1.1A bill for an act1.2relating to retirement; modifying State Board of Investment provisions; MSRS 1.3administrative provisions; PERA administrative provisions; benefit accrual rate 1.4specification; revisions and repeals of former local police and paid firefighter 1.5relief association laws; volunteer firefighter retirement changes; one person 1.6and small group retirement changes; miscellaneous provisions; state patrol 1.7retirement plan financial solvency measures; PERA plans salary definitions; 1.8public employees police and fire retirement plan financial solvency measures; 1.9Teachers Retirement Association early retirement reduction factors; first class 1.10city teacher retirement increases and financial solvency measures; judges 1.11retirement plan financial solvency measures; requiring reports; appropriating 1.12money;amending Minnesota Statutes 2012, sections 3.85, subdivision 10; 1.133A.011; 3A.03, subdivision 3; 3A.07; 3A.115; 3A.13; 3A.15; 6.495, subdivisions 1.141, 3; 6.67; 11A.24, subdivision 1; 13D.01, subdivision 1; 69.011, subdivisions 1.151, 2, 3, 4; 69.021, subdivisions 1, 2, 3, 4, 5, 7, 7a, 8, 9, 10, 11; 69.031, 1.16subdivisions 1, 3, 5; 69.041; 69.051, subdivisions 1, 1a, 1b, 2, 3, 4; 69.33; 69.77, 1.17subdivisions 1, 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 69.771, subdivision 1; 69.774, 1.18subdivision 1; 69.80; 275.70, subdivision 5; 297I.10, subdivision 1; 345.381; 1.19352.01, subdivisions 2a, 17b; 352.029, subdivisions 1, 2a, 2b, 3, 5; 352.03, 1.20subdivisions 4, 8; 352.045, by adding subdivisions; 352.113, subdivisions 4, 1.216, 8, by adding subdivisions; 352.115, subdivision 3; 352.22, subdivision 3; 1.22352.87, subdivision 3; 352.93, subdivision 2; 352.95, subdivision 1; 352.955, 1.23subdivisions 1, 3; 352B.011, subdivisions 4, 13; 352B.02, subdivisions 1a, 1.241c; 352B.08, subdivisions 1, 2, 2a; 352B.10, subdivisions 1, 5, by adding 1.25a subdivision; 352B.11, subdivisions 1, 2b; 352D.04, subdivision 2; 353.01, 1.26subdivisions 2a, 2b, 6, 10, 16, 17a, 29, 41, 47; 353.03, subdivision 3; 353.031, 1.27subdivision 4; 353.27, subdivision 7; 353.29, subdivision 3; 353.34, subdivisions 1.281, 2; 353.35, subdivision 1; 353.50, subdivisions 3, 6; 353.64, subdivision 1a; 1.29353.65, subdivisions 2, 3; 353.651, subdivisions 3, 4; 353.656, subdivisions 1, 1.301a, 3a; 353.657, subdivisions 2, 2a, 3, 3a; 353.659; 353.665, subdivisions 1, 1.315, 8, by adding a subdivision; 353.71, subdivision 1; 353E.001, subdivision 1.321; 353E.04, subdivision 3; 353E.06, subdivision 1; 353F.02, subdivisions 3, 1.334, 6, by adding a subdivision; 353F.025, subdivisions 1, 2; 353F.03; 353F.04; 1.34353F.05; 353F.051, subdivision 1; 353F.052; 353F.06; 353F.07; 353F.08; 1.35353G.05, subdivision 2; 354.07, subdivision 1; 354.44, subdivision 6; 354A.011, 1.36subdivision 21; 354A.021, subdivision 2; 354A.12, subdivisions 1, 2a, 3a, 3c, 1.377, by adding subdivisions; 354A.27, subdivision 7, by adding a subdivision; 1.38354A.31, subdivisions 3, 4, 4a, 7; 354A.35, subdivision 2; 356.20, subdivisions 1.392, 4; 356.214, subdivision 1; 356.215, subdivisions 1, 8, 18; 356.216; 356.219, 2.1subdivisions 1, 2, 8; 356.30, subdivisions 1, 3; 356.315, subdivision 9, by 2.2adding a subdivision; 356.401, subdivision 3; 356.406, subdivision 1; 356.415, 2.3subdivisions 1, 1a, 1b, 1c, 1e, 2, by adding a subdivision; 356.47, subdivision 2.41; 356.48, subdivision 1; 356.635, subdivision 1; 356.91; 356A.01, subdivision 2.519; 356A.06, subdivision 4; 356A.07, subdivision 2; 423A.02, subdivisions 1, 2.61b, 2, 3, 3a, 4, 5; 424A.001, subdivision 4, by adding a subdivision; 424A.01, 2.7subdivision 6; 424A.015, subdivisions 1, 4; 424A.016, subdivision 6; 424A.02, 2.8subdivisions 7, 9; 424A.10, subdivisions 1, 2; 475.52, subdivision 6; 490.121, 2.9subdivisions 21f, 22, by adding subdivisions; 490.123, subdivisions 1a, 1b; 2.10490.124, subdivision 1; proposing coding for new law in Minnesota Statutes, 2.11chapters 3A; 6; 353F; 354; 356; 490; repealing Minnesota Statutes 2012, sections 2.123A.02, subdivision 3; 69.021, subdivision 6; 69.77, subdivision 3; 352.045, 2.13subdivisions 3, 4; 352.955, subdivision 2; 352B.11, subdivision 2c; 352C.001; 2.14352C.091, subdivision 1; 352C.10; 353.29, subdivision 6; 353.64, subdivision 3; 2.15353.665, subdivisions 2, 3, 4, 6, 7, 9, 10; 353.667; 353.668; 353.669; 353.6691; 2.16353A.01; 353A.02; 353A.03; 353A.04; 353A.05; 353A.06; 353A.07; 353A.08; 2.17353A.081; 353A.083; 353A.09; 353A.10; 353B.01; 353B.02; 353B.03; 353B.04; 2.18353B.05; 353B.06; 353B.07; 353B.08; 353B.09; 353B.10; 353B.11; 353B.12; 2.19353B.13; 353B.14; 353F.02, subdivisions 4, 5; 353F.025, subdivision 3; 2.20354A.27, subdivision 6; 356.315, subdivisions 1, 1a, 2, 2a, 2b, 3, 4, 5, 5a, 6, 7, 2.218; 423A.01; 423A.02, subdivision 1a; 423A.04; 423A.05; 423A.07; 423A.10; 2.22423A.11; 423A.12; 423A.13; 423A.14; 423A.15; 423A.16; 423A.17; 423A.171; 2.23423A.18; 423A.19; 423A.20; 423A.21; 423A.22; 424A.10, subdivision 5.2.24BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:2.25ARTICLE 12.26STATE BOARD OF INVESTMENT PROVISIONS2.27    Section 1. Minnesota Statutes 2012, section 11A.24, subdivision 1, is amended to read:2.28    Subdivision 1. Securities generally. (a) Pursuant to an investment policy adopted 2.29by the state board, the state board is authorized to purchase, sell, lend, and exchange the 2.30securities specified in this section, for funds or accounts specifically made subject to this 2.31section,. This authorityincluding includes puts and call options,and future contracts, 2.32and swap contracts marked to market, if these options and contracts are traded on a 2.33contract market regulated by a governmental agency or by a financial institution regulated 2.34by a governmental agency. These securities may be owned directly or through shares 2.35in exchange-traded or mutual funds, or as units in commingled trusts, subject to any 2.36limitations as specified in this section.2.37(b) Any agreement to lend securities must be concurrently collateralized with cash 2.38or securities with a market value of not less than 100 percent of the market value of the 2.39loaned securities at the time of the agreement. Any agreement for put and call options 2.40and futures contracts may only be entered into with a fully offsetting amount of cash or 2.41securities. Only securities authorized by this section, excluding those under subdivision 6, 2.42paragraph (a), clauses (1) to (3), may be accepted as collateral or offsetting securities.3.1EFFECTIVE DATE.This section is effective the day following final enactment.3.2ARTICLE 23.3MSRS ADMINISTRATIVE PROVISIONS3.4    Section 1. Minnesota Statutes 2012, section 3.85, subdivision 10, is amended to read:3.5    Subd. 10. Standards for pension valuations and cost estimates. The commission 3.6shall adopt standards prescribing specific detailed methods to calculate, evaluate, and 3.7display current and proposed law liabilities, costs, and actuarial equivalents of all public 3.8employee pension plans in Minnesota. These standards shall be consistent with chapter 3.9356 and be updated annually. At a minimum, the standards must notshall contain a 3.10valuation requirementrequirements that is inconsistentcomply with generally accepted 3.11accounting principles applicable to government pension plans. The standards may include 3.12additional financial, funding, or valuation requirements that are not required under 3.13generally accepted accounting principles applicable to government pension plans.3.14EFFECTIVE DATE.This section is effective the day following final enactment.3.15    Sec. 2. Minnesota Statutes 2012, section 3A.011, is amended to read:3.163A.011 ADMINISTRATION OF PLAN PLANS.3.17    The executive director and the board of directors of the Minnesota State Retirement 3.18System shall administer the legislators retirement planplans specified in accordancethis 3.19chapter consistent with this chapter and chapterchapters 356 and 356A.3.20EFFECTIVE DATE.This section is effective July 1, 2013.3.21    Sec. 3. Minnesota Statutes 2012, section 3A.03, subdivision 3, is amended to read:3.22    Subd. 3. Legislators retirement fund. (a) The legislators retirement fund, a special 3.23retirement fund, is created within the state treasury and must be credited with assets equal 3.24to the participation of the legislators retirement plan in the Minnesota postretirement 3.25investment fund as of June 30, 2009, and any investment proceeds on those assets. The 3.26legislators retirement fund must be credited with any investment proceeds on the assets of 3.27the retirement fund.3.28(b) The payment of annuities under section 
         3A.115, paragraph (b), is appropriated 3.29from the legislators retirement fund.3.30EFFECTIVE DATE.This section is effective July 1, 2013.4.1    Sec. 4. Minnesota Statutes 2012, section 3A.07, is amended to read:4.23A.07 APPLICATION.4.3    (a) Except as provided in paragraph (b) and section 3A.17, this chapter applies 4.4to members of the legislature in service after July 1, 1965, who otherwise meet the 4.5requirements of this chapter.4.6    (b) Members of the legislature who were elected for the first time after June 30, 4.71997, or members of the legislature who were elected before July 1, 1997, and who, after 4.8July 1, 1998, elect not to be members of the plan established by this chapter are covered 4.9by the unclassified employees retirement program governed by chapter 352D.4.10    (c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable 4.11and must be made on a form prescribed by the director. The second chance referendum 4.12election under Laws 2002, chapter 392, article 15, also is irrevocable.4.13EFFECTIVE DATE.This section is effective July 1, 2013.4.14    Sec. 5. Minnesota Statutes 2012, section 3A.115, is amended to read:4.153A.115 RETIREMENT ALLOWANCE APPROPRIATION; 4.16POSTRETIREMENT ADJUSTMENT.4.17(a) The amount necessary to fund the retirement allowance granted under this 4.18chapter to a former legislator retiring after June 30, 2003, or to that legislator's survivor, 4.19and the retirement allowance granted under section 3A.17 to a former constitutional 4.20officer or the survivor of that constitutional officer is appropriated from the general fund to 4.21the director to pay pension obligations due to the retiree.4.22(b) The amount necessary to fund the retirement allowance granted under this 4.23chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators 4.24retirement fund created under section 
         3A.03, subdivision 3, until the assets of the fund 4.25are exhausted and at that time, the amount necessary to fund the retirement allowances 4.26under this paragraph is appropriated from the general fund to the director to pay pension 4.27obligations to the retiree and survivor.4.28(c) Retirement allowances payable to retired legislators and their survivors under 4.29this chapter must be adjusted as provided in sections 
         3A.02, subdivision 6, and 
         356.415.4.30EFFECTIVE DATE.This section is effective July 1, 2013.5.1    Sec. 6. Minnesota Statutes 2012, section 3A.13, is amended to read:5.23A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH 5.3PREMIUM DEDUCTION.5.4(a) The provisions of section 
         356.401 apply to the legislators retirement plan plans 5.5specified in this chapter.5.6(b) The executive director of the Minnesota State Retirement System must, at the 5.7request of a retired legislator or constitutional officer who is enrolled in a health insurance 5.8plan covering state employees, deduct the person's health insurance premiums from the 5.9person's annuity and transfer the amount of the premium to a health insurance carrier 5.10covering state employees.5.11EFFECTIVE DATE.This section is effective July 1, 2013.5.12    Sec. 7. Minnesota Statutes 2012, section 3A.15, is amended to read:5.133A.15 COORDINATED PROGRAMPROGRAMS OF THE LEGISLATORS 5.14RETIREMENT PLAN.5.15The coordinated program of the legislators retirement plan is created. The provisions 5.16of sections 
         3A.01 to 
         3A.13 apply to the coordinated program and basic programs of the 5.17legislators retirement plan.5.18EFFECTIVE DATE.This section is effective July 1, 2013.5.19    Sec. 8. [3A.17] CONSTITUTIONAL OFFICERS.5.20    Subdivision 1.Application.(a) This section specifies the retirement plan applicable 5.21to a former constitutional officer who was first elected to a constitutional office after July 5.221, 1967, and before July 1, 1997. The plan includes the applicable portions of chapters 5.23352C and 356 in effect on the date on which the person terminated active service as a 5.24constitutional officer.5.25(b) Nothing in this section, this act, or Laws 2006, chapter 271, article 10, section 5.2633, subdivision 2, is intended to increase or reduce the benefits of former constitutional 5.27officers or their survivors or to adversely modify their eligibility for benefits in effect 5.28as of June 30, 2012.5.29    Subd. 2.Benefit adjustments.Retirement allowances payable to retired 5.30constitutional officers and surviving spouse benefits payable must be adjusted under 5.31section 356.415.5.32EFFECTIVE DATE.This section is effective July 1, 2013.6.1    Sec. 9. Minnesota Statutes 2012, section 352.01, subdivision 17b, is amended to read:6.2    Subd. 17b. Duty disability, physical or psychological. "Duty disability, physical 6.3or psychological," for a correctional employee, means an occupational disability that is 6.4the direct result of an injury incurred during, or a disease arising out of, the performance 6.5of normal duties or the performance of less frequent duties either of which arepresent 6.6inherent dangers specific to the correctional employee.6.7EFFECTIVE DATE.This section is effective the day following final enactment.6.8    Sec. 10. Minnesota Statutes 2012, section 352.03, subdivision 8, is amended to read:6.9    Subd. 8. Medical adviser. The state commissioner of health or otherexecutive 6.10director may contract with an accredited independent organization specializing in 6.11disability determinations, licensed physicianphysicians, or physicians on the staff of the 6.12commissioner of health as designated by the commissioner may designate shall, to be the 6.13medical adviser ofto the director system.6.14EFFECTIVE DATE.This section is effective the day following final enactment.6.15    Sec. 11. Minnesota Statutes 2012, section 352.045, is amended by adding a subdivision 6.16to read:6.17    Subd. 3a.Contribution rate revision; general state employees retirement plan.6.18(a) Notwithstanding the contribution rates stated in plan law, the employee and employer 6.19contribution rates for the general state employees retirement plan must be adjusted:6.20(1) if the regular actuarial valuation of the plan under section 356.215 indicates that 6.21there is a contribution sufficiency greater than one percent of covered payroll and that the 6.22sufficiency has existed for at least two consecutive years, the employee and employer 6.23contribution rates must be decreased as determined under paragraph (b) to a level such 6.24that the sufficiency is no greater than one percent of covered payroll based on the most 6.25recent actuarial valuation; or6.26(2) if the regular actuarial valuation of the plan under section 356.215 indicates that 6.27there is a contribution deficiency equal to or greater than 0.5 percent of covered payroll 6.28and that the deficiency has existed for at least two consecutive years, the employee and 6.29employer contribution rates must be increased as determined under paragraph (c) to a level 6.30such that no deficiency exists based on the most recent actuarial valuation.6.31(b) If the actuarially required contribution of the plan is less than the total support 6.32provided by the combined employee and employer contribution rates by more than one 6.33percent of covered payroll, the plan employee and employer contribution rates must be 7.1decreased incrementally over one or more years by no more than 0.25 percent of pay 7.2each for employee and employer contribution rates to a level such that there remains a 7.3contribution sufficiency of at least one percent of covered payroll. No contribution rate 7.4decrease may be made until at least two years have elapsed since any adjustment under 7.5this paragraph has been fully implemented.7.6(c) If the actuarially required contribution exceeds the total support provided by the 7.7employee and employer contribution rates, the employee and employer contribution rates 7.8must be increased equally to eliminate that contribution deficiency. If the contribution 7.9deficiency is:7.10(1) less than two percent, the incremental increase may be up to 0.25 percent each 7.11for the employee and employer contribution rates;7.12(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase 7.13may be up to 0.5 percent each for the employee and employer contribution rates; or7.14(3) greater than four percent, the incremental increase may be up to 0.75 percent 7.15each for the employee and employer contribution.7.16(d) Any recommended adjustment to the contribution rates must be reported to 7.17the chair and the executive director of the Legislative Commission on Pensions and 7.18Retirement by January 15 following receipt of the most recent annual actuarial valuation 7.19prepared under section 356.215. The report must include draft legislation to revise the 7.20employee and employer contributions stated in plan law. If the Legislative Commission 7.21on Pensions and Retirement does not recommend against the rate change or does not 7.22recommend a modification in the rate change, the recommended adjustment becomes 7.23effective on the first day of the first full payroll period in the fiscal year following receipt 7.24of the most recent actuarial valuation that gave rise to the adjustment.7.25(e) A contribution sufficiency of up to one percent of covered payroll must be held 7.26in reserve to be used to offset any future actuarially required contributions that are more 7.27than the total combined employee and employer contributions.7.28(f) Before any reduction in contributions to eliminate a sufficiency in excess of one 7.29percent of covered pay may be recommended, the executive director must review any 7.30need for a change in actuarial assumptions, as recommended by the actuary retained under 7.31section 356.214 in the most recent experience study of the general employees retirement 7.32plan prepared under section 356.215 and the standards for actuarial work promulgated by 7.33the Legislative Commission on Pensions and Retirement that may result in an increase 7.34in the actuarially required contribution and must report to the Legislative Commission 7.35on Pensions and Retirement any recommendation by the board to use the sufficiency 7.36exceeding one percent of covered payroll to offset the impact of an actuarial assumption 8.1change recommended by the actuary retained under section 356.214, subdivision 1, and 8.2reviewed by the actuary retained by the commission under section 356.214, subdivision 4.8.3(g) No contribution sufficiency in excess of one percent of covered pay may be 8.4proposed to be used to increase benefits, and no benefit increase may be proposed that 8.5would initiate an automatic adjustment to increase contributions under this subdivision. 8.6Any proposed benefit improvement must include a recommendation, prepared by the 8.7actuary retained under section 356.214, subdivision 1, and reviewed by the actuary 8.8retained by the Legislative Commission on Pensions and Retirement as provided under 8.9section 356.214, subdivision 4, on how the benefit modification will be funded.8.10EFFECTIVE DATE.This section is effective the day following final enactment.8.11    Sec. 12. Minnesota Statutes 2012, section 352.045, is amended by adding a subdivision 8.12to read:8.13    Subd. 3b.Contribution rate revision; correctional state employees retirement 8.14plan and State Patrol retirement plan.(a) Subdivision 3a applies to the correctional 8.15state employees retirement plan under this chapter and to the State Patrol retirement plan 8.16established under chapter 352B, except as stated in this subdivision.8.17(b) Any limitations on the amount of contribution rate changes stated in subdivision 8.183a apply only to the amount of the employee contribution revision. The employer 8.19contribution for the correctional state employees retirement plan or the State Patrol 8.20retirement plan, whichever is applicable, must be adjusted so that the employer 8.21contribution is equal to 60 percent of the sum of employee plus employer contributions.8.22(c) For the State Patrol retirement plan, a contribution sufficiency of up to two 8.23percent of covered payroll, rather than one percent, may be held in reserves without taking 8.24action to reduce employee and employer contributions.8.25EFFECTIVE DATE.This section is effective the day following final enactment.8.26    Sec. 13. Minnesota Statutes 2012, section 352.113, subdivision 4, is amended to read:8.27    Subd. 4. Medical or psychological examinations; authorization for payment of 8.28benefit. (a) Any physician, psychologist, chiropractor, or physician assistant providing 8.29any service specified in this section must be licensed.8.30(b) An applicant shall provide medical, chiropractic, or psychological a detailed 8.31report signed by a physician, and at least one additional report signed by a physician, 8.32chiropractor, psychologist, or physician assistant with  evidence to support an application 8.33for total and permanent disability.9.1(b) The director shall have the employee examined by at least one additional 9.2licensed chiropractor, physician, or psychologist designated by the medical adviser. The 9.3chiropractors, physicians, or psychologists shall make written reports to the director 9.4concerning the employee's disability includingmust include an expert opinions as to9.5opinion regarding whether the employee is permanently and totally disabled within 9.6the meaning of section 
         352.01, subdivision 17, and that the disability arose before the 9.7employee was placed on any paid or unpaid leave of absence or terminated public service.9.8(c) If there is medical evidence that supports the expectation that at some point 9.9the person applying for the disability benefit will no longer be disabled, the decision 9.10granting the disability benefit may provide for a termination date upon which the total and 9.11permanent disability can be expected to no longer exist. When a termination date is part 9.12of the decision granting benefits, prior to the benefit termination the executive director 9.13shall review any evidence provided by the disabled employee to show that the disabling 9.14condition for which benefits were initially granted continues. If the benefits cease, the 9.15disabled employee may follow the appeal procedures described in section 356.96 or may 9.16reapply for disability benefits using the process described in this subdivision.9.17(d) Any claim to disability must be supported by a report from the employer 9.18indicating that there is no available work that the employee can perform with the disabling 9.19condition and that all reasonable accommodations have been considered. Upon request of 9.20the executive director, an employer shall provide evidence of the steps the employer has 9.21taken to attempt to provide reasonable accommodations and continued employment to 9.22the claimant.9.23(c)(e) The director shall also obtain written certification from the employer 9.24stating whether the employment has ceased or whether the employee is on sick leave of 9.25absence because of a disability that will prevent further service to the employer and as a 9.26consequencethat the employee is not entitled to compensation from the employer.9.27(d)(f) The medical adviser shall consider the reports of the physicians, physician 9.28assistants, psychologists, and chiropractors and any other evidence supplied by the 9.29employee or other interested parties. If the medical adviser finds the employee totally and 9.30permanently disabled, the adviser shall make appropriate recommendation to the director 9.31in writing together with the date from which the employee has been totally disabled. The 9.32director shall then determine if the disability occurred within 18 months of filing the 9.33application, while still in the employment of the state, and the propriety of authorizing 9.34payment of a disability benefit as provided in this section.9.35(e)(g) A terminated employee may apply for a disability benefit within 18 months of 9.36termination as long as the disability occurred while in the employment of the state. The 10.1fact that an employee is placed on leave of absence without compensation because of 10.2disability does not bar that employee from receiving a disability benefit.10.3(f)(h) Unless the payment of a disability benefit has terminated because the 10.4employee is no longer totally disabled, or because the employee has reached normal 10.5retirement age as provided in this section, the disability benefit must cease with the last 10.6payment received by the disabled employee or which had accrued during the lifetime of the 10.7employee unless there is a spouse surviving. In that event, the surviving spouse is entitled 10.8to the disability benefit for the calendar month in which the disabled employee died.10.9EFFECTIVE DATE.This section is effective the day following final enactment.10.10    Sec. 14. Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision 10.11to read:10.12    Subd. 4a.Independent medical examination or vocational rehabilitation 10.13counseling.Any individual applying for or receiving disability benefits shall submit 10.14to an independent medical examination or an assessment by a certified rehabilitation 10.15counselor if requested by the executive director or designee. The examination must be 10.16paid for by the system.10.17EFFECTIVE DATE.This section is effective the day following final enactment.10.18    Sec. 15. Minnesota Statutes 2012, section 352.113, subdivision 6, is amended to read:10.19    Subd. 6. Regular medical or psychological examinations. At least once each 10.20year during the first five years following the allowance of a disability benefit to any 10.21employee, and at least once in every three-year period thereafter, the director may require 10.22any disabled employee to undergo aprovide medical, chiropractic, or psychological 10.23examination evidence to support the continuation of the total and permanent disability. 10.24The examination must be made at the place of residence of the employee, or at any place 10.25mutually agreed upon,evidence must be in a form and manner prescribed by the executive 10.26director for review by an expert or experts designated by the medical adviser and engaged 10.27by the director. If any examination indicatesthe medical information provided to the 10.28medical adviser indicates that the employee is no longer permanently and totally disabled, 10.29or is engaged in or can engage in a gainful occupation, payments of the disability benefit 10.30by the fund must be discontinued. The payments must be discontinued as soon as the 10.31employee is reinstated to the payroll following a sick leave of absence, but in no case may 10.32payment be made for more than 60 days after the medical adviser finds that the employee 10.33is no longer permanently and totally disabled.11.1EFFECTIVE DATE.This section is effective the day following final enactment.11.2    Sec. 16. Minnesota Statutes 2012, section 352.113, subdivision 8, is amended to read:11.3    Subd. 8. Refusal of examination. If a disabled employeeperson applying for a 11.4disability benefit refuses to submit to an experta medical or psychological examination, 11.5the disability application shall be rejected. If a disability benefit recipient refuses to submit 11.6to a medical or psychological examination as required, payments by the fund must be 11.7discontinued and the director shall revoke all rights of the employee in any disability benefit.11.8EFFECTIVE DATE.This section is effective the day following final enactment.11.9    Sec. 17. Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision 11.10to read:11.11    Subd. 14.Disabilitant earnings reports.Disability benefit recipients must report 11.12all earnings from reemployment and income from workers' compensation to the system 11.13annually by May 15 in a format prescribed by the executive director. If the form is not 11.14submitted by June 15, benefits must be suspended effective July 1. If the form deemed 11.15acceptable by the executive director is received after the June 15 deadline, benefits shall 11.16be reinstated retroactive to July 1.11.17EFFECTIVE DATE.This section is effective the day following final enactment.11.18    Sec. 18. Minnesota Statutes 2012, section 352.22, subdivision 3, is amended to read:11.19    Subd. 3. Deferred annuity. (a) An employee who has at least three years of 11.20allowable service if employed before July 1, 2010, or who has at least five years of 11.21allowable service if employed after June 30, 2010, when termination occurs may elect 11.22to leave the accumulated contributions in the fund and thereby be entitled to a deferred 11.23retirement annuity. The annuity must be computed under the law in effect when state 11.24service terminated, on the basis of the allowable service credited to the person before 11.25the termination of service.11.26(b) An employee on layoff or on leave of absence without pay, except a leave of 11.27absence for health reasons, and who does not return to state service must have an annuity, 11.28deferred annuity, or other benefit to which the employee may become entitled computed 11.29under the law in effect on the employee's last working day.11.30(c) No application for a deferred annuity may be made more than 60 days before 11.31the time the former employee reaches the required age for entitlement to the payment of 11.32the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date 12.1the application is filed in the office of the system, but not (1) before the date on which 12.2the employee reaches the required age for entitlement to the annuity nor (2) before the 12.3day following the termination of state service in a position which is not covered by the 12.4retirement system.12.5(d) Application for the accumulated contributions left on deposit with the fund may 12.6be made at any time following the date of the termination of service.12.7(e) Deferred annuities must be augmented as provided in section 352.72, subdivision 12.82.12.9EFFECTIVE DATE.This section is effective the day following final enactment.12.10    Sec. 19. Minnesota Statutes 2012, section 352.955, subdivision 1, is amended to read:12.11    Subdivision 1. Election to transfer prior MSRS-general service credit. (a) An 12.12eligible employee described in paragraph (b) may elect to transfer service credit in the 12.13general state employees retirement plan of the Minnesota State Retirement System to the 12.14correctional state employees retirement plan for eligible prior correctional employment.12.15    (b) An eligible employee is a person who is covered by Laws 2007, chapter 134, 12.16article 3, section 6, or who became eligible for retirement coverage by the correctional 12.17state employees retirement plan of the Minnesota State Retirement System under Laws 12.182006, chapter 271, article 2, Laws 2007, chapter 134, article 3, or legislation implementing 12.19the recommendations under section 
         352.91, subdivision 4a.12.20    (c) Eligible prior correctional employment is employment covered correctional 12.21service defined in Laws 2007, chapter 134, article 3, section 6, or is employment by the 12.22Department of Corrections or by the Department of Human Services that preceded the 12.23effective date of the retirement coverage transfer under Laws 2006, chapter 271, article 12.242, Laws 2007, chapter 134, article 3, or legislation implementing the recommendations 12.25under section 352.91, subdivision 4a by the general state employees retirement plan of 12.26the Minnesota State Retirement System, is continuous service, and is certified by the 12.27commissioner of corrections and the commissioner of human services, whichever applies, 12.28and by the commissioner of management and budget to the executive director of the 12.29Minnesota State Retirement System as service that would qualify for correctional state 12.30employees retirement plan coverage under section 
         352.91, if the service washad been 12.31rendered after the date of coverage transfer.12.32    (d) The election to transfer past service credit under this section must be made in 12.33writing by the applicable person on a form prescribed by the executive director of the 12.34Minnesota State Retirement System and must be filed with the executive director of the 12.35Minnesota State Retirement System on or before (1) January 1, 2008, or the one year 13.1anniversary of the coverage transfer, whichever is later, or (2) the date of the eligible 13.2employee's termination of state employment, whichever is earlier.13.3EFFECTIVE DATE.This section is effective the day following final enactment.13.4    Sec. 20. Minnesota Statutes 2012, section 352.955, subdivision 3, is amended to read:13.5    Subd. 3. Payment of additional equivalent contributions; post-June 30, 2007, 13.6coverage transfers. (a) An eligible employee who is transferred to plan coverage after 13.7June 30, 2007, and who elects to transfer past service credit under this section must pay 13.8an additional member contribution for that prior service period. The additional member 13.9contribution is the amount computed under paragraph (b), plus the greater of the amount 13.10computed under paragraph (c), or 40 percent of the unfunded actuarial accrued liability 13.11attributable to the past service credit transfer.13.12    (b) The executive director shall compute, for the most recent 12 months of service 13.13credit eligible for transfer, or for the entire period eligible for transfer if less than 12 13.14months, the difference between the employee contribution rate or rates for the general state 13.15employees retirement plan and the employee contribution rate or rates for the correctional 13.16state employees retirement plan applied to the eligible employee's salary during that 13.17transfer period, plus compound interest at a monthly rate of 0.71 percent.13.18    (c) The executive director shall compute, for any service credit being transferred 13.19on behalf of the eligible employee and not included under paragraph (b), the difference 13.20between the employee contribution rate or rates for the general state employees retirement 13.21plan and the employee contribution rate or rates for the correctional state employees 13.22retirement plan applied to the eligible employee's salary during that transfer period, plus 13.23compound interest at a monthly rate of 0.71 percent.13.24    (d) The executive director shall compute an amount using the process specified in 13.25paragraph (b), but based on differences in employer contribution rates between the general 13.26state employees retirement plan and the correctional state employees retirement plan 13.27rather than employee contribution rates.13.28    (e) The executive director shall compute an amount using the process specified in 13.29paragraph (c), but based on differences in employer contribution rates between the general 13.30state employees retirement plan and the correctional state employees retirement plan 13.31rather than employee contribution rates.13.32    (f) The additional equivalent member contribution under this subdivision must be 13.33paid in a lump sum. Payment must accompany the election to transfer the prior service 13.34credit. No transfer election or additional equivalent member contribution payment may be 13.35made by a person or accepted by the executive director after the one year anniversary date 14.1of the effective date of the retirement coverage transfer, or the date on which the eligible 14.2employee terminates state employment, whichever is earlier.14.3    (g) If an eligible employee elects to transfer past service credit under this section 14.4and pays the additional equivalent member contribution amount under paragraph (a), the 14.5applicable department shall pay an additional equivalent employer contribution amount. 14.6The additional employer contribution is the amount computed under paragraph (d), plus 14.7the greater of the amount computed under paragraph (e), or 60 percent of the unfunded 14.8actuarial accrued liability attributable to the past service credit transfer.14.9    (h) The unfunded actuarial accrued liability attributable to the past service credit 14.10transfer is the present value of the benefit obtained by the transfer of the service credit 14.11to the correctional state employees retirement plan reduced by the amount of the asset 14.12transfer under subdivision 4, by the amount of the member contribution equivalent 14.13payment computed under paragraph (b), and by the amount of the employer contribution 14.14equivalent payment computed under paragraph (d).14.15    (i) The additional equivalent employer contribution under this subdivision must be 14.16paid in a lump sum and must be paid within 30 days of the date on which the executive 14.17director of the Minnesota State Retirement System certifies to the applicable department 14.18that the employee paid the additional equivalent member contribution.14.19EFFECTIVE DATE.This section is effective the day following final enactment.14.20    Sec. 21. Minnesota Statutes 2012, section 352B.011, subdivision 13, is amended to read:14.21    Subd. 13. Surviving spouse. "Surviving spouse" means a member's or former 14.22member's legally married spouse who resided with the member or former member at the 14.23time of death and was married to the member or former member, for a period of at least 14.24one year, during or before the time of membership.14.25EFFECTIVE DATE.This section is effective the day following final enactment.14.26    Sec. 22. Minnesota Statutes 2012, section 352B.10, is amended by adding a 14.27subdivision to read:14.28    Subd. 7.Disabilitant earnings reports.Disability benefit recipients must report 14.29all earnings from reemployment and income from workers' compensation to the system 14.30annually by May 15 in a format prescribed by the executive director. If the form is not 14.31submitted by June 15, benefits must be suspended effective July 1. If the form deemed 14.32acceptable by the executive director is received after the June 15 deadline, benefits shall 14.33be reinstated retroactive to July 1.15.1EFFECTIVE DATE.This section is effective the day following final enactment.15.2    Sec. 23. Minnesota Statutes 2012, section 352D.04, subdivision 2, is amended to read:15.3    Subd. 2. Contribution rates. (a) The money used to purchase shares under this 15.4section is the employee and employer contributions provided in this subdivision.15.5    (b) The employee contribution is an amount equal to the percent of salary specified 15.6in section 
         352.04, subdivision 2, or 
         352.045, subdivision 3 3a.15.7    (c) The employer contribution is an amount equal to six percent of salary.15.8    (d) For members of the legislature, the contributions under this subdivision also must 15.9be made on per diem payments received during a regular or special legislative session, but 15.10may not be made on per diem payments received outside of a regular or special legislative 15.11session, on the additional compensation attributable to a leadership position under section 15.123.099
         , subdivision 3, living expense payments under section 
         3.101, or special session 15.13living expense payments under section 
         3.103.15.14    (e) For a judge who is a member of the unclassified plan under section 
         352D.02, 15.15subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent 15.16of salary, and there is no employer contribution.15.17(f) These contributions must be made in the manner provided in section 
         352.04, 15.18subdivisions 4, 5, and 6.15.19EFFECTIVE DATE.This section is effective the day following final enactment.15.20    Sec. 24. Minnesota Statutes 2012, section 356.20, subdivision 4, is amended to read:15.21    Subd. 4. Contents of financial report. (a) The financial report required by 15.22this section must contain financial statements and disclosures that indicate the financial 15.23operations and position of the retirement plan and fund. The report must conform with 15.24generally accepted governmental accounting principles, applied on a consistent basis. The 15.25report must be audited.15.26    (b) The report must include, as part of its exhibits or its footnotes, an actuarial 15.27disclosure item based ona statement that the actuarial valuation calculations prepared 15.28by the actuary retained under section 
         356.214 or by the actuary retained by the 15.29retirement fund or plan, whichever applies, according tocomply with applicable actuarial 15.30requirements enumerated in section 
         356.215, and specified in the most recent standards 15.31for actuarial work adopted by the Legislative Commission on Pensions and Retirement. 15.32The actuarial value of assets, the actuarial accrued liabilities, including accrued reserves,15.33 and the unfunded actuarial accrued liability of the fund or plan must be disclosed. The 15.34disclosure itemreport must contain a declarationcertification by the actuary retained 16.1under section 
         356.214 or the actuary retained by the fund or plan, whichever applies, 16.2specifying that the required reserves for any retirement, disability, or survivornormal 16.3cost and the actuarial accrued liabilities for all benefits provided under a benefit formula16.4 are computed in accordance with the entry age actuarial cost method and in accordance 16.5with the most recent applicable standards for actuarial work adopted by the Legislative 16.6Commission on Pensions and Retirement.16.7    (c) The report must contain an itemized exhibit describing the administrative 16.8expenses of the plan, including, but not limited to, the following items, classified on a 16.9consistent basis from year to year, and with any further meaningful detail:16.10    (1) personnel expenses;16.11    (2) communication-related expenses;16.12    (3) office building and maintenance expenses;16.13    (4) professional services fees; and16.14    (5) other expenses.16.15    (d) The report must contain an itemized exhibit describing the investment expenses 16.16of the plan, including, but not limited to, the following items, classified on a consistent 16.17basis from year to year, and with any further meaningful detail:16.18    (1) internal investment-related expenses; and16.19    (2) external investment-related expenses.16.20    (e) Any additional statements or exhibits or more detailed or subdivided itemization 16.21of a disclosure item that will enable the management of the plan to portray a true 16.22interpretation of the plan's financial condition must be included in the additional 16.23statements or exhibits.16.24EFFECTIVE DATE.This section is effective the day following final enactment.16.25    Sec. 25. Minnesota Statutes 2012, section 356.214, subdivision 1, is amended to read:16.26    Subdivision 1. Actuary retention. (a) The governing board or managing or 16.27administrative official of each public pension plan and retirement fund or plan enumerated 16.28in paragraph (b) shall contract with an established actuarial consulting firm to conduct 16.29annual actuarial valuations and related services. The principal from the actuarial 16.30consulting firm on the contract must be an approved actuary under section 
         356.215, 16.31subdivision 1
         , paragraph (c).16.32    (b) Actuarial services must include the preparation of actuarial valuations and 16.33related actuarial work for the following retirement plans:16.34    (1) the teachers retirement plan, Teachers Retirement Association;16.35    (2) the general state employees retirement plan, Minnesota State Retirement System;17.1    (3) the correctional employees retirement plan, Minnesota State Retirement System;17.2    (4) the State Patrol retirement plan, Minnesota State Retirement System;17.3    (5) the judges retirement plan, Minnesota State Retirement System;17.4    (6) the general employees retirement plan, Public Employees Retirement 17.5Association, including the MERF division;17.6    (7) the public employees police and fire plan, Public Employees Retirement 17.7Association;17.8    (8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund 17.9Association;17.10    (9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund 17.11Association;17.12    (10) the legislators retirement plan, Minnesota State Retirement System; and17.13    (11) the elective state officers retirement plan, Minnesota State Retirement System; 17.14and17.15    (12)(11) the local government correctional service retirement plan, Public 17.16Employees Retirement Association.17.17(c) The actuarial valuation for the legislators retirement plan must include a separate 17.18calculation of total plan actuarial accrued liabilities due to constitutional officer coverage 17.19under section 3A.17.17.20    (c)(d) The contracts must require completion of the annual actuarial valuation 17.21calculations on a fiscal year basis, with the contents of the actuarial valuation calculations 17.22as specified in section 
         356.215, and in conformity with the standards for actuarial work 17.23adopted by the Legislative Commission on Pensions and Retirement.17.24    The contracts must require completion of annual experience data collection and 17.25processing and a quadrennial published experience study for the plans listed in paragraph 17.26(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by 17.27the commission. The experience data collection, processing, and analysis must evaluate 17.28the following:17.29    (1) individual salary progression;17.30    (2) the rate of return on investments based on the current asset value;17.31    (3) payroll growth;17.32    (4) mortality;17.33    (5) retirement age;17.34    (6) withdrawal; and17.35    (7) disablement.18.1    (d)(e) The actuary shall annually prepare a report to the governing or managing 18.2board or administrative official and the legislature, summarizing the results of the actuarial 18.3valuation calculations. The actuary shall include with the report any recommendations 18.4concerning the appropriateness of the support rates to achieve proper funding of 18.5the retirement plans by the required funding dates. The actuary shall, as part of the 18.6quadrennial experience study, include recommendations on the appropriateness of the 18.7actuarial valuation assumptions required for evaluation in the study.18.8    (e)(f) If the actuarial gain and loss analysis in the actuarial valuation calculations 18.9indicates a persistent pattern of sizable gains or losses, the governing or managing board 18.10or administrative official shall direct the actuary to prepare a special experience study for 18.11a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), (10), (11), or (12), in the 18.12manner provided for in the standards for actuarial work adopted by the commission.18.13EFFECTIVE DATE.This section is effective July 1, 2013.18.14    Sec. 26. Minnesota Statutes 2012, section 356.215, subdivision 1, is amended to read:18.15    Subdivision 1. Definitions. (a) For the purposes of sections 
         3.85 and 
         356.20 to 18.16356.23
         , each of the terms in the following paragraphs has the meaning given.18.17    (b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 18.18under section 
         356.214 if so required under section 
         3.85, or otherwise, by an approved 18.19actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 18.20plan, according to the entry age actuarial cost method and based upon stated assumptions 18.21including, but not limited to rates of interest, mortality, salary increase, disability, 18.22withdrawal, and retirement and to determine the payment necessary to amortize over a 18.23stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 18.24valuation of the benefit plan.18.25    (c) "Approved actuary" means a person who is regularly engaged in the business of 18.26providing actuarial services and who is a fellow in the Society of Actuaries.18.27    (d) "Entry age actuarial cost method" means an actuarial cost method under which 18.28the actuarial present value of the projected benefits of each individual currently covered 18.29by the benefit plan and included in the actuarial valuation is allocated on a level basis over 18.30the service of the individual, if the benefit plan is governed by section 
         69.773, or over the 18.31earnings of the individual, if the benefit plan is governed by any other law, between the 18.32entry age and the assumed exit age, with the portion of the actuarial present value which is 18.33allocated to the valuation year to be the normal cost and the portion of the actuarial present 18.34value not provided for at the valuation date by the actuarial present value of future normal 18.35costs to be the actuarial accrued liability, with aggregation in the calculation process to be 19.1the sum of the calculated result for each covered individual and with recognition given to 19.2any different benefit formulas which may apply to various periods of service.19.3    (e) "Experience study" means a report providing experience data and an actuarial 19.4analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 19.5based.19.6    (f) "Actuarial value of assets" means:19.7    (1) For the July 1, 2012, actuarial valuation, the market value of all assets as of 19.8June 30, 2012, reduced by:19.9    (i) 20 percent of the difference between the actual net change in the market value of 19.10assets other than the Minnesota postretirement investment fund between June 30, 2009, 19.11and June 30, 2008, and the computed increase in the market value of assets other than the 19.12Minnesota postretirement investment fund over that fiscal year period if the assets had 19.13earned a rate of return on assets equal to the annual percentage preretirement interest rate 19.14assumption used in the actuarial valuation for July 1, 2008;19.15    (ii) 40 percent of the difference between the actual net change in the market value of 19.16total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 19.17market value of total assets over that fiscal year period if the assets had earned a rate of 19.18return on assets equal to the annual percentage preretirement interest rate assumption used 19.19in the actuarial valuation for July 1, 2009;19.20    (iii) 60 percent of the difference between the actual net change in the market value 19.21of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 19.22market value of total assets over that fiscal year period if the assets had earned a rate of 19.23return on assets equal to the annual percentage preretirement interest rate assumption used 19.24in the actuarial valuation for July 1, 2010;19.25    (iv) 80 percent of the difference between the actual net change in the market value of 19.26total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 19.27market value of total assets over that fiscal year period if the assets had earned a rate of 19.28return on assets equal to the annual percentage preretirement interest rate assumption used 19.29in the actuarial valuation for July 1, 2011; and19.30    (v) if applicable, 20 percent of the difference between the actual net change in the 19.31market value of the Minnesota postretirement investment fund between June 30, 2009, 19.32and June 30, 2008, and the computed increase in the market value of assets over that fiscal 19.33year period if the assets had increased at 8.5 percent annually.19.34    (2) For the July 1, 2013, and following actuarial valuations, the market value of all 19.35assets as of the preceding June 30, reduced by:20.1    (i) (1) 20 percent of the difference between the actual net change in the market value 20.2of total assets between the June 30 that occurred three years earlier and the June 30 that 20.3occurred four years earlier and the computed increase in the market value of total assets 20.4over that fiscal year period if the assets had earned a rate of return on assets equal to the 20.5annual percentage preretirement interest rate assumption used in the actuarial valuation 20.6for the July 1 that occurred four years earlier;20.7    (ii) (2) 40 percent of the difference between the actual net change in the market value 20.8of total assets between the June 30 that occurred two years earlier and the June 30 that 20.9occurred three years earlier and the computed increase in the market value of total assets 20.10over that fiscal year period if the assets had earned a rate of return on assets equal to the 20.11annual percentage preretirement interest rate assumption used in the actuarial valuation 20.12for the July 1 that occurred three years earlier;20.13    (iii) (3) 60 percent of the difference between the actual net change in the market 20.14value of total assets between the June 30 that occurred one year earlier and the June 30 that 20.15occurred two years earlier and the computed increase in the market value of total assets 20.16over that fiscal year period if the assets had earned a rate of return on assets equal to the 20.17annual percentage preretirement interest rate assumption used in the actuarial valuation 20.18for the July 1 that occurred two years earlier; and20.19    (iv) (4) 80 percent of the difference between the actual net change in the market 20.20value of total assets between the most recent June 30 and the June 30 that occurred 20.21one year earlier and the computed increase in the market value of total assets over that 20.22fiscal year period if the assets had earned a rate of return on assets equal to the annual 20.23percentage preretirement interest rate assumption used in the actuarial valuation for the 20.24July 1 that occurred one year earlier.20.25    (g) "Unfunded actuarial accrued liability" means the total current and expected 20.26future benefit obligations, reduced by the sum of the actuarial value of assets and the 20.27present value of future normal costs.20.28    (h) "Pension benefit obligation" means the actuarial present value of credited 20.29projected benefits, determined as the actuarial present value of benefits estimated to be 20.30payable in the future as a result of employee service attributing an equal benefit amount, 20.31including the effect of projected salary increases and any step rate benefit accrual rate 20.32differences, to each year of credited and expected future employee service.20.33EFFECTIVE DATE.This section is effective the day following final enactment.20.34    Sec. 27. Minnesota Statutes 2012, section 356.215, subdivision 8, is amended to read:21.1    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use 21.2the applicable following preretirement interest assumption and the applicable following 21.3postretirement interest assumption:21.4(1) select and ultimate interest rate assumption

21.521.621.721.8planultimate 
                  		preretirement 
                  		interest rate 
                  		assumptionultimate 
                  		postretirement 
                  		interest rate 
                  		assumption21.9general state employees retirement plan 8.5% 6.0%21.10correctional state employees retirement plan8.56.021.11State Patrol retirement plan8.56.021.1221.1321.14legislators 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, 20400.021.1521.1621.17elective state officers retirement plan0.0-2.0 until June 30, 2040, and -2.5 after June 30, 2040 21.18judges retirement plan8.56.021.19general public employees retirement plan8.56.021.20public employees police and fire retirement plan8.56.021.2121.22local government correctional service 
                  		retirement plan8.56.021.23teachers retirement plan8.56.021.24Duluth teachers retirement plan8.58.521.25St. Paul teachers retirement plan8.58.5

21.26Except for the legislators retirement plan and the elective stateconstitutional officers 21.27retirement plan calculation of total plan liabilities, the select preretirement interest rate 21.28assumption for the period after June 30, 2012, through June 30, 2017, is 8.0 percent. 21.29Except for the legislators retirement plan and the elective stateconstitutional officers 21.30retirement plan calculation of total plan liabilities, the select postretirement interest rate 21.31assumption for the period after June 30, 2012, through June 30, 2017, is 5.5 percent, 21.32except for the Duluth teachers retirement plan and the St. Paul teachers retirement plan, 21.33each with a select postretirement interest rate assumption for the period after June 30, 21.342012, through June 30, 2017, of 8.0 percent.21.35(2) single rate preretirement and postretirement interest rate assumption

21.3621.37planinterest rate 
                  		assumption21.38Bloomington Fire Department Relief Association6.021.3921.40local monthly benefit volunteer firefighters relief 
                  		associations5.0

22.1    (b) The actuarial valuation must use the applicable following single rate future salary 22.2increase assumption, the applicable following modified single rate future salary increase 22.3assumption, or the applicable following graded rate future salary increase assumption:22.4    (1) single rate future salary increase assumption

22.5planfuture salary increase assumption22.6legislators retirement plan5.0%22.7judges retirement plan3.0 22.822.9Bloomington Fire Department Relief 
                  		Association4.0

22.10    (2) age-related future salary increase age-related select and ultimate future salary 22.11increase assumption or graded rate future salary increase assumption

22.12planfuture salary increase assumption22.13local government correctional service retirement planassumption C22.14Duluth teachers retirement planassumption A22.15St. Paul teachers retirement planassumption B

22.16For plans other than the Duluth teachers 22.17retirement plan, the select calculation 22.18is: during the designated select period, a 22.19designated percentage rate is multiplied by 22.20the result of the designated integer minus T, 22.21where T is the number of completed years 22.22of service, and is added to the applicable 22.23future salary increase assumption. The 22.24designated select period is ten years and the 22.25designated integer is ten for all retirement 22.26plans covered by this clause. The designated 22.27percentage rate is 0.3 percent for the St. Paul 22.28Teachers Retirement Fund Association. The 22.29select calculation for the Duluth Teachers 22.30Retirement Fund Association is 8.00 percent 22.31per year for service years one through seven, 22.327.25 percent per year for service years seven 22.33and eight, and 6.50 percent per year for 22.34service years eight and nine.22.35    The ultimate future salary increase assumption is:

22.36ageABC22.37168.00%6.90%9.00%23.1178.006.909.0023.2188.006.909.0023.3198.006.909.0023.4206.906.909.0023.5216.906.908.7523.6226.906.908.5023.7236.856.858.2523.8246.806.808.0023.9256.756.757.7523.10266.706.707.5023.11276.656.657.2523.12286.606.607.0023.13296.556.556.7523.14306.506.506.7523.15316.456.456.5023.16326.406.406.5023.17336.356.356.5023.18346.306.306.2523.19356.256.256.2523.20366.206.206.0023.21376.156.156.0023.22386.106.106.0023.23396.056.055.7523.24406.006.005.7523.25415.905.955.7523.26425.805.905.5023.27435.705.855.2523.28445.605.805.2523.29455.505.755.0023.30465.405.705.0023.31475.305.655.0023.32485.205.605.0023.33495.105.555.0023.34505.005.505.0023.35514.905.455.0023.36524.805.405.0023.37534.705.355.0023.38544.605.305.0023.39554.505.254.7523.40564.405.204.7523.41574.305.154.5023.42584.205.104.2523.43594.105.054.2524.1604.005.004.2524.2613.905.004.2524.3623.805.004.2524.4633.705.004.2524.5643.605.004.2524.6653.505.004.0024.7663.505.004.0024.8673.505.004.0024.9683.505.004.0024.10693.505.004.0024.11703.505.004.00

24.12(3) service-related ultimate future salary increase assumption

24.1324.14general state employees retirement plan of the 
                  		Minnesota State Retirement Systemassumption A24.1524.16general employees retirement plan of the Public 
                  		Employees Retirement Associationassumption B24.17Teachers Retirement Associationassumption C24.18public employees police and fire retirement planassumption D24.19State Patrol retirement planassumption E24.2024.21correctional state employees retirement plan of the 
                  		Minnesota State Retirement Systemassumption F

24.2224.23service 
                  		lengthABCDEF24.24110.50%12.03%12.00%13.00%8.00%6.00%24.2528.108.909.0011.007.505.8524.2636.907.468.009.007.005.7024.2746.206.587.508.006.755.5524.2855.705.977.256.506.505.4024.2965.305.527.006.106.255.2524.3075.005.166.855.806.005.1024.3184.704.876.705.605.854.9524.3294.504.636.555.405.704.8024.33104.404.426.405.305.554.6524.34114.204.246.255.205.404.5524.35124.104.086.005.105.254.4524.36134.003.945.755.005.104.3524.37143.803.825.504.904.954.2524.38153.703.705.254.804.804.1524.39163.603.605.004.804.654.0524.40173.503.514.754.804.503.9524.41183.503.504.504.804.353.8524.42193.503.504.254.804.203.7524.43203.503.504.004.804.053.7525.1213.503.503.904.704.003.7525.2223.503.503.804.604.003.7525.3233.503.503.704.504.003.7525.4243.503.503.604.504.003.7525.5253.503.503.504.504.003.7525.6263.503.503.504.504.003.7525.7273.503.503.504.504.003.7525.8283.503.503.504.504.003.7525.9293.503.503.504.504.003.7525.1030 or more3.503.503.504.504.003.75

25.11    (c) The actuarial valuation must use the applicable following payroll growth 25.12assumption for calculating the amortization requirement for the unfunded actuarial 25.13accrued liability where the amortization retirement is calculated as a level percentage 25.14of an increasing payroll:

25.15planpayroll growth assumption25.1625.17general state employees retirement plan of the 
                  		Minnesota State Retirement System3.75%25.18correctional state employees retirement plan3.7525.19State Patrol retirement plan3.7525.20judges retirement plan3.0025.2125.22general employees retirement plan of the Public 
                  		Employees Retirement Association3.7525.23public employees police and fire retirement plan3.7525.24local government correctional service retirement plan3.7525.25teachers retirement plan3.7525.26Duluth teachers retirement plan4.5025.27St. Paul teachers retirement plan5.00

