1.1                          A bill for an act 
  1.2             relating to retirement; pension plan actuarial 
  1.3             reporting; various public retirement plans; volunteer 
  1.4             firefighter relief associations; Minneapolis 
  1.5             firefighters relief association; modifying actuarial 
  1.6             cost allocation by the legislative commission on 
  1.7             pensions and retirement; changing the actuarial value 
  1.8             of assets, actuarial assumptions and funding surplus 
  1.9             recognition method; revising reemployed annuitant 
  1.10            earnings limitations; adding certain prior 
  1.11            correctional positions to correctional plan coverage; 
  1.12            clarifying various former police and fire 
  1.13            consolidation account merger provisions; authorizing 
  1.14            certain optional annuity form elections by former 
  1.15            consolidation account members; revising local 
  1.16            correctional retirement plan membership eligibility; 
  1.17            increasing local correctional retirement plan member 
  1.18            and employer contribution rates; authorizing the 
  1.19            purchase of nonprofit community-based corporation 
  1.20            teaching service; expanding investment options for 
  1.21            employer matching contribution tax sheltered 
  1.22            annuities; modifying various volunteer firefighter 
  1.23            relief association benefit and administration 
  1.24            provisions; modifying judicial pension provision; 
  1.25            modifying the marriage duration requirement for 
  1.26            certain Minneapolis firefighter relief association 
  1.27            survivor benefits; creating additional Minneapolis 
  1.28            police and firefighter relief association post 
  1.29            retirement adjustment mechanisms; resolving various 
  1.30            individual and small group pension problems; amending 
  1.31            Minnesota Statutes 1998, sections 16A.055, subdivision 
  1.32            5; 69.773, subdivision 1; 122A.46, subdivision 1, and 
  1.33            by adding a subdivision; 136F.43, subdivisions 1, 2, 
  1.34            and 6; 136F.45, subdivision 1a; 352.115, subdivision 
  1.35            10; 352.15, subdivision 1a; 352.91, subdivisions 3c, 
  1.36            3d, and by adding subdivisions; 352B.01, subdivision 
  1.37            3, and by adding a subdivision; 352D.02, subdivision 
  1.38            1; 352D.04, subdivision 2; 352D.05, subdivision 3; 
  1.39            352D.06; 352D.09, subdivision 5a; 353.01, subdivisions 
  1.40            2, 6, 11a, 28, 32, and by adding a subdivision; 
  1.41            353.15, subdivision 2; 353.27, subdivisions 4 and 12; 
  1.42            353.33, subdivisions 2 and 6; 353.34, subdivision 1; 
  1.43            353.37, by adding a subdivision; 353.64, subdivisions 
  1.44            2, 3, 4, and by adding a subdivision; 353.656, 
  1.45            subdivisions 1 and 3; 353.71, subdivision 2; 353B.11, 
  1.46            subdivision 3; 354.05, subdivisions 2 and 35; 354.091; 
  2.1             354.092, subdivision 2; 354.093; 354.094, subdivision 
  2.2             1; 354.10, subdivision 2; 354.35; 354.44, subdivision 
  2.3             5; 354.46, subdivision 2a; 354.47, subdivision 1; 
  2.4             354.48, subdivision 6; 354.49, subdivision 1; 354.52, 
  2.5             subdivisions 3, 4, 4a, and 4b; 354.63, subdivision 2; 
  2.6             354A.091, subdivisions 1, 2, 3, 5, and 6; 354A.31, 
  2.7             subdivisions 3 and 3a; 354B.23, subdivision 5a; 
  2.8             354C.12, subdivision 1a; 354C.165; 356.215, 
  2.9             subdivisions 1, 2, and 4d; 356.24, by adding a 
  2.10            subdivision; 356.30, subdivision 1; 356A.01, 
  2.11            subdivision 8; 356A.02; 356A.06, by adding a 
  2.12            subdivision; 423B.01; 424A.001, subdivision 9; 
  2.13            424A.02, subdivisions 3, 7, 9, 13, and by adding a 
  2.14            subdivision; 424A.04, subdivision 1; 424A.05, 
  2.15            subdivision 3; 490.121, subdivision 4, and by adding a 
  2.16            subdivision; 490.123, subdivisions 1a and 1b; and 
  2.17            490.124, subdivision 1; Minnesota Statutes 1999 
  2.18            Supplement, sections 3.85, subdivision 12; 69.021, 
  2.19            subdivision 7; 136F.48; 352.1155, subdivisions 1 and 
  2.20            4; 353.01, subdivisions 2b and 10; 353.64, subdivision 
  2.21            1; 353E.02; 353E.03; 353F.02, subdivision 5; 354.445; 
  2.22            354.536, subdivision 1; 354A.101, subdivision 1; 
  2.23            356.215, subdivision 4g; 356.24, subdivisions 1 and 
  2.24            1b; and 423A.02, subdivisions 1b, 4 and 5; Laws 1965, 
  2.25            chapter 705, section 1, subdivision 4, as amended; 
  2.26            proposing coding for new law in Minnesota Statutes, 
  2.27            chapters 69; 352; 353; 354; 354A; 356; and 423B; 
  2.28            proposing coding for new law as Minnesota Statutes, 
  2.29            chapter 424B; repealing Minnesota Statutes 1998, 
  2.30            sections 352.91, subdivision 4; 353.024; 354.52, 
  2.31            subdivision 2; and 424A.02, subdivision 11; Minnesota 
  2.32            Statutes 1999 Supplement, sections 356.24, subdivision 
  2.33            1a; and 356.61. 
