6,3.0 percent per year of 
65.15 	service for any year of service or fraction thereof. The accrual rate or rates used by the 
65.16 	legislators retirement plan must not exceed 2.5 percent, but this limit does not apply to the 
65.17 	adjustment provided under section 3A.02, subdivision 1, paragraph (c).
65.18 	(f) Any period of time for which a person has credit in more than one of the covered 
65.19 	plans must be used only once for the purpose of determining total allowable service.
65.20 	(g) If the period of duplicated service credit is more than one-half year, or the person 
65.21 	has credit for more than one-half year, with each of the plans, each plan must apply its 
65.22 	formula to a prorated service credit for the period of duplicated service based on a fraction 
65.23 	of the salary on which deductions were paid to that fund for the period divided by the total 
65.24 	salary on which deductions were paid to all plans for the period.
65.25 	(h) If the period of duplicated service credit is less than one-half year, or when 
65.26 	added to other service credit with that plan is less than one-half year, the service credit 
65.27 	must be ignored and a refund of contributions made to the person in accord with that 
65.28 	plan's refund provisions.

65.29 	Sec. 18. Minnesota Statutes 2012, section 356.315, subdivision 9, is amended to read:
65.30 		Subd. 9.Future benefit accrual rate increases. After January 2, 1998, benefit 
65.31 	accrual rate increases under this section352.115, subdivision 3; 352.87, subdivision 
65.32 	3; 352.93, subdivision 3; 352.95, subdivision 1; 352B.08, subdivision 2; 352B.10, 
65.33 	subdivision 1; 353.29, subdivision 3; 353.651, subdivision 3; 353.656, subdivision 
65.34 	1, 1a, or 3a; 353E.04, subdivision 3; 353E.06, subdivision 1; 354.44, subdivision 6; 
65.35 	354A.31, subdivision 4 or 4a; 356.30, subdivision 1; 490.121, subdivision 22; or 490.124, 
66.1 	subdivision 1, must apply only to allowable service or formula service rendered after the 
66.2 	effective date of the benefit accrual rate increase.

66.3 	Sec. 19. Minnesota Statutes 2012, section 490.121, subdivision 22, is amended to read:
66.4 		Subd. 22.Service credit limit. "Service credit limit" means the greater of: (1) 24 
66.5 	years of allowable service under this chapter; or (2) for judges with allowable service 
66.6 	rendered before July 1, 1980, the number of years of allowable service under chapter 490, 
66.7 	which, when multiplied by the percentage listed in section 356.315, subdivision 72.7 or 8
66.8 	 3.2, whichever is applicable to each year of service, equals 76.8.

66.9 	Sec. 20. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:
66.10 		Subdivision 1.Basic retirement annuity. (a) Except as qualified hereinafter from 
66.11 	and after the mandatory retirement date, the normal retirement date, the early retirement 
66.12 	date, or one year from the disability retirement date, as the case may be, a retiring judge is 
66.13 	eligible to receive a retirement annuity from the judges' retirement fund.
66.14 	(b) The retirement annuity is an amount equal to: (1) the2.7 percent specified in 
66.15 	section 356.315, subdivision 7, multiplied by the judge's final average compensation with 
66.16 	that result then multiplied by the number of years and fractions of years of allowable 
66.17 	service rendered before July 1, 1980; plus (2) the3.2 percent specified in section 356.315, 
66.18 	subdivision 8, multiplied by the judge's final average compensation with that result then 
66.19 	multiplied by the number of years and fractions of years of allowable service rendered 
66.20 	after June 30, 1980.
66.21 	(c) Service that exceeds the service credit limit in section 490.121, subdivision 22, 
66.22 	must be excluded in calculating the retirement annuity, but the compensation earned by 
66.23 	the judge during this period of judicial service must be used in determining a judge's final 
66.24 	average compensation and calculating the retirement annuity.

66.25 	Sec. 21.  REPEALER.
 66.26 	Minnesota Statutes 2012, section 356.315, subdivisions 1, 1a, 2, 2a, 2b, 3, 4, 5, 5a, 
66.27 	6, 7, and 8, are repealed.

66.28 	Sec. 22. EFFECTIVE DATE.
 66.29 	Sections 1 to 21 are effective the day following final enactment.

67.1 	ARTICLE 5
67.2 	REVISIONS AND REPEALS OF FORMER LOCAL POLICE AND PAID 
67.3 	FIREFIGHTER RELIEF ASSOCIATION LAWS

67.4 	Section 1. Minnesota Statutes 2012, section 6.495, subdivision 1, is amended to read:
67.5 		Subdivision 1.Audit and examinations. All powers and duties conferred and 
67.6 	imposed upon the state auditor with respect to state, county, and first-class city officers, 
67.7 	institutions, and property are hereby extended to the various fire and police relief 
67.8 	associations in the state. The state auditor shall annually audit the special and general 
67.9 	funds of the relief association or, at the request of the board of trustees or the municipality, 
67.10 	the state auditor may contract for an annual audit by a certified public accountant. The 
67.11 	state auditor may determine that an annual audit is not necessary, in which case the state 
67.12 	auditor shall develop a plan for examination of unaudited relief associations, and shall 
67.13 	prescribe suitable systems of accounts and budgeting, and forms, books, and instructions 
67.14 	concerning the same.
67.15 	Copies of the written report of the state auditor on the financial condition and 
67.16 	accounts of the relief association shallmust be filed with the board of trustees of the 
67.17 	relief association and the governing body of the municipality associated with the relief 
67.18 	association. If the report discloses malfeasance, misfeasance, or nonfeasance with regard 
67.19 	to relief association funds, copies thereof shallmust be filed with the city attorney or county 
67.20 	attorney in the city or county in which the relief association is located, and these officials of 
67.21 	the law shall institute proceedings, civil or criminal, as the law and public interest require.

67.22 	Sec. 2. Minnesota Statutes 2012, section 6.495, subdivision 3, is amended to read:
67.23 		Subd. 3.Report to commissioner of revenue. The state auditor shall file with 
67.24 	the commissioner of revenue a financial compliance report certifying for each relief 
67.25 	association:
67.26 	(1) the completion of the annual financial report required pursuant tounder section 
67.27 	69.051 and the auditing or certification of those financial reports pursuant tounder 
67.28 	subdivision 1; and
67.29 	(2) the receipt of any actuarial valuations required pursuant tounder section 69.77 
67.30 	or69.773 or sections 31 to 42.

67.31 	Sec. 3. Minnesota Statutes 2012, section 6.67, is amended to read:
67.32 	6.67 PUBLIC ACCOUNTANTS; REPORT OF POSSIBLE MISCONDUCT.
68.1 	Whenever a public accountant in the course of auditing the books and affairs of a 
68.2 	political subdivision or a local public pension plan governed by section 69.77, sections 
68.3 	69.771 to 69.775, or chapter 354A or 424A, or sections 31 to 42, discovers evidence 
68.4 	pointing to nonfeasance, misfeasance, or malfeasance, on the part of an officer or 
68.5 	employee in the conduct of duties and affairs, the public accountant shall promptly make 
68.6 	a report of such discovery to the state auditor and the county attorney of the county in 
68.7 	which the governmental unit is situated and the public accountant shall also furnish a 
68.8 	copy of the report of audit upon completion to said officers. The county attorney shall 
68.9 	act on such report in the same manner as required by law for reports made to the county 
68.10 	attorney by the state auditor.

68.11 	Sec. 4. Minnesota Statutes 2012, section 13D.01, subdivision 1, is amended to read:
68.12 		Subdivision 1.In executive branch, local government. All meetings, including 
68.13 	executive sessions, must be open to the public
68.14 	(a) of a state
68.15 	(1) agency,
68.16 	(2) board,
68.17 	(3) commission, or
68.18 	(4) department,
68.19 	when required or permitted by law to transact public business in a meeting;
68.20 	(b) of the governing body of a
68.21 	(1) school district however organized,
68.22 	(2) unorganized territory,
68.23 	(3) county,
68.24 	(4) statutory or home rule charter city,
68.25 	(5) town, or
68.26 	(6) other public body;
68.27 	(c) of any
68.28 	(1) committee,
68.29 	(2) subcommittee,
68.30 	(3) board,
68.31 	(4) department, or
68.32 	(5) commission,
68.33 	of a public body; and
68.34 	(d) of the governing body or a committee of:
68.35 	(1) a statewide public pension plan defined in section 356A.01, subdivision 24; or
69.1 	(2) a local public pension plan governed by section 69.77, sections 69.771 to 69.775, 
69.2 	or chapter 354A, or sections 31 to 42.

69.3 	Sec. 5. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:
69.4 		Subdivision 1.Definitions. Unless the language or context clearly indicates that 
69.5 	a different meaning is intended, the following words and terms, for the purposes of this 
69.6 	chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
69.7 	(a) "Commissioner" means the commissioner of revenue.
69.8 	(b) "Municipality" means:
69.9 	(1) a home rule charter or statutory city;
69.10 	(2) an organized town;
69.11 	(3) a park district subject to chapter 398;
69.12 	(4) the University of Minnesota;
69.13 	(5) for purposes of the fire state aid program only, an American Indian tribal 
69.14 	government entity located within a federally recognized American Indian reservation;
69.15 	(6) for purposes of the police state aid program only, an American Indian tribal 
69.16 	government with a tribal police department which exercises state arrest powers under 
69.17 	section 626.90, 626.91, 626.92, or 626.93;
69.18 	(7) for purposes of the police state aid program only, the Metropolitan Airports 
69.19 	Commission; and
69.20 	(8) for purposes of the police state aid program only, the Department of Natural 
69.21 	Resources and the Department of Public Safety with respect to peace officers covered 
69.22 	under chapter 352B.
69.23 	(c) "Minnesota Firetown Premium Report" means a form prescribed by the 
69.24 	commissioner containing space for reporting by insurers of fire, lightning, sprinkler 
69.25 	leakage and extended coverage premiums received upon risks located or to be performed 
69.26 	in this state less return premiums and dividends.
69.27 	(d) "Firetown" means the area serviced by any municipality having a qualified fire 
69.28 	department or a qualified incorporated fire department having a subsidiary volunteer 
69.29 	firefighters' relief association.
69.30 	(e) "Market value" means latest available market value of all property in a taxing 
69.31 	jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 
69.32 	taxation obtained from information which appears on abstracts filed with the commissioner 
69.33 	of revenue or equalized by the State Board of Equalization.
69.34 	(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 
69.35 	commissioner for reporting by each fire and casualty insurer of all premiums received 
70.1 	upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 
70.2 	during the preceding calendar year, with reference to insurance written for insuring against 
70.3 	the perils contained in auto insurance coverages as reported in the Minnesota business 
70.4 	schedule of the annual financial statement which each insurer is required to file with 
70.5 	the commissioner in accordance with the governing laws or rules less return premiums 
70.6 	and dividends.
70.7 	(g) "Peace officer" means any person:
70.8 	(1) whose primary source of income derived from wages is from direct employment 
70.9 	by a municipality or county as a law enforcement officer on a full-time basis of not less 
70.10 	than 30 hours per week;
70.11 	(2) who has been employed for a minimum of six months prior to December 31 
70.12 	preceding the date of the current year's certification under subdivision 2, clause (b);
70.13 	(3) who is sworn to enforce the general criminal laws of the state and local ordinances;
70.14 	(4) who is licensed by the Peace Officers Standards and Training Board and is 
70.15 	authorized to arrest with a warrant; and
70.16 	(5) who is a member of the State Patrol retirement plan or the public employees 
70.17 	police and fire fund.
70.18 	(h) "Full-time equivalent number of peace officers providing contract service" means 
70.19 	the integral or fractional number of peace officers which would be necessary to provide 
70.20 	the contract service if all peace officers providing service were employed on a full-time 
70.21 	basis as defined by the employing unit and the municipality receiving the contract service.
70.22 	(i) "Retirement benefits other than a service pension" means any disbursement 
70.23 	authorized under section 424A.05, subdivision 3, clauses (3) and (4).
70.24 	(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:
70.25 	(1) for the police state aid program and police relief association financial reports:
70.26 	(i) the person who was elected or appointed to the specified position or, in the 
70.27 	absence of the person, another person who is designated by the applicable governing body;
70.28 	(ii) in a park district, the secretary of the board of park district commissioners;
70.29 	(iii) in the case of the University of Minnesota, the official designated by the Board 
70.30 	of Regents;
70.31 	(iv) for the Metropolitan Airports Commission, the person designated by the 
70.32 	commission;
70.33 	(v) for the Department of Natural Resources or the Department of Public Safety, the 
70.34 	respective commissioner;
71.1 	(vi) for a tribal police department which exercises state arrest powers under section 
71.2 	626.90, 626.91, 626.92, or 626.93, the person designated by the applicable American 
71.3 	Indian tribal government; and
71.4 	(2) for the fire state aid program and fire relief association financial reports, the 
71.5 	person who was elected or appointed to the specified position, or, for governmental 
71.6 	entities other than counties, if the governing body of the governmental entity designates 
71.7 	the position to perform the function, the chief financial official of the governmental entity 
71.8 	or the chief administrative official of the governmental entity.
71.9 	(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 
71.10 	retirement plan established by chapter 353G.

71.11 	Sec. 6. Minnesota Statutes 2012, section 69.011, subdivision 2, is amended to read:
71.12 		Subd. 2.Qualification for fire or police state aid. (a) Unless retirement coverage 
71.13 	is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in 
71.14 	order to qualify to receive fire state aid, on or before March 15 annually, in conjunction 
71.15 	with the financial report required pursuant to section 69.051, the clerk of each municipality 
71.16 	having a duly organized fire department as provided in subdivision 4, or the secretary of 
71.17 	each independent nonprofit firefighting corporation having a subsidiary incorporated 
71.18 	firefighters' relief association, whichever is applicable, and the fire chief, shall jointly 
71.19 	certify the existence of the municipal fire department or of the independent nonprofit 
71.20 	firefighting corporation, whichever is applicable, which meets the minimum qualification 
71.21 	requirements set forth in this subdivision, and the fire personnel and equipment of the 
71.22 	municipal fire department or the independent nonprofit firefighting corporation as of the 
71.23 	preceding December 31.
71.24 	(b) Where retirement coverage is provided by the voluntary statewide lump-sum 
71.25 	volunteer firefighter retirement plan, in order to qualify to receive fire state aid, on or 
71.26 	before March 15, annually, the executive director of the Public Employees Retirement 
71.27 	Association shall certify the existence of that coverage for each municipality and the 
71.28 	municipal clerk or independent nonprofit firefighting corporation secretary, whichever 
71.29 	applies, and the applicable fire chief shall certify the fire personnel and fire department 
71.30 	equipment as of the preceding December 31.
71.31 	(c) Certification must be made to the commissioner on a form prescribed by the 
71.32 	commissioner and shall include any other facts the commissioner may require. The 
71.33 	certification must be made to the commissioner in duplicate. Each copy of the certificate 
71.34 	must be duly executed and is deemed to be an original. The commissioner shall forward 
72.1 	one copy to the auditor of the county wherein the fire department is located and shall 
72.2 	retain one copy.
72.3 	(d) On or before March 15 annually the clerk of each municipality having a duly 
72.4 	organized police department and having a duly incorporated relief association shall certify 
72.5 	that fact to the county auditor of the county where the police department is located and to 
72.6 	the commissioner on a form prescribed by the commissioner together with the other facts 
72.7 	the commissioner or auditor may require.
72.8 	(e)(c) Except as provided in subdivision 2b, on or before March 15 annually, in 
72.9 	order to qualify to receive police state aid, the clerk of each municipality and the auditor of 
72.10 	each county employing one or more peace officers as defined in subdivision 1, clause (g), 
72.11 	shall certify the number of such peace officers to the commissioner on forms prescribed by 
72.12 	the commissioner. Credit for officers employed less than a full year must be apportioned. 
72.13 	Each full month of employment of a qualifying officer during the calendar year entitles the 
72.14 	employing municipality or county to credit for 1/12 of the payment for employment of a 
72.15 	peace officer for the entire year. For purposes of sections 69.011 to 69.051, employment 
72.16 	of a peace officer commences when the peace officer is entered on the payroll of the 
72.17 	respective municipal police department or county sheriff's department. No peace officer 
72.18 	may be included in the certification of the number of peace officers by more than one 
72.19 	municipality or countyemploying unit for the same month.
72.20 	(d) A certification made under this subdivision must be filed with the commissioner, 
72.21 	must be made on a form prescribed by the commissioner, and must include any other facts 
72.22 	that the commissioner requires.

72.23 	Sec. 7. Minnesota Statutes 2012, section 69.011, subdivision 3, is amended to read:
72.24 		Subd. 3.Failure to file certificate deemed waiver. (a) If a certification required by 
72.25 	this section is not filed with the commissioner by the due date prescribed by this section, 
72.26 	the commissioner shall notify the county, the municipality, or the nonprofit firefighting 
72.27 	corporation that a portion or all of its current year aid will be forfeited if the certification 
72.28 	is not received within ten days.
72.29 	(b) The amount of aid forfeited is equal to the amount of state police aid or state fire 
72.30 	aid determined for the county, the municipality, or the nonprofit firefighting corporation 
72.31 	for the current year, multiplied by five percent for each week or fraction of a week that 
72.32 	this certification is late. The penalty willmust be computed beginning ten days after the 
72.33 	postmark date of the commissioner's notification as required under this subdivision. All 
72.34 	forfeited aid amounts revert to the general fund in the state treasury. Failure to receive the 
72.35 	certificate form cannotmay not be used as a defense for not filing a failure to file.

73.1 	Sec. 8. Minnesota Statutes 2012, section 69.011, subdivision 4, is amended to read:
73.2 		Subd. 4.Qualification for fire state aid. Any(a) A municipality in this state 
73.3 	qualifies to receive fire state aid if it meets the general requirements of paragraph (b) and 
73.4 	if it meets the specific requirements of paragraph (c).
73.5 	(b) Minimum qualifications for fire state aid include the following:
73.6 	(1) having for more than one year an organized fire department and officially 
73.7 	established by the governing body of the municipality or an independent nonprofit 
73.8 	firefighting corporation created under the nonprofit corporation act of this state and 
73.9 	operating exclusively for firefighting purposes and providing retirement and relief benefits 
73.10 	to its members,; and
73.11 	(2) having a separate subsidiary incorporated firefighter's relief and pension
73.12 	 association providing retirement and relief benefits, or participating in the voluntary 
73.13 	statewide lump-sum volunteer firefighter retirement plan, may qualify to receive state aid 
73.14 	if it meets the followingor, if a paid fire department, having retirement coverage by the 
73.15 	public employees police and fire retirement plan.
73.16 	(c) Minimum requirements for fire state aid also include the following or their 
73.17 	equivalent as determined by the state fire marshal by July 1, 1972:
73.18 	(a)(1) having ten paid or volunteer firefighters including a fire chief and assistant 
73.19 	fire chief, and;
73.20 	(b)(2) having regular scheduled meetings and frequent drills including instructions 
73.21 	in firefighting tactics and in the use, care, and operation of all fire apparatus and 
73.22 	equipment, and;
73.23 	(c)(3) having a motorized fire truck equipped with a motorized pump, 250 gallon or 
73.24 	larger water tank, 300 feet of one inch or larger fire hose in two lines with combination 
73.25 	spray and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, 
73.26 	dry chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars, 
73.27 	axes, lanterns, fire coats, helmets, and boots, and;
73.28 	(d)(4) having apparatus suitably housed in a building of good construction with 
73.29 	facilities for care of hose and equipment, and;
73.30 	(e)(5) having a reliable and adequate method of receiving fire alarms by telephone 
73.31 	or with electric siren and suitable means of sounding an alarm, and;
73.32 	(f)(6) if response is to be provided outside the corporate limits of the municipality 
73.33 	wherein the fire department is located, the municipality hashaving another piece of 
73.34 	motorized apparatus to make the response,; and
73.35 	(g)(7) meeting other requirements that the commissioner establishes by rule.

74.1 	Sec. 9. Minnesota Statutes 2012, section 69.021, subdivision 1, is amended to read:
74.2 		Subdivision 1.Minnesota Firetown Premium Report and Minnesota Aid to 
74.3 	Police Premium Report. The commissioner shall, at the time of mailing tax forms, 
74.4 	send blank copies of the Minnesota Firetown Premium Report and when applicable the 
74.5 	Minnesota Aid to Police Premium Report to each insurer, including township and farmers 
74.6 	mutual insurance companies licensed to write insurance as described in section 69.011, 
74.7 	subdivision 1, clauses (c) and (f) in this state. These reports shallmust contain space 
74.8 	for the insurers name, address, gross premiums less return premiums, dividends, net 
74.9 	premiums, certification and other facts that the commissioner may require.

74.10 	Sec. 10. Minnesota Statutes 2012, section 69.021, subdivision 2, is amended to read:
74.11 		Subd. 2.Report of premiums. (a) Each insurer, including township and farmers 
74.12 	mutual insurers where applicable, shall return to the commissioner the reports described in 
74.13 	subdivision 1 certified by its secretary and president or chief financial officer.
74.14 	(b) The Minnesota Firetown Premium Report shallmust contain a true and accurate 
74.15 	statement of the total premium for all gross direct fire, lightning, sprinkler leakage, and 
74.16 	extended coverage insurance of all domestic mutual insurers and the total premiums for 
74.17 	all gross direct fire, lightning, sprinkler leakage and extended coverage insurance of all 
74.18 	other insurers, less return premiums and dividends received by them on that business 
74.19 	written or done during the preceding calendar year upon property located within the state 
74.20 	or brought into the state for temporary use. The fire and extended coverage portion of 
74.21 	multiperil and multiple peril package premiums and all other combination premiums shall
74.22 	must be determined by applying percentages determined by the commissioner or by rating 
74.23 	bureaus recognized by the commissioner.
74.24 	(c) The Minnesota Aid to Police Premium Report shallmust contain a true and 
74.25 	accurate statement of the total premiums, less return premiums and dividends, on all direct 
74.26 	business received by such insurer in this state, or by its agents for it, in cash or otherwise, 
74.27 	during the preceding calendar year, with reference to insurance written for perils described 
74.28 	in section 69.011, subdivision 1, clause (f).

74.29 	Sec. 11. Minnesota Statutes 2012, section 69.021, subdivision 3, is amended to read:
74.30 		Subd. 3.Penalty for fraudulent, incorrect, incomplete returns and late filing of 
74.31 	report. (a) When it appears to the commissioner that any insurer has made an incomplete or 
74.32 	inaccurate report, the commissioner shall return the report and demand that a complete and 
74.33 	accurate report be filed. If the insurer fails to file a report on or before March 1, annually, 
74.34 	the insurer shall beis liable and shall pay $25 for each seven days delinquent, or fraction 
75.1 	thereof, that the report is delinquent, but not to exceed $200. If the insurer fails to file a 
75.2 	corrected report within 30 days after demand, the insurer is liable for the penalties provided 
75.3 	in this subdivisionparagraph (b) or (c) for knowingly filing an inaccurate or false report.
75.4 	(b) Any insurer whowhich knowingly makes and files an inaccurate or false report 
75.5 	shall beis liable to a fine in an amount of not less than $25 nor more than $1,000, as 
75.6 	determined by the commissioner, and additionally the commissioner of commerce may 
75.7 	revoke the insurer's certificate of authority.
75.8 	(c) Any person whose duty it is to make the report who fails or refuses to make it 
75.9 	within 30 days after notification by the commissioner shall be fined an amount of not 
75.10 	more than $1,000.
75.11 	(d) Failure of the insurer to receive a reporting form shalldoes not excuse the insurer 
75.12 	from filing the report.

75.13 	Sec. 12. Minnesota Statutes 2012, section 69.021, subdivision 4, is amended to read:
75.14 		Subd. 4.Determination of qualified state aid recipients; certification to 
75.15 	commissioner of management and budget. (a) The commissioner shall determine 
75.16 	which municipalities and independent nonprofit firefighting corporations are qualified to 
75.17 	receive fire state aid directly or are qualified to receive the benefit of fire state aid paid 
75.18 	to the voluntary statewide lump-sum volunteer firefighter retirement plan and which 
75.19 	municipalities and counties are qualified to receive police state aid.
75.20 	(b) The commissioner shall determine qualification for state aid upon receipt of:
75.21 	(1) the fire department personnel and equipment certification or the police department 
75.22 	and qualified peace officers certificate, whichever applies, required under section 69.011;
75.23 	(2) the financial compliance report required under section 6.495, subdivision 3, if 
75.24 	applicable; and
75.25 	(3) any other relevant information which comes to the attention of the commissioner.
75.26 	(c) Upon completion of the determination, on or before October 1, the commissioner 
75.27 	shall calculate the amount of:
75.28 	(1) the police state aid which each county or municipality is to receive under 
75.29 	subdivisions 5, 6, 7a, and 10; and
75.30 	(2) the fire state aid which each municipality or nonprofit firefighting corporation 
75.31 	is to receive under subdivisions 5 and 7.
75.32 	(d) The commissioner shall certify to the commissioner of management and budget 
75.33 	the name of each county or municipality, and the amount of state aid which each county or 
75.34 	municipality is to receive, in the case of police state aid. The commissioner shall certify to 
75.35 	the commissioner of management and budget the name of each municipality or independent 
76.1 	nonprofit firefighting corporation and the amount of state aid which each municipality 
76.2 	or independent nonprofit firefighting corporation is to receive directly or the amount of 
76.3 	state aid which the voluntary statewide lump-sum volunteer firefighter retirement plan is 
76.4 	qualified to receive on behalf of the municipality or corporation, in the case of fire state aid.

76.5 	Sec. 13. Minnesota Statutes 2012, section 69.021, subdivision 5, is amended to read:
76.6 		Subd. 5.Calculation of state aid. (a) The amount of fire state aid available for 
76.7 	apportionment, before the addition of the minimum fire state aid allocation amount under 
76.8 	subdivision 7, is equal to 107 percent of the amount of premium taxes paid to the state 
76.9 	upon the fire, lightning, sprinkler leakage, and extended coverage premiums reported to 
76.10 	the commissioner by insurers on the Minnesota Firetown Premium Report. This amount 
76.11 	must be reduced by the amount required to pay the state auditor's costs and expenses of 
76.12 	the audits or exams of the firefighters relief associations.
76.13 	The total amount for apportionment in respect to fire state aid must not be less than 
76.14 	two percent of the premiums reported to the commissioner by insurers on the Minnesota 
76.15 	Firetown Premium Report after subtracting the following amounts:
76.16 	(1) the amount required to pay the state auditor's costs and expenses of the audits or 
76.17 	exams of the firefighters relief associations; and
76.18 	(2) one percent of the premiums reported by town and farmers' mutual insurance 
76.19 	companies and mutual property and casualty companies with total assets of $5,000,000 or 
76.20 	less.
76.21 	(b) The total amount for apportionment as police state aid is equal to 104 percent 
76.22 	of the amount of premium taxes paid to the state on the premiums reported to the 
76.23 	commissioner by insurers on the Minnesota Aid to Police Premium Report, reduced by 
76.24 	the amount required to pay the costs and expenses of the state auditor for audits or exams 
76.25 	of police relief associations. The total amount for apportionment in respect to the police 
76.26 	state aid program must not be less than two percent of the amount of premiums reported 
76.27 	to the commissioner by insurers on the Minnesota Aid to Police Premium Report after 
76.28 	subtracting the amount required to pay the state auditor's cost and expenses of the audits 
76.29 	or exams of the police relief associations.
76.30 	(c) The commissioner shall calculate the percentage of increase or decrease reflected 
76.31 	in the apportionment over or under the previous year's available state aid using the same 
76.32 	premiums as a basis for comparison.
76.33 	(d) In addition to the amount for apportionment of police state aid under paragraph 
76.34 	(b), each year $100,000 must be apportioned for police state aid. An amount sufficient to 
76.35 	pay this increase is annually appropriated from the general fund.