25.28    (d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a 25.29different salary assumption or a different payroll increase assumption:25.30    (1) has been proposed by the governing board of the applicable retirement plan;25.31    (2) is accompanied by the concurring recommendation of the actuary retained under 25.32section 
         356.214, subdivision 1, if applicable, or by the approved actuary preparing the 25.33most recent actuarial valuation report if section 
         356.214 does not apply; and25.34    (3) has been approved or deemed approved under subdivision 18.25.35EFFECTIVE DATE.This section is effective July 1, 2013.25.36    Sec. 28. Minnesota Statutes 2012, section 356.30, subdivision 3, is amended to read:25.37    Subd. 3. Covered plans. This section applies to the following retirement plans:26.1(1) the general state employees retirement plan of the Minnesota State Retirement 26.2System, established under chapter 352;26.3(2) the correctional state employees retirement plan of the Minnesota State 26.4Retirement System, established under chapter 352;26.5(3) the unclassified employees retirement program, established under chapter 352D;26.6(4) the State Patrol retirement plan, established under chapter 352B;26.7(5) the legislators retirement plan, established under chapter 3A, including 26.8constitutional officers as specified in that chapter;26.9(6) the elective state officers retirement plan, established under chapter 352C;26.10(7)(6) the general employees retirement plan of the Public Employees Retirement 26.11Association, established under chapter 353, including the MERF division of the Public 26.12Employees Retirement Association;26.13(8)(7) the public employees police and fire retirement plan of the Public Employees 26.14Retirement Association, established under chapter 353;26.15(9)(8) the local government correctional service retirement plan of the Public 26.16Employees Retirement Association, established under chapter 353E;26.17(10) (9) the Teachers Retirement Association, established under chapter 354;26.18(11)(10) the St. Paul Teachers Retirement Fund Association, established under 26.19chapter 354A;26.20(12)(11) the Duluth Teachers Retirement Fund Association, established under 26.21chapter 354A; and26.22(13)(12) the judges retirement fund, established by chapter 490.26.23EFFECTIVE DATE.This section is effective July 1, 2013.26.24    Sec. 29. Minnesota Statutes 2012, section 356.401, subdivision 3, is amended to read:26.25    Subd. 3. Covered retirement plans. The provisions of this section apply to the 26.26following retirement plans:26.27(1) the legislators retirement plan, established by chapter 3A, including constitutional 26.28officers as specified in that chapter;26.29(2) the general state employees retirement plan of the Minnesota State Retirement 26.30System, established by chapter 352;26.31(3) the correctional state employees retirement plan of the Minnesota State 26.32Retirement System, established by chapter 352;26.33(4) the State Patrol retirement plan, established by chapter 352B;26.34(5) the elective state officers retirement plan, established by chapter 352C;27.1(6)(5) the unclassified state employees retirement program, established by chapter 27.2352D;27.3(7)(6) the general employees retirement plan of the Public Employees Retirement 27.4Association, established by chapter 353, including the MERF division of the Public 27.5Employees Retirement Association;27.6(8)(7) the public employees police and fire plan of the Public Employees Retirement 27.7Association, established by chapter 353;27.8(9)(8) the public employees defined contribution plan, established by chapter 353D;27.9(10)(9) the local government correctional service retirement plan of the Public 27.10Employees Retirement Association, established by chapter 353E;27.11(11)(10) the voluntary statewide lump-sum volunteer firefighter retirement plan, 27.12established by chapter 353G;27.13(12)(11) the Teachers Retirement Association, established by chapter 354;27.14(13)(12) the Duluth Teachers Retirement Fund Association, established by chapter 27.15354A;27.16(14)(13) the St. Paul Teachers Retirement Fund Association, established by chapter 27.17354A;27.18(15)(14) the individual retirement account plan, established by chapter 354B;27.19(16)(15) the higher education supplemental retirement plan, established by chapter 27.20354C; and27.21(17)(16) the judges retirement fund, established by chapter 490.27.22EFFECTIVE DATE.This section is effective July 1, 2013.27.23    Sec. 30. Minnesota Statutes 2012, section 356.415, subdivision 1a, is amended to read:27.24    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement 27.25System plans other than State Patrol retirement plan. (a) Retirement annuity, disability 27.26benefit, or survivor benefit recipients of the legislators retirement plan plans, including 27.27constitutional officers as specified in chapter 3A, the general state employees retirement 27.28plan, the correctional state employees retirement plan, the elected state officers retirement 27.29plan, the unclassified state employees retirement program, and the judges retirement plan 27.30are entitled to a postretirement adjustment annually on January 1, as follows:27.31(1) a postretirement increase of two percent must be applied each year, effective 27.32on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 27.33who has been receiving an annuity or a benefit for at least 18 full months before the 27.34January 1 increase; and28.1(2) for each annuitant or benefit recipient who has been receiving an annuity or 28.2a benefit for at least six full months, an annual postretirement increase of 1/12 of two 28.3percent for each month that the person has been receiving an annuity or benefit must be 28.4applied, effective January 1, following the calendar year in which the person has been 28.5retired for at least six months, but has been retired for less than 18 months.28.6(b) The increases provided by this subdivision commence on January 1, 2011. 28.7Increases under this subdivision for the general state employees retirement plan, the 28.8correctional state employees retirement plan, or the judges retirement plan terminate 28.9on December 31 of the calendar year in which the actuarial valuation prepared by the 28.10approved actuary under sections 
         356.214 and 
         356.215 and the standards for actuarial work 28.11promulgated by the Legislative Commission on Pensions and Retirement indicates that the 28.12market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial 28.13accrued liability of the retirement plan and increases under subdivision 1 recommence 28.14after that date. Increases under this subdivision for the legislators retirement plan or the 28.15elected state officers retirement plan terminate on December 31 of the calendar year in 28.16which the actuarial valuation prepared by the approved actuary under sections 
         356.214 and 28.17356.215
          and the standards for actuarial work promulgated by the Legislative Commission 28.18on Pensions and Retirement indicates that the market value of assets of the general state 28.19employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability 28.20of the retirement plan and increases under subdivision 1 recommence after that date.28.21(c) An increase in annuity or benefit payments under this subdivision must be made 28.22automatically unless written notice is filed by the annuitant or benefit recipient with the 28.23executive director of the applicable covered retirement plan requesting that the increase 28.24not be made.28.25EFFECTIVE DATE.This section is effective July 1, 2013.28.26    Sec. 31. Minnesota Statutes 2012, section 356.415, subdivision 2, is amended to read:28.27    Subd. 2. Covered retirement plans. The provisions of this section apply to the 28.28following retirement plans:28.29(1) the legislators retirement plan established under chapter 3A, including 28.30constitutional officers as specified in that chapter;28.31(2) the correctional state employees retirement plan of the Minnesota State 28.32Retirement System established under chapter 352;28.33(3) the general state employees retirement plan of the Minnesota State Retirement 28.34System established under chapter 352;28.35(4) the State Patrol retirement plan established under chapter 352B;29.1(5) the elective state officers retirement plan established under chapter 352C;29.2(6)(5) the general employees retirement plan of the Public Employees Retirement 29.3Association established under chapter 353, including the MERF division of the Public 29.4Employees Retirement Association;29.5(7)(6) the public employees police and fire retirement plan of the Public Employees 29.6Retirement Association established under chapter 353;29.7(8)(7) the local government correctional employees retirement plan of the Public 29.8Employees Retirement Association established under chapter 353E;29.9(9)(8) the teachers retirement plan established under chapter 354; and29.10(10)(9) the judges retirement plan established under chapter 490.29.11EFFECTIVE DATE.This section is effective July 1, 2013.29.12    Sec. 32. APPLICATION AND INTENT.29.13Sections 2 to 8 and 25 to 31 merge the remaining provisions of the elective 29.14state officers retirement plan into the legislators retirement plan chapter to achieve 29.15administrative savings, including reduced cost for actuarial calculations. Nothing in those 29.16sections should be interpreted as modifying benefits or benefit eligibility compared to law 29.17in effect immediately before the effective date of this section.29.18EFFECTIVE DATE.This section is effective July 1, 2013.29.19    Sec. 33.  REPEALER.29.20(a) Minnesota Statutes 2012, sections 3A.02, subdivision 3; 352C.001; 352C.091, 29.21subdivision 1; and 352C.10, are repealed.29.22(b) Minnesota Statutes 2012, sections 352.045, subdivisions 3 and 4; and 352.955, 29.23subdivision 2, are repealed.29.24EFFECTIVE DATE.Paragraph (a) is effective July 1, 2013. Paragraph (b) is 29.25effective the day following final enactment.29.26ARTICLE 329.27PERA ADMINISTRATIVE PROVISIONS29.28    Section 1. Minnesota Statutes 2012, section 353.01, subdivision 2b, is amended to read:29.29    Subd. 2b. Excluded employees. (a) The following public employees are not eligible 29.30to participate as members of the association with retirement coverage by the general 30.1employees retirement plan, the local government correctional employees retirement plan 30.2under chapter 353E, or the public employees police and fire retirement plan:30.3    (1) persons whose salary from one governmental subdivision never exceeds $425 in 30.4a month;30.5(2) public officers who are elected to a governing body, city mayors, or persons who 30.6are appointed to fill a vacancy in an elective office of a governing body, whose term of office 30.7commences on or after July 1, 2002, for the service to be rendered in that elective position;30.8    (3) election officers or election judges;30.9    (4) patient and inmate personnel who perform services for a governmental 30.10subdivision;30.11    (5) except as otherwise specified in subdivision 12a, employees who are hired for 30.12a temporary position as defined under subdivision 12a, and employees who resign from 30.13a nontemporary position and accept a temporary position within 30 days in the same 30.14governmental subdivision;30.15    (6) employees who are employed by reason of work emergency caused by fire, 30.16flood, storm, or similar disaster;30.17    (7) employees who by virtue of their employment in one governmental subdivision 30.18are required by law to be a member of and to contribute to any of the plans or funds 30.19administered by the Minnesota State Retirement System, the Teachers Retirement 30.20Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 30.21Retirement Fund Association, or any police or firefighters relief association governed by 30.22section 
         69.77 that has not consolidated with the Public Employees Retirement Association, 30.23or any local police or firefighters consolidation account who have not elected the type of 30.24benefit coverage provided by the public employees police and fire fund under sections 30.25353A.01
          to 
         353A.10, or any persons covered by section 
         353.665, subdivision 4, 5, or 6, 30.26who have not elected public employees police and fire plan benefit coverage. This clause 30.27must not be construed to prevent a person from being a member of and contributing to 30.28the Public Employees Retirement Association and also belonging to and contributing to 30.29another public pension plan or fund for other service occurring during the same period 30.30of time. A person who meets the definition of "public employee" in subdivision 2 by 30.31virtue of other service occurring during the same period of time becomes a member of the 30.32association unless contributions are made to another public retirement fund on the salary 30.33based on the other service or to the Teachers Retirement Association by a teacher as 30.34defined in section 
         354.05, subdivision 2;30.35    (8) persons who are members of a religious order and are excluded from coverage 30.36under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 31.1performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 31.2as amended through January 1, 1987, if no irrevocable election of coverage has been made 31.3under section 3121(r) of the Internal Revenue Code of 1954, as amended;31.4    (9) employees of a governmental subdivision who have not reached the age of 31.523 and are enrolled on a full-time basis to attend or are attending classes on a full-time 31.6basis at an accredited school, college, or university in an undergraduate, graduate, or 31.7professional-technical program, or a public or charter high school;31.8    (10) resident physicians, medical interns, and pharmacist residents and pharmacist 31.9interns who are serving in a degree or residency program in public hospitals or clinics;31.10    (11) students who are serving for up to five years in an internship or residency program 31.11sponsored by a governmental subdivision, including an accredited educational institution;31.12    (12) persons who hold a part-time adult supplementary technical college license who 31.13render part-time teaching service in a technical college;31.14    (13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., 31.15foreign citizens who are employed by a governmental subdivision under a work permit, or 31.16an H-1b visa initially issued or extended for a combined period less than three years of 31.17employment. Upon extension of the employment beyond the three-year period, the foreign 31.18citizens must be reported for membership beginning the first of the month thereafter 31.19provided the monthly earnings threshold as provided under subdivision 2a is met;31.20    (14) public hospital employees who elected not to participate as members of the 31.21association before 1972 and who did not elect to participate from July 1, 1988, to October 31.221, 1988;31.23    (15) except as provided in section 
         353.86, volunteer ambulance service personnel, as 31.24defined in subdivision 35, but persons who serve as volunteer ambulance service personnel 31.25may still qualify as public employees under subdivision 2 and may be members of the 31.26Public Employees Retirement Association and participants in the general employees 31.27retirement plan or the public employees police and fire plan, whichever applies, on the 31.28basis of compensation received from public employment service other than service as 31.29volunteer ambulance service personnel;31.30    (16) except as provided in section 
         353.87, volunteer firefighters, as defined in 31.31subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, 31.32but a person who is a volunteer firefighter may still qualify as a public employee under 31.33subdivision 2 and may be a member of the Public Employees Retirement Association and 31.34a participant in the general employees retirement plan or the public employees police 31.35and fire plan, whichever applies, on the basis of compensation received from public 31.36employment activities other than those as a volunteer firefighter;32.1    (17) pipefitters and associated trades personnel employed by Independent School 32.2District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 32.3pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 32.4if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 32.5241, article 2, section 12;32.6    (18) electrical workers, plumbers, carpenters, and associated trades personnel who 32.7are employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 32.8who have retirement coverage under a collective bargaining agreement by the Electrical 32.9Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 32.10or the pension plan applicable to Carpenters Local 87 who were either first employed after 32.11May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under 32.12Laws 2000, chapter 461, article 7, section 5;32.13    (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 32.14painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul 32.15or Independent School District No. 625, St. Paul, with coverage under a collective 32.16bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 32.17the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 32.18pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 32.19Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 32.20first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 32.21Session chapter 10, article 10, section 6;32.22    (20) plumbers who are employed by the Metropolitan Airports Commission, with 32.23coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan, 32.24who either were first employed after May 1, 2001, or if first employed before May 2, 32.252001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 32.2610, section 6;32.27    (21) employees who are hired after June 30, 2002, to fill seasonal positions under 32.28subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 32.29days or less in each year of employment with the governmental subdivision;32.30    (22) persons who are provided supported employment or work-study positions by a 32.31governmental subdivision and who participate in an employment or industries program 32.32maintained for the benefit of these persons where the governmental subdivision limits 32.33the position's duration up to threefive years or less, including persons participating in a 32.34federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 32.35unemployment relief program where the training or work experience is not provided as a 32.36part of, or for, future permanent public employment;33.1    (23) independent contractors and the employees of independent contractors;33.2    (24) reemployed annuitants of the association during the course of that 33.3reemployment; and33.4(25) persons appointed to serve on a board or commission of a governmental 33.5subdivision or an instrumentality thereof.33.6(b) Any person performing the duties of a public officer in a position defined in 33.7subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an 33.8employee of an independent contractor.33.9EFFECTIVE DATE.This section is effective the day following final enactment.33.10    Sec. 2. Minnesota Statutes 2012, section 353.01, subdivision 16, is amended to read:33.11    Subd. 16. Allowable service; limits and computation. (a) "Allowable service" 33.12means:33.13    (1) service during years of actual membership in the course of which employee 33.14deductions were withheld from salary and contributions were made at the applicable rates 33.15under section 
         353.27, 
         353.65, or 
         353E.03;33.16(2) periods of service covered by payments in lieu of salary deductions under 33.17sections 
         353.27, subdivision 12, and 
         353.35;33.18    (3) service in years during which the public employee was not a member but for 33.19which the member later elected, while a member, to obtain credit by making payments to 33.20the fund as permitted by any law then in effect;33.21    (4) a period of authorized leave of absence with pay from which deductions for 33.22employee contributions are made, deposited, and credited to the fund;33.23    (5) a period of authorized personal, parental, or medical leave of absence without 33.24pay, including a leave of absence covered under the federal Family Medical Leave Act, 33.25that does not exceed one year, and for which a member obtained service credit for each 33.26month in the leave period by payment under section 
         353.0161 to the fund made in place of 33.27salary deductions. An employee must return to public service and render a minimum of 33.28three months of allowable service in order to be eligible to make payment under section 33.29353.0161
          for a subsequent authorized leave of absence without pay. Upon payment, the 33.30employee must be granted allowable service credit for the purchased period;33.31    (6) a periodic, repetitive leave that is offered to all employees of a governmental 33.32subdivision. The leave program may not exceed 208 hours per annual normal work cycle 33.33as certified to the association by the employer. A participating member obtains service 33.34credit by making employee contributions in an amount or amounts based on the member's 33.35average salary, excluding overtime pay, that would have been paid if the leave had not been 34.1taken. The employer shall pay the employer and additional employer contributions on 34.2behalf of the participating member. The employee and the employer are responsible to pay 34.3interest on their respective shares at the rate of 8.5 percent a year, compounded annually, 34.4from the end of the normal cycle until full payment is made. An employer shall also make 34.5the employer and additional employer contributions, plus 8.5 percent interest, compounded 34.6annually, on behalf of an employee who makes employee contributions but terminates 34.7public service. The employee contributions must be made within one year after the end of 34.8the annual normal working cycle or within 30 days after termination of public service, 34.9whichever is sooner. The executive director shall prescribe the manner and forms to be 34.10used by a governmental subdivision in administering a periodic, repetitive leave. Upon 34.11payment, the member must be granted allowable service credit for the purchased period;34.12    (7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 34.13months allowable service per authorized temporary or seasonal layoff in one calendar year. 34.14An employee who has received the maximum service credit allowed for an authorized 34.15temporary or seasonal layoff must return to public service and must obtain a minimum of 34.16three months of allowable service subsequent to the layoff in order to receive allowable 34.17service for a subsequent authorized temporary or seasonal layoff;34.18    (8) a period during which a member is absent from employment by a governmental 34.19subdivision by reason of service in the uniformed services, as defined in United States 34.20Code, title 38, section 4303(13), if the member returns to public service with the same 34.21governmental subdivision upon discharge from service in the uniformed service within the 34.22time frames required under United States Code, title 38, section 4312(e), provided that 34.23the member did not separate from uniformed service with a dishonorable or bad conduct 34.24discharge or under other than honorable conditions. The service must be credited if the 34.25member pays into the fund equivalent employee contributions based upon the contribution 34.26rate or rates in effect at the time that the uniformed service was performed multiplied 34.27by the full and fractional years being purchased and applied to the annual salary rate. 34.28The annual salary rate is the average annual salary, excluding overtime pay, during the 34.29purchase period that the member would have received if the member had continued to 34.30be employed in covered employment rather than to provide uniformed service, or, if 34.31the determination of that rate is not reasonably certain, the annual salary rate is the 34.32member's average salary rate, excluding overtime pay, during the 12-month period of 34.33covered employment rendered immediately preceding the period of the uniformed service. 34.34Payment of the member equivalent contributions must be made during a period that begins 34.35with the date on which the individual returns to public employment and that is three times 34.36the length of the military leave period, or within five years of the date of discharge from 35.1the military service, whichever is less. If the determined payment period is less than 35.2one year, the contributions required under this clause to receive service credit may be 35.3made within one year of the discharge date. Payment may not be accepted following 30 35.4days after termination of public service under subdivision 11a. If the member equivalent 35.5contributions provided for in this clause are not paid in full, the member's allowable 35.6service credit must be prorated by multiplying the full and fractional number of years of 35.7uniformed service eligible for purchase by the ratio obtained by dividing the total member 35.8contributions received by the total member contributions otherwise required under this 35.9clause. The equivalent employer contribution, and, if applicable, the equivalent additional 35.10employer contribution must be paid by the governmental subdivision employing the 35.11member if the member makes the equivalent employee contributions. The employer 35.12payments must be made from funds available to the employing unit, using the employer 35.13and additional employer contribution rate or rates in effect at the time that the uniformed 35.14service was performed, applied to the same annual salary rate or rates used to compute the 35.15equivalent member contribution. The governmental subdivision involved may appropriate 35.16money for those payments. The amount of service credit obtainable under this section may 35.17not exceed five years unless a longer purchase period is required under United States Code, 35.18title 38, section 4312. The employing unit shall pay interest on all equivalent member and 35.19employer contribution amounts payable under this clause. Interest must be computed at a 35.20rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the 35.21break in service to the end of the month in which the payment is received. Upon payment, 35.22the employee must be granted allowable service credit for the purchased period; or35.23(9) a period specified under section 
         353.0162.35.24    (b) For calculating benefits under sections 
         353.30, 
         353.31, 
         353.32, and 
         353.33 for 35.25state officers and employees displaced by the Community Corrections Act, chapter 401, 35.26and transferred into county service under section 
         401.04, "allowable service" means the 35.27combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 35.28section 
         352.01, subdivision 11.35.29    (c) For a public employee who has prior service covered by a local police or 35.30firefighters relief association that has consolidated with the Public Employees Retirement 35.31Association under chapter 353A or to which section 
         353.665 applies, and who has 35.32elected the type of benefit coverage provided by the public employees police and fire 35.33fund either under section 
         353A.08 following the consolidation or under section 
         353.665, 35.34subdivision 4
         , "allowable service" is a period of service credited by the local police or 35.35firefighters relief association as of the effective date of the consolidation based on law 36.1and on bylaw provisions governing the relief association on the date of the initiation 36.2of the consolidation procedure.36.3    (d) No member may receive more than 12 months of allowable service credit in a 36.4year either for vesting purposes or for benefit calculation purposes. For an active member 36.5who was an active member of the former Minneapolis Firefighters Relief Association 36.6on December 29, 2011, "allowable service" is the period of service credited by the 36.7Minneapolis Firefighters Relief Association as reflected in the transferred records of the 36.8association up to December 30, 2011, and the period of service credited under paragraph 36.9(a), clause (1), after December 30, 2011. For an active member who was an active member 36.10of the former Minneapolis Police Relief Association on December 29, 2011, "allowable 36.11service" is the period of service credited by the Minneapolis Police Relief Association as 36.12reflected in the transferred records of the association up to December 30, 2011, and the 36.13period of service credited under paragraph (a), clause (1), after December 30, 2011.36.14    (e) MS 2002 [Expired]36.15EFFECTIVE DATE.This section is effective the day following final enactment.36.16    Sec. 3. Minnesota Statutes 2012, section 353.01, subdivision 17a, is amended to read:36.17    Subd. 17a. Average salary. (a) "Average salary," for purposes of calculating a 36.18retirement annuity under section 353.29, subdivision 3 unless otherwise specified, means 36.19an amount equivalent to the average of the highest salary of the member, police officer, 36.20or firefighter, whichever applies, upon which employee contributions were paid for any 36.21five successive years of allowable service, based on dates of salary periods as listed on 36.22salary deduction reports. Average salary must be based upon all allowable service if 36.23this service is less than five years.36.24(b) "Average salary" may not include any reduced salary paid during a period 36.25in which the employee is entitled to benefit payments from workers' compensation for 36.26temporary disability, unless the average salary is higher, including this period.36.27(c) "Average salary," for purposes of calculating benefits for a surviving spouse or 36.28dependent children under section 353.657, subdivision 2 or 3, means the average of the 36.29full-time monthly base salary rate in effect during the last six months of allowable service. 36.30If the employment during the last six months of allowable service was part-time, the 36.31average salary must be prorated based on the actual number of hours worked.36.32EFFECTIVE DATE.This section is effective the day following final enactment.36.33    Sec. 4. Minnesota Statutes 2012, section 353.01, subdivision 29, is amended to read:37.1    Subd. 29. Designated beneficiary. "Designated beneficiary" means the person or,37.2 organization, trust, or estate designated by a member, former member, disabilitant, or 37.3retired member in writing, signed and filed with the association before the death of the 37.4member, former member, disabilitant, or retired member,or a person legally authorized 37.5to act on behalf of the member or former member to receive a refund of the balance of 37.6the member's or former member's accumulated deductions after death. A beneficiary 37.7designation is valid if it is made in the form prescribed by the executive director and 37.8is received by the association on or before the date of death of the member or former 37.9member. If a beneficiary designation is deemed to be invalid for any reason, any remaining 37.10balance of the member's or former member's accumulated deductions are subject to the 37.11provisions of section 353.32, subdivisions 4 and 5.37.12EFFECTIVE DATE.This section is effective the day following final enactment.37.13    Sec. 5. Minnesota Statutes 2012, section 353.27, subdivision 7, is amended to read:37.14    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except 37.15as provided in paragraph (b), erroneous employee deductions and erroneous employer 37.16contributions and additional employer contributions to the general employees retirement 37.17plan of the Public Employees Retirement Association or to the public employees police 37.18and fire retirement plan for a person who otherwise does not qualify for membership 37.19under this chapter, are considered:37.20(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 37.21determination of the error by the association, the person may continue membership in the 37.22association while employed in the same position for which erroneous deductions were 37.23taken, or file a written election to terminate membership and apply for a refund upon 37.24termination of public service or defer an annuity under section 
         353.34; or37.25(2) invalid, if the initial erroneous employee deduction began on or after January 1, 37.261990. Upon determination of the error, the association shall refund all erroneous employee 37.27deductions and all erroneous employer contributions as specified in paragraph (e). No 37.28person may claim a right to continued or past membership in the association based on 37.29erroneous deductions which began on or after January 1, 1990.37.30(b) Erroneous deductions taken from the salary of a person who did not qualify 37.31for membership in the general employees retirement plan of the Public Employees 37.32Retirement Association or in the public employees police and fire retirement plan by 37.33virtue of concurrent employment before July 1, 1978, which required contributions to 37.34another retirement fund or relief association established for the benefit of officers and 37.35employees of a governmental subdivision, are invalid. Upon discovery of the error, 38.1allowable service credit for all invalid service if forfeited and, upon termination of public 38.2service, the association shall refund all erroneous employee deductions to the person, with 38.3interest as determined under section 
         353.34, subdivision 2, and all erroneous employer 38.4contributions without interest to the employer. This paragraph has both retroactive and 38.5prospective application.38.6(c) Adjustments to correct employer contributions and employee deductions taken 38.7in error from amounts which are not salary under section 
         353.01, subdivision 10, must 38.8be made as specified in paragraph (e). The period of adjustment must be limited to the 38.9fiscal year in which the error is discovered by the association and the immediate two 38.10preceding fiscal years.38.11(d) If there is evidence of fraud or other misconduct on the part of the employee or 38.12the employer, the board of trustees may authorize adjustments to the account of a member 38.13or former member to correct erroneous employee deductions and employer contributions 38.14on invalid salary and the recovery of any overpayments for a period longer than provided 38.15for under paragraph (c).38.16(e) Upon discovery of the receipt of erroneous employee deductions and employer 38.17contributions under paragraph (a), clause (2), or paragraph (c), the association must require 38.18the employer to discontinue the erroneous employee deductions and erroneous employer 38.19contributions reported on behalf of a member. Upon discontinuation, the association must:38.20(1) for a member, provide a refund in the amount of the invalid employee deductions 38.21with interest on the invalid employee deductions at the rate specified under section 
         353.34, 38.22subdivision 2
         , from the received date of each invalid salary transaction through the date 38.23the credit or refund is made;38.24(2) for a former member who:38.25(i) is not receiving a retirement annuity or benefit, return the erroneous employee 38.26deductions to the former member through a refund with interest at the rate specified under 38.27section 
         353.34, subdivision 2, from the received date of each invalid salary transaction 38.28through the date the credit or refund is made; or38.29(ii) is receiving a retirement annuity or disability benefit, or a person who is 38.30receiving an optional annuity or survivor benefit, for whom it has been determined an 38.31overpayment must be recovered, adjust the payment amount and recover the overpayments 38.32as provided under this section; and38.33(3) return the invalid employer contributions reported on behalf of a member or 38.34former member to the employer by providing a credit against future contributions payable 38.35by the employer.39.1(f) In the event that a salary warrant or check from which a deduction for the 39.2retirement fund was taken has been canceled or the amount of the warrant or check 39.3returned to the funds of the department making the payment, a refund of the sum 39.4deducted, or any portion of it that is required to adjust the deductions, must be made 39.5to the department or institution.39.6(g) If the accrual date of anyassociation discovers that a retirement annuity, survivor 39.7benefit, or disability benefit is within the limitation period specified in paragraph (c), and 39.8an overpayment has resultedhas been incorrectly calculated by using invalid service or 39.9salary, or due to any erroneous calculation procedure, the association must recalculate 39.10the annuity or benefit payable and recover anybegin payment of the corrected annuity or 39.11benefit effective the first of the month following discovery of the error. Any overpayment 39.12resulting from the incorrect calculation must be recovered as provided under subdivision 39.137b, if the accrual date, or any adjustment in the amount of the annuity or benefit calculated 39.14after the accrual date, except adjustments required under section 353.656, subdivision 4, 39.15falls within the current fiscal year and the two immediate previous fiscal years.39.16(h) Notwithstanding the provisions of this subdivision, the association may apply 39.17the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 39.18Compliance Resolution System and not issue a refund of erroneous employee deductions 39.19and employer contributions or not recover a small overpayment of benefits if the cost to 39.20correct the error would exceed the amount of the member refund or overpayment.39.21(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 39.22failure by an employer to follow the statutory requirements for reporting eligible members 39.23and salary must be paid by the employer.39.24EFFECTIVE DATE.This section is effective the day following final enactment.39.25    Sec. 6. Minnesota Statutes 2012, section 353.34, subdivision 1, is amended to read:39.26    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled to 39.27either a refund of accumulated employee deductions under subdivision 2, or to a deferred 39.28annuity under subdivision 3. Application for a refund may not be made before the date of 39.29termination of public service. Except as specified in paragraph (b), A refund must be paid 39.30within 120 days following receipt of the application unless the applicant has again become 39.31a public employee required to be covered by the association.39.32(b) If an individual was placed on layoff under section 
         353.01, subdivision 12 or 12c, 39.33a refund is not payable before termination of service under section 
         353.01, subdivision 11a.39.34(c) An individual who terminates public service covered by the Public Employees 39.35Retirement Association general employees retirement plan, the MERF division, the Public 40.1Employees Retirement Association police and fire retirement plan, or the public employees 40.2local government correctional service retirement plan, and who is employed by a different 40.3employer and who becomes an active member covered by one of the other two plans, may 40.4receive a refund of employee contributions plus annual compound interest from the plan 40.5from which the member terminated service at the applicable rate specified in subdivision 2.40.6EFFECTIVE DATE.This section is effective the day following final enactment.40.7    Sec. 7. Minnesota Statutes 2012, section 353.34, subdivision 2, is amended to read:40.8    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person 40.9who ceases to be a public employee is entitled to receive a refund in an amount equal to 40.10accumulated deductions with annual compound interest to the first day of the month 40.11in which the refund is processed.40.12(b) For a person who ceases to be a public employee before July 1, 2011, the refund 40.13interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after 40.14June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the 40.15refund interest is at the rate of four percent.40.16(c) If a person repays a refund and subsequently applies for another refund, the 40.17repayment amount, including interest, is added to the fiscal year balance in which the 40.18repayment was made.40.19(d) If the refund payable to a member is based on employee deductions that are 40.20determined to be invalid under section 353.27, subdivision 7, the interest payable on the 40.21invalid employee deductions is four percent.40.22EFFECTIVE DATE.This section is effective the day following final enactment.40.23    Sec. 8. Minnesota Statutes 2012, section 353.50, subdivision 3, is amended to read:40.24    Subd. 3. Service credit and benefit liability transfer. (a) All allowable service 40.25credit and salary credit of the members of the Minneapolis Employees Retirement Fund 40.26as specified in the records of the Minneapolis Employees Retirement Fund through June 40.2730, 2010, are transferred to the MERF division of the Public Employees Retirement 40.28Association and are credited by the MERF division. Annuities or benefits of persons 40.29who are active members of the former Minneapolis Employees Retirement Fund on 40.30June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11; 40.31422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16; 40.32422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic 40.33postretirement adjustments after December 31, 2010, under section 356.415.41.1(b) The liability for the payment of annuities and benefits of the Minneapolis 41.2Employees Retirement Fund retirees and benefit recipients as specified in the records of 41.3the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the 41.4MERF division of the Public Employees Retirement Association on June 30, 2010.41.5EFFECTIVE DATE.This section is effective the day following final enactment.41.6    Sec. 9. Minnesota Statutes 2012, section 353.50, subdivision 6, is amended to read:41.7    Subd. 6. Benefits. (a) Retired, disabled, deferred, and inactive member benefits. 41.8The annuities and benefits of, or attributable to, retired, disabled, deferred, or inactive 41.9Minneapolis Employees Retirement Fund members with that status as of June 30, 2010, 41.10with the exception of post-December 31, 2010, postretirement adjustments, which 41.11are governed by paragraph (b), as calculated under Minnesota Statutes 2008, sections 41.12422A.11
         ; 
         422A.12; 
         422A.13; 
         422A.14; 
         422A.15; 
         422A.151; 
         422A.155; 
         422A.156; 41.13422A.16
         ; 
         422A.17; 
         422A.18; 
         422A.19; 
         422A.20; and 
         422A.23, continue in force after the 41.14administrative consolidation under Laws 2010, chapter 359, article 11.41.15(b) Benefits; benefit eligibility for June 30, 2010, active members. Persons who 41.16were active members of the former Minneapolis Employees Retirement Fund on June 41.1730, 2010, upon satisfying eligibility requirements stated in the applicable sections of 41.18Minnesota Statutes 2008 specified in paragraph (a), are entitled to annuities or benefits 41.19specified in those sections. Eligibility for a formula retirement annuity includes the 41.20requirement in Minnesota Statutes 2008, sections 422A.13 and 422A.16, that the 41.21terminating member has attained retirement age, which is age 60 if the person has at least 41.22ten years of service credit, or any age if the person has 30 or more years of service credit.41.23(b)(c) Postretirement adjustments.After December 31, 2010, annuities and 41.24benefits from the MERF division are eligible for annual automatic postretirement 41.25adjustments solely under section 
         356.415.41.26EFFECTIVE DATE.This section is effective the day following final enactment.41.27    Sec. 10. Minnesota Statutes 2012, section 353.657, subdivision 2, is amended to read:41.28    Subd. 2. Benefit amount. (a) The spouse of a deceased member is entitled to 41.29receive a monthly benefit for life equal to the following percentage of the member's 41.30average full-time monthly salary rate, as defined in section 353.01, subdivision 17a, 41.31paragraph (c),  as a member of the police and fire plan in effect over the last six months of 41.32allowable service preceding the month in which death occurred:42.1    (1) if the death was a line of duty death, 60 percent of the stated average salary 42.2is payable; and42.3    (2) if the death was not a line of duty death or if death occurred while receiving 42.4disability benefits that accrued before July 1, 2007, 50 percent of the stated average salary 42.5is payable.42.6    (b) If the member was a part-time employee in the position for which the employee 42.7qualified for participation in the police and fire plan, the monthly survivor benefit is based 42.8on the salary rate in effect for that member's part-time service during the last six months 42.9of allowable service. If the member's status changed from full time to part time fordue 42.10to health reasons during the last year12 months of employment, notwithstanding the 42.11definition of average salary in section 353.01, subdivision 17a, paragraph (c), the average 42.12salary used to compute the monthly survivor benefit ismust be based on the full-time 42.13salary rate of the position held as a member of the police and fire plan in effect over the 42.14last six months of allowable service preceding the month in which the death occurred.42.15EFFECTIVE DATE.This section is effective the day following final enactment.42.16    Sec. 11. Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:42.17    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member 42.18who has attained the age of at least 50 years and either who is vested under section 42.19353.01, subdivision 47
         , or who has credit for at least 30 years of allowable service, 42.20regardless of age attained, dies before the annuity or disability benefit becomes payable, 42.21notwithstanding any designation of beneficiary to the contrary, the surviving spouse may 42.22elect to receive a death while eligible survivor benefit.42.23    (b) Notwithstanding the definition of surviving spouse in section 
         353.01, subdivision 42.2420
         , a former spouse of the member, if any, is entitled to a portion of the death while 42.25eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 42.26filed with the association. If there is no surviving spouse or child or children, a former 42.27spouse may be entitled to a lump-sum refund payment under section 
         353.32, subdivision 42.281
         , if provided for in a marriage dissolution decree but not a death while eligible survivor 42.29benefit despite the terms of a marriage dissolution decree filed with the association.42.30    (c) The benefit may be elected instead of a refund with interest under section 
         353.32, 42.31subdivision 1
         , or surviving spouse benefits otherwise payable under subdivisions 1 and 42.322. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 42.33which the member could have qualified for on the date of death, computed as provided in 42.34sections 353.651, subdivisions 2 andsubdivision 3, and 
         353.30, subdivision 3.43.1    (d) The surviving spouse may apply for the annuity at any time after the date 43.2on which the deceased employee would have attained the required age for retirement 43.3based on the employee's allowable service. Sections 
         353.34, subdivision 3, and 
         353.71, 43.4subdivision 2
         , apply to a deferred annuity payable under this subdivision.43.5    (e) No payment accrues beyond the end of the month in which entitlement to 43.6such annuity has terminated. An amount equal to the excess, if any, of the accumulated 43.7contributions which were credited to the account of the deceased employee over and 43.8above the total of the annuities paid and payable to the surviving spouse must be paid to 43.9the deceased member's last designated beneficiary or, if none, to the legal representative of 43.10the estate of such deceased member.43.11    (f) Any member may request in writing, with the signed consent of the spouse, that 43.12this subdivision not apply and that payment be made only to the designated beneficiary, as 43.13otherwise provided by this chapter.43.14    (g) For a member who is employed as a full-time firefighter by the Department of 43.15Military Affairs of the state of Minnesota, allowable service as a full-time state Military 43.16Affairs Department firefighter credited by the Minnesota State Retirement System may be 43.17used in meeting the minimum allowable service requirement of this subdivision.43.18EFFECTIVE DATE.This section is effective the day following final enactment.43.19    Sec. 12. Minnesota Statutes 2012, section 353.657, subdivision 3, is amended to read:43.20    Subd. 3. Dependent children.(a) A dependent child, as defined in section 
         353.01, 43.21subdivision 15
         , is entitled to receive a monthly benefit equal to ten percent of the member's 43.22average full-time monthly salary rate, as defined in section 353.01, subdivision 17a, 43.23paragraph (c),  as a member of the police and fire plan in effect over the last six months of 43.24allowable service preceding the month in which death occurred.43.25(b) If the member's status changed from full-time to part-time due to health reasons 43.26during the last 12 months of employment, notwithstanding the definition of average salary 43.27in section 353.01, subdivision 17a, paragraph (c), the average salary used to compute the 43.28monthly dependent child benefit must be based on the full-time salary rate of the position 43.29held as a member of the police and fire plan in effect over the last six months of allowable 43.30service preceding the month in which the death occurred.43.31    (c) Payments for the benefit of a dependent child must be made to the surviving 43.32parent, or to the legal guardian of the child or to any adult person with whom the child 43.33may at the time be living, provided only that the parent or other person to whom any 43.34amount is to be paid advises the board in writing that the amount will be held or used in 43.35trust for the benefit of the child.44.1EFFECTIVE DATE.This section is effective the day following final enactment.44.2    Sec. 13. Minnesota Statutes 2012, section 353F.02, subdivision 3, is amended to read:44.3    Subd. 3. Effective date of privatization. "Effective date of privatization" means 44.4the date that the operation of thea medical facility or other public employing unit is 44.5assumed by another employer or the date that thea medical facility or other public 44.6employing unit is purchased by another employer and active membership in the Public 44.7Employees Retirement Association consequently terminates.44.8EFFECTIVE DATE.This section is effective the day following final enactment.44.9    Sec. 14. Minnesota Statutes 2012, section 353F.02, subdivision 4, is amended to read:44.10    Subd. 4. Medical facility. "Medical facility" means:44.11    (1) Bridges Medical Services;44.12(2) Cedarview Care Center in Steele County;44.13    (3) the City of Cannon Falls Hospital;44.14    (4) the Chris Jenson Health and Rehabilitation Center in St. Louis County;44.15(5) Cornerstone Nursing and Rehabilitation Center in Clearwater County Memorial 44.16Hospital doing business as Clearwater Health Services in Bagley;44.17    (6) the Dassel Lakeside Community Home;44.18(7) the Douglas County Hospital, with respect to the Mental Health Unit;44.19    (8) the Fair Oaks Lodge, Wadena;44.20    (9) the Glencoe Area Health Center;44.21    (10) Hutchinson Area Health Care;44.22(11) Lake County Sunrise Home;44.23    (11)(12) the Lakefield Nursing Home;44.24    (12)(13) the Lakeview Nursing Home in Gaylord;44.25    (13)(14) the Luverne Public Hospital;44.26    (14)(15) the Oakland Park Nursing Home;44.27    (15)(16) the RenVilla Nursing Home;44.28    (16)(17) the Rice Memorial Hospital in Willmar, with respect to the Department 44.29of Radiology and the Department of Radiation/Oncology;44.30(17)(18) the St. Peter Community Health Care Center;44.31(18)(19) the Traverse Care Center in Traverse County;44.32    (19)(20) the Waconia-Ridgeview Medical Center;44.33(20)(21) the Weiner Memorial Medical Center, Inc.;44.34(21)(22) the Wheaton Community Hospital; and45.1(22)(23) the Worthington Regional Hospital.45.2EFFECTIVE DATE.This section is effective the day following final enactment if 45.3Minnesota Statutes, section 353F.02, subdivision 4, is not repealed in the 2013 legislative 45.4session.45.5    Sec. 15. Minnesota Statutes 2012, section 353F.02, is amended by adding a subdivision 45.6to read:45.7    Subd. 4a.Privatized former public employer."Privatized former public employer" 45.8means a medical facility or other employing unit formerly included in the definition of 45.9governmental subdivision under section 353.01, subdivision 6, that is privatized and 45.10whose employees are certified for participation under this chapter.45.11EFFECTIVE DATE.This section is effective the day following final enactment.45.12    Sec. 16. Minnesota Statutes 2012, section 353F.02, subdivision 6, is amended to read:45.13    Subd. 6. Terminated medical facility or otherPrivatized former public 45.14employing unit employee."Terminated medical facility or other(a) "Privatized former 45.15public employing unit employee" means a person who:45.16(1) was employed by the privatized former public employer on the day before the 45.17effective date by the medical facility or other public employing unit of privatization; or45.18(2) terminated employment with the medical facility or otherprivatized former 45.19public employing unitemployer on the day before the effective date; and45.20(3) was a participant in the general employees retirement plan of the Public 45.21Employees Retirement Association at the time of termination of employment with the 45.22medical facility or otherprivatized former public employing unit employer.45.23(b) Privatized former public employee does not mean a person who, on the day 45.24before the effective date of privatization, was simultaneously employed with the privatized 45.25former public employer and by a governmental subdivision under section 353.01, 45.26subdivision 6, and who, after the effective date of privatization, continues to accrue 45.27service credit under section 353.01, subdivision 16, through simultaneous employment 45.28with a governmental subdivision.45.29EFFECTIVE DATE.This section is effective the day following final enactment.45.30    Sec. 17. Minnesota Statutes 2012, section 353F.025, subdivision 1, is amended to read:45.31    Subdivision 1. Eligibility determination. (a) The chief clerical officer of a 45.32governmental subdivision may submit a resolution from the governing body to the 46.1executive director of the Public Employees Retirement Association which supports 46.2providing coverage under this chapter for employees of that governmental subdivision 46.3who are privatized, and which states that the governing body will pay for actuarial 46.4calculations, as further specified in paragraph (c).46.5    (b) The governing body must also provide a copy of any applicable purchase or 46.6lease agreement and any other information requested by the executive director to allow the 46.7executive director to verify that under the proposed employer change, the new employer 46.8does not qualify as a governmental subdivision under section 
         353.01, subdivision 6, 46.9making the employees ineligible for continued coverage as active members of the general 46.10employees retirement plan of the Public Employees Retirement Association.46.11    (c) Following receipt of a resolution and a determination by the executive director 46.12that the new employer is not a governmental subdivision, the executive director shall 46.13direct the consulting actuary retained under section 
         356.214 to determine whether the 46.14general employees retirement plan of the Public Employees Retirement Association, if 46.15coverage under this chapter is provided, is expected to receive a net gain or a net loss if 46.16privatization occurs. A net gain is expected if the actuarial liability of the special benefit 46.17coverage provided under this chapter, if extended to the applicable employees under the 46.18privatization, is less than the actuarial gain otherwise to accrue to the plan. A net loss is 46.19expected if the actuarial accrued liability of the special benefit coverage provided under 46.20this chapter, if extended to the applicable employees under the privatization, is more than 46.21the actuarial gain otherwise to accrue to the plan. The date of the actuarial calculations 46.22used to make this determination must be within one year of the effective date, as defined 46.23in section 353F.02, subdivision 3 of privatization.46.24EFFECTIVE DATE.This section is effective the day following final enactment.46.25    Sec. 18. Minnesota Statutes 2012, section 353F.025, subdivision 2, is amended to read:46.26    Subd. 2. Recommendation to legislature Reporting privatizations. (a) If the 46.27actuarial calculations under subdivision 1, paragraph (c), indicate thatprivatization can 46.28be approved because a net gain to the general employees retirement plan of the Public 46.29Employees Retirement Association is expected due to the privatization, or if paragraph (c)46.30(b) applies, the executive director shall, following acceptance of the actuarial calculations 46.31by the board of trustees,  forward a recommendationnotice and supporting documentation, 46.32including a copy of the actuary's report and findings,  to the chair of the Legislative 46.33Commission on Pensions and Retirement, the chair of the Governmental Operations, 46.34Reform, Technology and Elections Committee of the house of representatives, the chair 46.35of the State and Local Government Operations and Oversight Committee of the senate,47.1 and the executive director of the Legislative Commission on Pensions and Retirement47.2 and the chairs and the ranking minority members of the committees with jurisdiction over 47.3governmental operations in the house of representatives and senate. The recommendation 47.4must be in the form of an addition to the definition of "medical facility" under section 47.5353F.02, subdivision 4, or to "other public employing unit" under section 353F.02, 47.6subdivision 5, whichever is applicable. The recommendation must be forwarded to the 47.7legislature before January 15 for the recommendation to be considered in that year's 47.8legislative session. The recommendation may be included as part of public pension 47.9administrative legislation under section 356B.05.47.10    (b) If a medical facility or other public employing unit listed under section 353F.02, 47.11subdivision 4 or 5, fails to privatize within one year of the final enactment date of the 47.12legislation adding the entity to the applicable definition, its inclusion under this chapter is 47.13voided, and the executive director shall include in the subsequent proposed legislation under 47.14paragraph (a) a recommendation that the applicable entity be stricken from the definition.47.15(c)(b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the 47.16executive director shall forward a recommendationrecommend to the board of trustees 47.17that the privatization be included as an addition under paragraph (a)approved if the chief 47.18clerical officer of the applicable governmental subdivision submits a resolution from 47.19the governing body specifying that a lump sum payment will be made to the executive 47.20directorPublic Employees Retirement Association equal to the net loss, plus interest. 47.21The interest must be computed using the applicable ultimate preretirement interest rate 47.22assumption under section 
         356.215, subdivision 8, expressed as a monthly rate, from the 47.23date of the actuarial valuation from which the actuarial accrued liability data was used to 47.24determine the net loss in the actuarial study under subdivision 1, to the date of payment, 47.25with annual compounding. Payment must be made on or after the effective date defined 47.26under section 353F.02 of privatization.47.27(c) The Public Employees Retirement Association must maintain a list that includes 47.28the names of all privatized former public employers in the association's comprehensive 47.29annual financial report and on the association's Web site. Annually by March 1, the 47.30association must submit to the executive director of the Legislative Commission on 47.31Pensions and Retirement the names of any privatized former public employers approved 47.32since the publication of the previous fiscal year's comprehensive annual financial report.47.33EFFECTIVE DATE.This section is effective the day following final enactment.48.1    Sec. 19. Minnesota Statutes 2012, section 353F.03, is amended to read:48.2353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.48.3Notwithstanding any provision of chapter 353 to the contrary, a terminated medical 48.4facility or otherprivatized former public employing unit employee is eligible to receive a 48.5retirement annuity under section 
         353.29 of the edition of Minnesota Statutes published 48.6in the year before the year in which the privatization occurred, without regard to the 48.7requirement specified in section 
         353.01, subdivision 47.48.8EFFECTIVE DATE.This section is effective the day following final enactment.48.9    Sec. 20. Minnesota Statutes 2012, section 353F.04, is amended to read:48.10353F.04 AUGMENTATION INTEREST RATES FOR TERMINATED 48.11MEDICAL OR OTHERPRIVATIZED FORMER PUBLIC EMPLOYING UNIT 48.12FACILITY EMPLOYEES.48.13    Subdivision 1. Enhanced augmentation rates. (a) The deferred annuity of a 48.14terminated medical facility or otherprivatized former public employing unit employee is 48.15subject to augmentation under section 
         353.71, subdivision 2, of the edition of Minnesota 48.16Statutes published in the year in which the privatization occurred, except that the rate of 48.17augmentation is as specified in this subdivision.48.18    (b) This paragraph applies if the legislation adding the medical facility or other 48.19employing unit to section 353F.02, subdivision 4 or 5, as applicable,effective date of 48.20privatization was enacted before July 26, 2005, and became effective before January 1, 48.212008, for the Hutchinson Area Health Careon or before January 1, 2007, for all other 48.22medical facilities and all other employing units and also applies to Hutchinson Area Health 48.23Care with a privatization effective date of January 1, 2008. For a terminated medical 48.24facility or otherprivatized former public employing unit employee, the augmentation 48.25rate is 5.5 percent compounded annually until January 1 following the year in which the 48.26person attains age 55. From that date to the effective date of retirement, the augmentation 48.27rate is 7.5 percent compounded annually.48.28    (c) If paragraph (b) is not applicable, and if the effective date of the privatization is 48.29before January 1, 2011, the augmentation rate is four percent compounded annually until 48.30January 1, following the year in which the person attains age 55. From that date to the 48.31effective date of retirement, the augmentation rate is six percent compounded annually.48.32(d) If the effective date of the privatization is after December 31, 2010, the applicable 48.33augmentation rate depends on the result of computations specified in section 
         353F.025, 48.34subdivision 1
         . If those computations indicate no loss or a net gain to the fund of the 49.1general employees retirement plan of the Public Employees Retirement Association, the 49.2augmentation rate is 2.0 percent compounded annually until the effective date of retirement. 49.3If the computations under that subdivision indicate a net loss to the fund if a 2.0 percent 49.4augmentation rate is used, but a net gain or no loss if a 1.0 percent rate is used, then the 49.5augmentation rate is 1.0 percent compounded annually until the effective date of retirement.49.6(e) The term "effective date of the privatization" as used in this subdivision means 49.7the "effective date" as defined in section 353F.02, subdivision 3.49.8    Subd. 2. Exceptions. The increased augmentation rates specified in subdivision 49.91 do not apply if the terminated medical facility or otherto a privatized former public 49.10employing unit employee:49.11(1) beginning the first of the month in which the privatized former public employee 49.12becomes covered again by a retirement plan enumerated in section 
         356.30, subdivision 3, if 49.13the employee continues to be covered and accrues at least six months of credited service; or49.14(2) beginning the first of the month after a privatized former public employee 49.15terminates service with the successor entity; or49.16(2)(3) if the person begins receipt of a retirement annuity while employed by 49.17the employer which assumed operations of or purchased the medical facility or other49.18privatized former public employing unit or purchased the medical facility or other public 49.19employing unit employer.49.20EFFECTIVE DATE.This section is effective the day following final enactment.49.21    Sec. 21. Minnesota Statutes 2012, section 353F.05, is amended to read:49.22353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE 49.23FOR EARLY RETIREMENT PURPOSES.49.24(a) For the purpose of determining eligibility for early retirement benefits provided 49.25under section 
         353.30, subdivision 1a, of the edition of Minnesota Statutes published in 49.26the year before the year in which the privatization occurred, and notwithstanding any 49.27provision of chapter 353, to the contrary, the years of allowable service for a terminated 49.28medical facility or otherprivatized former public employing unit employee who transfers 49.29employment on the effective date of privatization and does not apply for a refund of 49.30contributions under section 
         353.34, subdivision 1, of the edition of Minnesota Statutes 49.31published in the year before the year in which the privatization occurred, or any similar 49.32provision, includes service with the successor employer to the medical facility or other49.33privatized former public employing unitemployer following the effective date. The 49.34successor employer shall provide any reports that the executive director of the Public 50.1Employees Retirement Association may reasonably request to permit calculation of 50.2benefits.50.3(b) To be eligible for early retirement benefits under this section, the individual must 50.4separate from service with the successor to the privatized former public employer to the 50.5medical facility. The terminated eligible individual privatized former public employee, or 50.6an individual authorized to act on behalf of that individual employee, may apply for an 50.7annuity following application procedures under section 
         353.29, subdivision 4.50.8EFFECTIVE DATE.This section is effective the day following final enactment.50.9    Sec. 22. Minnesota Statutes 2012, section 353F.051, subdivision 1, is amended to read:50.10    Subdivision 1. Eligibility. A terminated medical facility or otherprivatized former 50.11public employing unit employee who is totally and permanently disabled under Minnesota 50.12Statutes 1998, section 
         353.01, subdivision 19, and who had a medically documented 50.13preexisting condition of the disability before the termination of coverage, may apply for 50.14a disability benefit.50.15EFFECTIVE DATE.This section is effective the day following final enactment.50.16    Sec. 23. Minnesota Statutes 2012, section 353F.052, is amended to read:50.17353F.052 APPLICATION OF SURVIVING SPOUSE, DEPENDENT CHILD 50.18PROVISION.50.19Notwithstanding any provisions of law to the contrary, subdivisions within section 50.20353.32
          of the edition of Minnesota Statutes published in the year before the year in which 50.21a privatization occurred, applicable to the surviving spouse or dependent children of a 50.22former member as defined in section 
         353.01, subdivision 7a, apply to the survivors of a 50.23terminated medical facility or otherprivatized former public employing unit employee.50.24EFFECTIVE DATE.This section is effective the day following final enactment.50.25    Sec. 24. [353F.057] TERMINATION FROM SERVICE REQUIREMENT.50.26Upon termination of service from the privatized former public employer or any 50.27successor entity after the effective date of privatization, a privatized former public 50.28employee must separate from any employment relationship with the privatized former 50.29public employer or any successor entity for at least 30 days to qualify to receive a 50.30retirement annuity under this chapter.50.31EFFECTIVE DATE.This section is effective the day following final enactment.51.1    Sec. 25. Minnesota Statutes 2012, section 353F.06, is amended to read:51.2353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 51.3LIMITATIONS.51.4If a privatized former public employee satisfies the separation from service 51.5requirement in section 353F.057 and thereafter resumes employment with the privatized 51.6former public employer or any successor entity or a governmental subdivision under 51.7section 353.01, subdivision 6, the reemployed annuitant earnings limitations of section 51.8353.37
          apply to any service by a terminated medical facility or other public employing 51.9unit employee as an employee of the successor employer to the medical facility.51.10EFFECTIVE DATE.This section is effective the day following final enactment.51.11    Sec. 26. Minnesota Statutes 2012, section 353F.07, is amended to read:51.12353F.07 EFFECT ON REFUND.51.13Notwithstanding any provision of chapter 353 to the contrary, terminated medical 51.14facility or otherprivatized former public employing unit employees may receive a refund 51.15of employee accumulated contributions plus interest as provided in section 
         353.34, 51.16subdivision 2
         , at any time after the transfer of employment to the successor employer of 51.17the terminated medical facility or otherprivatized former public employing unit employer. 51.18If a terminated medical facility or otherprivatized former public employing unit employee 51.19has received a refund from a pension plan listed in section 
         356.30, subdivision 3, the 51.20person may not repay that refund unless the person again becomes a member of one of 51.21those listed plans and complies with section 
         356.30, subdivision 2.51.22EFFECTIVE DATE.This section is effective the day following final enactment.51.23    Sec. 27. Minnesota Statutes 2012, section 353F.08, is amended to read:51.24353F.08 COUNSELING SERVICES.51.25The medical facility or otherprivatized former public employing unitemployer and 51.26the executive director of the Public Employees Retirement Association shall provide 51.27terminated medical facility or otherprivatized former public employing unit employees 51.28with counseling on their benefits available under the general employees retirement plan 51.29of the Public Employees Retirement Association during the 90 days followinga period 51.30mutually agreed upon before or after the effective date of privatization.51.31EFFECTIVE DATE.This section is effective the day following final enactment.52.1    Sec. 28. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:52.2    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as 52.3otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, retirement annuity, disability 52.4benefit, or survivor benefit recipients of a covered retirement plan are entitled to a 52.5postretirement adjustment annually on January 1, as follows:52.6(1) a postretirement increase of 2.5 percent must be applied each year, effective 52.7January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 52.8been receiving an annuity or a benefit for at least 12 full months prior to the January 1 52.9increase; and52.10(2) for each annuitant or benefit recipient who has been receiving an annuity or a 52.11benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 52.12percent for each month that the person has been receiving an annuity or benefit must be 52.13applied, effective on January 1 following the calendar year in which the person has been 52.14retired for less than 12 months.52.15(b) The increases provided by this subdivision commence on January 1, 2010.52.16(c) An increase in annuity or benefit payments under this section must be made 52.17automatically unless written notice is filed by the annuitant or benefit recipient with the 52.18executive director of the covered retirement plan requesting that the increase not be made.52.19(d) The retirement annuity payable to a person who retires before becoming eligible 52.20for Social Security benefits and who has elected the optional payment as provided in 52.21section 353.29, subdivision 6, must be treated as the sum of a period certain retirement 52.22annuity and a life retirement annuity for the purposes of any postretirement adjustment. 52.23The period certain retirement annuity plus the life retirement annuity must be the 52.24annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 52.25adjustment granted on the period certain retirement annuity must terminate when the 52.26period certain retirement annuity terminates.52.27EFFECTIVE DATE.This section is effective January 1, 2014.52.28    Sec. 29. Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:52.29    Subd. 1b. Annual postretirement adjustments; PERA; general employees 52.30retirement plan and local government correctional retirement plan. (a) Retirement 52.31annuity, disability benefit, or survivor benefit recipients of the general employees 52.32retirement plan of the Public Employees Retirement Association and the local government 52.33correctional service retirement plan are entitled to a postretirement adjustment annually 52.34on January 1, as follows:53.1(1) for January 1, 2011, and each successive January 1 until funding stability is 53.2restored for the applicable retirement plan, a postretirement increase of one percent must 53.3be applied each year, effective on January 1, to the monthly annuity or benefit amount of 53.4each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 53.512 full months as of the current June 30;53.6(2) for January 1, 2011, and each successive January 1 until funding stability is 53.7restored for the applicable retirement plan, for each annuitant or benefit recipient who has 53.8been receiving an annuity or a benefit for at least one full month, but less than 12 full 53.9months as of the current June 30, an annual postretirement increase of 1/12 of one percent 53.10for each month the person has been receiving an annuity or benefit must be applied;53.11(3) for each January 1 following the restoration of funding stability for the applicable 53.12retirement plan, a postretirement increase of 2.5 percent must be applied each year, 53.13effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 53.14recipient who has been receiving an annuity or benefit for at least 12 full months as of 53.15the current June 30; and53.16(4) for each January 1 following restoration of funding stability for the applicable 53.17retirement plan, for each annuity or benefit recipient who has been receiving an annuity or 53.18a benefit for at least one full month, but less than 12 full months as of the current June 53.1930, an annual postretirement increase of 1/12 of 2.5 percent for each month the person 53.20has been receiving an annuity or benefit must be applied.53.21(b) Funding stability is restored when the market value of assets of the applicable 53.22retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 53.23applicable plan in the most recent prior actuarial valuation prepared under section 
         356.21553.24and the standards for actuarial work by the approved actuary retained by the Public 53.25Employees Retirement Association under section 
         356.214.53.26(c) If, after applying the increase as provided for in paragraph (a), clauses (3) 53.27and (4), the market value of the applicable retirement plan is determined in the next 53.28subsequent actuarial valuation prepared under section 
         356.215 to be less than 90 percent 53.29of the actuarial accrued liability of any of the applicable Public Employees Retirement 53.30Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be 53.31applied as of the next successive January until funding stability is again restored.53.32(d) An increase in annuity or benefit payments under this section must be made 53.33automatically unless written notice is filed by the annuitant or benefit recipient with the 53.34executive director of the Public Employees Retirement Association requesting that the 53.35increase not be made.54.1(e) The retirement annuity payable to a person who retires before becoming eligible 54.2for Social Security benefits and who has elected the optional payment, as provided in 54.3section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement 54.4annuity and a life retirement annuity for the purposes of any postretirement adjustment. 54.5The period-certain retirement annuity plus the life retirement annuity must be the 54.6annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 54.7adjustment granted on the period-certain retirement annuity must terminate when the 54.8period-certain retirement annuity terminates.54.9EFFECTIVE DATE.This section is effective January 1, 2014.54.10    Sec. 30. Minnesota Statutes 2012, section 356.635, subdivision 1, is amended to read:54.11    Subdivision 1. Retirement benefit commencement.(a) The retirement benefit of a 54.12member who has terminated employment must begin no later than the later of April 1 of 54.13the calendar year following the calendar year that the member attains the federal minimum 54.14distribution age under section 401(a)(9) of the Internal Revenue Code or April 1 of the 54.15calendar year following the calendar year in which the member terminated employment.54.16(b) The consent requirements of section 411(a)(11) of the Internal Revenue Code do 54.17not apply to the extent that a distribution is required to satisfy the requirements of section 54.18401(a)(9) of the Internal Revenue Code.54.19EFFECTIVE DATE.This section is effective the day following final enactment.54.20    Sec. 31.  REPEALER.54.21(a) Minnesota Statutes 2012, sections 353F.02, subdivisions 4 and 5; and 353F.025, 54.22subdivision 3, are repealed.54.23(b) Minnesota Statutes 2012, section 353.29, subdivision 6, is repealed.54.24EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment. 54.25Paragraph (b) is effective January 1, 2014.54.26ARTICLE 454.27BENEFIT ACCRUAL RATE SPECIFICATION54.28    Section 1. Minnesota Statutes 2012, section 352.115, subdivision 3, is amended to read:54.29    Subd. 3. Retirement annuity formula. (a) This paragraph, in conjunction with 54.30section 
         352.116, subdivision 1, applies to a person who became a covered employee or a 54.31member of a pension fund listed in section 
         356.30, subdivision 3, before July 1, 1989, 55.1unless paragraph (b), in conjunction with section 
         352.116, subdivision 1a, produces a 55.2higher annuity amount, in which case paragraph (b) will apply applies. The employee's 55.3average salary, as defined in section 
         352.01, subdivision 14a, multiplied by the1.2 percent 55.4specified in section 356.315, subdivision 1, per year of allowable service for the first ten 55.5years and the1.7 percent specified in section 356.315, subdivision 2, for each later year of 55.6allowable service and pro rata for completed months less than a full year shall determine55.7determines the amount of the retirement annuity to which the employee is entitled.55.8(b) This paragraph applies to a person who has become at least 55 years old and 55.9first became a covered employee after June 30, 1989, and to any other covered employee 55.10who has become at least 55 years old and whose annuity amount, when calculated under 55.11this paragraph and in conjunction with section 
         352.116, subdivision 1a, is higher than it is 55.12when calculated under paragraph (a), in conjunction with section 
         352.116, subdivision 1. 55.13The employee's average salary, as defined in section 
         352.01, subdivision 14a, multiplied 55.14by the1.7 percent specified in section 356.315, subdivision 2, for each year of allowable 55.15service and pro rata for months less than a full year shall determinedetermines the amount 55.16of the retirement annuity to which the employee is entitled.55.17    Sec. 2. Minnesota Statutes 2012, section 352.87, subdivision 3, is amended to read:55.18    Subd. 3. Retirement annuity formula. A person specified in subdivision 1 is 55.19entitled to receive a retirement annuity applicable for allowable service credit under this 55.20section calculated by multiplying the employee's average salary, as defined in section 55.21352.01, subdivision 14a
         , by the2.0 percent specified in section 356.315, subdivision 2a,55.22 for each year or portions of a year of allowable service credit. No reduction for retirement 55.23before the normal retirement age, as specified in section 
         352.01, subdivision 25, applies 55.24to service to which this section applies.55.25    Sec. 3. Minnesota Statutes 2012, section 352.93, subdivision 2, is amended to read:55.26    Subd. 2. Calculating monthly annuity. The monthly annuity under this section 55.27must be determined by multiplying the average monthly salary by the number of years, or 55.28completed months, of covered correctional service by the2.4 percent specified in section 55.29356.315, subdivision 5 if employed as a correctional state employee before July 1, 2010, 55.30or 2.2 percent if employed as a correctional state employee after June 30, 2010.55.31    Sec. 4. Minnesota Statutes 2012, section 352.95, subdivision 1, is amended to read:55.32    Subdivision 1. Duty disability; computation of benefit. A covered correctional 55.33employee who is determined to have a duty disability, physical or psychological, as 56.1defined under section 
         352.01, subdivision 17b, is entitled to a duty disability benefit. The 56.2duty disability benefit must be based on covered correctional service only. The duty 56.3disability benefit amount is 50 percent of the average salary defined in section 
         352.93, 56.4plus an additional 2.4 percent equal to that specified in section 356.315, subdivision 5, if 56.5employed as a correctional state employee before July 1, 2010, or 2.2 percent if employed 56.6as a correctional state employee after June 30, 2010, for each year of covered correctional 56.7service in excess of 20 years, ten months, prorated for completed months.56.8    Sec. 5. Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:56.9    Subd. 2. Normal retirement annuity. The annuity must be paid in monthly 56.10installments. The annuity shall beis equal to the amount determined by multiplying the 56.11average monthly salary of the member by the3.0 percent specified in section 356.315, 56.12subdivision 6, for each year and pro rata for completed months of service.56.13    Sec. 6. Minnesota Statutes 2012, section 352B.10, subdivision 1, is amended to read:56.14    Subdivision 1. Duty disability. A member who is determined to qualify for duty 56.15disability as defined in section 
         352B.011, subdivision 7, is entitled to receive a duty 56.16disability benefit while disabled. The benefits must be paid monthly. The duty disability 56.17benefit is an amount equal to the member's average monthly salary multiplied by 60 percent, 56.18plus an additional 3.0 percent equal to that specified in section 356.315, subdivision 6, for 56.19each year and pro rata for completed months of service in excess of 20 years, if any.56.20    Sec. 7. Minnesota Statutes 2012, section 353.29, subdivision 3, is amended to read:56.21    Subd. 3. Retirement annuity formula. (a) This paragraph, in conjunction with 56.22section 
         353.30, subdivisions 1a, 1b, and 1c, applies to any member who first became a 56.23public employee or a member of a pension fund listed in section 
         356.30, subdivision 3, 56.24before July 1, 1989, unless paragraph (b), in conjunction with section 
         353.30, subdivision 56.255
         , produces a higher annuity amount, in which case paragraph (b) will apply applies. The 56.26average salary as defined in section 
         353.01, subdivision 17a, multiplied by the2.2 percent 56.27specified in section 356.315, subdivision 3, for each year of allowable service for the 56.28first ten years and thereafter by the2.7 percent specified in section 356.315, subdivision 56.294, per year of allowable service and completed months less than a full year for a basic 56.30member, and the1.2 percent specified in section 356.315, subdivision 1, for each year 56.31of allowable service for the first ten years and thereafter by the1.7 percent specified in 56.32section 356.315, subdivision 2, per year of allowable service and completed months less 57.1than a full year for a coordinated member shall determinedetermines the amount of the 57.2normal retirement annuity.57.3    (b) This paragraph applies to a member who has become at least 55 years old and first 57.4became a public employee after June 30, 1989, and to any other member whose annuity 57.5amount, when calculated under this paragraph and in conjunction with section 
         353.30, 57.6subdivision 5
         , is higher than it is when calculated under paragraph (a), in conjunction with 57.7section 
         353.30, subdivisions 1a, 1b, and 1c. The average salary, as defined in section 57.8353.01, subdivision 17a
         , multiplied by the2.7 percent specified in section 356.315, 57.9subdivision 4, for each year of allowable service and completed months less than a full 57.10year for a basic member and the1.7 percent specified in section 356.315, subdivision 2,57.11 per year of allowable service and completed months less than a full year for a coordinated 57.12member, shall determinedetermines the amount of the normal retirement annuity.57.13    Sec. 8. Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:57.14    Subd. 3. Retirement annuity formula. The average salary as defined in section 57.15353.01, subdivision 17a
         , multiplied by the3.0 percent specified in section 356.315, 57.16subdivision 6, per year of allowable service determines the amount of the normal 57.17retirement annuity. If the member has earned allowable service for performing services 57.18other than those of a police officer or firefighter, the annuity representing that service must 57.19be computed under sections 
         353.29 and 
         353.30.57.20    Sec. 9. Minnesota Statutes 2012, section 353.656, subdivision 1, is amended to read:57.21    Subdivision 1. Duty disability; computation of benefits. (a) A member of the 57.22police and fire plan, other than a firefighter covered by section 
         353.6511, or a police 57.23officer covered by section 
         353.6512, who is determined to qualify for duty disability as 57.24defined in section 
         353.01, subdivision 41, shallis entitled to receive disability benefits 57.25during the period of such disability in an amount equal to 60 percent of the average salary 57.26as defined in section 
         353.01, subdivision 17a, plus an additional percentage specified 57.27under section 356.315, subdivision 6,3.0 percent of that average salary for each year 57.28of service in excess of 20 years.57.29    (b) To be eligible for a benefit under paragraph (a), the member must have:57.30    (1) not met the requirements for a retirement annuity under section 
         353.651, 57.31subdivision 1; or57.32    (2) met the requirements under that subdivision, but does not have at least 20 years 57.33of allowable service credit.58.1    (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a 58.2period of 60 months from the disability benefit accrual date and at the end of that period 58.3is subject to provisions of subdivision 5a.58.4    (d) If the disability under this subdivision occurs before the member has at least five 58.5years of allowable service credit in the police and fire plan, the disability benefit must be 58.6computed on the average salary from which deductions were made for contribution to 58.7the police and fire fund.58.8    Sec. 10. Minnesota Statutes 2012, section 353.656, subdivision 1a, is amended to read:58.9    Subd. 1a. Total and permanent duty disability; computation of benefits. (a) A 58.10member of the police and fire plan, other than a firefighter covered by section 
         353.6511, or 58.11a police officer covered by section 
         353.6512, whose disabling condition is determined 58.12to be a duty disability that is also a permanent and total disability as defined in section 58.13353.01
         , subdivision 19, is entitled to receive, for life, disability benefits in an amount 58.14equal to 60 percent of the average salary as defined in section 
         353.01, subdivision 17a, 58.15plus an additional 3.0 percent specified in section 356.315, subdivision 6, of that average 58.16salary for each year of service in excess of 20 years.58.17    (b) A disability benefit payable under paragraph (a) is subject to eligibility review 58.18under section 
         353.33, subdivision 6, but the review may be waived if the executive 58.19director receives a written statement from the association's medical advisor that no 58.20improvement can be expected in the member's disabling condition that was the basis for 58.21payment of the benefit under paragraph (a). A member receiving a disability benefit 58.22under this subdivision who is found to no longer be permanently and totally disabled as 58.23defined under section 
         353.01, subdivision 19, but continues to meet the definition for 58.24receipt of a duty disability under section 
         353.01, subdivision 41, is subject to subdivision 58.251 upon written notice from the association's medical advisor that the person is no longer 58.26considered permanently and totally disabled.58.27    (c) If a member approved for disability benefits under this subdivision dies before 58.28attaining normal retirement age as defined in section 
         353.01, subdivision 37, paragraph 58.29(b), or within 60 months of the effective date of the disability, whichever is later, 58.30the surviving spouse is entitled to receive a survivor benefit under section 
         353.657, 58.31subdivision 2, paragraph (a), clause (1), if the death is the direct result of the disabling 58.32condition for which disability benefits were approved, or section 
         353.657, subdivision 58.332, paragraph (a), clause (2), if the death is not directly related to the disabling condition 58.34for which benefits were approved under this subdivision.59.1    (d) If the election of an actuarial equivalent optional annuity is not made at the time 59.2the permanent and total disability benefit accrues, an election must be made within 90 59.3days before the member attains normal retirement age as defined under section 
         353.01, 59.4subdivision 37, paragraph (b), or having collected total and permanent disability benefits 59.5for 60 months, whichever is later. If a member receiving disability benefits who has 59.6dependent children dies, subdivision 6a, paragraph (c), applies.59.7    Sec. 11. Minnesota Statutes 2012, section 353.656, subdivision 3a, is amended to read:59.8    Subd. 3a. Total and permanent regular disability; computation of benefits. (a) 59.9A member of the police and fire plan, other than a firefighter covered by section 
         353.6511, 59.10or a police officer covered by section 
         353.6512, whose disabling condition is determined 59.11to be a regular disability under section 
         353.01, subdivision 46, that is also a permanent 59.12and total disability as defined in section 
         353.01, subdivision 19, is entitled to receive, for 59.13life, a disability benefit in an amount equal to 45 percent of the average salary as defined 59.14in section 
         353.01, subdivision 17a, plus an additional 3.0 percent specified in section 59.15356.315, subdivision 6, of that average salary for each year of service in excess of 15 years.59.16    (b) A disability benefit payable under paragraph (a) is subject to eligibility review 59.17under section 
         353.33, subdivision 6, but the review may be waived if the executive 59.18director receives a written statement from the association's medical advisor that no 59.19improvement can be expected in the member's disabling condition that was the basis for 59.20payment of the benefit under paragraph (a). A member receiving a disability benefit under 59.21this subdivision who is found to no longer be permanently and totally disabled as defined 59.22under section 
         353.01, subdivision 19, but continues to meet the definition for receipt 59.23of a regular disability under section 
         353.01, subdivision 46, is subject to subdivision 3 59.24upon written notice from the association's medical advisor that the person is no longer 59.25considered permanently and totally disabled.59.26    (c) A member approved for disability benefits under this subdivision may elect 59.27to receive a normal disability benefit or an actuarial equivalent optional annuity. If the 59.28election of an actuarial equivalent optional annuity is not made at the time the total and 59.29permanent disability benefit accrues, an election must be made within 90 days before 59.30the member attains normal retirement age as defined in section 
         353.01, subdivision 37, 59.31paragraph (b), or having collected disability benefits for 60 months, whichever is later. 59.32No surviving spouse benefits are payable if the member dies during the period in which 59.33a normal total and permanent disability benefit is being paid. If a member receiving 59.34disability benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.60.1    Sec. 12. Minnesota Statutes 2012, section 353E.04, subdivision 3, is amended to read:60.2    Subd. 3. Annuity amount.(a) The average salary as defined in subdivision 2, 60.3multiplied by the1.9 percent specified in section 356.315, subdivision 5a, for each year of 60.4allowable service, determines the amount of the normal retirement annuity.60.5(b) If a person has earned allowable service in the general employees retirement plan 60.6of the Public Employees Retirement Association or the public employees police and fire 60.7fund prior toretirement plan before participation under this chapter, the retirement annuity 60.8representing such service must be computed in accordance with the formula specified in 60.9sections 
         353.29 and 
         353.30 or 
         353.651, whichever applies.60.10    Sec. 13. Minnesota Statutes 2012, section 353E.06, subdivision 1, is amended to read:60.11    Subdivision 1. Duty disability qualification requirements. A local government 60.12correctional employee who is determined to qualify for a duty disability as defined in 60.13section 
         353E.001, subdivision 1, is entitled to a disability benefit. The disability benefit 60.14must be based on covered service under this chapter only and is an amount equal to 47.5 60.15percent of the average salary defined in section 
         353E.04, subdivision 2, plus an additional 60.161.9 percent equal to that specified in section 356.315, subdivision 5a, for each year of 60.17covered service under this chapter in excess of 25 years.60.18    Sec. 14. Minnesota Statutes 2012, section 354.44, subdivision 6, is amended to read:60.19    Subd. 6. Computation of formula program retirement annuity. (a) The formula 60.20retirement annuity must be computed in accordance with the applicable provisions of the 60.21formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 60.22section 
         354.05, subdivision 13a, for the period of the member's formula service credit.60.23    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first 60.24became a member of the association or a member of a pension fund listed in section 60.25356.30, subdivision 3
         , before July 1, 1989, unless paragraph (d), in conjunction with 60.26paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 60.27average salary as defined in section 
         354.05, subdivision 13a, multiplied by the following 60.28percentages per year of formula service credit shall determine the amount of the annuity to 60.29which the member qualifying therefor is entitled for service rendered before July 1, 2006:

60.30Coordinated MemberBasic Member60.3160.3260.33Each year of service 
                  		during first tenthe1.2 percent specified in section 356.315, subdivision 1, per yearthe2.2 percent specified in section 356.315, subdivision 3, per year60.3460.3560.36Each year of service 
                  		thereafterthe1.7 percent specified in section 356.315, subdivision 2, per yearthe2.7 percent specified in section 356.315, subdivision 4, per year

61.1    For service rendered on or after July 1, 2006, the average salary as defined in section 61.2354.05
         , subdivision 13a, multiplied by the following percentages per year of service credit, 61.3determines the amount the annuity to which the member qualifying therefor is entitled:

61.4Coordinated MemberBasic Member61.561.661.7Each year of service 
                  		during first tenthe1.4 percent specified in section 356.315, subdivision 1a, per yearthe2.2 percent specified in section 356.315, subdivision 3, per year61.861.961.10Each year of service after 
                  		ten years of servicethe1.9 percent specified in section 356.315, subdivision 2b, per yearthe2.7 percent specified in section 356.315, subdivision 4, per year

61.11    (c)(i) This paragraph applies only to a person who first became a member of the 61.12association or a member of a pension fund listed in section 
         356.30, subdivision 3, before 61.13July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 61.14conjunction with this paragraph than when calculated under paragraph (d), in conjunction 61.15with paragraph (e).61.16    (ii) Where any member retires prior to normal retirement age under a formula 61.17annuity, the member shall be paid a retirement annuity in an amount equal to the normal 61.18annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 61.19that the member is under normal retirement age at the time of retirement except that for 61.20any member who has 30 or more years of allowable service credit, the reduction shall be 61.21applied only for each month that the member is under age 62.61.22    (iii) Any member whose attained age plus credited allowable service totals 90 years 61.23is entitled, upon application, to a retirement annuity in an amount equal to the normal 61.24annuity provided in paragraph (b), without any reduction by reason of early retirement.61.25    (d) This paragraph applies to a member who has become at least 55 years old and 61.26first became a member of the association after June 30, 1989, and to any other member 61.27who has become at least 55 years old and whose annuity amount when calculated 61.28under this paragraph and in conjunction with paragraph (e), is higher than it is when 61.29calculated under paragraph (b), in conjunction with paragraph (c). For a basic member, 61.30the average salary, as defined in section 
         354.05, subdivision 13a, multiplied by the2.7 61.31percent specified by section 356.315, subdivision 4, for each year of service for a basic 61.32member shall determinedetermines the amount of the retirement annuity to which the 61.33basic member is entitled. The annuity of a basic member who was a member of the 61.34former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must be 61.35determined according to the annuity formula under the articles of incorporation of the 61.36former Minneapolis Teachers Retirement Fund Association in effect as of that date. For a 61.37coordinated member, the average salary, as defined in section 
         354.05, subdivision 13a, 61.38multiplied by the1.7 percent specified in section 356.315, subdivision 2, for each year of 62.1service rendered before July 1, 2006, and by the1.9 percent specified in section 356.315, 62.2subdivision 2b, for each year of service rendered on or after July 1, 2006, determines the 62.3amount of the retirement annuity to which the coordinated member is entitled.62.4    (e) This paragraph applies to a person who has become at least 55 years old and first 62.5becomes a member of the association after June 30, 1989, and to any other member who 62.6has become at least 55 years old and whose annuity is higher when calculated under 62.7paragraph (d) in conjunction with this paragraph than when calculated under paragraph 62.8(b), in conjunction with paragraph (c). An employee who retires under the formula annuity 62.9before the normal retirement age shall be paid the normal annuity provided in paragraph 62.10(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would 62.11be payable to the employee if the employee deferred receipt of the annuity and the annuity 62.12amount were augmented at an annual rate of three percent compounded annually from the 62.13day the annuity begins to accrue until the normal retirement age if the employee became 62.14an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 62.15becomes an employee after June 30, 2006.62.16    (f) No retirement annuity is payable to a former employee with a salary that exceeds 62.1795 percent of the governor's salary unless and until the salary figures used in computing 62.18the highest five successive years average salary under paragraph (a) have been audited by 62.19the Teachers Retirement Association and determined by the executive director to comply 62.20with the requirements and limitations of section 
         354.05, subdivisions 35 and 35a.62.21    Sec. 15. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:62.22    Subd. 4. Computation of normal coordinated retirement annuity; St. Paul 62.23fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers 62.24Retirement Fund Association.62.25(b) The normal coordinated retirement annuity is an amount equal to a retiring 62.26coordinated member's average salary under section 
         354A.011, subdivision 7a, multiplied 62.27by the retirement annuity formula percentage.62.28(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 62.29became a member or a member in a pension fund listed in section 
         356.30, subdivision 3, 62.30before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 62.31higher annuity amount, in which case paragraph (d) will apply. The retirement annuity 62.32formula percentage for purposes of this paragraph is the1.2 percent specified in section 62.33356.315, subdivision 1, per year for each year of coordinated service for the first ten 62.34years and the1.7 percent specified in section 356.315, subdivision 2, for each year of 62.35coordinated service thereafter.63.1(d) This paragraph applies to a person who has become at least 55 years old and who 63.2first becomes a member after June 30, 1989, and to any other member who has become 63.3at least 55 years old and whose annuity amount, when calculated under this paragraph 63.4and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 63.5(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 63.6percentage for purposes of this paragraph is the1.7 percent specified in section 356.315, 63.7subdivision 2, for each year of coordinated service.63.8    Sec. 16. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:63.9    Subd. 4a. Computation of normal coordinated retirement annuity; Duluth 63.10fund. (a) This subdivision applies to the new law coordinated program of the Duluth 63.11Teachers Retirement Fund Association.63.12(b) The normal coordinated retirement annuity is an amount equal to a retiring 63.13coordinated member's average salary under section 
         354A.011, subdivision 7a, multiplied 63.14by the retirement annuity formula percentage.63.15(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 63.16became a member or a member in a pension fund listed in section 
         356.30, subdivision 3, 63.17before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 63.18higher annuity amount, in which case paragraph (d) applies. The retirement annuity 63.19formula percentage for purposes of this paragraph is the1.2 percent specified in section 63.20356.315, subdivision 1, per year for each year of coordinated service for the first ten 63.21years and the1.7 percent specified in section 356.315, subdivision 2, for each subsequent 63.22year of coordinated service.63.23(d) This paragraph applies to a person who is at least 55 years old and who first 63.24becomes a member after June 30, 1989, and to any other member who is at least 55 years 63.25old and whose annuity amount, when calculated under this paragraph and in conjunction 63.26with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction 63.27with subdivision 6. The retirement annuity formula percentage for purposes of this 63.28paragraph is the1.7 percent specified in section 356.315, subdivision 2, for each year of 63.29coordinated service.63.30    Sec. 17. Minnesota Statutes 2012, section 356.30, subdivision 1, is amended to read:63.31    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any 63.32provisions of the laws governing the retirement plans enumerated in subdivision 3, a 63.33person who has met the qualifications of paragraph (b) may elect to receive a retirement 63.34annuity from each enumerated retirement plan in which the person has at least one-half 64.1year of allowable service, based on the allowable service in each plan, subject to the 64.2provisions of paragraph (c).64.3(b) A person may receive, upon retirement, a retirement annuity from each 64.4enumerated retirement plan in which the person has at least one-half year of allowable 64.5service, and augmentation of a deferred annuity calculated at the appropriate rate under 64.6the laws governing each public pension plan or fund named in subdivision 3, based on 64.7the date of the person's initial entry into public employment from the date the person 64.8terminated all public service if:64.9(1) the person has allowable service in any two or more of the enumerated plans;64.10(2) the person has sufficient allowable service in total that equals or exceeds the 64.11applicable service credit vesting requirement of the retirement plan with the longest 64.12applicable service credit vesting requirement; and64.13(3) the person has not begun to receive an annuity from any enumerated plan or the 64.14person has made application for benefits from each applicable plan and the effective 64.15dates of the retirement annuity with each plan under which the person chooses to receive 64.16an annuity are within a one-year period.64.17(c) The retirement annuity from each plan must be based upon the allowable service, 64.18accrual rates, and average salary in the applicable plan except as further specified or 64.19modified in the following clauses:64.20(1) the laws governing annuities must be the law in effect on the date of termination 64.21from the last period of public service under a covered retirement plan with which the person 64.22earned a minimum of one-half year of allowable service credit during that employment;64.23(2) the "average salary" on which the annuity from each covered plan in which 64.24the employee has credit in a formula plan must be based on the employee's highest five 64.25successive years of covered salary during the entire service in covered plans;64.26(3) the accrual rates to be used by each plan must be those percentages prescribed by 64.27each plan's formula as continued for the respective years of allowable service from one 64.28plan to the next, recognizing all previous allowable service with the other covered plans;64.29(4) the allowable service in all the plans must be combined in determining eligibility 64.30for and the application of each plan's provisions in respect to reduction in the annuity 64.31amount for retirement prior to normal retirement age; and64.32(5) the annuity amount payable for any allowable service under a nonformula plan 64.33of a covered plan must not be affected, but such service and covered salary must be used 64.34in the above calculation.64.35(d) This section does not apply to any person whose final termination from the last 64.36public service under a covered plan was before May 1, 1975.65.1(e) For the purpose of computing annuities under this section, the accrual rates 65.2used by any covered plan, except the public employees police and fire plan, the judges 65.3retirement fund, and the State Patrol retirement plan, must not exceed the2.7 percent 65.4specified in section 356.315, subdivision 4, per year of service for any year of service or 65.5fraction thereof. The formula percentage used by the judges retirement fund must not 65.6exceed the percentage rate specified in section 356.315, subdivision 8,3.2 percent per 65.7year of service for any year of service or fraction thereof. The accrual rate used by the 65.8public employees police and fire plan and the State Patrol retirement plan must not exceed 65.9the percentage rate specified in section 356.315, subdivision 6,3.0 percent per year of 65.10service for any year of service or fraction thereof. The accrual rate or rates used by the 65.11legislators retirement plan must not exceed 2.5 percent, but this limit does not apply to the 65.12adjustment provided under section 
         3A.02, subdivision 1, paragraph (c).65.13(f) Any period of time for which a person has credit in more than one of the covered 65.14plans must be used only once for the purpose of determining total allowable service.65.15(g) If the period of duplicated service credit is more than one-half year, or the person 65.16has credit for more than one-half year, with each of the plans, each plan must apply its 65.17formula to a prorated service credit for the period of duplicated service based on a fraction 65.18of the salary on which deductions were paid to that fund for the period divided by the total 65.19salary on which deductions were paid to all plans for the period.65.20(h) If the period of duplicated service credit is less than one-half year, or when 65.21added to other service credit with that plan is less than one-half year, the service credit 65.22must be ignored and a refund of contributions made to the person in accord with that 65.23plan's refund provisions.65.24    Sec. 18. Minnesota Statutes 2012, section 356.315, subdivision 9, is amended to read:65.25    Subd. 9. Future benefit accrual rate increases. After January 2, 1998, benefit 65.26accrual rate increases under this section352.115, subdivision 3; 352.87, subdivision 65.273; 352.93, subdivision 3; 352.95, subdivision 1; 352B.08, subdivision 2; 352B.10, 65.28subdivision 1; 353.29, subdivision 3; 353.651, subdivision 3; 353.656, subdivision 65.291, 1a, or 3a; 353E.04, subdivision 3; 353E.06, subdivision 1; 354.44, subdivision 6; 65.30354A.31, subdivision 4 or 4a; 356.30, subdivision 1; 490.121, subdivision 22; or 490.124, 65.31subdivision 1, must apply only to allowable service or formula service rendered after the 65.32effective date of the benefit accrual rate increase.65.33    Sec. 19. Minnesota Statutes 2012, section 490.121, subdivision 22, is amended to read:66.1    Subd. 22. Service credit limit. "Service credit limit" means the greater of: (1) 24 66.2years of allowable service under this chapter; or (2) for judges with allowable service 66.3rendered before July 1, 1980, the number of years of allowable service under chapter 490, 66.4which, when multiplied by the percentage listed in section 356.315, subdivision 72.7 or 866.5 3.2, whichever is applicable to each year of service, equals 76.8.66.6    Sec. 20. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:66.7    Subdivision 1. Basic retirement annuity. (a) Except as qualified hereinafter from 66.8and after the mandatory retirement date, the normal retirement date, the early retirement 66.9date, or one year from the disability retirement date, as the case may be, a retiring judge is 66.10eligible to receive a retirement annuity from the judges' retirement fund.66.11    (b) The retirement annuity is an amount equal to: (1) the2.7 percent specified in 66.12section 356.315, subdivision 7, multiplied by the judge's final average compensation with 66.13that result then multiplied by the number of years and fractions of years of allowable 66.14service rendered before July 1, 1980; plus (2) the3.2 percent specified in section 356.315, 66.15subdivision 8, multiplied by the judge's final average compensation with that result then 66.16multiplied by the number of years and fractions of years of allowable service rendered 66.17after June 30, 1980.66.18    (c) Service that exceeds the service credit limit in section 
         490.121, subdivision 22, 66.19must be excluded in calculating the retirement annuity, but the compensation earned by 66.20the judge during this period of judicial service must be used in determining a judge's final 66.21average compensation and calculating the retirement annuity.66.22    Sec. 21.  REPEALER.66.23Minnesota Statutes 2012, section 356.315, subdivisions 1, 1a, 2, 2a, 2b, 3, 4, 5, 5a, 66.246, 7, and 8, are repealed.66.25    Sec. 22. EFFECTIVE DATE.66.26Sections 1 to 21 are effective the day following final enactment.66.27ARTICLE 566.28REVISIONS AND REPEALS OF FORMER LOCAL POLICE AND PAID 66.29FIREFIGHTER RELIEF ASSOCIATION LAWS66.30    Section 1. Minnesota Statutes 2012, section 6.495, subdivision 1, is amended to read:66.31    Subdivision 1. Audit and examinations. All powers and duties conferred and 66.32imposed upon the state auditor with respect to state, county, and first-class city officers, 67.1institutions, and property are hereby extended to the various fire and police relief 67.2associations in the state. The state auditor shall annually audit the special and general 67.3funds of the relief association or, at the request of the board of trustees or the municipality, 67.4the state auditor may contract for an annual audit by a certified public accountant. The 67.5state auditor may determine that an annual audit is not necessary, in which case the state 67.6auditor shall develop a plan for examination of unaudited relief associations, and shall 67.7prescribe suitable systems of accounts and budgeting, and forms, books, and instructions 67.8concerning the same.67.9Copies of the written report of the state auditor on the financial condition and 67.10accounts of the relief association shallmust be filed with the board of trustees of the 67.11relief association and the governing body of the municipality associated with the relief 67.12association. If the report discloses malfeasance, misfeasance, or nonfeasance with regard 67.13to relief association funds, copies thereof shallmust be filed with the city attorney or county 67.14attorney in the city or county in which the relief association is located, and these officials of 67.15the law shall institute proceedings, civil or criminal, as the law and public interest require.67.16    Sec. 2. Minnesota Statutes 2012, section 6.495, subdivision 3, is amended to read:67.17    Subd. 3. Report to commissioner of revenue. The state auditor shall file with 67.18the commissioner of revenue a financial compliance report certifying for each relief 67.19association:67.20(1) the completion of the annual financial report required pursuant tounder section 67.2169.051
          and the auditing or certification of those financial reports pursuant tounder 67.22subdivision 1; and67.23(2) the receipt of any actuarial valuations required pursuant tounder section 69.77 67.24or69.773 or sections 31 to 42.67.25    Sec. 3. Minnesota Statutes 2012, section 6.67, is amended to read:67.266.67 PUBLIC ACCOUNTANTS; REPORT OF POSSIBLE MISCONDUCT.67.27    Whenever a public accountant in the course of auditing the books and affairs of a 67.28political subdivision or a local public pension plan governed by section 69.77, sections 67.2969.771
          to 
         69.775, or chapter 354A or 424A, or sections 31 to 42, discovers evidence 67.30pointing to nonfeasance, misfeasance, or malfeasance, on the part of an officer or 67.31employee in the conduct of duties and affairs, the public accountant shall promptly make 67.32a report of such discovery to the state auditor and the county attorney of the county in 67.33which the governmental unit is situated and the public accountant shall also furnish a 67.34copy of the report of audit upon completion to said officers. The county attorney shall 68.1act on such report in the same manner as required by law for reports made to the county 68.2attorney by the state auditor.68.3    Sec. 4. Minnesota Statutes 2012, section 13D.01, subdivision 1, is amended to read:68.4    Subdivision 1. In executive branch, local government. All meetings, including 68.5executive sessions, must be open to the public68.6(a) of a state68.7(1) agency,68.8(2) board,68.9(3) commission, or68.10(4) department,68.11when required or permitted by law to transact public business in a meeting;68.12(b) of the governing body of a68.13(1) school district however organized,68.14(2) unorganized territory,68.15(3) county,68.16(4) statutory or home rule charter city,68.17(5) town, or68.18(6) other public body;68.19(c) of any68.20(1) committee,68.21(2) subcommittee,68.22(3) board,68.23(4) department, or68.24(5) commission,68.25of a public body; and68.26(d) of the governing body or a committee of:68.27(1) a statewide public pension plan defined in section 
         356A.01, subdivision 24; or68.28(2) a local public pension plan governed by section 69.77, sections 
         69.771 to 
         69.775, 68.29or chapter 354A, or sections 31 to 42.68.30    Sec. 5. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:68.31    Subdivision 1. Definitions. Unless the language or context clearly indicates that 68.32a different meaning is intended, the following words and terms, for the purposes of this 68.33chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:68.34    (a) "Commissioner" means the commissioner of revenue.69.1    (b) "Municipality" means:69.2    (1) a home rule charter or statutory city;69.3    (2) an organized town;69.4    (3) a park district subject to chapter 398;69.5    (4) the University of Minnesota;69.6    (5) for purposes of the fire state aid program only, an American Indian tribal 69.7government entity located within a federally recognized American Indian reservation;69.8    (6) for purposes of the police state aid program only, an American Indian tribal 69.9government with a tribal police department which exercises state arrest powers under 69.10section 
         626.90, 
         626.91, 
         626.92, or 
         626.93;69.11    (7) for purposes of the police state aid program only, the Metropolitan Airports 69.12Commission; and69.13    (8) for purposes of the police state aid program only, the Department of Natural 69.14Resources and the Department of Public Safety with respect to peace officers covered 69.15under chapter 352B.69.16    (c) "Minnesota Firetown Premium Report" means a form prescribed by the 69.17commissioner containing space for reporting by insurers of fire, lightning, sprinkler 69.18leakage and extended coverage premiums received upon risks located or to be performed 69.19in this state less return premiums and dividends.69.20    (d) "Firetown" means the area serviced by any municipality having a qualified fire 69.21department or a qualified incorporated fire department having a subsidiary volunteer 69.22firefighters' relief association.69.23    (e) "Market value" means latest available market value of all property in a taxing 69.24jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 69.25taxation obtained from information which appears on abstracts filed with the commissioner 69.26of revenue or equalized by the State Board of Equalization.69.27    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 69.28commissioner for reporting by each fire and casualty insurer of all premiums received 69.29upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 69.30during the preceding calendar year, with reference to insurance written for insuring against 69.31the perils contained in auto insurance coverages as reported in the Minnesota business 69.32schedule of the annual financial statement which each insurer is required to file with 69.33the commissioner in accordance with the governing laws or rules less return premiums 69.34and dividends.69.35    (g) "Peace officer" means any person:70.1    (1) whose primary source of income derived from wages is from direct employment 70.2by a municipality or county as a law enforcement officer on a full-time basis of not less 70.3than 30 hours per week;70.4    (2) who has been employed for a minimum of six months prior to December 31 70.5preceding the date of the current year's certification under subdivision 2, clause (b);70.6    (3) who is sworn to enforce the general criminal laws of the state and local ordinances;70.7    (4) who is licensed by the Peace Officers Standards and Training Board and is 70.8authorized to arrest with a warrant; and70.9    (5) who is a member of the State Patrol retirement plan or the public employees 70.10police and fire fund.70.11    (h) "Full-time equivalent number of peace officers providing contract service" means 70.12the integral or fractional number of peace officers which would be necessary to provide 70.13the contract service if all peace officers providing service were employed on a full-time 70.14basis as defined by the employing unit and the municipality receiving the contract service.70.15    (i) "Retirement benefits other than a service pension" means any disbursement 70.16authorized under section 
         424A.05, subdivision 3, clauses (3) and (4).70.17    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:70.18(1) for the police state aid program and police relief association financial reports:70.19(i) the person who was elected or appointed to the specified position or, in the 70.20absence of the person, another person who is designated by the applicable governing body;70.21(ii) in a park district, the secretary of the board of park district commissioners;70.22(iii) in the case of the University of Minnesota, the official designated by the Board 70.23of Regents;70.24(iv) for the Metropolitan Airports Commission, the person designated by the 70.25commission;70.26(v) for the Department of Natural Resources or the Department of Public Safety, the 70.27respective commissioner;70.28(vi) for a tribal police department which exercises state arrest powers under section 70.29626.90
         , 
         626.91, 
         626.92, or 
         626.93, the person designated by the applicable American 70.30Indian tribal government; and70.31(2) for the fire state aid program and fire relief association financial reports, the 70.32person who was elected or appointed to the specified position, or, for governmental 70.33entities other than counties, if the governing body of the governmental entity designates 70.34the position to perform the function, the chief financial official of the governmental entity 70.35or the chief administrative official of the governmental entity.71.1(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 71.2retirement plan established by chapter 353G.71.3    Sec. 6. Minnesota Statutes 2012, section 69.011, subdivision 2, is amended to read:71.4    Subd. 2. Qualification for fire or police state aid. (a) Unless retirement coverage 71.5is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in 71.6order to qualify to receive fire state aid, on or before March 15 annually, in conjunction 71.7with the financial report required pursuant to section 
         69.051, the clerk of each municipality 71.8having a duly organized fire department as provided in subdivision 4, or the secretary of 71.9each independent nonprofit firefighting corporation having a subsidiary incorporated 71.10firefighters' relief association, whichever is applicable, and the fire chief, shall jointly 71.11certify the existence of the municipal fire department or of the independent nonprofit 71.12firefighting corporation, whichever is applicable, which meets the minimum qualification 71.13requirements set forth in this subdivision, and the fire personnel and equipment of the 71.14municipal fire department or the independent nonprofit firefighting corporation as of the 71.15preceding December 31.71.16(b) Where retirement coverage is provided by the voluntary statewide lump-sum 71.17volunteer firefighter retirement plan, in order to qualify to receive fire state aid, on or 71.18before March 15, annually, the executive director of the Public Employees Retirement 71.19Association shall certify the existence of that coverage for each municipality and the 71.20municipal clerk or independent nonprofit firefighting corporation secretary, whichever 71.21applies, and the applicable fire chief shall certify the fire personnel and fire department 71.22equipment as of the preceding December 31.71.23(c) Certification must be made to the commissioner on a form prescribed by the 71.24commissioner and shall include any other facts the commissioner may require. The 71.25certification must be made to the commissioner in duplicate. Each copy of the certificate 71.26must be duly executed and is deemed to be an original. The commissioner shall forward 71.27one copy to the auditor of the county wherein the fire department is located and shall 71.28retain one copy.71.29(d) On or before March 15 annually the clerk of each municipality having a duly 71.30organized police department and having a duly incorporated relief association shall certify 71.31that fact to the county auditor of the county where the police department is located and to 71.32the commissioner on a form prescribed by the commissioner together with the other facts 71.33the commissioner or auditor may require.71.34(e)(c) Except as provided in subdivision 2b, on or before March 15 annually, in 71.35order to qualify to receive police state aid, the clerk of each municipality and the auditor of 72.1each county employing one or more peace officers as defined in subdivision 1, clause (g), 72.2shall certify the number of such peace officers to the commissioner on forms prescribed by 72.3the commissioner. Credit for officers employed less than a full year must be apportioned. 72.4Each full month of employment of a qualifying officer during the calendar year entitles the 72.5employing municipality or county to credit for 1/12 of the payment for employment of a 72.6peace officer for the entire year. For purposes of sections 
         69.011 to 
         69.051, employment 72.7of a peace officer commences when the peace officer is entered on the payroll of the 72.8respective municipal police department or county sheriff's department. No peace officer 72.9may be included in the certification of the number of peace officers by more than one 72.10municipality or countyemploying unit for the same month.72.11(d) A certification made under this subdivision must be filed with the commissioner, 72.12must be made on a form prescribed by the commissioner, and must include any other facts 72.13that the commissioner requires.72.14    Sec. 7. Minnesota Statutes 2012, section 69.011, subdivision 3, is amended to read:72.15    Subd. 3. Failure to file certificate deemed waiver.(a) If a certification required by 72.16this section is not filed with the commissioner by the due date prescribed by this section, 72.17the commissioner shall notify the county, the municipality, or the nonprofit firefighting 72.18corporation that a portion or all of its current year aid will be forfeited if the certification 72.19is not received within ten days.72.20(b) The amount of aid forfeited is equal to the amount of state police aid or state fire 72.21aid determined for the county, the municipality, or the nonprofit firefighting corporation 72.22for the current year, multiplied by five percent for each week or fraction of a week that 72.23this certification is late. The penalty willmust be computed beginning ten days after the 72.24postmark date of the commissioner's notification as required under this subdivision. All 72.25forfeited aid amounts revert to the general fund in the state treasury. Failure to receive the 72.26certificate form cannotmay not be used as a defense for not filing a failure to file.72.27    Sec. 8. Minnesota Statutes 2012, section 69.011, subdivision 4, is amended to read:72.28    Subd. 4. Qualification for fire state aid.Any(a) A municipality in this state 72.29qualifies to receive fire state aid if it meets the general requirements of paragraph (b) and 72.30if it meets the specific requirements of paragraph (c).72.31(b) Minimum qualifications for fire state aid include the following:72.32(1) having for more than one year an organized fire department and officially 72.33established by the governing body of the municipality or an independent nonprofit 72.34firefighting corporation created under the nonprofit corporation act of this state and 73.1operating exclusively for firefighting purposes and providing retirement and relief benefits 73.2to its members,; and73.3(2) having a separate subsidiary incorporated firefighter's relief and pension73.4 association providing retirement and relief benefits, or participating in the voluntary 73.5statewide lump-sum volunteer firefighter retirement plan, may qualify to receive state aid 73.6if it meets the followingor, if a paid fire department, having retirement coverage by the 73.7public employees police and fire retirement plan.73.8(c) Minimum requirements for fire state aid also include the following or their 73.9equivalent as determined by the state fire marshal by July 1, 1972:73.10(a)(1) having ten paid or volunteer firefighters including a fire chief and assistant 73.11fire chief, and;73.12(b)(2) having regular scheduled meetings and frequent drills including instructions 73.13in firefighting tactics and in the use, care, and operation of all fire apparatus and 73.14equipment, and;73.15(c)(3) having a motorized fire truck equipped with a motorized pump, 250 gallon or 73.16larger water tank, 300 feet of one inch or larger fire hose in two lines with combination 73.17spray and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, 73.18dry chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars, 73.19axes, lanterns, fire coats, helmets, and boots, and;73.20(d)(4) having apparatus suitably housed in a building of good construction with 73.21facilities for care of hose and equipment, and;73.22(e)(5) having a reliable and adequate method of receiving fire alarms by telephone 73.23or with electric siren and suitable means of sounding an alarm, and;73.24(f)(6) if response is to be provided outside the corporate limits of the municipality 73.25wherein the fire department is located, the municipality hashaving another piece of 73.26motorized apparatus to make the response,; and73.27(g)(7) meeting other requirements that the commissioner establishes by rule.73.28    Sec. 9. Minnesota Statutes 2012, section 69.021, subdivision 1, is amended to read:73.29    Subdivision 1. Minnesota Firetown Premium Report and Minnesota Aid to 73.30Police Premium Report. The commissioner shall, at the time of mailing tax forms, 73.31send blank copies of the Minnesota Firetown Premium Report and when applicable the 73.32Minnesota Aid to Police Premium Report to each insurer, including township and farmers 73.33mutual insurance companies licensed to write insurance as described in section 
         69.011, 73.34subdivision 1
         , clauses (c) and (f) in this state. These reports shallmust contain space 74.1for the insurers name, address, gross premiums less return premiums, dividends, net 74.2premiums, certification and other facts that the commissioner may require.74.3    Sec. 10. Minnesota Statutes 2012, section 69.021, subdivision 2, is amended to read:74.4    Subd. 2. Report of premiums.(a) Each insurer, including township and farmers 74.5mutual insurers where applicable, shall return to the commissioner the reports described in 74.6subdivision 1 certified by its secretary and president or chief financial officer.74.7(b) The Minnesota Firetown Premium Report shallmust contain a true and accurate 74.8statement of the total premium for all gross direct fire, lightning, sprinkler leakage, and 74.9extended coverage insurance of all domestic mutual insurers and the total premiums for 74.10all gross direct fire, lightning, sprinkler leakage and extended coverage insurance of all 74.11other insurers, less return premiums and dividends received by them on that business 74.12written or done during the preceding calendar year upon property located within the state 74.13or brought into the state for temporary use. The fire and extended coverage portion of 74.14multiperil and multiple peril package premiums and all other combination premiums shall74.15must be determined by applying percentages determined by the commissioner or by rating 74.16bureaus recognized by the commissioner.74.17(c) The Minnesota Aid to Police Premium Report shallmust contain a true and 74.18accurate statement of the total premiums, less return premiums and dividends, on all direct 74.19business received by such insurer in this state, or by its agents for it, in cash or otherwise, 74.20during the preceding calendar year, with reference to insurance written for perils described 74.21in section 
         69.011, subdivision 1, clause (f).74.22    Sec. 11. Minnesota Statutes 2012, section 69.021, subdivision 3, is amended to read:74.23    Subd. 3. Penalty for fraudulent, incorrect, incomplete returns and late filing of 74.24report. (a) When it appears to the commissioner that any insurer has made an incomplete or 74.25inaccurate report, the commissioner shall return the report and demand that a complete and 74.26accurate report be filed. If the insurer fails to file a report on or before March 1, annually, 74.27the insurer shall beis liable and shall pay $25 for each seven days delinquent, or fraction 74.28thereof, that the report is delinquent, but not to exceed $200. If the insurer fails to file a 74.29corrected report within 30 days after demand, the insurer is liable for the penalties provided 74.30in this subdivisionparagraph (b) or (c) for knowingly filing an inaccurate or false report.74.31(b) Any insurer whowhich knowingly makes and files an inaccurate or false report 74.32shall beis liable to a fine in an amount of not less than $25 nor more than $1,000, as 74.33determined by the commissioner, and additionally the commissioner of commerce may 74.34revoke the insurer's certificate of authority.75.1(c) Any person whose duty it is to make the report who fails or refuses to make it 75.2within 30 days after notification by the commissioner shall be fined an amount of not 75.3more than $1,000.75.4(d) Failure of the insurer to receive a reporting form shalldoes not excuse the insurer 75.5from filing the report.75.6    Sec. 12. Minnesota Statutes 2012, section 69.021, subdivision 4, is amended to read:75.7    Subd. 4. Determination of qualified state aid recipients; certification to 75.8commissioner of management and budget. (a) The commissioner shall determine 75.9which municipalities and independent nonprofit firefighting corporations are qualified to 75.10receive fire state aid directly or are qualified to receive the benefit of fire state aid paid 75.11to the voluntary statewide lump-sum volunteer firefighter retirement plan and which 75.12municipalities and counties are qualified to receive police state aid.75.13(b) The commissioner shall determine qualification for state aid upon receipt of:75.14(1) the fire department personnel and equipment certification or the police department 75.15and qualified peace officers certificate, whichever applies, required under section 
         69.011;75.16(2) the financial compliance report required under section 
         6.495, subdivision 3, if 75.17applicable; and75.18(3) any other relevant information which comes to the attention of the commissioner.75.19(c) Upon completion of the determination, on or before October 1, the commissioner 75.20shall calculate the amount of:75.21(1) the police state aid which each county or municipality is to receive under 75.22subdivisions 5, 6, 7a, and 10; and75.23(2) the fire state aid which each municipality or nonprofit firefighting corporation 75.24is to receive under subdivisions 5 and 7.75.25(d) The commissioner shall certify to the commissioner of management and budget 75.26the name of each county or municipality, and the amount of state aid which each county or 75.27municipality is to receive, in the case of police state aid. The commissioner shall certify to 75.28the commissioner of management and budget the name of each municipality or independent 75.29nonprofit firefighting corporation and the amount of state aid which each municipality 75.30or independent nonprofit firefighting corporation is to receive directly or the amount of 75.31state aid which the voluntary statewide lump-sum volunteer firefighter retirement plan is 75.32qualified to receive on behalf of the municipality or corporation, in the case of fire state aid.75.33    Sec. 13. Minnesota Statutes 2012, section 69.021, subdivision 5, is amended to read:76.1    Subd. 5. Calculation of state aid. (a) The amount of fire state aid available for 76.2apportionment, before the addition of the minimum fire state aid allocation amount under 76.3subdivision 7, is equal to 107 percent of the amount of premium taxes paid to the state 76.4upon the fire, lightning, sprinkler leakage, and extended coverage premiums reported to 76.5the commissioner by insurers on the Minnesota Firetown Premium Report. This amount 76.6must be reduced by the amount required to pay the state auditor's costs and expenses of 76.7the audits or exams of the firefighters relief associations.76.8The total amount for apportionment in respect to fire state aid must not be less than 76.9two percent of the premiums reported to the commissioner by insurers on the Minnesota 76.10Firetown Premium Report after subtracting the following amounts:76.11(1) the amount required to pay the state auditor's costs and expenses of the audits or 76.12exams of the firefighters relief associations; and76.13(2) one percent of the premiums reported by town and farmers' mutual insurance 76.14companies and mutual property and casualty companies with total assets of $5,000,000 or 76.15less.76.16(b) The total amount for apportionment as police state aid is equal to 104 percent 76.17of the amount of premium taxes paid to the state on the premiums reported to the 76.18commissioner by insurers on the Minnesota Aid to Police Premium Report, reduced by 76.19the amount required to pay the costs and expenses of the state auditor for audits or exams 76.20of police relief associations. The total amount for apportionment in respect to the police 76.21state aid program must not be less than two percent of the amount of premiums reported 76.22to the commissioner by insurers on the Minnesota Aid to Police Premium Report after 76.23subtracting the amount required to pay the state auditor's cost and expenses of the audits 76.24or exams of the police relief associations.76.25(c) The commissioner shall calculate the percentage of increase or decrease reflected 76.26in the apportionment over or under the previous year's available state aid using the same 76.27premiums as a basis for comparison.76.28(d) In addition to the amount for apportionment of police state aid under paragraph 76.29(b), each year $100,000 must be apportioned for police state aid. An amount sufficient to 76.30pay this increase is annually appropriated from the general fund.76.31    Sec. 14. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:76.32    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.76.33(a) The commissioner shall apportion the fire state aid relative to the premiums reported 76.34on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 76.35and/or firefighters relief association qualified under section 69.011, subdivision 4.77.1(b) The commissioner shall calculate an initial fire state aid allocation amount for each 77.2municipality or fire department under paragraph (c) and, if applicable, a minimum fire state 77.3aid allocation amount for each municipality or fire department under paragraph (d). The 77.4municipality or fire department must receivebe apportioned the larger fire state aid amount.77.5(c) The initial fire state aid allocation amount is the amount available for 77.6apportionment as fire state aid under subdivision 5, without the inclusion of any additional 77.7funding amount to support a minimum fire state aid amount under section 
         423A.02, 77.8subdivision 3
         , allocated one-half in proportion to the population as shown in the last 77.9official statewide federal census for each fire town and one-half in proportion to the market 77.10value of each fire town, including (1) the market value of tax-exempt property and (2) the 77.11market value of natural resources lands receiving in lieu payments under sections 
         477A.11 77.12to 
         477A.14, but excluding the market value of minerals. In the case of incorporated or 77.13municipal fire departments furnishing fire protection to other cities, towns, or townships 77.14as evidenced by valid fire service contracts filed with the commissioner, the distribution 77.15must be adjusted proportionately to take into consideration the crossover fire protection 77.16service. Necessary adjustments must be made to subsequent apportionments. In the case 77.17of municipalities or independent fire departments qualifying for the aid, the commissioner 77.18shall calculate the state aid for the municipality or relief association on the basis of the 77.19population and the market value of the area furnished fire protection service by the fire 77.20department as evidenced by duly executed and valid fire service agreements filed with the 77.21commissioner. If one or more fire departments are furnishing contracted fire service to a 77.22city, town, or township, only the population and market value of the area served by each 77.23fire department may be considered in calculating the state aid and the fire departments 77.24furnishing service shall enter into an agreement apportioning among themselves the 77.25percent of the population and the percent of the market value of each shared service area. 77.26The agreement must be in writing and must be filed with the commissioner.77.27(d) The minimum fire state aid allocation amount is the amount in addition to the 77.28initial fire state allocation amount that is derived from any additional funding amount 77.29to support a minimum fire state aid amount under section 
         423A.02, subdivision 3, and 77.30allocated to municipalities with volunteer firefighters relief associations or covered by the 77.31voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 77.32of active volunteer firefighters who are members of the relief association as reported 77.33in the annual financial reporting for the calendar year 1993 to the Office of the State 77.34Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 77.35fire departments with volunteer firefighters relief associations receive in total at least a 77.36minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 78.130 firefighters. If a relief association is established after calendar year 1993 and before 78.2calendar year 2000, the number of active volunteer firefighters who are members of the 78.3relief association as reported in the annual financial reporting for calendar year 1998 78.4to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 78.5shall be used in this determination. If a relief association is established after calendar 78.6year 1999, the number of active volunteer firefighters who are members of the relief 78.7association as reported in the first annual financial reporting submitted to the Office of 78.8the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 78.9determination. If a relief association is terminated as a result of providing retirement 78.10coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 78.11firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 78.12of the municipality covered by the statewide plan as certified by the executive director of 78.13the Public Employees Retirement Association to the commissioner and the state auditor, 78.14but not to exceed 30 active firefighters, must be used in this determination.78.15(e) Unless the firefighters of the applicable fire department are members of the 78.16voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 78.17be paid to the treasurer of the municipality where the fire department is located and the 78.18treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 78.19the aid to the relief association if the relief association has filed a financial report with the 78.20treasurer of the municipality and has met all other statutory provisions pertaining to the 78.21aid apportionment. If the firefighters of the applicable fire department are members of 78.22the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 78.23must be paid to the executive director of the Public Employees Retirement Association 78.24and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.78.25(f) The commissioner may make rules to permit the administration of the provisions 78.26of this section.78.27(g) Any adjustments needed to correct prior misallocations must be made to 78.28subsequent fire state aid apportionments.78.29    Sec. 15. Minnesota Statutes 2012, section 69.021, subdivision 7a, is amended to read:78.30    Subd. 7a. Apportionment of police state aid.(a) Subject to the reduction provided 78.31for under subdivision 10, the commissioner shall apportion the police state aid to each 78.32municipality and, to theeach county, and to the Departments of Natural Resources and 78.33Public Safety in the following manner:78.34(1) for all municipalities maintaining police departments, counties, the Department 78.35of Natural Resources, and the Department of Public Safety, the police state aid must be 79.1distributed in proportion to the relationship that the total number of peace officers, as 79.2determined under section 
         69.011, subdivision 1, clauseparagraph (g), and subdivision 2, 79.3clauseparagraph (b), employed by that employing unit for 12 calendar months and the 79.4proportional or fractional number who were employed less than 12 months bears to the total 79.5number of peace officers employed by all municipalities and, counties, the Departments of 79.6Natural Resources and Public Safety, subject to any reduction under subdivision 10;79.7(2) for each municipality which contracts with the county for police service, a 79.8proportionate amount of the state aid distributed to the county based on the full-time 79.9equivalent number of peace officers providing contract service to that municipality must 79.10be credited against the municipality's contract obligation; and79.11(3) for each municipality which contracts with another municipality for police 79.12service, a proportionate amount of the state aid distributed to the municipality providing 79.13contract service based on the full-time equivalent number of peace officers providing 79.14contract service to that municipality on a full-time equivalent basis must be credited 79.15against the contract obligation of the municipality receiving contract service.79.16(b) Any necessary additional adjustments must be made to subsequent police state 79.17aid apportionments.79.18    Sec. 16. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:79.19    Subd. 8. Population and market value. (a) In computations relating to fire state aid 79.20requiring the use of population figures, only official statewide federal census figures are 79.21tomay be used. Increases or decreases in population disclosed by reason of any special 79.22census must not be taken into consideration.79.23(b) In calculations relating to fire state aid requiring the use of market value property 79.24figures, only the latest available market value property figures may be used.79.25    Sec. 17. Minnesota Statutes 2012, section 69.021, subdivision 9, is amended to read:79.26    Subd. 9. Appeal.(a) In the event that a municipality, a county, a fire relief 79.27association, a police relief association,the Department of Natural Resources, the 79.28Department of Public Safety, or the voluntary statewide lump-sum volunteer firefighter 79.29retirement plan, feels itself to be aggrieved, it may request the commissioner to review 79.30and adjust the apportionment of funds within the county in the case of police state aid, or 79.31within the state in the case of fire state aid.79.32(b) The decision of the commissioner is subject to appeal, review, and adjustment by 79.33the district court in the county in which the applicable municipality, or fire department,79.34or police department is located or by the Ramsey County District Court with respect to 80.1the Department of Natural Resources, the Department of Public Safety, or the voluntary 80.2statewide lump-sum volunteer firefighter retirement plan.80.3    Sec. 18. Minnesota Statutes 2012, section 69.021, subdivision 10, is amended to read:80.4    Subd. 10. Reduction in police state aid apportionment. (a) The commissioner of 80.5revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph 80.6(b), 6, and 7a, for eligible employer units by the amount of any excess police state aid.80.7(b) "Excess police state aid" is:80.8(1) for counties and for municipalities in which police retirement coverage is 80.9provided wholly by the public employees police and fire fund and all police officers are 80.10members of the plan governed by sections 
         353.63 to 
         353.657, the amount in excess of the 80.11employer's total prior calendar year obligation as defined in paragraph (c), as certified by 80.12the executive director of the Public Employees Retirement Association;80.13(2) for municipalities in which police retirement coverage is provided in part by the 80.14public employees police and fire fund governed by sections 353.63 to 353.657 and in 80.15part by a local police consolidation account governed by chapter 353A, and established 80.16before March 2, 1999, for which the municipality declined merger under section 353.665, 80.17subdivision 1, or established after March 1, 1999, the amount in excess of the employer's 80.18total prior calendar year obligation as defined in paragraph (c), plus the amount of the 80.19employer's total prior calendar year obligation under section 353A.09, subdivision 5, 80.20paragraphs (a) and (b), as certified by the executive director of the Public Employees 80.21Retirement Association;80.22(3) for municipalities in which police retirement coverage is provided by the public 80.23employees police and fire plan governed by sections 353.63 to 353.657, in which police 80.24retirement coverage was provided by a police consolidation account under chapter 80.25353A before July 1, 1999, and for which the municipality has an additional municipal 80.26contribution under section 353.665, subdivision 8, paragraph (b), the amount in excess of 80.27the employer's total prior calendar year obligation as defined in paragraph (c), plus the 80.28amount of any additional municipal contribution under section 353.665, subdivision 8, 80.29paragraph (b), until the year 2010, as certified by the executive director of the Public 80.30Employees Retirement Association;80.31(4)(2) for municipalities in which police retirement coverage is provided in part by 80.32the public employees police and fire fund governed by sections 353.63 to 353.657 and in 80.33part by a local police relief association governed by sections 69.77 and 423A.01 the cities 80.34of Fairmont and Minneapolis, the amount in excess of the employer's total prior calendar 80.35year obligation as defined in paragraph (c), as certified by the executive director of the 81.1public employees retirement association, plus the amount of the financial requirements of 81.2the relief association certified to the applicable municipality during the prior calendar year 81.3under section 69.77, subdivisions 4 and 5, reduced by the amount of member contributions 81.4deducted from the covered salary of the relief association during the prior calendar year 81.5under section 69.77, subdivision 3, as certified by the chief administrative officer of the 81.6applicable municipality any additional municipal contribution under section 353.668, 81.7subdivision 6, or 353.669, subdivision 6;81.8(5)(3) for the Metropolitan Airports Commission, the amount in excess of the 81.9commission's total prior calendar year obligation as defined in paragraph (c), as certified 81.10by the executive director of the Public Employees Retirement Association; and81.11(6)(4) for the Department of Natural Resources and for the Department of Public 81.12Safety, the amount in excess of the employer's total prior calendar year obligation under 81.13section 
         352B.02, subdivision 1c, for plan members who are peace officers under section 81.1469.011, subdivision 1
         , clause (g), as certified by the executive director of the Minnesota 81.15State Retirement System.81.16(c) The employer's total prior calendar year obligation with respect to the public 81.17employees police and fire plan under paragraph (b), clause (1), is the total prior calendar 81.18year obligation under section 
         353.65, subdivision 3, for police officers as defined in 81.19section 
         353.64, subdivision 2, and the actual total prior calendar year obligation under 81.20section 
         353.65, subdivision 3, for firefighters, as defined in section 
         353.64, subdivision 81.213
         , but not to exceed for those firefighters the applicable following amounts employer 81.22calendar year amount:

81.23MunicipalityMaximum Amount81.24Albert Lea$54,157.0181.25Anoka10,399.3181.26Apple Valley5,442.4481.27Austin49,864.7381.28Bemidji27,671.3881.29Brooklyn Center6,605.9281.30Brooklyn Park24,002.2681.31Burnsville15,956.0081.32Cloquet4,260.4981.33Coon Rapids39,920.0081.34Cottage Grove8,588.4881.35Crystal5,855.0081.36East Grand Forks51,009.8881.37Edina32,251.0081.38Elk River5,216.5581.39Ely13,584.1682.1Eveleth16,288.2782.2Fergus Falls6,742.0082.3Fridley33,420.6482.4Golden Valley11,744.6182.5Hastings16,561.0082.6Hopkins4,324.2382.7International Falls14,400.6982.8Lakeville782.3582.9Lino Lakes5,324.0082.10Little Falls7,889.4182.11Maple Grove6,707.5482.12Maplewood8,476.6982.13Minnetonka10,403.0082.14Montevideo1,307.6682.15Moorhead68,069.2682.16New Hope6,739.7282.17North St. Paul4,241.1482.18Northfield770.6382.19Owatonna37,292.6782.20Plymouth6,754.7182.21Red Wing3,504.0182.22Richfield53,757.9682.23Rosemount1,712.5582.24Roseville9,854.5182.25St. Anthony33,055.0082.26St. Louis Park53,643.1182.27Thief River Falls28,365.0482.28Virginia31,164.4682.29Waseca11,135.1782.30West St. Paul15,707.2082.31White Bear Lake6,521.0482.32Woodbury3,613.0082.33any other municipality0.00

82.34(d) The total amount of excess police state aid must be deposited in the excess 82.35police state-aid account in the general fund, administered and distributed as provided 82.36in subdivision 11.82.37    Sec. 19. Minnesota Statutes 2012, section 69.021, subdivision 11, is amended to read:82.38    Subd. 11. Excess police state-aid holding account. (a) The excess police state-aid 82.39holding account is established in the general fund. The excess police state-aid holding 82.40account must be administered by the commissioner.83.1    (b) Excess police state aid determined according to subdivision 10, must be 83.2deposited annually in the excess police state-aid holding account.83.3    (c) From the balance in the excess police state-aid holding account, $900,000 must 83.4be canceled annually to the general fund.83.5    (d) If a police officer stress reduction program is created by law and money is 83.6appropriated for that program, an amount equal to that appropriation must be transferred 83.7to the administrator of that program from the balance in the excess police state-aid holding 83.8account.83.9    (e)(d) On October 1 of each year, one-half of the balance of the excess police 83.10state-aid holding account remaining after the deductionsdeduction under paragraphs83.11paragraph (c) and (d) is appropriated for additional amortization aid under section 83.12423A.02, subdivision 1b
         .83.13    (f)(e) Annually, the remaining balance in the excess police state-aid holding account, 83.14after the deductions under paragraphs (c),and (d), and (e), cancels to the general fund.83.15    Sec. 20. Minnesota Statutes 2012, section 69.031, subdivision 1, is amended to read:83.16    Subdivision 1. Commissioner's warrant. (a) The commissioner of management 83.17and budget shall issue to the Public Employees Retirement Association on behalf of 83.18a municipality or independent nonprofit firefighting corporation that is a member of the 83.19voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G, 83.20to the Department of Natural Resources, the Department of Public Safety, or to the 83.21county, municipality, or independent nonprofit firefighting corporation certified to the 83.22commissioner of management and budget by the commissioner a warrant for an amount 83.23equal to the amount of fire state aid or police state aid, whichever applies, certified for the 83.24applicable state aid recipient by the commissioner under section 
         69.021.83.25(b) Fire state aid and police state aid is payable on October 1 annually. The amount 83.26of state aid due and not paid by October 1 accrues interest payable to the state aid recipient 83.27at the rate of one percent for each month or part of a month that the amount remains 83.28unpaid after October 1.83.29    Sec. 21. Minnesota Statutes 2012, section 69.031, subdivision 3, is amended to read:83.30    Subd. 3. Appropriations. There is hereby appropriated annually from the state 83.31general fund to the commissioner of revenue an amountamounts sufficient to make the 83.32police state aid payments and the fire state aid payments specified in this section and 83.33section 
         69.021.84.1    Sec. 22. Minnesota Statutes 2012, section 69.031, subdivision 5, is amended to read:84.2    Subd. 5. Deposit of state aid. (a) If the municipality or the independent nonprofit 84.3firefighting corporation is covered by the voluntary statewide lump-sum volunteer 84.4firefighter retirement plan under chapter 353G, the executive director shall credit the fire 84.5state aid against future municipal contribution requirements under section 
         353G.08 and 84.6shall notify the municipality or independent nonprofit firefighting corporation of the fire 84.7state aid so credited at least annually. If the municipality or the independent nonprofit 84.8firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 84.9firefighter retirement plan, the municipal treasurer shall, within 30 days after receipt, 84.10transmit the fire state aid to the treasurer of the duly incorporated firefighters' relief 84.11association if there is one organized and the association has filed a financial report with the 84.12municipality. If the relief association has not filed a financial report with the municipality, 84.13the municipal treasurer shall delay transmission of the fire state aid to the relief association 84.14until the complete financial report is filed. If the municipality or independent nonprofit 84.15firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 84.16firefighter retirement plan, if there is no relief association organized, or if the association 84.17has dissolved or has been removed as trustees of state aid, then the treasurer of the 84.18municipality shall deposit the money in the municipal treasury and the money may be 84.19disbursed only for the purposes and in the manner set forth in section 
         424A.08 or for the 84.20payment of the employer contribution requirement with respect to firefighters covered by 84.21the public employees police and fire retirement plan under section 
         353.65, subdivision 3.84.22(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 84.23police state aid in the following manner:84.24(1) For a municipality in which a local police relief association exists and all peace 84.25officers are members of the association, the total state aid must be transmitted to the 84.26treasurer of the relief association within 30 days of the date of receipt, and the treasurer 84.27of the relief association shall immediately deposit the total state aid in the special fund 84.28of the relief association;84.29(2)(b) For a municipality in which police retirement coverage is provided by the 84.30public employees police and fire fund and all peace officers are members of the fund, 84.31including municipalities covered by section 
         353.665, the total state aid must be applied 84.32toward the municipality's employer contribution to the public employees police and 84.33fire fund under sections 
         353.65, subdivision 3, and 353.665 353.668, subdivision 8 6, 84.34paragraph (b) or 353.669, subdivision 6, if applicable; or.84.35(3) For a municipality other than a city of the first class with a population of more 84.36than 300,000 in which both a police relief association exists and police retirement 85.1coverage is provided in part by the public employees police and fire fund, the municipality 85.2may elect at its option to transmit the total state aid to the treasurer of the relief association 85.3as provided in clause (1), to use the total state aid to apply toward the municipality's 85.4employer contribution to the public employees police and fire fund subject to all the 85.5provisions set forth in clause (2), or to allot the total state aid proportionately to be 85.6transmitted to the police relief association as provided in this subdivision and to apply 85.7toward the municipality's employer contribution to the public employees police and fire 85.8fund subject to the provisions of clause (2) on the basis of the respective number of active 85.9full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).85.10For a city of the first class with a population of more than 300,000, in addition, the 85.11city may elect to allot the appropriate portion of the total police state aid to apply toward 85.12the employer contribution of the city to the public employees police and fire fund based 85.13on the covered salary of police officers covered by the fund each payroll period and to 85.14transmit the balance to the police relief association; or85.15(4) For a municipality in which police retirement coverage is provided in part by 85.16the public employees police and fire fund and in part by a local police consolidation 85.17account governed by chapter 353A and established before March 2, 1999, for which the 85.18municipality declined merger under section 353.665, subdivision 1, or established after 85.19March 1, 1999, the total police state aid must be applied towards the municipality's total 85.20employer contribution to the public employees police and fire fund and to the local police 85.21consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.85.22(c) The county treasurer, upon receipt of the police state aid for the county, shall 85.23apply the total state aid toward the county's employer contribution to the public employees 85.24police and fire fund under section 
         353.65, subdivision 3.85.25(d) The designated Metropolitan Airports Commission official, upon receipt of the 85.26police state aid for the Metropolitan Airports Commission, shall apply the total police 85.27state aid toward the commission's employer contribution for police officers to the public 85.28employees police and fire plan under section 
         353.65, subdivision 3.85.29(e) The police state aid apportioned to the Departments of Public Safety and Natural 85.30Resources under section 
         69.021, subdivision 7a, is appropriated to the commissioner of 85.31management and budget for transfer to the funds and accounts from which the salaries of 85.32peace officers certified under section 
         69.011, subdivision 2b, are paid. The commissioner 85.33of revenue shall certify to the commissioners of public safety, natural resources, and 85.34management and budget the amounts to be transferred from the appropriation for police 85.35state aid. The commissioners of public safety and natural resources shall certify to the 85.36commissioner of management and budget the amounts to be credited to each of the funds 86.1and accounts from which the peace officers employed by their respective departments are 86.2paid. Each commissioner shall allocate the police state aid first for employer contributions 86.3for employees funded from the general fund and then for employer contributions for 86.4employees funded from other funds. For peace officers whose salaries are paid from the 86.5general fund, the amounts transferred from the appropriation for police state aid must 86.6be canceled to the general fund.86.7    Sec. 23. Minnesota Statutes 2012, section 69.041, is amended to read:86.869.041 SHORTFALL FROM GENERAL FUND.86.9(a) If the annual funding requirements of fire or police relief associations or 86.10consolidation accounts under sections 69.77,69.771 to 
         69.775, or353A.09, or sections 86.1131 to 42, exceed all applicable revenue sources of a given year, including the insurance 86.12premium taxes funding the applicable fire or police state aid as set under section 
         297I.05, 86.13subdivisions 2, 3, and 4
         , the shortfall in the annual funding requirements must be paid 86.14from the general fund to the extent appropriated by the legislature.86.15(b) Nothing in this section may be deemed to relieve any municipality from its 86.16obligation to a relief association or consolidation account under law.86.17    Sec. 24. Minnesota Statutes 2012, section 69.051, subdivision 1, is amended to read:86.18    Subdivision 1. Financial report and audit. (a) The board of each salaried 86.19firefightersthe Bloomington Fire Department Relief Association, police relief association,86.20 and each volunteer firefighters relief association as defined in section 
         424A.001, 86.21subdivision 4
         , with assets of at least $200,000 or liabilities of at least $200,000 in the prior 86.22year or in any previous year, according to the applicable actuarial valuation or according 86.23to the financial report if no valuation is required, shall prepare a financial report covering 86.24the special and general funds of the relief association for the preceding fiscal year, file the 86.25financial report, and submit financial statements.86.26(b) The financial report must contain financial statements and disclosures which 86.27present the true financial condition of the relief association and the results of relief 86.28association operations in conformity with generally accepted accounting principles and in 86.29compliance with the regulatory, financing and funding provisions of this chapter and any 86.30other applicable laws. The financial report must be countersigned by:86.31(1) the municipal clerk or clerk-treasurer of the municipality in which the relief 86.32association is located if the relief association is a firefighters relief association which is 86.33directly associated with a municipal fire department or is a police relief association; or87.1(2) by the municipal clerk or clerk-treasurer of the largest municipality in population 87.2which contracts with the independent nonprofit firefighting corporation if the volunteer 87.3firefighter relief association is a subsidiary of an independent nonprofit firefighting 87.4corporation and by the secretary of the independent nonprofit firefighting corporation; or87.5(3) by the chief financial official of the county in which the volunteer firefighter 87.6relief association is located or primarily located if the relief association is associated with 87.7a fire department that is not located in or associated with an organized municipality.87.8(c) The financial report must be retained in its office for public inspection and must 87.9be filed with the governing body of the government subdivision in which the associated 87.10fire department is located after the close of the fiscal year. One copy of the financial report 87.11must be furnished to the state auditor after the close of the fiscal year.87.12(d) Audited financial statements must be attested to by a certified public accountant 87.13or by the state auditor and must be filed with the state auditor within 180 days after the 87.14close of the fiscal year. The state auditor may accept this report in lieu of the report 87.15required in paragraph (c).87.16    Sec. 25. Minnesota Statutes 2012, section 69.051, subdivision 1a, is amended to read:87.17    Subd. 1a. Financial statement. (a) The board of each volunteer firefighters relief 87.18association, as defined in section 
         424A.001, subdivision 4, that is not required to file a 87.19financial report and audit under subdivision 1 must prepare a detailed statement of the 87.20financial affairs for the preceding fiscal year of the relief association's special and general 87.21funds in the style and form prescribed by the state auditor. The detailed statement must 87.22show:87.23(1) the sources and amounts of all money received;87.24(2) all disbursements, accounts payable and accounts receivable;87.25(3) the amount of money remaining in the treasury;87.26(4)  total assets, including a listing of all investments;87.27(5) the accrued liabilities; and87.28(6) all other items necessary to show accurately the revenues and expenditures and 87.29financial position of the relief association.87.30(b) The detailed financial statement required under paragraph (a) must be certified 87.31by an independent public accountant or auditor or by the auditor or accountant who 87.32regularly examines or audits the financial transactions of the municipality. In addition to 87.33certifying the financial condition of the special and general funds of the relief association, 87.34the accountant or auditor conducting the examination shall give an opinion as to the 87.35condition of the special and general funds of the relief association, and shall comment 88.1upon any exceptions to the report. The independent accountant or auditor must have at 88.2least five years of public accounting, auditing, or similar experience, and must not be an 88.3active, inactive, or retired member of the relief association or the fire or police department.88.4(c) The detailed statement required under paragraph (a) must be countersigned by:88.5(1) the municipal clerk or clerk-treasurer of the municipality; or88.6(2) where applicable, by the municipal clerk or clerk-treasurer of the largest 88.7municipality in population which contracts with the independent nonprofit firefighting 88.8corporation if the relief association is a subsidiary of an independent nonprofit firefighting 88.9corporation and by the secretary of the independent nonprofit firefighting corporation; or88.10(3) by the chief financial official of the county in which the volunteer firefighter 88.11relief association is located or primarily located if the relief association is associated with 88.12a fire department that is not located in or associated with an organized municipality.88.13(d) The volunteer firefighters' relief association board must file the detailed statement 88.14required under paragraph (a) in the relief association office for public inspection and 88.15present it to the city councilgoverning body of the municipality within 45 days after the 88.16close of the fiscal year, and must submit a copy of the detailed statement to the state 88.17auditor within 90 days of the close of the fiscal year.88.18    Sec. 26. Minnesota Statutes 2012, section 69.051, subdivision 1b, is amended to read:88.19    Subd. 1b. Qualification. The state auditor may, upon a demonstration by a relief 88.20association of hardship or an inability to conform, extend the deadline for reports under 88.21subdivisions 1 or 1a, but not beyond November 30th following the due date. If the 88.22reports are not received by November 30th, the municipality or relief association will 88.23forfeitforfeits its current year state aid, and, until the state auditor receives the required 88.24information, the relief association or municipality will beis ineligible to receive any 88.25future state aid. A municipality or police or firefighters' relief association shalldoes not 88.26qualify initially to receive, or be entitled subsequently to retain, state aid pursuant tounder 88.27this chapter if the financial reporting requirement or the applicable requirements of this 88.28chapter or any other statute or special law have not been complied with or are not fulfilled.88.29    Sec. 27. Minnesota Statutes 2012, section 69.051, subdivision 2, is amended to read:88.30    Subd. 2. Treasurers bond.No(a) The treasurer of athe Bloomington Fire 88.31Department Relief Association governed by section 69.77 shallmay not enter upon duties 88.32without having given the association a bond in a reasonable amount acceptable to the 88.33municipality for the faithful discharge of duties according to law.89.1(b) No treasurer of a relief association governed by sections 
         69.771 to 
         69.776shall89.2may enter upon the duties of the office until the treasurer has given the association a good 89.3and sufficient bond in an amount equal to at least ten percent of the assets of the relief 89.4association; however, the amount of the bond need not exceed $500,000.89.5    Sec. 28. Minnesota Statutes 2012, section 69.051, subdivision 3, is amended to read:89.6    Subd. 3. Report by certain municipalities. (a) The chief administrative officer 89.7of each municipality which has an organized fire department but which does not have a 89.8firefighters' relief association governed by section 
         69.77 or sections 
         69.771 to 
         69.775 and 89.9which is not exempted under paragraph (b) shall annually prepare a detailed financial 89.10report of the receipts and disbursements by the municipality for fire protection service 89.11during the preceding calendar year, on a form prescribed by the state auditor. The financial 89.12report must contain any information which the state auditor deems necessary to disclose 89.13the sources of receipts and the purpose of disbursements for fire protection service. 89.14The financial report must be signed by the municipal clerk or clerk-treasurer of the 89.15municipality. The financial report must be filed by the municipal clerk or clerk-treasurer 89.16with the state auditor on or before July 1 annually. The municipality shalldoes not qualify 89.17initially to receive, or beand is not entitled subsequently to retain, state aid under this 89.18chapter if the financial reporting requirement or the applicable requirements of this chapter 89.19or any other statute or special law have not been complied with or are not fulfilled.89.20(b) Each municipality that has an organized fire department and provides retirement 89.21coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter 89.22retirement plan under chapter 353G qualifies to have fire state aid transmitted to and 89.23retained in the statewide lump-sum volunteer firefighter retirement fund without filing 89.24a detailed financial report if the executive director of the Public Employees Retirement 89.25Association certifies compliance by the municipality with the requirements of sections 89.26353G.04
          and 
         353G.08, paragraph (e), and certifies conformity by the applicable fire chief 89.27with the requirements of section 
         353G.07.89.28    Sec. 29. Minnesota Statutes 2012, section 69.051, subdivision 4, is amended to read:89.29    Subd. 4. Notification by commissioner and state auditor. (a) The state auditor,89.30 in performing an audit or examination, shall notify the Legislative Commission on 89.31Pensions and Retirement if the audit or examination reveals malfeasance, misfeasance, or 89.32nonfeasance in office by relief association officials or municipal officials.90.1(b) The commissioner shall notify the Legislative Commission on Pensions and 90.2Retirement if the state auditor has not filed the required financial compliance reports 90.3by July 1.90.4    Sec. 30. Minnesota Statutes 2012, section 69.33, is amended to read:90.569.33 REPORT; AMOUNT OF PREMIUMS RECEIVED BY INSURANCE 90.6COMPANIES.90.7For purposes of the first class city fire insurance premium tax surcharge aid program 90.8under section 297I.10, the commissioner shall enclose in the annual statement blank that is 90.9sent to all fire insurance companies doing business in this state a blank form containing 90.10the names of all cities of the first class and require these companies, at the time of making 90.11their annual statements to the commissioner, to state on these blanks the amount of 90.12premiums received by them upon properties insured within the corporate limits of the 90.13cities named thereon during the year ending December 31st last past. Thereafter, before 90.14July first each year, the commissioner shall certify to the commissioner of management 90.15and budget the information thus obtained, together with the amount of the tax for the 90.16benefit of the pension plans covering firefighters in cities of the first class paid in such 90.17year by these companies upon these insurance premiums.90.18    Sec. 31. Minnesota Statutes 2012, section 69.77, subdivision 1, is amended to read:90.19    Subdivision 1. Conditioned employer support for athe Bloomington Fire 90.20Department Relief Association. (a) Notwithstanding any law to the contrary, only 90.21if the municipalitycity of Bloomington and the Bloomington Fire Department Relief 90.22Association comply with the provisions of this section, a municipalitythe city of 90.23Bloomington may contribute public funds, including any applicable police or fire state 90.24aid, or levy property taxes for the support of a police or firefighters'the Bloomington 90.25Fire Department Relief Association, enumerated in subdivision 1a, however organized, 90.26which provides retirement coverage or pays a service pension to a retired police officer or 90.27firefighter or a retirement benefit to a surviving dependent of either an active or retired 90.28police officer or firefighter,and for the operation and maintenance of the relief association.90.29(b) The commissioner shall not include in the apportionment of police or fire state 90.30aid to the county auditor under section 69.021, subdivision 6, any municipality in which 90.31there exists a local police or salaried firefighters' relief association as enumerated in 90.32subdivision 1a whichthe city of Bloomington if the Bloomington Fire Department Relief 90.33Association does not comply with the provisions of this section or the provisions of any 90.34applicable special law relating to the funding or financing of the association and that 91.1municipalitythe city of Bloomington may not qualify initially to receive, or be entitled 91.2subsequently to retain, fire state aid under sections 
         69.011 to 
         69.051 until the reason 91.3for the disqualification is remedied, whereupon the municipality city of Bloomington, 91.4if otherwise qualified, is entitled to again receive fire state aid for the year occurring 91.5immediately subsequent to the year in which the disqualification is remedied.91.6(c) The state auditor and the commissioner shall determine if a municipality with a 91.7local police or salaried firefighters' relief association failsthe city of Bloomington and the 91.8Bloomington Fire Department Relief Association fail to comply with the provisions of 91.9this section or the funding or financing provisions of any applicable special law.91.10    Sec. 32. Minnesota Statutes 2012, section 69.77, subdivision 2, is amended to read:91.11    Subd. 2. Inapplicable penalty. The penalty provided for in subdivision 1 does not 91.12apply to athe Bloomington Fire Department Relief Association enumerated in subdivision 91.131a if the requirements of subdivisions 3 to 10 are met.91.14    Sec. 33. Minnesota Statutes 2012, section 69.77, subdivision 4, is amended to read:91.15    Subd. 4. Relief association financial requirements; minimum municipal 91.16obligation. (a) The officers of the Bloomington Fire Department Relief Association 91.17shall determine the financial requirements of the relief association and the minimum 91.18obligation of the municipalitycity of Bloomington for the following calendar year in 91.19accordance with the requirements of this subdivision. The financial requirements of the 91.20relief association and the minimum obligation of the municipalitycity of Bloomington 91.21must be determined on or before the submission date established by the municipality91.22city of Bloomington under subdivision 5.91.23(b) The financial requirements of the relief association for the following calendar 91.24year must be based on the most recent actuarial valuation or survey of the special fund of 91.25the association if more than one fund is maintained by the association, or of the association, 91.26if only one fund is maintained, prepared in accordance with sections 
         356.215, subdivisions 91.274 to 15, and 
         356.216, as required under subdivision 10. If an actuarial estimate is prepared 91.28by the actuary of the relief association as part of obtaining a modification of the benefit 91.29plan of the relief association and the modification is implemented, the actuarial estimate 91.30must be used in calculating the subsequent financial requirements of the relief association.91.31(c) If the relief association has an unfunded actuarial accrued liability as reported in 91.32the most recent actuarial valuation or survey, the total of the amounts calculated under 91.33clauses (1), (2), and (3), constitute the financial requirements of the relief association for 91.34the following year. If the relief association does not have an unfunded actuarial accrued 92.1liability as reported in the most recent actuarial valuation or survey, the amount calculated 92.2under clauses (1) and (2) constitute the financial requirements of the relief association for 92.3the following year. The financial requirement elements are:92.4(1) the normal level cost requirement for the following year, expressed as a dollar 92.5amount, which must be determined by applying the normal level cost of the relief 92.6association as reported in the actuarial valuation or survey and expressed as a percentage 92.7of covered payroll to the estimated covered payroll of the active membership of the relief 92.8association, including any projected change in the active membership, for the following 92.9year;92.10(2) for the Bloomington Fire Department Relief Association, to the dollar amount 92.11of normal cost determined under clause (1) must be added an amount equal to the dollar 92.12amount of the administrative expenses of the special fund of the association if more 92.13than one fund is maintained by the association, or of the association if only one fund is 92.14maintained, for the most recent year, multiplied by the factor of 1.035. The administrative 92.15expenses are those authorized under section 
         69.80; and92.16(3) to the dollar amount of normal cost and expenses determined under clauses 92.17(1) and (2) must be added an amount equal to the level annual dollar amount which 92.18is sufficient to amortize the unfunded actuarial accrued liability as determined from 92.19the actuarial valuation or survey of the fund, using an interest assumption set at the 92.20applicable rate specified in section 
         356.215, subdivision 8, by that fund's amortization 92.21date as specified in paragraph (d).92.22(d) The Bloomington Fire Department Relief Association special fund amortization 92.23date is determined under section 
         356.216, clause (2). The amortization date specified in 92.24this paragraph supersedes any amortization date specified in any applicable special law.92.25(d) If the actuarial value of the assets of the special fund of the relief association 92.26exceed the actuarial accrued liability as reported in the most recent actuarial valuation of the 92.27special fund of the relief association, the financial requirements of the relief association are 92.28the amounts calculated under paragraph (c), clauses (1) and (2), reduced by one-tenth of the 92.29amount by which the actuarial value of the assets of the special fund of the relief association 92.30exceeds the actuarial accrued liability of the special fund of the relief association.92.31(e) The minimum obligation of the municipality is an amount equal to the financial 92.32requirements of the relief association reduced by the estimated amount of member 92.33contributions from covered salary anticipated for the following calendar year and the 92.34estimated amountsamount anticipated for the following calendar year from the applicable92.35fire state aid program established under sections 
         69.011 to 
         69.051 receivable by the relief 92.36association after any allocation made under section 
         69.031, subdivision 5, paragraph (b), 93.1clause (2), or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police 93.2and salaried firefighters' relief association amortization aid program established under 93.3section 423A.02, subdivision 1, from the supplementary amortization state-aid program 93.4established under section 423A.02, subdivision 1a, and from the additional amortization 93.5state aid under section 423A.02, subdivision 1b.93.6    Sec. 34. Minnesota Statutes 2012, section 69.77, subdivision 5, is amended to read:93.7    Subd. 5. Determination submission. The officers of the relief association shall 93.8submit the determination of the financial requirements of the relief association and of the 93.9minimum obligation of the municipality to the governing bodyBloomington City Council 93.10on or before the date established by the municipality city of Bloomington, which may 93.11not be earlier than August 1 and may not be later than September 1 of each year. The 93.12governing body of the municipalityBloomington City Council must ascertain whether or 93.13not the determinations were prepared in accordance with law.93.14    Sec. 35. Minnesota Statutes 2012, section 69.77, subdivision 6, is amended to read:93.15    Subd. 6. Municipal payment. (a) The municipalitycity of Bloomington shall 93.16provide for and shall pay, each year, at least the amount of the minimum obligation of the 93.17municipalitycity of Bloomington to the Bloomington Fire Department Relief Association.93.18(b) If there is any deficiency in the municipal payment to meet the minimum 93.19obligation of the municipalitycity of Bloomington as of the end of any calendar year, the 93.20amount of the deficiency must be added to the minimum obligation of the municipalitycity 93.21of Bloomington for the following year calculated under subdivision 4 and must include 93.22interest at the compound rate of six percent per annum from the date that the municipality93.23city of Bloomington was required to make payment under this subdivision until the date 93.24that the municipalitycity of Bloomington actually makes the required payment.93.25    Sec. 36. Minnesota Statutes 2012, section 69.77, subdivision 7, is amended to read:93.26    Subd. 7. Budget inclusion. (a) The municipalitycity of Bloomington shall provide 93.27in the annual municipal budget for at least the minimum obligation of the municipality 93.28calculated under subdivision 4.93.29(b) The municipalitycity of Bloomington may levy taxes for the payment of the 93.30minimum obligation of the municipalitycity of Bloomington without any limitation as to 93.31rate or amount and irrespective of limitations imposed by other provisions of law upon the 93.32rate or amount of taxation when the balance of the special fund or any fund of the relief 93.33association has attained a specified minimum asset level. In addition, any taxes levied 94.1under this section may not cause the amount or rate of other taxes levied in that year or to 94.2be levied in a subsequent year by the municipalitycity of Bloomington which are subject 94.3to a limitation as to rate or amount to be reduced.94.4(c) If the municipalitycity of Bloomington does not include the full amount of 94.5the minimum obligation of the municipalitycity of Bloomington in the levy that the 94.6municipalitycity of Bloomington certified to the Hennepin County auditor in any year, the 94.7officers of the relief association shall certify the amount of any deficiency to the Hennepin 94.8County auditor. Upon verifying the existence of any deficiency in the levy certified by 94.9the municipality city of Bloomington, the Hennepin County auditor shall spread a levy 94.10over the taxable property of the municipalitycity of Bloomington in the amount of the 94.11deficiency certified to by the officers of the relief association.94.12    Sec. 37. Minnesota Statutes 2012, section 69.77, subdivision 8, is amended to read:94.13    Subd. 8. Accelerated amortization. Any sums of money paid by the municipality94.14city of Bloomington to the relief association in excess of the minimum obligation of the 94.15municipalitycity of Bloomington in any year must be used to amortize any unfunded 94.16actuarial accrued liabilities of the Bloomington Fire Department Relief Association.94.17    Sec. 38. Minnesota Statutes 2012, section 69.77, subdivision 9, is amended to read:94.18    Subd. 9. Local paid fire relief association investment authority. (a) The special 94.19fundfunds of the association must be invested in securities that are authorized investments 94.20under section 
         356A.06, subdivision 6 or 7, whichever applies.94.21(b) The governing board of the Bloomington Fire Department Relief Association 94.22may select and appoint a qualified private firm to measure management performance and 94.23return on investment, and the firm must use the formula or formulas developed by the 94.24State Board of Investment under section 
         11A.04, clause (11). The governing board of the 94.25Bloomington Fire Department Relief Association may certify general fund assets of the 94.26relief association for investment by the State Board of Investment in fixed income pools 94.27or in a separately managed account at the discretion of the State Board of Investment 94.28as provided in section 11A.14.94.29(c) The governing board of the association may certify general fund assets of the 94.30relief association for investment by the State Board of Investment in fixed income pools 94.31or in a separately managed account at the discretion of the State Board of Investment 94.32as provided in section 11A.14.94.33    Sec. 39. Minnesota Statutes 2012, section 69.77, subdivision 10, is amended to read:95.1    Subd. 10. Actuarial valuation required. The governing board of the Bloomington 95.2Fire Department Relief Association shall obtain an actuarial valuation showing the 95.3condition of the special fund of the relief association under sections 
         356.215 and 
         356.21695.4and anythe applicable standards for actuarial work established by the Legislative 95.5Commission on Pensions and Retirement. The actuarial valuation must be made as of 95.6December 31 of every year. A copy of the actuarial valuation must be filed with the 95.7Director of the Legislative Reference Library, the governing body of the municipality in 95.8which the association is organized Bloomington City Council, the executive director of 95.9the Legislative Commission on Pensions and Retirement, and the state auditor, not later 95.10than July 1 of the following year.95.11    Sec. 40. Minnesota Statutes 2012, section 69.77, subdivision 11, is amended to read:95.12    Subd. 11. Municipal approval of benefit changes required. Any amendment to 95.13the bylaws or articles of incorporation of athe Bloomington Fire Department Relief 95.14Association which increases or otherwise affects the retirement coverage provided by or 95.15the service pensions or retirement benefits payable from any police or firefighters'the 95.16relief association enumerated in subdivision 1a is not effective until it is ratified by the 95.17municipality in which the relief association is located city of Bloomington. The officers 95.18of the relief association shall not seek municipal ratification before obtaining either an 95.19updated actuarial valuation including the proposed amendment or an estimate of the 95.20expected actuarial impact of the proposed amendment prepared by the actuary of the relief 95.21association and submitting that actuarial valuation or estimate to the Bloomington city 95.22clerk of the municipality.95.23    Sec. 41. Minnesota Statutes 2012, section 69.77, subdivision 12, is amended to read:95.24    Subd. 12. Application of other laws to contribution rate. In the absence of any 95.25specific provision to the contrary, no general or special law previously enacted may be 95.26construed as reducing the levy amount or rate of contribution to a police or firefightersthe 95.27Bloomington Fire Department Relief Association to which subdivision 1a applies, by a 95.28municipality or member of the association the city of Bloomington, which is required as a 95.29condition for the use of public funds or the levy of taxes for the support of the association. 95.30EachThe Bloomington Fire Department Relief Association, the municipality in which 95.31it is organized city of Bloomington, and the officers of each, are authorized to do all 95.32things required by this section as a condition for the use of public funds or the levy of 95.33taxes for the support of the association.96.1    Sec. 42. Minnesota Statutes 2012, section 69.77, subdivision 13, is amended to read:96.2    Subd. 13. Citation. This section may be cited as the "Police and Firefighters'96.3Bloomington Fire Department Relief AssociationsAssociation Guidelines Act of 1969."96.4    Sec. 43. Minnesota Statutes 2012, section 69.771, subdivision 1, is amended to read:96.5    Subdivision 1. Covered relief associations. The applicable provisions of sections 96.669.771
          to 
         69.776 apply to any firefighters' relief association other than athe Bloomington 96.7Fire Department Relief Association enumerated in section 69.77, subdivision 1a, which 96.8is organized under any laws of this state, which is composed of volunteer firefighters or 96.9is composed partially of volunteer firefighters and partially of salaried firefighters with 96.10retirement coverage provided by the public employees police and fire fund and which, in 96.11either case, operates subject to the service pension minimum requirements for entitlement 96.12and maximums contained in section 
         424A.02, or subject to a special law modifying those 96.13requirements or maximums.96.14    Sec. 44. Minnesota Statutes 2012, section 69.80, is amended to read:96.1569.80 AUTHORIZED ADMINISTRATIVE EXPENSES.96.16(a) Notwithstanding any provision of law to the contrary, the payment of the 96.17following necessary, reasonable and direct expenses of maintaining, protecting and 96.18administering the special fund, when provided for in the bylaws of the association and 96.19approved by the board of trustees, constitutes authorized administrative expenses of a 96.20police, salaried firefighters', or volunteer firefighters' relief association organized under 96.21any law of this state or the Bloomington Fire Department Relief Association:96.22(1) office expense, including, but not limited to, rent, utilities, equipment, supplies, 96.23postage, periodical subscriptions, furniture, fixtures, and salaries of administrative 96.24personnel;96.25(2) salaries of the officers of the association, or their designees, and salaries of the 96.26members of the board of trustees of the association if the salary amounts are approved by 96.27the governing body of the entity that is responsible for meeting any minimum obligation 96.28under section 
         69.77,69.772, or 
         69.773, or sections 31 to 42, and the itemized expenses 96.29of relief association officers and board members that are incurred as a result of fulfilling 96.30their responsibilities as administrators of the special fund;96.31(3) tuition, registration fees, organizational dues, and other authorized expenses 96.32of the officers or members of the board of trustees incurred in attending educational 96.33conferences, seminars, or classes relating to the administration of the relief association;97.1(4) audit, actuarial, medical, legal, and investment and performance evaluation 97.2expenses;97.3(5) filing and application fees payable by the relief association to federal or other 97.4governmental entities;97.5(6) reimbursement to the officers and members of the board of trustees, or their 97.6designees, for reasonable and necessary expenses actually paid and incurred in the 97.7performance of their duties as officers or members of the board; and97.8(7) premiums on fiduciary liability insurance and official bonds for the officers, 97.9members of the board of trustees, and employees of the relief association.97.10(b) Any other expenses of the relief association must be paid from the general fund 97.11of the association, if one exists. If a relief association has only one fund, that fund is the 97.12special fund for purposes of this section. If a relief association has a special fund and 97.13a general fund, and any expense of the relief association that is directly related to the 97.14purposes for which both funds were established, the payment of that expense must be 97.15apportioned between the two funds on the basis of the benefits derived by each fund.97.16    Sec. 45. Minnesota Statutes 2012, section 275.70, subdivision 5, is amended to read:97.17    Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes 97.18levied by a local governmental unit for the following purposes or in the following manner:97.19    (1) to pay the costs of the principal and interest on bonded indebtedness or to 97.20reimburse for the amount of liquor store revenues used to pay the principal and interest 97.21due on municipal liquor store bonds in the year preceding the year for which the levy 97.22limit is calculated;97.23    (2) to pay the costs of principal and interest on certificates of indebtedness issued for 97.24any corporate purpose except for the following:97.25    (i) tax anticipation or aid anticipation certificates of indebtedness;97.26    (ii) certificates of indebtedness issued under sections 
         298.28 and 
         298.282;97.27    (iii) certificates of indebtedness used to fund current expenses or to pay the costs of 97.28extraordinary expenditures that result from a public emergency; or97.29    (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an 97.30insufficiency in other revenue sources, provided that nothing in this subdivision limits the 97.31special levy authorized under section 
         475.755;97.32    (3) to provide for the bonded indebtedness portion of payments made to another 97.33political subdivision of the state of Minnesota;98.1    (4) to fund payments made to the Minnesota State Armory Building Commission 98.2under section 
         193.145, subdivision 2, to retire the principal and interest on armory 98.3construction bonds;98.4    (5) property taxes approved by voters which are levied against the referendum 98.5market value as provided under section 
         275.61;98.6    (6) to fund matching requirements needed to qualify for federal or state grants or 98.7programs to the extent that either (i) the matching requirement exceeds the matching 98.8requirement in calendar year 2001, or (ii) it is a new matching requirement that did not 98.9exist prior to 2002;98.10    (7) to pay the expenses reasonably and necessarily incurred in preparing for or 98.11repairing the effects of natural disaster including the occurrence or threat of widespread 98.12or severe damage, injury, or loss of life or property resulting from natural causes, in 98.13accordance with standards formulated by the Emergency Services Division of the state 98.14Department of Public Safety, as allowed by the commissioner of revenue under section 98.15275.74, subdivision 2
         ;98.16    (8) pay amounts required to correct an error in the levy certified to the county 98.17auditor by a city or county in a levy year, but only to the extent that when added to the 98.18preceding year's levy it is not in excess of an applicable statutory, special law or charter 98.19limitation, or the limitation imposed on the governmental subdivision by sections 
         275.70 98.20to 
         275.74 in the preceding levy year;98.21    (9) to pay an abatement under section 
         469.1815;98.22    (10) to pay any costs attributable to increases in the employer contribution rates under 98.23chapter 353, or locally administered pension plans, that are effective after June 30, 2001;98.24    (11) to pay the operating or maintenance costs of a county jail as authorized in section 98.25641.01
          or 
         641.262, or of a correctional facility as defined in section 
         241.021, subdivision 1, 98.26paragraph (f), to the extent that the county can demonstrate to the commissioner of revenue 98.27that the amount has been included in the county budget as a direct result of a rule, minimum 98.28requirement, minimum standard, or directive of the Department of Corrections, or to pay 98.29the operating or maintenance costs of a regional jail as authorized in section 
         641.262. For 98.30purposes of this clause, a district court order is not a rule, minimum requirement, minimum 98.31standard, or directive of the Department of Corrections. If the county utilizes this special 98.32levy, except to pay operating or maintenance costs of a new regional jail facility under 98.33sections 
         641.262 to 
         641.264 which will not replace an existing jail facility, any amount 98.34levied by the county in the previous levy year for the purposes specified under this clause 98.35and included in the county's previous year's levy limitation computed under section 98.36275.71
         , shall be deducted from the levy limit base under section 
         275.71, subdivision 2, 99.1when determining the county's current year levy limitation. The county shall provide the 99.2necessary information to the commissioner of revenue for making this determination;99.3    (12) to pay for operation of a lake improvement district, as authorized under section 99.4103B.555
         . If the county utilizes this special levy, any amount levied by the county in the 99.5previous levy year for the purposes specified under this clause and included in the county's 99.6previous year's levy limitation computed under section 
         275.71 shall be deducted from 99.7the levy limit base under section 
         275.71, subdivision 2, when determining the county's 99.8current year levy limitation. The county shall provide the necessary information to the 99.9commissioner of revenue for making this determination;99.10    (13) to repay a state or federal loan used to fund the direct or indirect required 99.11spending by the local government due to a state or federal transportation project or other 99.12state or federal capital project. This authority may only be used if the project is not a 99.13local government initiative;99.14    (14) to pay for court administration costs as required under section 
         273.1398, 99.15subdivision 4b
         , less the (i) county's share of transferred fines and fees collected by the 99.16district courts in the county for calendar year 2001 and (ii) the aid amount certified to be 99.17paid to the county in 2004 under section 
         273.1398, subdivision 4c; however, for taxes 99.18levied to pay for these costs in the year in which the court financing is transferred to the 99.19state, the amount under this clause is limited to the amount of aid the county is certified to 99.20receive under section 
         273.1398, subdivision 4a;99.21    (15) to fund a police or firefighters relief association as required under section 99.2269.77sections 31 to 42 to the extent that the required amount exceeds the amount levied 99.23for this purpose in 2001;99.24    (16) for purposes of a storm sewer improvement district under section 
         444.20;99.25    (17) to pay for the maintenance and support of a city or county society for the 99.26prevention of cruelty to animals under section 
         343.11, but not to exceed in any year 99.27$4,800 or the sum of $1 per capita based on the county's or city's population as of the most 99.28recent federal census, whichever is greater. If the city or county uses this special levy, any 99.29amount levied by the city or county in the previous levy year for the purposes specified 99.30in this clause and included in the city's or county's previous year's levy limit computed 99.31under section 
         275.71, must be deducted from the levy limit base under section 
         275.71, 99.32subdivision 2
         , in determining the city's or county's current year levy limit;99.33    (18) for counties, to pay for the increase in their share of health and human service 99.34costs caused by reductions in federal health and human services grants effective after 99.35September 30, 2007;100.1    (19) for a city, for the costs reasonably and necessarily incurred for securing, 100.2maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by 100.3the commissioner of revenue under section 
         275.74, subdivision 2. A city must have either 100.4(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in 100.5the city or in a zip code area of the city that is at least 50 percent higher than the average 100.6foreclosure rate in the metropolitan area, as defined in section 
         473.121, subdivision 2, 100.7to use this special levy. For purposes of this paragraph, "foreclosure rate" means the 100.8number of foreclosures, as indicated by sheriff sales records, divided by the number of 100.9households in the city in 2007;100.10    (20) for a city, for the unreimbursed costs of redeployed traffic-control agents and 100.11lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified 100.12to the Federal Highway Administration;100.13    (21) to pay costs attributable to wages and benefits for sheriff, police, and fire 100.14personnel. If a local governmental unit did not use this special levy in the previous year its 100.15levy limit base under section 
         275.71 shall be reduced by the amount equal to the amount it 100.16levied for the purposes specified in this clause in the previous year;100.17    (22) an amount equal to any reductions in the certified aids or credit reimbursements 100.18payable under sections 
         477A.011 to 
         477A.014, and section 
         273.1384, due to unallotment 100.19under section 
         16A.152 or reductions under another provision of law. The amount of the 100.20levy allowed under this clause for each year is limited to the amount unallotted or reduced 100.21from the aids and credit reimbursements certified for payment in the year following the 100.22calendar year in which the tax levy is certified unless the unallotment or reduction amount 100.23is not known by September 1 of the levy certification year, and the local government has 100.24not adjusted its levy under section 
         275.065, subdivision 6, or 
         275.07, subdivision 6, in 100.25which case that unallotment or reduction amount may be levied in the following year;100.26(23) to pay for the difference between one-half of the costs of confining sex offenders 100.27undergoing the civil commitment process and any state payments for this purpose pursuant 100.28to section 
         253B.185, subdivision 5;100.29(24) for a county to pay the costs of the first year of maintaining and operating a new 100.30facility or new expansion, either of which contains courts, corrections, dispatch, criminal 100.31investigation labs, or other public safety facilities and for which all or a portion of the 100.32funding for the site acquisition, building design, site preparation, construction, and related 100.33equipment was issued or authorized prior to the imposition of levy limits in 2008. The 100.34levy limit base shall then be increased by an amount equal to the new facility's first full 100.35year's operating costs as described in this clause; and101.1(25) for the estimated amount of reduction to market value credit reimbursements 101.2under section 
         273.1384 for credits payable in the year in which the levy is payable.101.3    Sec. 46. Minnesota Statutes 2012, section 297I.10, subdivision 1, is amended to read:101.4    Subdivision 1. Cities of the first class. (a) The commissioner shall order and direct 101.5a surcharge to be collected of two percent of the fire, lightning, and sprinkler leakage gross 101.6premiums, less return premiums, on all direct business received by any licensed foreign or 101.7domestic fire insurance company on property in a city of the first class, or by its agents for 101.8it, in cash or otherwise.101.9(b) By July 31 and December 31 of each year, the commissioner of management 101.10and budget shall pay to the relief association in each city of the first class a warrant for 101.11an amount equal to the total amount of the surcharge on the premiums collected within 101.12thethat city since the previous payment.101.13(c) The treasurer of the relief associationcity shall place the money received under 101.14this subdivision in thea special account or fund of the relief association to defray all or a 101.15a portion of the employer contribution requirement of public employees police and fire 101.16plan coverage for city firefighters.101.17    Sec. 47. Minnesota Statutes 2012, section 345.381, is amended to read:101.18345.381 PROPERTY HELD BY MINNESOTA PUBLIC PENSION FUND.101.19No amounts of money held or owing by a public pension fund enumerated in section 101.20356.20, subdivision 2
         , or 
         356.30, subdivision 3, or governed by sections 69.77 or69.771 to 101.2169.776
         shallor sections 31 to 42 may be presumed to have been abandoned for purposes of 101.22sections 
         345.41, 
         345.42, 
         345.43, 
         345.47 and 
         345.48 if the plan governing the public pension 101.23fund includes a provision governing the disposition of unclaimed amounts of money.101.24    Sec. 48. Minnesota Statutes 2012, section 353.01, subdivision 2a, is amended to read:101.25    Subd. 2a. Included employees; mandatory membership. (a) Public employees 101.26whose salary exceeds $425 in any month and who are not specifically excluded under 101.27subdivision 2b or who have not been provided an option to participate under subdivision 101.282d, whether individually or by action of the governmental subdivision, must participate as 101.29members of the association with retirement coverage by the general employees retirement 101.30plan under this chapter, the public employees police and fire retirement plan under this 101.31chapter, or the local government correctional employees retirement plan under chapter 101.32353E, whichever applies. Membership commences as a condition of their employment on 102.1the first day of their employment or on the first day that the eligibility criteria are met, 102.2whichever is later. Public employees include but are not limited to:102.3(1) persons whose salary meets the threshold in this paragraph from employment in 102.4one or more positions within one governmental subdivision;102.5(2) elected county sheriffs;102.6(3) persons who are appointed, employed, or contracted to perform governmental 102.7functions that by law or local ordinance are required of a public officer, including, but 102.8not limited to:102.9(i) town and city clerk or treasurer;102.10(ii) county auditor, treasurer, or recorder;102.11(iii) city manager as defined in section 
         353.028 who does not exercise the option 102.12provided under subdivision 2d; or102.13(iv) emergency management director, as provided under section 
         12.25;102.14(4) physicians under section 
         353D.01, subdivision 2, who do not elect public 102.15employees defined contribution plan coverage under section 
         353D.02, subdivision 2;102.16(5) full-time employees of the Dakota County Agricultural Society;102.17(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis 102.18Police Relief Association who are not excluded employees under subdivision 2b due 102.19to coverage by the relief association pension plan and who elected general employee 102.20retirement plan coverage before August 20, 2009;102.21(7)(6) employees of the Red Wing Port Authority who were first employed by the 102.22Red Wing Port Authority before May 1, 2011, and who are not excluded employees 102.23under subdivision 2b; and102.24(8)(7) employees of the Seaway Port Authority of Duluth who are not excluded 102.25employees under subdivision 2b.102.26    (b) A public employee or elected official who was a member of the association on 102.27June 30, 2002, based on employment that qualified for membership coverage by the public 102.28employees retirement plan or the public employees police and fire plan under this chapter, 102.29or the local government correctional employees retirement plan under chapter 353E as of 102.30June 30, 2002, retains that membership for the duration of the person's employment in that 102.31position or incumbency in elected office. Except as provided in subdivision 28, the person 102.32shall participate as a member until the employee or elected official terminates public 102.33employment under subdivision 11a or terminates membership under subdivision 11b.102.34(c) If the salary of an included public employee is less than $425 in any subsequent 102.35month, the member retains membership eligibility.103.1(d) For the purpose of participation in the MERF division of the general employees 103.2retirement plan, public employees include employees who were members of the former 103.3Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as 103.4members of the MERF division of the association.103.5    Sec. 49. Minnesota Statutes 2012, section 353.01, subdivision 2b, is amended to read:103.6    Subd. 2b. Excluded employees. (a) The following public employees are not eligible 103.7to participate as members of the association with retirement coverage by the general 103.8employees retirement plan, the local government correctional employees retirement plan 103.9under chapter 353E, or the public employees police and fire retirement plan:103.10    (1) persons whose salary from one governmental subdivision never exceeds $425 in 103.11a month;103.12(2) public officers who are elected to a governing body, city mayors, or persons who 103.13are appointed to fill a vacancy in an elective office of a governing body, whose term of office 103.14commences on or after July 1, 2002, for the service to be rendered in that elective position;103.15    (3) election officers or election judges;103.16    (4) patient and inmate personnel who perform services for a governmental 103.17subdivision;103.18    (5) except as otherwise specified in subdivision 12a, employees who are hired for 103.19a temporary position as defined under subdivision 12a, and employees who resign from 103.20a nontemporary position and accept a temporary position within 30 days in the same 103.21governmental subdivision;103.22    (6) employees who are employed by reason of work emergency caused by fire, 103.23flood, storm, or similar disaster;103.24    (7) employees who by virtue of their employment in one governmental subdivision 103.25are required by law to be a member of and to contribute to any of the plans or funds 103.26administered by the Minnesota State Retirement System, the Teachers Retirement 103.27Association, the Duluth Teachers Retirement Fund Association, and the St. Paul Teachers 103.28Retirement Fund Association, or any police or firefighters relief association governed by 103.29section 69.77 that has not consolidated with the Public Employees Retirement Association, 103.30or any local police or firefighters consolidation account who have not elected the type of 103.31benefit coverage provided by the public employees police and fire fund under sections 103.32353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4, 5, or 6, 103.33who have not elected public employees police and fire plan benefit coverage. This clause 103.34must not be construed to prevent a person from being a member of and contributing to 103.35the Public Employees Retirement Association and also belonging to and contributing to 104.1another public pension plan or fund for other service occurring during the same period 104.2of time. A person who meets the definition of "public employee" in subdivision 2 by 104.3virtue of other service occurring during the same period of time becomes a member of the 104.4association unless contributions are made to another public retirement fund on the salary 104.5based on the other service or to the Teachers Retirement Association by a teacher as 104.6defined in section 
         354.05, subdivision 2;104.7    (8) persons who are members of a religious order and are excluded from coverage 104.8under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 104.9performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 104.10as amended through January 1, 1987, if no irrevocable election of coverage has been made 104.11under section 3121(r) of the Internal Revenue Code of 1954, as amended;104.12    (9) employees of a governmental subdivision who have not reached the age of 104.1323 and are enrolled on a full-time basis to attend or are attending classes on a full-time 104.14basis at an accredited school, college, or university in an undergraduate, graduate, or 104.15professional-technical program, or a public or charter high school;104.16    (10) resident physicians, medical interns, and pharmacist residents and pharmacist 104.17interns who are serving in a degree or residency program in public hospitals or clinics;104.18    (11) students who are serving in an internship or residency program sponsored 104.19by an accredited educational institution;104.20    (12) persons who hold a part-time adult supplementary technical college license who 104.21render part-time teaching service in a technical college;104.22    (13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., 104.23foreign citizens who are employed by a governmental subdivision under a work permit, or 104.24an H-1b visa initially issued or extended for a combined period less than three years of 104.25employment. Upon extension of the employment beyond the three-year period, the foreign 104.26citizens must be reported for membership beginning the first of the month thereafter 104.27provided the monthly earnings threshold as provided under subdivision 2a is met;104.28    (14) public hospital employees who elected not to participate as members of the 104.29association before 1972 and who did not elect to participate from July 1, 1988, to October 104.301, 1988;104.31    (15) except as provided in section 