77.1 	Sec. 14. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:
77.2 		Subd. 7.Apportionment of fire state aid to municipalities and relief associations.
 77.3 	(a) The commissioner shall apportion the fire state aid relative to the premiums reported 
77.4 	on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 
77.5 	and/or firefighters relief association qualified under section 69.011, subdivision 4.
77.6 	(b) The commissioner shall calculate an initial fire state aid allocation amount for each 
77.7 	municipality or fire department under paragraph (c) and, if applicable, a minimum fire state 
77.8 	aid allocation amount for each municipality or fire department under paragraph (d). The 
77.9 	municipality or fire department must receivebe apportioned the larger fire state aid amount.
77.10 	(c) The initial fire state aid allocation amount is the amount available for 
77.11 	apportionment as fire state aid under subdivision 5, without the inclusion of any additional 
77.12 	funding amount to support a minimum fire state aid amount under section 423A.02, 
77.13 	subdivision 3, allocated one-half in proportion to the population as shown in the last 
77.14 	official statewide federal census for each fire town and one-half in proportion to the market 
77.15 	value of each fire town, including (1) the market value of tax-exempt property and (2) the 
77.16 	market value of natural resources lands receiving in lieu payments under sections 477A.11 
77.17 	to 477A.14, but excluding the market value of minerals. In the case of incorporated or 
77.18 	municipal fire departments furnishing fire protection to other cities, towns, or townships 
77.19 	as evidenced by valid fire service contracts filed with the commissioner, the distribution 
77.20 	must be adjusted proportionately to take into consideration the crossover fire protection 
77.21 	service. Necessary adjustments must be made to subsequent apportionments. In the case 
77.22 	of municipalities or independent fire departments qualifying for the aid, the commissioner 
77.23 	shall calculate the state aid for the municipality or relief association on the basis of the 
77.24 	population and the market value of the area furnished fire protection service by the fire 
77.25 	department as evidenced by duly executed and valid fire service agreements filed with the 
77.26 	commissioner. If one or more fire departments are furnishing contracted fire service to a 
77.27 	city, town, or township, only the population and market value of the area served by each 
77.28 	fire department may be considered in calculating the state aid and the fire departments 
77.29 	furnishing service shall enter into an agreement apportioning among themselves the 
77.30 	percent of the population and the percent of the market value of each shared service area. 
77.31 	The agreement must be in writing and must be filed with the commissioner.
77.32 	(d) The minimum fire state aid allocation amount is the amount in addition to the 
77.33 	initial fire state allocation amount that is derived from any additional funding amount 
77.34 	to support a minimum fire state aid amount under section 423A.02, subdivision 3, and 
77.35 	allocated to municipalities with volunteer firefighters relief associations or covered by the 
77.36 	voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 
78.1 	of active volunteer firefighters who are members of the relief association as reported 
78.2 	in the annual financial reporting for the calendar year 1993 to the Office of the State 
78.3 	Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 
78.4 	fire departments with volunteer firefighters relief associations receive in total at least a 
78.5 	minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 
78.6 	30 firefighters. If a relief association is established after calendar year 1993 and before 
78.7 	calendar year 2000, the number of active volunteer firefighters who are members of the 
78.8 	relief association as reported in the annual financial reporting for calendar year 1998 
78.9 	to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 
78.10 	shall be used in this determination. If a relief association is established after calendar 
78.11 	year 1999, the number of active volunteer firefighters who are members of the relief 
78.12 	association as reported in the first annual financial reporting submitted to the Office of 
78.13 	the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 
78.14 	determination. If a relief association is terminated as a result of providing retirement 
78.15 	coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 
78.16 	firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 
78.17 	of the municipality covered by the statewide plan as certified by the executive director of 
78.18 	the Public Employees Retirement Association to the commissioner and the state auditor, 
78.19 	but not to exceed 30 active firefighters, must be used in this determination.
78.20 	(e) Unless the firefighters of the applicable fire department are members of the 
78.21 	voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 
78.22 	be paid to the treasurer of the municipality where the fire department is located and the 
78.23 	treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 
78.24 	the aid to the relief association if the relief association has filed a financial report with the 
78.25 	treasurer of the municipality and has met all other statutory provisions pertaining to the 
78.26 	aid apportionment. If the firefighters of the applicable fire department are members of 
78.27 	the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 
78.28 	must be paid to the executive director of the Public Employees Retirement Association 
78.29 	and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
78.30 	(f) The commissioner may make rules to permit the administration of the provisions 
78.31 	of this section.
78.32 	(g) Any adjustments needed to correct prior misallocations must be made to 
78.33 	subsequent fire state aid apportionments.

78.34 	Sec. 15. Minnesota Statutes 2012, section 69.021, subdivision 7a, is amended to read:
79.1 		Subd. 7a.Apportionment of police state aid. (a) Subject to the reduction provided 
79.2 	for under subdivision 10, the commissioner shall apportion the police state aid to each 
79.3 	municipality and, to theeach county, and to the Departments of Natural Resources and 
79.4 	Public Safety in the following manner:
79.5 	(1) for all municipalities maintaining police departments, counties, the Department 
79.6 	of Natural Resources, and the Department of Public Safety, the police state aid must be 
79.7 	distributed in proportion to the relationship that the total number of peace officers, as 
79.8 	determined under section 69.011, subdivision 1, clauseparagraph (g), and subdivision 2, 
79.9 	clauseparagraph (b), employed by that employing unit for 12 calendar months and the 
79.10 	proportional or fractional number who were employed less than 12 months bears to the total 
79.11 	number of peace officers employed by all municipalities and, counties, the Departments of 
79.12 	Natural Resources and Public Safety, subject to any reduction under subdivision 10;
79.13 	(2) for each municipality which contracts with the county for police service, a 
79.14 	proportionate amount of the state aid distributed to the county based on the full-time 
79.15 	equivalent number of peace officers providing contract service to that municipality must 
79.16 	be credited against the municipality's contract obligation; and
79.17 	(3) for each municipality which contracts with another municipality for police 
79.18 	service, a proportionate amount of the state aid distributed to the municipality providing 
79.19 	contract service based on the full-time equivalent number of peace officers providing 
79.20 	contract service to that municipality on a full-time equivalent basis must be credited 
79.21 	against the contract obligation of the municipality receiving contract service.
79.22 	(b) Any necessary additional adjustments must be made to subsequent police state 
79.23 	aid apportionments.

79.24 	Sec. 16. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:
79.25 		Subd. 8.Population and market value. (a) In computations relating to fire state aid 
79.26 	requiring the use of population figures, only official statewide federal census figures are 
79.27 	tomay be used. Increases or decreases in population disclosed by reason of any special 
79.28 	census must not be taken into consideration.
79.29 	(b) In calculations relating to fire state aid requiring the use of market value property 
79.30 	figures, only the latest available market value property figures may be used.

79.31 	Sec. 17. Minnesota Statutes 2012, section 69.021, subdivision 9, is amended to read:
79.32 		Subd. 9.Appeal. (a) In the event that a municipality, a county, a fire relief 
79.33 	association, a police relief association,the Department of Natural Resources, the 
79.34 	Department of Public Safety, or the voluntary statewide lump-sum volunteer firefighter 
80.1 	retirement plan, feels itself to be aggrieved, it may request the commissioner to review 
80.2 	and adjust the apportionment of funds within the county in the case of police state aid, or 
80.3 	within the state in the case of fire state aid.
80.4 	(b) The decision of the commissioner is subject to appeal, review, and adjustment by 
80.5 	the district court in the county in which the applicable municipality, or fire department,
80.6 	or police department is located or by the Ramsey County District Court with respect to 
80.7 	the Department of Natural Resources, the Department of Public Safety, or the voluntary 
80.8 	statewide lump-sum volunteer firefighter retirement plan.

80.9 	Sec. 18. Minnesota Statutes 2012, section 69.021, subdivision 10, is amended to read:
80.10 		Subd. 10.Reduction in police state aid apportionment. (a) The commissioner of 
80.11 	revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph 
80.12 	(b), 6, and 7a, for eligible employer units by the amount of any excess police state aid.
80.13 	(b) "Excess police state aid" is:
80.14 	(1) for counties and for municipalities in which police retirement coverage is 
80.15 	provided wholly by the public employees police and fire fund and all police officers are 
80.16 	members of the plan governed by sections 353.63 to 353.657, the amount in excess of the 
80.17 	employer's total prior calendar year obligation as defined in paragraph (c), as certified by 
80.18 	the executive director of the Public Employees Retirement Association;
80.19 	(2) for municipalities in which police retirement coverage is provided in part by the 
80.20 	public employees police and fire fund governed by sections 353.63 to 353.657 and in 
80.21 	part by a local police consolidation account governed by chapter 353A, and established 
80.22 	before March 2, 1999, for which the municipality declined merger under section 353.665, 
80.23 	subdivision 1, or established after March 1, 1999, the amount in excess of the employer's 
80.24 	total prior calendar year obligation as defined in paragraph (c), plus the amount of the 
80.25 	employer's total prior calendar year obligation under section 353A.09, subdivision 5, 
80.26 	paragraphs (a) and (b), as certified by the executive director of the Public Employees 
80.27 	Retirement Association;
80.28 	(3) for municipalities in which police retirement coverage is provided by the public 
80.29 	employees police and fire plan governed by sections 353.63 to 353.657, in which police 
80.30 	retirement coverage was provided by a police consolidation account under chapter 
80.31 	353A before July 1, 1999, and for which the municipality has an additional municipal 
80.32 	contribution under section 353.665, subdivision 8, paragraph (b), the amount in excess of 
80.33 	the employer's total prior calendar year obligation as defined in paragraph (c), plus the 
80.34 	amount of any additional municipal contribution under section 353.665, subdivision 8, 
81.1 	paragraph (b), until the year 2010, as certified by the executive director of the Public 
81.2 	Employees Retirement Association;
81.3 	(4)(2) for municipalities in which police retirement coverage is provided in part by 
81.4 	the public employees police and fire fund governed by sections 353.63 to 353.657 and in 
81.5 	part by a local police relief association governed by sections 69.77 and 423A.01 the cities 
81.6 	of Fairmont and Minneapolis, the amount in excess of the employer's total prior calendar 
81.7 	year obligation as defined in paragraph (c), as certified by the executive director of the 
81.8 	public employees retirement association, plus the amount of the financial requirements of 
81.9 	the relief association certified to the applicable municipality during the prior calendar year 
81.10 	under section 69.77, subdivisions 4 and 5, reduced by the amount of member contributions 
81.11 	deducted from the covered salary of the relief association during the prior calendar year 
81.12 	under section 69.77, subdivision 3, as certified by the chief administrative officer of the 
81.13 	applicable municipality any additional municipal contribution under section 353.668, 
81.14 	subdivision 6, or 353.669, subdivision 6;
81.15 	(5)(3) for the Metropolitan Airports Commission, the amount in excess of the 
81.16 	commission's total prior calendar year obligation as defined in paragraph (c), as certified 
81.17 	by the executive director of the Public Employees Retirement Association; and
81.18 	(6)(4) for the Department of Natural Resources and for the Department of Public 
81.19 	Safety, the amount in excess of the employer's total prior calendar year obligation under 
81.20 	section 352B.02, subdivision 1c, for plan members who are peace officers under section 
81.21 	69.011, subdivision 1, clause (g), as certified by the executive director of the Minnesota 
81.22 	State Retirement System.
81.23 	(c) The employer's total prior calendar year obligation with respect to the public 
81.24 	employees police and fire plan under paragraph (b), clause (1), is the total prior calendar 
81.25 	year obligation under section 353.65, subdivision 3, for police officers as defined in 
81.26 	section 353.64, subdivision 2, and the actual total prior calendar year obligation under 
81.27 	section 353.65, subdivision 3, for firefighters, as defined in section 353.64, subdivision 
81.28 	3, but not to exceed for those firefighters the applicable following amounts employer 
81.29 	calendar year amount:

81.30		Municipality
	Maximum Amount
		
81.31		Albert Lea
	$54,157.01
		
81.32		Anoka
	10,399.31
		
81.33		Apple Valley
	5,442.44
		
81.34		Austin
	49,864.73
		
81.35		Bemidji
	27,671.38
		
81.36		Brooklyn Center
	6,605.92
		
81.37		Brooklyn Park
	24,002.26
		
82.1		Burnsville
	15,956.00
		
82.2		Cloquet
	4,260.49
		
82.3		Coon Rapids
	39,920.00
		
82.4		Cottage Grove
	8,588.48
		
82.5		Crystal
	5,855.00
		
82.6		East Grand Forks
	51,009.88
		
82.7		Edina
	32,251.00
		
82.8		Elk River
	5,216.55
		
82.9		Ely
	13,584.16
		
82.10		Eveleth
	16,288.27
		
82.11		Fergus Falls
	6,742.00
		
82.12		Fridley
	33,420.64
		
82.13		Golden Valley
	11,744.61
		
82.14		Hastings
	16,561.00
		
82.15		Hopkins
	4,324.23
		
82.16		International Falls
	14,400.69
		
82.17		Lakeville
	782.35
		
82.18		Lino Lakes
	5,324.00
		
82.19		Little Falls
	7,889.41
		
82.20		Maple Grove
	6,707.54
		
82.21		Maplewood
	8,476.69
		
82.22		Minnetonka
	10,403.00
		
82.23		Montevideo
	1,307.66
		
82.24		Moorhead
	68,069.26
		
82.25		New Hope
	6,739.72
		
82.26		North St. Paul
	4,241.14
		
82.27		Northfield
	770.63
		
82.28		Owatonna
	37,292.67
		
82.29		Plymouth
	6,754.71
		
82.30		Red Wing
	3,504.01
		
82.31		Richfield
	53,757.96
		
82.32		Rosemount
	1,712.55
		
82.33		Roseville
	9,854.51
		
82.34		St. Anthony
	33,055.00
		
82.35		St. Louis Park
	53,643.11
		
82.36		Thief River Falls
	28,365.04
		
82.37		Virginia
	31,164.46
		
82.38		Waseca
	11,135.17
		
82.39		West St. Paul
	15,707.20
		
82.40		White Bear Lake
	6,521.04
		
82.41		Woodbury
	3,613.00
		
82.42		any other municipality
	0.00
		
83.1 	(d) The total amount of excess police state aid must be deposited in the excess 
83.2 	police state-aid account in the general fund, administered and distributed as provided 
83.3 	in subdivision 11.

83.4 	Sec. 19. Minnesota Statutes 2012, section 69.021, subdivision 11, is amended to read:
83.5 		Subd. 11.Excess police state-aid holding account. (a) The excess police state-aid 
83.6 	holding account is established in the general fund. The excess police state-aid holding 
83.7 	account must be administered by the commissioner.
83.8 	(b) Excess police state aid determined according to subdivision 10, must be 
83.9 	deposited annually in the excess police state-aid holding account.
83.10 	(c) From the balance in the excess police state-aid holding account, $900,000 must 
83.11 	be canceled annually to the general fund.
83.12 	(d) If a police officer stress reduction program is created by law and money is 
83.13 	appropriated for that program, an amount equal to that appropriation must be transferred 
83.14 	to the administrator of that program from the balance in the excess police state-aid holding 
83.15 	account.
83.16 	(e)(d) On October 1 of each year, one-half of the balance of the excess police 
83.17 	state-aid holding account remaining after the deductionsdeduction under paragraphs
83.18 	paragraph (c) and (d) is appropriated for additional amortization aid under section 
83.19 	423A.02, subdivision 1b.
83.20 	(f)(e) Annually, the remaining balance in the excess police state-aid holding account, 
83.21 	after the deductions under paragraphs (c),and (d), and (e), cancels to the general fund.

83.22 	Sec. 20. Minnesota Statutes 2012, section 69.031, subdivision 1, is amended to read:
83.23 		Subdivision 1.Commissioner's warrant. (a) The commissioner of management 
83.24 	and budget shall issue to the Public Employees Retirement Association on behalf of 
83.25 	a municipality or independent nonprofit firefighting corporation that is a member of the 
83.26 	voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G, 
83.27 	to the Department of Natural Resources, the Department of Public Safety, or to the 
83.28 	county, municipality, or independent nonprofit firefighting corporation certified to the 
83.29 	commissioner of management and budget by the commissioner a warrant for an amount 
83.30 	equal to the amount of fire state aid or police state aid, whichever applies, certified for the 
83.31 	applicable state aid recipient by the commissioner under section 69.021.
83.32 	(b) Fire state aid and police state aid is payable on October 1 annually. The amount 
83.33 	of state aid due and not paid by October 1 accrues interest payable to the state aid recipient 
84.1 	at the rate of one percent for each month or part of a month that the amount remains 
84.2 	unpaid after October 1.

84.3 	Sec. 21. Minnesota Statutes 2012, section 69.031, subdivision 3, is amended to read:
84.4 		Subd. 3.Appropriations. There is hereby appropriated annually from the state 
84.5 	general fund to the commissioner of revenue an amountamounts sufficient to make the 
84.6 	police state aid payments and the fire state aid payments specified in this section and 
84.7 	section 69.021.

84.8 	Sec. 22. Minnesota Statutes 2012, section 69.031, subdivision 5, is amended to read:
84.9 		Subd. 5.Deposit of state aid. (a) If the municipality or the independent nonprofit 
84.10 	firefighting corporation is covered by the voluntary statewide lump-sum volunteer 
84.11 	firefighter retirement plan under chapter 353G, the executive director shall credit the fire 
84.12 	state aid against future municipal contribution requirements under section 353G.08 and 
84.13 	shall notify the municipality or independent nonprofit firefighting corporation of the fire 
84.14 	state aid so credited at least annually. If the municipality or the independent nonprofit 
84.15 	firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 
84.16 	firefighter retirement plan, the municipal treasurer shall, within 30 days after receipt, 
84.17 	transmit the fire state aid to the treasurer of the duly incorporated firefighters' relief 
84.18 	association if there is one organized and the association has filed a financial report with the 
84.19 	municipality. If the relief association has not filed a financial report with the municipality, 
84.20 	the municipal treasurer shall delay transmission of the fire state aid to the relief association 
84.21 	until the complete financial report is filed. If the municipality or independent nonprofit 
84.22 	firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 
84.23 	firefighter retirement plan, if there is no relief association organized, or if the association 
84.24 	has dissolved or has been removed as trustees of state aid, then the treasurer of the 
84.25 	municipality shall deposit the money in the municipal treasury and the money may be 
84.26 	disbursed only for the purposes and in the manner set forth in section 424A.08 or for the 
84.27 	payment of the employer contribution requirement with respect to firefighters covered by 
84.28 	the public employees police and fire retirement plan under section 353.65, subdivision 3.
84.29 	(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 
84.30 	police state aid in the following manner:
84.31 	(1) For a municipality in which a local police relief association exists and all peace 
84.32 	officers are members of the association, the total state aid must be transmitted to the 
84.33 	treasurer of the relief association within 30 days of the date of receipt, and the treasurer 
85.1 	of the relief association shall immediately deposit the total state aid in the special fund 
85.2 	of the relief association;
85.3 	(2)(b) For a municipality in which police retirement coverage is provided by the 
85.4 	public employees police and fire fund and all peace officers are members of the fund, 
85.5 	including municipalities covered by section 353.665, the total state aid must be applied 
85.6 	toward the municipality's employer contribution to the public employees police and 
85.7 	fire fund under sections 353.65, subdivision 3, and 353.665 353.668, subdivision 8 6, 
85.8 	paragraph (b) or 353.669, subdivision 6, if applicable; or.
85.9 	(3) For a municipality other than a city of the first class with a population of more 
85.10 	than 300,000 in which both a police relief association exists and police retirement 
85.11 	coverage is provided in part by the public employees police and fire fund, the municipality 
85.12 	may elect at its option to transmit the total state aid to the treasurer of the relief association 
85.13 	as provided in clause (1), to use the total state aid to apply toward the municipality's 
85.14 	employer contribution to the public employees police and fire fund subject to all the 
85.15 	provisions set forth in clause (2), or to allot the total state aid proportionately to be 
85.16 	transmitted to the police relief association as provided in this subdivision and to apply 
85.17 	toward the municipality's employer contribution to the public employees police and fire 
85.18 	fund subject to the provisions of clause (2) on the basis of the respective number of active 
85.19 	full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
85.20 	For a city of the first class with a population of more than 300,000, in addition, the 
85.21 	city may elect to allot the appropriate portion of the total police state aid to apply toward 
85.22 	the employer contribution of the city to the public employees police and fire fund based 
85.23 	on the covered salary of police officers covered by the fund each payroll period and to 
85.24 	transmit the balance to the police relief association; or
85.25 	(4) For a municipality in which police retirement coverage is provided in part by 
85.26 	the public employees police and fire fund and in part by a local police consolidation 
85.27 	account governed by chapter 353A and established before March 2, 1999, for which the 
85.28 	municipality declined merger under section 353.665, subdivision 1, or established after 
85.29 	March 1, 1999, the total police state aid must be applied towards the municipality's total 
85.30 	employer contribution to the public employees police and fire fund and to the local police 
85.31 	consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
85.32 	(c) The county treasurer, upon receipt of the police state aid for the county, shall 
85.33 	apply the total state aid toward the county's employer contribution to the public employees 
85.34 	police and fire fund under section 353.65, subdivision 3.
85.35 	(d) The designated Metropolitan Airports Commission official, upon receipt of the 
85.36 	police state aid for the Metropolitan Airports Commission, shall apply the total police 
86.1 	state aid toward the commission's employer contribution for police officers to the public 
86.2 	employees police and fire plan under section 353.65, subdivision 3.
86.3 	(e) The police state aid apportioned to the Departments of Public Safety and Natural 
86.4 	Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of 
86.5 	management and budget for transfer to the funds and accounts from which the salaries of 
86.6 	peace officers certified under section 69.011, subdivision 2b, are paid. The commissioner 
86.7 	of revenue shall certify to the commissioners of public safety, natural resources, and 
86.8 	management and budget the amounts to be transferred from the appropriation for police 
86.9 	state aid. The commissioners of public safety and natural resources shall certify to the 
86.10 	commissioner of management and budget the amounts to be credited to each of the funds 
86.11 	and accounts from which the peace officers employed by their respective departments are 
86.12 	paid. Each commissioner shall allocate the police state aid first for employer contributions 
86.13 	for employees funded from the general fund and then for employer contributions for 
86.14 	employees funded from other funds. For peace officers whose salaries are paid from the 
86.15 	general fund, the amounts transferred from the appropriation for police state aid must 
86.16 	be canceled to the general fund.

86.17 	Sec. 23. Minnesota Statutes 2012, section 69.041, is amended to read:
86.18 	69.041 SHORTFALL FROM GENERAL FUND.
86.19 	(a) If the annual funding requirements of fire or police relief associations or 
86.20 	consolidation accounts under sections 69.77,69.771 to 69.775, or353A.09, or sections 
86.21 	31 to 42, exceed all applicable revenue sources of a given year, including the insurance 
86.22 	premium taxes funding the applicable fire or police state aid as set under section 297I.05, 
86.23 	subdivisions 2, 3, and 4, the shortfall in the annual funding requirements must be paid 
86.24 	from the general fund to the extent appropriated by the legislature.
86.25 	(b) Nothing in this section may be deemed to relieve any municipality from its 
86.26 	obligation to a relief association or consolidation account under law.

86.27 	Sec. 24. Minnesota Statutes 2012, section 69.051, subdivision 1, is amended to read:
86.28 		Subdivision 1.Financial report and audit. (a) The board of each salaried 
86.29 	firefightersthe Bloomington Fire Department Relief Association, police relief association,
86.30 	 and each volunteer firefighters relief association as defined in section 424A.001, 
86.31 	subdivision 4, with assets of at least $200,000 or liabilities of at least $200,000 in the prior 
86.32 	year or in any previous year, according to the applicable actuarial valuation or according 
86.33 	to the financial report if no valuation is required, shall prepare a financial report covering 
87.1 	the special and general funds of the relief association for the preceding fiscal year, file the 
87.2 	financial report, and submit financial statements.
87.3 	(b) The financial report must contain financial statements and disclosures which 
87.4 	present the true financial condition of the relief association and the results of relief 
87.5 	association operations in conformity with generally accepted accounting principles and in 
87.6 	compliance with the regulatory, financing and funding provisions of this chapter and any 
87.7 	other applicable laws. The financial report must be countersigned by:
87.8 	(1) the municipal clerk or clerk-treasurer of the municipality in which the relief 
87.9 	association is located if the relief association is a firefighters relief association which is 
87.10 	directly associated with a municipal fire department or is a police relief association; or
87.11 	(2) by the municipal clerk or clerk-treasurer of the largest municipality in population 
87.12 	which contracts with the independent nonprofit firefighting corporation if the volunteer 
87.13 	firefighter relief association is a subsidiary of an independent nonprofit firefighting 
87.14 	corporation and by the secretary of the independent nonprofit firefighting corporation; or
87.15 	(3) by the chief financial official of the county in which the volunteer firefighter 
87.16 	relief association is located or primarily located if the relief association is associated with 
87.17 	a fire department that is not located in or associated with an organized municipality.
87.18 	(c) The financial report must be retained in its office for public inspection and must 
87.19 	be filed with the governing body of the government subdivision in which the associated 
87.20 	fire department is located after the close of the fiscal year. One copy of the financial report 
87.21 	must be furnished to the state auditor after the close of the fiscal year.
87.22 	(d) Audited financial statements must be attested to by a certified public accountant 
87.23 	or by the state auditor and must be filed with the state auditor within 180 days after the 
87.24 	close of the fiscal year. The state auditor may accept this report in lieu of the report 
87.25 	required in paragraph (c).

87.26 	Sec. 25. Minnesota Statutes 2012, section 69.051, subdivision 1a, is amended to read:
87.27 		Subd. 1a.Financial statement. (a) The board of each volunteer firefighters relief 
87.28 	association, as defined in section 424A.001, subdivision 4, that is not required to file a 
87.29 	financial report and audit under subdivision 1 must prepare a detailed statement of the 
87.30 	financial affairs for the preceding fiscal year of the relief association's special and general 
87.31 	funds in the style and form prescribed by the state auditor. The detailed statement must 
87.32 	show:
87.33 	(1) the sources and amounts of all money received;
87.34 	(2) all disbursements, accounts payable and accounts receivable;
87.35 	(3) the amount of money remaining in the treasury;
88.1 	(4)  total assets, including a listing of all investments;
88.2 	(5) the accrued liabilities; and
88.3 	(6) all other items necessary to show accurately the revenues and expenditures and 
88.4 	financial position of the relief association.
88.5 	(b) The detailed financial statement required under paragraph (a) must be certified 
88.6 	by an independent public accountant or auditor or by the auditor or accountant who 
88.7 	regularly examines or audits the financial transactions of the municipality. In addition to 
88.8 	certifying the financial condition of the special and general funds of the relief association, 
88.9 	the accountant or auditor conducting the examination shall give an opinion as to the 
88.10 	condition of the special and general funds of the relief association, and shall comment 
88.11 	upon any exceptions to the report. The independent accountant or auditor must have at 
88.12 	least five years of public accounting, auditing, or similar experience, and must not be an 
88.13 	active, inactive, or retired member of the relief association or the fire or police department.
88.14 	(c) The detailed statement required under paragraph (a) must be countersigned by:
88.15 	(1) the municipal clerk or clerk-treasurer of the municipality; or
88.16 	(2) where applicable, by the municipal clerk or clerk-treasurer of the largest 
88.17 	municipality in population which contracts with the independent nonprofit firefighting 
88.18 	corporation if the relief association is a subsidiary of an independent nonprofit firefighting 
88.19 	corporation and by the secretary of the independent nonprofit firefighting corporation; or
88.20 	(3) by the chief financial official of the county in which the volunteer firefighter 
88.21 	relief association is located or primarily located if the relief association is associated with 
88.22 	a fire department that is not located in or associated with an organized municipality.
88.23 	(d) The volunteer firefighters' relief association board must file the detailed statement 
88.24 	required under paragraph (a) in the relief association office for public inspection and 
88.25 	present it to the city councilgoverning body of the municipality within 45 days after the 
88.26 	close of the fiscal year, and must submit a copy of the detailed statement to the state 
88.27 	auditor within 90 days of the close of the fiscal year.

88.28 	Sec. 26. Minnesota Statutes 2012, section 69.051, subdivision 1b, is amended to read:
88.29 		Subd. 1b.Qualification. The state auditor may, upon a demonstration by a relief 
88.30 	association of hardship or an inability to conform, extend the deadline for reports under 
88.31 	subdivisions 1 or 1a, but not beyond November 30th following the due date. If the 
88.32 	reports are not received by November 30th, the municipality or relief association will 
88.33 	forfeitforfeits its current year state aid, and, until the state auditor receives the required 
88.34 	information, the relief association or municipality will beis ineligible to receive any 
88.35 	future state aid. A municipality or police or firefighters' relief association shalldoes not 
89.1 	qualify initially to receive, or be entitled subsequently to retain, state aid pursuant tounder 
89.2 	this chapter if the financial reporting requirement or the applicable requirements of this 
89.3 	chapter or any other statute or special law have not been complied with or are not fulfilled.

89.4 	Sec. 27. Minnesota Statutes 2012, section 69.051, subdivision 2, is amended to read:
89.5 		Subd. 2.Treasurers bond. No(a) The treasurer of athe Bloomington Fire 
89.6 	Department Relief Association governed by section 69.77 shallmay not enter upon duties 
89.7 	without having given the association a bond in a reasonable amount acceptable to the 
89.8 	municipality for the faithful discharge of duties according to law.
89.9 	(b) No treasurer of a relief association governed by sections 69.771 to 69.776shall
89.10 	may enter upon the duties of the office until the treasurer has given the association a good 
89.11 	and sufficient bond in an amount equal to at least ten percent of the assets of the relief 
89.12 	association; however, the amount of the bond need not exceed $500,000.