         353.86, volunteer ambulance service personnel, as 104.32defined in subdivision 35, but persons who serve as volunteer ambulance service personnel 104.33may still qualify as public employees under subdivision 2 and may be members of the 104.34Public Employees Retirement Association and participants in the general employees 104.35retirement plan or the public employees police and fire plan, whichever applies, on the 105.1basis of compensation received from public employment service other than service as 105.2volunteer ambulance service personnel;105.3    (16) except as provided in section 
         353.87, volunteer firefighters, as defined in 105.4subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, 105.5but a person who is a volunteer firefighter may still qualify as a public employee under 105.6subdivision 2 and may be a member of the Public Employees Retirement Association and 105.7a participant in the general employees retirement plan or the public employees police 105.8and fire plan, whichever applies, on the basis of compensation received from public 105.9employment activities other than those as a volunteer firefighter;105.10    (17) pipefitters and associated trades personnel employed by Independent School 105.11District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 105.12pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 105.13if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 105.14241, article 2, section 12;105.15    (18) electrical workers, plumbers, carpenters, and associated trades personnel who 105.16are employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 105.17who have retirement coverage under a collective bargaining agreement by the Electrical 105.18Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 105.19or the pension plan applicable to Carpenters Local 87 who were either first employed after 105.20May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under 105.21Laws 2000, chapter 461, article 7, section 5;105.22    (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 105.23painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul 105.24or Independent School District No. 625, St. Paul, with coverage under a collective 105.25bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 105.26the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 105.27pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 105.28Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 105.29first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 105.30Session chapter 10, article 10, section 6;105.31    (20) plumbers who are employed by the Metropolitan Airports Commission, with 105.32coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan, 105.33who either were first employed after May 1, 2001, or if first employed before May 2, 105.342001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 105.3510, section 6;106.1    (21) employees who are hired after June 30, 2002, to fill seasonal positions under 106.2subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 106.3days or less in each year of employment with the governmental subdivision;106.4    (22) persons who are provided supported employment or work-study positions 106.5by a governmental subdivision and who participate in an employment or industries 106.6program maintained for the benefit of these persons where the governmental subdivision 106.7limits the position's duration to three years or less, including persons participating in a 106.8federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 106.9unemployment relief program where the training or work experience is not provided as a 106.10part 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 106.13reemployment; and106.14(25) persons appointed to serve on a board or commission of a governmental 106.15subdivision or an instrumentality thereof.106.16(b) Any person performing the duties of a public officer in a position defined in 106.17subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an 106.18employee 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 106.21county, city, town, school district within this state, or a department, unit or instrumentality 106.22of state or local government, or any public body established under state or local 106.23authority that has a governmental purpose, is under public control, is responsible for the 106.24employment and payment of the salaries of employees of the entity, and receives a major 106.25portion of its revenues from taxation, fees, assessments or from other public sources.106.26    (b) Governmental subdivision also means the Public Employees Retirement 106.27Association, the League of Minnesota Cities, the Association of Metropolitan 106.28Municipalities, charter schools formed under section 
         124D.10, service cooperatives 106.29exercising retirement plan participation under section 
         123A.21, subdivision 5, joint powers 106.30boards organized under section 
         471.59, subdivision 11, paragraph (a), family service 106.31collaboratives and children's mental health collaboratives organized under section 
         471.59, 106.32subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives 106.33are governmental units that otherwise qualify for retirement plan membership, public 106.34hospitals owned or operated by, or an integral part of, a governmental subdivision or 106.35governmental subdivisions, the Association of Minnesota Counties, the Minnesota 107.1Inter-county Association, the Minnesota Municipal Utilities Association, the Metropolitan 107.2Airports Commission, the University of Minnesota with respect to police officers covered 107.3by the public employees police and fire retirement plan, the Minneapolis Employees 107.4Retirement Fund for employment initially commenced after June 30, 1979, the Range 107.5Association of Municipalities and Schools, soil and water conservation districts, economic 107.6development authorities created or operating under sections 
         469.090 to 
         469.108, the Port 107.7Authority of the city of St. Paul, the Seaway Port Authority of Duluth, the Red Wing 107.8Port Authority, the Spring Lake Park Fire Department, incorporated, the Lake Johanna 107.9Volunteer Fire Department, incorporated, the Red Wing Environmental Learning Center, 107.10the Dakota County Agricultural Society, and Hennepin Healthcare System, Inc., and the 107.11Minneapolis Firefighters Relief Association and Minneapolis Police Relief Association 107.12with respect to staff covered by the Public Employees Retirement Association general plan.107.13    (c) Governmental subdivision does not mean any municipal housing and 107.14redevelopment authority organized under the provisions of sections 
         469.001 to 
         469.047; 107.15or any port authority organized under sections 
         469.048 to 
         469.089 other than the Port 107.16Authority of the city of St. Paul or the Seaway Port Authority of Duluth and other than 107.17the Red Wing Port Authority; or any hospital district organized or reorganized prior to 107.18July 1, 1975, under sections 
         447.31 to 
         447.37 or the successor of the district; or the board 107.19of a family service collaborative or children's mental health collaborative organized 107.20under sections 
         124D.23, 
         245.491 to 
         245.495, or 
         471.59, if that board is not controlled 107.21by representatives of governmental units.107.22    (d) A nonprofit corporation governed by chapter 317A or organized under Internal 107.23Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a 107.24governmental subdivision unless the entity has obtained a written advisory opinion from 107.25the United States Department of Labor or a ruling from the Internal Revenue Service 107.26declaring the entity to be an instrumentality of the state so as to provide that any future 107.27contributions by the entity on behalf of its employees are contributions to a governmental 107.28plan 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 107.30behalf of its employees by providing sufficient evidence that it meets the requirements in 107.31paragraph (a).107.32    (f) An entity determined to be a governmental subdivision is subject to the reporting 107.33requirements of this chapter upon receipt of a written notice of eligibility from the 107.34association.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 108.3compensation, supplemental retirement plans, or other voluntary salary reduction 108.4programs, and also means "wages" and includes net income from fees; and108.5    (2) for a public employee who is covered by a supplemental retirement plan under 108.6section 
         356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions 108.7be made by the employer, the contribution to the applicable supplemental retirement plan 108.8when an agreement between the parties establishes that the contribution will either result 108.9in a mandatory reduction of employees' wages through payroll withholdings, or be made 108.10in 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 108.12firefighters relief association that has consolidated with the Public Employees Retirement 108.13Association or to which section 353.665 applies and who has elected coverage either 108.14under the public employees police and fire fund benefit plan under section 353A.08 108.15following the consolidation or under section 353.665, subdivision 4, the rate of salary 108.16upon which member contributions to the special fund of the relief association were made 108.17prior to the effective date of the consolidation as specified by law and by bylaw provisions 108.18governing the relief association on the date of the initiation of the consolidation procedure 108.19and the actual periodic compensation of the public employee after the effective date of 108.20consolidation.108.21    (b) Salary does not mean:108.22    (1) the fees paid to district court reporters, unused annual vacation or sick leave 108.23payments, in lump-sum or periodic payments, severance payments, reimbursement of 108.24expenses, lump-sum settlements not attached to a specific earnings period, or workers' 108.25compensation payments;108.26    (2) employer-paid amounts used by an employee toward the cost of insurance 108.27coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health 108.28care expense accounts, day care expenses, or any payments in lieu of any employer-paid 108.29group insurance coverage, including the difference between single and family rates that 108.30may be paid to a member with single coverage and certain amounts determined by the 108.31executive director to be ineligible;108.32    (3) the amount equal to that which the employing governmental subdivision would 108.33otherwise pay toward single or family insurance coverage for a covered employee when, 108.34through 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 108.36employee'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 109.2the employee's selected insurance coverages under a group plan offered by the employer, 109.3including any amount the employer makes toward other employees' selected insurance 109.4coverages under a group plan offered by the employer; and109.5    (iii) provides increased salary rates for employees who do not have any 109.6employer-paid group insurance coverages;109.7    (4) except as provided in section 
         353.86 or 
         353.87, compensation of any kind paid to 109.8volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision 109.935 or 36;109.10    (5) the amount of compensation that exceeds the limitation provided in section 109.11356.611
         ; and109.12    (6) amounts paid by a federal or state grant for which the grant specifically 109.13prohibits grant proceeds from being used to make pension plan contributions, unless the 109.14contributions 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 109.16proceeding or a legal settlement are salary only if the settlement is reviewed by the 109.17executive director and the amounts are determined by the executive director to be 109.18consistent 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" 109.21means:109.22    (1) service during years of actual membership in the course of which employee 109.23deductions were withheld from salary and contributions were made at the applicable rates 109.24under section 
         353.27, 
         353.65, or 
         353E.03;109.25(2) periods of service covered by payments in lieu of salary deductions under 109.26sections 
         353.27, subdivision 12, and 
         353.35;109.27    (3) service in years during which the public employee was not a member but for 109.28which the member later elected, while a member, to obtain credit by making payments to 109.29the 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 109.31employee contributions are made, deposited, and credited to the fund;109.32    (5) a period of authorized personal, parental, or medical leave of absence without 109.33pay, including a leave of absence covered under the federal Family Medical Leave Act, 109.34that does not exceed one year, and for which a member obtained service credit for each 109.35month in the leave period by payment under section 
         353.0161 to the fund made in place of 110.1salary deductions. An employee must return to public service and render a minimum of 110.2three months of allowable service in order to be eligible to make payment under section 110.3353.0161
          for a subsequent authorized leave of absence without pay. Upon payment, the 110.4employee 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 110.6subdivision. The leave program may not exceed 208 hours per annual normal work cycle 110.7as certified to the association by the employer. A participating member obtains service 110.8credit by making employee contributions in an amount or amounts based on the member's 110.9average salary, excluding overtime pay, that would have been paid if the leave had not been 110.10taken. The employer shall pay the employer and additional employer contributions on 110.11behalf of the participating member. The employee and the employer are responsible to pay 110.12interest on their respective shares at the rate of 8.5 percent a year, compounded annually, 110.13from the end of the normal cycle until full payment is made. An employer shall also make 110.14the employer and additional employer contributions, plus 8.5 percent interest, compounded 110.15annually, on behalf of an employee who makes employee contributions but terminates 110.16public service. The employee contributions must be made within one year after the end of 110.17the annual normal working cycle or within 30 days after termination of public service, 110.18whichever is sooner. The executive director shall prescribe the manner and forms to be 110.19used by a governmental subdivision in administering a periodic, repetitive leave. Upon 110.20payment, 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 110.22months allowable service per authorized temporary or seasonal layoff in one calendar year. 110.23An employee who has received the maximum service credit allowed for an authorized 110.24temporary or seasonal layoff must return to public service and must obtain a minimum of 110.25three months of allowable service subsequent to the layoff in order to receive allowable 110.26service for a subsequent authorized temporary or seasonal layoff;110.27    (8) a period during which a member is absent from employment by a governmental 110.28subdivision by reason of service in the uniformed services, as defined in United States 110.29Code, title 38, section 4303(13), if the member returns to public service with the same 110.30governmental subdivision upon discharge from service in the uniformed service within the 110.31time frames required under United States Code, title 38, section 4312(e), provided that 110.32the member did not separate from uniformed service with a dishonorable or bad conduct 110.33discharge or under other than honorable conditions. The service must be credited if the 110.34member pays into the fund equivalent employee contributions based upon the contribution 110.35rate or rates in effect at the time that the uniformed service was performed multiplied by 110.36the full and fractional years being purchased and applied to the annual salary rate. The 111.1annual salary rate is the average annual salary, excluding overtime pay, during the purchase 111.2period that the member would have received if the member had continued to be employed 111.3in covered employment rather than to provide uniformed service, or, if the determination 111.4of that rate is not reasonably certain, the annual salary rate is the member's average salary 111.5rate, excluding overtime pay, during the 12-month period of covered employment rendered 111.6immediately preceding the period of the uniformed service. Payment of the member 111.7equivalent contributions must be made during a period that begins with the date on which 111.8the individual returns to public employment and that is three times the length of the 111.9military leave period, or within five years of the date of discharge from the military service, 111.10whichever is less. If the determined payment period is less than one year, the contributions 111.11required under this clause to receive service credit may be made within one year of the 111.12discharge date. Payment may not be accepted following 30 days after termination of 111.13public service under subdivision 11a. If the member equivalent contributions provided for 111.14in this clause are not paid in full, the member's allowable service credit must be prorated 111.15by multiplying the full and fractional number of years of uniformed service eligible for 111.16purchase by the ratio obtained by dividing the total member contributions received by the 111.17total member contributions otherwise required under this clause. The equivalent employer 111.18contribution, and, if applicable, the equivalent additional employer contribution must be 111.19paid by the governmental subdivision employing the member if the member makes the 111.20equivalent employee contributions. The employer payments must be made from funds 111.21available to the employing unit, using the employer and additional employer contribution 111.22rate or rates in effect at the time that the uniformed service was performed, applied to the 111.23same annual salary rate or rates used to compute the equivalent member contribution. The 111.24governmental subdivision involved may appropriate money for those payments. The 111.25amount of service credit obtainable under this section may not exceed five years unless a 111.26longer purchase period is required under United States Code, title 38, section 4312. The 111.27employing unit shall pay interest on all equivalent member and employer contribution 111.28amounts payable under this clause. Interest must be computed at a rate of 8.5 percent 111.29compounded annually from the end of each fiscal year of the leave or the break in service 111.30to the end of the month in which the payment is received. Upon payment, the employee 111.31must be granted allowable service credit for the purchased period; or111.32(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 111.34state officers and employees displaced by the Community Corrections Act, chapter 401, 111.35and transferred into county service under section 
         401.04, "allowable service" means the 112.1combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 112.2section 
         352.01, subdivision 11.112.3    (c) For a public employee who has prior service covered by a local police or 112.4firefighters relief association that has consolidated with the Public Employees Retirement 112.5Association under chapter 353A or to which section 353.665 applies, and who has 112.6elected the type of benefit coverage provided by the public employees police and fire 112.7fund either under section 353A.08 following the consolidation or under section 353.665, 112.8subdivision 4, "allowable service" is a period of service credited by the local police or 112.9firefighters relief association as of the effective date of the consolidation based on law 112.10and on bylaw provisions governing the relief association on the date of the initiation 112.11of the consolidation procedure.112.12    (d)(c) No member may receive more than 12 months of allowable service credit in a 112.13year either for vesting purposes or for benefit calculation purposes. For an active member 112.14who was an active member of the former Minneapolis Firefighters Relief Association 112.15on December 29, 2011, "allowable service" is the period of service credited by the 112.16Minneapolis Firefighters Relief Association as reflected in the transferred records of the 112.17association 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 112.19of the former Minneapolis Police Relief Association on December 29, 2011, "allowable 112.20service" is the period of service credited by the Minneapolis Police Relief Association as 112.21reflected in the transferred records of the association up to December 30, 2011, and the 112.22period 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 112.261, 1961, was a member of the police and fire plan, by virtue of being a police officer or 112.27firefighter, shall, as long as the person remains in either position, continue membership in 112.28the plan.112.29(b) A person who was employed by a governmental subdivision as a police officer 112.30and was a member of the police and fire plan on July 1, 1978, by virtue of being a police 112.31officer as defined by this section on that date, and if employed by the same governmental 112.32subdivision in a position in the same department in which the person was employed on 112.33that date, continues to be a member of the plan, whether or not that person has the power 112.34of arrest by warrant and is licensed by the Peace Officers Standards and Training Board 112.35after that date.113.1(c)(b) A person who was employed as a correctional officer by Rice county before 113.2July 1, 1998, for the duration of employment in the correctional position held on July 1, 113.31998, continues to be a member of the public employees police and fire plan, whether or 113.4not the person has the power of arrest by warrant and is licensed by the Peace Officers 113.5Standards and Training Board after that date.113.6(d) A person who was employed by a governmental subdivision as a police officer 113.7or a firefighter, whichever applies, was an active member of the local police or salaried 113.8firefighters relief association located in that governmental subdivision by virtue of that 113.9employment as of the effective date of the consolidation as authorized by sections 113.10353A.01 to 353A.10, and has elected coverage by the public employees police and fire 113.11plan, shall become a member of the police and fire plan after that date if employed by 113.12the same governmental subdivision in a position in the same department in which the 113.13person was employed on that date.113.14(e) Any police officer or firefighter of a relief association that has consolidated 113.15with the association for which the employee has not elected coverage by the public 113.16employees police and fire plan as provided in sections 353A.01 to 353A.10, or any police 113.17officer or firefighter to whom section 353.665 applies who has not elected coverage by 113.18the public employees police and fire plan as provided in section 353.665, subdivision 4, 113.19must become a member of the public employees police and fire plan, but is not subject 113.20to the provisions of sections 353.651 to 353.659 unless an election for such coverage is 113.21made under section 353.665, subdivision 4.113.22    Sec. 54. Minnesota Statutes 2012, section 353.659, is amended to read:113.23353.659 LOCAL RELIEF ASSOCIATION CONSOLIDATION ACCOUNT 113.24BENEFITS.113.25(a) For any person who hashad prior service covered by a local police or firefighters 113.26relief association which has consolidatedmerged with the public employees police and 113.27fire retirement associationplan and who has elected the type of benefit coverage provided 113.28by the public employees police and fire fund benefit plan under section 353A.08 following 113.29the consolidation as permitted by the applicable law, anythe retirement benefits payable 113.30are 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 113.32relief association which has consolidatedmerged with the public employees police and fire 113.33retirement associationplan and who hasdid not electedelect the type of benefit coverage 113.34provided by the public employees police and fire fund benefit plan under section 353A.08113.35 following the consolidation as permitted by the applicable law, anythe retirement benefits 114.1payable are governed by the provisions of Minnesota Statutes 2012, sections 
         353B.01 to 114.2353B.13
          which applyapplied to the applicable former relief association or by section 114.3353.6511 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 114.6provision of law to the contrary, unless the applicable municipality elects otherwise under 114.7paragraph (b), everyThis section applies to the local police and fire relief associations or 114.8consolidation account under chapter 353A in existence on March 1, 1999, becomes a part 114.9ofaccounts that merged with the public employees police and fire plan and fund governed 114.10by 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 114.12police or fire relief associations or consolidation accounts, whichever applies, the 114.13governing body of the municipality must adopt a resolution to that effect and must file a 114.14copy of the resolution with the secretary of state, the state auditor, the legislative auditor, 114.15the management and budget commissioner, the revenue commissioner, the executive 114.16director of the public employees retirement association, and the executive director of 114.17the Legislative Commission on Pensions and Retirement. The retention election must 114.18apply to both consolidation accounts if the municipality is associated with more than 114.19one consolidation account. The retention resolution must be adopted and filed with all 114.20recipients before June 15, 1999. are:114.21(1) the former local police and fire consolidation accounts that merged with the public 114.22employees 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; and114.26(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 114.29relief association or consolidation account members. (a) A person who received a114.30Except as provided in paragraph (b), (e), or (f), the annuity, service pension, a disability 114.31pension or benefit, or a survivor benefit from a mergingattributable to or of a former 114.32member of a former merged local police or fire consolidation account for the month of June 114.331999, and who hasdid not previously elected participation in the Minnesota postretirement 114.34investment fund for any future postretirement adjustments rather than the postretirement 115.1adjustment mechanism or mechanisms of the relief association benefit plan under 115.2section 353A.08, subdivision 1, may elect participation in the Minnesota postretirement 115.3investment fund for any future postretirement adjustments or retention of the 115.4postretirement adjustment mechanism or mechanisms of the relief association benefit plan 115.5as reflected in the applicable provisions of chapter 353B. This election must be in writing 115.6on a form prescribed by the executive director and must be made before September 1, 115.71999. elect coverage by all or a portion of the public employees police and fire retirement 115.8plan as permitted by applicable law must be calculated or computed under the benefit plan 115.9provisions 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 115.11parent or legal guardian. If the eligible person makes no affirmative election under this 115.12subdivision, the person retains the postretirement adjustment mechanism or mechanisms 115.13of the relief association benefit plan as reflected in the applicable provisions of chapter 115.14353B. The annuity, service pension, disability pension or benefit, or survivor benefit 115.15attributable to or of a former member of the former Minneapolis Firefighters Relief 115.16Association or of the former Minneapolis Police Relief Association who had that status as 115.17of December 29, 2011, continue after consolidation in the same amount and under the 115.18same terms as provided in chapter 423B or 423C, respectively, and the bylaws in effect as 115.19of that date, except that the unit value is governed by section 353.01, subdivisions 10a and 115.2010b, respectively, and the postretirement adjustments after December 31, 2015, must be 115.21calculated solely under section 353.6511, subdivision 7.115.22(c) On behalf of former members of the Minneapolis Firefighters Relief Association 115.23or Minneapolis Police Relief Association, the executive director shall withhold any health 115.24insurance or dental insurance premiums designated by the annuitant or benefit recipient 115.25and shall transfer them to the city of Minneapolis. The Public Employees Retirement 115.26Association may charge a necessary and reasonable monthly administrative fee to the city 115.27of Minneapolis for this function and bill it in addition to the employer contribution under 115.28section 353.65, subdivision 3, paragraph (b). Notwithstanding any provision of chapter 115.2913 to the contrary, the executive director shall provide the city of Minneapolis with the 115.30current addresses of former members of the Minneapolis Firefighters Relief Association 115.31and the Minneapolis Police Relief Association. The city of Minneapolis shall continue to 115.32administer the health and dental insurance programs as constituted May 1, 2011, for the 115.33former members of the former Minneapolis relief associations.115.34(d) The executive director shall cooperate with the Minneapolis firefighters 115.35fraternal association and the Minneapolis police fraternal association to ensure adequate 115.36communications with the former members of the former Minneapolis Firefighters 116.1Relief Association or the Minneapolis Police Relief Association consistent with Public 116.2Employees Retirement Association policy.116.3(c) The survivor benefit payable on behalf of any service pension or disability 116.4benefit recipient who elects participation in the Minnesota postretirement investment fund 116.5must be calculated under the relief association benefit plan in effect on the effective date 116.6of consolidation under chapter 353A as reflected in the applicable provisions of chapter 116.7353B. (e) The annuity, service pension, disability pension or benefit, or survivor benefit 116.8attributable to or of a former member of the former Fairmont Police Relief Association 116.9must be calculated or computed under Minnesota Statutes 2000, sections 423.41 to 116.10423.46, 423.48 to 423.59, 423.61, and 423.62; Laws 1963, chapter 423; Laws 1977, 116.11chapter 100; and Laws 1999, chapter 222, article 3, section 4, except that the annual 116.12base salary figure for pension and benefit determinations upon consolidation and for 116.13the balance of calendar year 2012 is $106,666.67 and after December 31, 2012, annual 116.14postretirement adjustments of pensions and benefits in force must be calculated solely 116.15under section 356.415, subdivision 1c.116.16(f) The annuity, service pension, disability pension or benefit, or survivor benefit 116.17attributable to or of a former member of the former Virginia firefighters consolidation 116.18account must be calculated or computed under the election made under Minnesota 116.19Statutes 2012, section 353A.08, unless the person made a subsequent election under 116.20Minnesota Statutes 2012, section 353.6691, subdivision 4, subject to any additional ad hoc 116.21postretirement adjustment under Minnesota Statutes 2012, section 353.6691, subdivision 116.225, paragraph (d).116.23    Sec. 57. Minnesota Statutes 2012, section 353.665, is amended by adding a subdivision 116.24to read:116.25    Subd. 5a.Continuing provisions; prior Minneapolis relief associations.116.26(a) Health insurance account retention. The health insurance account of the former 116.27Minneapolis Firefighters Relief Association and the health insurance account of the 116.28former Minneapolis Police Relief Association shall remain with the financial institution 116.29holding the applicable account on the effective date of this section, if the applicable 116.30financial institution adequately performs all trustee and fiduciary duties with respect to the 116.31applicable account as a condition of the retention of the account.116.32(b) Health insurance account administrative expenses. Under Laws 2011, First 116.33Special Session chapter 8, article 6, section 14, and article 7, section 14, three years of 116.34expected administrative expenses were prepaid from the Minneapolis Firefighters Relief 116.35Association and the Minneapolis Police Relief Association health insurance accounts to 117.1the financial institution holding the applicable account. After the three-year prepayment 117.2period, the beneficiaries of the applicable account are responsible for the payment of 117.3administrative expenses related to the operation of the account.117.4(c) Successor in interest. The public employees police and fire retirement plan 117.5and fund is the successor in interest to all claims for or against the former Minneapolis 117.6Firefighters Relief Association and the former Minneapolis Police Relief Association. The 117.7public employees police and fire retirement plan and fund is not liable for any claim against 117.8a former Minneapolis relief association, its governing board, or its administrative staff 117.9acting in a fiduciary capacity, under chapter 356A or common law, which is founded upon 117.10a claim of a breach of fiduciary duty if the act or acts constituting the claimed breach were 117.11not undertaken in good faith. The public employees police and fire retirement plan may 117.12assert any applicable defense to any claim in any judicial or administrative proceeding that 117.13the applicable Minneapolis relief association, its board, or its administrative staff would 117.14otherwise have been entitled to assert, and the public employees police and fire retirement 117.15plan may assert any applicable defense that it has in its capacity as a statewide agency.117.16(d) Indemnification. The Public Employees Retirement Association shall indemnify 117.17any former fiduciary of the Minneapolis relief associations consistent with the provisions 117.18of section 356A.11. The indemnification may be effected by the purchase by the Public 117.19Employees Retirement Association of reasonable fiduciary liability tail insurance for the 117.20officers and directors of the former Minneapolis relief association.117.21    Sec. 58. Minnesota Statutes 2012, section 353.665, subdivision 8, is amended to read:117.22    Subd. 8. Member and employer contributions. (a) Effective on the first day of the 117.23first full pay period following June 30, 1999,Except as provided in paragraph (b), (c), 117.24or (d), the employee contribution rate for mergingmerged former consolidation account 117.25active members is the rate specified in section 
         353.65, subdivision 2, and the regular 117.26municipal contribution rate on behalf of merged former consolidation account active 117.27members is the rate specified in section 
         353.65, subdivision 3.117.28(b) The municipality associated with a merging former local consolidation account 117.29that had a positive value amortizable base calculation under subdivision 7, paragraph (d), 117.30after the preliminary calculation or the second calculation, whichever applies, must make 117.31an additional municipal contribution to the public employees police and fire plan for 117.32the period from January 1, 2000, to December 31, 2009. The amount of the additional 117.33municipal contribution is the amount calculated by the actuary retained under section 117.34356.214 and certified by the executive director of the Public Employees Retirement 117.35Association by which the amortizable base amount would be amortized on a level dollar 118.1annual end-of-the-year contribution basis, using an 8.5 percent interest rate assumption. 118.2The additional municipal contribution is payable during the month of January, is without 118.3any interest, or if made after January 31, but before the next following December 31, 118.4is payable with interest for the period since January 1 at a rate which is equal to the 118.5preretirement interest rate assumption specified in section 356.215, subdivision 8, 118.6applicable to the public employees police and fire fund expressed as a monthly rate and 118.7compounded on a monthly basis or if made after December 31 of the year in which the 118.8additional municipal contribution is due is payable with interest at a rate which is four 118.9percent greater than the highest interest rate assumption specified in section 356.215, 118.10subdivision 8, expressed as a monthly rate and compounded monthly from January 1 of the 118.11year in which the additional municipal contribution is due until the date on which payment 118.12is made. With respect to active members of the merged former Minneapolis Firefighters 118.13Relief Association and the merged former Minneapolis Police Relief Association, there are 118.14no employee contributions payable and the employer contribution on behalf of those active 118.15members is at the rate specified in section 353.65, subdivision 3, applied to the active 118.16member's salary. In addition, an additional municipal contribution is payable by the city of 118.17Minneapolis annually on July 15, set at the amount calculated as of December 30, 2011, as 118.18sufficient to amortize, on a level annual dollar basis by December 31, 2031, the unfunded 118.19present value figure calculated as required by Minnesota Statutes 2012, section 353.667, 118.20subdivision 6, paragraph (a), and Minnesota Statutes 2012, section 353.668, subdivision 118.216, paragraph (a). If the postretirement or preretirement interest rate actuarial assumption 118.22applicable  to the public employees police and fire retirement plan under section 356.215, 118.23subdivision  8, is modified from the rates specified in Minnesota Statutes 2010, section 118.24356.215, subdivision 8, the remainder present value of future benefits amount calculation 118.25under Minnesota Statutes 2012, section 353.667, subdivision 6, and Minnesota Statutes 118.262012, section 353.668, subdivision 6, paragraph (a), updated for the passage of time, must 118.27be revised and the amortization contribution by the city of Minneapolis for the balance 118.28of the amortization period must be redetermined by the actuary retained under section 118.29356.214 and certified by the executive director to the city of Minneapolis.118.30(c) If there are assets of the former Fairmont Police Relief Association in excess of 118.31the present value of future benefits as of June 29, 2012, these assets must be credited to an 118.32interest-bearing suspense account within the public employees police and fire retirement 118.33fund, must be used to offset any amount payable under paragraph (a) until June 30, 2015, 118.34and, after June 30, 2015, must be paid to the city of Fairmont. The suspense account must 118.35be credited with the same rate of investment return as the public employees police and fire 118.36retirement fund. If, after June 29, 2012, the postretirement or preretirement interest rate 119.1actuarial assumption applicable to the public employees police and fire retirement plan 119.2under section 356.215, subdivision 8, is modified from the rates specified in Minnesota 119.3Statutes 2010, section 356.215, subdivision 8, the remainder present value of future 119.4benefits amount calculation under paragraph (a), updated for the passage of time, must be 119.5revised and the amortization contribution by the city of Fairmont for the balance of the 119.6amortization period must be redetermined by the actuary retained under section 356.214 119.7and certified by the executive director to the city of Fairmont.119.8(d) If there was a remainder present value of future benefits amounts under 119.9Minnesota Statutes 2012, section 353.6691, subdivision 5, paragraph (a), the city of 119.10Virginia shall pay an additional municipal contribution annually on or before December 119.1131 sufficient to amortize on a level annual dollar basis by December 31, 2020, that 119.12remainder present value of future benefits amounts of the former Virginia fire department 119.13consolidation account. If, after June 29, 2012, the postretirement or preretirement interest 119.14rate actuarial assumption applicable to the public employees police and fire retirement plan 119.15under section 356.215, subdivision 8, is modified from the rates specified in Minnesota 119.16Statutes 2010, section 356.215, subdivision 8, the remainder present value of future 119.17benefits amount calculation under paragraph (a), updated for the passage of time, must be 119.18revised and any amortization contribution by the city of Virginia for the balance of the 119.19amortization period must be redetermined by the actuary retained under section 356.214 119.20and certified by the executive director to the city of Virginia.119.21    Sec. 59. Minnesota Statutes 2012, section 353.71, subdivision 1, is amended to read:119.22    Subdivision 1. Eligibility. Any person who has been a member of a defined 119.23benefit retirement plan administered by the Public Employees Retirement Association, 119.24or a retirement plan administered by the Minnesota State Retirement System, or the 119.25Teachers Retirement Association, or any other public retirement system in the state of 119.26Minnesota having a like provision, except a retirement plan providing benefits for police 119.27officers or firefighters governed by sections 
         69.77 or69.771 to 
         69.776, or by sections 31 119.28to 42, is entitled, when qualified, to an annuity from each retirement plan if the total 119.29allowable service in all retirement plans or in any two of these retirement plans totals the 119.30number of years of allowable service required to receive a normal retirement annuity for 119.31that retirement plan, provided that no portion of the allowable service upon which the 119.32retirement annuity from one retirement plan is based is again used in the computation for 119.33benefits from another retirement plan and provided further that the person has not taken a 119.34refund from any one of these retirement plans since the person's membership in that 119.35association or system last terminated. The annuity from each fund must be determined by 120.1the appropriate provisions of the law except that the requirement that a person must have 120.2at least a specific minimum period of allowable service in the respective association or 120.3system does not apply for the purposes of this section if the combined service in two or 120.4more of these retirement plans equals the number of years of allowable service required to 120.5receive a normal retirement annuity for that retirement plan.120.6    Sec. 60. Minnesota Statutes 2012, section 356.20, subdivision 2, is amended to read:120.7    Subd. 2. Covered public pension plans and funds. This section applies to the 120.8following public pension plans:120.9    (1) the general state employees retirement plan of the Minnesota State Retirement 120.10System;120.11    (2) the general employees retirement plan of the Public Employees Retirement 120.12Association;120.13    (3) the Teachers Retirement Association;120.14    (4) the State Patrol retirement plan;120.15    (5) the St. Paul Teachers Retirement Fund Association;120.16    (6) the Duluth Teachers Retirement Fund Association;120.17    (7) the University of Minnesota faculty retirement plan;120.18    (8) the University of Minnesota faculty supplemental retirement plan;120.19    (9) the judges retirement fund;120.20    (10) a police or firefighter's relief association specified or described in section 69.77, 120.21subdivision 1a the Bloomington Fire Department Relief Association;120.22    (11) a volunteer firefighter relief association governed by section 
         69.771, subdivision 120.231
         ;120.24    (12) the public employees police and fire plan of the Public Employees Retirement 120.25Association;120.26    (13) the correctional state employees retirement plan of the Minnesota State 120.27Retirement System;120.28    (14) the local government correctional service retirement plan of the Public 120.29Employees Retirement Association; and120.30(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.120.31    Sec. 61. Minnesota Statutes 2012, section 356.215, subdivision 18, is amended to read:120.32    Subd. 18. Establishment of actuarial assumptions. (a) Before July 2, 2010, the 120.33actuarial assumptions used for the preparation of actuarial valuations under this section 120.34that are other than preretirement interest, postretirement interest, salary increase, and 121.1payroll increase may be changed only with the approval of the Legislative Commission on 121.2Pensions and Retirement or after a period of one year has elapsed since the date on which 121.3the proposed assumption change or changes were received by the Legislative Commission 121.4on Pensions and Retirement without commission action.121.5    (b) After July 1, 2010, the actuarial assumptions used for the preparation of actuarial 121.6valuations under this section that are other than postretirement interest and preretirement 121.7interest may be changed only with the approval of the Legislative Commission on 121.8Pensions and Retirement or after a period of one year has elapsed since the date on which 121.9the proposed assumption change or changes were received by the Legislative Commission 121.10on Pensions and Retirement without commission action.121.11    (c) A change in the applicable actuarial assumptions may be proposed by the 121.12governing board of the applicable pension fund or relief association, by the actuary 121.13retained by the joint retirement systems under section 
         356.214 or by the actuary retained 121.14by a local police or firefighters relief association governed by sections 
         69.77 or69.771 to 121.1569.776
          or by sections 31 to 42, if one is retained.121.16    Sec. 62. Minnesota Statutes 2012, section 356.216, is amended to read:121.17356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL 121.18POLICE AND FIRE FUNDS MONTHLY VOLUNTEER FIREFIGHTER RELIEF 121.19ASSOCIATIONS.121.20The provisions of section 
         356.215 that govern the contents of actuarial valuations 121.21must apply to the Bloomington Fire Department Relief Association and to any local police 121.22or fire pension fund ormonthly volunteer firefighter relief association required to make 121.23an actuarial report under this section, except as follows:121.24(1) in calculating normal cost and other requirements, if required to be expressed as 121.25a level percentage of covered payroll, the salaries used in computing covered payroll must 121.26be the maximum rate of salary on which retirement and survivorship credits and amounts 121.27of benefits are determined and from which any member contributions are calculated and 121.28deducted;121.29(2)(1) in lieu of the amortization date specified in section 
         356.215, subdivision 121.3011
         , the appropriate amortization target date specified in clause (2) or section 
         69.77, 121.31subdivision 4, or69.773, subdivision 4, clause paragraph (c), must be used in calculating 121.32any required amortization contribution, except that if the actuarial report;121.33(2) for the Bloomington Fire Department Relief Association indicates an, any121.34 unfunded actuarial accrued liability, the unfunded obligation is tomust be amortized on 121.35a level dollar basis by December 31 of the year occurring 20 years later after the year 122.1in which the unfunded actuarial accrued liability initially occurred, and, if subsequent 122.2actuarial valuations for the Bloomington Fire Department Relief Association determine122.3indicate a net actuarial experience loss incurred during the year which ended as of the day 122.4before the most recent actuarial valuation date, any unfunded actuarial accrued liability 122.5due to that loss is to be amortized on a level dollar basis by December 31 of the year 122.6occurring 20 years later after the year in which the net actuarial experience loss occurred;122.7(3) in addition to the tabulation of active members and annuitants provided for in 122.8section 
         356.215, subdivision 13, the member contributions for active members for the 122.9calendar year and the prospective annual retirement annuitiesservice pensions under the 122.10benefit plan for active members must be reported;122.11(4) actuarial valuations required under section 39 must be made annually and 122.12actuarial valuations required under section 69.773, subdivision 2, must be made at least122.13 every four years and actuarial valuations required under section 69.77 shall be made 122.14annually or as frequently as required by generally accepted accounting principles in the 122.15government sector, whichever frequency requirement is shorter;122.16(5) the actuarial balance sheet showing accrued assets valued at market value if the 122.17actuarial valuation is required to be prepared at least every four years or valued as current 122.18assets under section 356.215, subdivision 1, paragraph (b) or (f), whichever applies, if the 122.19actuarial valuation is required to be prepared annually, actuarial accrued liabilities, and the 122.20unfunded actuarial accrued liability must include the following required reserves:122.21(i) for active members:122.221. (A) retirement benefits or service pensions;122.232. (B) disability benefits; and122.243. refund liability due to death or withdrawal;122.254.(C) survivors' benefits;122.26(ii) for deferred annuitants' benefits;122.27(iii) for former members without vested rights;122.28(iv) for annuitants;:122.291. (A) retirement annuities or service pensions;122.302. (B) disability annuities; and122.313. surviving spouses' annuities;122.324. surviving children's annuities; (C) survivor benefits.122.33In addition to those required reserves, separate items must be shown for additional 122.34benefits, if any, which may not be appropriately included in the reserves listed above; and122.35(6) actuarial valuations are due to be filed with the state auditor by the first day of 122.36the seventh month after the end of the fiscal year which the actuarial valuation covers.123.1    Sec. 63. Minnesota Statutes 2012, section 356.219, subdivision 1, is amended to read:123.2    Subdivision 1. Report required. (a) The State Board of Investment, on behalf 123.3of the public pension funds and programs for which it is the investment authority, and 123.4any Minnesota public pension plan that is not fully invested through the State Board of 123.5Investment, including the Bloomington Fire Department Relief Association and a local 123.6police orvolunteer firefighters relief association governed by sections 
         69.77 or69.771 to 123.769.775
         , shall report the information specified in subdivision 3 to the state auditor. The 123.8state auditor may prescribe a form or forms for the purposes of the reporting requirements 123.9contained in this section.123.10(b) The Bloomington Fire Department Relief Association and a local police or123.11volunteer firefighters relief association governed by section 69.77 or sections 
         69.771 to 123.1269.775
          is fully invested during a given calendar year for purposes of this section if all 123.13assets of the applicable pension plan beyond sufficient cash equivalent investments to 123.14cover six months expected expenses are invested under section 
         11A.17. The board of any 123.15fully invested public pension plan remains responsible for submitting investment policy 123.16statements and subsequent revisions as required by subdivision 3, paragraph (a).123.17(c) For purposes of this section, the State Board of Investment is considered to be 123.18the investment authority for any Minnesota public pension fund required to be invested by 123.19the State Board of Investment under section 
         11A.23, or for any Minnesota public pension 123.20fund authorized to invest in the supplemental investment fund under section 
         11A.17 and 123.21which is fully invested by the State Board of Investment.123.22(d) This section does not apply to the following plans:123.23(1) the Minnesota unclassified employees retirement program under chapter 352D;123.24(2) the public employees defined contribution plan under chapter 353D;123.25(3) the individual retirement account plans under chapters 354B and 354D;123.26(4) the higher education supplemental retirement plan under chapter 354C;123.27(5) any alternative retirement benefit plan established under section 
         383B.914; and123.28(6) the University of Minnesota faculty retirement plan.123.29    Sec. 64. Minnesota Statutes 2012, section 356.219, subdivision 2, is amended to read:123.30    Subd. 2. Asset class definition. (a) For purposes of this section, "asset class" 123.31means any of the following asset groupings as authorized in applicable law, bylaws, or 123.32articles of incorporation:123.33(1) cash and any cash equivalent investments with maturities of one year or less 123.34when issued;124.1(2) debt securities with maturities greater than one year when issued, including 124.2but not limited to mortgage participation certificates and pools, asset backed securities, 124.3guaranteed investment contracts, and authorized government and corporate obligations of 124.4corporations organized under laws of the United States or any state, or the Dominion of 124.5Canada or its provinces;124.6(3) stocks or convertible issues of any corporation organized under laws of the 124.7United States or any state, or the Dominion of Canada or its provinces, or any corporation 124.8listed on the New York Stock Exchange or the American Stock Exchange;124.9(4) international stocks or convertible issues;124.10(5) international debt securities; and124.11(6) real estate and venture capital.124.12(b) If the pension plan is investing under section 69.77, subdivision 9, section 69.775, 124.13or any other applicable law, in open-end investment companies registered under the 124.14federal Investment Company Act of 1940, or in the Minnesota supplemental investment 124.15fund under section 
         11A.17, this investment must be included under an asset class indicated 124.16in paragraph (a), clauses (1) through (6), as appropriate. If the investment vehicle includes 124.17underlying securities from more than one asset class as indicated by paragraph (a), clauses 124.18(1) through (6), the investment may be treated as a separate asset class.124.19    Sec. 65. Minnesota Statutes 2012, section 356.219, subdivision 8, is amended to read:124.20    Subd. 8. Timing of reports. (a) For salaried firefighter relief associations, police124.21 the Bloomington Fire Department  Relief associations,Association and the volunteer 124.22firefighter relief associations, the information required under this section must be 124.23submitted by the due date for reports required under section 
         69.051, subdivision 1 or 1a, 124.24as applicable. If a relief association satisfies the definition of a fully invested plan under 124.25subdivision 1, paragraph (b), for the calendar year covered by the report required under 124.26section 
         69.051, subdivision 1 or 1a, as applicable, the chief administrative officer of 124.27the covered pension plan shall certify that compliance on a form prescribed by the state 124.28auditor. The state auditor shall transmit annually to the State Board of Investment a list or 124.29lists of covered pension plans which submitted certifications in order to facilitate reporting 124.30by the State Board of Investment under paragraph (c).124.31(b) For the St. Paul Teachers Retirement Fund Association, the Duluth Teachers 124.32Retirement Fund Association, and the University of Minnesota faculty supplemental 124.33retirement plan, the information required under this section must be submitted to the state 124.34auditor by June 1 of each year.125.1(c) The State Board of Investment, on behalf of pension funds specified in 125.2subdivision 1, paragraph (c), must report information required under this section by 125.3September 1 of each year.125.4    Sec. 66. Minnesota Statutes 2012, section 356.406, subdivision 1, is amended to read:125.5    Subdivision 1. Definitions. (a) Each of the words or terms defined in this 125.6subdivision has the meaning indicated.125.7(b) "Public pension plan" means any retirement plan or fund enumerated in section 125.8356.20, subdivision 2
         , or 
         356.30, subdivision 3, the Bloomington Fire Department Relief 125.9Association, any relief association governed by section 69.77 or sections 
         69.771 to 125.1069.775
         , any retirement plan governed by chapter 354B or 354C, the Hennepin County 125.11supplemental retirement plan governed by sections 
         383B.46 to 
         383B.52, or any housing 125.12and redevelopment authority retirement plan.125.13(c) "Public pension plan member" means a person who is a participant covered by 125.14a public pension plan; a former participant of a public pension plan who has sufficient 125.15service to be entitled to receive a future retirement annuity or service pension; a recipient 125.16of a retirement annuity, service pension, or disability benefit from a public pension plan; or 125.17a former participant of a public pension plan who has member or employee contributions 125.18to the person's credit in the public pension plan.125.19(d) "Survivor" means the surviving spouse, a former spouse, a surviving child, a 125.20joint annuitant, a designated recipient of a second or remainder portion of an optional 125.21annuity form, a beneficiary, or the estate of a deceased public pension plan member, as 125.22those terms are commonly understood or defined in the benefit plan document of the 125.23public pension plan.125.24(e) "Survivor benefit" means a surviving spouse benefit, surviving child benefit, 125.25second or remainder portion of an optional annuity form, a death benefit, a funeral benefit, 125.26or a refund of member or employee contributions payable on account of the death of a 125.27public pension plan member as provided for in the benefit plan document of the public 125.28pension plan.125.29    Sec. 67. Minnesota Statutes 2012, section 356A.01, subdivision 19, is amended to read:125.30    Subd. 19. Pension fund. "Pension fund" means the assets amassed and held in a 125.31pension plan, other than the general fund, as reserves for present and future payment 125.32of benefits and administrative expenses. For the Bloomington Fire Department Relief 125.33Association or a retirement plan governed by section 
         69.77 or by chapter 424A, the term 125.34means the relief association special fund.126.1    Sec. 68. Minnesota Statutes 2012, section 356A.06, subdivision 4, is amended to read:126.2    Subd. 4. Economic interest statement. (a) Each member of the governing board 126.3of a covered pension plan and the chief administrative officer of the plan shall file with 126.4the plan a statement of economic interest.126.5(b) For a covered pension plan other than a plan specified in paragraph (c), the 126.6statement must contain the information required by section 
         10A.09, subdivision 5, and 126.7any other information that the fiduciary or the governing board of the plan determines is 126.8necessary to disclose a reasonably foreseeable potential or actual conflict of interest.126.9(c) For a covered pension plan governed by sections 
         69.771 to 
         69.776 or a covered 126.10pension plan governed by section 69.77 withthe Bloomington Fire Department Relief 126.11Association if its special fund assets are under $8,000,000, the statement must contain 126.12the following:126.13(1) the person's principal occupation and principal place of business;126.14(2) whether or not the person has an ownership of or interest of ten percent or greater 126.15in an investment security brokerage business, a real estate sales business, an insurance 126.16agency, a bank, a savings and loan, or another financial institution; and126.17(3) any relationship or financial arrangement that can reasonably be expected to 126.18give rise to a conflict of interest.126.19(d) The statement must be filed annually with the chief administrative officer of 126.20the plan and be available for public inspection during regular office hours at the office 126.21of the pension plan.126.22(e) A disclosure form meeting the requirements of the federal Investment Advisers 126.23Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21 as amended, and 126.24filed with the State Board of Investment or the pension plan meets the requirements of 126.25this subdivision.126.26(f) The chief administrative officer of each covered pension plan, by January 15, 126.27annually, shall transmit a certified listing of all individuals who have filed statements of 126.28economic interest with the plan under this subdivision during the preceding 12 months 126.29and the address of the office referenced in paragraph (d) to the Campaign Finance and 126.30Public Disclosure Board.126.31    Sec. 69. Minnesota Statutes 2012, section 356A.07, subdivision 2, is amended to read:126.32    Subd. 2. Annual financial report. A covered pension plan shall provide each 126.33active plan participant and benefit recipient with a copy of the most recent annual financial 126.34report required by section 
         356.20 and a copy of the most recent actuarial evaluation, 127.1if any, required by section 
         69.77,69.773, 
         356.215, or 
         356.216, or by section 39, or a 127.2summary of those reports.127.3    Sec. 70. Minnesota Statutes 2012, section 423A.02, subdivision 1, is amended to read:127.4    Subdivision 1. Amortization state aid. (a) A municipality in which is located a local 127.5police or salaried firefighters relief association to which the provisions of section 69.77, 127.6apply, that had an unfunded actuarial accrued liability in the most recent relief association 127.7actuarial valuation, is entitled, upon application as required by the commissioner of 127.8revenue, to receive local police and salaried firefighters' relief association amortization 127.9state aid if the municipality and the appropriate relief association both comply with the 127.10applicable provisions of sections 69.031, subdivision 5, 69.051, subdivisions 1 and 3, and 127.1169.77. The cities of Fairmont and Minneapolis are entitled, subject to subdivisions 2, 4, 127.12and 5, to receive amortization state aid under this section.127.13(b) The total amount of amortization state aid to all entitled municipalities must not 127.14exceed $5,055,000 the appropriation under subdivision 3a.127.15(c) Subject to the adjustment for the city of Minneapolis provided in this paragraph, 127.16the amount of amortization state aid to which a municipality is entitled annually is an 127.17amount equal to the level annual dollar amount required to amortize, by December 31, 127.182010, the unfunded actuarial accrued liability of the special fund of the appropriate 127.19relief association as reported in the December 31, 1978, actuarial valuation of the relief 127.20association prepared under sections 356.215 and 356.216, reduced by the dollar amount 127.21required to pay the interest on the unfunded actuarial accrued liability of the special fund of 127.22the relief association for calendar year 1981 set at the rate specified in Minnesota Statutes 127.231978, section 356.215, subdivision 8. For the city of Minneapolis, the amortization state 127.24aid amount thus determined must be reduced by $747,232 on account of the former 127.25Minneapolis Police Relief Association and by $772,768 on account of the former 127.26Minneapolis Fire Department Relief Association.The amortization state aid amounts are:

127.27CityAid Amount127.28Fairmont$24,172127.29Minneapolis$2,728,547

127.30If the amortization state aid amounts determined under this paragraph exceed the 127.31amount appropriated for this purpose under subdivision 3a, the amortization state aid for 127.32actual allocation must be reduced pro rata.127.33(d) Each municipality is eligible for an amortization state aid payment in a fiscal 127.34year if:128.1(1) for Fairmont, the executive director of the Public Employees Retirement 128.2Association certifies on or before June 30 that a municipal contribution with respect to the 128.3former Fairmont Police Relief Association is payable in the upcoming fiscal year under 128.4section 353.665, subdivision 8, paragraph (c); and128.5(2) for Minneapolis, the executive director of the Public Employees Retirement 128.6Association certifies on or before June 30 that an additional employer contribution with 128.7respect to either the former Minneapolis Firefighters Relief Association or the former 128.8Minneapolis Police Relief Association is payable in the upcoming fiscal year under section 128.9353.665, subdivision 8, paragraph (b).128.10Payment of amortization state aid to municipalities must be made directly to 128.11the municipalities involved in three equal installments on July 15, September 15, and 128.12November 15 annually. Upon receipt of amortization state aid, the municipal treasurer 128.13shall transmit the aid amount to the treasurercustodian of the local relief associationtrust 128.14fund or to the executive director of the public employees police and fire retirement fund, 128.15whichever applies, for immediate deposit in the special fund of the relief association.128.16(e) The commissioner of revenue shall administer the amortization state aid program. 128.17The commissioner shall prescribe and periodically revise, as necessary, the form for and128.18required content of the applicationcertifications for the amortization state aid.128.19(f) The amount required under this section, as provided in subdivision 3a, is 128.20appropriated annually from the general fund to the commissioner of revenue.128.21    Sec. 71. Minnesota Statutes 2012, section 423A.02, subdivision 1b, is amended to read:128.22    Subd. 1b. Additional amortization state aid.(a) Annually, on October 1, the 128.23commissioner of revenue shall allocate the additional amortization state aid transferred 128.24under section 69.021, subdivision 11, to:128.25    (1) all police or salaried firefighters relief associations governed by and in full 128.26compliance with the requirements of section 69.77, that had an unfunded actuarial accrued 128.27liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 128.28preceding December 31;128.29    (2) all local police or salaried firefighter consolidation accounts governed by chapter 128.30353A that are certified by the executive director of the public employees retirement 128.31association as having for the current fiscal year an additional municipal contribution 128.32amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented 128.33section 353A.083, subdivision 1, if the effective date of the consolidation preceded May 128.3424, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date 128.35of the consolidation preceded June 1, 1995; and129.1    (3) the municipalities that are required to make an additional municipal contribution 129.2under section 353.665, subdivision 8; 353.667, subdivision 6; or 353.668, subdivision 129.36, for the duration of the required additional contribution.129.4    (b) The commissioner shall allocate the state aid on the basis of the proportional share 129.5of the relief association or consolidation account of the total unfunded actuarial accrued 129.6liability of all recipient relief associations and consolidation accounts as of December 31, 129.71993, for relief associations, and as of June 30, 1994, for consolidation accounts.129.8    (c)(a) Beginning October 1, 2000 2013, and annually thereafter, the commissioner 129.9shall allocate the additional amortization state aid, including any state aid in excess of the 129.10limitation in subdivision 4, on the following basis:129.11    (1) 64.5 percent to the municipalities to which section 353.665, subdivision 129.128, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in 129.13accordance with paragraph (b) and subject to the limitation in subdivision 4;129.14    (2) 34.2(1) 47.1 percent to the city of Minneapolis to fund any unfunded actuarial 129.15accrued liability in the actuarial valuation prepared under sections 356.215 and 356.216129.16 as of the preceding December 31 for the Minneapolis Police Relief Association or the 129.17Minneapolis Fire Department Relief Association; and defray the employer costs associated 129.18with police and firefighter retirement coverage;129.19(2) 25.8 percent as additional funding to support the minimum fire state aid for 129.20volunteer firefighter relief associations under section 69.021, subdivision 7, paragraph (d);129.21(3) 12.9 percent to the city of Duluth to defray employer costs associated with 129.22police and firefighter retirement coverage;129.23(4) 12.9 percent to the St. Paul Teachers Retirement Fund Association if the 129.24investment performance requirement of paragraph (c) is met; and 129.25    (3)(5) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued 129.26liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 129.27preceding December 31 for the Virginia Fire Department Relief Association defray the 129.28employer contribution under section 353.665, subdivision 8, paragraph (d).129.29    If there is no unfunded actuarial accrued liability in bothadditional employer 129.30contribution under section 353.665, subdivision 8, paragraph (b), certified under 129.31subdivision 1, paragraph (d), clause (2), with respect to the former Minneapolis Police 129.32Relief Association and the former Minneapolis Fire Department Relief Association as 129.33disclosed in the most recent actuarial valuations for the relief associations prepared under 129.34sections 356.215 and 356.216, the commissioner shall allocate that 34.247.1 percent 129.35of the aid as follows: 49 percent to the Teachers Retirement Association, 21 percent 129.36to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional 130.1funding to support minimum fire state aid for volunteer firefighters relief associations. If 130.2there is no unfunded actuarial accrued liability inemployer contribution by the city of 130.3Virginia Fire Department Relief Association as disclosed in the most recent actuarial 130.4valuation for the relief association prepared under sections 356.215 and 356.216 under 130.5section 353.665, subdivision 8, paragraph (d), for the former Virginia Fire Department 130.6Relief Association certified on or before June 30 by the executive director of the Public 130.7Employees Retirement Association, the commissioner shall allocate that 1.3 percent 130.8of the aid as follows: 49 percent to the Teachers Retirement Association, 21 percent 130.9to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional 130.10funding to support minimum fire state aid for volunteer firefighters relief associations. 130.11Upon the final payment to municipalities required by section 353.665, subdivision 8, 130.12paragraph (b), or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate 130.13that 64.5 percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement 130.14Fund Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial 130.15accrued liability in the actuarial valuation proposed under sections 356.215 and 356.216130.16 as of the preceding December 31 for the Minneapolis Police Relief Association or the 130.17Minneapolis Firefighters Relief Association, 20 percent for the city of Duluth to pay for 130.18any costs associated with the police and firefighters pensions, and 40 percent as additional 130.19funding to support minimum fire state aid for volunteer firefighters relief associations.130.20    (b) The allocation must be made by the commissioner at the same time and under the 130.21same procedures as specified in subdivision 3 of revenue on October 1 annually.130.22    (c) With respect to the St. Paul Teachers Retirement Fund Association, annually, 130.23beginning on July 1, 2005, if the applicable teacher's association five-year average 130.24time-weighted rate of investment return does not equal or exceed the performance of a 130.25composite portfolio assumed passively managed (indexed) invested ten percent in cash 130.26equivalents, 60 percent in bonds and similar debt securities, and 30 percent in domestic 130.27stock calculated using the formula under section 
         11A.04, clause (11), the aid allocation 130.28to thatthe retirement fund under this section ceases until the five-year annual rate of 130.29investment return equals or exceeds the performance of that composite portfolio.130.30    (d) The amounts required under this subdivision are the amounts annually 130.31appropriated to the commissioner of revenue under section 
         69.021, subdivision 11, 130.32paragraph (e), and the aid amounts in excess of the limitation in subdivision 4.130.33    Sec. 72. Minnesota Statutes 2012, section 423A.02, subdivision 2, is amended to read:130.34    Subd. 2. Continued eligibility. A municipality that has qualified for amortization 130.35state aid under subdivision 1 on December 31, 1984, and has an additional municipal 131.1contribution payable under section 353A.09, subdivision 5, paragraph (b), as of the most 131.2recent December 31, continues upon application to be entitled to receive amortization 131.3state aid under subdivision 1 and supplementary amortization state aid under subdivision 131.41a, after the local police or salaried firefighters' relief association has been consolidated 131.5into the public employees police and fire fund. If a municipality loses entitlement for 131.6amortization state aid and supplementary amortization state aid in any year because of 131.7not having an additional municipal contribution under section 353A.09, subdivision 5, 131.8paragraph (b), the municipality is not entitled to the aid amounts in any subsequent year. A 131.9municipality that received amortization aid in 1999 and is required to make an additional 131.10municipal contribution under section 353.665, subdivision 8, continues to qualify for the 131.11amortization state aid and the supplemental amortization aid until December 31, 2009131.12 received amortization aid in 2011 and is required to make a municipal contribution under 131.13section 353.665, subdivision 8, paragraph (b), (c), or (d), whichever applies, continues to 131.14qualify for amortization state aid for the duration of the applicable municipal contribution.131.15    Sec. 73. Minnesota Statutes 2012, section 423A.02, subdivision 3, is amended to read:131.16    Subd. 3. Reallocation of amortization or supplementary amortization state aid.131.17    (a) Seventy percent of the difference between $5,720,000 and the current year amortization 131.18aid and supplemental amortization aid distributed under subdivisions subdivision 1 and 1a131.19 that is not distributed for any reason to a municipality for use by a local police or salaried 131.20fire relief association must be distributed by the commissioner of revenue according to this 131.21paragraph. The commissioner shall distribute 50 percent of the amounts derived under 131.22this paragraph to the Teachers Retirement Association, ten percent to the Duluth Teachers 131.23Retirement Fund Association, and 40 percent to the St. Paul Teachers Retirement Fund 131.24Association to fund the unfunded actuarial accrued liabilities of the respective funds. 131.25These payments shallmust be made on or before June 30July 15 each fiscal year. If the 131.26St. Paul Teachers Retirement Fund Association or the Duluth Teachers Retirement Fund 131.27Association becomes fully funded, itsthe association's eligibility for its portion of this 131.28aid ceases. Amounts remaining in the undistributed balance account at the end of the 131.29biennium if aid eligibility ceases cancel to the general fund.131.30    (b) In order to receive amortization and supplementary amortization aid under 131.31paragraph (a), prior tobefore June 30 annually Independent School District No. 625, St. 131.32Paul, must make an additional contribution of $800,000 each year to the St. Paul Teachers 131.33Retirement Fund Association.131.34    (c) Thirty percent of the difference between $5,720,000 and the current year 131.35amortization aid and supplemental amortization aid under subdivisions 1 and subdivision132.1 1a that is not distributed for any reason to a municipality for use by a local police or 132.2salaried firefighter relief association must be distributed under section 
         69.021, subdivision 132.37
         , paragraph (d), as additional funding to support a minimum fire state aid amount for 132.4volunteer firefighter relief associations.132.5    Sec. 74. Minnesota Statutes 2012, section 423A.02, subdivision 3a, is amended to read:132.6    Subd. 3a. Appropriations for amortization state aid; supplementary 132.7amortization state aid; and amortization state aid and supplementary state aid132.8 reallocations.$4,720,000$5,720,000 is annually appropriated from the general fund to 132.9the commissioner of revenue for amortization state aid under subdivision 1, and for the 132.10reallocation of amortization aid under subdivision 3. $1,000,000 is annually appropriated 132.11from the general fund to the commissioner of revenue for supplementary amortization 132.12state aid under subdivision 1a, and for the reallocation of supplementary amortization state 132.13aid under subdivision 3.132.14    Sec. 75. Minnesota Statutes 2012, section 423A.02, subdivision 4, is amended to read:132.15    Subd. 4. Limit on certain total aid amounts. (a) The total of amortization aid, 132.16supplemental amortization aid, and additional amortization aid under this section payable 132.17to a municipality to which section 
         353.665, subdivision 8, paragraph (b), (c), or (d), 132.18applies, may not exceed the amount of the additional municipal contribution payable by 132.19an individual municipality under section 
         353.665, subdivision 8, paragraph (b), (c), or (d).132.20(b) Any aid amount in excess of the limit under this subdivision for an individual 132.21municipality must be redistributed to the other municipalities to which section 
         353.665, 132.22subdivision 8
         , paragraph (b), (c), or (d), applies. The excess aid must be distributed in 132.23proportion to each municipality's additional municipal contribution under section 
         353.665, 132.24subdivision 8
         , paragraph (b), (c), or (d).132.25(c) When the total aid for each municipality under this section equals the limit under 132.26paragraph (a), any aid in excess of the limit must be redistributed under subdivision 1b.132.27    Sec. 76. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:132.28    Subd. 5. Termination of state aid programs. The amortization state aid, 132.29supplemental amortization state aid, and additional amortization state aid programs 132.30terminate as of the December 31, next following the date of the actuarial valuation when 132.31the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial 132.32accrued liability of that plan or December 31, 2009 when the assets of the Duluth Teachers 133.1Retirement Fund Association equal the actuarial accrued liability of that plan, whichever 133.2is later.133.3    Sec. 77. Minnesota Statutes 2012, section 424A.001, subdivision 4, is amended to read:133.4    Subd. 4. Relief association. (a) "Relief association" or "volunteer firefighters' relief 133.5association" means a volunteer firefighters' relief association or a volunteer firefighters' 133.6division or account of a partially salaried and partially volunteer firefighters' relief 133.7association that is:133.8(1) organized and incorporated as a nonprofit corporation to provide retirement 133.9benefits to volunteer firefighters under chapter 317A and any laws of the state;133.10(2) governed by this chapter and sections 
         69.771 to 
         69.775; and133.11(3) directly associated with:133.12(i) a fire department established by municipal ordinance;133.13(ii) an independent nonprofit firefighting corporation that is organized under the 133.14provisions of chapter 317A and that operates primarily for firefighting purposes; or133.15(iii) a fire department operated as or by a joint powers entity that operates primarily 133.16for firefighting purposes.133.17(b) "Relief association" or "volunteer firefighters' relief association" does not mean:133.18(1) the Bloomington Fire Department Relief Association governed by section 69.77133.19 sections 31 to 42; Minnesota Statutes 2000, chapter 424; and Laws 1965, chapter 446, 133.20as amended; or133.21(2) the voluntary statewide lump-sum volunteer firefighter retirement plan governed 133.22by chapter 353G.133.23(c) A relief association or volunteer firefighters' relief association is a governmental 133.24entity that receives and manages public money to provide retirement benefits for individuals 133.25providing the governmental services of firefighting and emergency first response.133.26    Sec. 78. Minnesota Statutes 2012, section 424A.02, subdivision 9, is amended to read:133.27    Subd. 9. Limitation on ancillary benefits. A defined benefit relief association, 133.28including any volunteer firefighters relief association governed by section 69.77sections 133.2931 to 42 or any volunteer firefighters division of a relief association governed by chapter 133.30424, may only pay ancillary benefits which would constitute an authorized disbursement 133.31as specified in section 
         424A.05 subject to the following requirements or limitations:133.32    (1) with respect to a defined benefit relief association in which governing bylaws 133.33provide solely for a lump-sum service pension to a retiring member, or provide a retiring 133.34member the choice of either a lump-sum service pension or a monthly service pension 134.1and the lump-sum service pension was chosen, no ancillary benefit may be paid to any 134.2former member or paid to any person on behalf of any former member after the former 134.3member (i) terminates active service with the fire department and active membership 134.4in the relief association; and (ii) commences receipt of a service pension as authorized 134.5under this section; and134.6    (2) with respect to any defined benefit relief association, no ancillary benefit paid or 134.7payable to any member, to any former member, or to any person on behalf of any member 134.8or former member, may exceed in amount the total earned service pension of the member 134.9or former member. The total earned service pension must be calculated by multiplying 134.10the service pension amount specified in the bylaws of the relief association at the time of 134.11death or disability, whichever applies, by the years of service credited to the member or 134.12former member. The years of service must be determined as of (i) the date the member or 134.13former member became entitled to the ancillary benefit; or (ii) the date the member or 134.14former member died entitling a survivor or the estate of the member or former member to 134.15an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 134.16member had attained the minimum amount of service and membership credit specified in 134.17the governing bylaws. For active members, the amount of a permanent disability benefit 134.18or a survivor benefit must be equal to the member's total earned service pension except 134.19that the bylaws of a defined benefit relief association may provide for the payment of a 134.20survivor benefit in an amount not to exceed five times the yearly service pension amount 134.21specified in the bylaws on behalf of any member who dies before having performed five 134.22years of active service in the fire department with which the relief association is affiliated.134.23(3)(i) If a lump sum survivor or death benefit is payable under the articles of 134.24incorporation or bylaws, the benefit must be paid:134.25(A) as a survivor benefit to the surviving spouse of the deceased firefighter;134.26(B) as a survivor benefit to the surviving children of the deceased firefighter if 134.27no surviving spouse;134.28(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 134.29surviving spouse or surviving children; or134.30(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 134.31surviving children and no beneficiary designated.134.32(ii) If there are no surviving children, the surviving spouse may waive, in writing, 134.33wholly or partially, the spouse's entitlement to a survivor benefit.134.34(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of 134.35incorporation or bylaws, the benefit must be paid:134.36(A) as a survivor benefit to the surviving spouse of the deceased firefighter;135.1(B) as a survivor benefit to the surviving children of the deceased firefighter if 135.2no surviving spouse;135.3(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 135.4surviving spouse or surviving children; or135.5(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 135.6surviving spouse, no surviving children, and no beneficiary designated.135.7(ii) If there are no surviving children, the surviving spouse may waive, in writing, 135.8wholly or partially, the spouse's entitlement to a survivor benefit.135.9(iii) For purposes of this clause, if the relief association bylaws authorize a monthly 135.10survivor benefit payable to a designated beneficiary, the relief association bylaws may 135.11limit the total survivor benefit amount payable.135.12(5) For purposes of this section, for a monthly benefit volunteer fire relief association 135.13or for a combination lump-sum and monthly benefit volunteer fire relief association where 135.14a monthly benefit service pension has been elected by or a monthly benefit is payable with 135.15respect to a firefighter, a designated beneficiary must be a natural person. For purposes 135.16of this section, for a lump-sum volunteer fire relief association or for a combination 135.17lump-sum and monthly benefit volunteer fire relief association where a lump-sum service 135.18pension has been elected by or a lump-sum benefit is payable with respect to a firefighter, 135.19a trust created under chapter 501B may be a designated beneficiary. If a trust is payable to 135.20the surviving children organized under chapter 501B as authorized by this section and 135.21there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding 135.22a requirement of this section to the contrary.135.23    Sec. 79. Minnesota Statutes 2012, section 475.52, subdivision 6, is amended to read:135.24    Subd. 6. Certain purposes. Any municipality may issue bonds for paying 135.25judgments against it; for refunding outstanding bonds; for funding floating indebtedness; 135.26for funding actuarial liabilities to pay postemployment benefits to employees or officers 135.27after their termination of service; or for funding all or part of the municipality's current 135.28and future unfunded liability for a pension or retirement fund or plan referred to in 135.29section 
         356.20, subdivision 2, as those liabilities are most recently computed under 135.30sections 
         356.215 and 
         356.216. The board of trustees or directors of athe Bloomington 135.31Fire Department Relief Association referred to in section 69.77 must consent and must 135.32be a party to any contract made under this section with respect to the fund held by it 135.33for the benefit of and in trust for its members. For purposes of this section, the term 135.34"postemployment benefits" means benefits giving rise to a liability under Statement No. 135.3545 of the Governmental Accounting Standards Board.136.1    Sec. 80. REVISOR'S INSTRUCTION.136.2(a) The revisor of statutes shall not show the text of Minnesota Statutes, section 136.369.77, and shall add the note in Minnesota Statutes, section 69.77, "CITY OF 136.4BLOOMINGTON; LOCAL."136.5(b) In Minnesota Statutes 2014 and subsequent editions, Minnesota Statutes, 136.6sections 69.771 to 69.776 must be recodified as Minnesota Statutes, sections 424A.091 136.7to 424A.096, and all statutory cross-references revised.136.8    Sec. 81.  REPEALER.136.9(a) Minnesota Statutes 2012, section 353.665, subdivisions 2, 3, 4, 6, 7, 9, and 136.1010, are repealed.136.11(b) Minnesota Statutes 2012, sections 353.667; 353.668; 353.669; and 353.6691, are 136.12repealed.136.13(c) Minnesota Statutes 2012, sections 353A.01; 353A.02; 353A.03; 353A.04; 136.14353A.05; 353A.06; 353A.07; 353A.08; 353A.081; 353A.083; 353A.09; 353A.10; 136.15353B.01; 353B.02; 353B.03; 353B.04; 353B.05; 353B.06; 353B.07; 353B.08; 353B.09; 136.16353B.10; 353B.11; 353B.12; 353B.13; and 353B.14, are repealed.136.17(d) Minnesota Statutes 2012, sections 423A.01; 423A.04; 423A.05; 423A.07; 136.18423A.10; 423A.11; 423A.12; 423A.13; 423A.14; 423A.15; 423A.16; 423A.17; 423A.171; 136.19423A.18; 423A.19; 423A.20; 423A.21; and 423A.22, are repealed.136.20(e) Minnesota Statutes 2012, sections 69.021, subdivision 6; 353.64, subdivision 3; 136.21and 423A.02, subdivision 1a, are repealed.136.22(f) Minnesota Statutes 2012, section 69.77, subdivision 3, is repealed.136.23    Sec. 82. EFFECTIVE DATE; PRIOR AID ALLOCATIONS VALIDATED.136.24(a) Sections 70 to 76 are effective June 1, 2013.136.25(b) Except as provided in paragraph (c), sections 1 to 69 and 77 to 81 are effective 136.26July 1, 2013.136.27(c) With respect to the city of Minneapolis, section 18 is effective retroactively from 136.28July 20, 2011, and with respect to the city of Fairmont, section 18 is effective retroactively 136.29from May 10, 2012.136.30(d) Allocations of amortization state aid, supplementary amortization state aid, or 136.31additional amortization state aid made by the commissioner of revenue before January 1, 136.322013, are hereby validated.137.1ARTICLE 6137.2VOLUNTEER FIREFIGHTER RETIREMENT CHANGES137.3    Section 1. Minnesota Statutes 2012, section 69.771, subdivision 1, is amended to read:137.4    Subdivision 1. Covered relief associations. The applicable provisions of sections 137.569.771
          to 
         69.776apply togovern any firefighters' relief association other thandefined in 137.6section 424A.001, subdivision 4, and do not apply to a relief association enumerated in 137.7section 
         69.77, subdivision 1a, which is organized under any laws of this state, which is 137.8composed of volunteer firefighters or is composed partially of volunteer firefighters and 137.9partially of salaried firefighters with retirement coverage provided by the public employees 137.10police and fire fund and which, in either case, operates subject to the service pension 137.11minimum requirements for entitlement and maximums contained in section 424A.02, or 137.12subject to a special law modifying those requirements or maximums.137.13EFFECTIVE DATE.This section is effective the day following final enactment.137.14    Sec. 2. Minnesota Statutes 2012, section 69.774, subdivision 1, is amended to read:137.15    Subdivision 1. Authorized inclusion in fire state aid program; covered nonprofit 137.16corporations.(a) This section shall applyapplies to any independent nonprofit firefighting 137.17corporation incorporated or organized pursuant tounder chapter 317A which: (1) operates 137.18exclusively for firefighting purposes,; (2) which is composed of volunteer firefighters,; 137.19and (3) which has a duly established separate subsidiary incorporated firefighters' relief 137.20association which provides retirement coverage for or pays a service pension to a retired 137.21firefighter or a retirement benefit to a surviving dependent of either an active or a retired 137.22firefighter, and which operatesis subject to the service pension minimum requirements 137.23for entitlement to and maximums for a service pension contained in section 424A.02, 137.24or a special law modifying those requirements or maximums applicable provisions of 137.25chapter 424A.137.26(b) Notwithstanding any law to the contrary, a municipality contracting with an 137.27independent nonprofit firefighting corporation shallmust be included in the distribution of 137.28fire state aid to the appropriate county auditor by the state auditor only if the independent 137.29nonprofit firefighting corporation complies with the provisions of this section.137.30EFFECTIVE DATE.This section is effective the day following final enactment.137.31    Sec. 3. Minnesota Statutes 2012, section 353G.05, subdivision 2, is amended to read:138.1    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer 138.2firefighters by the retirement plan is initiated by a request to the executive director for a 138.3cost analysis of the prospective retirement coverage.138.4(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 138.5association governed by chapter 424A, the cost analysis of the prospective retirement 138.6coverage must be requested jointly by the secretary of the volunteer firefighters' relief 138.7association, following approval of the request by the board of the volunteer firefighters' 138.8relief association, and the chief administrative officer of the entity associated with the relief 138.9association, following approval of the request by the governing body of the entity associated 138.10with the relief association. If the relief association is associated with more than one entity, 138.11the chief administrative officer of each associated entity must execute the request. If 138.12the volunteer firefighters are not currently covered by a volunteer firefighters' relief 138.13association, the cost analysis of the prospective retirement coverage must be requested by 138.14the chief administrative officer of the entity operating the fire department. The request 138.15must be made in writing and must be made on a form prescribed by the executive director.138.16(c) The cost analysis of the prospective retirement coverage by the statewide 138.17retirement plan must be based on the service pension amount under section 
         353G.11138.18closest to the service pension amount provided by the volunteer firefighters' relief 138.19association if the relief association is a lump-sum defined benefit plan, or the amount equal 138.20to 95 percent of the most current average account balance per relief association member if 138.21the relief association is a defined contribution plan, or to the lowest service pension amount 138.22under section 
         353G.11 if there is no volunteer firefighters' relief association, rounded up, 138.23and any other service pension amount designated by the requester or requesters. The cost 138.24analysis must be prepared using a mathematical procedure certified as accurate by an 138.25approved actuary retained by the Public Employees Retirement Association.138.26(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 138.27that has filed the information required under section 
         69.051 in a timely fashion, upon 138.28request by the executive director, the state auditor shall provide the most recent data 138.29available on the financial condition of the volunteer firefighters' relief association, the most 138.30recent firefighter demographic data available, and a copy of the current relief association 138.31bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 138.32exists, the chief administrative officer of the entity operating the fire department shall 138.33provide the demographic information on the volunteer firefighters serving as members 138.34of the fire department requested by the executive director.138.35(e) If a cost analysis is requested, the executive director of the State Board of 138.36Investment shall review the investment portfolio of the relief association, if applicable, 139.1for compliance with the applicable provisions of chapter 11A and for appropriateness 139.2for retention under the established investment objectives and investment policies of the 139.3State Board of Investment. If the prospective retirement coverage change is approved 139.4under paragraph (f), the State Board of Investment may require that the relief association 139.5liquidate any investment security or other asset which the executive director of the State 139.6Board of Investment has determined to be an ineligible or inappropriate investment for 139.7retention by the State Board of Investment. The security or asset liquidation must occur 139.8before the effective date of the transfer of retirement plan coverage. If requested to do so by 139.9the chief administrative officer of the relief association, the executive director of the State 139.10Board of Investment shall provide advice about the best means to conduct the liquidation.139.11(f) Upon receipt of the cost analysis, the governing body of the municipality or 139.12independent nonprofit firefighting corporation associated with the fire department shall 139.13either approve or disapprove the retirement coverage change within 90120 days. If the 139.14retirement coverage change is not acted upon within 90120 days, it is deemed to be 139.15disapproved. If the retirement coverage change is approved by the applicable governing 139.16body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan 139.17is effective on the next following January 1.139.18EFFECTIVE DATE.This section is effective July 1, 2013.139.19    Sec. 4. Minnesota Statutes 2012, section 424A.001, is amended by adding a 139.20subdivision to read:139.21    Subd. 11.Fiscal year.The fiscal year for a volunteer firefighter relief association 139.22begins on January 1 of each calendar year and ends on December 31 of the same calendar 139.23year.139.24EFFECTIVE DATE.This section is effective the day following final enactment.139.25    Sec. 5. Minnesota Statutes 2012, section 424A.01, subdivision 6, is amended to read:139.26    Subd. 6. Return to active firefighting after break in service. (a) The requirements 139.27of This section applysubdivision applies to all breaks in service, except breaks inthat the 139.28resumption service mandated byrequirements of this subdivision do not apply to leaves 139.29of absence made available by federal orstatute, such as the Family Medical Leave Act, 139.30United States Code, title 29, section 2691, and the Uniformed Services Employment and 139.31Reemployment Rights Act, United States Code, title 38, section 4301, and do not apply 139.32to leaves of absence made available by state law statute, such as the Parental Leave Act, 139.33section 181.941; the Leave for Organ Donations Act, section 181.9456; the Leave for 140.1Civil Air Patrol Service Act, section 181.946; the Leave for Immediate Family Members 140.2of Military Personnel Injured or Killed in Active Service Act, section 181.947; or the 140.3Protection of Jurors' Employment Act, section 593.50.140.4(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and 140.5fire prevention duties for at least 60 days resumes performing active firefighting with the 140.6fire department associated with the relief association, if the bylaws of the relief association 140.7so permit, the firefighter may again become an active member of the relief association. A 140.8firefighter who returns to active service and membership is subject to the service pension 140.9calculation requirements under this section.140.10(2) A firefighter who has been granted an approved leave of absence not exceeding 140.11one year by the fire department or by the relief association is exempt from the minimum 140.12period of resumption service requirement of this section.140.13(3) A person who has a break in service not exceeding one year but has not been 140.14granted an approved leave of absence and who has not received a service pension or 140.15disability benefit may be made exempt from the minimum period of resumption service 140.16requirement of this section by the relief association bylaws.140.17(4) If the bylaws so provide, a firefighter who returns to active relief association 140.18membership under this paragraph may continue to collect a monthly service pension, 140.19notwithstanding the service pension eligibility requirements under chapter 424A.140.20(c) If a former firefighter who has received a service pension or disability benefit 140.21returns to active relief association membership under paragraph (b), the firefighter may 140.22qualify for the receipt of a service pension from the relief association for the resumption 140.23service period if the firefighter meets the service requirements of section 
         424A.016, 140.24subdivision 3
         , or 
         424A.02, subdivision 2. No firefighter may be paid a service pension 140.25more than once for the same period of service.140.26(d) If a former firefighter who has not received a service pension or disability benefit 140.27returns to active relief association membership under paragraph (b), the firefighter may 140.28qualify for the receipt of a service pension from the relief association for the original and 140.29resumption service periods if the firefighter meets the service requirements of section 140.30424A.016
         , subdivision 3, or 
         424A.02, subdivision 2, based on the original and resumption 140.31years of service credit.140.32(e) A firefighter who returns to active lump-sum relief association membership under 140.33paragraph (b) and who qualifies for a service pension under paragraph (c) must have, 140.34upon a subsequent cessation of duties, any service pension for the resumption service 140.35period calculated as a separate benefit. If a lump-sum service pension had been paid to the 140.36firefighter upon the firefighter's previous cessation of duties, a second lump-sum service 141.1pension for the resumption service period must be calculated by applying the service 141.2pension amount in effect on the date of the firefighter's termination of the resumption 141.3service for all years of the resumption service.141.4(f) A firefighter who had not been paid a lump-sum service pension returns to active 141.5relief association membership under paragraph (b), who did not meet the minimum period 141.6of resumption service requirement specified in the relief association's bylaws, but who 141.7does meet the minimum service requirement of section 
         424A.02, subdivision 2, based 141.8on the firefighter's original and resumption years of active service, must have, upon a 141.9subsequent cessation of duties, a service pension for the original and resumption service 141.10periods calculated by applying the service pension amount in effect on the date of the 141.11firefighter's termination of the resumption service, or, if the bylaws so provide, based on 141.12the service pension amount in effect on the date of the firefighter's previous cessation 141.13of duties. The service pension for a firefighter who returns to active lump-sum relief 141.14association membership under this paragraph, but who had met the minimum period 141.15of resumption service requirement specified in the relief association's bylaws, must be 141.16calculated by applying the service pension amount in effect on the date of the firefighter's 141.17termination of the resumption service.141.18(g) If a firefighter receiving a monthly benefit service pension returns to active 141.19monthly benefit relief association membership under paragraph (b), and if the relief 141.20association bylaws do not allow for the firefighter to continue collecting a monthly service 141.21pension, any monthly benefit service pension payable to the firefighter is suspended as 141.22of the first day of the month next following the date on which the firefighter returns to 141.23active membership. If the firefighter was receiving a monthly benefit service pension, 141.24and qualifies for a service pension under paragraph (c), the firefighter is entitled to 141.25an additional monthly benefit service pension upon a subsequent cessation of duties 141.26calculated based on the resumption service credit and the service pension accrual amount 141.27in effect on the date of the termination of the resumption service. A suspended initial 141.28service pension resumes as of the first of the month next following the termination of the 141.29resumption service. If the firefighter was not receiving a monthly benefit service pension 141.30and meets the minimum service requirement of section 
         424A.02, subdivision 2, a service 141.31pension must be calculated by applying the service pension amount in effect on the date of 141.32the firefighter's termination of the resumption service for all years of service credit.141.33(h) A firefighter who was not receiving a monthly benefit service pension returns to 141.34active relief association membership under paragraph (b), who did not meet the minimum 141.35period of resumption service requirement specified in the relief association's bylaws, but 141.36who does meet the minimum service requirement of section 
         424A.02, subdivision 2, 142.1based on the firefighter's original and resumption years of active service, must have, 142.2upon a subsequent cessation of duties, a service pension for the original and resumption 142.3service periods calculated by applying the service pension amount in effect on the date of 142.4the firefighter's termination of the resumption service, or, if the bylaws so provide, based 142.5on the service pension amount in effect on the date of the firefighter's previous cessation 142.6of duties. The service pension for a firefighter who returns to active relief association 142.7membership under this paragraph, but who had met the minimum period of resumption 142.8service requirement specified in the relief association's bylaws, must be calculated by 142.9applying the service pension amount in effect on the date of the firefighter's termination of 142.10the resumption service.142.11(i) For defined contribution plans, a firefighter who returns to active relief 142.12association membership under paragraph (b) and who qualifies for a service pension 142.13under paragraph (c) or (d) must have, upon a subsequent cessation of duties, any service 142.14pension for the resumption service period calculated as a separate benefit. If a service 142.15pension had been paid to the firefighter upon the firefighter's previous cessation of duties, 142.16and if the firefighter meets the minimum service requirement of section 
         424A.016, 142.17subdivision 3, based on the resumption years of service, a second service pension for 142.18the resumption service period must be calculated to include allocations credited to the 142.19firefighter's individual account during the resumption period of service and deductions 142.20for administrative expenses, if applicable.142.21(j) For defined contribution plans, if a firefighter who had not been paid a service 142.22pension returns to active relief association membership under paragraph (b), and who 142.23meets the minimum service requirement of section 
         424A.016, subdivision 3, based on 142.24the firefighter's original and resumption years of service, must have, upon a subsequent 142.25cessation of duties, a service pension for the original and resumption service periods 142.26calculated to include allocations credited to the firefighter's individual account during 142.27the original and resumption periodperiods of service and deductions for administrative 142.28expenses, if applicable, less any amounts previously forfeited under section 
         424A.016, 142.29subdivision 4
         .142.30EFFECTIVE DATE.This section is effective the day following final enactment.142.31    Sec. 6. Minnesota Statutes 2012, section 424A.015, subdivision 1, is amended to read:142.32    Subdivision 1. Separation from active service; exception. (a) No service pension 142.33is payable to a person while the person remains an active member of the respective fire 142.34department, and a person who is receiving a service pension is not entitled to receive any 142.35other benefits from the special fund of the relief association.143.1(b) No relief association as defined in section 
         424A.001, subdivision 4, may pay a 143.2service pension or disability benefit to a former member of the relief association if that 143.3person has not separated from active service with the fire department to which the relief 143.4association is directly associated, unless:143.5(1) the person is employed subsequent to retirement bydiscontinues volunteer 143.6firefighter duties with the municipality or the independent nonprofit firefighting 143.7corporation, whichever applies, to performand performs duties within the municipal fire 143.8department or corporation on a full-time basis;143.9(2) the governing body of the municipality or of the corporation has filed its 143.10determination with the board of trustees of the relief association that the person's 143.11experience with and service to the fire department in that person's full-time capacity 143.12would be difficult to replace; and143.13(3) the bylaws of the relief association were amended to provide for the payment of 143.14a service pension or disability benefit for such full-time employees.143.15EFFECTIVE DATE.This section is effective the day following final enactment.143.16    Sec. 7. Minnesota Statutes 2012, section 424A.015, subdivision 4, is amended to read:143.17    Subd. 4. Transfer to individual retirement account. A relief association that is a 143.18qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, 143.19and that provides a single payment service pension, at the written request of the applicable 143.20retiring member or, following the death of the active member, at the written request of the 143.21deceased member's surviving spouse, may directly transfer on an institution-to-institution 143.22basis the eligible member's lump-sum pension or the death or survivor benefit attributable 143.23to the member, whichever applies, to the requesting person's individual retirement account 143.24under section 408(a) of the Internal Revenue Code, as amended.143.25EFFECTIVE DATE.This section is effective the day following final enactment.143.26    Sec. 8. Minnesota Statutes 2012, section 424A.016, subdivision 6, is amended to read:143.27    Subd. 6. Deferred service pensions. (a) A member of a relief association is entitled 143.28to a deferred service pension if the member:143.29    (1) has completed the lesser of the minimum period of active service with the fire 143.30department specified in the bylaws or 20 years of active service with the fire department;143.31    (2) has completed at least five years of active membership in the relief association; and143.32    (3) separates from active service and membership and has completed the minimum 143.33service and membership requirements in subdivision 2. The requirement that a member 144.1separate from active service and membership is waived for persons who have discontinued 144.2their volunteer firefighter duties and who are employed on a full-time basis under section 144.3424A.015, subdivision 1
         .144.4    (b) The deferred service pension is payable when the former member reaches at 144.5least age 50, or at least the minimum age specified in the bylaws governing the relief 144.6association if that age is greater than age 50, and when the former member makes a valid 144.7written application.144.8    (c) A defined contribution relief association may, if its governing bylaws so provide, 144.9credit interest or additional investment performance on the deferred lump-sum service 144.10pension during the period of deferral. If provided for in the bylaws, the interest must be 144.11paid:144.12(1) at the investment performance rate actually earned on that portion of the assets 144.13if the deferred benefit amount is invested by the relief association in a separate account 144.14established and maintained by the relief association;144.15(2) at the investment performance rate actually earned on that portion of the assets 144.16if the deferred benefit amount is invested in a separate investment vehicle held by the 144.17relief association; or144.18(3) at the investment return on the assets of the special fund of the defined contribution 144.19volunteer firefighter relief association in proportion to the share of the assets of the special 144.20fund to the credit of each individual deferred member account through the accounting date 144.21on which the investment return is recognized by and credited to the special fund.144.22    (d) Unless the bylaws of a relief association that has elected to pay interest or 144.23additional investment performance on deferred lump-sum service pensions under 144.24paragraph (c) specifies a different interest or additional investment performance method, 144.25including the interest or additional investment performance period starting date and ending 144.26date, the interest or additional investment performance on a deferred service pension 144.27is creditable as follows:144.28(1) for a relief association that has elected to pay interest or additional investment 144.29performance under paragraph (c), clause (1) or (3), beginning on the date that the 144.30member separates from active service and membership and ending on the accounting 144.31date immediately before the deferred member commences receipt of the deferred service 144.32pension; or144.33(2) for a relief association that has elected to pay interest or additional investment 144.34performance under paragraph (c), clause (2), beginning on the date that the member 144.35separates from active service and membership and ending on the date that the separate 145.1investment vehicle is valued immediately before the date on which the deferred member 145.2commences receipt of the deferred service pension.145.3(e) The deferred service pension is governed by and must be calculated under 145.4the general statute, special law, relief association articles of incorporation, and relief 145.5association bylaw provisions applicable on the date on which the member separated from 145.6active service with the fire department and active membership in the relief association.145.7EFFECTIVE DATE.This section is effective the day following final enactment.145.8    Sec. 9. Minnesota Statutes 2012, section 424A.02, subdivision 7, is amended to read:145.9    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief 145.10association is entitled to a deferred service pension if the member:145.11    (1) has completed the lesser of either the minimum period of active service with the 145.12fire department specified in the bylaws or 20 years of active service with the fire department;145.13    (2) has completed at least five years of active membership in the relief association; and145.14    (3) separates from active service and membership and has completed the minimum 145.15service and membership requirements in subdivision 1. The requirement that a member 145.16separate from active service and membership is waived for persons who have discontinued 145.17their volunteer firefighter duties and who are employed on a full-time basis under section 145.18424A.015, subdivision 1
         .145.19    (b) The deferred service pension is payable when the former member reaches at 145.20least age 50, or at least the minimum age specified in the bylaws governing the relief 145.21association if that age is greater than age 50, and when the former member makes a valid 145.22written application.145.23    (c) A defined benefit relief association that provides a lump-sum service pension 145.24governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the 145.25deferred lump-sum service pension during the period of deferral. If provided for in the 145.26bylaws, interest must be paid in one of the following manners:145.27    (1) at the investment performance rate actually earned on that portion of the assets 145.28if the deferred benefit amount is invested by the relief association in a separate account 145.29established and maintained by the relief association;145.30(2) at the investment performance rate actually earned on that portion of the assets 145.31if the deferred benefit amount is invested in a separate investment vehicle held by the 145.32relief association; or145.33    (3) at an interest rate of up to five percent, compounded annually, as set by the board 145.34of directors and approved as provided in subdivision 10 trustees.146.1(d) Any change in the interest rate set by the board of directors under paragraph (c), 146.2clause (3), must be ratified by the governing body of the municipality served by the fire 146.3department to which the relief association is directly associated, or by the independent 146.4nonprofit firefighting corporation, as applicable.146.5    (d)(e) Interest under paragraph (c), clause (3), is payable beginning on the January 146.61 next following the date on which the municipality has approved the deferred service 146.7pension interest rate establishedas set by the board of trustees was ratified by the governing 146.8body of the municipality served by the fire department to which the relief association is 146.9directly associated, or by the independent nonprofit firefighting corporation, as applicable.146.10    (e)(f) Unless the bylaws of a relief association that has elected to pay interest 146.11or additional investment performance on deferred lump-sum service pensions under 146.12paragraph (c) specifies a different interest or additional investment performance method, 146.13including the interest or additional investment performance period starting date and ending 146.14date, the interest or additional investment performance on a deferred service pension 146.15is creditable as follows:146.16(1) for a relief association that has elected to pay interest or additional investment 146.17performance under paragraph (c), clause (1) or (3), beginning on the first day of the 146.18month next following the date thaton which the member separates from active service 146.19and membership and ending on the accounting datelast day of the month immediately 146.20before the month in which the deferred member commences receipt of the deferred 146.21service pension; or146.22(2) for a relief association that has elected to pay interest or additional investment 146.23performance under paragraph (c), clause (2), beginning on the date that the member 146.24separates from active service and membership and ending on the date that the separate 146.25investment vehicle is valued immediately before the date on which the deferred member 146.26commences receipt of the deferred service pension.146.27(f)(g) For a deferred service pension that is transferred to a separate account 146.28established and maintained by the relief association or separate investment vehicle held 146.29by the relief association, the deferred member bears the full investment risk subsequent 146.30to transfer and in calculating the accrued liability of the volunteer firefighters relief 146.31association that pays a lump-sum service pension, the accrued liability for deferred service 146.32pensions is equal to the separate relief association account balance or the fair market value 146.33of the separate investment vehicle held by the relief association.146.34    (g)(h) The deferred service pension is governed by and must be calculated under 146.35the general statute, special law, relief association articles of incorporation, and relief 147.1association bylaw provisions applicable on the date on which the member separated from 147.2active service with the fire department and active membership in the relief association.147.3EFFECTIVE DATE.This section is effective January 1, 2014, with respect to the 147.4amendments to paragraphs (c), (d), and (e), and is effective retroactively from January 147.51, 2013, with respect to the amendments to paragraph (f).147.6    Sec. 10. Minnesota Statutes 2012, section 424A.10, subdivision 1, is amended to read:147.7    Subdivision 1.  Definitions. For purposes of this section:147.8    (1) "qualified recipient" means an individual who receives a lump-sum distribution 147.9of pension or retirement benefits from a volunteer firefighters' relief association or from 147.10the voluntary statewide lump-sum volunteer firefighter retirement plan for service that the 147.11individual has performed as a volunteer firefighter;147.12    (2) "survivor of a deceased active or deferred volunteer firefighter" means the 147.13surviving spouse of a deceased active or deferred volunteer firefighter under section 147.14424A.001, subdivision 6, or, if none, the surviving child or children of a deceased active 147.15or deferred volunteer firefighter;147.16    (3) "active volunteer firefighter" means a person who regularly renders fire 147.17suppression service for a municipal fire department or an independent nonprofit firefighting 147.18corporation, who has met the statutory and other requirements for relief association 147.19membership, and who is deemed by the relief association under law and its bylaws to be a 147.20fully qualified member of the relief association or from the voluntary statewide lump-sum 147.21volunteer firefighter retirement plan for at least one month; and147.22    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who 147.23terminated active firefighting service, has sufficient service credit from the applicable relief 147.24association or from the voluntary statewide lump-sum volunteer firefighter retirement plan 147.25to be entitled to a service pension under the bylaws of the relief association, but has not 147.26applied for or has not received the service pension.147.27EFFECTIVE DATE.This section is effective the day following final enactment.147.28    Sec. 11. Minnesota Statutes 2012, section 424A.10, subdivision 2, is amended to read:147.29    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a volunteer 147.30firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter 147.31retirement plan of a lump-sum distribution to a qualified recipient, the association must 147.32pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the 147.33contrary, the relief association must pay the supplemental benefit out of its special fund 148.1and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay 148.2the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter 148.3retirement plan. This benefit is an amount equal to ten percent of the regular lump-sum 148.4distribution that is paid on the basis of the recipient's service as a volunteer firefighter. 148.5In no case may the amount of the supplemental benefit exceed $1,000. A supplemental 148.6benefit under this paragraph may not be paid to a survivor of a deceased active or deferred 148.7volunteer firefighter in that capacity.148.8    (b) Upon the payment by a relief association or the retirement plan of a lump-sum 148.9survivor benefit to a survivor of a deceased active volunteer firefighter or of a deceased 148.10deferred volunteer firefighter, the association maymust pay a supplemental survivor 148.11benefit to the survivor of the deceased active or deferred volunteer firefighter from the 148.12special fund of the relief association if its articles of incorporation or bylaws so provide148.13 and the retirement plan maymust pay a supplemental survivor benefit to the survivor of 148.14the deceased active or deferred volunteer firefighter from the retirement fund if chapter 148.15353G so provides. The amount of the supplemental survivor benefit is 20 percent of the 148.16survivor benefit, but not to exceed $2,000.148.17    (c) An individual may receive a supplemental benefit under paragraph (a) or under 148.18paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 148.19firefighter benefit.148.20EFFECTIVE DATE.This section is effective the day following final enactment.148.21    Sec. 12. WHITE BEAR LAKE VOLUNTEER FIRE DEPARTMENT RELIEF 148.22ASSOCIATION; RETIREE DEATH BENEFIT.148.23Notwithstanding any provision of Minnesota Statutes, section 424A.05, subdivision 148.243, clause (4), to the contrary, the White Bear Lake Volunteer Fire Department Relief 148.25Association may provide, if its bylaws so provide, for the payment of a $2,000 lump sum 148.26death benefit from the special fund of the relief association to the estate of a person who 148.27was a member of the relief association, who rendered at least 20 years of firefighting 148.28service in the fire department and membership in the relief association, who retired 148.29before January 1, 2009, who received a monthly benefit service pension from the relief 148.30association for the month in which this section became effective, and who died after the 148.31effective date of the bylaw amendment that implements the authority under this section.148.32EFFECTIVE DATE.This section is effective the day after the governing body of 148.33the city of White Bear Lake and its chief clerical officer timely complete their compliance 148.34with Minnesota Statutes, section 645.021, subdivisions 2 and 3.149.1    Sec. 13.  REPEALER.149.2Minnesota Statutes 2012, section 424A.10, subdivision 5, is repealed.149.3EFFECTIVE DATE.This section is effective the day following final enactment.149.4ARTICLE 7149.5ONE PERSON AND SMALL GROUP RETIREMENT CHANGES149.6    Section 1. Minnesota Statutes 2012, section 352.01, subdivision 2a, is amended to read:149.7    Subd. 2a. Included employees. (a) "State employee" includes:149.8    (1) employees of the Minnesota Historical Society;149.9    (2) employees of the State Horticultural Society;149.10    (3) employees of the Minnesota Crop Improvement Association;149.11    (4) employees of the adjutant general whose salaries are paid from federal funds and 149.12who are not covered by any federal civilian employees retirement system;149.13    (5) employees of the Minnesota State Colleges and Universities who are employed 149.14under the university or college activities program;149.15    (6) currently contributing employees covered by the system who are temporarily 149.16employed by the legislature during a legislative session or any currently contributing 149.17employee employed for any special service as defined in subdivision 2b, clause (8);149.18    (7) employees of the legislature who are appointed without a limit on the duration 149.19of their employment and persons employed or designated by the legislature or by a 149.20legislative committee or commission or other competent authority to conduct a special 149.21inquiry, investigation, examination, or installation;149.22    (8) trainees who are employed on a full-time established training program 149.23performing the duties of the classified position for which they will be eligible to receive 149.24immediate appointment at the completion of the training period;149.25    (9) employees of the Minnesota Safety Council;149.26    (10) any employees who are on authorized leave of absence from the Transit 149.27Operating Division of the former Metropolitan Transit Commission and who are employed 149.28by the labor organization which is the exclusive bargaining agent representing employees 149.29of the Transit Operating Division;149.30    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space 149.31Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito 149.32Control Commission unless excluded under subdivision 2b or are covered by another 149.33public pension fund or plan under section 
         473.415, subdivision 3;149.34    (12) judges of the Tax Court;150.1    (13) personnel who were employed on June 30, 1992, by the University of 150.2Minnesota in the management, operation, or maintenance of its heating plant facilities, 150.3whose employment transfers to an employer assuming operation of the heating plant 150.4facilities, so long as the person is employed at the University of Minnesota heating plant 150.5by that employer or by its successor organization;150.6    (14) personnel who are employed as seasonal employees in the classified or 150.7unclassified service;150.8    (15) persons who are employed by the Department of Commerce as a peace officer 150.9in the Insurance Fraud Prevention Division under section 
         45.0135 who have attained the 150.10mandatory retirement age specified in section 
         43A.34, subdivision 4;150.11    (16) employees of the University of Minnesota unless excluded under subdivision 150.122b, clause (3);150.13    (17) employees of the Middle Management Association whose employment began 150.14after July 1, 2007, and to whom section 
         352.029 does not apply;150.15    (18) employees of the Minnesota Government Engineers Council to whom section 150.16352.029
          does not apply; and150.17(19) employees of the Minnesota Sports Facilities Authority.; and150.18(20) employees of the Minnesota Association of Professional Employees.150.19    (b) Employees specified in paragraph (a), clause (13), are included employees under 150.20paragraph (a) if employer and employee contributions are made in a timely manner in the 150.21amounts required by section 
         352.04. Employee contributions must be deducted from 150.22salary. Employer contributions are the sole obligation of the employer assuming operation 150.23of the University of Minnesota heating plant facilities or any successor organizations to 150.24that employer.150.25EFFECTIVE DATE.(a) This section is effective July 1, 2013.150.26(b) The membership inclusion under paragraph (a), clause (20), does not apply to 150.27a person who is receiving an age and service retirement annuity from the general state 150.28employees retirement plan of the Minnesota State Retirement System on June 30, 2013.150.29    Sec. 2. Minnesota Statutes 2012, section 352.029, subdivision 1, is amended to read:150.30    Subdivision 1. Qualifications. Unless already specifically included under section 150.31352.01, subdivision 2a, or unless specifically excluded under section 
         352.01, subdivision 150.322b
         , a state employee on leave of absence without pay to provide service as an employee 150.33or officer of a labor organization that is an exclusive bargaining agent representing state 150.34employees may elect under subdivision 2 to be covered by the general state employees 151.1retirement plan of the Minnesota State Retirement System for service with the labor 151.2organization, subject to the limitations set forth in subdivisions 2a and 2b.151.3EFFECTIVE DATE.This section is effective July 1, 2013.151.4    Sec. 3. Minnesota Statutes 2012, section 352.029, subdivision 2a, is amended to read:151.5    Subd. 2a. Limitations on salary for benefits and contributions. (a) The covered 151.6salary for a labor organization employee who is a member under section 352.01, 151.7subdivision 2a, paragraph (a), or who qualifies for membership under this section or 151.8section 
         352.75 is limited to the lesser of:151.9(1) the employee's actual salary as defined under section 
         352.01, subdivision 13; or151.10(2) 75 percent of the salary of the governor as set under section 
         15A.082.151.11(b) The limited covered salary determined under this subdivision must be used in 151.12determining employee, employer, and employer additional contributions under section 151.13352.04
         , subdivisions 2 and 3, and in determining retirement annuities and other benefits 151.14under this chapter and chapter 356.151.15EFFECTIVE DATE.This section is effective July 1, 2013.151.16    Sec. 4. Minnesota Statutes 2012, section 352.029, subdivision 2b, is amended to read:151.17    Subd. 2b. Earning restrictions apply. A retirement annuity is only payable, if the 151.18person has met any other applicable requirements, upon the termination of employment by 151.19the labor organization by the person who is a member under section 352.01, subdivision 151.202a, paragraph (a), or who elected coverage under subdivision 1 of employment by the 151.21labor organization. The reemployed annuitant earnings limitation set forth in section 151.22352.115, subdivision 10
         , applies in the event that the person who is a member under 151.23section 352.01, subdivision 2a, paragraph (a), or who elected coverage under subdivision 151.241 retires and is subsequently reemployed while an annuitant by the labor organization or 151.25by any other entity employing persons who are covered by the Minnesota State Retirement 151.26System by virtue of that employment.151.27EFFECTIVE DATE.This section is effective July 1, 2013.151.28    Sec. 5. Minnesota Statutes 2012, section 352.029, subdivision 3, is amended to read:151.29    Subd. 3. Contributions. The employee and employer contributions required 151.30by section 
         352.04, or by section 
         352.92 for employees covered by section 
         352.91, are 151.31the obligation of the employee who is a member under section 352.01, subdivision 2a, 151.32paragraph (a), or who chooses coverage under this section. However, the employing 152.1labor organization may pay the employer contributions. Contributions made by the 152.2employee must be made by salary deduction. The employing labor organization shall 152.3pay all contributions to the system as required by section 
         352.04, or by section 
         352.92152.4for employees covered by section 
         352.91.152.5EFFECTIVE DATE.This section is effective July 1, 2013.152.6    Sec. 6. Minnesota Statutes 2012, section 352.029, subdivision 5, is amended to read:152.7    Subd. 5. Board membership excluded. Employees of a labor organization who 152.8become members of the system under section 352.01, subdivision 2a, paragraph (a), or 152.9under this section are not eligible for election to the board of directors.152.10EFFECTIVE DATE.This section is effective July 1, 2013.152.11    Sec. 7. [356.408] TERMINATION OF SURVIVOR DESIGNATION.152.12    Subdivision 1.Authorization to terminate optional annuity form.A public 152.13pension plan retired member receiving a joint and survivor retirement annuity or a person 152.14receiving a joint and survivor disability benefit from a plan listed in section 356.30, 152.15subdivision 3, and the designated survivor of that person may mutually agree to terminate 152.16the survivor designation by filing a termination statement on a form and in the manner 152.17specified by the chief administrative officer of the applicable public pension plan. Upon 152.18filing a valid termination statement accepted by the chief administrative officer, the rights 152.19of the designated survivor to receive a benefit upon death of the plan retired or disabled 152.20annuitant are terminated, and the retired or disabled annuitant must receive a normal 152.21single-life annuity. 152.22    Subd. 2.Revised annuity form.The replacement single life annuity must be 152.23actuarially equivalent to the joint and survivor annuity as of the first day of the month 152.24following acceptance of the valid termination statement by the chief administrative officer 152.25and payment of this revised prospective annuity begins on that same date.152.26    Subd. 3.Application.This section does not apply if the designated survivor is the 152.27spouse or former spouse of the plan member.152.28    Subd. 4.Termination statement form requirements.The annuity form 152.29termination statements must be in written form and must be notarized. Before accepting 152.30any signed form or forms, the chief administrative officer of the applicable pension plan 152.31must offer counseling to the retired or disabled annuitant and the designated survivor 152.32regarding the implications of the annuity form waiver. The forms must indicate that this 153.1counseling has been offered and either has been completed or has been waived by the 153.2retired or disabled annuitant and the designated survivor.153.3    Subd. 5.Prohibition against further annuity form revisions.No retired or 153.4disabled annuitant who waives the annuity form under this section may further revise 153.5the annuity form at any later date.153.6EFFECTIVE DATE.This section is effective the day following final enactment.153.7    Sec. 8. Minnesota Statutes 2012, section 356.48, subdivision 1, is amended to read:153.8    Subdivision 1. Covered plans. This section applies to the following retirement plans:153.9(1) the general state employees retirement plan of the Minnesota State Retirement 153.10System established under chapter 352;153.11(2) the correctional state employees retirement plan of the Minnesota State 153.12Retirement System established under chapter 352;153.13(3) the State Patrol retirement plan established under chapter 352B;153.14(4) the unclassified state employees retirement program of the Minnesota State 153.15Retirement System established under chapter 352D;153.16(5) the general employee retirement plan of the Public Employees Retirement 153.17Association established under chapter 353;153.18(6) the public employees police and fire retirement plan established under chapter 353;153.19(7) the local government correctional employees retirement plan of the Public 153.20Employees Retirement Association established under chapter 353E;153.21(8) the Teachers Retirement Association established under chapter 354; and153.22(9) the St. Paul Teachers Retirement Fund Association established under chapter 153.23354A; and153.24(9)(10) the uniform judicial retirement plan established under chapter 490.153.25EFFECTIVE DATE.This section is effective the day following final enactment.153.26    Sec. 9. MSRS-GENERAL RETIREMENT ELIGIBILITY CLARIFICATION; 153.27SERVICE CREDIT PURCHASE IN CERTAIN INSTANCES.153.28(a) An eligible person described in paragraph (b) is entitled to purchase prior 153.29uncredited service credit under paragraph (c) and, if the service credit purchase is made, to 153.30have the effective start date for active retirement plan membership of June 30, 1989, and 153.31to retire under Minnesota Statutes, section 352.116, subdivision 1.153.32(b) An eligible person is a person who:153.33(1) was born on July 17, 1964;154.1(2) was initially employed by the state of Minnesota as a temporary status laborer 154.2general on June 19, 1989;154.3(3) became a seasonal status laborer general on August 30, 1989;154.4(4) became an unlimited status laborer general on December 12, 1990;154.5(5) has received annual statements from the Minnesota State Retirement System 154.6indicating eligibility for a retirement benefit under Minnesota Statutes, section 352.116, 154.7subdivision 1, paragraph (b), as of September 1, 2012, including the June 30, 2012, annual 154.8statement;154.9(6) attended a Minnesota State Retirement System preretirement class in March 154.102012 and was individually informed by a Minnesota State Retirement System employee of 154.11the person's retirement eligibility under Minnesota Statutes, section 352.116, subdivision 154.121, paragraph (b); and154.13(7) received a letter from the Minnesota State Retirement System on August 16, 154.142012, revising the start date for general state employees retirement plan allowable 154.15service credit from June 19, 1989, to September 27, 1989, and indicating consequent 154.16inapplicability of Minnesota Statutes, section 352.116, subdivision 1.154.17(c) An eligible person may purchase allowable service credit in the general state 154.18employees retirement plan of the Minnesota State Retirement System for the period June 154.1930, 1989, by paying an amount equal to 7.63 percent of salary earned after June 18, 1989, 154.20to June 30, 1989, and to 8.85 percent of salary earned after June 30, 1989, to September 27, 154.211989, plus 8.5 percent compound interest on the total equivalent employee and employer 154.22contribution amounts from the date on which the contribution would have been deducted 154.23or paid if the person had been a member of the general state employees retirement plan of 154.24the Minnesota State Retirement System at the time to the date that this portion of the prior 154.25service credit purchase payment is made. The payment must be made in a lump sum.154.26(d) An eligible person who purchased allowable service credit under paragraph 154.27(c) has a June 30, 1989, start date for allowable service credited by the general state 154.28employees retirement plan of the Minnesota State Retirement System and is eligible for a 154.29retirement annuity under Minnesota Statutes, section 352.116, subdivision 1.154.30(e) Authority to purchase prior uncredited allowable service credit under this section 154.31expires on August 1, 2013.154.32EFFECTIVE DATE.This section is effective July 1, 2013.154.33    Sec. 10. PERA-GENERAL; PURCHASE OF CERTAIN PRIOR NORTHFIELD 154.34SERVICE CREDIT.155.1(a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the 155.2contrary, an eligible person described in paragraph (b) is entitled to repay any prior refund 155.3as provided in paragraph (c) and is entitled to purchase service credit as provided in 155.4paragraph (d).155.5(b) An eligible person is a person who:155.6(1) was born on July 10, 1942;155.7(2) was employed by the city of Northfield on October 5, 2005;155.8(3) became a member of the general employees retirement plan of the Public 155.9Employees Retirement Association on April 5, 2009;155.10(4) was employed by the transit division of the city of Northfield until June 29, 155.112012; and155.12(5) was eligible for PERA general employees retirement plan membership on 155.13October 5, 2005, but was not reported to PERA for membership in a timely fashion.155.14(c) The eligible person may repay to the general employees retirement fund of 155.15the Public Employees Retirement Association any refund of accumulated member 155.16contributions and interest previously received, plus interest at an annual rate of 8.5 percent 155.17compounded annually from the date on which the refund was paid until the date on which 155.18the refund is repaid.155.19(d) If the eligible person repays all prior refunds under paragraph (c), the eligible 155.20person may purchase 43 months of allowable service credit and salary credit from the 155.21general employees retirement plan of the Public Employees Retirement Association by 155.22making a payment equal to the unpaid member contributions during the period October 5, 155.232005, until April 5, 2009, plus 8.5 percent interest from the date that each contribution 155.24would have been transmitted to the Public Employees Retirement Association until the 155.25date that the payment under this paragraph is made.155.26(e) If the eligible person makes the payment required under paragraph (c) in a timely 155.27fashion, within 30 days following notification of that fact by the executive director of the 155.28Public Employees Retirement Association, the city of Northfield shall pay the balance 155.29of the prior service credit purchase payment amount required under Minnesota Statutes, 155.30section 356.551. If the payment by the city of Northfield is not paid in a timely fashion, 155.31the executive director shall collect the unpaid amount as provided under Minnesota 155.32Statutes, section 353.28, subdivision 6.155.33(f) Authority to repay a refund and to make a prior service credit purchase payment 155.34under this section expires on December 31, 2014.155.35EFFECTIVE DATE.This section is effective the day following final enactment.156.1    Sec. 11. PERA-GENERAL; SERVICE CREDIT PURCHASE FOR OMITTED 156.2CONTRIBUTION PERIOD; WRIGHT COUNTY HIGHWAY DEPARTMENT 156.3EMPLOYEE.156.4(a) Notwithstanding any provision of law to the contrary, an eligible person 156.5described in paragraph (b) is entitled to purchase from the general employees retirement 156.6plan of the Public Employees Retirement Association allowable service credit under 156.7Minnesota Statutes, section 353.01, subdivision 16, for the period of omitted member 156.8deductions described in paragraph (c).156.9(b) An eligible person is a person who:156.10(1) was born on March 19, 1959;156.11(2) is a current employee of the Wright County Highway Department, covered by 156.12the general employees retirement plan of the Public Employees Retirement Association;156.13(3) shifted from temporary to full-time employment with the highway department 156.14in April 2007; and156.15(4) was not reported by Wright County for retirement coverage by and membership 156.16in the general employees retirement plan of the Public Employees Retirement Association 156.17until March 2012.156.18(c) The period of uncredited service authorized for purchase is the period from 156.19April 2007 through December 2008, during which no member contributions for the 156.20general employees retirement plan of the Public Employees Retirement Association were 156.21deducted from the eligible person's salary by Wright County, and which could not be 156.22corrected through the Public Employees Retirement Association omitted contribution 156.23provision due to a three-year time limit in the provision.156.24(d) Minnesota Statutes, section 356.551, applies to this purchase, except that the 156.25purchase payment amount payable by the eligible person is the employee contributions 156.26that should have been made, plus 8.5 percent interest compounded annually from the 156.27date each deduction should have occurred, until the date paid to the Public Employees 156.28Retirement Association. The purchase payment amount payable by Wright County is the 156.29balance of the full actuarial value prior service credit purchase payment amount as of the 156.30first day of the month next following the receipt of the eligible person's payment that is 156.31remaining after deducting the purchase payment amount payable by the eligible person.156.32(e) The payment amount due from the county under paragraph (d) must be made on 156.33or before the 15th of the month next following the receipt of the eligible person's payment 156.34under paragraph (d). If the county purchase payment amount is not paid in a timely 156.35fashion, the amount due accrues compound monthly interest at the rate of 0.71 percent per 156.36month from the first day of the month next following the receipt of the eligible person's 157.1payment until the county purchase payment amount is received by the Public Employees 157.2Retirement Association. If the county purchase payment amount is not paid to the Public 157.3Employees Retirement Association 90 days after the receipt of the eligible person's 157.4payment, the executive director shall notify the commissioner of management and budget 157.5and the commissioner of revenue of that unpaid obligation and the unpaid obligation must 157.6be deducted from any state aid otherwise payable to the county, plus interest.157.7(f) The eligible person must provide the executive director of the Public Employees 157.8Retirement Association with any relevant requested information pertaining to this service 157.9credit purchase.157.10(g) Authority to make a service credit purchase under this section expires on June 157.1130, 2014, or upon the termination from public employment under Minnesota Statutes, 157.12section 353.01, subdivision 11a, whichever occurs earlier.157.13EFFECTIVE DATE.This section is effective the day following final enactment.157.14ARTICLE 8157.15MISCELLANEOUS PROVISIONS157.16    Section 1. [6.496] VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; 157.17STATE BOARD OF INVESTMENT OPTIONS.157.18(a) Annually, on or before March 1, the state auditor shall provide all volunteer 157.19firefighter relief associations with recent and historic investment performance results of 157.20the various accounts of the Minnesota supplemental investment fund and information 157.21on the process and procedures for a volunteer firefighter relief association to utilize the 157.22Minnesota supplemental investment fund as an investment option.157.23(b) Annually, on or before March 1, the state auditor shall provide all volunteer 157.24firefighter relief associations with basic information on the voluntary statewide lump-sum 157.25volunteer firefighter retirement plan, that a fire department has the option annually to join 157.26the retirement plan, and that, if the fire department joins the retirement plan, future asset 157.27investments would be the responsibility of the State Board of Investment.157.28(c) The information provision required by paragraphs (a) and (b) may be provided in 157.29an electronic or other format if the state auditor determines that the format is reasonably 157.30accessible by a preponderance of volunteer firefighter relief associations.157.31EFFECTIVE DATE.This section is effective July 1, 2013.157.32    Sec. 2. Minnesota Statutes 2012, section 352.03, subdivision 4, is amended to read:157.33    Subd. 4. Duties and powers of board of directors. (a) The board shall:158.1    (1) elect a chair;158.2    (2) appoint an executive director;158.3    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D, 158.4and 490 and transact the business of the system, subject to the limitations of law;158.5    (4) consider and dispose of, or take any other action the board of directors deems 158.6appropriate concerning, denials of applications for annuities or disability benefits under 158.7this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and 158.8others pertaining to the retirement of employees and the operation of the system;158.9    (5) oversee the administration of the deferred compensation plan established in 158.10section 
         352.965; and158.11    (6) oversee the administration of the health care savings plan established in section 158.12352.98.; and158.13    (7) approve early retirement and optional annuity factors, subject to review by the 158.14actuary retained by the Legislative Commission on Pensions and Retirement; establish 158.15the schedule for implementation of the approved factors; and notify the Legislative 158.16Commission on Pensions and Retirement of the implementation schedule.158.17    (b) The board shall advise the director on any matters relating to the system and 158.18carrying out functions and purposes of this chapter. The board's advice shall control.158.19    Sec. 3. Minnesota Statutes 2012, section 353.03, subdivision 3, is amended to read:158.20    Subd. 3. Duties and powers. (a) The board shall:158.21    (1) elect a president and vice-president;158.22    (2) approve the staffing complement, as recommended by the executive director, 158.23necessary to administer the fund;158.24     (3) adopt bylaws for its own government and for the management of the fund 158.25consistent with the laws of the state and may modify them at pleasure;158.26    (4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and 158.27the terms of the applicable benefit plans for the administration and management of the 158.28fund, for the payment and collection of payments from members and for the payment of 158.29withdrawals and benefits, and that are necessary in order to comply with the applicable 158.30federal Internal Revenue Service and Department of Labor requirements;158.31    (5) pass upon and allow or disallow all applications for membership in the fund and 158.32allow or disallow claims for withdrawals, pensions, or benefits payable from the fund;158.33    (6) adopt an appropriate mortality table based on experience of the fund as 158.34recommended by the association actuary and approved under section 
         356.215, subdivision 158.3518
         , with interest set at the rate specified in section 
         356.215, subdivision 8;159.1    (7) provide for the payment out of the fund of the cost of administering this 159.2chapter, of all necessary expenses for the administration of the fund and of all claims for 159.3withdrawals, pensions, or benefits allowed; and159.4    (8) approve or disapprove all recommendations and actions of the executive director 159.5made subject to its approval or disapproval by subdivision 3a.; and159.6    (9) approve early retirement and optional annuity factors, subject to review by the 159.7actuary retained by the Legislative Commission on Pensions and Retirement; establish 159.8the schedule for implementation of the approved factors; and notify the Legislative 159.9Commission on Pensions and Retirement of the implementation schedule.159.10    (b) In passing upon all applications and claims, the board may summon, swear, hear, 159.11and examine witnesses and, in the case of claims for disability benefits, may require the 159.12claimant to submit to a medical examination by a physician of the board's choice, at the 159.13expense of the fund, as a condition precedent to the passing on the claim, and, in the 159.14case of all applications and claims, may conduct investigations necessary to determine 159.15their validity and merit.159.16    (c) The board may continue to authorize the sale of life insurance to members under 159.17the insurance program in effect on January 1, 1985, but must not change that program 159.18without the approval of the commissioner of management and budget. The association 159.19shall not receive any financial benefit from the life insurance program beyond the amount 159.20necessary to reimburse the association for costs incurred in administering the program. 159.21The association shall not engage directly or indirectly in any other activity involving the 159.22sale or promotion of goods or services, or both, whether to members or nonmembers.159.23    (d) The board shall establish procedures governing reimbursement of expenses 159.24to board members. These procedures must define the types of activities and expenses 159.25that qualify for reimbursement, must provide that all out-of-state travel be authorized 159.26by the board, and must provide for the independent verification of claims for expense 159.27reimbursement. The procedures must comply with the applicable rules and policies of the 159.28Department of Management and Budget and the Department of Administration.159.29    (e) The board may purchase fiduciary liability insurance and official bonds for the 159.30officers and members of the board of trustees and employees of the association and may 159.31purchase property insurance or may establish a self-insurance risk reserve including, but 159.32not limited to, data processing insurance and "extra-expense" coverage.159.33    Sec. 4. Minnesota Statutes 2012, section 354.07, subdivision 1, is amended to read:159.34    Subdivision 1. General powers of board. The board has the power to frame bylaws 159.35for its own government and for the management of the association not inconsistent with 160.1the laws of the state and to modify them at its pleasure; to adopt, alter, and enforce 160.2reasonable rules not inconsistent with the laws of the state for the administration and 160.3management of the association, for the payment and collection of payments from 160.4members, and for the payment of withdrawals and benefits; to pass upon and allow or 160.5disallow applications for membership in the association and for credit for teaching service; 160.6to pass upon and allow or disallow claims for withdrawals, pensions, or benefits payable 160.7by the fund; to adopt an appropriate mortality table based on experience of the association 160.8as recommended by the actuary retained under section 
         356.214 and using the applicable 160.9postretirement interest assumption specified in section 
         356.215, subdivision 8; to approve 160.10early retirement and optional annuity factors, subject to review by the actuary retained by 160.11the Legislative Commission on Pensions and Retirement; to establish the schedule for 160.12implementation of the approved factors; to notify the Legislative Commission on Pensions 160.13and Retirement of the implementation schedule; and to provide for the payment out of 160.14the fund of necessary expenses for the administration by the association and of claims for 160.15withdrawals, pensions, or benefits allowed.160.16    Sec. 5. Minnesota Statutes 2012, section 354A.021, subdivision 2, is amended to read:160.17    Subd. 2. Organization; board duties.(a) Each teachers retirement fund association 160.18shall be organized and governed pursuant to this chapter and chapter 317A, except that 160.19each association shall be deemed to be a nonprofit corporation without coming within 160.20the definition in section 
         317A.011, subdivision 6. Any corporate action of any teachers 160.21retirement fund association taken prior to April 9, 1976, shall be deemed to be valid if it 160.22conformed with Minnesota Statutes 1976, chapter 317 or 354A, or Revised Laws 1905, 160.23chapter 58, as amended through April 9, 1976.160.24(b) In addition to the other powers and duties of a board of trustees of a first class 160.25city teacher retirement fund association, the board shall approve early retirement and 160.26optional annuity factors, subject to review by the actuary retained by the Legislative 160.27Commission on Pensions and Retirement; shall establish the schedule for implementation 160.28of the approved factors; and shall notify the Legislative Commission on Pensions and 160.29Retirement of the implementation schedule.160.30ARTICLE 9160.31STATE PATROL RETIREMENT PLAN FINANCIAL SOLVENCY MEASURES160.32    Section 1. Minnesota Statutes 2012, section 352B.011, subdivision 4, is amended to 160.33read:161.1    Subd. 4. Average monthly salary. (a) Subject to the limitations of section 
         356.611, 161.2"average monthly salary" means the average of the highest monthly salaries for five years 161.3of service as a member upon which contributions were deducted from pay under section 161.4352B.02
         , or upon which appropriate contributions or payments were made to the fund to 161.5receive allowable service and salary credit as specified under the applicable law. Average 161.6monthly salary must be based upon all allowable service if this service is less than five years.161.7(b) The salary used for the calculation of "average monthly salary" means the salary 161.8of the member as defined in section 
         352.01, subdivision 13. "Average monthly salary" 161.9includes the salary of the member during the period of covered employment rendered after 161.10reaching the allowable service credit limit of section 352B.08, subdivision 2, paragraph 161.11(b). The salary used for the calculation of "average monthly salary" does not include any 161.12lump-sum annual leave payments and overtime payments made at the time of separation 161.13from state service, any amounts of severance pay, or any reduced salary paid during the 161.14period the person is entitled to workers' compensation benefit payments for temporary 161.15disability.161.16EFFECTIVE DATE.This section is effective the day following final enactment.161.17    Sec. 2. Minnesota Statutes 2012, section 352B.02, subdivision 1a, is amended to read:161.18    Subd. 1a. Member contributions. (a) The member contribution is the following 161.19percentage of the member's salary:

161.20161.21(1) before the first day of the first pay period beginning 
                  		after July 1, 2011 201410.4012.4 percent161.22161.23(2) on or after the first day of the first pay period 
                  		beginning after July 1, 2011 2014, to June 30, 201612.4013.4 percent161.24(3) after June 30, 201614.4 percent

161.25(b) These contributions must be made by deduction from salary as provided in 161.26section 
         352.04, subdivision 4.161.27EFFECTIVE DATE.This section is effective July 1, 2013.161.28    Sec. 3. Minnesota Statutes 2012, section 352B.02, subdivision 1c, is amended to read:161.29    Subd. 1c. Employer contributions. (a) In addition to member contributions, 161.30department heads shall pay a sum equal to the specified percentage of the salary upon which 161.31deductions were made, which constitutes the employer contribution to the fund as follows:

162.1162.2(1) before the first day of the first pay period beginning 
                  		after July 1, 2011 201415.6018.6 percent162.3162.4(2) on or after the first day of the first pay period 
                  		beginning after July 1, 2011 2014, to June 30, 201618.6020.1 percent162.5(3) after June 30, 201621.6 percent

162.6(b) Department contributions must be paid out of money appropriated to departments 162.7for this purpose.162.8EFFECTIVE DATE.This section is effective July 1, 2013.162.9    Sec. 4. Minnesota Statutes 2012, section 352B.08, subdivision 1, is amended to read:162.10    Subdivision 1. Eligibility; when to apply; accrual. (a) Every member who is 162.11credited with three or more years of allowable service if first employed before July 1, 2010162.12 2013, or with at least fiveten years of allowable service if first employed after June 30, 162.132010 2013, is entitled to separate from state service and upon becoming 50 years old, is 162.14entitled to receive a life annuity, upon separation from state service.162.15(b) Members must apply for an annuity in a form and manner prescribed by the 162.16executive director.162.17(c) No application may be made more than 90 days before the date the member is 162.18eligible to retire by reason of both age and service requirements.162.19(d) An annuity begins to accrue no earlier than 180 days before the date the 162.20application is filed with the executive director.162.21EFFECTIVE DATE.This section is effective July 1, 2013.162.22    Sec. 5. Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:162.23    Subd. 2. Normal retirement annuity.(a) The annuity must be paid in monthly 162.24installments. The annuity shall be equal to the amount determined by multiplying 162.25the average monthly salary of the member by the percent specified in section 
         356.315, 162.26subdivision 6
         , for each year of allowable service and pro rataprorated for additional 162.27completed months of allowable service, unless restricted under paragraph (b).162.28(b) Allowable service in excess of 33 years must not be used in computing the 162.29annuity. This restriction does not apply to any member who has at least 28 years of 162.30allowable service before July 1, 2013.162.31(c) When the annuity commences, any member contributions attributable to 162.32allowable service not used to compute the annuity due to the restrictions in paragraph (b) 162.33must be refunded using procedures specified in section 352B.11, subdivision 1.163.1EFFECTIVE DATE.This section is effective July 1, 2013.163.2    Sec. 6. Minnesota Statutes 2012, section 352B.08, subdivision 2a, is amended to read:163.3    Subd. 2a. Early retirement. Any member who has become at least 50 years old 163.4and who has at least three years of allowable service if first employed before July 1, 163.52010 2013, or who has at least fiveten years of allowable service if first employed after 163.6June 30, 2010 2013, is entitled upon application to a reduced retirement annuity equal 163.7to the annuity calculated under subdivision 2, reduced by one-tenth of one percent for 163.8each month that the member is under age 55 at the time of retirement, if first employed163.9the effective date of retirement is before July 1, 2010, or reduced by two-tenths of one 163.10percent2015. If the effective date of retirement is after June 30, 2015, the reduction is 163.110.34 percent for each month that the member is under age 55 at the time of retirement if 163.12first employed after June 30, 2010.163.13EFFECTIVE DATE.This section is effective July 1, 2013.163.14    Sec. 7. Minnesota Statutes 2012, section 352B.10, subdivision 5, is amended to read:163.15    Subd. 5. Optional annuity. A disabilitant may elect, in lieu of spousal survivorship 163.16coverage under section 
         352B.11, subdivisions subdivision 2b and 2c, the normal disability 163.17benefit or an optional annuity as provided in section 
         352B.08, subdivision 3. The choice 163.18of an optional annuity must be made in writing, on a form prescribed by the executive 163.19director, and must be made before the commencement of the payment of the disability 163.20benefit, or within 90 days before reaching age 55 or before reaching the five-year 163.21anniversary of the effective date of the disability benefit, whichever is later. The optional 163.22annuity is effective on the date on which the disability benefit begins to accrue, or the 163.23month following the attainment of age 55 or following the five-year anniversary of the 163.24effective date of the disability benefit, whichever is later.163.25    Sec. 8. Minnesota Statutes 2012, section 352B.11, subdivision 1, is amended to read:163.26    Subdivision 1. Refund of payments. (a) A member who has not received other 163.27benefits under this chapter is entitled to a refund of payments made by salary deduction, 163.28plus interest, if the member is separated, either voluntarily or involuntarily, from the state 163.29service that entitled the member to membership.163.30(b) A refund under section 352B.08, subdivision 2, paragraph (c), does not result in 163.31a forfeiture of salary credit for the allowable service credit covered by the refund.163.32(b)(c) In the event of the member's death, if there are no survivor benefits payable 163.33under this chapter, a refund plus interest is payable to the last designated beneficiary on 164.1a form filed with the director before death, or if no designation is filed, is payable to 164.2the member's estate. Interest under this subdivision must be calculated as provided in 164.3section 
         352.22, subdivision 2. To receive a refund, the application must be made on a 164.4form prescribed by the executive director.164.5EFFECTIVE DATE.This section is effective the day following final enactment.164.6    Sec. 9. Minnesota Statutes 2012, section 352B.11, subdivision 2b, is amended to read:164.7    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with 164.8three or more years of allowable service if first employed before July 1, 2010 2013, or 164.9with at least five years of allowable service if first employed after June 30, 2010 2013, 164.10dies before attaining age 55, the surviving spouse is entitled to thea benefit specified in 164.11subdivision 2c, paragraph (b) for life equal to 50 percent of the average monthly salary 164.12of the deceased member. On the first of the month next following the date on which the 164.13deceased member would have attained exact age 55, in lieu of continued receipt of the 164.14prior benefit, the surviving spouse is eligible to commence receipt of the second half of 164.15a 100 percent joint and survivor annuity if this provides a larger benefit. The joint and 164.16survivor annuity must be computed assuming the exact age 55 for the deceased member 164.17and the age of the surviving spouse on the date of death.164.18(b) If an active member with less than three years of allowable service if first 164.19employed before July 1, 2010 2013, or with fewer than five years of allowable service if 164.20first employed after June 30, 2010 2013, dies at any age, the surviving spouse is entitled to 164.21receive thea benefit specified in subdivision 2c, paragraph (c) for life equal to 50 percent 164.22of the average monthly salary of the deceased member.164.23(c) If an active member with three or more years of allowable service if first 164.24employed before July 1, 2010 2013, or with at least five years of allowable service if first 164.25employed after June 30, 2010 2013, dies on or after attaining exact age 55, the surviving 164.26spouse is entitled to receive the benefits specified in subdivision 2c, paragraph (d) a benefit 164.27for life equal to 50 percent of the average monthly salary of the deceased member, or the 164.28second half of a 100 percent joint and survivor annuity, whichever is larger. The joint and 164.29survivor annuity must be computed using the age of the deceased member on the date of 164.30death and the age of the surviving spouse on that same date.164.31(d) If a disabilitant dies while receiving a disability benefit under section 
         352B.10164.32or before the benefit under that section commenced, and an optional annuity was not 164.33elected under section 
         352B.10, subdivision 5, the surviving spouse is entitled to receive 164.34thea benefit specified in subdivision 2c, paragraph (b) for life equal to 50 percent of the 164.35average monthly salary of the deceased member. On the first of the month next following 165.1the date on which the deceased member would have attained exact age 55, in lieu of 165.2continued receipt of the prior benefit, the surviving spouse is eligible to commence receipt 165.3of the second half of a 100 percent joint and survivor annuity if this provides a larger 165.4benefit. The joint and survivor annuity must be computed assuming the exact age 55 for 165.5the deceased member and the age of the surviving spouse on the date of death.165.6(e) If a former member with three or more years of allowable service if first employed 165.7before July 1, 2010 2013, or with at least five years of allowable service if first employed 165.8after June 30, 2010 2013, who terminated from service and has not received a refund or 165.9commenced receipt of any other benefit provided by this chapter, dies, the surviving 165.10spouse is entitled to receive theas a benefit specified in subdivision 2c, paragraph (e) the 165.11second half of a 100 percent joint and survivor annuity, commencing on the first of the 165.12month next following the deceased member's date of death, or the first of the month next 165.13following the date on which the deceased member would have attained age 55, whichever 165.14is later. The joint and survivor annuity must be computed using the age of the deceased 165.15member on the date of death and the age of the surviving spouse on that same date.165.16(f) If a former member with less than three years of allowable service if first 165.17employed before July 1, 2010 2013, or with fewer than five years of allowable service if 165.18first employed after June 30, 2010 2013, who terminated from service and has not received 165.19a refund or commenced receipt of any other benefit, if applicable, provided by this chapter, 165.20dies, the surviving spouse is entitled to receive the refund specified in subdivision 2c, 165.21paragraph (f) or, if none, the children or, if none, the deceased member's estate is entitled to 165.22a refund of the employee contributions plus interest computed as specified in subdivision 1.165.23EFFECTIVE DATE.This section is effective July 1, 2013.165.24    Sec. 10. Minnesota Statutes 2012, section 356.415, subdivision 1e, is amended to read:165.25    Subd. 1e. Annual postretirement adjustments; State Patrol retirement plan.165.26(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 165.27retirement plan are entitled to a postretirement adjustment annually on January 1, as 165.28follows:165.29(1) a postretirement increase of 1.5one percent must be applied each year, effective 165.30on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 165.31who has been receiving an annuity or a benefit for at least 18 full months before the 165.32January 1 increase; and165.33(2) for each annuitant or benefit recipient who has been receiving an annuity or a 165.34benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5one 165.35percent for each month that the person has been receiving an annuity or benefit must be 166.1applied, effective January 1, following the calendar year in which the person has been 166.2retired for at least six months, but has been retired for less than 18 months.166.3(b) The increases provided by this subdivision commence on January 1, 2011166.4 2014. Increases under this subdivisionparagraph (a) for the State Patrol retirement plan 166.5terminate on December 31 of the calendar year in which the actuarial valuation prepared 166.6by the approved actuary under sections 
         356.214 and 
         356.215 and the standards for 166.7actuarial work promulgated by the Legislative Commission on Pensions and Retirement 166.8indicates that the market value of assets of the retirement plan equals or exceeds 90166.985 percent of the actuarial accrued liability of the retirement plan and increases under 166.10subdivision 1paragraph (c) recommence after that date.166.11(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State 166.12Patrol retirement plan are entitled to a postretirement adjustment annually on January 166.131, as follows:166.14(1) a postretirement increase of 1.5 percent must be applied each year, effective on 166.15January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 166.16has been receiving an annuity or a benefit for at least 18 full months before the January 1 166.17increase; and166.18(2) for each annuitant or benefit recipient who has been receiving an annuity or a 166.19benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent 166.20for each month that the person has been receiving an annuity or benefit must be applied, 166.21effective January 1, following the calendar year in which the person has been retired for at 166.22least six months, but has been retired for less than 18 months.166.23(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on 166.24December 31 of the calendar year in which the actuarial valuation prepared by the approved 166.25actuary under sections 356.214 and 356.215 and the standards for actuarial work adopted by 166.26the Legislative Commission on Pensions and Retirement indicates that the market value of 166.27assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability 166.28of the retirement plan and increases under subdivision 1 recommence after that date.166.29(c)(e) An increase in annuity or benefit payments under this subdivision must be 166.30made automatically unless written notice is filed by the annuitant or benefit recipient 166.31with the executive director of the applicable covered retirement plan requesting that the 166.32increase not be made.166.33EFFECTIVE DATE.This section is effective July 1, 2013.166.34    Sec. 11.  REPEALER.166.35Minnesota Statutes 2012, section 352B.11, subdivision 2c, is repealed.167.1EFFECTIVE DATE.This section is effective July 1, 2013.167.2ARTICLE 10167.3PERA PLANS SALARY DEFINITION167.4    Section 1. Minnesota Statutes 2012, section 353.01, subdivision 10, is amended to read:167.5    Subd. 10. Salary. (a) Subject to the limitations of section 
         356.611, "salary" means:167.6    (1) the wages or periodic compensation ofpayable to a public employee,by the 167.7employing governmental subdivision before:167.8    (i) employee retirement deductions that are designated as picked-up contributions 167.9under section 356.62;167.10    (ii) any employee-elected  deductions for deferred compensation, supplemental 167.11retirement plans, or other voluntary salary reduction programs, and also means "wages" 167.12and includes net income from fees that would have otherwise been available as a cash 167.13payment to the employee; and167.14(iii) employee deductions for contributions to a supplemental plan or to a 167.15governmental trust established under section 356.24, subdivision 1, clause (7), to save for 167.16postretirement health care expenses,  unless otherwise excluded under paragraph (b);167.17    (2) for a public employee who is covered by a supplemental retirement plan under 167.18section 
         356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions 167.19be made by or (12), the employer, the contributioncontributions to the applicable 167.20supplemental retirement plan when an agreement between the parties establishes that the 167.21contributioncontributions will either result in a mandatory reduction of employees' wages 167.22through payroll withholdings, or be made in lieu of an amount that would otherwise be 167.23paid as wages; and167.24    (3) for a public employee who has prior service covered by a local police or 167.25firefighters relief association that has consolidated with the Public Employees Retirement 167.26Association or to which section 
         353.665 applies and who has elected coverage either 167.27under the public employees police and fire fund benefit plan under section 
         353A.08 167.28following the consolidation or under section 
         353.665, subdivision 4, the rate of salary 167.29upon which member contributions to the special fund of the relief association were made 167.30prior to the effective date of the consolidation as specified by law and by bylaw provisions 167.31governing the relief association on the date of the initiation of the consolidation procedure 167.32and the actual periodic compensation of the public employee after the effective date of 167.33consolidation.;167.34(4) a payment from a public employer through a grievance proceeding, settlement, 167.35or court order that is attached to a specific earnings period in which the employee's regular 168.1salary was not earned or paid to the member due to a suspension or a period of involuntary 168.2termination that is not a wrongful discharge under section 356.50; provided the amount is 168.3not less than the equivalent of the average of the hourly  base salary rate in effect during 168.4the last six months of allowable service prior to the suspension or period of involuntary 168.5termination, plus any applicable increases awarded during the period that would have been 168.6paid under a collective bargaining agreement or personnel policy but for the suspension 168.7or involuntary termination, multiplied by the average number of regular hours for which 168.8the employee was compensated  during the six months of allowable service prior to the 168.9suspension or period of involuntary termination, but not to exceed the compensation that 168.10the public employee would have earned if regularly employed during the applicable period;168.11(5) the amount paid to a member who is absent from employment by reason of 168.12personal, parental, or military leave of absence if equivalent to the hourly base salary 168.13rate in effect during the six months of allowable service, or portions thereof, prior to the 168.14leave, multiplied by the average number of regular hours for which the employee was 168.15compensated during the six months of allowable service prior to the applicable leave of 168.16absence;168.17(6) the amount paid to a member who is absent from employment by reason of an 168.18authorized medical leave of absence if specified in advance to be at least one-half but 168.19no more than equal to the earnings the member received, on which contributions were 168.20reported and allowable service credited during the six months immediately preceding 168.21the medical leave of absence; and168.22    (7) for a public employee who receives performance or merit bonus payment under 168.23a written compensation plan, policy, or collective bargaining agreement in addition 168.24to regular salary or in lieu of regular salary increases, the compensation paid to the 168.25employee for attaining or exceeding performance goals, duties, or measures during a 168.26specified period of employment.168.27    (b) Salary does not mean:168.28    (1) the fees paid to district court reporters,;168.29    (2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum 168.30or periodic payments,;168.31    (3) for the donor, payment to another person of the value of hours donated under a 168.32benevolent vacation, personal, or sick leave donation program;168.33    (4) any form of severance payments,or retirement incentive payments;168.34    (5) an allowance payment or per diem payments for or reimbursement of expenses,;168.35    (6) lump-sum settlements not attached to a specific earnings period, or;169.1    (7)  workers' compensation payments or disability insurance payments, including 169.2payments from employer self-insurance arrangements;169.3    (2)(8) employer-paid amounts used by an employee toward the cost of insurance 169.4coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health 169.5care expense accounts, day care expenses, or any payments in lieu of any employer-paid 169.6group insurance coverage, including the difference between single and family rates that 169.7may be paid to a member with single coverage and certain amounts determined by the 169.8executive director to be ineligible;169.9(9) employer-paid fringe benefits, including, but not limited to:169.10(i) employer-paid premiums or supplemental contributions for employees for all 169.11types of insurance;169.12(ii) membership dues or fees for the use of fitness or recreational facilities;169.13(iii) incentive payments or cash awards relating to a wellness program;169.14(iv) the value of any nonmonetary benefits;169.15(v) any form of payment made in lieu of an employer-paid fringe benefit;169.16(vi) an employer-paid amount made to a deferred compensation or tax-sheltered 169.17annuity program; and169.18(vii) any amount paid by the employer as a supplement to salary, either as a 169.19lump-sum amount or a fixed or matching amount paid on a recurring basis, that is not 169.20available to the employee as cash;169.21    (3)(10) the amount equal to that which the employing governmental subdivision 169.22would otherwise pay toward single or family insurance coverage for a covered employee 169.23when, through a contract or agreement with some but not all employees, the employer:169.24    (i) discontinues, or for new hires does not provide, payment toward the cost of the 169.25employee's selected insurance coverages under a group plan offered by the employer;169.26    (ii) makes the employee solely responsible for all contributions toward the cost of 169.27the employee's selected insurance coverages under a group plan offered by the employer, 169.28including any amount the employer makes toward other employees' selected insurance 169.29coverages under a group plan offered by the employer; and169.30    (iii) provides increased salary rates for employees who do not have any 169.31employer-paid group insurance coverages;169.32    (4)(11) except as provided in section 
         353.86 or 
         353.87, compensation of any 169.33kind paid to volunteer ambulance service personnel or volunteer firefighters, as defined 169.34in subdivision 35 or 36;169.35    (5)(12) the amount of compensation that exceeds the limitation provided in section 169.36356.611
         ; and170.1    (6)(13) amounts paid by a federal or state grant for which the grant specifically 170.2prohibits grant proceeds from being used to make pension plan contributions, unless the 170.3contributions to the plan are made from sources other than the federal or state grant.; and170.4(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).170.5    (c) Amounts, other than those provided under paragraph (a), clause (4), provided to 170.6an employee by the employer through a grievance proceeding, a court order, or a legal 170.7settlement are salary only if the settlement or court order is reviewed by the executive 170.8director and the amounts are determined by the executive director to be consistent with 170.9paragraph (a) and prior determinations.170.10EFFECTIVE DATE.This section is effective the day following final enactment. 170.11ARTICLE 11170.12PUBLIC EMPLOYEES POLICE AND FIRE RETIREMENT PLAN 170.13FINANCIAL SOLVENCY MEASURES170.14    Section 1. Minnesota Statutes 2012, section 353.01, subdivision 17a, is amended to read:170.15    Subd. 17a. Average salary. (a) "Average salary," for purposes of calculating a 170.16retirement annuity under section 
         353.29, subdivision 3, means an amount equivalent to 170.17the average of the highest salary of the member, police officer, or firefighter, whichever 170.18applies, upon which employee contributions were paid for any five successive years of 170.19allowable service, based on dates of salary periods as listed on salary deduction reports. 170.20"Average salary" includes the salary of the employee during the period of covered 170.21employment rendered after reaching the allowable service credit limit of section 353.651, 170.22subdivision 3, paragraph (b). Average salary must be based upon all allowable service if 170.23this service is less than five years.170.24(b) "Average salary" may not include any reduced salary paid during a period 170.25in which the employee is entitled to benefit payments from workers' compensation for 170.26temporary disability, unless the average salary is higher, including this period.170.27EFFECTIVE DATE.This section is effective the day following final enactment.170.28    Sec. 2. Minnesota Statutes 2012, section 353.01, subdivision 41, is amended to read:170.29    Subd. 41. Duty disability. "Duty disability," physical or psychological, means a 170.30condition that is expected to prevent a member, for a period of not less than 12 months, 170.31from performing the normal duties of the position held by a person who is a member of the 170.32public employees police and fire retirement plan, and that is the direct result of an injury 170.33incurred during, or a disease arising out of, the performance of normal duties or the actual 171.1performance of less frequentinherently dangerous duties, either of which are specific to 171.2protecting the property and personal safety of others and that present inherent dangers that 171.3are specific to the positions covered by the public employees police and fire retirement plan.171.4EFFECTIVE DATE.This section is effective the day following final enactment.171.5    Sec. 3. Minnesota Statutes 2012, section 353.01, subdivision 47, is amended to read:171.6    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement 171.7to an annuity or benefit from a retirement plan administered by the Public Employees 171.8Retirement Association by having credit for sufficient allowable service under paragraph 171.9(b) or, (c), or (d), whichever applies.171.10(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan 171.11member of the general employees retirement plan of the Public Employees Retirement 171.12Association:171.13(1) a public employee who first became a member of the association before July 171.141, 2010, is 100 percent vested when the person has accrued credit for not less than three 171.15years of allowable service as defined under subdivision 16; and171.16(2) a public employee who first becomes a member of the association after June 30, 171.172010, is 100 percent vested when the person has accrued credit for not less than five years 171.18of allowable service as defined under subdivision 16.171.19(c) For purposes of qualifying for an annuity or benefit as a member of the police 171.20and fire plan or a member of the local government correctional employees retirement plan:171.21(1) a public employee who first became a member of the association before July 171.221, 2010, is 100 percent vested when the person has accrued credit for not less than three 171.23years of allowable service as defined under subdivision 16; and171.24(2) a public employee who first becomes a member of the association after June 171.2530, 2010, is vested at the following percentages when the person has accrued credited 171.26allowable service as defined under subdivision 16, as follows:171.27(i) 50 percent after five years;171.28(ii) 60 percent after six years;171.29(iii) 70 percent after seven years;171.30(iv) 80 percent after eight years;171.31(v) 90 percent after nine years; and171.32(vi) 100 percent after ten years.171.33(d) For purposes of qualifying for an annuity or benefit as a member of the public 171.34employees police and fire retirement plan:172.1(1) a public employee who first became a member of the association before July 172.21, 2010, is 100 percent vested when the person has accrued credit for not less than three 172.3years of allowable service as defined under subdivision 16;172.4(2) a public employee who first becomes a member of the association after June 30, 172.52010, and before July 1, 2014, is vested at the following percentages when the person has 172.6accrued credited allowable service as defined under subdivision 16, as follows:172.7(i) 50 percent after five years;172.8(ii) 60 percent after six years;172.9(iii) 70 percent after seven years;172.10(iv) 80 percent after eight years;172.11(v) 90 percent after nine years; and172.12(vi) 100 percent after ten years; and172.13(3) a public employee who first becomes a member of the association after June 172.1430, 2014, is vested at the following percentages when the person has accrued credited 172.15allowable service as defined under subdivision 16, as follows:172.16(i) 50 percent after ten years;172.17(ii) 55 percent after 11 years;172.18(iii) 60 percent after 12 years;172.19(iv) 65 percent after 13 years;172.20(v) 70 percent after 14 years;172.21(vi) 75 percent after 15 years;172.22(vii) 80 percent after 16 years;172.23(viii) 85 percent after 17 years;172.24(ix) 90 percent after 18 years;172.25(x) 95 percent after 19 years; and172.26(xi) 100 percent after 20 or more years.172.27    Sec. 4. Minnesota Statutes 2012, section 353.031, subdivision 4, is amended to read:172.28    Subd. 4. Additional requirements; eligibility for police and fire or local 172.29government correctional service retirement plan disability benefits. (a) If an 172.30application for disability benefits is filed within two years of the date of the injury or the 172.31onset of the illness that gave rise to the disability application, the application must be 172.32supported by evidence that the applicant is unable to perform the duties of the position 172.33held by the applicant on the date of the injury or the onset of the illness causing the 172.34disability. The employer must provide evidence indicating whether the applicant is able or 172.35unable to perform the duties of the position held on the date of the injury or onset of the 173.1illness causing the disability and the specifications, a clear explanation of any duties that 173.2the individual can or cannot perform, and an explanation of why the employer may or may 173.3not authorize continued employment to the applicant in the current or other position.173.4    (b) If an application for disability benefits is filed more than two years after the 173.5date of injury or the onset of an illness causing the disability, the application must be 173.6supported by evidence that the applicant is unable to perform the most recent duties that 173.7arewere expected to be performed by the applicant during the 90 days beforepreceding 173.8the filing oflast day the application applicant performed services for the employer. The 173.9employer must provide evidence of the duties that arewere expected to be performed by 173.10the applicant during the 90 days beforepreceding the filing oflast day the application173.11 applicant performed services, whether the applicant can or cannot perform those duties 173.12overall, and the specificationsa clear explanation of any duties that the applicant can 173.13or cannot perform, and an explanation of why the employer may or may not authorize 173.14continued employment to the applicant in the current or other position.173.15    (c) Any report supporting a claim to disability benefits under section 
         353.656 or 173.16353E.06
          must specifically relate the disability to its cause; and for any claim to duty 173.17disability from an injury or illness arising out of an act of duty, the report must state the 173.18specific act of duty giving rise to the claim, and relate the cause of disability to inherently 173.19dangerous duties specific tasks or functions required to be performed by the employee in 173.20fulfilling the employee's duty-related acts which must be specific to the inherent dangers of 173.21the positions eligible for membership incovered by the public employees police and fire 173.22fundplan and the local government correctional service retirement plan. Any report that 173.23does not relate the cause of disability to specific acts or functionsinherently dangerous 173.24duties performed by the employee may not be relied upon as evidence to support eligibility 173.25for benefits and may be disregarded in the executive director's decision-making process.173.26    (d) Any application for duty disability must be supported by a first report of injury as 173.27defined in section 
         176.231.173.28    (e) If a member who has applied for and been approved for disability benefits before 173.29the termination of service does not terminate service or is not placed on an authorized 173.30leave of absence as certified by the governmental subdivision within 45 days following 173.31the date on which the application is approved, the application shall be canceled. If an 173.32approved application for disability benefits has been canceled, a subsequent application 173.33for disability benefits may not be filed on the basis of the same medical condition for a 173.34minimum of one year from the date on which the previous application was canceled.173.35EFFECTIVE DATE.This section is effective the day following final enactment.174.1    Sec. 5. Minnesota Statutes 2012, section 353.35, subdivision 1, is amended to read:174.2    Subdivision 1. Refund rights.(a) Except as provided in paragraph (b), when any 174.3former member accepts a refund, all existing service credits and all rights and benefits to 174.4which the person was entitled prior to the acceptance of the refund must terminate.174.5(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a 174.6forfeiture of salary credit for the allowable service credit covered by the refund.174.7(c) The rights and benefits of a former member must not be restored until the person 174.8returns to active service and acquires at least six months of allowable service credit 174.9after taking the last refund and repays the refund or refunds taken and interest received 174.10under section 
         353.34, subdivisions 1 and 2, plus interest at an annual rate of 8.5 percent 174.11compounded annually. If the person elects to restore service credit in a particular fund 174.12from which the person has taken more than one refund, the person must repay all refunds 174.13to that fund. All refunds must be repaid within six months of the last date of termination 174.14of public service.174.15EFFECTIVE DATE.This section is effective the day following final enactment.174.16    Sec. 6. Minnesota Statutes 2012, section 353.65, subdivision 2, is amended to read:174.17    Subd. 2. Employee contribution. (a) For members other than members who were 174.18active members of the former Minneapolis Firefighters Relief Association on December 174.1929, 2011, or for members other than members who were active members of the former 174.20Minneapolis Police Relief Association on December 29, 2011, the employee contribution 174.21is 9.4 percentan amount equal to the following percentage of the total salary of theeach 174.22member in calendar year 2010 and is, as follows: 9.6 percent of the salary of the member 174.23in eachbefore calendar year after 2010 2014; 10.2 percent in calendar year 2014; and 10.8 174.24percent in calendar year 2015 and thereafter.174.25(b) For members who were active members of the former Minneapolis Firefighters 174.26Relief Association on December 29, 2011, the employee contribution is an amount 174.27equal to eight percent of the monthly unit value under section 
         353.01, subdivision 10a, 174.28multiplied by 80 and expressed as a biweekly amount for each member. The employee 174.29contribution made by a member with at least 25 years of service credit as an active 174.30member of the former Minneapolis Firefighters Relief Association must be deposited in 174.31the postretirement health care savings account established under section 
         352.98.174.32(c) For members who were active members of the former Minneapolis Police Relief 174.33Association on December 29, 2011, the employee contribution is an amount equal to eight 174.34percent of the monthly unit value under section 
         353.01, subdivision 10b, multiplied by 80 174.35and expressed as a biweekly amount for each member. The employee contribution made 175.1by a member with at least 25 years of service credit as an active member of the former 175.2Minneapolis Police Relief Association must be deposited in the postretirement health care 175.3savings account established under section 
         352.98.175.4(d) Contributions under this section must be made by deduction from salary in 175.5the manner provided in subdivision 4. Where any portion of a member's salary is paid 175.6from other than public funds, the member's employee contribution is based on the total 175.7salary received from all sources.175.8EFFECTIVE DATE.This section is effective the day following final enactment.175.9    Sec. 7. Minnesota Statutes 2012, section 353.65, subdivision 3, is amended to read:175.10    Subd. 3. Employer contribution. (a) With respect to members other than members 175.11who were active members of the former Minneapolis Firefighters Relief Association on 175.12December 29, 2011, or for members other than members who were active members of 175.13the former Minneapolis Police Relief Association on December 29, 2011, the employer 175.14contribution is 14.1 percentan amount equal to the following percentage of the total salary 175.15of theeach member in calendar year 2010 and is, as follows: 14.4 percent of the salary of 175.16the member in eachbefore calendar year after 2010 2014; 15.3 percent in calendar year 175.172014; and 16.2 percent in calendar year 2015 and thereafter.175.18(b) With respect to members who were active members of the former Minneapolis 175.19Firefighters Relief Association on December 29, 2011, the employer contribution is an 175.20amount equal to the amount of the member contributions under subdivision 2, paragraph 175.21(b).175.22(c) With respect to members who were active members of the former Minneapolis 175.23Police Relief Association on December 29, 2011, the employer contribution is an amount 175.24equal to the amount of the member contributions under subdivision 2, paragraph (c).175.25(d) Contributions under this subdivision must be made from funds available to the 175.26employing subdivision by the means and in the manner provided in section 
         353.28.175.27EFFECTIVE DATE.This section is effective the day following final enactment.175.28    Sec. 8. Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:175.29    Subd. 3. Retirement annuity formula.(a) The average salary as defined in 175.30section 
         353.01, subdivision 17a, multiplied by the percent specified in section 
         356.315, 175.31subdivision 6
         , per yearmultiplied by years of allowable service, multiplied by the 175.32applicable vesting percentage indicated in section 353.01, subdivision 47, determines the 175.33amount of the normal retirement annuity. If the member has earned allowable service 176.1for performing services other than those of a police officer or firefighter, the annuity 176.2representing that service must be computed under sections 
         353.29 and 
         353.30.176.3(b) For a member first enrolled in the public employees police and fire retirement 176.4plan after June 30, 2014, the average salary as defined in section 353.01, subdivision 17a, 176.5paragraph (a), includes salary for all years for which contributions have been reported to 176.6the public employees police and fire retirement plan, but allowable service included in 176.7the calculation is limited to 33 years and the normal retirement annuity must not exceed 176.899 percent of the average salary.176.9(c) When the annuity begins for members of the public employees police and fire 176.10retirement plan enrolled after June 30, 2014, a prorated share of the contributions for 176.11allowable service exceeding 33 years must be refunded to the member. The prorated 176.12share of the contributions to be refunded is determined by multiplying the accumulated 176.13deductions paid by the member to the public employees police and fire retirement plan by 176.14a percentage determined using the number of months of service in excess of 396 as the 176.15numerator and the total number of months of allowable service on which contributions 176.16were reported as the denominator. Interest as defined in section 353.34, subdivision 2, 176.17is to be applied to the prorated share of contributions from the first of the 397th month 176.18of allowable service reported to the public employees police and fire retirement plan to 176.19the first of the month the annuity begins.176.20EFFECTIVE DATE.This section is effective the day following final enactment.176.21    Sec. 9. Minnesota Statutes 2012, section 353.651, subdivision 4, is amended to read:176.22    Subd. 4. Early retirement. (a) A person who becomes a public employees police 176.23and fire retirement plan member after June 30, 2007, or a former member who is reinstated 176.24as a member of the plan after that date, who is at least 50 years of age and who is at least 176.25partially vested under section 
         353.01, subdivision 47, upon the termination of public 176.26service before July 1, 2014, if the person is other than a county sheriff or after January 4, 176.272015, if the person is a county sheriff is entitled upon application to a retirement annuity 176.28equal to the normal annuity calculated under subdivision 3, reduced by two-tenths of one 176.29percent for each month that the member is under age 55 at the time of retirement.176.30    (b) Upon the termination of public service before July 1, 2014, if the person is 176.31other than a county sheriff or upon the termination of public service before January 5, 176.322015, if the person is a county sheriff, any public employees police and fire retirement 176.33plan member who first became a member of the plan before July 1, 2007, and who is 176.34not specified in paragraph (a), upon attaining at least 50 years of age with at least three 176.35years of allowable service is entitled upon application to a retirement annuity equal to the 177.1normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for 177.2each month that the member is under age 55 at the time of retirement.177.3(c) A person other than a county sheriff who is a member of the public employees 177.4police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a 177.5member of the public employees police and fire retirement plan on or after January 5, 177.62015, and who is at least 50 years old and is at least partially vested under section 353.01, 177.7subdivision 47, and whose benefit effective date is after July 1, 2014, if other than a 177.8county sheriff or after January 4, 2015, if a county sheriff and on or before July 1, 2019, is 177.9entitled upon application to a retirement annuity equal to the normal annuity calculated 177.10under subdivision 3, reduced for each month the member is under age 55 at the time of 177.11retirement by applying a blended monthly rate that is equivalent to the sum of:177.12(1) one-sixtieth of the annual rate of five percent, prorated for each month the 177.13person's benefit effective date is after July 1, 2014, or after December 31, 2014, whichever 177.14applies; and177.15(2) one-sixtieth of the annual rate provided under paragraph (a) or (b), whichever 177.16applies, for each month the person's benefit effective date is before July 1, 2019.177.17(d) A person other than a county sheriff who is a member of the public employees 177.18police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a member 177.19of the public employees police and fire retirement plan on or after January 5, 2015, and 177.20who is at least 50 years old and is at least partially vested under section 353.01, subdivision 177.2147, whose benefit effective date is after July 1, 2019, is entitled, upon application, to a 177.22retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by 177.23five percent annually, prorated for each month that the member is under age 55.177.24EFFECTIVE DATE.This section is effective the day following final enactment.177.25    Sec. 10. Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:177.26    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member 177.27who has attained the age of at least 50 years and either who is vested under section 177.28353.01, subdivision 47
         , or who has credit for at least 30 years of allowable service, 177.29regardless of age attained, dies before the annuity or disability benefit becomes payable, 177.30notwithstanding any designation of beneficiary to the contrary, the surviving spouse may 177.31elect to receive a death while eligible survivor benefit.177.32    (b) Notwithstanding the definition of surviving spouse in section 
         353.01, subdivision 177.3320
         , a former spouse of the member, if any, is entitled to a portion of the death while 177.34eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 177.35filed with the association. If there is no surviving spouse or child or children, a former 178.1spouse may be entitled to a lump-sum refund payment under section 
         353.32, subdivision 178.21
         , if provided for in a marriage dissolution decree but not a death while eligible survivor 178.3benefit despite the terms of a marriage dissolution decree filed with the association.178.4    (c) The benefit may be elected instead of a refund with interest under section 
         353.32, 178.5subdivision 1
         , or surviving spouse benefits otherwise payable under subdivisions 1 and 178.62. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 178.7which the member could have qualified for on the date of death, computed as provided in 178.8sections 353.651, subdivisions 2 andsubdivision 3, and 
         353.30, subdivision 3.178.9    (d) The surviving spouse may apply for the annuity at any time after the date 178.10on which the deceased employee would have attained the required age for retirement 178.11based on the employee's allowable service. Sections 
         353.34, subdivision 3, and 
         353.71, 178.12subdivision 2
         , apply to a deferred annuity payable under this subdivision.178.13    (e) No payment accrues beyond the end of the month in which entitlement to 178.14such annuity has terminated. An amount equal to the excess, if any, of the accumulated 178.15contributions which were credited to the account of the deceased employee over and 178.16above the total of the annuities paid and payable to the surviving spouse must be paid to 178.17the deceased member's last designated beneficiary or, if none, to the legal representative of 178.18the estate of such deceased member.178.19    (f) Any member may request in writing, with the signed consent of the spouse, that 178.20this subdivision not apply and that payment be made only to the designated beneficiary, as 178.21otherwise provided by this chapter.178.22    (g) For a member who is employed as a full-time firefighter by the Department of 178.23Military Affairs of the state of Minnesota, allowable service as a full-time state Military 178.24Affairs Department firefighter credited by the Minnesota State Retirement System may be 178.25used in meeting the minimum allowable service requirement of this subdivision.178.26EFFECTIVE DATE.This section is effective the day following final enactment.178.27    Sec. 11. Minnesota Statutes 2012, section 353.657, subdivision 3a, is amended to read:178.28    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly 178.29benefit per family must not exceed the following percentages of the member's average 178.30monthly salary as specified in subdivision 3:178.31    (1) 80 percent, if the member's death was a line of duty death; or178.32    (2) 70 percent, if the member's death was not a line of duty death or occurred while 178.33the member was receiving a disability benefit that accrued before July 1, 2007.178.34    (b) The minimum monthly benefit per family, including the joint and survivor 178.35optional annuity under subdivision 2a, and section 
         353.656, subdivision 1a, must not be 179.1less than the following percentage of the member's average monthly salary as specified in 179.2subdivision 3:179.3    (1) 60 percent, if the death was a line of duty death; or179.4    (2) 50 percent, if the death was not a line of duty death or occurred while the member 179.5was receiving a disability benefit that accrued before July 1, 2007.179.6    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the 179.7joint annuitant, surviving spouse, and dependent children, as applicable, must each be 179.8reduced to the amount necessaryproportionately so that the total family benefit does 179.9not exceed the applicable maximum. The joint and survivor optional annuity, surviving 179.10spouse, or dependent children benefit, as applicable, must be restored, plus applicable 179.11postretirement adjustments under Minnesota Statutes 2008, section 
         356.41 or section 179.12356.415
         , as the dependent child or children become no longer dependent under section 179.13353.01, subdivision 15
         , or in the event of the death of the joint and survivor annuity 179.14recipient or the surviving spouse.179.15EFFECTIVE DATE.This section is effective the day following final enactment.179.16    Sec. 12. Minnesota Statutes 2012, section 353E.001, subdivision 1, is amended to read:179.17    Subdivision 1. Duty disability. "Duty disability," physical or psychological, means 179.18a condition that is expected to prevent a member, for a period of not less than 12 months, 179.19from performing the normal duties of a local government correctional service employee as 179.20defined under section 
         353E.02 and that is the direct result of an injury incurred during, or 179.21a disease arising out of, the performance of normal duties or the actual performance of 179.22less frequentinherently dangerous duties, either of which are specific to protecting the 179.23property and personal safety of others and that present inherent dangers that are specific to 179.24the positions covered by the local government correctional service retirement plan.179.25EFFECTIVE DATE.This section is effective the day following final enactment.179.26    Sec. 13. Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:179.27    Subd. 1b. Annual postretirement adjustments; PERA; general employees 179.28retirement plan and local government correctional retirement plan. (a) Retirement 179.29annuity, disability benefit, or survivor benefit recipients of the general employees 179.30retirement plan of the Public Employees Retirement Association and the local government 179.31correctional service retirement plan are entitled to a postretirement adjustment annually 179.32on January 1, as follows:180.1(1) for January 1, 2011, and each successive January 1 until funding stability is 180.2restored for the applicable retirement plan, a postretirement increase of one percent must 180.3be applied each year, effective on January 1, to the monthly annuity or benefit amount of 180.4each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 180.512 full months as of the current June 30;180.6(2) for January 1, 2011, and each successive January 1 until funding stability is 180.7restored for the applicable retirement plan, for each annuitant or benefit recipient who has 180.8been receiving an annuity or a benefit for at least one full month, but less than 12 full 180.9months as of the current June 30, an annual postretirement increase of 1/12 of one percent 180.10for each month the person has been receiving an annuity or benefit must be applied;180.11(3) for each January 1 following the restoration of funding stability for the applicable 180.12retirement plan, a postretirement increase of 2.5 percent must be applied each year, 180.13effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 180.14recipient who has been receiving an annuity or benefit for at least 12 full months as of 180.15the current June 30; and180.16(4) for each January 1 following restoration of funding stability for the applicable 180.17retirement plan, for each annuity or benefit recipient who has been receiving an annuity or 180.18a benefit for at least one full month, but less than 12 full months as of the current June 180.1930, an annual postretirement increase of 1/12 of 2.5 percent for each month the person 180.20has been receiving an annuity or benefit must be applied.180.21(b) Funding stability is restored when the market value of assets of the applicable 180.22retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 180.23applicable plan in the two most recent priorconsecutive actuarial valuationvaluations 180.24prepared under section 
         356.215 and the standards for actuarial work by the approved 180.25actuary retained by the Public Employees Retirement Association under section 
         356.214.180.26(c) If, after applying the increase as provided for in paragraph (a), clauses (3) 180.27and (4), the market value of the applicable retirement plan is determined in the next 180.28subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent 180.29of the actuarial accrued liability of any of the applicable Public Employees Retirement 180.30Association plans, After having met the definition of funding stability under paragraph 180.31(b), the increase provided in paragraph (a), clauses (1) and (2), arerather than an increase 180.32under subdivision 1, is again to be applied as of the next successive January until funding 180.33stability is again restored. in a subsequent year or years if the market value of assets of 180.34the applicable plan equals or is less than:180.35(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two 180.36consecutive actuarial valuations; or181.1(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most 181.2recent actuarial valuation.181.3(d) An increase in annuity or benefit payments under this section must be made 181.4automatically unless written notice is filed by the annuitant or benefit recipient with the 181.5executive director of the Public Employees Retirement Association requesting that the 181.6increase not be made.181.7(e) The retirement annuity payable to a person who retires before becoming eligible 181.8for Social Security benefits and who has elected the optional payment, as provided in 181.9section 
         353.29, subdivision 6, must be treated as the sum of a period-certain retirement 181.10annuity and a life retirement annuity for the purposes of any postretirement adjustment. 181.11The period-certain retirement annuity plus the life retirement annuity must be the 181.12annuity amount payable until age 62 for section 
         353.29, subdivision 6. A postretirement 181.13adjustment granted on the period-certain retirement annuity must terminate when the 181.14period-certain retirement annuity terminates.181.15EFFECTIVE DATE.This section is effective the day following final enactment.181.16    Sec. 14. Minnesota Statutes 2012, section 356.415, subdivision 1c, is amended to read:181.17    Subd. 1c. Annual postretirement adjustments; PERA-police and fire. (a) 181.18Retirement annuity, disability benefit, or survivor benefit recipients of the public 181.19employees police and fire retirement plan are entitled to a postretirement adjustment 181.20annually on January 1, until funding stability is restored, as follows:181.21(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 181.22recipient whose annuity or benefit effective date is on or before June 1, 2014, who has 181.23been receiving the annuity or benefit for at least 12 full months as of the immediate 181.24preceding June 30, an amount equal to one percent in each year; or181.25(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 181.26recipient whose annuity or benefit effective date is on or before June 1, 2014, who has 181.27been receiving the annuity or benefit for at least one full month, but not less than 11 181.28months, as of the immediate preceding June 30, an amount equal to 1/12 of one percent in 181.29each year for each month of annuity or benefit receipt; and181.30(3) for January 1, 2013, and each successive January 1 that follows the loss of 181.31funding stability as defined under paragraph (b) until funding stability as defined under 181.32paragraph (b) is again restored, for each annuitant or benefit recipient whose annuity 181.33or benefit effective date is after June 1, 2014, who haswill have been receiving thean 181.34annuity or benefit for at least 1236 full months as of the immediate preceding June 30, 181.35an amount equal to the percentage increase in the Consumer Price Index for urban wage 182.1earners and clerical workers all items index published by the Bureau of Labor Statistics of 182.2the United States Department of Labor between the immediate preceding June 30 and the 182.3June 30 occurring 12 months previous, but not to exceed 1.5one percent; or182.4(4) for January 1, 2013, and each successive January 1 that follows the loss of funding 182.5stability as defined under paragraph (b) until funding stability as defined under paragraph 182.6(b) is again restored, for each annuitant or benefit recipient whose annuity or benefit 182.7effective date is after June 1, 2014, who has been receiving the annuity or benefit for at 182.8least one25 full monthmonths, but less than 36 months as of the immediate preceding June 182.930, an amount equal to 1/12 of the percentage increase in the Consumer Price Index for 182.10urban wage earners and clerical workers all items index published by the Bureau of Labor 182.11Statistics of the United States Department of Labor between the immediate preceding June 182.1230 and the June 30 occurring 12 months previous for each full month of annuity or benefit 182.13receipt, but not to exceed 1/12 of 1.5one percent for each full month of annuity or benefit 182.14receipt; during the fiscal year in which the annuity or benefit was effective.182.15(5) for(b) Retirement annuity, disability benefit, or survivor benefit recipients of 182.16the public employees police and fire retirement plan are entitled to a postretirement 182.17adjustment annually on each January 1 following the restoration of funding stability as 182.18defined under paragraph (b)(c) and during the continuation of funding stability as defined 182.19under paragraph (b) (c), as follows:182.20(1) for each annuitant or benefit recipient who has been receiving the annuity or 182.21benefit for at least 1236 full months as of the immediate preceding June 30, an amount 182.22equal to the percentage increase in the Consumer Price Index for urban wage earners and 182.23clerical workers all items index published by the Bureau of Labor Statistics of the United 182.24States Department of Labor between the immediate preceding June 30 and the June 30 182.25occurring 12 months previous, but not to exceed 2.5 percent; and182.26(6) for each January 1 following the restoration of funding stability as defined under 182.27paragraph (b) and during the continuation of funding stability as defined under paragraph 182.28(b),(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit 182.29for at least one25 full monthmonths, but less than 36 full months, as of the immediate 182.30preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer 182.31Price Index for urban wage earners and clerical workers all items index published by 182.32the Bureau of Labor Statistics of the United States Department of Labor between the 182.33immediate preceding June 30 and the June 30 occurring 12 months previous for each full 182.34month of annuity or benefit receipt during the fiscal year in which the annuity or benefit 182.35was effective, but not to exceed 1/12 of 2.5 percent for each full month of annuity or 182.36benefit receipt during the fiscal year in which the annuity or benefit was effective.183.1(b)(c) Funding stability is restored when the market value of assets of the public 183.2employees police and fire retirement plan equals or exceeds 90 percent of the actuarial 183.3accrued liabilities of the applicable plan in the two most recent priorconsecutive actuarial 183.4valuationvaluations prepared under section 
         356.215 and under the standards for actuarial 183.5work of the Legislative Commission on Pensions and Retirement by the approved actuary 183.6retained by the Public Employees Retirement Association under section 
         356.214.183.7(d) After having met the definition of funding stability under paragraph (c), a full 183.8or prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever 183.9applies, rather than adjustments under paragraph (b), is again applied in a subsequent year 183.10or years if the market value of assets of the public employees police and fire retirement 183.11plan equals or is less than:183.12(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two 183.13consecutive actuarial valuations; or183.14(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most 183.15recent actuarial valuation.183.16(c)(e) An increase in annuity or benefit payments under this section must be made 183.17automatically unless written notice is filed by the annuitant or benefit recipient with the 183.18executive director of the Public Employees Retirement Association requesting that the 183.19increase not be made.183.20EFFECTIVE DATE.This section is effective the day following final enactment.183.21ARTICLE 12183.22TEACHERS RETIREMENT ASSOCIATION EARLY RETIREMENT 183.23REDUCTION FACTORS183.24    Section 1. Minnesota Statutes 2012, section 354.44, subdivision 6, is amended to read:183.25    Subd. 6. Computation of formula program retirement annuity. (a) The formula 183.26retirement annuity must be computed in accordance with the applicable provisions of the 183.27formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 183.28section 
         354.05, subdivision 13a, for the period of the member's formula service credit.183.29    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first 183.30became a member of the association or a member of a pension fund listed in section 183.31356.30, subdivision 3
         , before July 1, 1989, unless paragraph (d), in conjunction with 183.32paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 183.33average salary as defined in section 
         354.05, subdivision 13a, multiplied by the following 184.1percentages per year of formula service credit shall determine the amount of the annuity to 184.2which the member qualifying therefor is entitled for service rendered before July 1, 2006:

184.3Coordinated MemberBasic Member184.4184.5184.6Each year of service during 
                  		first tenthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 1, per yearthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 3, per year184.7184.8184.9Each year of service 
                  		thereafterthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 2, per yearthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 4, per year

184.10    For service rendered on or after July 1, 2006, the average salary as defined in section 184.11354.05
         , subdivision 13a, multiplied by the following percentages per year of service credit, 184.12determines the amount the annuity to which the member qualifying therefor is entitled:

184.13Coordinated MemberBasic Member184.14184.15184.16Each year of service during 
                  		first tenthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 1a, per yearthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 3, per year184.17184.18184.19Each year of service after 
                  		ten years of servicethe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 2b, per yearthe percent specified 
                  		in section 
                  356.315, 
                  		subdivision 4, per year