89.13 	Sec. 28. Minnesota Statutes 2012, section 69.051, subdivision 3, is amended to read:
89.14 		Subd. 3.Report by certain municipalities. (a) The chief administrative officer 
89.15 	of each municipality which has an organized fire department but which does not have a 
89.16 	firefighters' relief association governed by section 69.77 or sections 69.771 to 69.775 and 
89.17 	which is not exempted under paragraph (b) shall annually prepare a detailed financial 
89.18 	report of the receipts and disbursements by the municipality for fire protection service 
89.19 	during the preceding calendar year, on a form prescribed by the state auditor. The financial 
89.20 	report must contain any information which the state auditor deems necessary to disclose 
89.21 	the sources of receipts and the purpose of disbursements for fire protection service. 
89.22 	The financial report must be signed by the municipal clerk or clerk-treasurer of the 
89.23 	municipality. The financial report must be filed by the municipal clerk or clerk-treasurer 
89.24 	with the state auditor on or before July 1 annually. The municipality shalldoes not qualify 
89.25 	initially to receive, or beand is not entitled subsequently to retain, state aid under this 
89.26 	chapter if the financial reporting requirement or the applicable requirements of this chapter 
89.27 	or any other statute or special law have not been complied with or are not fulfilled.
89.28 	(b) Each municipality that has an organized fire department and provides retirement 
89.29 	coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter 
89.30 	retirement plan under chapter 353G qualifies to have fire state aid transmitted to and 
89.31 	retained in the statewide lump-sum volunteer firefighter retirement fund without filing 
89.32 	a detailed financial report if the executive director of the Public Employees Retirement 
89.33 	Association certifies compliance by the municipality with the requirements of sections 
90.1 	353G.04 and 353G.08, paragraph (e), and certifies conformity by the applicable fire chief 
90.2 	with the requirements of section 353G.07.

90.3 	Sec. 29. Minnesota Statutes 2012, section 69.051, subdivision 4, is amended to read:
90.4 		Subd. 4.Notification by commissioner and state auditor. (a) The state auditor,
90.5 	 in performing an audit or examination, shall notify the Legislative Commission on 
90.6 	Pensions and Retirement if the audit or examination reveals malfeasance, misfeasance, or 
90.7 	nonfeasance in office by relief association officials or municipal officials.
90.8 	(b) The commissioner shall notify the Legislative Commission on Pensions and 
90.9 	Retirement if the state auditor has not filed the required financial compliance reports 
90.10 	by July 1.

90.11 	Sec. 30. Minnesota Statutes 2012, section 69.33, is amended to read:
90.12 	69.33 REPORT; AMOUNT OF PREMIUMS RECEIVED BY INSURANCE 
90.13 	COMPANIES.
90.14 	For purposes of the first class city fire insurance premium tax surcharge aid program 
90.15 	under section 297I.10, the commissioner shall enclose in the annual statement blank that is 
90.16 	sent to all fire insurance companies doing business in this state a blank form containing 
90.17 	the names of all cities of the first class and require these companies, at the time of making 
90.18 	their annual statements to the commissioner, to state on these blanks the amount of 
90.19 	premiums received by them upon properties insured within the corporate limits of the 
90.20 	cities named thereon during the year ending December 31st last past. Thereafter, before 
90.21 	July first each year, the commissioner shall certify to the commissioner of management 
90.22 	and budget the information thus obtained, together with the amount of the tax for the 
90.23 	benefit of the pension plans covering firefighters in cities of the first class paid in such 
90.24 	year by these companies upon these insurance premiums.

90.25 	Sec. 31. Minnesota Statutes 2012, section 69.77, subdivision 1, is amended to read:
90.26 		Subdivision 1.Conditioned employer support for athe Bloomington Fire 
90.27 	Department Relief Association. (a) Notwithstanding any law to the contrary, only 
90.28 	if the municipalitycity of Bloomington and the Bloomington Fire Department Relief 
90.29 	Association comply with the provisions of this section, a municipalitythe city of 
90.30 	Bloomington may contribute public funds, including any applicable police or fire state 
90.31 	aid, or levy property taxes for the support of a police or firefighters'the Bloomington 
90.32 	Fire Department Relief Association, enumerated in subdivision 1a, however organized, 
90.33 	which provides retirement coverage or pays a service pension to a retired police officer or 
91.1 	firefighter or a retirement benefit to a surviving dependent of either an active or retired 
91.2 	police officer or firefighter,and for the operation and maintenance of the relief association.
91.3 	(b) The commissioner shall not include in the apportionment of police or fire state 
91.4 	aid to the county auditor under section 69.021, subdivision 6, any municipality in which 
91.5 	there exists a local police or salaried firefighters' relief association as enumerated in 
91.6 	subdivision 1a whichthe city of Bloomington if the Bloomington Fire Department Relief 
91.7 	Association does not comply with the provisions of this section or the provisions of any 
91.8 	applicable special law relating to the funding or financing of the association and that 
91.9 	municipalitythe city of Bloomington may not qualify initially to receive, or be entitled 
91.10 	subsequently to retain, fire state aid under sections 69.011 to 69.051 until the reason 
91.11 	for the disqualification is remedied, whereupon the municipality city of Bloomington, 
91.12 	if otherwise qualified, is entitled to again receive fire state aid for the year occurring 
91.13 	immediately subsequent to the year in which the disqualification is remedied.
91.14 	(c) The state auditor and the commissioner shall determine if a municipality with a 
91.15 	local police or salaried firefighters' relief association failsthe city of Bloomington and the 
91.16 	Bloomington Fire Department Relief Association fail to comply with the provisions of 
91.17 	this section or the funding or financing provisions of any applicable special law.

91.18 	Sec. 32. Minnesota Statutes 2012, section 69.77, subdivision 2, is amended to read:
91.19 		Subd. 2.Inapplicable penalty. The penalty provided for in subdivision 1 does not 
91.20 	apply to athe Bloomington Fire Department Relief Association enumerated in subdivision 
91.21 	1a if the requirements of subdivisions 3 to 10 are met.

91.22 	Sec. 33. Minnesota Statutes 2012, section 69.77, subdivision 4, is amended to read:
91.23 		Subd. 4.Relief association financial requirements; minimum municipal 
91.24 	obligation. (a) The officers of the Bloomington Fire Department Relief Association 
91.25 	shall determine the financial requirements of the relief association and the minimum 
91.26 	obligation of the municipalitycity of Bloomington for the following calendar year in 
91.27 	accordance with the requirements of this subdivision. The financial requirements of the 
91.28 	relief association and the minimum obligation of the municipalitycity of Bloomington 
91.29 	must be determined on or before the submission date established by the municipality
91.30 	city of Bloomington under subdivision 5.
91.31 	(b) The financial requirements of the relief association for the following calendar 
91.32 	year must be based on the most recent actuarial valuation or survey of the special fund of 
91.33 	the association if more than one fund is maintained by the association, or of the association, 
91.34 	if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions 
92.1 	4 to 15, and 356.216, as required under subdivision 10. If an actuarial estimate is prepared 
92.2 	by the actuary of the relief association as part of obtaining a modification of the benefit 
92.3 	plan of the relief association and the modification is implemented, the actuarial estimate 
92.4 	must be used in calculating the subsequent financial requirements of the relief association.
92.5 	(c) If the relief association has an unfunded actuarial accrued liability as reported in 
92.6 	the most recent actuarial valuation or survey, the total of the amounts calculated under 
92.7 	clauses (1), (2), and (3), constitute the financial requirements of the relief association for 
92.8 	the following year. If the relief association does not have an unfunded actuarial accrued 
92.9 	liability as reported in the most recent actuarial valuation or survey, the amount calculated 
92.10 	under clauses (1) and (2) constitute the financial requirements of the relief association for 
92.11 	the following year. The financial requirement elements are:
92.12 	(1) the normal level cost requirement for the following year, expressed as a dollar 
92.13 	amount, which must be determined by applying the normal level cost of the relief 
92.14 	association as reported in the actuarial valuation or survey and expressed as a percentage 
92.15 	of covered payroll to the estimated covered payroll of the active membership of the relief 
92.16 	association, including any projected change in the active membership, for the following 
92.17 	year;
92.18 	(2) for the Bloomington Fire Department Relief Association, to the dollar amount 
92.19 	of normal cost determined under clause (1) must be added an amount equal to the dollar 
92.20 	amount of the administrative expenses of the special fund of the association if more 
92.21 	than one fund is maintained by the association, or of the association if only one fund is 
92.22 	maintained, for the most recent year, multiplied by the factor of 1.035. The administrative 
92.23 	expenses are those authorized under section 69.80; and
92.24 	(3) to the dollar amount of normal cost and expenses determined under clauses 
92.25 	(1) and (2) must be added an amount equal to the level annual dollar amount which 
92.26 	is sufficient to amortize the unfunded actuarial accrued liability as determined from 
92.27 	the actuarial valuation or survey of the fund, using an interest assumption set at the 
92.28 	applicable rate specified in section 356.215, subdivision 8, by that fund's amortization 
92.29 	date as specified in paragraph (d).
92.30 	(d) The Bloomington Fire Department Relief Association special fund amortization 
92.31 	date is determined under section 356.216, clause (2). The amortization date specified in 
92.32 	this paragraph supersedes any amortization date specified in any applicable special law.
92.33 	(d) If the actuarial value of the assets of the special fund of the relief association 
92.34 	exceed the actuarial accrued liability as reported in the most recent actuarial valuation of the 
92.35 	special fund of the relief association, the financial requirements of the relief association are 
92.36 	the amounts calculated under paragraph (c), clauses (1) and (2), reduced by one-tenth of the 
93.1 	amount by which the actuarial value of the assets of the special fund of the relief association 
93.2 	exceeds the actuarial accrued liability of the special fund of the relief association.
93.3 	(e) The minimum obligation of the municipality is an amount equal to the financial 
93.4 	requirements of the relief association reduced by the estimated amount of member 
93.5 	contributions from covered salary anticipated for the following calendar year and the 
93.6 	estimated amountsamount anticipated for the following calendar year from the applicable
93.7 	fire state aid program established under sections 69.011 to 69.051 receivable by the relief 
93.8 	association after any allocation made under section 69.031, subdivision 5, paragraph (b), 
93.9 	clause (2), or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police 
93.10 	and salaried firefighters' relief association amortization aid program established under 
93.11 	section 423A.02, subdivision 1, from the supplementary amortization state-aid program 
93.12 	established under section 423A.02, subdivision 1a, and from the additional amortization 
93.13 	state aid under section 423A.02, subdivision 1b.

93.14 	Sec. 34. Minnesota Statutes 2012, section 69.77, subdivision 5, is amended to read:
93.15 		Subd. 5.Determination submission. The officers of the relief association shall 
93.16 	submit the determination of the financial requirements of the relief association and of the 
93.17 	minimum obligation of the municipality to the governing bodyBloomington City Council 
93.18 	on or before the date established by the municipality city of Bloomington, which may 
93.19 	not be earlier than August 1 and may not be later than September 1 of each year. The 
93.20 	governing body of the municipalityBloomington City Council must ascertain whether or 
93.21 	not the determinations were prepared in accordance with law.

93.22 	Sec. 35. Minnesota Statutes 2012, section 69.77, subdivision 6, is amended to read:
93.23 		Subd. 6.Municipal payment. (a) The municipalitycity of Bloomington shall 
93.24 	provide for and shall pay, each year, at least the amount of the minimum obligation of the 
93.25 	municipalitycity of Bloomington to the Bloomington Fire Department Relief Association.
93.26 	(b) If there is any deficiency in the municipal payment to meet the minimum 
93.27 	obligation of the municipalitycity of Bloomington as of the end of any calendar year, the 
93.28 	amount of the deficiency must be added to the minimum obligation of the municipalitycity 
93.29 	of Bloomington for the following year calculated under subdivision 4 and must include 
93.30 	interest at the compound rate of six percent per annum from the date that the municipality
93.31 	city of Bloomington was required to make payment under this subdivision until the date 
93.32 	that the municipalitycity of Bloomington actually makes the required payment.

93.33 	Sec. 36. Minnesota Statutes 2012, section 69.77, subdivision 7, is amended to read:
94.1 		Subd. 7.Budget inclusion. (a) The municipalitycity of Bloomington shall provide 
94.2 	in the annual municipal budget for at least the minimum obligation of the municipality 
94.3 	calculated under subdivision 4.
94.4 	(b) The municipalitycity of Bloomington may levy taxes for the payment of the 
94.5 	minimum obligation of the municipalitycity of Bloomington without any limitation as to 
94.6 	rate or amount and irrespective of limitations imposed by other provisions of law upon the 
94.7 	rate or amount of taxation when the balance of the special fund or any fund of the relief 
94.8 	association has attained a specified minimum asset level. In addition, any taxes levied 
94.9 	under this section may not cause the amount or rate of other taxes levied in that year or to 
94.10 	be levied in a subsequent year by the municipalitycity of Bloomington which are subject 
94.11 	to a limitation as to rate or amount to be reduced.
94.12 	(c) If the municipalitycity of Bloomington does not include the full amount of 
94.13 	the minimum obligation of the municipalitycity of Bloomington in the levy that the 
94.14 	municipalitycity of Bloomington certified to the Hennepin County auditor in any year, the 
94.15 	officers of the relief association shall certify the amount of any deficiency to the Hennepin 
94.16 	County auditor. Upon verifying the existence of any deficiency in the levy certified by 
94.17 	the municipality city of Bloomington, the Hennepin County auditor shall spread a levy 
94.18 	over the taxable property of the municipalitycity of Bloomington in the amount of the 
94.19 	deficiency certified to by the officers of the relief association.

94.20 	Sec. 37. Minnesota Statutes 2012, section 69.77, subdivision 8, is amended to read:
94.21 		Subd. 8.Accelerated amortization. Any sums of money paid by the municipality
94.22 	city of Bloomington to the relief association in excess of the minimum obligation of the 
94.23 	municipalitycity of Bloomington in any year must be used to amortize any unfunded 
94.24 	actuarial accrued liabilities of the Bloomington Fire Department Relief Association.

94.25 	Sec. 38. Minnesota Statutes 2012, section 69.77, subdivision 9, is amended to read:
94.26 		Subd. 9.Local paid fire relief association investment authority. (a) The special 
94.27 	fundfunds of the association must be invested in securities that are authorized investments 
94.28 	under section 356A.06, subdivision 6 or 7, whichever applies.
94.29 	(b) The governing board of the Bloomington Fire Department Relief Association 
94.30 	may select and appoint a qualified private firm to measure management performance and 
94.31 	return on investment, and the firm must use the formula or formulas developed by the 
94.32 	State Board of Investment under section 11A.04, clause (11). The governing board of the 
94.33 	Bloomington Fire Department Relief Association may certify general fund assets of the 
94.34 	relief association for investment by the State Board of Investment in fixed income pools 
95.1 	or in a separately managed account at the discretion of the State Board of Investment 
95.2 	as provided in section 11A.14.
95.3 	(c) The governing board of the association may certify general fund assets of the 
95.4 	relief association for investment by the State Board of Investment in fixed income pools 
95.5 	or in a separately managed account at the discretion of the State Board of Investment 
95.6 	as provided in section 11A.14.

95.7 	Sec. 39. Minnesota Statutes 2012, section 69.77, subdivision 10, is amended to read:
95.8 		Subd. 10.Actuarial valuation required. The governing board of the Bloomington 
95.9 	Fire Department Relief Association shall obtain an actuarial valuation showing the 
95.10 	condition of the special fund of the relief association under sections 356.215 and 356.216
95.11 	and anythe applicable standards for actuarial work established by the Legislative 
95.12 	Commission on Pensions and Retirement. The actuarial valuation must be made as of 
95.13 	December 31 of every year. A copy of the actuarial valuation must be filed with the 
95.14 	Director of the Legislative Reference Library, the governing body of the municipality in 
95.15 	which the association is organized Bloomington City Council, the executive director of 
95.16 	the Legislative Commission on Pensions and Retirement, and the state auditor, not later 
95.17 	than July 1 of the following year.

95.18 	Sec. 40. Minnesota Statutes 2012, section 69.77, subdivision 11, is amended to read:
95.19 		Subd. 11.Municipal approval of benefit changes required. Any amendment to 
95.20 	the bylaws or articles of incorporation of athe Bloomington Fire Department Relief 
95.21 	Association which increases or otherwise affects the retirement coverage provided by or 
95.22 	the service pensions or retirement benefits payable from any police or firefighters'the 
95.23 	relief association enumerated in subdivision 1a is not effective until it is ratified by the 
95.24 	municipality in which the relief association is located city of Bloomington. The officers 
95.25 	of the relief association shall not seek municipal ratification before obtaining either an 
95.26 	updated actuarial valuation including the proposed amendment or an estimate of the 
95.27 	expected actuarial impact of the proposed amendment prepared by the actuary of the relief 
95.28 	association and submitting that actuarial valuation or estimate to the Bloomington city 
95.29 	clerk of the municipality.

95.30 	Sec. 41. Minnesota Statutes 2012, section 69.77, subdivision 12, is amended to read:
95.31 		Subd. 12.Application of other laws to contribution rate. In the absence of any 
95.32 	specific provision to the contrary, no general or special law previously enacted may be 
95.33 	construed as reducing the levy amount or rate of contribution to a police or firefightersthe 
96.1 	Bloomington Fire Department Relief Association to which subdivision 1a applies, by a 
96.2 	municipality or member of the association the city of Bloomington, which is required as a 
96.3 	condition for the use of public funds or the levy of taxes for the support of the association. 
96.4 	EachThe Bloomington Fire Department Relief Association, the municipality in which 
96.5 	it is organized city of Bloomington, and the officers of each, are authorized to do all 
96.6 	things required by this section as a condition for the use of public funds or the levy of 
96.7 	taxes for the support of the association.

96.8 	Sec. 42. Minnesota Statutes 2012, section 69.77, subdivision 13, is amended to read:
96.9 		Subd. 13.Citation. This section may be cited as the "Police and Firefighters'
96.10 	Bloomington Fire Department Relief AssociationsAssociation Guidelines Act of 1969."

96.11 	Sec. 43. Minnesota Statutes 2012, section 69.771, subdivision 1, is amended to read:
96.12 		Subdivision 1.Covered relief associations. The applicable provisions of sections 
96.13 	69.771 to 69.776 apply to any firefighters' relief association other than athe Bloomington 
96.14 	Fire Department Relief Association enumerated in section 69.77, subdivision 1a, which 
96.15 	is organized under any laws of this state, which is composed of volunteer firefighters or 
96.16 	is composed partially of volunteer firefighters and partially of salaried firefighters with 
96.17 	retirement coverage provided by the public employees police and fire fund and which, in 
96.18 	either case, operates subject to the service pension minimum requirements for entitlement 
96.19 	and maximums contained in section 424A.02, or subject to a special law modifying those 
96.20 	requirements or maximums.

96.21 	Sec. 44. Minnesota Statutes 2012, section 69.80, is amended to read:
96.22 	69.80 AUTHORIZED ADMINISTRATIVE EXPENSES.
96.23 	(a) Notwithstanding any provision of law to the contrary, the payment of the 
96.24 	following necessary, reasonable and direct expenses of maintaining, protecting and 
96.25 	administering the special fund, when provided for in the bylaws of the association and 
96.26 	approved by the board of trustees, constitutes authorized administrative expenses of a 
96.27 	police, salaried firefighters', or volunteer firefighters' relief association organized under 
96.28 	any law of this state or the Bloomington Fire Department Relief Association:
96.29 	(1) office expense, including, but not limited to, rent, utilities, equipment, supplies, 
96.30 	postage, periodical subscriptions, furniture, fixtures, and salaries of administrative 
96.31 	personnel;
96.32 	(2) salaries of the officers of the association, or their designees, and salaries of the 
96.33 	members of the board of trustees of the association if the salary amounts are approved by 
97.1 	the governing body of the entity that is responsible for meeting any minimum obligation 
97.2 	under section 69.77,69.772, or 69.773, or sections 31 to 42, and the itemized expenses 
97.3 	of relief association officers and board members that are incurred as a result of fulfilling 
97.4 	their responsibilities as administrators of the special fund;
97.5 	(3) tuition, registration fees, organizational dues, and other authorized expenses 
97.6 	of the officers or members of the board of trustees incurred in attending educational 
97.7 	conferences, seminars, or classes relating to the administration of the relief association;
97.8 	(4) audit, actuarial, medical, legal, and investment and performance evaluation 
97.9 	expenses;
97.10 	(5) filing and application fees payable by the relief association to federal or other 
97.11 	governmental entities;
97.12 	(6) reimbursement to the officers and members of the board of trustees, or their 
97.13 	designees, for reasonable and necessary expenses actually paid and incurred in the 
97.14 	performance of their duties as officers or members of the board; and
97.15 	(7) premiums on fiduciary liability insurance and official bonds for the officers, 
97.16 	members of the board of trustees, and employees of the relief association.
97.17 	(b) Any other expenses of the relief association must be paid from the general fund 
97.18 	of the association, if one exists. If a relief association has only one fund, that fund is the 
97.19 	special fund for purposes of this section. If a relief association has a special fund and 
97.20 	a general fund, and any expense of the relief association that is directly related to the 
97.21 	purposes for which both funds were established, the payment of that expense must be 
97.22 	apportioned between the two funds on the basis of the benefits derived by each fund.

97.23 	Sec. 45. Minnesota Statutes 2012, section 275.70, subdivision 5, is amended to read:
97.24 		Subd. 5.Special levies. "Special levies" means those portions of ad valorem taxes 
97.25 	levied by a local governmental unit for the following purposes or in the following manner:
97.26 	(1) to pay the costs of the principal and interest on bonded indebtedness or to 
97.27 	reimburse for the amount of liquor store revenues used to pay the principal and interest 
97.28 	due on municipal liquor store bonds in the year preceding the year for which the levy 
97.29 	limit is calculated;
97.30 	(2) to pay the costs of principal and interest on certificates of indebtedness issued for 
97.31 	any corporate purpose except for the following:
97.32 	(i) tax anticipation or aid anticipation certificates of indebtedness;
97.33 	(ii) certificates of indebtedness issued under sections 298.28 and 298.282;
97.34 	(iii) certificates of indebtedness used to fund current expenses or to pay the costs of 
97.35 	extraordinary expenditures that result from a public emergency; or
98.1 	(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an 
98.2 	insufficiency in other revenue sources, provided that nothing in this subdivision limits the 
98.3 	special levy authorized under section 475.755;
98.4 	(3) to provide for the bonded indebtedness portion of payments made to another 
98.5 	political subdivision of the state of Minnesota;
98.6 	(4) to fund payments made to the Minnesota State Armory Building Commission 
98.7 	under section 193.145, subdivision 2, to retire the principal and interest on armory 
98.8 	construction bonds;
98.9 	(5) property taxes approved by voters which are levied against the referendum 
98.10 	market value as provided under section 275.61;
98.11 	(6) to fund matching requirements needed to qualify for federal or state grants or 
98.12 	programs to the extent that either (i) the matching requirement exceeds the matching 
98.13 	requirement in calendar year 2001, or (ii) it is a new matching requirement that did not 
98.14 	exist prior to 2002;
98.15 	(7) to pay the expenses reasonably and necessarily incurred in preparing for or 
98.16 	repairing the effects of natural disaster including the occurrence or threat of widespread 
98.17 	or severe damage, injury, or loss of life or property resulting from natural causes, in 
98.18 	accordance with standards formulated by the Emergency Services Division of the state 
98.19 	Department of Public Safety, as allowed by the commissioner of revenue under section 
98.20 	275.74, subdivision 2;
98.21 	(8) pay amounts required to correct an error in the levy certified to the county 
98.22 	auditor by a city or county in a levy year, but only to the extent that when added to the 
98.23 	preceding year's levy it is not in excess of an applicable statutory, special law or charter 
98.24 	limitation, or the limitation imposed on the governmental subdivision by sections 275.70 
98.25 	to 275.74 in the preceding levy year;
98.26 	(9) to pay an abatement under section 469.1815;
98.27 	(10) to pay any costs attributable to increases in the employer contribution rates under 
98.28 	chapter 353, or locally administered pension plans, that are effective after June 30, 2001;
98.29 	(11) to pay the operating or maintenance costs of a county jail as authorized in section 
98.30 	641.01 or 641.262, or of a correctional facility as defined in section 241.021, subdivision 1, 
98.31 	paragraph (f), to the extent that the county can demonstrate to the commissioner of revenue 
98.32 	that the amount has been included in the county budget as a direct result of a rule, minimum 
98.33 	requirement, minimum standard, or directive of the Department of Corrections, or to pay 
98.34 	the operating or maintenance costs of a regional jail as authorized in section 641.262. For 
98.35 	purposes of this clause, a district court order is not a rule, minimum requirement, minimum 
98.36 	standard, or directive of the Department of Corrections. If the county utilizes this special 
99.1 	levy, except to pay operating or maintenance costs of a new regional jail facility under 
99.2 	sections 641.262 to 641.264 which will not replace an existing jail facility, any amount 
99.3 	levied by the county in the previous levy year for the purposes specified under this clause 
99.4 	and included in the county's previous year's levy limitation computed under section 
99.5 	275.71, shall be deducted from the levy limit base under section 275.71, subdivision 2, 
99.6 	when determining the county's current year levy limitation. The county shall provide the 
99.7 	necessary information to the commissioner of revenue for making this determination;
99.8 	(12) to pay for operation of a lake improvement district, as authorized under section 
99.9 	103B.555. If the county utilizes this special levy, any amount levied by the county in the 
99.10 	previous levy year for the purposes specified under this clause and included in the county's 
99.11 	previous year's levy limitation computed under section 275.71 shall be deducted from 
99.12 	the levy limit base under section 275.71, subdivision 2, when determining the county's 
99.13 	current year levy limitation. The county shall provide the necessary information to the 
99.14 	commissioner of revenue for making this determination;
99.15 	(13) to repay a state or federal loan used to fund the direct or indirect required 
99.16 	spending by the local government due to a state or federal transportation project or other 
99.17 	state or federal capital project. This authority may only be used if the project is not a 
99.18 	local government initiative;
99.19 	(14) to pay for court administration costs as required under section 273.1398, 
99.20 	subdivision 4b, less the (i) county's share of transferred fines and fees collected by the 
99.21 	district courts in the county for calendar year 2001 and (ii) the aid amount certified to be 
99.22 	paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes 
99.23 	levied to pay for these costs in the year in which the court financing is transferred to the 
99.24 	state, the amount under this clause is limited to the amount of aid the county is certified to 
99.25 	receive under section 273.1398, subdivision 4a;
99.26 	(15) to fund a police or firefighters relief association as required under section 
99.27 	69.77sections 31 to 42 to the extent that the required amount exceeds the amount levied 
99.28 	for this purpose in 2001;
99.29 	(16) for purposes of a storm sewer improvement district under section 444.20;
99.30 	(17) to pay for the maintenance and support of a city or county society for the 
99.31 	prevention of cruelty to animals under section 343.11, but not to exceed in any year 
99.32 	$4,800 or the sum of $1 per capita based on the county's or city's population as of the most 
99.33 	recent federal census, whichever is greater. If the city or county uses this special levy, any 
99.34 	amount levied by the city or county in the previous levy year for the purposes specified 
99.35 	in this clause and included in the city's or county's previous year's levy limit computed 
100.1 	under section 275.71, must be deducted from the levy limit base under section 275.71, 
100.2 	subdivision 2, in determining the city's or county's current year levy limit;
100.3 	(18) for counties, to pay for the increase in their share of health and human service 
100.4 	costs caused by reductions in federal health and human services grants effective after 
100.5 	September 30, 2007;
100.6 	(19) for a city, for the costs reasonably and necessarily incurred for securing, 
100.7 	maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by 
100.8 	the commissioner of revenue under section 275.74, subdivision 2. A city must have either 
100.9 	(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in 
100.10 	the city or in a zip code area of the city that is at least 50 percent higher than the average 
100.11 	foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2, 
100.12 	to use this special levy. For purposes of this paragraph, "foreclosure rate" means the 
100.13 	number of foreclosures, as indicated by sheriff sales records, divided by the number of 
100.14 	households in the city in 2007;
100.15 	(20) for a city, for the unreimbursed costs of redeployed traffic-control agents and 
100.16 	lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified 
100.17 	to the Federal Highway Administration;
100.18 	(21) to pay costs attributable to wages and benefits for sheriff, police, and fire 
100.19 	personnel. If a local governmental unit did not use this special levy in the previous year its 
100.20 	levy limit base under section 275.71 shall be reduced by the amount equal to the amount it 
100.21 	levied for the purposes specified in this clause in the previous year;
100.22 	(22) an amount equal to any reductions in the certified aids or credit reimbursements 
100.23 	payable under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment 
100.24 	under section 16A.152 or reductions under another provision of law. The amount of the 
100.25 	levy allowed under this clause for each year is limited to the amount unallotted or reduced 
100.26 	from the aids and credit reimbursements certified for payment in the year following the 
100.27 	calendar year in which the tax levy is certified unless the unallotment or reduction amount 
100.28 	is not known by September 1 of the levy certification year, and the local government has 
100.29 	not adjusted its levy under section 275.065, subdivision 6, or 275.07, subdivision 6, in 
100.30 	which case that unallotment or reduction amount may be levied in the following year;
100.31 	(23) to pay for the difference between one-half of the costs of confining sex offenders 
100.32 	undergoing the civil commitment process and any state payments for this purpose pursuant 
100.33 	to section 253B.185, subdivision 5;
100.34 	(24) for a county to pay the costs of the first year of maintaining and operating a new 
100.35 	facility or new expansion, either of which contains courts, corrections, dispatch, criminal 
100.36 	investigation labs, or other public safety facilities and for which all or a portion of the 
101.1 	funding for the site acquisition, building design, site preparation, construction, and related 
101.2 	equipment was issued or authorized prior to the imposition of levy limits in 2008. The 
101.3 	levy limit base shall then be increased by an amount equal to the new facility's first full 
101.4 	year's operating costs as described in this clause; and
101.5 	(25) for the estimated amount of reduction to market value credit reimbursements 
101.6 	under section 273.1384 for credits payable in the year in which the levy is payable.

101.7 	Sec. 46. Minnesota Statutes 2012, section 297I.10, subdivision 1, is amended to read:
101.8 		Subdivision 1.Cities of the first class. (a) The commissioner shall order and direct 
101.9 	a surcharge to be collected of two percent of the fire, lightning, and sprinkler leakage gross 
101.10 	premiums, less return premiums, on all direct business received by any licensed foreign or 
101.11 	domestic fire insurance company on property in a city of the first class, or by its agents for 
101.12 	it, in cash or otherwise.
101.13 	(b) By July 31 and December 31 of each year, the commissioner of management 
101.14 	and budget shall pay to the relief association in each city of the first class a warrant for 
101.15 	an amount equal to the total amount of the surcharge on the premiums collected within 
101.16 	thethat city since the previous payment.
101.17 	(c) The treasurer of the relief associationcity shall place the money received under 
101.18 	this subdivision in thea special account or fund of the relief association to defray all or a 
101.19 	a portion of the employer contribution requirement of public employees police and fire 
101.20 	plan coverage for city firefighters.

101.21 	Sec. 47. Minnesota Statutes 2012, section 345.381, is amended to read:
101.22 	345.381 PROPERTY HELD BY MINNESOTA PUBLIC PENSION FUND.
101.23 	No amounts of money held or owing by a public pension fund enumerated in section 
101.24 	356.20, subdivision 2, or 356.30, subdivision 3, or governed by sections 69.77 or69.771 to 
101.25 	69.776shallor sections 31 to 42 may be presumed to have been abandoned for purposes of 
101.26 	sections 345.41, 345.42, 345.43, 345.47 and 345.48 if the plan governing the public pension 
101.27 	fund includes a provision governing the disposition of unclaimed amounts of money.

101.28 	Sec. 48. Minnesota Statutes 2012, section 353.01, subdivision 2a, is amended to read:
101.29 		Subd. 2a.Included employees; mandatory membership. (a) Public employees 
101.30 	whose salary exceeds $425 in any month and who are not specifically excluded under 
101.31 	subdivision 2b or who have not been provided an option to participate under subdivision 
101.32 	2d, whether individually or by action of the governmental subdivision, must participate as 
101.33 	members of the association with retirement coverage by the general employees retirement 
102.1 	plan under this chapter, the public employees police and fire retirement plan under this 
102.2 	chapter, or the local government correctional employees retirement plan under chapter 
102.3 	353E, whichever applies. Membership commences as a condition of their employment on 
102.4 	the first day of their employment or on the first day that the eligibility criteria are met, 
102.5 	whichever is later. Public employees include but are not limited to:
102.6 	(1) persons whose salary meets the threshold in this paragraph from employment in 
102.7 	one or more positions within one governmental subdivision;
102.8 	(2) elected county sheriffs;
102.9 	(3) persons who are appointed, employed, or contracted to perform governmental 
102.10 	functions that by law or local ordinance are required of a public officer, including, but 
102.11 	not limited to:
102.12 	(i) town and city clerk or treasurer;
102.13 	(ii) county auditor, treasurer, or recorder;
102.14 	(iii) city manager as defined in section 353.028 who does not exercise the option 
102.15 	provided under subdivision 2d; or
102.16 	(iv) emergency management director, as provided under section 12.25;
102.17 	(4) physicians under section 353D.01, subdivision 2, who do not elect public 
102.18 	employees defined contribution plan coverage under section 353D.02, subdivision 2;
102.19 	(5) full-time employees of the Dakota County Agricultural Society;
102.20 	(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis 
102.21 	Police Relief Association who are not excluded employees under subdivision 2b due 
102.22 	to coverage by the relief association pension plan and who elected general employee 
102.23 	retirement plan coverage before August 20, 2009;
102.24 	(7)(6) employees of the Red Wing Port Authority who were first employed by the 
102.25 	Red Wing Port Authority before May 1, 2011, and who are not excluded employees 
102.26 	under subdivision 2b; and
102.27 	(8)(7) employees of the Seaway Port Authority of Duluth who are not excluded 
102.28 	employees under subdivision 2b.
102.29 	(b) A public employee or elected official who was a member of the association on 
102.30 	June 30, 2002, based on employment that qualified for membership coverage by the public 
102.31 	employees retirement plan or the public employees police and fire plan under this chapter, 
102.32 	or the local government correctional employees retirement plan under chapter 353E as of 
102.33 	June 30, 2002, retains that membership for the duration of the person's employment in that 
102.34 	position or incumbency in elected office. Except as provided in subdivision 28, the person 
102.35 	shall participate as a member until the employee or elected official terminates public 
102.36 	employment under subdivision 11a or terminates membership under subdivision 11b.
103.1 	(c) If the salary of an included public employee is less than $425 in any subsequent 
103.2 	month, the member retains membership eligibility.
103.3 	(d) For the purpose of participation in the MERF division of the general employees 
103.4 	retirement plan, public employees include employees who were members of the former 
103.5 	Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as 
103.6 	members of the MERF division of the association.

103.7 	Sec. 49. Minnesota Statutes 2012, section 353.01, subdivision 2b, is amended to read:
103.8 		Subd. 2b.Excluded employees. (a) The following public employees are not eligible 
103.9 	to participate as members of the association with retirement coverage by the general 
103.10 	employees retirement plan, the local government correctional employees retirement plan 
103.11 	under chapter 353E, or the public employees police and fire retirement plan:
103.12 	(1) persons whose salary from one governmental subdivision never exceeds $425 in 
103.13 	a month;
103.14 	(2) public officers who are elected to a governing body, city mayors, or persons who 
103.15 	are appointed to fill a vacancy in an elective office of a governing body, whose term of office 
103.16 	commences on or after July 1, 2002, for the service to be rendered in that elective position;
103.17 	(3) election officers or election judges;
103.18 	(4) patient and inmate personnel who perform services for a governmental 
103.19 	subdivision;
103.20 	(5) except as otherwise specified in subdivision 12a, employees who are hired for 
103.21 	a temporary position as defined under subdivision 12a, and employees who resign from 
103.22 	a nontemporary position and accept a temporary position within 30 days in the same 
103.23 	governmental subdivision;
103.24 	(6) employees who are employed by reason of work emergency caused by fire, 
103.25 	flood, storm, or similar disaster;
103.26 	(7) employees who by virtue of their employment in one governmental subdivision 
103.27 	are required by law to be a member of and to contribute to any of the plans or funds 
103.28 	administered by the Minnesota State Retirement System, the Teachers Retirement 
103.29 	Association, the Duluth Teachers Retirement Fund Association, and the St. Paul Teachers 
103.30 	Retirement Fund Association, or any police or firefighters relief association governed by 
103.31 	section 69.77 that has not consolidated with the Public Employees Retirement Association, 
103.32 	or any local police or firefighters consolidation account who have not elected the type of 
103.33 	benefit coverage provided by the public employees police and fire fund under sections 
103.34 	353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4, 5, or 6, 
103.35 	who have not elected public employees police and fire plan benefit coverage. This clause 
104.1 	must not be construed to prevent a person from being a member of and contributing to 
104.2 	the Public Employees Retirement Association and also belonging to and contributing to 
104.3 	another public pension plan or fund for other service occurring during the same period 
104.4 	of time. A person who meets the definition of "public employee" in subdivision 2 by 
104.5 	virtue of other service occurring during the same period of time becomes a member of the 
104.6 	association unless contributions are made to another public retirement fund on the salary 
104.7 	based on the other service or to the Teachers Retirement Association by a teacher as 
104.8 	defined in section 354.05, subdivision 2;
104.9 	(8) persons who are members of a religious order and are excluded from coverage 
104.10 	under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 
104.11 	performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 
104.12 	as amended through January 1, 1987, if no irrevocable election of coverage has been made 
104.13 	under section 3121(r) of the Internal Revenue Code of 1954, as amended;
104.14 	(9) employees of a governmental subdivision who have not reached the age of 
104.15 	23 and are enrolled on a full-time basis to attend or are attending classes on a full-time 
104.16 	basis at an accredited school, college, or university in an undergraduate, graduate, or 
104.17 	professional-technical program, or a public or charter high school;
104.18 	(10) resident physicians, medical interns, and pharmacist residents and pharmacist 
104.19 	interns who are serving in a degree or residency program in public hospitals or clinics;
104.20 	(11) students who are serving in an internship or residency program sponsored 
104.21 	by an accredited educational institution;
104.22 	(12) persons who hold a part-time adult supplementary technical college license who 
104.23 	render part-time teaching service in a technical college;
104.24 	(13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., 
104.25 	foreign citizens who are employed by a governmental subdivision under a work permit, or 
104.26 	an H-1b visa initially issued or extended for a combined period less than three years of 
104.27 	employment. Upon extension of the employment beyond the three-year period, the foreign 
104.28 	citizens must be reported for membership beginning the first of the month thereafter 
104.29 	provided the monthly earnings threshold as provided under subdivision 2a is met;
104.30 	(14) public hospital employees who elected not to participate as members of the 
104.31 	association before 1972 and who did not elect to participate from July 1, 1988, to October 
104.32 	1, 1988;
104.33 	(15) except as provided in section 353.86, volunteer ambulance service personnel, as 
104.34 	defined in subdivision 35, but persons who serve as volunteer ambulance service personnel 
104.35 	may still qualify as public employees under subdivision 2 and may be members of the 
104.36 	Public Employees Retirement Association and participants in the general employees 
105.1 	retirement plan or the public employees police and fire plan, whichever applies, on the 
105.2 	basis of compensation received from public employment service other than service as 
105.3 	volunteer ambulance service personnel;
105.4 	(16) except as provided in section 353.87, volunteer firefighters, as defined in 
105.5 	subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, 
105.6 	but a person who is a volunteer firefighter may still qualify as a public employee under 
105.7 	subdivision 2 and may be a member of the Public Employees Retirement Association and 
105.8 	a participant in the general employees retirement plan or the public employees police 
105.9 	and fire plan, whichever applies, on the basis of compensation received from public 
105.10 	employment activities other than those as a volunteer firefighter;
105.11 	(17) pipefitters and associated trades personnel employed by Independent School 
105.12 	District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 
105.13 	pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 
105.14 	if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 
105.15 	241, article 2, section 12;
105.16 	(18) electrical workers, plumbers, carpenters, and associated trades personnel who 
105.17 	are employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 
105.18 	who have retirement coverage under a collective bargaining agreement by the Electrical 
105.19 	Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 
105.20 	or the pension plan applicable to Carpenters Local 87 who were either first employed after 
105.21 	May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under 
105.22 	Laws 2000, chapter 461, article 7, section 5;
105.23 	(19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 
105.24 	painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul 
105.25 	or Independent School District No. 625, St. Paul, with coverage under a collective 
105.26 	bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 
105.27 	the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 
105.28 	pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 
105.29 	Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 
105.30 	first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 
105.31 	Session chapter 10, article 10, section 6;
105.32 	(20) plumbers who are employed by the Metropolitan Airports Commission, with 
105.33 	coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan, 
105.34 	who either were first employed after May 1, 2001, or if first employed before May 2, 
105.35 	2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 
105.36 	10, section 6;
106.1 	(21) employees who are hired after June 30, 2002, to fill seasonal positions under 
106.2 	subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 
106.3 	days or less in each year of employment with the governmental subdivision;
106.4 	(22) persons who are provided supported employment or work-study positions 
106.5 	by a governmental subdivision and who participate in an employment or industries 
106.6 	program maintained for the benefit of these persons where the governmental subdivision 
106.7 	limits the position's duration to three years or less, including persons participating in a 
106.8 	federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 
106.9 	unemployment relief program where the training or work experience is not provided as a 
106.10 	part of, or for, future permanent public employment;
106.11 	(23) independent contractors and the employees of independent contractors;
106.12 	(24) reemployed annuitants of the association during the course of that 
106.13 	reemployment; and
106.14 	(25) persons appointed to serve on a board or commission of a governmental 
106.15 	subdivision or an instrumentality thereof.
106.16 	(b) Any person performing the duties of a public officer in a position defined in 
106.17 	subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an 
106.18 	employee of an independent contractor.

106.19 	Sec. 50. Minnesota Statutes 2012, section 353.01, subdivision 6, is amended to read:
106.20 		Subd. 6.Governmental subdivision. (a) "Governmental subdivision" means a 
106.21 	county, city, town, school district within this state, or a department, unit or instrumentality 
106.22 	of state or local government, or any public body established under state or local 
106.23 	authority that has a governmental purpose, is under public control, is responsible for the 
106.24 	employment and payment of the salaries of employees of the entity, and receives a major 
106.25 	portion of its revenues from taxation, fees, assessments or from other public sources.
106.26 	(b) Governmental subdivision also means the Public Employees Retirement 
106.27 	Association, the League of Minnesota Cities, the Association of Metropolitan 
106.28 	Municipalities, charter schools formed under section 124D.10, service cooperatives 
106.29 	exercising retirement plan participation under section 123A.21, subdivision 5, joint powers 
106.30 	boards organized under section 471.59, subdivision 11, paragraph (a), family service 
106.31 	collaboratives and children's mental health collaboratives organized under section 471.59, 
106.32 	subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives 
106.33 	are governmental units that otherwise qualify for retirement plan membership, public 
106.34 	hospitals owned or operated by, or an integral part of, a governmental subdivision or 
106.35 	governmental subdivisions, the Association of Minnesota Counties, the Minnesota 
107.1 	Inter-county Association, the Minnesota Municipal Utilities Association, the Metropolitan 
107.2 	Airports Commission, the University of Minnesota with respect to police officers covered 
107.3 	by the public employees police and fire retirement plan, the Minneapolis Employees 
107.4 	Retirement Fund for employment initially commenced after June 30, 1979, the Range 
107.5 	Association of Municipalities and Schools, soil and water conservation districts, economic 
107.6 	development authorities created or operating under sections 469.090 to 469.108, the Port 
107.7 	Authority of the city of St. Paul, the Seaway Port Authority of Duluth, the Red Wing 
107.8 	Port Authority, the Spring Lake Park Fire Department, incorporated, the Lake Johanna 
107.9 	Volunteer Fire Department, incorporated, the Red Wing Environmental Learning Center, 
107.10 	the Dakota County Agricultural Society, and Hennepin Healthcare System, Inc., and the 
107.11 	Minneapolis Firefighters Relief Association and Minneapolis Police Relief Association 
107.12 	with respect to staff covered by the Public Employees Retirement Association general plan.
107.13 	(c) Governmental subdivision does not mean any municipal housing and 
107.14 	redevelopment authority organized under the provisions of sections 469.001 to 469.047; 
107.15 	or any port authority organized under sections 469.048 to 469.089 other than the Port 
107.16 	Authority of the city of St. Paul or the Seaway Port Authority of Duluth and other than 
107.17 	the Red Wing Port Authority; or any hospital district organized or reorganized prior to 
107.18 	July 1, 1975, under sections 447.31 to 447.37 or the successor of the district; or the board 
107.19 	of a family service collaborative or children's mental health collaborative organized 
107.20 	under sections 124D.23, 245.491 to 245.495, or 471.59, if that board is not controlled 
107.21 	by representatives of governmental units.
107.22 	(d) A nonprofit corporation governed by chapter 317A or organized under Internal 
107.23 	Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a 
107.24 	governmental subdivision unless the entity has obtained a written advisory opinion from 
107.25 	the United States Department of Labor or a ruling from the Internal Revenue Service 
107.26 	declaring the entity to be an instrumentality of the state so as to provide that any future 
107.27 	contributions by the entity on behalf of its employees are contributions to a governmental 
107.28 	plan within the meaning of Internal Revenue Code, section 414(d).
107.29 	(e) A public body created by state or local authority may request membership on 
107.30 	behalf of its employees by providing sufficient evidence that it meets the requirements in 
107.31 	paragraph (a).
107.32 	(f) An entity determined to be a governmental subdivision is subject to the reporting 
107.33 	requirements of this chapter upon receipt of a written notice of eligibility from the 
107.34 	association.

107.35 	Sec. 51. Minnesota Statutes 2012, section 353.01, subdivision 10, is amended to read:
108.1 		Subd. 10.Salary. (a) Subject to the limitations of section 356.611, "salary" means:
108.2 	(1) the periodic compensation of a public employee, before deductions for deferred 
108.3 	compensation, supplemental retirement plans, or other voluntary salary reduction 
108.4 	programs, and also means "wages" and includes net income from fees; and
108.5 	(2) for a public employee who is covered by a supplemental retirement plan under 
108.6 	section 356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions 
108.7 	be made by the employer, the contribution to the applicable supplemental retirement plan 
108.8 	when an agreement between the parties establishes that the contribution will either result 
108.9 	in a mandatory reduction of employees' wages through payroll withholdings, or be made 
108.10 	in lieu of an amount that would otherwise be paid as wages; and.
108.11 	(3) for a public employee who has prior service covered by a local police or 
108.12 	firefighters relief association that has consolidated with the Public Employees Retirement 
108.13 	Association or to which section 353.665 applies and who has elected coverage either 
108.14 	under the public employees police and fire fund benefit plan under section 353A.08 
108.15 	following the consolidation or under section 353.665, subdivision 4, the rate of salary 
108.16 	upon which member contributions to the special fund of the relief association were made 
108.17 	prior to the effective date of the consolidation as specified by law and by bylaw provisions 
108.18 	governing the relief association on the date of the initiation of the consolidation procedure 
108.19 	and the actual periodic compensation of the public employee after the effective date of 
108.20 	consolidation.
108.21 	(b) Salary does not mean:
108.22 	(1) the fees paid to district court reporters, unused annual vacation or sick leave 
108.23 	payments, in lump-sum or periodic payments, severance payments, reimbursement of 
108.24 	expenses, lump-sum settlements not attached to a specific earnings period, or workers' 
108.25 	compensation payments;
108.26 	(2) employer-paid amounts used by an employee toward the cost of insurance 
108.27 	coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health 
108.28 	care expense accounts, day care expenses, or any payments in lieu of any employer-paid 
108.29 	group insurance coverage, including the difference between single and family rates that 
108.30 	may be paid to a member with single coverage and certain amounts determined by the 
108.31 	executive director to be ineligible;
108.32 	(3) the amount equal to that which the employing governmental subdivision would 
108.33 	otherwise pay toward single or family insurance coverage for a covered employee when, 
108.34 	through a contract or agreement with some but not all employees, the employer:
108.35 	(i) discontinues, or for new hires does not provide, payment toward the cost of the 
108.36 	employee's selected insurance coverages under a group plan offered by the employer;
109.1 	(ii) makes the employee solely responsible for all contributions toward the cost of 
109.2 	the employee's selected insurance coverages under a group plan offered by the employer, 
109.3 	including any amount the employer makes toward other employees' selected insurance 
109.4 	coverages under a group plan offered by the employer; and
109.5 	(iii) provides increased salary rates for employees who do not have any 
109.6 	employer-paid group insurance coverages;
109.7 	(4) except as provided in section 353.86 or 353.87, compensation of any kind paid to 
109.8 	volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision 
109.9 	35 or 36;
109.10 	(5) the amount of compensation that exceeds the limitation provided in section 
109.11 	356.611; and
109.12 	(6) amounts paid by a federal or state grant for which the grant specifically 
109.13 	prohibits grant proceeds from being used to make pension plan contributions, unless the 
109.14 	contributions to the plan are made from sources other than the federal or state grant.
109.15 	(c) Amounts provided to an employee by the employer through a grievance 
109.16 	proceeding or a legal settlement are salary only if the settlement is reviewed by the 
109.17 	executive director and the amounts are determined by the executive director to be 
109.18 	consistent with paragraph (a) and prior determinations.

109.19 	Sec. 52. Minnesota Statutes 2012, section 353.01, subdivision 16, is amended to read:
109.20 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" 
109.21 	means:
109.22 	(1) service during years of actual membership in the course of which employee 
109.23 	deductions were withheld from salary and contributions were made at the applicable rates 
109.24 	under section 353.27, 353.65, or 353E.03;
109.25 	(2) periods of service covered by payments in lieu of salary deductions under 
109.26 	sections 353.27, subdivision 12, and 353.35;
109.27 	(3) service in years during which the public employee was not a member but for 
109.28 	which the member later elected, while a member, to obtain credit by making payments to 
109.29 	the fund as permitted by any law then in effect;
109.30 	(4) a period of authorized leave of absence with pay from which deductions for 
109.31 	employee contributions are made, deposited, and credited to the fund;
109.32 	(5) a period of authorized personal, parental, or medical leave of absence without 
109.33 	pay, including a leave of absence covered under the federal Family Medical Leave Act, 
109.34 	that does not exceed one year, and for which a member obtained service credit for each 
109.35 	month in the leave period by payment under section 353.0161 to the fund made in place of 
110.1 	salary deductions. An employee must return to public service and render a minimum of 
110.2 	three months of allowable service in order to be eligible to make payment under section 
110.3 	353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 
110.4 	employee must be granted allowable service credit for the purchased period;
110.5 	(6) a periodic, repetitive leave that is offered to all employees of a governmental 
110.6 	subdivision. The leave program may not exceed 208 hours per annual normal work cycle 
110.7 	as certified to the association by the employer. A participating member obtains service 
110.8 	credit by making employee contributions in an amount or amounts based on the member's 
110.9 	average salary, excluding overtime pay, that would have been paid if the leave had not been 
110.10 	taken. The employer shall pay the employer and additional employer contributions on 
110.11 	behalf of the participating member. The employee and the employer are responsible to pay 
110.12 	interest on their respective shares at the rate of 8.5 percent a year, compounded annually, 
110.13 	from the end of the normal cycle until full payment is made. An employer shall also make 
110.14 	the employer and additional employer contributions, plus 8.5 percent interest, compounded 
110.15 	annually, on behalf of an employee who makes employee contributions but terminates 
110.16 	public service. The employee contributions must be made within one year after the end of 
110.17 	the annual normal working cycle or within 30 days after termination of public service, 
110.18 	whichever is sooner. The executive director shall prescribe the manner and forms to be 
110.19 	used by a governmental subdivision in administering a periodic, repetitive leave. Upon 
110.20 	payment, the member must be granted allowable service credit for the purchased period;
110.21 	(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 
110.22 	months allowable service per authorized temporary or seasonal layoff in one calendar year. 
110.23 	An employee who has received the maximum service credit allowed for an authorized 
110.24 	temporary or seasonal layoff must return to public service and must obtain a minimum of 
110.25 	three months of allowable service subsequent to the layoff in order to receive allowable 
110.26 	service for a subsequent authorized temporary or seasonal layoff;
110.27 	(8) a period during which a member is absent from employment by a governmental 
110.28 	subdivision by reason of service in the uniformed services, as defined in United States 
110.29 	Code, title 38, section 4303(13), if the member returns to public service with the same 
110.30 	governmental subdivision upon discharge from service in the uniformed service within the 
110.31 	time frames required under United States Code, title 38, section 4312(e), provided that 
110.32 	the member did not separate from uniformed service with a dishonorable or bad conduct 
110.33 	discharge or under other than honorable conditions. The service must be credited if the 
110.34 	member pays into the fund equivalent employee contributions based upon the contribution 
110.35 	rate or rates in effect at the time that the uniformed service was performed multiplied by 
110.36 	the full and fractional years being purchased and applied to the annual salary rate. The 
111.1 	annual salary rate is the average annual salary, excluding overtime pay, during the purchase 
111.2 	period that the member would have received if the member had continued to be employed 
111.3 	in covered employment rather than to provide uniformed service, or, if the determination 
111.4 	of that rate is not reasonably certain, the annual salary rate is the member's average salary 
111.5 	rate, excluding overtime pay, during the 12-month period of covered employment rendered 
111.6 	immediately preceding the period of the uniformed service. Payment of the member 
111.7 	equivalent contributions must be made during a period that begins with the date on which 
111.8 	the individual returns to public employment and that is three times the length of the 
111.9 	military leave period, or within five years of the date of discharge from the military service, 
111.10 	whichever is less. If the determined payment period is less than one year, the contributions 
111.11 	required under this clause to receive service credit may be made within one year of the 
111.12 	discharge date. Payment may not be accepted following 30 days after termination of 
111.13 	public service under subdivision 11a. If the member equivalent contributions provided for 
111.14 	in this clause are not paid in full, the member's allowable service credit must be prorated 
111.15 	by multiplying the full and fractional number of years of uniformed service eligible for 
111.16 	purchase by the ratio obtained by dividing the total member contributions received by the 
111.17 	total member contributions otherwise required under this clause. The equivalent employer 
111.18 	contribution, and, if applicable, the equivalent additional employer contribution must be 
111.19 	paid by the governmental subdivision employing the member if the member makes the 
111.20 	equivalent employee contributions. The employer payments must be made from funds 
111.21 	available to the employing unit, using the employer and additional employer contribution 
111.22 	rate or rates in effect at the time that the uniformed service was performed, applied to the 
111.23 	same annual salary rate or rates used to compute the equivalent member contribution. The 
111.24 	governmental subdivision involved may appropriate money for those payments. The 
111.25 	amount of service credit obtainable under this section may not exceed five years unless a 
111.26 	longer purchase period is required under United States Code, title 38, section 4312. The 
111.27 	employing unit shall pay interest on all equivalent member and employer contribution 
111.28 	amounts payable under this clause. Interest must be computed at a rate of 8.5 percent 
111.29 	compounded annually from the end of each fiscal year of the leave or the break in service 
111.30 	to the end of the month in which the payment is received. Upon payment, the employee 
111.31 	must be granted allowable service credit for the purchased period; or
111.32 	(9) a period specified under section 353.0162.
111.33 	(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 
111.34 	state officers and employees displaced by the Community Corrections Act, chapter 401, 
111.35 	and transferred into county service under section 401.04, "allowable service" means the 
112.1 	combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 
112.2 	section 352.01, subdivision 11.
112.3 	(c) For a public employee who has prior service covered by a local police or 
112.4 	firefighters relief association that has consolidated with the Public Employees Retirement 
112.5 	Association under chapter 353A or to which section 353.665 applies, and who has 
112.6 	elected the type of benefit coverage provided by the public employees police and fire 
112.7 	fund either under section 353A.08 following the consolidation or under section 353.665, 
112.8 	subdivision 4, "allowable service" is a period of service credited by the local police or 
112.9 	firefighters relief association as of the effective date of the consolidation based on law 
112.10 	and on bylaw provisions governing the relief association on the date of the initiation 
112.11 	of the consolidation procedure.
112.12 	(d)(c) No member may receive more than 12 months of allowable service credit in a 
112.13 	year either for vesting purposes or for benefit calculation purposes. For an active member 
112.14 	who was an active member of the former Minneapolis Firefighters Relief Association 
112.15 	on December 29, 2011, "allowable service" is the period of service credited by the 
112.16 	Minneapolis Firefighters Relief Association as reflected in the transferred records of the 
112.17 	association up to December 30, 2011, and the period of service credited under paragraph 
112.18 	(a), clause (1), after December 30, 2011. For an active member who was an active member 
112.19 	of the former Minneapolis Police Relief Association on December 29, 2011, "allowable 
112.20 	service" is the period of service credited by the Minneapolis Police Relief Association as 
112.21 	reflected in the transferred records of the association up to December 30, 2011, and the 
112.22 	period of service credited under paragraph (a), clause (1), after December 30, 2011.
112.23 	(e)(d) MS 2002 [Expired]

112.24 	Sec. 53. Minnesota Statutes 2012, section 353.64, subdivision 1a, is amended to read:
112.25 		Subd. 1a.Police and fire plan; other members. (a) A person who prior to July 
112.26 	1, 1961, was a member of the police and fire plan, by virtue of being a police officer or 
112.27 	firefighter, shall, as long as the person remains in either position, continue membership in 
112.28 	the plan.
112.29 	(b) A person who was employed by a governmental subdivision as a police officer 
112.30 	and was a member of the police and fire plan on July 1, 1978, by virtue of being a police 
112.31 	officer as defined by this section on that date, and if employed by the same governmental 
112.32 	subdivision in a position in the same department in which the person was employed on 
112.33 	that date, continues to be a member of the plan, whether or not that person has the power 
112.34 	of arrest by warrant and is licensed by the Peace Officers Standards and Training Board 
112.35 	after that date.
113.1 	(c)(b) A person who was employed as a correctional officer by Rice county before 
113.2 	July 1, 1998, for the duration of employment in the correctional position held on July 1, 
113.3 	1998, continues to be a member of the public employees police and fire plan, whether or 
113.4 	not the person has the power of arrest by warrant and is licensed by the Peace Officers 
113.5 	Standards and Training Board after that date.
113.6 	(d) A person who was employed by a governmental subdivision as a police officer 
113.7 	or a firefighter, whichever applies, was an active member of the local police or salaried 
113.8 	firefighters relief association located in that governmental subdivision by virtue of that 
113.9 	employment as of the effective date of the consolidation as authorized by sections 
113.10 	353A.01 to 353A.10, and has elected coverage by the public employees police and fire 
113.11 	plan, shall become a member of the police and fire plan after that date if employed by 
113.12 	the same governmental subdivision in a position in the same department in which the 
113.13 	person was employed on that date.
113.14 	(e) Any police officer or firefighter of a relief association that has consolidated 
113.15 	with the association for which the employee has not elected coverage by the public 
113.16 	employees police and fire plan as provided in sections 353A.01 to 353A.10, or any police 
113.17 	officer or firefighter to whom section 353.665 applies who has not elected coverage by 
113.18 	the public employees police and fire plan as provided in section 353.665, subdivision 4, 
113.19 	must become a member of the public employees police and fire plan, but is not subject 
113.20 	to the provisions of sections 353.651 to 353.659 unless an election for such coverage is 
113.21 	made under section 353.665, subdivision 4.