184.20    (c)(i) This paragraph applies only to a person who first became a member of the 184.21association or a member of a pension fund listed in section 
         356.30, subdivision 3, before 184.22July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 184.23conjunction with this paragraph than when calculated under paragraph (d), in conjunction 184.24with paragraph (e).184.25    (ii) Where any member retires prior to normal retirement age under a formula 184.26annuity, the member shall be paid a retirement annuity in an amount equal to the normal 184.27annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 184.28that the member is under normal retirement age at the time of retirement except that for 184.29any member who has 30 or more years of allowable service credit, the reduction shall be 184.30applied only for each month that the member is under age 62.184.31    (iii) Any member whose attained age plus credited allowable service totals 90 years 184.32is entitled, upon application, to a retirement annuity in an amount equal to the normal 184.33annuity provided in paragraph (b), without any reduction by reason of early retirement.184.34    (d) This paragraph applies to a member who has become at least 55 years old and 184.35first became a member of the association after June 30, 1989, and to any other member 184.36who has become at least 55 years old and whose annuity amount when calculated under 184.37this paragraph and in conjunction with paragraph (e), is higher than it is when calculated 184.38under paragraph (b), in conjunction with paragraph (c). For a basic member, the average 184.39salary, as defined in section 
         354.05, subdivision 13a, multiplied by the percent specified 185.1by section 
         356.315, subdivision 4, for each year of service for a basic member shall 185.2determine the amount of the retirement annuity to which the basic member is entitled. 185.3The annuity of a basic member who was a member of the former Minneapolis Teachers 185.4Retirement Fund Association as of June 30, 2006, must be determined according to the 185.5annuity formula under the articles of incorporation of the former Minneapolis Teachers 185.6Retirement Fund Association in effect as of that date. For a coordinated member, the 185.7average salary, as defined in section 
         354.05, subdivision 13a, multiplied by the percent 185.8specified in section 
         356.315, subdivision 2, for each year of service rendered before July 185.91, 2006, and by the percent specified in section 
         356.315, subdivision 2b, for each year of 185.10service rendered on or after July 1, 2006, determines the amount of the retirement annuity 185.11to which the coordinated member is entitled.185.12    (e) This paragraph applies to a person who has become at least 55 years old and first 185.13becomes a member of the association after June 30, 1989, and to any other member who 185.14has become at least 55 years old and whose annuity is higher when calculated under 185.15paragraph (d) in conjunction with this paragraph than when calculated under paragraph 185.16(b), in conjunction with paragraph (c). An employee who retires under the formula annuity 185.17before the normal retirement age shall be paid the normal annuity provided in paragraph 185.18(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that 185.19would be payable to the employee if the employee deferred receipt of the annuity and the 185.20annuity amount were augmented at an annual rate of three percent compounded annually 185.21from the day the annuity begins to accrue until the normal retirement age if the employee 185.22became an employee before July 1, 2006, and at 2.5 percent compounded annually if the 185.23employee becomes an employee after June 30, 2006. Except in regards to section 354.46, 185.24this paragraph remains in effect until June 30, 2015.185.25(f) After June 30, 2020, this paragraph applies to a person who has become at least 185.2655 years old and first becomes a member of the association after June 30, 1989, and to any 185.27other member who has become at least 55 years old and whose annuity is higher when 185.28calculated under paragraph (d) in conjunction with this paragraph than when calculated 185.29under paragraph (b), in conjunction with paragraph (c). An employee who retires under 185.30the formula annuity before the normal retirement age is entitled to receive the normal 185.31annuity provided in paragraph (d). For a person who is at least age 62 or older and has at 185.32least 30 years of service, the annuity must be reduced by an early reduction factor of six 185.33percent per year of the annuity that would be payable to the employee if the employee 185.34deferred receipt of the annuity and the annuity amount were augmented at an annual rate 185.35of three percent compounded annually from the day the annuity begins to accrue until the 185.36normal retirement age if the employee became an employee before July 1, 2006, and at 2.5 186.1percent compounded annually if the employee became an employee after June 30, 2006. 186.2For a person who is not at least age 62 or older and does not have at least 30 years of 186.3service, the annuity would be reduced by an early reduction factor of four percent per year 186.4for ages 55 through 59 and seven percent per year of the annuity that would be payable 186.5to the employee if the employee deferred receipt of the annuity and the annuity amount 186.6were augmented at an annual rate of three percent compounded annually from the day 186.7the annuity begins to accrue until the normal retirement age if the employee became an 186.8employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 186.9became an employee after June 30, 2006.186.10(g) After June 30, 2015, and before July 1, 2020, for a person who would have 186.11a reduced retirement annuity under either paragraph (e) or (f) if they were applicable, 186.12the employee is entitled to receive a reduced annuity which must be calculated using 186.13a blended reduction factor augmented monthly by 1/60 of the difference between the 186.14reduction required under paragraph (e) and the reduction required under paragraph (f).186.15    (f) (h) No retirement annuity is payable to a former employee with a salary that 186.16exceeds 95 percent of the governor's salary unless and until the salary figures used in 186.17computing the highest five successive years average salary under paragraph (a) have been 186.18audited by the Teachers Retirement Association and determined by the executive director 186.19to comply with the requirements and limitations of section 
         354.05, subdivisions 35 and 35a.186.20EFFECTIVE DATE.This section is effective July 1, 2013.186.21ARTICLE 13186.22FIRST CLASS CITY TEACHER RETIREMENT INCREASES AND 186.23FINANCIAL SOLVENCY MEASURES186.24    Section 1. [354.436] DIRECT STATE AID ON BEHALF OF THE FORMER 186.25MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.186.26    Subdivision 1.Aid authorization.The state shall pay $12,954,000 to the Teachers 186.27Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund 186.28Association. 186.29    Subd. 2.Aid appropriation.The commissioner of management and budget shall 186.30pay the aid annually on October 1. The amount required is appropriated annually from the 186.31general fund to the commissioner of management and budget.186.32    Subd. 3.Aid expiration.The aid specified in this section terminates and this 186.33section expires when the current assets of the Teachers Retirement Association fund equal 186.34or exceed the actuarial accrued liabilities of the fund as determined in the most recent 187.1actuarial valuation report for the Teachers Retirement Association fund by the actuary 187.2retained under section 356.214, or on the established date for full funding under section 187.3356.215, subdivision 11, whichever occurs earlier.187.4EFFECTIVE DATE.This section is effective the day following final enactment.187.5    Sec. 2. Minnesota Statutes 2012, section 354A.011, subdivision 21, is amended to read:187.6    Subd. 21. Retirement.(a) "Retirement" means the time after the date of cessation 187.7of active teaching service by a teacher who is thereafterthen entitled to an accrued 187.8retirement annuity commencingbeginning as designated by the board of trustees and 187.9payable pursuant to anupon filing a valid application for an annuity filed with the board. 187.10The applicable provisions of law, articles of incorporation and bylaws in effect on the date 187.11of cessation of active teaching service thereafter determine the rights of the person.187.12(b) For members of the St. Paul Teachers Retirement Fund Association, a right to 187.13a retirement annuity requires a complete and continuous separation for 90 days from 187.14employment in any form with Independent School District No. 625, including service 187.15provided to the school district as an independent contractor or as an employee of an 187.16independent contractor.187.17EFFECTIVE DATE.This section is effective the day following final enactment.187.18    Sec. 3. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:187.19    Subdivision 1. Employee contributions. (a) The contribution required to be paid 187.20by each member of a teachers retirement fund association is the percentage of total salary 187.21specified below for the applicable association and program:

187.22Association and ProgramPercentage of Total Salary187.23Duluth Teachers Retirement Fund Association187.24old law and new law187.25coordinated programs187.26before July 1, 2011 20135.56.5 percent187.27effective July 1, 2011 20136.07.0 percent187.28effective July 1, 2012 20146.57.5 percent187.29St. Paul Teachers Retirement Fund Association187.30basic program before July 1, 20118 percent187.31basic program after June 30, 20118.25 percent187.32basic program after June 30, 20128.5 percent187.33basic program after June 30, 20138.75 percent187.34basic program after June 30, 20149.0 percent187.35basic program after June 30, 20159.5 percent188.1basic program after June 30, 201610.0 percent188.2coordinated program before July 1, 20115.5 percent188.3coordinated program after June 30, 20115.75 percent188.4coordinated program after June 30, 20126.0 percent188.5coordinated program after June 30, 20136.25 percent188.6coordinated program after June 30, 20146.50 percent188.7coordinated program after June 30, 20157.0 percent188.8coordinated program after June 30, 20167.50 percent

188.9(b) Contributions shall be made by deduction from salary and must be remitted 188.10directly to the respective teachers retirement fund association at least once each month.188.11(c) When an employee contribution rate changes for a fiscal year, the new 188.12contribution rate is effective for the entire salary paid by the employer with the first 188.13payroll cycle reported.188.14EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers 188.15Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 188.16Teachers Retirement Fund Association on the day following final enactment.188.17    Sec. 4. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:188.18    Subd. 2a. Employer regular and additional contributions. (a) The employing 188.19units shall make the following employer contributions to teachers retirement fund 188.20associations:188.21(1) for any coordinated member of one of the following teachers retirement fund 188.22associations in a city of the first class, the employing unit shall make a regular employer 188.23contribution to the respective retirement fund association in an amount equal to the 188.24designated percentage of the salary of the coordinated member as provided below:

188.25Duluth Teachers Retirement Fund Association188.26before July 1, 2011 20135.79 6.79 percent188.27effective July 1, 2011 20136.297.29 percent188.28effective July 1, 2012 20146.797.50 percent188.29St. Paul Teachers Retirement Fund Association188.30before July 1, 20114.50 percent188.31after June 30, 20114.75 percent188.32after June 30, 20125.0 percent188.33after June 30, 20135.25 percent188.34after June 30, 20145.5 percent188.35after June 30, 20156.0 percent188.36after June 30, 20166.25 percent188.37after June 30, 20176.5 percent

189.1(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the 189.2employing unit shall make a regular employer contribution to the respective retirement 189.3fund in an amount according to the schedule below:

189.4before July 1, 20118.0 percent of salary189.5after June 30, 20118.25 percent of salary189.6after June 30, 20128.5 percent of salary189.7after June 30, 20138.75 percent of salary189.8after June 30, 20149.0 percent of salary189.9after June 30, 20159.5 percent of salary189.10after June 30, 20169.75 percent of salary189.11after June 30, 201710.0 percent of salary

189.12(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 189.13employing unit shall make an additional employer contribution to the respective fund in 189.14an amount equal to 3.64 percent of the salary of the basic member;189.15(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association, 189.16the employing unit shall make an additional employer contribution to the respective fund 189.17in an amount equal to the applicable percentage of the coordinated member's salary, 189.18as provided below:

189.19St. Paul Teachers Retirement Fund Association3.84 percent

189.20(b) The regular and additional employer contributions must be remitted directly to 189.21the respective teachers retirement fund association at least once each month. Delinquent 189.22amounts are payable with interest under the procedure in subdivision 1a.189.23(c) Payments of regular and additional employer contributions for school district 189.24or technical college employees who are paid from normal operating funds must be made 189.25from the appropriate fund of the district or technical college.189.26(d) When an employer contribution rate changes for a fiscal year, the new 189.27contribution rate is effective for the entire salary paid by the employer with the first 189.28payroll cycle reported.189.29EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers 189.30Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 189.31Teachers Retirement Fund Association on the day following final enactment.189.32    Sec. 5. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision 189.33to read:189.34    Subd. 2c.Duluth Teachers Retirement Fund Association; employer 189.35contributions for reemployed annuitants.The school district shall make the regular 190.1employer contributions and additional employer contributions specified in subdivision 2a 190.2on behalf of any retired member of the Duluth Teachers Retirement Fund Association who 190.3is reemployed by Independent School District No. 709, including providing service to the 190.4school district as an independent contractor or as an employee of an independent contractor.190.5EFFECTIVE DATE.This section is effective July 1, 2013.190.6    Sec. 6. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision 190.7to read:190.8    Subd. 2d.St. Paul Teachers Retirement Fund Association; employer 190.9contributions for reemployed annuitants.Independent School District No. 625 shall 190.10make the regular employer contribution and additional employer contribution specified in 190.11subdivision 2a, plus a supplemental contribution equal to 2.5 percent of salary, on behalf 190.12of any retired member of the St. Paul Teachers Retirement Fund Association who is 190.13reemployed by Independent School District No. 625, including providing service to the 190.14school district as an independent contractor or as an employee of an independent contractor.190.15EFFECTIVE DATE.This section is effective the day following final enactment.190.16    Sec. 7. Minnesota Statutes 2012, section 354A.12, subdivision 3a, is amended to read:190.17    Subd. 3a. Special direct state aid to first class city teachers retirement fund 190.18associations. (a) The state shall pay $346,000$6,346,000 as special direct state aid to 190.19the Duluth Teachers Retirement Fund Association,and $2,827,000 $9,827,000 to the St. 190.20Paul Teachers Retirement Fund Association and, for the former Minneapolis Teachers 190.21Retirement Fund Association, $12,954,000 to the Teachers Retirement Association.190.22    (b) The direct state aids under this subdivision are payable October 1 annually. The 190.23commissioner of management and budget shall pay the direct state aidaids specified in 190.24this subdivision. The amount amounts required under this subdivision isare appropriated 190.25annually from the general fund to the commissioner of management and budget.190.26EFFECTIVE DATE.This section is effective the day following final enactment. 190.27    Sec. 8. Minnesota Statutes 2012, section 354A.12, subdivision 3c, is amended to read:190.28    Subd. 3c. Termination of supplemental contributions and direct matching 190.29and state aid.(a) The supplemental contributions payable to the St. Paul Teachers 190.30Retirement Fund Association by Independent School District No. 625 under section 190.31423A.02, subdivision 3
         , or the directand all forms of state aid under subdivision 3a to the 190.32St. Paul Teachers Retirement Fund Association must continue until the current assets of 191.1the fund equal or exceed the actuarial accrued liability of the fund as determined in the 191.2most recent actuarial report for the fund by the actuary retained under section 
         356.214 or 191.3until June 30, 2037, whichever occurs earlier.191.4(b) The aid to the Duluth Teachers Retirement Fund Association under section 191.5423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth 191.6Teachers Retirement Fund Association must continue until the current assets of the fund 191.7equal or exceed the actuarial accrued liability of the fund as determined in the most 191.8recent actuarial report for the fund by the actuary retained under section 356.214 or until 191.9the established date for full funding under section 356.215, subdivision 11, whichever 191.10occurs earlier.191.11EFFECTIVE DATE.This section is effective the day following final enactment.191.12    Sec. 9. Minnesota Statutes 2012, section 354A.12, subdivision 7, is amended to read:191.13    Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers, 191.14within the time period specified in subdivision 8 following the payment of a refund or 191.15the accrual date of any retirement annuity, survivor benefit, or disability benefit, that 191.16benefit overpayment has occurred due to using invalid service or salary, or due to any 191.17erroneous calculation procedure, the executive director must recalculate the annuity or 191.18benefit payable and recover any overpayment. The executive director shall recover the 191.19overpayment by requiring direct repayment or by suspending or reducing the payment of a 191.20retirement annuity or other benefit payable under this chapter to the applicable person or 191.21the person's estate, whichever applies, until all outstanding amounts have been recovered.191.22 If a benefit overpayment or improper payment of benefits occurred caused by a failure 191.23of the person to satisfy length of separation requirements for retirement under section 191.24354A.011, subdivision 21, the executive director shall recover the improper payments by 191.25requiring direct repayment. The repayment must include interest at the rate of 0.71 percent 191.26per month from the first of the month in which a monthly benefit amount was paid to the 191.27first of the month in which the amount is repaid, with annual compounding.191.28(b) In the event the executive director determines that an overpaid annuity or benefit 191.29that is the result of invalid salary included in the average salary used to calculate the 191.30payment amount must be recovered, the executive director must determine the amount of 191.31the employee deductions taken in error on the invalid salary, with interest as determined 191.32under 
         354A.37, subdivision 3, and must subtract that amount from the total annuity or 191.33benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if 191.34any, must be recovered.192.1(c) If the invalid employee deductions plus interest exceed the amount of the 192.2overpaid benefits, the balance must be refunded to the person to whom the benefit or 192.3annuity is being paid.192.4(d) Any invalid employer contributions reported on the invalid salary must be 192.5credited against future contributions payable by the employer.192.6(e) If a member or former member, who is receiving a retirement annuity or 192.7disability benefit for which an overpayment is being recovered, dies before recovery of the 192.8overpayment is completed and an optional annuity or refund is payable, the remaining 192.9balance of the overpaid annuity or benefit must continue to be recovered from the payment 192.10to the optional annuity beneficiary or refund recipient.192.11(f) The board of trustees shall adopt policies directing the period of time and manner 192.12for the collection of any overpaid retirement or optional annuity, and survivor or disability 192.13benefit, or a refund that the executive director determines must be recovered as provided 192.14under this section.192.15EFFECTIVE DATE.This section is effective the day following final enactment.192.16    Sec. 10. Minnesota Statutes 2012, section 354A.27, is amended by adding a 192.17subdivision to read:192.18    Subd. 6a.Postretirement adjustment transition.(a) If the funded ratio of the 192.19retirement plan based on the actuarial value of assets is at least 90 percent as reported 192.20in the most recent actuarial valuation prepared under sections 356.214 and 356.215, 192.21this subdivision expires and subsequent postretirement adjustments are governed by 192.22subdivision 7.192.23(b) Each annuity or benefit recipient of the retirement plan who has been receiving 192.24that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to 192.25receive a postretirement adjustment of one percent, payable on January 1.192.26EFFECTIVE DATE.This section is effective July 1, 2013, and applies to the 192.27January 1, 2014, postretirement increase.192.28    Sec. 11. Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:192.29    Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies 192.30if subdivision 66a has expired.192.31(b) A percentage adjustment must be computed and paid under this subdivision to 192.32eligible persons under subdivision 5. This adjustment is determined by reference to the 192.33Consumer Price Index for urban wage earners and clerical workers all items index as 193.1reported by the Bureau of Labor Statistics within the United States Department of Labor 193.2each year as part of the determination of annual cost-of-living adjustments to recipients 193.3of federal old-age, survivors, and disability insurance. For calculations of cost-of-living 193.4adjustments under paragraph (c), the term "average third quarter Consumer Price Index 193.5value" means the sum of the monthly index values as initially reported by the Bureau of 193.6Labor Statistics for the months of July, August, and September, divided by 3.193.7(c) Before January 1 of each year, the executive director must calculate the amount 193.8of the cost-of-living adjustment by dividing the most recent average third quarter index 193.9value by the same average third quarter index value from the previous year, subtract one 193.10from the resulting quotient, and express the result as a percentage amount, which must be 193.11rounded to the nearest one-tenth of one percent.193.12(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment 193.13to be applied as a permanent increase to the regular payment of each eligible member 193.14on January 1 of the next calendar year. For any eligible member whose effective date 193.15of benefit commencement occurred during the calendar year before the cost-of-living 193.16adjustment is applied, the full increase amount must be prorated on the basis of whole 193.17calendar quarters in benefit payment status in the calendar year prior to the January 1 on 193.18which the cost-of-living adjustment is applied, calculated to the third decimal place.193.19(e) The adjustment must not be less than zero nor greater than five percent.193.20(f) If the funding ratio of the plan as determined in the most recent actuarial 193.21valuation using the actuarial value of assets is less than 80 percent there will be no 193.22postretirement adjustment the following January 1.193.23EFFECTIVE DATE.This section is effective July 1, 2013.193.24    Sec. 12. Minnesota Statutes 2012, section 354A.31, subdivision 3, is amended to read:193.25    Subd. 3. Resumption of teaching after commencement of a retirement annuity.193.26    (a) Any person who retired and is receiving a coordinated program retirement annuity 193.27under the provisions of sections 
         354A.31 to 
         354A.41 or any person receiving a basic 193.28program retirement annuity under the governing sections in the articles of incorporation 193.29or bylaws and who has resumed teaching service for the school district in which the 193.30teachers retirement fund association exists is entitled to continue to receive retirement 193.31annuity payments, except that all or a portion of the annuity payments must be deferred 193.32during the calendar year immediately following the calendar year in which the person's 193.33salary from the teaching service is in an amount greater than $46,000. The amount of the 193.34annuity deferral is one-third the salary amount in excess of $46,000 and must be deducted 194.1from the annuity payable for the calendar year immediately following the calendar year 194.2in which the excess amount was earned.194.3    (b) If the person is retired for only a fractional part of the calendar year during the 194.4initial year of retirement, the maximum reemployment salary exempt from triggering a 194.5deferral as specified in this subdivision must be prorated for that calendar year.194.6    (c) After a person has reached the Social Security normal retirement age, no deferral 194.7requirement is applicable regardless of the amount of any compensation received for 194.8teaching service for the school district in which the teachers retirement fund association 194.9exists.194.10    (d) The amount of the retirement annuity deferral must be handled or disposed 194.11of as provided in section 
         356.47.194.12(e) Notwithstanding other paragraphs of this subdivision, for any retired Duluth 194.13Teachers Retirement Fund Association member whose effective date of retirement is after 194.14June 30, 2013, amounts specified as deferred under this subdivision must instead be 194.15forfeited to the Duluth Teachers Retirement Fund Association fund.194.16(f) Notwithstanding other paragraphs of this subdivision, for any retired St. Paul 194.17Teachers Retirement Fund Association basic or coordinated program member whose 194.18effective date of retirement is after June 30, 2013, amounts specified as deferred under 194.19this subdivision must instead be forfeited to the St. Paul Teachers Retirement Fund 194.20Association fund.194.21    (e)(g) For the purpose of this subdivision, salary from teaching service includes: (i) 194.22all income for services performed as a consultant or independent contractor; or income 194.23resulting from working with the school district in any capacity; and (ii) the greater of either 194.24the income received or an amount based on the rate paid with respect to an administrative 194.25position, consultant, or independent contractor in the school district in which the teachers 194.26retirement fund association exists and at the same level as the position occupied by the 194.27person who resumes teaching service.194.28    (f)(h) On or before February 15 of each year, each applicable employing unit 194.29shall report to the teachers retirement fund association the amount of postretirement 194.30salary as defined in this subdivision, earned as a teacher, consultant, or independent 194.31contractor during the previous calendar year by each retiree of the teachers retirement 194.32fund association for teaching service performed after retirement. The report must be in 194.33a format approved by the executive secretary or director.194.34EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers 194.35Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 194.36Teachers Retirement Fund Association the day following final enactment.195.1    Sec. 13. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:195.2    Subd. 4. Computation of normal coordinated retirement annuity; St. Paul 195.3fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers 195.4Retirement Fund Association.195.5(b) The normal coordinated retirement annuity is an amount equal to a retiring 195.6coordinated member's average salary under section 
         354A.011, subdivision 7a, multiplied 195.7by the retirement annuity formula percentage.195.8(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 195.9became a member or a member in a pension fund listed in section 
         356.30, subdivision 3, 195.10before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces 195.11a higher annuity amount, in which case paragraph (d) will apply. For service rendered 195.12before July 1, 2015, the retirement annuity formula percentage for purposes of this 195.13paragraph is the percent specified in section 
         356.315, subdivision 1, per year for each year 195.14of coordinated service for the first ten years and the percent specified in section 
         356.315, 195.15subdivision 2
         , for each year of coordinated service thereafter. For service rendered after 195.16June 30, 2015, the retirement annuity formula percentage for purposes of this paragraph 195.17is the percent specified in section 356.315, subdivision 1a, per year for each year of 195.18coordinated service for the first ten years and the percent specified in section 356.315, 195.19subdivision 2b, for each year of coordinated service thereafter.195.20(d) This paragraph applies to a person who has become at least 55 years old and who 195.21first becomes a member after June 30, 1989, and to any other member who has become 195.22at least 55 years old and whose annuity amount, when calculated under this paragraph 195.23and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 195.24(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 195.25percentage for purposes of this paragraph is the percent specified in section 
         356.315, 195.26subdivision 2
         , for each year of coordinated service rendered before July 1, 2015, and 195.27the percent specified in section 356.215, subdivision 2b, for each year of coordinated 195.28service thereafter.195.29EFFECTIVE DATE.This section is effective July 1, 2014.195.30    Sec. 14. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:195.31    Subd. 4a. Computation of normal coordinated retirement annuity; Duluth 195.32fund. (a) This subdivision applies to the new law coordinated program of the Duluth 195.33Teachers Retirement Fund Association.196.1(b) The normal coordinated retirement annuity is an amount equal to a retiring 196.2coordinated member's average salary under section 
         354A.011, subdivision 7a, multiplied 196.3by the retirement annuity formula percentage.196.4(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 196.5became a member or a member in a pension fund listed in section 
         356.30, subdivision 3, 196.6before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 196.7higher annuity amount, in which case paragraph (d) applies. The retirement annuity 196.8formula percentage for purposes of this paragraph is the percent specified in section 196.9356.315, subdivision 1
         , per year for each year of coordinated program service for the first 196.10ten years rendered through June 30, 2013, and the percent specified in section 356.315, 196.11subdivision 1a, per year for each year of coordinated program service rendered after June 196.1230, 2013, and the percent specified in section 
         356.315, subdivision 2, for each subsequent 196.13year of coordinated program service through June 30, 2013, and the percent specified in 196.14section 356.315, subdivision 2b, per year for each year of coordinated program service 196.15rendered after June 30, 2013.196.16(d) This paragraph applies to a person who is at least 55 years old and who first 196.17becomes a member after June 30, 1989, and to any other member who is at least 55 years 196.18old and whose annuity amount, when calculated under this paragraph and in conjunction 196.19with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction 196.20with subdivision 6. The retirement annuity formula percentage for purposes of this 196.21paragraph is the percent specified in section 
         356.315, subdivision 2, for each year of 196.22coordinated program service through June 30, 2013, and the percent specified in section 196.23356.315, subdivision 2b, per year for each year of coordinated program service rendered 196.24after June 30, 2013.196.25EFFECTIVE DATE.This section is effective July 1, 2013.196.26    Sec. 15. Minnesota Statutes 2012, section 354A.31, subdivision 7, is amended to read:196.27    Subd. 7. Actuarial Reduction for early retirement.(a) This subdivision applies to 196.28a person who has become at least 55 years old and first becomes a coordinated member 196.29after June 30, 1989, and to any other coordinated member who has become at least 55 196.30years old and whose annuity is higher when calculated using the retirement annuity 196.31formula percentage in subdivision 4, paragraph (d), andor subdivision 4a, paragraph (d), 196.32as applicable, in conjunction with this subdivision than when calculated under subdivision 196.334, paragraph (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6.196.34(b) A coordinated member who retires before the full benefitnormal retirement 196.35age shall be paid the retirement annuity calculated using the retirement annuity formula 197.1percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), reduced so 197.2that the reduced annuity is the actuarial equivalent of the annuity that would be payable 197.3to the member if the member deferred receipt of the annuity and the annuity amount 197.4were augmented at an annual rate of three percent compounded annually from the day 197.5the annuity begins to accrue until the normal retirement age if the employee became an 197.6employee before July 1, 2006, and at 2.5 percent compounded annually from the day the 197.7annuity begins to accrue until the normal retirement age if the person initially becomes a 197.8teacher after June 30, 2006. whichever is applicable, multiplied by the applicable early 197.9retirement factor specified below:

197.10Under age 62Age 62 or older197.11or less than 30 years of servicewith 30 years of service197.12Normal retirement age:65666566197.13Age at retirement197.14550.53760.4592197.15560.57450.4992197.16570.60920.5370197.17580.64190.5726197.18590.67260.6062197.19600.73540.6726197.20610.79470.7354197.21620.85070.79470.88310.8389197.22630.90350.85070.92460.8831197.23640.95330.90350.96350.9246197.24651.00000.95331.00000.9635197.25661.00001.0000

197.26For normal retirement ages between ages 65 and 66, the early retirement factors will 197.27be determined by linear interpolation between the early retirement factors applicable for 197.28normal retirement ages 65 and 66.197.29EFFECTIVE DATE.This section is effective July 1, 2013.197.30    Sec. 16. Minnesota Statutes 2012, section 354A.35, subdivision 2, is amended to read:197.31    Subd. 2. Death while eligible to retire; surviving spouse optional annuity. (a) 197.32The surviving spouse of a vested coordinated member who dies prior to retirement may 197.33elect to receive, instead of a refund with interest under subdivision 1, an annuity equal 197.34to the 100 percent joint and survivor annuity the member could have qualified for had 197.35the member terminated service on the date of death. The surviving spouse eligible for 197.36a surviving spouse benefit under this paragraph may apply for the annuity at any time 197.37after the date on which the deceased employee would have attained the required age for 198.1retirement based on the employee's allowable service. A surviving spouse eligible for 198.2surviving spouse benefits under paragraph (b) or (c) may apply for an annuity at any time 198.3after the member's death. The member's surviving spouse shall be paid a joint and survivor 198.4annuity under section 
         354A.32 and computed under section 
         354A.31.198.5(b) If the member was under age 55 and has credit for at least 30 years of allowable 198.6service on the date of death, the surviving spouse may elect to receive a 100 percent joint 198.7and survivor annuity based on the age of the member and surviving spouse on the date 198.8of death. The annuity is payable using the full early retirement reduction under section 198.9354A.31, subdivision 6
         , paragraph (a), to age 55 and one-half of the early retirement 198.10reduction from age 55 to the age payment begins.198.11(c) If a vested member of the Duluth Teachers Retirement Fund Association was 198.12under age 55 on the date of death but did not yet qualify for retirement, the surviving 198.13spouse may elect to receive the 100 percent joint and survivor annuity based on the age 198.14of the member and the survivor at the time of death. The annuity is payable using the 198.15full early retirement reduction under section 
         354A.31, subdivision 6 or 7, to age 55 and 198.16one-half of the early retirement reduction from age 55 to the date payment begins.198.17(d) If a vested member of the St. Paul Teachers Retirement Fund Association was 198.18under age 55 on the date of death but did not yet qualify for retirement, the surviving 198.19spouse may elect to receive the 100 percent joint and survivor annuity based on the age 198.20of the member and the survivor at the time of death. The annuity is payable using the 198.21full early retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and 198.22one-half of the actuarial equivalent reduction from age 55 to the date payment begins. 198.23The actuarial equivalent reduction is calculated so that the reduced annuity is the actuarial 198.24equivalent of the annuity that would be payable to the member if the member deferred 198.25receipt of the annuity and the annuity amount were augmented at an annual rate of 2.5 198.26percent compounded annually from the day the annuity begins to accrue until the normal 198.27retirement age. 198.28(d) (e) Sections 
         354A.37, subdivision 2, and 
         354A.39 apply to a deferred annuity 198.29or surviving spouse benefit payable under this section. The benefits are payable for the 198.30life of the surviving spouse, or upon expiration of the term certain benefit payment under 198.31subdivision 2b.198.32EFFECTIVE DATE.This section is effective the day following final enactment.198.33    Sec. 17. Minnesota Statutes 2012, section 356.215, subdivision 8, is amended to read:199.1    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use 199.2the applicable following preretirement interest assumption and the applicable following 199.3postretirement interest assumption:199.4(1) select and ultimate interest rate assumption

199.5199.6199.7199.8planultimate 
                  		preretirement 
                  		interest rate 
                  		assumptionultimate 
                  		postretirement 
                  		interest rate 
                  		assumption199.9general state employees retirement plan 8.5% 6.0%199.10correctional state employees retirement plan8.56.0199.11State Patrol retirement plan8.56.0199.12199.13199.14legislators retirement plan 0.0  -2.0 until June 30, 
                  		2040, and -2.5 after 
                  		June 30, 2040 199.15199.16199.17elective state officers retirement plan 0.0  -2.0 until June 30, 
                  		2040, and -2.5 after 
                  		June 30, 2040 199.18judges retirement plan8.56.0199.19general public employees retirement plan8.56.0199.20public employees police and fire retirement plan8.56.0199.21199.22local government correctional service 
                  		retirement plan8.56.0199.23teachers retirement plan8.56.0199.24Duluth teachers retirement plan8.58.5199.25St. Paul teachers retirement plan8.58.5

199.26Except for the legislators retirement plan and the elective state officers retirement 199.27plan, the select preretirement interest rate assumption for the period after June 30, 2012, 199.28through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the 199.29elective state officers retirement plan, the select postretirement interest rate assumption for 199.30the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for the Duluth 199.31teachers retirement plan and the St. Paul teachers retirement plan, each with a select 199.32postretirement interest rate assumption for the period after June 30, 2012, through June 199.3330, 2017, of 8.0 percent.199.34(2) single rate preretirement and postretirement interest rate assumption

199.35199.36planinterest rate 
                  		assumption199.37Bloomington Fire Department Relief Association6.0199.38199.39local monthly benefit volunteer firefighters relief 
                  		associations5.0

199.40    (b) The actuarial valuation must use the applicable following single rate future salary 199.41increase assumption, the applicable following modified single rate future salary increase 199.42assumption, or the applicable following graded rate future salary increase assumption:200.1    (1) single rate future salary increase assumption

200.2planfuture salary increase assumption200.3legislators retirement plan5.0%200.4judges retirement plan3.0 200.5200.6Bloomington Fire Department Relief 
                  		Association4.0

200.7    (2) age-related future salary increase age-related select and ultimate future salary 200.8increase assumption or graded rate future salary increase assumption

200.9planfuture salary increase assumption200.10local government correctional service retirement planassumption C200.11Duluth teachers retirement planassumption A200.12St. Paul teachers retirement planassumption B

200.13For plans other than the Duluth teachers 200.14retirement plan, the select calculation 200.15is: during the designated select period, a 200.16designated percentage rate is multiplied by 200.17the result of the designated integer minus T, 200.18where T is the number of completed years 200.19of service, and is added to the applicable 200.20future salary increase assumption. The 200.21designated select period is ten years and the 200.22designated integer is ten for all retirement 200.23plans covered by this clause the Duluth 200.24Teachers Retirement Fund Association 200.25and for the local government correctional 200.26service retirement plan and 15 for the St. 200.27Paul Teachers Retirement Fund Association. 200.28The designated percentage rate is 0.30.2 200.29percent for the St. Paul Teachers Retirement 200.30Fund Association. The select calculation 200.31for the Duluth Teachers Retirement Fund 200.32Association is 8.00 percent per year for 200.33service years one through seven, 7.25 percent 200.34per year for service years seven and eight, 200.35and 6.50 percent per year for service years 200.36eight and nine.200.37    The ultimate future salary increase assumption is:

201.1ageABC201.2168.00%6.00%6.90%5.90%9.00%201.3178.006.006.905.909.00201.4188.006.006.905.909.00201.5198.006.006.905.909.00201.6206.906.006.905.909.00201.7216.906.006.905.908.75201.8226.906.006.905.908.50201.9236.856.006.855.858.25201.10246.806.006.805.808.00201.11256.756.006.755.757.75201.12266.706.006.705.707.50201.13276.656.006.655.657.25201.14286.606.006.605.607.00201.15296.556.006.555.556.75201.16306.506.006.505.506.75201.17316.456.006.455.456.50201.18326.406.006.405.406.50201.19336.356.006.355.356.50201.20346.306.006.305.306.25201.21356.256.006.255.256.25201.22366.205.866.205.206.00201.23376.155.736.155.156.00201.24386.105.596.105.106.00201.25396.055.456.055.055.75201.26406.005.316.005.005.75201.27415.905.185.954.955.75201.28425.805.045.904.905.50201.29435.704.905.854.855.25201.30445.604.765.804.805.25201.31455.504.635.754.755.00201.32465.404.495.704.705.00201.33475.304.355.654.655.00201.34485.204.215.604.605.00201.35495.104.085.554.555.00201.36505.003.945.504.505.00201.37514.903.805.454.455.00201.38524.803.665.404.405.00201.39534.703.535.354.355.00201.40544.603.395.304.305.00201.41554.503.255.254.254.75201.42564.403.255.204.204.75201.43574.303.255.154.154.50202.1584.203.255.104.104.25202.2594.103.255.054.054.25202.3604.003.255.004.004.25202.4613.903.255.004.004.25202.5623.803.255.004.004.25202.6633.703.255.004.004.25202.7643.603.255.004.004.25202.8653.503.255.004.004.00202.9663.503.255.004.004.00202.10673.503.255.004.004.00202.11683.503.255.004.004.00202.12693.503.255.004.004.00202.13703.503.255.004.004.00

202.14(3) service-related ultimate future salary increase assumption

202.15202.16general state employees retirement plan of the 
                  		Minnesota State Retirement Systemassumption A202.17202.18general employees retirement plan of the Public 
                  		Employees Retirement Associationassumption B202.19Teachers Retirement Associationassumption C202.20public employees police and fire retirement planassumption D202.21State Patrol retirement planassumption E202.22202.23correctional state employees retirement plan of the 
                  		Minnesota State Retirement Systemassumption F

202.24202.25service 
                  		lengthABCDEF202.26110.50%12.03%12.00%13.00%8.00%6.00%202.2728.108.909.0011.007.505.85202.2836.907.468.009.007.005.70202.2946.206.587.508.006.755.55202.3055.705.977.256.506.505.40202.3165.305.527.006.106.255.25202.3275.005.166.855.806.005.10202.3384.704.876.705.605.854.95202.3494.504.636.555.405.704.80202.35104.404.426.405.305.554.65202.36114.204.246.255.205.404.55202.37124.104.086.005.105.254.45202.38134.003.945.755.005.104.35202.39143.803.825.504.904.954.25202.40153.703.705.254.804.804.15202.41163.603.605.004.804.654.05202.42173.503.514.754.804.503.95202.43183.503.504.504.804.353.85203.1193.503.504.254.804.203.75203.2203.503.504.004.804.053.75203.3213.503.503.904.704.003.75203.4223.503.503.804.604.003.75203.5233.503.503.704.504.003.75203.6243.503.503.604.504.003.75203.7253.503.503.504.504.003.75203.8263.503.503.504.504.003.75203.9273.503.503.504.504.003.75203.10283.503.503.504.504.003.75203.11293.503.503.504.504.003.75203.1230 or more3.503.503.504.504.003.75

203.13    (c) The actuarial valuation must use the applicable following payroll growth 203.14assumption for calculating the amortization requirement for the unfunded actuarial 203.15accrued liability where the amortization retirement is calculated as a level percentage 203.16of an increasing payroll:

203.17planpayroll growth assumption203.18203.19general state employees retirement plan of the 
                  		Minnesota State Retirement System3.75%203.20correctional state employees retirement plan3.75203.21State Patrol retirement plan3.75203.22judges retirement plan3.00203.23203.24general employees retirement plan of the Public 
                  		Employees Retirement Association3.75203.25public employees police and fire retirement plan3.75203.26local government correctional service retirement plan3.75203.27teachers retirement plan3.75203.28Duluth teachers retirement plan4.503.50203.29St. Paul teachers retirement plan5.004.00

203.30    (d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a 203.31different salary assumption or a different payroll increase assumption:203.32    (1) has been proposed by the governing board of the applicable retirement plan;203.33    (2) is accompanied by the concurring recommendation of the actuary retained under 203.34section 
         356.214, subdivision 1, if applicable, or by the approved actuary preparing the 203.35most recent actuarial valuation report if section 
         356.214 does not apply; and203.36    (3) has been approved or deemed approved under subdivision 18.203.37EFFECTIVE DATE.This section is effective the day following final enactment.203.38    Sec. 18. Minnesota Statutes 2012, section 356.47, subdivision 1, is amended to read:204.1    Subdivision 1. Application.(a) This section applies to the balance of annual 204.2retirement annuities on the amount of retirement annuity reductions after reemployed 204.3annuitant earnings limitations for retirement plans governed by section 
         352.115, 204.4subdivision 10
         ; 
         353.37; 
         354.44, subdivision 5; or 
         354A.31, subdivision 3.204.5(b) This section also applies to the balance of annual retirement annuities on 204.6the amount of retirement annuity reductions under section 354A.31, subdivision 3, for 204.7members of the Duluth Teachers Retirement Fund Association whose effective date of 204.8retirement is before July 1, 2013.204.9(c) This section also applies to the balance of annual retirement annuities on 204.10the amount of retirement annuity reductions under section 354A.31, subdivision 3, for 204.11members of the St. Paul Teachers Retirement Fund Association whose effective date of 204.12retirement is before July 1, 2013.204.13EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers 204.14Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 204.15Teachers Retirement Fund Association the day following final enactment.204.16    Sec. 19. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:204.17    Subd. 5. Termination of state aid programs. The amortization state aid, 204.18supplemental amortization state aid, and additional amortization state aid programs 204.19terminate as of the December 31, next following the date of the actuarial valuation when 204.20the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial accrued 204.21liability of that plan or December 31, 2009 June 30, 2037, whichever is later earlier.204.22EFFECTIVE DATE.This section is effective the day following final enactment.204.23    Sec. 20. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 204.24AMENDMENT AUTHORIZATION.204.25Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the Duluth 204.26Teachers Retirement Fund Association is authorized to amend its articles of incorporation 204.27or its bylaws to specify the revised contribution rates under sections 3 and 4, required 204.28employee contributions on behalf of reemployed annuitants as specified under section 5, 204.29and revised treatment of reemployed annuitant holding accounts under sections 12 and 18.204.30EFFECTIVE DATE.This section is effective July 1, 2013.204.31    Sec. 21. ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 204.32AMENDMENT AUTHORIZATION.205.1Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the St. Paul 205.2Teachers Retirement Fund Association is authorized to amend its articles of incorporation 205.3or its bylaws to apply the reduction factors stated in section 15 rather than the actuarial 205.4reduction factors previously authorized.205.5EFFECTIVE DATE.This section is effective the day following final enactment.205.6    Sec. 22. CONSOLIDATION STUDY.205.7The boards and executive directors of the Duluth Teachers Retirement Fund 205.8Association, the St. Paul Teachers Retirement Fund Association, and the Teachers 205.9Retirement Association shall jointly study and develop a report on the feasibility and 205.10requirements necessary for the consolidation of the Duluth Teachers Retirement Fund 205.11Association and the St. Paul Teachers Retirement Fund Association into the Teachers 205.12Retirement Association. The report shall include detailed actuarial analysis that will define 205.13the financial requirements for consolidating with the Teachers Retirement Association 205.14in a manner, consistent with past practice, that assures that the assets of the Teachers 205.15Retirement Association are protected, that the merging funds are fully funded, and that the 205.16Teachers Retirement Association is not subsidizing the merged funds. The report shall 205.17include implementation plans, proposed allocation of costs between the state and all 205.18interested parties, time frames sufficient for an orderly transition, necessary management 205.19and administrative changes, asset investment related considerations, and education and 205.20communication plans to fully inform the executive branch, the legislative branch, and all 205.21system stakeholders of financial requirements. The report shall include plans to treat 205.22the employees of the Duluth Teachers Retirement Fund Association and the St. Paul 205.23Teachers Retirement Fund Association in a manner comparable to that provided to the 205.24former employees of the former Minneapolis Teachers Retirement Fund Association upon 205.25consolidation into the Teachers Retirement Fund Association. The boards and executive 205.26directors shall consult with the executive director of the State Board of Investment on 205.27investment management transition issues. The report must be submitted to the Legislative 205.28Commission on Pensions and Retirement by January 6, 2014.205.29EFFECTIVE DATE.This section is effective the day following final enactment.205.30    Sec. 23.  REPEALER.205.31Minnesota Statutes 2012, section 354A.27, subdivision 6, is repealed.206.1ARTICLE 14206.2JUDGES RETIREMENT PLAN FINANCIAL SOLVENCY MEASURES206.3    Section 1. Minnesota Statutes 2012, section 356.315, is amended by adding a 206.4subdivision to read:206.5    Subd. 8a.Judges plan.The applicable benefit accrual rate is 2.5 percent.206.6EFFECTIVE DATE.This section is effective July 1, 2013.206.7    Sec. 2. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:206.8    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as 206.9otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, or 1f, retirement annuity, disability 206.10benefit, or survivor benefit recipients of a covered retirement plan are entitled to a 206.11postretirement adjustment annually on January 1, as follows:206.12(1) a postretirement increase of 2.5 percent must be applied each year, effective 206.13January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 206.14been receiving an annuity or a benefit for at least 12 full months prior to the January 1 206.15increase; and206.16(2) for each annuitant or benefit recipient who has been receiving an annuity or a 206.17benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 206.18percent for each month that the person has been receiving an annuity or benefit must be 206.19applied, effective on January 1 following the calendar year in which the person has been 206.20retired for less than 12 months.206.21(b) The increases provided by this subdivision commence on January 1, 2010.206.22(c) An increase in annuity or benefit payments under this section must be made 206.23automatically unless written notice is filed by the annuitant or benefit recipient with the 206.24executive director of the covered retirement plan requesting that the increase not be made.206.25(d) The retirement annuity payable to a person who retires before becoming eligible 206.26for Social Security benefits and who has elected the optional payment as provided in 206.27section 
         353.29, subdivision 6, must be treated as the sum of a period certain retirement 206.28annuity and a life retirement annuity for the purposes of any postretirement adjustment. 206.29The period certain retirement annuity plus the life retirement annuity must be the 206.30annuity amount payable until age 62 for section 
         353.29, subdivision 6. A postretirement 206.31adjustment granted on the period certain retirement annuity must terminate when the 206.32period certain retirement annuity terminates.206.33EFFECTIVE DATE.This section is effective July 1, 2013.207.1    Sec. 3. Minnesota Statutes 2012, section 356.415, is amended by adding a subdivision 207.2to read:207.3    Subd. 1f.Annual postretirement adjustments; Minnesota State Retirement 207.4System judges retirement plan.(a) The increases provided under this subdivision begin 207.5on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement 207.6annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.207.7(b) Retirement annuity, disability benefit, or survivor benefit recipients of the 207.8judges retirement plan are entitled to a postretirement adjustment annually on January 207.91, as follows:207.10(1) a postretirement increase of 1.75 percent must be applied each year, effective 207.11on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 207.12who has been receiving an annuity or a benefit for at least 18 full months before the 207.13January 1 increase; and207.14(2) for each annuitant or benefit recipient who has been receiving an annuity or a 207.15benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75 207.16percent for each month that the person has been receiving an annuity or benefit must be 207.17applied, effective January 1, following the calendar year in which the person has been 207.18retired for at least six months, but has been retired for less than 18 months.207.19(c) Increases under this subdivision terminate on December 31 of the calendar 207.20year in which the actuarial valuation prepared by the approved actuary under sections 207.21356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative 207.22Commission on Pensions and Retirement indicates that the market value of assets of the 207.23judges retirement plan equals or exceeds 70 percent of the actuarial accrued liability of 207.24the retirement plan. Increases under subdivision 1 or 1a, whichever is applicable, begin 207.25on the January 1 next following that date.207.26(d) An increase in annuity or benefit payments under this subdivision must be made 207.27automatically unless written notice is filed by the annuitant or benefit recipient with the 207.28executive director of the applicable covered retirement plan requesting that the increase 207.29not be made.207.30EFFECTIVE DATE.This section is effective July 1, 2013.207.31    Sec. 4. Minnesota Statutes 2012, section 490.121, subdivision 21f, is amended to read:207.32    Subd. 21f. Normal retirement date.(a) For a judge in the tier I program, "normal 207.33retirement date" means the date athe judge attains the age of 65.207.34(b) For a judge in the tier II program, normal retirement date means the date the 207.35judge attains age 66.208.1EFFECTIVE DATE.This section is effective July 1, 2013.208.2    Sec. 5. Minnesota Statutes 2012, section 490.121, subdivision 22, is amended to read:208.3    Subd. 22. Service credit limit. "Service credit limit" means, for a judge covered 208.4by tier I, the greater of: (1) 24 years of allowable service under this chapter; or (2), for 208.5judgesa judge with allowable service rendered before July 1, 1980, the number of years of 208.6allowable service under chapter 490, which, when multiplied by the percentage listed in 208.7section 
         356.315, subdivision 7 or 8, whichever is applicable to each year of service, equals 208.876.8. For a judge covered by tier II, there is no service credit limit.208.9EFFECTIVE DATE.This section is effective July 1, 2013.208.10    Sec. 6. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision 208.11to read:208.12    Subd. 25.Tier I."Tier I" is the benefit program of the retirement plan with a 208.13membership specified by section 490.1221, paragraph (b), and governed by sections 208.14356.315, subdivisions 7 and 8; 356.415, subdivisions 1 and 1f; and 490.121 to 490.133, 208.15except as modified in sections 356.315, subdivision 8a; 490.121, subdivision 21f, 208.16paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and 490.124, subdivision 208.171, paragraphs (c) and (d).208.18EFFECTIVE DATE.This section is effective July 1, 2013.208.19    Sec. 7. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision 208.20to read:208.21    Subd. 26.Tier II."Tier II" is the benefit program of the retirement plan with a 208.22membership specified by section 490.1221, paragraph (c), and governed by sections 208.23356.315, subdivision 8a; 356.415, subdivisions 1 and 1f; 490.121 to 490.133, as modified 208.24in section 490.121, subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, 208.25paragraph (b); and 490.124, subdivision 1, paragraphs (c) and (d).208.26EFFECTIVE DATE.This section is effective July 1, 2013.208.27    Sec. 8. [490.1221] JUDGES PLAN PROGRAMS.208.28(a) Members of the judges retirement plan are members of either the tier I or tier II 208.29program.208.30(b) A tier I program judge is a person who was first appointed or elected as a judge 208.31before July 1, 2013, who was not eligible for the tier II program because the judge had 209.1five or more years of allowable service on or before December 30, 2013, or did not elect 209.2that program.209.3(c) A tier II program judge is a person who:209.4(1) was first appointed or elected as a judge after June 30, 2013; or209.5(2) was first appointed or elected as a judge before July 1, 2013, had less than five 209.6years of allowable service on or before December 30, 2013, and made an election under 209.7section 14 to be in the tier II program.209.8EFFECTIVE DATE.This section is effective July 1, 2013.209.9    Sec. 9. [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.209.10The service credit limit specified in section 490.121, subdivision 22, does not apply 209.11to a judge in the tier II program.209.12EFFECTIVE DATE.This section is effective July 1, 2013.209.13    Sec. 10. Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:209.14    Subd. 1a. Member contribution rates.  (a) A judge who is covered by the federal 209.15Old Age, Survivors, Disability, and Health Insurance Program andin the tier I program 209.16whose service does not exceed the service credit limit in section 
         490.121, subdivision 22, 209.17shall contribute to the fund from each salary payment a sum equal to 8.009.00 percent 209.18of salary.209.19(b) A judge in the tier II program shall contribute to the fund from each salary 209.20payment a sum equal to 7.00 percent of salary.209.21    (b) The contribution(c) Contributions under this subdivision isare payable by salary 209.22deduction. The deduction must be made by the state court administrator under section 209.23352.04
         , subdivisions 4, 5, and 8.209.24EFFECTIVE DATE.This section is effective beginning on the first day of the first 209.25full payroll period following an increase in judicial salaries of at least one percent due to 209.26action by the legislature during calendar year 2013 or later.209.27    Sec. 11. Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:209.28    Subd. 1b. Employer contribution rate. (a) The employer contribution rate to the 209.29fund on behalf of a judge is 20.522.5 percent of salary. The employer obligation continues 209.30after a judge exceeds the service credit limit in section 
         490.121, subdivision 22.209.31    (b) The employer contribution must be paid by the state court administrator. The 209.32employer contribution is payable at the same time as member contributions are made 210.1under subdivision 1a or as employee contributions are made to the unclassified program 210.2governed by chapter 352D for judges whose service exceeds the limit in section 
         490.121, 210.3subdivision 22, are remitted.210.4EFFECTIVE DATE.This section is effective the first day of the first full payroll 210.5period after June 30, 2013.210.6    Sec. 12. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:210.7    Subdivision 1. Basic Retirement annuity. (a) Except as qualified hereinafter from 210.8and after the mandatory retirement date, the normal retirement date, the early retirement 210.9date, or one year from the disability retirement date, as the case may be, a retiring judge is 210.10eligible to receive a retirement annuity from the judges' retirement fund.210.11    (b) For a tier I program judge, the retirement annuity is an amount equal to: 210.12    (1) the percent specified in section 
         356.315, subdivision 7, multiplied by the judge's 210.13final average compensation with that result then multiplied by the number of years and 210.14fractions of years of allowable service rendered before July 1, 1980; plus 210.15    (2) the percent specified in section 
         356.315, subdivision 8, multiplied by the judge's 210.16final average compensation with that result then multiplied by the number of years and 210.17fractions of years of allowable service rendered after June 30, 1980.210.18(c) For a tier II program judge who was first appointed or elected as a judge before 210.19July 1, 2013, the retirement annuity is an amount equal to:210.20(1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's 210.21final average compensation with that result then multiplied by the number of years and 210.22fractions of years of allowable service rendered before January 1, 2014; plus210.23(2) the percentage specified in section 356.315, subdivision 8a, multiplied by the 210.24judge's final average compensation with that result then multiplied by the number of years 210.25and fractions of years of allowable service rendered after December 31, 2013.210.26(d) For a tier II program judge who was first appointed or elected as a judge after 210.27June 30, 2013, the retirement annuity is an amount equal to the percent specified in section 210.28356.315, subdivision 8a, multiplied by the judge's final average compensation with that 210.29result then multiplied by the number of years and fractions of years of allowable service.210.30    (c)(e) For a judge in the tier I program, service that exceeds the service credit limit in 210.31section 
         490.121, subdivision 22, must be excluded in calculating the retirement annuity, but 210.32the compensation earned by the judge during this period of judicial service must be used in 210.33determining a judge's final average compensation and calculating the retirement annuity.210.34EFFECTIVE DATE.This section is effective July 1, 2013.211.1    Sec. 13. MEMBER CONTRIBUTION INCREASE CONDITION.211.2Any increase in judicial salaries enacted by the legislature during calendar year 2013 211.3or later is not applicable to a judge in the tier I program if the member contribution rate 211.4applicable to that judge in the tier I program under Minnesota Statutes, section 490.123, 211.5subdivision 1a, is not deducted from the salary of the judge.211.6EFFECTIVE DATE.This section is effective the day following final enactment.211.7    Sec. 14. TIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.211.8    Subdivision 1.Authority.A person who was first appointed or elected as a judge 211.9covered by the Minnesota State Retirement System judges retirement plan before July 1, 211.102013, is eligible to elect treatment as a tier II program judge if the judge has less than five 211.11years of allowable service on the date the judge makes a valid election under subdivision 2.211.12    Subd. 2.Election procedure.An eligible judge under subdivision 1 may elect to 211.13be subject to the provisions of Minnesota Statutes, chapter 490, applicable to a tier II 211.14program judge rather than the tier I program by electing that treatment in writing before 211.15January 1, 2014, on a form provided by the executive director of the Minnesota State 211.16Retirement System.211.17    Subd. 3.Effect of election.(a) The election is irrevocable.211.18(b) An eligible judge who fails to make an election remains in the tier I program.211.19(c) If the tier II program is elected by an eligible judge, member contributions based on 211.20revised member contribution rates under Minnesota Statutes, section 490.123, subdivision 211.211a, begin on the first day of the first full pay period occurring after January 1, 2014.211.22EFFECTIVE DATE.This section is effective July 1, 2013.211.23ARTICLE 15211.24MISCELLANEOUS PROVISIONS211.25    Section 1. Minnesota Statutes 2012, section 356.91, is amended to read:211.26356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.211.27    (a) Upon written authorization of a person receiving an annuity from a public 211.28pension fund administered by the Minnesota State Retirement System or the Public 211.29Employees Retirement Association, the executive director of the public pension fund may211.30 shall deduct from the retirement annuity an amount requested by the annuitant to be paid 211.31as membership dues or other payments to any labor organization that is an exclusive 211.32bargaining agent representing public employees or an organization representing retired 212.1public employees of which the annuitant is a member and shall, on a monthly basis, pay 212.2the amount to the organization so designated by the annuitant.212.3    (b) A pension fund and the plan fiduciaries which authorize or administer deductions 212.4of dues payments under paragraph (a) are not liable for failure to properly deduct or transmit 212.5the dues amounts, provided that the fund and the fiduciaries have acted in good faith.212.6    (c) The deductions under paragraph (a) may occur no more frequently than two times 212.7per year and may not be used for political purposes. Any labor organization that is an 212.8exclusive bargaining agent representing public employees or an organization representing 212.9retired public employees may conduct blind mailings to the annuitants of a retirement 212.10system specified in paragraph (a) by requesting that the retirement system mail voluntary 212.11membership information and dues deduction cards to annuitants. Such mailings shall not 212.12be for the purpose of supporting or opposing any candidate, political party, or ballot 212.13measure. The organization requesting the blind mailing shall pay all costs associated 212.14with these mailings, including but not limited to copying, labeling, mailing, postage, and 212.15record keeping. In lieu of administering a blind mailing in-house, a retirement system 212.16may transmit annuitant data necessary for conducting a blind mailing to a mail center 212.17pursuant to a secure data share agreement with the mail center which provides that neither 212.18the organization nor any other entity shall have direct access to the data transmitted by 212.19the retirement system. The retirement system shall have no obligation to approve or 212.20disapprove, or otherwise be responsible for, the content of the mailings. No organization 212.21shall conduct more than two blind mailings per calendar year.212.22    (d) Any labor organization specified in paragraph (a) shall reimburse the public 212.23pension fund for the administrative expense of withholding premium amounts.212.24ARTICLE 16212.25APPROPRIATIONS212.26    Section 1. JUDICIARY.212.27(a) $22,000 in fiscal year 2014 and $22,000 in fiscal year 2015 are appropriated 212.28to the Supreme Court from the general fund for the increased employer contribution 212.29in article 14, section 11.212.30(b) $55,000 in fiscal year 2014 and $57,000 in fiscal year 2015 are appropriated 212.31to the court of appeals from the general fund for the increased employer contribution 212.32in article 14, section 11.212.33(c) $778,000 in fiscal year 2014 and $809,000 in fiscal year 2015 are appropriated 212.34to the district courts from the general fund for the increased employer contribution in 212.35article 14, section 11.213.1    Sec. 2. PUBLIC SAFETY.213.2The following amounts are appropriated to the Department of Public Safety for the 213.3increased employer contribution in article 9, section 3:213.4(1) $95,000 in fiscal year 2015 is appropriated from the general fund. The general 213.5fund base for fiscal year 2017 is increased by $94,000.213.6(2) $546,000 in fiscal year 2015 is appropriated from the trunk highway fund.  The 213.7trunk highway fund base for fiscal year 2017 is increased by $547,000.213.8(3) $8,000 in fiscal year 2015 is appropriated from the highway user tax distribution 213.9fund.  The highway user tax distribution fund base for fiscal year 2017 is increased 213.10by $8,000.