113.22 	Sec. 54. Minnesota Statutes 2012, section 353.659, is amended to read:
113.23 	353.659 LOCAL RELIEF ASSOCIATION CONSOLIDATION ACCOUNT 
113.24 	BENEFITS.
113.25 	(a) For any person who hashad prior service covered by a local police or firefighters 
113.26 	relief association which has consolidatedmerged with the public employees police and 
113.27 	fire retirement associationplan and who has elected the type of benefit coverage provided 
113.28 	by the public employees police and fire fund benefit plan under section 353A.08 following 
113.29 	the consolidation as permitted by the applicable law, anythe retirement benefits payable 
113.30 	are governed by the applicable provisions of this chapter.
113.31 	(b) For any person who hashad prior service covered by a local police or firefighters 
113.32 	relief association which has consolidatedmerged with the public employees police and fire 
113.33 	retirement associationplan and who hasdid not electedelect the type of benefit coverage 
113.34 	provided by the public employees police and fire fund benefit plan under section 353A.08
113.35 	 following the consolidation as permitted by the applicable law, anythe retirement benefits 
114.1 	payable are governed by the provisions of Minnesota Statutes 2012, sections 353B.01 to 
114.2 	353B.13 which applyapplied to the applicable former relief association or by section 
114.3 	353.6511 or 353.6512, if applicable.

114.4 	Sec. 55. Minnesota Statutes 2012, section 353.665, subdivision 1, is amended to read:
114.5 		Subdivision 1.Merger authorized Application. (a) Notwithstanding any 
114.6 	provision of law to the contrary, unless the applicable municipality elects otherwise under 
114.7 	paragraph (b), everyThis section applies to the local police and fire relief associations or 
114.8 	consolidation account under chapter 353A in existence on March 1, 1999, becomes a part 
114.9 	ofaccounts that merged with the public employees police and fire plan and fund governed 
114.10 	by sections 353.63 to 353.659 on July 1, 1999 and are specified in paragraph (b).
114.11 	(b) If a municipality desires to retain its consolidation accountThe former local 
114.12 	police or fire relief associations or consolidation accounts, whichever applies, the 
114.13 	governing body of the municipality must adopt a resolution to that effect and must file a 
114.14 	copy of the resolution with the secretary of state, the state auditor, the legislative auditor, 
114.15 	the management and budget commissioner, the revenue commissioner, the executive 
114.16 	director of the public employees retirement association, and the executive director of 
114.17 	the Legislative Commission on Pensions and Retirement. The retention election must 
114.18 	apply to both consolidation accounts if the municipality is associated with more than 
114.19 	one consolidation account. The retention resolution must be adopted and filed with all 
114.20 	recipients before June 15, 1999. are:
114.21 	(1) the former local police and fire consolidation accounts that merged with the public 
114.22 	employees police and fire retirement plan and fund under Laws 1999, chapter 222, article 4;
114.23 	(2) the former Minneapolis Firefighters Relief Association;
114.24 	(3) the former Minneapolis Police Relief Association;
114.25 	(4) the former Fairmont Police Relief Association; and
114.26 	(5) the former Virginia Fire Consolidation Account.

114.27 	Sec. 56. Minnesota Statutes 2012, section 353.665, subdivision 5, is amended to read:
114.28 		Subd. 5.Benefit coverage for retirees and benefit recipients certain former local 
114.29 	relief association or consolidation account members. (a) A person who received a
114.30 	Except as provided in paragraph (b), (e), or (f), the annuity, service pension, a disability 
114.31 	pension or benefit, or a survivor benefit from a mergingattributable to or of a former 
114.32 	member of a former merged local police or fire consolidation account for the month of June 
114.33 	1999, and who hasdid not previously elected participation in the Minnesota postretirement 
114.34 	investment fund for any future postretirement adjustments rather than the postretirement 
115.1 	adjustment mechanism or mechanisms of the relief association benefit plan under 
115.2 	section 353A.08, subdivision 1, may elect participation in the Minnesota postretirement 
115.3 	investment fund for any future postretirement adjustments or retention of the 
115.4 	postretirement adjustment mechanism or mechanisms of the relief association benefit plan 
115.5 	as reflected in the applicable provisions of chapter 353B. This election must be in writing 
115.6 	on a form prescribed by the executive director and must be made before September 1, 
115.7 	1999. elect coverage by all or a portion of the public employees police and fire retirement 
115.8 	plan as permitted by applicable law must be calculated or computed under the benefit plan 
115.9 	provisions of the applicable former local police or paid firefighters relief association.
115.10 	(b) If an eligible person is a minor, the election must be made by the person's 
115.11 	parent or legal guardian. If the eligible person makes no affirmative election under this 
115.12 	subdivision, the person retains the postretirement adjustment mechanism or mechanisms 
115.13 	of the relief association benefit plan as reflected in the applicable provisions of chapter 
115.14 	353B. The annuity, service pension, disability pension or benefit, or survivor benefit 
115.15 	attributable to or of a former member of the former Minneapolis Firefighters Relief 
115.16 	Association or of the former Minneapolis Police Relief Association who had that status as 
115.17 	of December 29, 2011, continue after consolidation in the same amount and under the 
115.18 	same terms as provided in chapter 423B or 423C, respectively, and the bylaws in effect as 
115.19 	of that date, except that the unit value is governed by section 353.01, subdivisions 10a and 
115.20 	10b, respectively, and the postretirement adjustments after December 31, 2015, must be 
115.21 	calculated solely under section 353.6511, subdivision 7.
115.22 	(c) On behalf of former members of the Minneapolis Firefighters Relief Association 
115.23 	or Minneapolis Police Relief Association, the executive director shall withhold any health 
115.24 	insurance or dental insurance premiums designated by the annuitant or benefit recipient 
115.25 	and shall transfer them to the city of Minneapolis. The Public Employees Retirement 
115.26 	Association may charge a necessary and reasonable monthly administrative fee to the city 
115.27 	of Minneapolis for this function and bill it in addition to the employer contribution under 
115.28 	section 353.65, subdivision 3, paragraph (b). Notwithstanding any provision of chapter 
115.29 	13 to the contrary, the executive director shall provide the city of Minneapolis with the 
115.30 	current addresses of former members of the Minneapolis Firefighters Relief Association 
115.31 	and the Minneapolis Police Relief Association.
115.32 	(d) The executive director shall cooperate with the Minneapolis firefighters 
115.33 	fraternal association and the Minneapolis police fraternal association to ensure adequate 
115.34 	communications with the former members of the former Minneapolis Firefighters 
115.35 	Relief Association or the Minneapolis Police Relief Association consistent with Public 
115.36 	Employees Retirement Association policy.
116.1 	(c) The survivor benefit payable on behalf of any service pension or disability 
116.2 	benefit recipient who elects participation in the Minnesota postretirement investment fund 
116.3 	must be calculated under the relief association benefit plan in effect on the effective date 
116.4 	of consolidation under chapter 353A as reflected in the applicable provisions of chapter 
116.5 	353B. (e) The annuity, service pension, disability pension or benefit, or survivor benefit 
116.6 	attributable to or of a former member of the former Fairmont Police Relief Association 
116.7 	must be calculated or computed under Minnesota Statutes 2000, sections 423.41 to 
116.8 	423.46, 423.48 to 423.59, 423.61, and 423.62; Laws 1963, chapter 423; Laws 1977, 
116.9 	chapter 100; and Laws 1999, chapter 222, article 3, section 4, except that the annual 
116.10 	base salary figure for pension and benefit determinations upon consolidation and for 
116.11 	the balance of calendar year 2012 is $106,666.67 and after December 31, 2012, annual 
116.12 	postretirement adjustments of pensions and benefits in force must be calculated solely 
116.13 	under section 356.415, subdivision 1c.
116.14 	(f) The annuity, service pension, disability pension or benefit, or survivor benefit 
116.15 	attributable to or of a former member of the former Virginia firefighters consolidation 
116.16 	account must be calculated or computed under the election made under Minnesota 
116.17 	Statutes 2012, section 353A.08, unless the person made a subsequent election under 
116.18 	Minnesota Statutes 2012, section 353.6691, subdivision 4, subject to any additional ad hoc 
116.19 	postretirement adjustment under Minnesota Statutes 2012, section 353.6691, subdivision 
116.20 	5, paragraph (d).

116.21 	Sec. 57. Minnesota Statutes 2012, section 353.665, subdivision 8, is amended to read:
116.22 		Subd. 8.Member and employer contributions. (a) Effective on the first day of the 
116.23 	first full pay period following June 30, 1999,Except as provided in paragraph (b), (c), 
116.24 	or (d), the employee contribution rate for mergingmerged former consolidation account 
116.25 	active members is the rate specified in section 353.65, subdivision 2, and the regular 
116.26 	municipal contribution rate on behalf of merged former consolidation account active 
116.27 	members is the rate specified in section 353.65, subdivision 3.
116.28 	(b) The municipality associated with a merging former local consolidation account 
116.29 	that had a positive value amortizable base calculation under subdivision 7, paragraph (d), 
116.30 	after the preliminary calculation or the second calculation, whichever applies, must make 
116.31 	an additional municipal contribution to the public employees police and fire plan for 
116.32 	the period from January 1, 2000, to December 31, 2009. The amount of the additional 
116.33 	municipal contribution is the amount calculated by the actuary retained under section 
116.34 	356.214 and certified by the executive director of the Public Employees Retirement 
116.35 	Association by which the amortizable base amount would be amortized on a level dollar 
117.1 	annual end-of-the-year contribution basis, using an 8.5 percent interest rate assumption. 
117.2 	The additional municipal contribution is payable during the month of January, is without 
117.3 	any interest, or if made after January 31, but before the next following December 31, 
117.4 	is payable with interest for the period since January 1 at a rate which is equal to the 
117.5 	preretirement interest rate assumption specified in section 356.215, subdivision 8, 
117.6 	applicable to the public employees police and fire fund expressed as a monthly rate and 
117.7 	compounded on a monthly basis or if made after December 31 of the year in which the 
117.8 	additional municipal contribution is due is payable with interest at a rate which is four 
117.9 	percent greater than the highest interest rate assumption specified in section 356.215, 
117.10 	subdivision 8, expressed as a monthly rate and compounded monthly from January 1 of the 
117.11 	year in which the additional municipal contribution is due until the date on which payment 
117.12 	is made. With respect to active members of the merged former Minneapolis Firefighters 
117.13 	Relief Association and the merged former Minneapolis Police Relief Association, there are 
117.14 	no employee contributions payable and the employer contribution on behalf of those active 
117.15 	members is at the rate specified in section 353.65, subdivision 3, applied to the active 
117.16 	member's salary. In addition, an additional municipal contribution is payable by the city of 
117.17 	Minneapolis annually on July 15, set at the amount calculated as of December 30, 2011, as 
117.18 	sufficient to amortize, on a level annual dollar basis by December 31, 2031, the unfunded 
117.19 	present value figure calculated as required by Minnesota Statutes 2012, section 353.667, 
117.20 	subdivision 6, paragraph (a), and Minnesota Statutes 2012, section 353.668, subdivision 
117.21 	6, paragraph (a). If the postretirement or preretirement interest rate actuarial assumption 
117.22 	applicable  to the public employees police and fire retirement plan under section 356.215, 
117.23 	subdivision  8, is modified from the rates specified in Minnesota Statutes 2010, section 
117.24 	356.215, subdivision 8, the remainder present value of future benefits amount calculation 
117.25 	under Minnesota Statutes 2012, section 353.667, subdivision 6, and Minnesota Statutes 
117.26 	2012, section 353.668, subdivision 6, paragraph (a), updated for the passage of time, must 
117.27 	be revised and the amortization contribution by the city of Minneapolis for the balance 
117.28 	of the amortization period must be redetermined by the actuary retained under section 
117.29 	356.214 and certified by the executive director to the city of Minneapolis.
117.30 	(c) If there are assets of the former Fairmont Police Relief Association in excess of 
117.31 	the present value of future benefits as of June 29, 2012, these assets must be credited to an 
117.32 	interest-bearing suspense account within the public employees police and fire retirement 
117.33 	fund, must be used to offset any amount payable under paragraph (a) until June 30, 2015, 
117.34 	and, after June 30, 2015, must be paid to the city of Fairmont. The suspense account must 
117.35 	be credited with the same rate of investment return as the public employees police and fire 
117.36 	retirement fund. If, after June 29, 2012, the postretirement or preretirement interest rate 
118.1 	actuarial assumption applicable to the public employees police and fire retirement plan 
118.2 	under section 356.215, subdivision 8, is modified from the rates specified in Minnesota 
118.3 	Statutes 2010, section 356.215, subdivision 8, the remainder present value of future 
118.4 	benefits amount calculation under paragraph (a), updated for the passage of time, must be 
118.5 	revised and the amortization contribution by the city of Fairmont for the balance of the 
118.6 	amortization period must be redetermined by the actuary retained under section 356.214 
118.7 	and certified by the executive director to the city of Fairmont.
118.8 	(d) If there was a remainder present value of future benefits amounts under 
118.9 	Minnesota Statutes 2012, section 353.6691, subdivision 5, paragraph (a), the city of 
118.10 	Virginia shall pay an additional municipal contribution annually on or before December 
118.11 	31 sufficient to amortize on a level annual dollar basis by December 31, 2020, that 
118.12 	remainder present value of future benefits amounts of the former Virginia fire department 
118.13 	consolidation account. If, after June 29, 2012, the postretirement or preretirement interest 
118.14 	rate actuarial assumption applicable to the public employees police and fire retirement plan 
118.15 	under section 356.215, subdivision 8, is modified from the rates specified in Minnesota 
118.16 	Statutes 2010, section 356.215, subdivision 8, the remainder present value of future 
118.17 	benefits amount calculation under paragraph (a), updated for the passage of time, must be 
118.18 	revised and any amortization contribution by the city of Virginia for the balance of the 
118.19 	amortization period must be redetermined by the actuary retained under section 356.214 
118.20 	and certified by the executive director to the city of Virginia.

118.21 	Sec. 58. Minnesota Statutes 2012, section 353.71, subdivision 1, is amended to read:
118.22 		Subdivision 1.Eligibility. Any person who has been a member of a defined 
118.23 	benefit retirement plan administered by the Public Employees Retirement Association, 
118.24 	or a retirement plan administered by the Minnesota State Retirement System, or the 
118.25 	Teachers Retirement Association, or any other public retirement system in the state of 
118.26 	Minnesota having a like provision, except a retirement plan providing benefits for police 
118.27 	officers or firefighters governed by sections 69.77 or69.771 to 69.776, or by sections 31 
118.28 	to 42, is entitled, when qualified, to an annuity from each retirement plan if the total 
118.29 	allowable service in all retirement plans or in any two of these retirement plans totals the 
118.30 	number of years of allowable service required to receive a normal retirement annuity for 
118.31 	that retirement plan, provided that no portion of the allowable service upon which the 
118.32 	retirement annuity from one retirement plan is based is again used in the computation for 
118.33 	benefits from another retirement plan and provided further that the person has not taken a 
118.34 	refund from any one of these retirement plans since the person's membership in that 
118.35 	association or system last terminated. The annuity from each fund must be determined by 
119.1 	the appropriate provisions of the law except that the requirement that a person must have 
119.2 	at least a specific minimum period of allowable service in the respective association or 
119.3 	system does not apply for the purposes of this section if the combined service in two or 
119.4 	more of these retirement plans equals the number of years of allowable service required to 
119.5 	receive a normal retirement annuity for that retirement plan.

119.6 	Sec. 59. Minnesota Statutes 2012, section 356.20, subdivision 2, is amended to read:
119.7 		Subd. 2.Covered public pension plans and funds. This section applies to the 
119.8 	following public pension plans:
119.9 	(1) the general state employees retirement plan of the Minnesota State Retirement 
119.10 	System;
119.11 	(2) the general employees retirement plan of the Public Employees Retirement 
119.12 	Association;
119.13 	(3) the Teachers Retirement Association;
119.14 	(4) the State Patrol retirement plan;
119.15 	(5) the St. Paul Teachers Retirement Fund Association;
119.16 	(6) the Duluth Teachers Retirement Fund Association;
119.17 	(7) the University of Minnesota faculty retirement plan;
119.18 	(8) the University of Minnesota faculty supplemental retirement plan;
119.19 	(9) the judges retirement fund;
119.20 	(10) a police or firefighter's relief association specified or described in section 69.77, 
119.21 	subdivision 1a the Bloomington Fire Department Relief Association;
119.22 	(11) a volunteer firefighter relief association governed by section 69.771, subdivision 
119.23 	1;
119.24 	(12) the public employees police and fire plan of the Public Employees Retirement 
119.25 	Association;
119.26 	(13) the correctional state employees retirement plan of the Minnesota State 
119.27 	Retirement System;
119.28 	(14) the local government correctional service retirement plan of the Public 
119.29 	Employees Retirement Association; and
119.30 	(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.

119.31 	Sec. 60. Minnesota Statutes 2012, section 356.215, subdivision 18, is amended to read:
119.32 		Subd. 18.Establishment of actuarial assumptions. (a) Before July 2, 2010, the 
119.33 	actuarial assumptions used for the preparation of actuarial valuations under this section 
119.34 	that are other than preretirement interest, postretirement interest, salary increase, and 
120.1 	payroll increase may be changed only with the approval of the Legislative Commission on 
120.2 	Pensions and Retirement or after a period of one year has elapsed since the date on which 
120.3 	the proposed assumption change or changes were received by the Legislative Commission 
120.4 	on Pensions and Retirement without commission action.
120.5 	(b) After July 1, 2010, the actuarial assumptions used for the preparation of actuarial 
120.6 	valuations under this section that are other than postretirement interest and preretirement 
120.7 	interest may be changed only with the approval of the Legislative Commission on 
120.8 	Pensions and Retirement or after a period of one year has elapsed since the date on which 
120.9 	the proposed assumption change or changes were received by the Legislative Commission 
120.10 	on Pensions and Retirement without commission action.
120.11 	(c) A change in the applicable actuarial assumptions may be proposed by the 
120.12 	governing board of the applicable pension fund or relief association, by the actuary 
120.13 	retained by the joint retirement systems under section 356.214 or by the actuary retained 
120.14 	by a local police or firefighters relief association governed by sections 69.77 or69.771 to 
120.15 	69.776 or by sections 31 to 42, if one is retained.

120.16 	Sec. 61. Minnesota Statutes 2012, section 356.216, is amended to read:
120.17 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL 
120.18 	POLICE AND FIRE FUNDS MONTHLY VOLUNTEER FIREFIGHTER RELIEF 
120.19 	ASSOCIATIONS.
120.20 	The provisions of section 356.215 that govern the contents of actuarial valuations 
120.21 	must apply to the Bloomington Fire Department Relief Association and to any local police 
120.22 	or fire pension fund ormonthly volunteer firefighter relief association required to make 
120.23 	an actuarial report under this section, except as follows:
120.24 	(1) in calculating normal cost and other requirements, if required to be expressed as 
120.25 	a level percentage of covered payroll, the salaries used in computing covered payroll must 
120.26 	be the maximum rate of salary on which retirement and survivorship credits and amounts 
120.27 	of benefits are determined and from which any member contributions are calculated and 
120.28 	deducted;
120.29 	(2)(1) in lieu of the amortization date specified in section 356.215, subdivision 
120.30 	11, the appropriate amortization target date specified in clause (2) or section 69.77, 
120.31 	subdivision 4, or69.773, subdivision 4, clause paragraph (c), must be used in calculating 
120.32 	any required amortization contribution, except that if the actuarial report;
120.33 	(2) for the Bloomington Fire Department Relief Association indicates an, any
120.34 	 unfunded actuarial accrued liability, the unfunded obligation is tomust be amortized on 
120.35 	a level dollar basis by December 31 of the year occurring 20 years later after the year 
121.1 	in which the unfunded actuarial accrued liability initially occurred, and, if subsequent 
121.2 	actuarial valuations for the Bloomington Fire Department Relief Association determine
121.3 	indicate a net actuarial experience loss incurred during the year which ended as of the day 
121.4 	before the most recent actuarial valuation date, any unfunded actuarial accrued liability 
121.5 	due to that loss is to be amortized on a level dollar basis by December 31 of the year 
121.6 	occurring 20 years later after the year in which the net actuarial experience loss occurred;
121.7 	(3) in addition to the tabulation of active members and annuitants provided for in 
121.8 	section 356.215, subdivision 13, the member contributions for active members for the 
121.9 	calendar year and the prospective annual retirement annuitiesservice pensions under the 
121.10 	benefit plan for active members must be reported;
121.11 	(4) actuarial valuations required under section 39 must be made annually and 
121.12 	actuarial valuations required under section 69.773, subdivision 2, must be made at least
121.13 	 every four years and actuarial valuations required under section 69.77 shall be made 
121.14 	annually or as frequently as required by generally accepted accounting principles in the 
121.15 	government sector, whichever frequency requirement is shorter;
121.16 	(5) the actuarial balance sheet showing accrued assets valued at market value if the 
121.17 	actuarial valuation is required to be prepared at least every four years or valued as current 
121.18 	assets under section 356.215, subdivision 1, paragraph (b) or (f), whichever applies, if the 
121.19 	actuarial valuation is required to be prepared annually, actuarial accrued liabilities, and the 
121.20 	unfunded actuarial accrued liability must include the following required reserves:
121.21 	(i) for active members:
121.22 	1. (A) retirement benefits or service pensions;
121.23 	2. (B) disability benefits; and
121.24 	3. refund liability due to death or withdrawal;
121.25 	4.(C) survivors' benefits;
121.26 	(ii) for deferred annuitants' benefits;
121.27 	(iii) for former members without vested rights;
121.28 	(iv) for annuitants;:
121.29 	1. (A) retirement annuities or service pensions;
121.30 	2. (B) disability annuities; and
121.31 	3. surviving spouses' annuities;
121.32 	4. surviving children's annuities; (C) survivor benefits.
121.33 	In addition to those required reserves, separate items must be shown for additional 
121.34 	benefits, if any, which may not be appropriately included in the reserves listed above; and
121.35 	(6) actuarial valuations are due to be filed with the state auditor by the first day of 
121.36 	the seventh month after the end of the fiscal year which the actuarial valuation covers.

122.1 	Sec. 62. Minnesota Statutes 2012, section 356.219, subdivision 1, is amended to read:
122.2 		Subdivision 1.Report required. (a) The State Board of Investment, on behalf 
122.3 	of the public pension funds and programs for which it is the investment authority, and 
122.4 	any Minnesota public pension plan that is not fully invested through the State Board of 
122.5 	Investment, including the Bloomington Fire Department Relief Association and a local 
122.6 	police orvolunteer firefighters relief association governed by sections 69.77 or69.771 to 
122.7 	69.775, shall report the information specified in subdivision 3 to the state auditor. The 
122.8 	state auditor may prescribe a form or forms for the purposes of the reporting requirements 
122.9 	contained in this section.
122.10 	(b) The Bloomington Fire Department Relief Association and a local police or
122.11 	volunteer firefighters relief association governed by section 69.77 or sections 69.771 to 
122.12 	69.775 is fully invested during a given calendar year for purposes of this section if all 
122.13 	assets of the applicable pension plan beyond sufficient cash equivalent investments to 
122.14 	cover six months expected expenses are invested under section 11A.17. The board of any 
122.15 	fully invested public pension plan remains responsible for submitting investment policy 
122.16 	statements and subsequent revisions as required by subdivision 3, paragraph (a).
122.17 	(c) For purposes of this section, the State Board of Investment is considered to be 
122.18 	the investment authority for any Minnesota public pension fund required to be invested by 
122.19 	the State Board of Investment under section 11A.23, or for any Minnesota public pension 
122.20 	fund authorized to invest in the supplemental investment fund under section 11A.17 and 
122.21 	which is fully invested by the State Board of Investment.
122.22 	(d) This section does not apply to the following plans:
122.23 	(1) the Minnesota unclassified employees retirement program under chapter 352D;
122.24 	(2) the public employees defined contribution plan under chapter 353D;
122.25 	(3) the individual retirement account plans under chapters 354B and 354D;
122.26 	(4) the higher education supplemental retirement plan under chapter 354C;
122.27 	(5) any alternative retirement benefit plan established under section 383B.914; and
122.28 	(6) the University of Minnesota faculty retirement plan.

122.29 	Sec. 63. Minnesota Statutes 2012, section 356.219, subdivision 2, is amended to read:
122.30 		Subd. 2.Asset class definition. (a) For purposes of this section, "asset class" 
122.31 	means any of the following asset groupings as authorized in applicable law, bylaws, or 
122.32 	articles of incorporation:
122.33 	(1) cash and any cash equivalent investments with maturities of one year or less 
122.34 	when issued;
123.1 	(2) debt securities with maturities greater than one year when issued, including 
123.2 	but not limited to mortgage participation certificates and pools, asset backed securities, 
123.3 	guaranteed investment contracts, and authorized government and corporate obligations of 
123.4 	corporations organized under laws of the United States or any state, or the Dominion of 
123.5 	Canada or its provinces;
123.6 	(3) stocks or convertible issues of any corporation organized under laws of the 
123.7 	United States or any state, or the Dominion of Canada or its provinces, or any corporation 
123.8 	listed on the New York Stock Exchange or the American Stock Exchange;
123.9 	(4) international stocks or convertible issues;
123.10 	(5) international debt securities; and
123.11 	(6) real estate and venture capital.
123.12 	(b) If the pension plan is investing under section 69.77, subdivision 9, section 69.775, 
123.13 	or any other applicable law, in open-end investment companies registered under the 
123.14 	federal Investment Company Act of 1940, or in the Minnesota supplemental investment 
123.15 	fund under section 11A.17, this investment must be included under an asset class indicated 
123.16 	in paragraph (a), clauses (1) through (6), as appropriate. If the investment vehicle includes 
123.17 	underlying securities from more than one asset class as indicated by paragraph (a), clauses 
123.18 	(1) through (6), the investment may be treated as a separate asset class.

123.19 	Sec. 64. Minnesota Statutes 2012, section 356.219, subdivision 8, is amended to read:
123.20 		Subd. 8.Timing of reports. (a) For salaried firefighter relief associations, police
123.21 	 the Bloomington Fire Department  Relief associations,Association and the volunteer 
123.22 	firefighter relief associations, the information required under this section must be 
123.23 	submitted by the due date for reports required under section 69.051, subdivision 1 or 1a, 
123.24 	as applicable. If a relief association satisfies the definition of a fully invested plan under 
123.25 	subdivision 1, paragraph (b), for the calendar year covered by the report required under 
123.26 	section 69.051, subdivision 1 or 1a, as applicable, the chief administrative officer of 
123.27 	the covered pension plan shall certify that compliance on a form prescribed by the state 
123.28 	auditor. The state auditor shall transmit annually to the State Board of Investment a list or 
123.29 	lists of covered pension plans which submitted certifications in order to facilitate reporting 
123.30 	by the State Board of Investment under paragraph (c).
123.31 	(b) For the St. Paul Teachers Retirement Fund Association, the Duluth Teachers 
123.32 	Retirement Fund Association, and the University of Minnesota faculty supplemental 
123.33 	retirement plan, the information required under this section must be submitted to the state 
123.34 	auditor by June 1 of each year.
124.1 	(c) The State Board of Investment, on behalf of pension funds specified in 
124.2 	subdivision 1, paragraph (c), must report information required under this section by 
124.3 	September 1 of each year.

124.4 	Sec. 65. Minnesota Statutes 2012, section 356.406, subdivision 1, is amended to read:
124.5 		Subdivision 1.Definitions. (a) Each of the words or terms defined in this 
124.6 	subdivision has the meaning indicated.
124.7 	(b) "Public pension plan" means any retirement plan or fund enumerated in section 
124.8 	356.20, subdivision 2, or 356.30, subdivision 3, the Bloomington Fire Department Relief 
124.9 	Association, any relief association governed by section 69.77 or sections 69.771 to 
124.10 	69.775, any retirement plan governed by chapter 354B or 354C, the Hennepin County 
124.11 	supplemental retirement plan governed by sections 383B.46 to 383B.52, or any housing 
124.12 	and redevelopment authority retirement plan.
124.13 	(c) "Public pension plan member" means a person who is a participant covered by 
124.14 	a public pension plan; a former participant of a public pension plan who has sufficient 
124.15 	service to be entitled to receive a future retirement annuity or service pension; a recipient 
124.16 	of a retirement annuity, service pension, or disability benefit from a public pension plan; or 
124.17 	a former participant of a public pension plan who has member or employee contributions 
124.18 	to the person's credit in the public pension plan.
124.19 	(d) "Survivor" means the surviving spouse, a former spouse, a surviving child, a 
124.20 	joint annuitant, a designated recipient of a second or remainder portion of an optional 
124.21 	annuity form, a beneficiary, or the estate of a deceased public pension plan member, as 
124.22 	those terms are commonly understood or defined in the benefit plan document of the 
124.23 	public pension plan.
124.24 	(e) "Survivor benefit" means a surviving spouse benefit, surviving child benefit, 
124.25 	second or remainder portion of an optional annuity form, a death benefit, a funeral benefit, 
124.26 	or a refund of member or employee contributions payable on account of the death of a 
124.27 	public pension plan member as provided for in the benefit plan document of the public 
124.28 	pension plan.

124.29 	Sec. 66. Minnesota Statutes 2012, section 356A.01, subdivision 19, is amended to read:
124.30 		Subd. 19.Pension fund. "Pension fund" means the assets amassed and held in a 
124.31 	pension plan, other than the general fund, as reserves for present and future payment 
124.32 	of benefits and administrative expenses. For the Bloomington Fire Department Relief 
124.33 	Association or a retirement plan governed by section 69.77 or by chapter 424A, the term 
124.34 	means the relief association special fund.

125.1 	Sec. 67. Minnesota Statutes 2012, section 356A.06, subdivision 4, is amended to read:
125.2 		Subd. 4.Economic interest statement. (a) Each member of the governing board 
125.3 	of a covered pension plan and the chief administrative officer of the plan shall file with 
125.4 	the plan a statement of economic interest.
125.5 	(b) For a covered pension plan other than a plan specified in paragraph (c), the 
125.6 	statement must contain the information required by section 10A.09, subdivision 5, and 
125.7 	any other information that the fiduciary or the governing board of the plan determines is 
125.8 	necessary to disclose a reasonably foreseeable potential or actual conflict of interest.
125.9 	(c) For a covered pension plan governed by sections 69.771 to 69.776 or a covered 
125.10 	pension plan governed by section 69.77 withthe Bloomington Fire Department Relief 
125.11 	Association if its special fund assets are under $8,000,000, the statement must contain 
125.12 	the following:
125.13 	(1) the person's principal occupation and principal place of business;
125.14 	(2) whether or not the person has an ownership of or interest of ten percent or greater 
125.15 	in an investment security brokerage business, a real estate sales business, an insurance 
125.16 	agency, a bank, a savings and loan, or another financial institution; and
125.17 	(3) any relationship or financial arrangement that can reasonably be expected to 
125.18 	give rise to a conflict of interest.
125.19 	(d) The statement must be filed annually with the chief administrative officer of 
125.20 	the plan and be available for public inspection during regular office hours at the office 
125.21 	of the pension plan.
125.22 	(e) A disclosure form meeting the requirements of the federal Investment Advisers 
125.23 	Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21 as amended, and 
125.24 	filed with the State Board of Investment or the pension plan meets the requirements of 
125.25 	this subdivision.
125.26 	(f) The chief administrative officer of each covered pension plan, by January 15, 
125.27 	annually, shall transmit a certified listing of all individuals who have filed statements of 
125.28 	economic interest with the plan under this subdivision during the preceding 12 months 
125.29 	and the address of the office referenced in paragraph (d) to the Campaign Finance and 
125.30 	Public Disclosure Board.

125.31 	Sec. 68. Minnesota Statutes 2012, section 356A.07, subdivision 2, is amended to read:
125.32 		Subd. 2.Annual financial report. A covered pension plan shall provide each 
125.33 	active plan participant and benefit recipient with a copy of the most recent annual financial 
125.34 	report required by section 356.20 and a copy of the most recent actuarial evaluation, 
126.1 	if any, required by section 69.77,69.773, 356.215, or 356.216, or by section 39, or a 
126.2 	summary of those reports.

126.3 	Sec. 69. Minnesota Statutes 2012, section 423A.02, subdivision 1, is amended to read:
126.4 		Subdivision 1.Amortization state aid. (a) A municipality in which is located a local 
126.5 	police or salaried firefighters relief association to which the provisions of section 69.77, 
126.6 	apply, that had an unfunded actuarial accrued liability in the most recent relief association 
126.7 	actuarial valuation, is entitled, upon application as required by the commissioner of 
126.8 	revenue, to receive local police and salaried firefighters' relief association amortization 
126.9 	state aid if the municipality and the appropriate relief association both comply with the 
126.10 	applicable provisions of sections 69.031, subdivision 5, 69.051, subdivisions 1 and 3, and 
126.11 	69.77. The cities of Fairmont and Minneapolis are entitled, subject to subdivisions 2, 4, 
126.12 	and 5, to receive amortization state aid under this section.
126.13 	(b) The total amount of amortization state aid to all entitled municipalities must not 
126.14 	exceed $5,055,000 the appropriation under subdivision 3a.
126.15 	(c) Subject to the adjustment for the city of Minneapolis provided in this paragraph, 
126.16 	the amount of amortization state aid to which a municipality is entitled annually is an 
126.17 	amount equal to the level annual dollar amount required to amortize, by December 31, 
126.18 	2010, the unfunded actuarial accrued liability of the special fund of the appropriate 
126.19 	relief association as reported in the December 31, 1978, actuarial valuation of the relief 
126.20 	association prepared under sections 356.215 and 356.216, reduced by the dollar amount 
126.21 	required to pay the interest on the unfunded actuarial accrued liability of the special fund of 
126.22 	the relief association for calendar year 1981 set at the rate specified in Minnesota Statutes 
126.23 	1978, section 356.215, subdivision 8. For the city of Minneapolis, the amortization state 
126.24 	aid amount thus determined must be reduced by $747,232 on account of the former 
126.25 	Minneapolis Police Relief Association and by $772,768 on account of the former 
126.26 	Minneapolis Fire Department Relief Association.The amortization state aid amounts are:

126.27		City
	Aid Amount
		
126.28		Fairmont
	$24,172
		
126.29		Minneapolis
	$2,728,547
		
126.30 	If the amortization state aid amounts determined under this paragraph exceed the 
126.31 	amount appropriated for this purpose under subdivision 3a, the amortization state aid for 
126.32 	actual allocation must be reduced pro rata.
126.33 	(d) Each municipality is eligible for an amortization state aid payment in a fiscal 
126.34 	year if:
127.1 	(1) for Fairmont, the executive director of the Public Employees Retirement 
127.2 	Association certifies on or before June 30 that a municipal contribution with respect to the 
127.3 	former Fairmont Police Relief Association is payable in the upcoming fiscal year under 
127.4 	section 353.665, subdivision 8, paragraph (c); and
127.5 	(2) for Minneapolis, the executive director of the Public Employees Retirement 
127.6 	Association certifies on or before June 30 that an additional employer contribution with 
127.7 	respect to either the former Minneapolis Firefighters Relief Association or the former 
127.8 	Minneapolis Police Relief Association is payable in the upcoming fiscal year under section 
127.9 	353.665, subdivision 8, paragraph (b).
127.10 	Payment of amortization state aid to municipalities must be made directly to 
127.11 	the municipalities involved in three equal installments on July 15, September 15, and 
127.12 	November 15 annually. Upon receipt of amortization state aid, the municipal treasurer 
127.13 	shall transmit the aid amount to the treasurercustodian of the local relief associationtrust 
127.14 	fund or to the executive director of the public employees police and fire retirement fund, 
127.15 	whichever applies, for immediate deposit in the special fund of the relief association.
127.16 	(e) The commissioner of revenue shall administer the amortization state aid program. 
127.17 	The commissioner shall prescribe and periodically revise, as necessary, the form for and
127.18 	required content of the applicationcertifications for the amortization state aid.
127.19 	(f) The amount required under this section, as provided in subdivision 3a, is 
127.20 	appropriated annually from the general fund to the commissioner of revenue.

127.21 	Sec. 70. Minnesota Statutes 2012, section 423A.02, subdivision 1b, is amended to read:
127.22 		Subd. 1b.Additional amortization state aid. (a) Annually, on October 1, the 
127.23 	commissioner of revenue shall allocate the additional amortization state aid transferred 
127.24 	under section 69.021, subdivision 11, to:
127.25 	(1) all police or salaried firefighters relief associations governed by and in full 
127.26 	compliance with the requirements of section 69.77, that had an unfunded actuarial accrued 
127.27 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
127.28 	preceding December 31;
127.29 	(2) all local police or salaried firefighter consolidation accounts governed by chapter 
127.30 	353A that are certified by the executive director of the public employees retirement 
127.31 	association as having for the current fiscal year an additional municipal contribution 
127.32 	amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented 
127.33 	section 353A.083, subdivision 1, if the effective date of the consolidation preceded May 
127.34 	24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date 
127.35 	of the consolidation preceded June 1, 1995; and
128.1 	(3) the municipalities that are required to make an additional municipal contribution 
128.2 	under section 353.665, subdivision 8; 353.667, subdivision 6; or 353.668, subdivision 
128.3 	6, for the duration of the required additional contribution.
128.4 	(b) The commissioner shall allocate the state aid on the basis of the proportional share 
128.5 	of the relief association or consolidation account of the total unfunded actuarial accrued 
128.6 	liability of all recipient relief associations and consolidation accounts as of December 31, 
128.7 	1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
128.8 	(c)(a) Beginning October 1, 2000 2013, and annually thereafter, the commissioner 
128.9 	shall allocate the additional amortization state aid, including any state aid in excess of the 
128.10 	limitation in subdivision 4, on the following basis:
128.11 	(1) 64.5 percent to the municipalities to which section 353.665, subdivision 
128.12 	8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in 
128.13 	accordance with paragraph (b) and subject to the limitation in subdivision 4;
128.14 	(2) 34.2(1) 47.1 percent to the city of Minneapolis to fund any unfunded actuarial 
128.15 	accrued liability in the actuarial valuation prepared under sections 356.215 and 356.216
128.16 	 as of the preceding December 31 for the Minneapolis Police Relief Association or the 
128.17 	Minneapolis Fire Department Relief Association; and defray the employer costs associated 
128.18 	with police and firefighter retirement coverage;
128.19 	(2) 25.8 percent as additional funding to support the minimum fire state aid for 
128.20 	volunteer firefighter relief associations under section 69.021, subdivision 7, paragraph (d);
128.21 	(3) 12.9 percent to the city of Duluth to defray employer costs associated with 
128.22 	police and firefighter retirement coverage;
128.23 	(4) 12.9 percent to the St. Paul Teachers Retirement Fund Association if the 
128.24 	investment performance requirement of paragraph (c) is met; and 
128.25 	(3)(5) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued 
128.26 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
128.27 	preceding December 31 for the Virginia Fire Department Relief Association defray the 
128.28 	employer contribution under section 353.665, subdivision 8, paragraph (d).
128.29 	If there is no unfunded actuarial accrued liability in bothadditional employer 
128.30 	contribution under section 353.665, subdivision 8, paragraph (b), certified under 
128.31 	subdivision 1, paragraph (d), clause (2), with respect to the former Minneapolis Police 
128.32 	Relief Association and the former Minneapolis Fire Department Relief Association as 
128.33 	disclosed in the most recent actuarial valuations for the relief associations prepared under 
128.34 	sections 356.215 and 356.216, the commissioner shall allocate that 34.247.1 percent 
128.35 	of the aid as follows: 49 percent to the Teachers Retirement Association, 21 percent 
128.36 	to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional 
129.1 	funding to support minimum fire state aid for volunteer firefighters relief associations. If 
129.2 	there is no unfunded actuarial accrued liability inemployer contribution by the city of 
129.3 	Virginia Fire Department Relief Association as disclosed in the most recent actuarial 
129.4 	valuation for the relief association prepared under sections 356.215 and 356.216 under 
129.5 	section 353.665, subdivision 8, paragraph (d), for the former Virginia Fire Department 
129.6 	Relief Association certified on or before June 30 by the executive director of the Public 
129.7 	Employees Retirement Association, the commissioner shall allocate that 1.3 percent 
129.8 	of the aid as follows: 49 percent to the Teachers Retirement Association, 21 percent 
129.9 	to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional 
129.10 	funding to support minimum fire state aid for volunteer firefighters relief associations. 
129.11 	Upon the final payment to municipalities required by section 353.665, subdivision 8, 
129.12 	paragraph (b), or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate 
129.13 	that 64.5 percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement 
129.14 	Fund Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial 
129.15 	accrued liability in the actuarial valuation proposed under sections 356.215 and 356.216
129.16 	 as of the preceding December 31 for the Minneapolis Police Relief Association or the 
129.17 	Minneapolis Firefighters Relief Association, 20 percent for the city of Duluth to pay for 
129.18 	any costs associated with the police and firefighters pensions, and 40 percent as additional 
129.19 	funding to support minimum fire state aid for volunteer firefighters relief associations.
129.20 	(b) The allocation must be made by the commissioner at the same time and under the 
129.21 	same procedures as specified in subdivision 3 of revenue on October 1 annually.
129.22 	(c) With respect to the St. Paul Teachers Retirement Fund Association, annually, 
129.23 	beginning on July 1, 2005, if the applicable teacher's association five-year average 
129.24 	time-weighted rate of investment return does not equal or exceed the performance of a 
129.25 	composite portfolio assumed passively managed (indexed) invested ten percent in cash 
129.26 	equivalents, 60 percent in bonds and similar debt securities, and 30 percent in domestic 
129.27 	stock calculated using the formula under section 11A.04, clause (11), the aid allocation 
129.28 	to thatthe retirement fund under this section ceases until the five-year annual rate of 
129.29 	investment return equals or exceeds the performance of that composite portfolio.
129.30 	(d) The amounts required under this subdivision are the amounts annually 
129.31 	appropriated to the commissioner of revenue under section 69.021, subdivision 11, 
129.32 	paragraph (e), and the aid amounts in excess of the limitation in subdivision 4.

129.33 	Sec. 71. Minnesota Statutes 2012, section 423A.02, subdivision 2, is amended to read:
129.34 		Subd. 2.Continued eligibility. A municipality that has qualified for amortization 
129.35 	state aid under subdivision 1 on December 31, 1984, and has an additional municipal 
130.1 	contribution payable under section 353A.09, subdivision 5, paragraph (b), as of the most 
130.2 	recent December 31, continues upon application to be entitled to receive amortization 
130.3 	state aid under subdivision 1 and supplementary amortization state aid under subdivision 
130.4 	1a, after the local police or salaried firefighters' relief association has been consolidated 
130.5 	into the public employees police and fire fund. If a municipality loses entitlement for 
130.6 	amortization state aid and supplementary amortization state aid in any year because of 
130.7 	not having an additional municipal contribution under section 353A.09, subdivision 5, 
130.8 	paragraph (b), the municipality is not entitled to the aid amounts in any subsequent year. A 
130.9 	municipality that received amortization aid in 1999 and is required to make an additional 
130.10 	municipal contribution under section 353.665, subdivision 8, continues to qualify for the 
130.11 	amortization state aid and the supplemental amortization aid until December 31, 2009
130.12 	 received amortization aid in 2011 and is required to make a municipal contribution under 
130.13 	section 353.665, subdivision 8, paragraph (b), (c), or (d), whichever applies, continues to 
130.14 	qualify for amortization state aid for the duration of the applicable municipal contribution.

130.15 	Sec. 72. Minnesota Statutes 2012, section 423A.02, subdivision 3, is amended to read:
130.16 		Subd. 3.Reallocation of amortization or supplementary amortization state aid.
 130.17 	(a) Seventy percent of the difference between $5,720,000 and the current year amortization 
130.18 	aid and supplemental amortization aid distributed under subdivisions subdivision 1 and 1a
130.19 	 that is not distributed for any reason to a municipality for use by a local police or salaried 
130.20 	fire relief association must be distributed by the commissioner of revenue according to this 
130.21 	paragraph. The commissioner shall distribute 50 percent of the amounts derived under 
130.22 	this paragraph to the Teachers Retirement Association, ten percent to the Duluth Teachers 
130.23 	Retirement Fund Association, and 40 percent to the St. Paul Teachers Retirement Fund 
130.24 	Association to fund the unfunded actuarial accrued liabilities of the respective funds. 
130.25 	These payments shallmust be made on or before June 30July 15 each fiscal year. If the 
130.26 	St. Paul Teachers Retirement Fund Association or the Duluth Teachers Retirement Fund 
130.27 	Association becomes fully funded, itsthe association's eligibility for its portion of this 
130.28 	aid ceases. Amounts remaining in the undistributed balance account at the end of the 
130.29 	biennium if aid eligibility ceases cancel to the general fund.
130.30 	(b) In order to receive amortization and supplementary amortization aid under 
130.31 	paragraph (a), prior tobefore June 30 annually Independent School District No. 625, St. 
130.32 	Paul, must make an additional contribution of $800,000 each year to the St. Paul Teachers 
130.33 	Retirement Fund Association.
130.34 	(c) Thirty percent of the difference between $5,720,000 and the current year 
130.35 	amortization aid and supplemental amortization aid under subdivisions 1 and subdivision
131.1 	 1a that is not distributed for any reason to a municipality for use by a local police or 
131.2 	salaried firefighter relief association must be distributed under section 69.021, subdivision 
131.3 	7, paragraph (d), as additional funding to support a minimum fire state aid amount for 
131.4 	volunteer firefighter relief associations.

131.5 	Sec. 73. Minnesota Statutes 2012, section 423A.02, subdivision 3a, is amended to read:
131.6 		Subd. 3a.Appropriations for amortization state aid; supplementary 
131.7 	amortization state aid; and amortization state aid and supplementary state aid
131.8 	 reallocations. $4,720,000$5,720,000 is annually appropriated from the general fund to 
131.9 	the commissioner of revenue for amortization state aid under subdivision 1, and for the 
131.10 	reallocation of amortization aid under subdivision 3. $1,000,000 is annually appropriated 
131.11 	from the general fund to the commissioner of revenue for supplementary amortization 
131.12 	state aid under subdivision 1a, and for the reallocation of supplementary amortization state 
131.13 	aid under subdivision 3.

131.14 	Sec. 74. Minnesota Statutes 2012, section 423A.02, subdivision 4, is amended to read:
131.15 		Subd. 4.Limit on certain total aid amounts. (a) The total of amortization aid, 
131.16 	supplemental amortization aid, and additional amortization aid under this section payable 
131.17 	to a municipality to which section 353.665, subdivision 8, paragraph (b), (c), or (d), 
131.18 	applies, may not exceed the amount of the additional municipal contribution payable by 
131.19 	an individual municipality under section 353.665, subdivision 8, paragraph (b), (c), or (d).
131.20 	(b) Any aid amount in excess of the limit under this subdivision for an individual 
131.21 	municipality must be redistributed to the other municipalities to which section 353.665, 
131.22 	subdivision 8, paragraph (b), (c), or (d), applies. The excess aid must be distributed in 
131.23 	proportion to each municipality's additional municipal contribution under section 353.665, 
131.24 	subdivision 8, paragraph (b), (c), or (d).
131.25 	(c) When the total aid for each municipality under this section equals the limit under 
131.26 	paragraph (a), any aid in excess of the limit must be redistributed under subdivision 1b.

131.27 	Sec. 75. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:
131.28 		Subd. 5.Termination of state aid programs. The amortization state aid, 
131.29 	supplemental amortization state aid, and additional amortization state aid programs 
131.30 	terminate as of the December 31, next following the date of the actuarial valuation when 
131.31 	the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial 
131.32 	accrued liability of that plan or December 31, 2009 when the assets of the Duluth Teachers 
132.1 	Retirement Fund Association equal the actuarial accrued liability of that plan, whichever 
132.2 	is later.

132.3 	Sec. 76. Minnesota Statutes 2012, section 424A.001, subdivision 4, is amended to read:
132.4 		Subd. 4.Relief association. (a) "Relief association" or "volunteer firefighters' relief 
132.5 	association" means a volunteer firefighters' relief association or a volunteer firefighters' 
132.6 	division or account of a partially salaried and partially volunteer firefighters' relief 
132.7 	association that is:
132.8 	(1) organized and incorporated as a nonprofit corporation to provide retirement 
132.9 	benefits to volunteer firefighters under chapter 317A and any laws of the state;
132.10 	(2) governed by this chapter and sections 69.771 to 69.775; and
132.11 	(3) directly associated with:
132.12 	(i) a fire department established by municipal ordinance;
132.13 	(ii) an independent nonprofit firefighting corporation that is organized under the 
132.14 	provisions of chapter 317A and that operates primarily for firefighting purposes; or
132.15 	(iii) a fire department operated as or by a joint powers entity that operates primarily 
132.16 	for firefighting purposes.
132.17 	(b) "Relief association" or "volunteer firefighters' relief association" does not mean:
132.18 	(1) the Bloomington Fire Department Relief Association governed by section 69.77
132.19 	 sections 31 to 42; Minnesota Statutes 2000, chapter 424; and Laws 1965, chapter 446, 
132.20 	as amended; or
132.21 	(2) the voluntary statewide lump-sum volunteer firefighter retirement plan governed 
132.22 	by chapter 353G.
132.23 	(c) A relief association or volunteer firefighters' relief association is a governmental 
132.24 	entity that receives and manages public money to provide retirement benefits for individuals 
132.25 	providing the governmental services of firefighting and emergency first response.

132.26 	Sec. 77. Minnesota Statutes 2012, section 424A.02, subdivision 9, is amended to read:
132.27 		Subd. 9.Limitation on ancillary benefits. A defined benefit relief association, 
132.28 	including any volunteer firefighters relief association governed by section 69.77sections 
132.29 	31 to 42 or any volunteer firefighters division of a relief association governed by chapter 
132.30 	424, may only pay ancillary benefits which would constitute an authorized disbursement 
132.31 	as specified in section 424A.05 subject to the following requirements or limitations:
132.32 	(1) with respect to a defined benefit relief association in which governing bylaws 
132.33 	provide solely for a lump-sum service pension to a retiring member, or provide a retiring 
132.34 	member the choice of either a lump-sum service pension or a monthly service pension 
133.1 	and the lump-sum service pension was chosen, no ancillary benefit may be paid to any 
133.2 	former member or paid to any person on behalf of any former member after the former 
133.3 	member (i) terminates active service with the fire department and active membership 
133.4 	in the relief association; and (ii) commences receipt of a service pension as authorized 
133.5 	under this section; and
133.6 	(2) with respect to any defined benefit relief association, no ancillary benefit paid or 
133.7 	payable to any member, to any former member, or to any person on behalf of any member 
133.8 	or former member, may exceed in amount the total earned service pension of the member 
133.9 	or former member. The total earned service pension must be calculated by multiplying 
133.10 	the service pension amount specified in the bylaws of the relief association at the time of 
133.11 	death or disability, whichever applies, by the years of service credited to the member or 
133.12 	former member. The years of service must be determined as of (i) the date the member or 
133.13 	former member became entitled to the ancillary benefit; or (ii) the date the member or 
133.14 	former member died entitling a survivor or the estate of the member or former member to 
133.15 	an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 
133.16 	member had attained the minimum amount of service and membership credit specified in 
133.17 	the governing bylaws. For active members, the amount of a permanent disability benefit 
133.18 	or a survivor benefit must be equal to the member's total earned service pension except 
133.19 	that the bylaws of a defined benefit relief association may provide for the payment of a 
133.20 	survivor benefit in an amount not to exceed five times the yearly service pension amount 
133.21 	specified in the bylaws on behalf of any member who dies before having performed five 
133.22 	years of active service in the fire department with which the relief association is affiliated.
133.23 	(3)(i) If a lump sum survivor or death benefit is payable under the articles of 
133.24 	incorporation or bylaws, the benefit must be paid:
133.25 	(A) as a survivor benefit to the surviving spouse of the deceased firefighter;
133.26 	(B) as a survivor benefit to the surviving children of the deceased firefighter if 
133.27 	no surviving spouse;
133.28 	(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 
133.29 	surviving spouse or surviving children; or
133.30 	(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 
133.31 	surviving children and no beneficiary designated.
133.32 	(ii) If there are no surviving children, the surviving spouse may waive, in writing, 
133.33 	wholly or partially, the spouse's entitlement to a survivor benefit.
133.34 	(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of 
133.35 	incorporation or bylaws, the benefit must be paid:
133.36 	(A) as a survivor benefit to the surviving spouse of the deceased firefighter;
134.1 	(B) as a survivor benefit to the surviving children of the deceased firefighter if 
134.2 	no surviving spouse;
134.3 	(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 
134.4 	surviving spouse or surviving children; or
134.5 	(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 
134.6 	surviving spouse, no surviving children, and no beneficiary designated.
134.7 	(ii) If there are no surviving children, the surviving spouse may waive, in writing, 
134.8 	wholly or partially, the spouse's entitlement to a survivor benefit.
134.9 	(iii) For purposes of this clause, if the relief association bylaws authorize a monthly 
134.10 	survivor benefit payable to a designated beneficiary, the relief association bylaws may 
134.11 	limit the total survivor benefit amount payable.
134.12 	(5) For purposes of this section, for a monthly benefit volunteer fire relief association 
134.13 	or for a combination lump-sum and monthly benefit volunteer fire relief association where 
134.14 	a monthly benefit service pension has been elected by or a monthly benefit is payable with 
134.15 	respect to a firefighter, a designated beneficiary must be a natural person. For purposes 
134.16 	of this section, for a lump-sum volunteer fire relief association or for a combination 
134.17 	lump-sum and monthly benefit volunteer fire relief association where a lump-sum service 
134.18 	pension has been elected by or a lump-sum benefit is payable with respect to a firefighter, 
134.19 	a trust created under chapter 501B may be a designated beneficiary. If a trust is payable to 
134.20 	the surviving children organized under chapter 501B as authorized by this section and 
134.21 	there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding 
134.22 	a requirement of this section to the contrary.

134.23 	Sec. 78. Minnesota Statutes 2012, section 475.52, subdivision 6, is amended to read:
134.24 		Subd. 6.Certain purposes. Any municipality may issue bonds for paying 
134.25 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness; 
134.26 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
134.27 	after their termination of service; or for funding all or part of the municipality's current 
134.28 	and future unfunded liability for a pension or retirement fund or plan referred to in 
134.29 	section 356.20, subdivision 2, as those liabilities are most recently computed under 
134.30 	sections 356.215 and 356.216. The board of trustees or directors of athe Bloomington 
134.31 	Fire Department Relief Association referred to in section 69.77 must consent and must 
134.32 	be a party to any contract made under this section with respect to the fund held by it 
134.33 	for the benefit of and in trust for its members. For purposes of this section, the term 
134.34 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
134.35 	45 of the Governmental Accounting Standards Board.

135.1 	Sec. 79. REVISOR'S INSTRUCTION.
 135.2 	(a) The revisor of statutes shall not show the text of Minnesota Statutes, section 
135.3 	69.77, and shall add the note in Minnesota Statutes, section 69.77, "CITY OF 
135.4 	BLOOMINGTON; LOCAL."
135.5 	(b) In Minnesota Statutes 2014 and subsequent editions, Minnesota Statutes, 
135.6 	sections 69.771 to 69.776 must be recodified as Minnesota Statutes, sections 424A.091 
135.7 	to 424A.096, and all statutory cross-references revised.

135.8 	Sec. 80.  REPEALER.
 135.9 	(a) Minnesota Statutes 2012, section 353.665, subdivisions 2, 3, 4, 6, 7, 9, and 
135.10 	10, are repealed.
135.11 	(b) Minnesota Statutes 2012, sections 353.667; 353.668; 353.669; and 353.6691, are 
135.12 	repealed.
135.13 	(c) Minnesota Statutes 2012, sections 353A.01; 353A.02; 353A.03; 353A.04; 
135.14 	353A.05; 353A.06; 353A.07; 353A.08; 353A.081; 353A.083; 353A.09; 353A.10; 
135.15 	353B.01; 353B.02; 353B.03; 353B.04; 353B.05; 353B.06; 353B.07; 353B.08; 353B.09; 
135.16 	353B.10; 353B.11; 353B.12; 353B.13; and 353B.14, are repealed.
135.17 	(d) Minnesota Statutes 2012, sections 423A.01; 423A.04; 423A.05; 423A.07; 
135.18 	423A.10; 423A.11; 423A.12; 423A.13; 423A.14; 423A.15; 423A.16; 423A.17; 423A.171; 
135.19 	423A.18; 423A.19; 423A.20; 423A.21; and 423A.22, are repealed.
135.20 	(e) Minnesota Statutes 2012, sections 69.021, subdivision 6; 353.64, subdivision 3; 
135.21 	and 423A.02, subdivision 1a, are repealed.
135.22 	(f) Minnesota Statutes 2012, section 69.77, subdivision 3, is repealed.

135.23 	Sec. 81. EFFECTIVE DATE; PRIOR AID ALLOCATIONS VALIDATED.
 135.24 	(a) Sections 69 to 75 are effective June 1, 2013.
135.25 	(b) Except as provided in paragraph (c), sections 1 to 68 and 76 to 80 are effective 
135.26 	July 1, 2013.
135.27 	(c) With respect to the city of Minneapolis, section 18 is effective retroactively from 
135.28 	July 20, 2011, and with respect to the city of Fairmont, section 18 is effective retroactively 
135.29 	from May 10, 2012.
135.30 	(d) Allocations of amortization state aid, supplementary amortization state aid, or 
135.31 	additional amortization state aid made by the commissioner of revenue before January 1, 
135.32 	2013, are hereby validated.

136.1 	ARTICLE 6
136.2 	VOLUNTEER FIREFIGHTER RETIREMENT CHANGES

136.3 	Section 1. Minnesota Statutes 2012, section 69.771, subdivision 1, is amended to read:
136.4 		Subdivision 1.Covered relief associations. The applicable provisions of sections 
136.5 	69.771 to 69.776apply togovern any firefighters' relief association other thandefined in 
136.6 	section 424A.001, subdivision 4, and do not apply to a relief association enumerated in 
136.7 	section 69.77, subdivision 1a, which is organized under any laws of this state, which is 
136.8 	composed of volunteer firefighters or is composed partially of volunteer firefighters and 
136.9 	partially of salaried firefighters with retirement coverage provided by the public employees 
136.10 	police and fire fund and which, in either case, operates subject to the service pension 
136.11 	minimum requirements for entitlement and maximums contained in section 424A.02, or 
136.12 	subject to a special law modifying those requirements or maximums.

136.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

136.14 	Sec. 2. Minnesota Statutes 2012, section 69.774, subdivision 1, is amended to read:
136.15 		Subdivision 1.Authorized inclusion in fire state aid program; covered nonprofit 
136.16 	corporations. (a) This section shall applyapplies to any independent nonprofit firefighting 
136.17 	corporation incorporated or organized pursuant tounder chapter 317A which: (1) operates 
136.18 	exclusively for firefighting purposes,; (2) which is composed of volunteer firefighters,; 
136.19 	and (3) which has a duly established separate subsidiary incorporated firefighters' relief 
136.20 	association which provides retirement coverage for or pays a service pension to a retired 
136.21 	firefighter or a retirement benefit to a surviving dependent of either an active or a retired 
136.22 	firefighter, and which operatesis subject to the service pension minimum requirements 
136.23 	for entitlement to and maximums for a service pension contained in section 424A.02, 
136.24 	or a special law modifying those requirements or maximums applicable provisions of 
136.25 	chapter 424A.
136.26 	(b) Notwithstanding any law to the contrary, a municipality contracting with an 
136.27 	independent nonprofit firefighting corporation shallmust be included in the distribution of 
136.28 	fire state aid to the appropriate county auditor by the state auditor only if the independent 
136.29 	nonprofit firefighting corporation complies with the provisions of this section.

136.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

136.31 	Sec. 3. Minnesota Statutes 2012, section 353G.05, subdivision 2, is amended to read:
137.1 		Subd. 2.Election of coverage. (a) The process for electing coverage of volunteer 
137.2 	firefighters by the retirement plan is initiated by a request to the executive director for a 
137.3 	cost analysis of the prospective retirement coverage.
137.4 	(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 
137.5 	association governed by chapter 424A, the cost analysis of the prospective retirement 
137.6 	coverage must be requested jointly by the secretary of the volunteer firefighters' relief 
137.7 	association, following approval of the request by the board of the volunteer firefighters' 
137.8 	relief association, and the chief administrative officer of the entity associated with the relief 
137.9 	association, following approval of the request by the governing body of the entity associated 
137.10 	with the relief association. If the relief association is associated with more than one entity, 
137.11 	the chief administrative officer of each associated entity must execute the request. If 
137.12 	the volunteer firefighters are not currently covered by a volunteer firefighters' relief 
137.13 	association, the cost analysis of the prospective retirement coverage must be requested by 
137.14 	the chief administrative officer of the entity operating the fire department. The request 
137.15 	must be made in writing and must be made on a form prescribed by the executive director.
137.16 	(c) The cost analysis of the prospective retirement coverage by the statewide 
137.17 	retirement plan must be based on the service pension amount under section 353G.11
137.18 	closest to the service pension amount provided by the volunteer firefighters' relief 
137.19 	association if the relief association is a lump-sum defined benefit plan, or the amount equal 
137.20 	to 95 percent of the most current average account balance per relief association member if 
137.21 	the relief association is a defined contribution plan, or to the lowest service pension amount 
137.22 	under section 353G.11 if there is no volunteer firefighters' relief association, rounded up, 
137.23 	and any other service pension amount designated by the requester or requesters. The cost 
137.24 	analysis must be prepared using a mathematical procedure certified as accurate by an 
137.25 	approved actuary retained by the Public Employees Retirement Association.
137.26 	(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 
137.27 	that has filed the information required under section 69.051 in a timely fashion, upon 
137.28 	request by the executive director, the state auditor shall provide the most recent data 
137.29 	available on the financial condition of the volunteer firefighters' relief association, the most 
137.30 	recent firefighter demographic data available, and a copy of the current relief association 
137.31 	bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 
137.32 	exists, the chief administrative officer of the entity operating the fire department shall 
137.33 	provide the demographic information on the volunteer firefighters serving as members 
137.34 	of the fire department requested by the executive director.
137.35 	(e) If a cost analysis is requested, the executive director of the State Board of 
137.36 	Investment shall review the investment portfolio of the relief association, if applicable, 
138.1 	for compliance with the applicable provisions of chapter 11A and for appropriateness 
138.2 	for retention under the established investment objectives and investment policies of the 
138.3 	State Board of Investment. If the prospective retirement coverage change is approved 
138.4 	under paragraph (f), the State Board of Investment may require that the relief association 
138.5 	liquidate any investment security or other asset which the executive director of the State 
138.6 	Board of Investment has determined to be an ineligible or inappropriate investment for 
138.7 	retention by the State Board of Investment. The security or asset liquidation must occur 
138.8 	before the effective date of the transfer of retirement plan coverage. If requested to do so by 
138.9 	the chief administrative officer of the relief association, the executive director of the State 
138.10 	Board of Investment shall provide advice about the best means to conduct the liquidation.
138.11 	(f) Upon receipt of the cost analysis, the governing body of the municipality or 
138.12 	independent nonprofit firefighting corporation associated with the fire department shall 
138.13 	either approve or disapprove the retirement coverage change within 90120 days. If the 
138.14 	retirement coverage change is not acted upon within 90120 days, it is deemed to be 
138.15 	disapproved. If the retirement coverage change is approved by the applicable governing 
138.16 	body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan 
138.17 	is effective on the next following January 1.

138.18 	EFFECTIVE DATE. This section is effective July 1, 2013.

138.19 	Sec. 4. Minnesota Statutes 2012, section 424A.001, is amended by adding a 
138.20 	subdivision to read:
138.21 		Subd. 11.Fiscal year. The fiscal year for a volunteer firefighter relief association 
138.22 	begins on January 1 of each calendar year and ends on December 31 of the same calendar 
138.23 	year.

138.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

138.25 	Sec. 5. Minnesota Statutes 2012, section 424A.01, subdivision 6, is amended to read:
138.26 		Subd. 6.Return to active firefighting after break in service. (a) The requirements 
138.27 	of This section applysubdivision applies to all breaks in service, except breaks inthat the 
138.28 	resumption service mandated byrequirements of this subdivision do not apply to leaves 
138.29 	of absence made available by federal orstatute, such as the Family Medical Leave Act, 
138.30 	United States Code, title 29, section 2691, and the Uniformed Services Employment and 
138.31 	Reemployment Rights Act, United States Code, title 38, section 4301, and do not apply 
138.32 	to leaves of absence made available by state law statute, such as the Parental Leave Act, 
138.33 	section 181.941; the Leave for Organ Donations Act, section 181.9456; the Leave for 
139.1 	Civil Air Patrol Service Act, section 181.946; the Leave for Immediate Family Members 
139.2 	of Military Personnel Injured or Killed in Active Service Act, section 181.947; or the 
139.3 	Protection of Jurors' Employment Act, section 593.50.
139.4 	(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and 
139.5 	fire prevention duties for at least 60 days resumes performing active firefighting with the 
139.6 	fire department associated with the relief association, if the bylaws of the relief association 
139.7 	so permit, the firefighter may again become an active member of the relief association. A 
139.8 	firefighter who returns to active service and membership is subject to the service pension 
139.9 	calculation requirements under this section.
139.10 	(2) A firefighter who has been granted an approved leave of absence not exceeding 
139.11 	one year by the fire department or by the relief association is exempt from the minimum 
139.12 	period of resumption service requirement of this section.
139.13 	(3) A person who has a break in service not exceeding one year but has not been 
139.14 	granted an approved leave of absence and who has not received a service pension or 
139.15 	disability benefit may be made exempt from the minimum period of resumption service 
139.16 	requirement of this section by the relief association bylaws.
139.17 	(4) If the bylaws so provide, a firefighter who returns to active relief association 
139.18 	membership under this paragraph may continue to collect a monthly service pension, 
139.19 	notwithstanding the service pension eligibility requirements under chapter 424A.
139.20 	(c) If a former firefighter who has received a service pension or disability benefit 
139.21 	returns to active relief association membership under paragraph (b), the firefighter may 
139.22 	qualify for the receipt of a service pension from the relief association for the resumption 
139.23 	service period if the firefighter meets the service requirements of section 424A.016, 
139.24 	subdivision 3, or 424A.02, subdivision 2. No firefighter may be paid a service pension 
139.25 	more than once for the same period of service.
139.26 	(d) If a former firefighter who has not received a service pension or disability benefit 
139.27 	returns to active relief association membership under paragraph (b), the firefighter may 
139.28 	qualify for the receipt of a service pension from the relief association for the original and 
139.29 	resumption service periods if the firefighter meets the service requirements of section 
139.30 	424A.016, subdivision 3, or 424A.02, subdivision 2, based on the original and resumption 
139.31 	years of service credit.
139.32 	(e) A firefighter who returns to active lump-sum relief association membership under 
139.33 	paragraph (b) and who qualifies for a service pension under paragraph (c) must have, 
139.34 	upon a subsequent cessation of duties, any service pension for the resumption service 
139.35 	period calculated as a separate benefit. If a lump-sum service pension had been paid to the 
139.36 	firefighter upon the firefighter's previous cessation of duties, a second lump-sum service 
140.1 	pension for the resumption service period must be calculated by applying the service 
140.2 	pension amount in effect on the date of the firefighter's termination of the resumption 
140.3 	service for all years of the resumption service.
140.4 	(f) A firefighter who had not been paid a lump-sum service pension returns to active 
140.5 	relief association membership under paragraph (b), who did not meet the minimum period 
140.6 	of resumption service requirement specified in the relief association's bylaws, but who 
140.7 	does meet the minimum service requirement of section 424A.02, subdivision 2, based 
140.8 	on the firefighter's original and resumption years of active service, must have, upon a 
140.9 	subsequent cessation of duties, a service pension for the original and resumption service 
140.10 	periods calculated by applying the service pension amount in effect on the date of the 
140.11 	firefighter's termination of the resumption service, or, if the bylaws so provide, based on 
140.12 	the service pension amount in effect on the date of the firefighter's previous cessation 
140.13 	of duties. The service pension for a firefighter who returns to active lump-sum relief 
140.14 	association membership under this paragraph, but who had met the minimum period 
140.15 	of resumption service requirement specified in the relief association's bylaws, must be 
140.16 	calculated by applying the service pension amount in effect on the date of the firefighter's 
140.17 	termination of the resumption service.
140.18 	(g) If a firefighter receiving a monthly benefit service pension returns to active 
140.19 	monthly benefit relief association membership under paragraph (b), and if the relief 
140.20 	association bylaws do not allow for the firefighter to continue collecting a monthly service 
140.21 	pension, any monthly benefit service pension payable to the firefighter is suspended as 
140.22 	of the first day of the month next following the date on which the firefighter returns to 
140.23 	active membership. If the firefighter was receiving a monthly benefit service pension, 
140.24 	and qualifies for a service pension under paragraph (c), the firefighter is entitled to 
140.25 	an additional monthly benefit service pension upon a subsequent cessation of duties 
140.26 	calculated based on the resumption service credit and the service pension accrual amount 
140.27 	in effect on the date of the termination of the resumption service. A suspended initial 
140.28 	service pension resumes as of the first of the month next following the termination of the 
140.29 	resumption service. If the firefighter was not receiving a monthly benefit service pension 
140.30 	and meets the minimum service requirement of section 424A.02, subdivision 2, a service 
140.31 	pension must be calculated by applying the service pension amount in effect on the date of 
140.32 	the firefighter's termination of the resumption service for all years of service credit.
140.33 	(h) A firefighter who was not receiving a monthly benefit service pension returns to 
140.34 	active relief association membership under paragraph (b), who did not meet the minimum 
140.35 	period of resumption service requirement specified in the relief association's bylaws, but 
140.36 	who does meet the minimum service requirement of section 424A.02, subdivision 2, 
141.1 	based on the firefighter's original and resumption years of active service, must have, 
141.2 	upon a subsequent cessation of duties, a service pension for the original and resumption 
141.3 	service periods calculated by applying the service pension amount in effect on the date of 
141.4 	the firefighter's termination of the resumption service, or, if the bylaws so provide, based 
141.5 	on the service pension amount in effect on the date of the firefighter's previous cessation 
141.6 	of duties. The service pension for a firefighter who returns to active relief association 
141.7 	membership under this paragraph, but who had met the minimum period of resumption 
141.8 	service requirement specified in the relief association's bylaws, must be calculated by 
141.9 	applying the service pension amount in effect on the date of the firefighter's termination of 
141.10 	the resumption service.
141.11 	(i) For defined contribution plans, a firefighter who returns to active relief 
141.12 	association membership under paragraph (b) and who qualifies for a service pension 
141.13 	under paragraph (c) or (d) must have, upon a subsequent cessation of duties, any service 
141.14 	pension for the resumption service period calculated as a separate benefit. If a service 
141.15 	pension had been paid to the firefighter upon the firefighter's previous cessation of duties, 
141.16 	and if the firefighter meets the minimum service requirement of section 424A.016, 
141.17 	subdivision 3, based on the resumption years of service, a second service pension for 
141.18 	the resumption service period must be calculated to include allocations credited to the 
141.19 	firefighter's individual account during the resumption period of service and deductions 
141.20 	for administrative expenses, if applicable.
141.21 	(j) For defined contribution plans, if a firefighter who had not been paid a service 
141.22 	pension returns to active relief association membership under paragraph (b), and who 
141.23 	meets the minimum service requirement of section 424A.016, subdivision 3, based on 
141.24 	the firefighter's original and resumption years of service, must have, upon a subsequent 
141.25 	cessation of duties, a service pension for the original and resumption service periods 
141.26 	calculated to include allocations credited to the firefighter's individual account during 
141.27 	the original and resumption periodperiods of service and deductions for administrative 
141.28 	expenses, if applicable, less any amounts previously forfeited under section 424A.016, 
141.29 	subdivision 4.

141.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

141.31 	Sec. 6. Minnesota Statutes 2012, section 424A.015, subdivision 1, is amended to read:
141.32 		Subdivision 1.Separation from active service; exception. (a) No service pension 
141.33 	is payable to a person while the person remains an active member of the respective fire 
141.34 	department, and a person who is receiving a service pension is not entitled to receive any 
141.35 	other benefits from the special fund of the relief association.
142.1 	(b) No relief association as defined in section 424A.001, subdivision 4, may pay a 
142.2 	service pension or disability benefit to a former member of the relief association if that 
142.3 	person has not separated from active service with the fire department to which the relief 
142.4 	association is directly associated, unless:
142.5 	(1) the person is employed subsequent to retirement bydiscontinues volunteer 
142.6 	firefighter duties with the municipality or the independent nonprofit firefighting 
142.7 	corporation, whichever applies, to performand performs duties within the municipal fire 
142.8 	department or corporation on a full-time basis;
142.9 	(2) the governing body of the municipality or of the corporation has filed its 
142.10 	determination with the board of trustees of the relief association that the person's 
142.11 	experience with and service to the fire department in that person's full-time capacity 
142.12 	would be difficult to replace; and
142.13 	(3) the bylaws of the relief association were amended to provide for the payment of 
142.14 	a service pension or disability benefit for such full-time employees.

142.15 	EFFECTIVE DATE. This section is effective the day following final enactment.

142.16 	Sec. 7. Minnesota Statutes 2012, section 424A.015, subdivision 4, is amended to read:
142.17 		Subd. 4.Transfer to individual retirement account. A relief association that is a 
142.18 	qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, 
142.19 	and that provides a single payment service pension, at the written request of the applicable 
142.20 	retiring member or, following the death of the active member, at the written request of the 
142.21 	deceased member's surviving spouse, may directly transfer on an institution-to-institution 
142.22 	basis the eligible member's lump-sum pension or the death or survivor benefit attributable 
142.23 	to the member, whichever applies, to the requesting person's individual retirement account 
142.24 	under section 408(a) of the Internal Revenue Code, as amended.

142.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

142.26 	Sec. 8. Minnesota Statutes 2012, section 424A.016, subdivision 6, is amended to read:
142.27 		Subd. 6.Deferred service pensions. (a) A member of a relief association is entitled 
142.28 	to a deferred service pension if the member:
142.29 	(1) has completed the lesser of the minimum period of active service with the fire 
142.30 	department specified in the bylaws or 20 years of active service with the fire department;
142.31 	(2) has completed at least five years of active membership in the relief association; and
142.32 	(3) separates from active service and membership and has completed the minimum 
142.33 	service and membership requirements in subdivision 2. The requirement that a member 
143.1 	separate from active service and membership is waived for persons who have discontinued 
143.2 	their volunteer firefighter duties and who are employed on a full-time basis under section 
143.3 	424A.015, subdivision 1.
143.4 	(b) The deferred service pension is payable when the former member reaches at 
143.5 	least age 50, or at least the minimum age specified in the bylaws governing the relief 
143.6 	association if that age is greater than age 50, and when the former member makes a valid 
143.7 	written application.
143.8 	(c) A defined contribution relief association may, if its governing bylaws so provide, 
143.9 	credit interest or additional investment performance on the deferred lump-sum service 
143.10 	pension during the period of deferral. If provided for in the bylaws, the interest must be 
143.11 	paid:
143.12 	(1) at the investment performance rate actually earned on that portion of the assets 
143.13 	if the deferred benefit amount is invested by the relief association in a separate account 
143.14 	established and maintained by the relief association;
143.15 	(2) at the investment performance rate actually earned on that portion of the assets 
143.16 	if the deferred benefit amount is invested in a separate investment vehicle held by the 
143.17 	relief association; or
143.18 	(3) at the investment return on the assets of the special fund of the defined contribution 
143.19 	volunteer firefighter relief association in proportion to the share of the assets of the special 
143.20 	fund to the credit of each individual deferred member account through the accounting date 
143.21 	on which the investment return is recognized by and credited to the special fund.
143.22 	(d) Unless the bylaws of a relief association that has elected to pay interest or 
143.23 	additional investment performance on deferred lump-sum service pensions under 
143.24 	paragraph (c) specifies a different interest or additional investment performance method, 
143.25 	including the interest or additional investment performance period starting date and ending 
143.26 	date, the interest or additional investment performance on a deferred service pension 
143.27 	is creditable as follows:
143.28 	(1) for a relief association that has elected to pay interest or additional investment 
143.29 	performance under paragraph (c), clause (1) or (3), beginning on the date that the 
143.30 	member separates from active service and membership and ending on the accounting 
143.31 	date immediately before the deferred member commences receipt of the deferred service 
143.32 	pension; or
143.33 	(2) for a relief association that has elected to pay interest or additional investment 
143.34 	performance under paragraph (c), clause (2), beginning on the date that the member 
143.35 	separates from active service and membership and ending on the date that the separate 
144.1 	investment vehicle is valued immediately before the date on which the deferred member 
144.2 	commences receipt of the deferred service pension.
144.3 	(e) The deferred service pension is governed by and must be calculated under 
144.4 	the general statute, special law, relief association articles of incorporation, and relief 
144.5 	association bylaw provisions applicable on the date on which the member separated from 
144.6 	active service with the fire department and active membership in the relief association.

144.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

144.8 	Sec. 9. Minnesota Statutes 2012, section 424A.02, subdivision 7, is amended to read:
144.9 		Subd. 7.Deferred service pensions. (a) A member of a defined benefit relief 
144.10 	association is entitled to a deferred service pension if the member:
144.11 	(1) has completed the lesser of either the minimum period of active service with the 
144.12 	fire department specified in the bylaws or 20 years of active service with the fire department;
144.13 	(2) has completed at least five years of active membership in the relief association; and
144.14 	(3) separates from active service and membership and has completed the minimum 
144.15 	service and membership requirements in subdivision 1. The requirement that a member 
144.16 	separate from active service and membership is waived for persons who have discontinued 
144.17 	their volunteer firefighter duties and who are employed on a full-time basis under section 
144.18 	424A.015, subdivision 1.
144.19 	(b) The deferred service pension is payable when the former member reaches at 
144.20 	least age 50, or at least the minimum age specified in the bylaws governing the relief 
144.21 	association if that age is greater than age 50, and when the former member makes a valid 
144.22 	written application.
144.23 	(c) A defined benefit relief association that provides a lump-sum service pension 
144.24 	governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the 
144.25 	deferred lump-sum service pension during the period of deferral. If provided for in the 
144.26 	bylaws, interest must be paid in one of the following manners:
144.27 	(1) at the investment performance rate actually earned on that portion of the assets 
144.28 	if the deferred benefit amount is invested by the relief association in a separate account 
144.29 	established and maintained by the relief association;
144.30 	(2) at the investment performance rate actually earned on that portion of the assets 
144.31 	if the deferred benefit amount is invested in a separate investment vehicle held by the 
144.32 	relief association; or
144.33 	(3) at an interest rate of up to five percent, compounded annually, as set by the board 
144.34 	of directors and approved as provided in subdivision 10 trustees.
145.1 	(d) Any change in the interest rate set by the board of directors under paragraph (c), 
145.2 	clause (3), must be ratified by the governing body of the municipality served by the fire 
145.3 	department to which the relief association is directly associated, or by the independent 
145.4 	nonprofit firefighting corporation, as applicable.
145.5 	(d)(e) Interest under paragraph (c), clause (3), is payable beginning on the January 
145.6 	1 next following the date on which the municipality has approved the deferred service 
145.7 	pension interest rate establishedas set by the board of trustees was ratified by the governing 
145.8 	body of the municipality served by the fire department to which the relief association is 
145.9 	directly associated, or by the independent nonprofit firefighting corporation, as applicable.
145.10 	(e)(f) Unless the bylaws of a relief association that has elected to pay interest 
145.11 	or additional investment performance on deferred lump-sum service pensions under 
145.12 	paragraph (c) specifies a different interest or additional investment performance method, 
145.13 	including the interest or additional investment performance period starting date and ending 
145.14 	date, the interest or additional investment performance on a deferred service pension 
145.15 	is creditable as follows:
145.16 	(1) for a relief association that has elected to pay interest or additional investment 
145.17 	performance under paragraph (c), clause (1) or (3), beginning on the first day of the 
145.18 	month next following the date thaton which the member separates from active service 
145.19 	and membership and ending on the accounting datelast day of the month immediately 
145.20 	before the month in which the deferred member commences receipt of the deferred 
145.21 	service pension; or
145.22 	(2) for a relief association that has elected to pay interest or additional investment 
145.23 	performance under paragraph (c), clause (2), beginning on the date that the member 
145.24 	separates from active service and membership and ending on the date that the separate 
145.25 	investment vehicle is valued immediately before the date on which the deferred member 
145.26 	commences receipt of the deferred service pension.
145.27 	(f)(g) For a deferred service pension that is transferred to a separate account 
145.28 	established and maintained by the relief association or separate investment vehicle held 
145.29 	by the relief association, the deferred member bears the full investment risk subsequent 
145.30 	to transfer and in calculating the accrued liability of the volunteer firefighters relief 
145.31 	association that pays a lump-sum service pension, the accrued liability for deferred service 
145.32 	pensions is equal to the separate relief association account balance or the fair market value 
145.33 	of the separate investment vehicle held by the relief association.
145.34 	(g)(h) The deferred service pension is governed by and must be calculated under 
145.35 	the general statute, special law, relief association articles of incorporation, and relief 
146.1 	association bylaw provisions applicable on the date on which the member separated from 
146.2 	active service with the fire department and active membership in the relief association.

146.3 	EFFECTIVE DATE. This section is effective January 1, 2014, with respect to the 
146.4 	amendments to paragraphs (c), (d), and (e), and is effective retroactively from January 
146.5 	1, 2013, with respect to the amendments to paragraph (f).

146.6 	Sec. 10. Minnesota Statutes 2012, section 424A.10, subdivision 1, is amended to read:
146.7 		Subdivision 1. Definitions. For purposes of this section:
146.8 	(1) "qualified recipient" means an individual who receives a lump-sum distribution 
146.9 	of pension or retirement benefits from a volunteer firefighters' relief association or from 
146.10 	the voluntary statewide lump-sum volunteer firefighter retirement plan for service that the 
146.11 	individual has performed as a volunteer firefighter;
146.12 	(2) "survivor of a deceased active or deferred volunteer firefighter" means the 
146.13 	surviving spouse of a deceased active or deferred volunteer firefighter under section 
146.14 	424A.001, subdivision 6, or, if none, the surviving child or children of a deceased active 
146.15 	or deferred volunteer firefighter;
146.16 	(3) "active volunteer firefighter" means a person who regularly renders fire 
146.17 	suppression service for a municipal fire department or an independent nonprofit firefighting 
146.18 	corporation, who has met the statutory and other requirements for relief association 
146.19 	membership, and who is deemed by the relief association under law and its bylaws to be a 
146.20 	fully qualified member of the relief association or from the voluntary statewide lump-sum 
146.21 	volunteer firefighter retirement plan for at least one month; and
146.22 	(4) "deferred volunteer firefighter" means a former active volunteer firefighter who 
146.23 	terminated active firefighting service, has sufficient service credit from the applicable relief 
146.24 	association or from the voluntary statewide lump-sum volunteer firefighter retirement plan 
146.25 	to be entitled to a service pension under the bylaws of the relief association, but has not 
146.26 	applied for or has not received the service pension.

146.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

146.28 	Sec. 11. Minnesota Statutes 2012, section 424A.10, subdivision 2, is amended to read:
146.29 		Subd. 2.Payment of supplemental benefit. (a) Upon the payment by a volunteer 
146.30 	firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter 
146.31 	retirement plan of a lump-sum distribution to a qualified recipient, the association must 
146.32 	pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the 
146.33 	contrary, the relief association must pay the supplemental benefit out of its special fund 
147.1 	and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay 
147.2 	the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter 
147.3 	retirement plan. This benefit is an amount equal to ten percent of the regular lump-sum 
147.4 	distribution that is paid on the basis of the recipient's service as a volunteer firefighter. 
147.5 	In no case may the amount of the supplemental benefit exceed $1,000. A supplemental 
147.6 	benefit under this paragraph may not be paid to a survivor of a deceased active or deferred 
147.7 	volunteer firefighter in that capacity.
147.8 	(b) Upon the payment by a relief association or the retirement plan of a lump-sum 
147.9 	survivor benefit to a survivor of a deceased active volunteer firefighter or of a deceased 
147.10 	deferred volunteer firefighter, the association maymust pay a supplemental survivor 
147.11 	benefit to the survivor of the deceased active or deferred volunteer firefighter from the 
147.12 	special fund of the relief association if its articles of incorporation or bylaws so provide
147.13 	 and the retirement plan maymust pay a supplemental survivor benefit to the survivor of 
147.14 	the deceased active or deferred volunteer firefighter from the retirement fund if chapter 
147.15 	353G so provides. The amount of the supplemental survivor benefit is 20 percent of the 
147.16 	survivor benefit, but not to exceed $2,000.
147.17 	(c) An individual may receive a supplemental benefit under paragraph (a) or under 
147.18 	paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 
147.19 	firefighter benefit.

147.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

147.21 	Sec. 12. WHITE BEAR LAKE VOLUNTEER FIRE DEPARTMENT RELIEF 
147.22 	ASSOCIATION; RETIREE DEATH BENEFIT.
 147.23 	Notwithstanding any provision of Minnesota Statutes, section 424A.05, subdivision 
147.24 	3, clause (4), to the contrary, the White Bear Lake Volunteer Fire Department Relief 
147.25 	Association may provide, if its bylaws so provide, for the payment of a $2,000 lump sum 
147.26 	death benefit from the special fund of the relief association to the estate of a person who 
147.27 	was a member of the relief association, who rendered at least 20 years of firefighting 
147.28 	service in the fire department and membership in the relief association, who retired 
147.29 	before January 1, 2009, who received a monthly benefit service pension from the relief 
147.30 	association for the month in which this section became effective, and who died after the 
147.31 	effective date of the bylaw amendment that implements the authority under this section.

147.32 	EFFECTIVE DATE. This section is effective the day after the governing body of 
147.33 	the city of White Bear Lake and its chief clerical officer timely complete their compliance 
147.34 	with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

148.1 	Sec. 13.  REPEALER.
 148.2 	Minnesota Statutes 2012, section 424A.10, subdivision 5, is repealed.

148.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

148.4 	ARTICLE 7
148.5 	ONE PERSON AND SMALL GROUP RETIREMENT CHANGES

148.6 	Section 1. Minnesota Statutes 2012, section 352.01, subdivision 2a, is amended to read:
148.7 		Subd. 2a.Included employees. (a) "State employee" includes:
148.8 	(1) employees of the Minnesota Historical Society;
148.9 	(2) employees of the State Horticultural Society;
148.10 	(3) employees of the Minnesota Crop Improvement Association;
148.11 	(4) employees of the adjutant general whose salaries are paid from federal funds and 
148.12 	who are not covered by any federal civilian employees retirement system;
148.13 	(5) employees of the Minnesota State Colleges and Universities who are employed 
148.14 	under the university or college activities program;
148.15 	(6) currently contributing employees covered by the system who are temporarily 
148.16 	employed by the legislature during a legislative session or any currently contributing 
148.17 	employee employed for any special service as defined in subdivision 2b, clause (8);
148.18 	(7) employees of the legislature who are appointed without a limit on the duration 
148.19 	of their employment and persons employed or designated by the legislature or by a 
148.20 	legislative committee or commission or other competent authority to conduct a special 
148.21 	inquiry, investigation, examination, or installation;
148.22 	(8) trainees who are employed on a full-time established training program 
148.23 	performing the duties of the classified position for which they will be eligible to receive 
148.24 	immediate appointment at the completion of the training period;
148.25 	(9) employees of the Minnesota Safety Council;
148.26 	(10) any employees who are on authorized leave of absence from the Transit 
148.27 	Operating Division of the former Metropolitan Transit Commission and who are employed 
148.28 	by the labor organization which is the exclusive bargaining agent representing employees 
148.29 	of the Transit Operating Division;
148.30 	(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space 
148.31 	Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito 
148.32 	Control Commission unless excluded under subdivision 2b or are covered by another 
148.33 	public pension fund or plan under section 473.415, subdivision 3;
148.34 	(12) judges of the Tax Court;
149.1 	(13) personnel who were employed on June 30, 1992, by the University of 
149.2 	Minnesota in the management, operation, or maintenance of its heating plant facilities, 
149.3 	whose employment transfers to an employer assuming operation of the heating plant 
149.4 	facilities, so long as the person is employed at the University of Minnesota heating plant 
149.5 	by that employer or by its successor organization;
149.6 	(14) personnel who are employed as seasonal employees in the classified or 
149.7 	unclassified service;
149.8 	(15) persons who are employed by the Department of Commerce as a peace officer 
149.9 	in the Insurance Fraud Prevention Division under section 45.0135 who have attained the 
149.10 	mandatory retirement age specified in section 43A.34, subdivision 4;
149.11 	(16) employees of the University of Minnesota unless excluded under subdivision 
149.12 	2b, clause (3);
149.13 	(17) employees of the Middle Management Association whose employment began 
149.14 	after July 1, 2007, and to whom section 352.029 does not apply;
149.15 	(18) employees of the Minnesota Government Engineers Council to whom section 
149.16 	352.029 does not apply; and
149.17 	(19) employees of the Minnesota Sports Facilities Authority.; and
149.18 	(20) employees of the Minnesota Association of Professional Employees.
149.19 	(b) Employees specified in paragraph (a), clause (13), are included employees under 
149.20 	paragraph (a) if employer and employee contributions are made in a timely manner in the 
149.21 	amounts required by section 352.04. Employee contributions must be deducted from 
149.22 	salary. Employer contributions are the sole obligation of the employer assuming operation 
149.23 	of the University of Minnesota heating plant facilities or any successor organizations to 
149.24 	that employer.

149.25 	EFFECTIVE DATE. (a) This section is effective July 1, 2013.
149.26 	(b) The membership inclusion under paragraph (a), clause (20), does not apply to 
149.27 	a person who is receiving an age and service retirement annuity from the general state 
149.28 	employees retirement plan of the Minnesota State Retirement System on June 30, 2013.

149.29 	Sec. 2. Minnesota Statutes 2012, section 352.029, subdivision 1, is amended to read:
149.30 		Subdivision 1.Qualifications. Unless already specifically included under section 
149.31 	352.01, subdivision 2a, or unless specifically excluded under section 352.01, subdivision 
149.32 	2b, a state employee on leave of absence without pay to provide service as an employee 
149.33 	or officer of a labor organization that is an exclusive bargaining agent representing state 
149.34 	employees may elect under subdivision 2 to be covered by the general state employees 
150.1 	retirement plan of the Minnesota State Retirement System for service with the labor 
150.2 	organization, subject to the limitations set forth in subdivisions 2a and 2b.

150.3 	EFFECTIVE DATE. This section is effective July 1, 2013.

150.4 	Sec. 3. Minnesota Statutes 2012, section 352.029, subdivision 2a, is amended to read:
150.5 		Subd. 2a.Limitations on salary for benefits and contributions. (a) The covered 
150.6 	salary for a labor organization employee who is a member under section 352.01, 
150.7 	subdivision 2a, paragraph (a), clause (20), or who qualifies for membership under this 
150.8 	section or section 352.75 is limited to the lesser of:
150.9 	(1) the employee's actual salary as defined under section 352.01, subdivision 13; or
150.10 	(2) 75 percent of the salary of the governor as set under section 15A.082.
150.11 	(b) The limited covered salary determined under this subdivision must be used in 
150.12 	determining employee, employer, and employer additional contributions under section 
150.13 	352.04, subdivisions 2 and 3, and in determining retirement annuities and other benefits 
150.14 	under this chapter and chapter 356.

150.15 	EFFECTIVE DATE. This section is effective July 1, 2013.

150.16 	Sec. 4. Minnesota Statutes 2012, section 352.029, subdivision 2b, is amended to read:
150.17 		Subd. 2b.Earning restrictions apply. A retirement annuity is only payable, if the 
150.18 	person has met any other applicable requirements, upon the termination of employment by 
150.19 	the labor organization by the person who is a member under section 352.01, subdivision 
150.20 	2a, paragraph (a), clause (20), or who elected coverage under subdivision 1 of employment 
150.21 	by the labor organization. The reemployed annuitant earnings limitation set forth in 
150.22 	section 352.115, subdivision 10, applies in the event that the person who is a member 
150.23 	under section 352.01, subdivision 2a, paragraph (a), clause (20), or who elected coverage 
150.24 	under subdivision 1 retires and is subsequently reemployed while an annuitant by the labor 
150.25 	organization or by any other entity employing persons who are covered by the Minnesota 
150.26 	State Retirement System by virtue of that employment.

150.27 	EFFECTIVE DATE. This section is effective July 1, 2013.

150.28 	Sec. 5. Minnesota Statutes 2012, section 352.029, subdivision 3, is amended to read:
150.29 		Subd. 3.Contributions. The employee and employer contributions required 
150.30 	by section 352.04, or by section 352.92 for employees covered by section 352.91, are 
150.31 	the obligation of the employee who is a member under section 352.01, subdivision 2a, 
150.32 	paragraph (a), clause (20), or who chooses coverage under this section. However, the 
151.1 	employing labor organization may pay the employer contributions. Contributions made by 
151.2 	the employee must be made by salary deduction. The employing labor organization shall 
151.3 	pay all contributions to the system as required by section 352.04, or by section 352.92
151.4 	for employees covered by section 352.91.

151.5 	EFFECTIVE DATE. This section is effective July 1, 2013.

151.6 	Sec. 6. Minnesota Statutes 2012, section 352.029, subdivision 5, is amended to read:
151.7 		Subd. 5.Board membership excluded. Employees of a labor organization who 
151.8 	become members of the system under section 352.01, subdivision 2a, paragraph (a), 
151.9 	clause (20), or under this section are not eligible for election to the board of directors.

151.10 	EFFECTIVE DATE. This section is effective July 1, 2013.

151.11 	Sec. 7. [356.408] TERMINATION OF SURVIVOR DESIGNATION.
151.12 		Subdivision 1.Authorization to terminate optional annuity form. A public 
151.13 	pension plan retired member receiving a joint and survivor retirement annuity or a person 
151.14 	receiving a joint and survivor disability benefit from a plan listed in section 356.30, 
151.15 	subdivision 3, and the designated survivor of that person may mutually agree to terminate 
151.16 	the survivor designation by filing a termination statement on a form and in the manner 
151.17 	specified by the chief administrative officer of the applicable public pension plan. Upon 
151.18 	filing a valid termination statement accepted by the chief administrative officer, the rights 
151.19 	of the designated survivor to receive a benefit upon death of the plan retired or disabled 
151.20 	annuitant are terminated, and the retired or disabled annuitant must receive a normal 
151.21 	single-life annuity. 
151.22 		Subd. 2.Revised annuity form. The replacement single life annuity must be 
151.23 	actuarially equivalent to the joint and survivor annuity as of the first day of the month 
151.24 	following acceptance of the valid termination statement by the chief administrative officer 
151.25 	and payment of this revised prospective annuity begins on that same date.
151.26 		Subd. 3.Application. This section does not apply if the designated survivor is the 
151.27 	spouse or former spouse of the plan member.
151.28 		Subd. 4.Termination statement form requirements. The annuity form 
151.29 	termination statements must be in written form and must be notarized. Before accepting 
151.30 	any signed form or forms, the chief administrative officer of the applicable pension plan 
151.31 	must offer counseling to the retired or disabled annuitant and the designated survivor 
151.32 	regarding the implications of the annuity form waiver. The forms must indicate that this 
152.1 	counseling has been offered and either has been completed or has been waived by the 
152.2 	retired or disabled annuitant and the designated survivor.
152.3 		Subd. 5.Prohibition against further annuity form revisions. No retired or 
152.4 	disabled annuitant who waives the annuity form under this section may further revise 
152.5 	the annuity form at any later date.

152.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

152.7 	Sec. 8. Minnesota Statutes 2012, section 356.48, subdivision 1, is amended to read:
152.8 		Subdivision 1.Covered plans. This section applies to the following retirement plans:
152.9 	(1) the general state employees retirement plan of the Minnesota State Retirement 
152.10 	System established under chapter 352;
152.11 	(2) the correctional state employees retirement plan of the Minnesota State 
152.12 	Retirement System established under chapter 352;
152.13 	(3) the State Patrol retirement plan established under chapter 352B;
152.14 	(4) the unclassified state employees retirement program of the Minnesota State 
152.15 	Retirement System established under chapter 352D;
152.16 	(5) the general employee retirement plan of the Public Employees Retirement 
152.17 	Association established under chapter 353;
152.18 	(6) the public employees police and fire retirement plan established under chapter 353;
152.19 	(7) the local government correctional employees retirement plan of the Public 
152.20 	Employees Retirement Association established under chapter 353E;
152.21 	(8) the Teachers Retirement Association established under chapter 354; and
152.22 	(9) the St. Paul Teachers Retirement Fund Association established under chapter 
152.23 	354A; and
152.24 	(9)(10) the uniform judicial retirement plan established under chapter 490.

152.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

152.26 	Sec. 9. MSRS-GENERAL RETIREMENT ELIGIBILITY CLARIFICATION; 
152.27 	SERVICE CREDIT PURCHASE IN CERTAIN INSTANCES.
 152.28 	(a) An eligible person described in paragraph (b) is entitled to purchase prior 
152.29 	uncredited service credit under paragraph (c) and, if the service credit purchase is made, to 
152.30 	have the effective start date for active retirement plan membership of June 30, 1989, and 
152.31 	to retire under Minnesota Statutes, section 352.116, subdivision 1.
152.32 	(b) An eligible person is a person who:
152.33 	(1) was born on July 17, 1964;
153.1 	(2) was initially employed by the state of Minnesota as a temporary status laborer 
153.2 	general on June 19, 1989;
153.3 	(3) became a seasonal status laborer general on August 30, 1989;
153.4 	(4) became an unlimited status laborer general on December 12, 1990;
153.5 	(5) has received annual statements from the Minnesota State Retirement System 
153.6 	indicating eligibility for a retirement benefit under Minnesota Statutes, section 352.116, 
153.7 	subdivision 1, paragraph (b), as of September 1, 2012, including the June 30, 2012, annual 
153.8 	statement;
153.9 	(6) attended a Minnesota State Retirement System preretirement class in March 
153.10 	2012 and was individually informed by a Minnesota State Retirement System employee of 
153.11 	the person's retirement eligibility under Minnesota Statutes, section 352.116, subdivision 
153.12 	1, paragraph (b); and
153.13 	(7) received a letter from the Minnesota State Retirement System on August 16, 
153.14 	2012, revising the start date for general state employees retirement plan allowable 
153.15 	service credit from June 19, 1989, to September 27, 1989, and indicating consequent 
153.16 	inapplicability of Minnesota Statutes, section 352.116, subdivision 1.
153.17 	(c) An eligible person may purchase allowable service credit in the general state 
153.18 	employees retirement plan of the Minnesota State Retirement System for the period June 
153.19 	30, 1989, by paying an amount equal to 7.63 percent of salary earned after June 18, 1989, 
153.20 	to June 30, 1989, and to 8.85 percent of salary earned after June 30, 1989, to September 27, 
153.21 	1989, plus 8.5 percent compound interest on the total equivalent employee and employer 
153.22 	contribution amounts from the date on which the contribution would have been deducted 
153.23 	or paid if the person had been a member of the general state employees retirement plan of 
153.24 	the Minnesota State Retirement System at the time to the date that this portion of the prior 
153.25 	service credit purchase payment is made. The payment must be made in a lump sum.
153.26 	(d) An eligible person who purchased allowable service credit under paragraph 
153.27 	(c) has a June 30, 1989, start date for allowable service credited by the general state 
153.28 	employees retirement plan of the Minnesota State Retirement System and is eligible for a 
153.29 	retirement annuity under Minnesota Statutes, section 352.116, subdivision 1.
153.30 	(e) Authority to purchase prior uncredited allowable service credit under this section 
153.31 	expires on August 1, 2013.

153.32 	EFFECTIVE DATE. This section is effective July 1, 2013.

153.33 	Sec. 10. PERA-GENERAL; PURCHASE OF CERTAIN PRIOR NORTHFIELD 
153.34 	SERVICE CREDIT.
 154.1 	(a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the 
154.2 	contrary, an eligible person described in paragraph (b) is entitled to repay any prior refund 
154.3 	as provided in paragraph (c) and is entitled to purchase service credit as provided in 
154.4 	paragraph (d).
154.5 	(b) An eligible person is a person who:
154.6 	(1) was born on July 10, 1942;
154.7 	(2) was employed by the city of Northfield on October 5, 2005;
154.8 	(3) became a member of the general employees retirement plan of the Public 
154.9 	Employees Retirement Association on April 5, 2009;
154.10 	(4) was employed by the transit division of the city of Northfield until June 29, 
154.11 	2012; and
154.12 	(5) was eligible for PERA general employees retirement plan membership on 
154.13 	October 5, 2005, but was not reported to PERA for membership in a timely fashion.
154.14 	(c) The eligible person may repay to the general employees retirement fund of 
154.15 	the Public Employees Retirement Association any refund of accumulated member 
154.16 	contributions and interest previously received, plus interest at an annual rate of 8.5 percent 
154.17 	compounded annually from the date on which the refund was paid until the date on which 
154.18 	the refund is repaid.
154.19 	(d) If the eligible person repays all prior refunds under paragraph (c), the eligible 
154.20 	person may purchase 43 months of allowable service credit and salary credit from the 
154.21 	general employees retirement plan of the Public Employees Retirement Association by 
154.22 	making a payment equal to the unpaid member contributions during the period October 5, 
154.23 	2005, until April 5, 2009, plus 8.5 percent interest from the date that each contribution 
154.24 	would have been transmitted to the Public Employees Retirement Association until the 
154.25 	date that the payment under this paragraph is made.
154.26 	(e) If the eligible person makes the payment required under paragraph (c) in a timely 
154.27 	fashion, within 30 days following notification of that fact by the executive director of the 
154.28 	Public Employees Retirement Association, the city of Northfield shall pay the balance 
154.29 	of the prior service credit purchase payment amount required under Minnesota Statutes, 
154.30 	section 356.551. If the payment by the city of Northfield is not paid in a timely fashion, 
154.31 	the executive director shall collect the unpaid amount as provided under Minnesota 
154.32 	Statutes, section 353.28, subdivision 6.
154.33 	(f) Authority to repay a refund and to make a prior service credit purchase payment 
154.34 	under this section expires on December 31, 2014.

154.35 	EFFECTIVE DATE. This section is effective the day following final enactment.

155.1 	Sec. 11. PERA-GENERAL; SERVICE CREDIT PURCHASE FOR OMITTED 
155.2 	CONTRIBUTION PERIOD; WRIGHT COUNTY HIGHWAY DEPARTMENT 
155.3 	EMPLOYEE.
 155.4 	(a) Notwithstanding any provision of law to the contrary, an eligible person 
155.5 	described in paragraph (b) is entitled to purchase from the general employees retirement 
155.6 	plan of the Public Employees Retirement Association allowable service credit under 
155.7 	Minnesota Statutes, section 353.01, subdivision 16, for the period of omitted member 
155.8 	deductions described in paragraph (c).
155.9 	(b) An eligible person is a person who:
155.10 	(1) was born on March 19, 1959;
155.11 	(2) is a current employee of the Wright County Highway Department, covered by 
155.12 	the general employees retirement plan of the Public Employees Retirement Association;
155.13 	(3) shifted from temporary to full-time employment with the highway department 
155.14 	in April 2007; and
155.15 	(4) was not reported by Wright County for retirement coverage by and membership 
155.16 	in the general employees retirement plan of the Public Employees Retirement Association 
155.17 	until March 2012.
155.18 	(c) The period of uncredited service authorized for purchase is the period from 
155.19 	April 2007 through December 2008, during which no member contributions for the 
155.20 	general employees retirement plan of the Public Employees Retirement Association were 
155.21 	deducted from the eligible person's salary by Wright County, and which could not be 
155.22 	corrected through the Public Employees Retirement Association omitted contribution 
155.23 	provision due to a three-year time limit in the provision.
155.24 	(d) Minnesota Statutes, section 356.551, applies to this purchase, except that the 
155.25 	purchase payment amount payable by the eligible person is the employee contributions 
155.26 	that should have been made, plus 8.5 percent interest compounded annually from the 
155.27 	date each deduction should have occurred, until the date paid to the Public Employees 
155.28 	Retirement Association. The purchase payment amount payable by Wright County is the 
155.29 	balance of the full actuarial value prior service credit purchase payment amount as of the 
155.30 	first day of the month next following the receipt of the eligible person's payment that is 
155.31 	remaining after deducting the purchase payment amount payable by the eligible person.
155.32 	(e) The payment amount due from the county under paragraph (d) must be made on 
155.33 	or before the 15th of the month next following the receipt of the eligible person's payment 
155.34 	under paragraph (d). If the county purchase payment amount is not paid in a timely 
155.35 	fashion, the amount due accrues compound monthly interest at the rate of 0.71 percent per 
155.36 	month from the first day of the month next following the receipt of the eligible person's 
156.1 	payment until the county purchase payment amount is received by the Public Employees 
156.2 	Retirement Association. If the county purchase payment amount is not paid to the Public 
156.3 	Employees Retirement Association 90 days after the receipt of the eligible person's 
156.4 	payment, the executive director shall notify the commissioner of management and budget 
156.5 	and the commissioner of revenue of that unpaid obligation and the unpaid obligation must 
156.6 	be deducted from any state aid otherwise payable to the county, plus interest.
156.7 	(f) The eligible person must provide the executive director of the Public Employees 
156.8 	Retirement Association with any relevant requested information pertaining to this service 
156.9 	credit purchase.
156.10 	(g) Authority to make a service credit purchase under this section expires on June 
156.11 	30, 2014, or upon the termination from public employment under Minnesota Statutes, 
156.12 	section 353.01, subdivision 11a, whichever occurs earlier.

156.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

156.14 	ARTICLE 8
156.15 	MISCELLANEOUS PROVISIONS

156.16 	Section 1. [6.496] VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; 
156.17 	STATE BOARD OF INVESTMENT OPTIONS.
156.18 	(a) Annually, on or before March 1, the state auditor shall provide all volunteer 
156.19 	firefighter relief associations with recent and historic investment performance results of 
156.20 	the various accounts of the Minnesota supplemental investment fund and information 
156.21 	on the process and procedures for a volunteer firefighter relief association to utilize the 
156.22 	Minnesota supplemental investment fund as an investment option.
156.23 	(b) Annually, on or before March 1, the state auditor shall provide all volunteer 
156.24 	firefighter relief associations with basic information on the voluntary statewide lump-sum 
156.25 	volunteer firefighter retirement plan, that a fire department has the option annually to join 
156.26 	the retirement plan, and that, if the fire department joins the retirement plan, future asset 
156.27 	investments would be the responsibility of the State Board of Investment.
156.28 	(c) The information provision required by paragraphs (a) and (b) may be provided in 
156.29 	an electronic or other format if the state auditor determines that the format is reasonably 
156.30 	accessible by a preponderance of volunteer firefighter relief associations.

156.31 	EFFECTIVE DATE. This section is effective July 1, 2013.

156.32 	Sec. 2. Minnesota Statutes 2012, section 352.03, subdivision 4, is amended to read:
156.33 		Subd. 4.Duties and powers of board of directors. (a) The board shall:
157.1 	(1) elect a chair;
157.2 	(2) appoint an executive director;
157.3 	(3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D, 
157.4 	and 490 and transact the business of the system, subject to the limitations of law;
157.5 	(4) consider and dispose of, or take any other action the board of directors deems 
157.6 	appropriate concerning, denials of applications for annuities or disability benefits under 
157.7 	this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and 
157.8 	others pertaining to the retirement of employees and the operation of the system;
157.9 	(5) oversee the administration of the deferred compensation plan established in 
157.10 	section 352.965; and
157.11 	(6) oversee the administration of the health care savings plan established in section 
157.12 	352.98.; and
157.13 	(7) approve early retirement and optional annuity factors, subject to review by the 
157.14 	actuary retained by the Legislative Commission on Pensions and Retirement; establish 
157.15 	the schedule for implementation of the approved factors; and notify the Legislative 
157.16 	Commission on Pensions and Retirement of the implementation schedule.
157.17 	(b) The board shall advise the director on any matters relating to the system and 
157.18 	carrying out functions and purposes of this chapter. The board's advice shall control.

157.19 	Sec. 3. Minnesota Statutes 2012, section 353.03, subdivision 3, is amended to read:
157.20 		Subd. 3.Duties and powers. (a) The board shall:
157.21 	(1) elect a president and vice-president;
157.22 	(2) approve the staffing complement, as recommended by the executive director, 
157.23 	necessary to administer the fund;
157.24 	 (3) adopt bylaws for its own government and for the management of the fund 
157.25 	consistent with the laws of the state and may modify them at pleasure;
157.26 	(4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and 
157.27 	the terms of the applicable benefit plans for the administration and management of the 
157.28 	fund, for the payment and collection of payments from members and for the payment of 
157.29 	withdrawals and benefits, and that are necessary in order to comply with the applicable 
157.30 	federal Internal Revenue Service and Department of Labor requirements;
157.31 	(5) pass upon and allow or disallow all applications for membership in the fund and 
157.32 	allow or disallow claims for withdrawals, pensions, or benefits payable from the fund;
157.33 	(6) adopt an appropriate mortality table based on experience of the fund as 
157.34 	recommended by the association actuary and approved under section 356.215, subdivision 
157.35 	18, with interest set at the rate specified in section 356.215, subdivision 8;
158.1 	(7) provide for the payment out of the fund of the cost of administering this 
158.2 	chapter, of all necessary expenses for the administration of the fund and of all claims for 
158.3 	withdrawals, pensions, or benefits allowed; and
158.4 	(8) approve or disapprove all recommendations and actions of the executive director 
158.5 	made subject to its approval or disapproval by subdivision 3a.; and
158.6 	(9) approve early retirement and optional annuity factors, subject to review by the 
158.7 	actuary retained by the Legislative Commission on Pensions and Retirement; establish 
158.8 	the schedule for implementation of the approved factors; and notify the Legislative 
158.9 	Commission on Pensions and Retirement of the implementation schedule.
158.10 	(b) In passing upon all applications and claims, the board may summon, swear, hear, 
158.11 	and examine witnesses and, in the case of claims for disability benefits, may require the 
158.12 	claimant to submit to a medical examination by a physician of the board's choice, at the 
158.13 	expense of the fund, as a condition precedent to the passing on the claim, and, in the 
158.14 	case of all applications and claims, may conduct investigations necessary to determine 
158.15 	their validity and merit.
158.16 	(c) The board may continue to authorize the sale of life insurance to members under 
158.17 	the insurance program in effect on January 1, 1985, but must not change that program 
158.18 	without the approval of the commissioner of management and budget. The association 
158.19 	shall not receive any financial benefit from the life insurance program beyond the amount 
158.20 	necessary to reimburse the association for costs incurred in administering the program. 
158.21 	The association shall not engage directly or indirectly in any other activity involving the 
158.22 	sale or promotion of goods or services, or both, whether to members or nonmembers.
158.23 	(d) The board shall establish procedures governing reimbursement of expenses 
158.24 	to board members. These procedures must define the types of activities and expenses 
158.25 	that qualify for reimbursement, must provide that all out-of-state travel be authorized 
158.26 	by the board, and must provide for the independent verification of claims for expense 
158.27 	reimbursement. The procedures must comply with the applicable rules and policies of the 
158.28 	Department of Management and Budget and the Department of Administration.
158.29 	(e) The board may purchase fiduciary liability insurance and official bonds for the 
158.30 	officers and members of the board of trustees and employees of the association and may 
158.31 	purchase property insurance or may establish a self-insurance risk reserve including, but 
158.32 	not limited to, data processing insurance and "extra-expense" coverage.

158.33 	Sec. 4. Minnesota Statutes 2012, section 354.07, subdivision 1, is amended to read:
158.34 		Subdivision 1.General powers of board. The board has the power to frame bylaws 
158.35 	for its own government and for the management of the association not inconsistent with 
159.1 	the laws of the state and to modify them at its pleasure; to adopt, alter, and enforce 
159.2 	reasonable rules not inconsistent with the laws of the state for the administration and 
159.3 	management of the association, for the payment and collection of payments from 
159.4 	members, and for the payment of withdrawals and benefits; to pass upon and allow or 
159.5 	disallow applications for membership in the association and for credit for teaching service; 
159.6 	to pass upon and allow or disallow claims for withdrawals, pensions, or benefits payable 
159.7 	by the fund; to adopt an appropriate mortality table based on experience of the association 
159.8 	as recommended by the actuary retained under section 356.214 and using the applicable 
159.9 	postretirement interest assumption specified in section 356.215, subdivision 8; to approve 
159.10 	early retirement and optional annuity factors, subject to review by the actuary retained by 
159.11 	the Legislative Commission on Pensions and Retirement; to establish the schedule for 
159.12 	implementation of the approved factors; to notify the Legislative Commission on Pensions 
159.13 	and Retirement of the implementation schedule; and to provide for the payment out of 
159.14 	the fund of necessary expenses for the administration by the association and of claims for 
159.15 	withdrawals, pensions, or benefits allowed.

159.16 	Sec. 5. Minnesota Statutes 2012, section 354A.021, subdivision 2, is amended to read:
159.17 		Subd. 2.Organization; board duties. (a) Each teachers retirement fund association 
159.18 	shall be organized and governed pursuant to this chapter and chapter 317A, except that 
159.19 	each association shall be deemed to be a nonprofit corporation without coming within 
159.20 	the definition in section 317A.011, subdivision 6. Any corporate action of any teachers 
159.21 	retirement fund association taken prior to April 9, 1976, shall be deemed to be valid if it 
159.22 	conformed with Minnesota Statutes 1976, chapter 317 or 354A, or Revised Laws 1905, 
159.23 	chapter 58, as amended through April 9, 1976.
159.24 	(b) In addition to the other powers and duties of a board of trustees of a first class 
159.25 	city teacher retirement fund association, the board shall approve early retirement and 
159.26 	optional annuity factors, subject to review by the actuary retained by the Legislative 
159.27 	Commission on Pensions and Retirement; shall establish the schedule for implementation 
159.28 	of the approved factors; and shall notify the Legislative Commission on Pensions and 
159.29 	Retirement of the implementation schedule.