  2.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.35                             ARTICLE 1
  2.36                   ACTUARIAL ASSET VALUE CHANGE, 
  2.37                   ACTUARIAL ASSUMPTION CHANGES, 
  2.38                   ACTUARIAL METHOD CHANGES, AND 
  2.39            ACTUARIAL REPORTING COST ALLOCATION CHANGES 
  2.40     Section 1.  Minnesota Statutes 1999 Supplement, section 
  2.41  3.85, subdivision 12, is amended to read: 
  2.42     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  2.43  commission shall assess each retirement plan specified in 
  2.44  subdivision 11, paragraph (b), its appropriate portion of the 
  2.45  compensation paid to the actuary retained by the commission for 
  2.46  the actuarial valuation calculations, quadrennial projection 
  2.47  valuations, and quadrennial experience studies.  The total 
  2.48  assessment is 100 percent of the amount of contract compensation 
  2.49  for the actuarial consulting firm retained by the commission for 
  2.50  actuarial valuation calculations, including the any public 
  2.51  employees police and fire plan consolidation accounts of the 
  2.52  public employees retirement association established before March 
  3.1   2, 1999, for which the municipality declined merger under 
  3.2   section 353.665, subdivision 1, or established after March 1, 
  3.3   1999, annual experience data collection and processing, and 
  3.4   quadrennial experience studies and quadrennial projection 
  3.5   valuations.  
  3.6      The portion of the total assessment payable by each 
  3.7   retirement system or pension plan must be determined as follows: 
  3.8      (1) Each pension plan specified in subdivision 11, 
  3.9   paragraph (b), clauses (1) to (14), must pay the following 
  3.10  indexed amount based on its total active, deferred, inactive, 
  3.11  and benefit recipient membership: 
  3.12         up to 2,000 members, inclusive         $2.55 per member 
  3.13         2,001 through 10,000 members           $1.13 per member 
  3.14         over 10,000 members                    $0.11 per member 
  3.15     The amount specified is applicable for the assessment of 
  3.16  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  3.17  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  3.18  fiscal year and subsequent fiscal year actuarial compensation 
  3.19  amounts, the amount specified must be increased at the same 
  3.20  percentage increase rate as the implicit price deflator for 
  3.21  state and local government purchases of goods and services for 
  3.22  the 12-month period ending with the first quarter of the 
  3.23  calendar year following the completion date for the actuarial 
  3.24  valuation calculations, as published by the federal Department 
  3.25  of Commerce, and rounded upward to the nearest full cent. 
  3.26     (2) The total per-member portion of the allocation must be 
  3.27  determined, and that total per-member amount must be subtracted 
  3.28  from the total amount for allocation.  Of the remainder dollar 
  3.29  amount, the following per-retirement system and per-pension plan 
  3.30  charges must be determined and the charges must be paid by the 
  3.31  system or plan: 
  3.32     (i) 37.87 percent is the total additional per-retirement 
  3.33  system charge, of which one-seventh must be paid by each 
  3.34  retirement system specified in subdivision 11, paragraph (b), 
  3.35  clauses (1), (2), (6), (7), (9), (10), and (11). 
  3.36     (ii) 62.13 percent is the total additional per-pension plan 
  4.1   charge, of which one-fourteenth must be paid by each pension 
  4.2   plan specified in subdivision 11, paragraph (b), clauses (1) to 
  4.3   (14) based on each plan's proportion of the actuarial services 
  4.4   required, as determined by the commission's retained actuary, to 
  4.5   complete the actuarial valuation calculations, annual experience 
  4.6   data collection and processing, and quadrennial experience 
  4.7   studies for all plans.  
  4.8      (b) The assessment must be made within 30 days following 
  4.9   the completion of the actuarial valuation calculations and the 
  4.10  experience analysis the end of the fiscal year and must be 
  4.11  reported to the executive director of the legislative commission 
  4.12  on pensions and retirement and to the chief administrative 
  4.13  officers of the applicable retirement plans.  The amount of the 
  4.14  assessment is appropriated from the retirement fund applicable 
  4.15  to the retirement plan.  Receipts from assessments must 
  4.16  be transmitted to the executive director of the legislative 
  4.17  commission on pensions and retirement and must be deposited in 
  4.18  the state treasury and credited to the general fund.  
  4.19     Sec. 2.  Minnesota Statutes 1998, section 16A.055, 
  4.20  subdivision 5, is amended to read: 
  4.21     Subd. 5.  [RETIREMENT FUND REPORTING.] (a) The commissioner 
  4.22  may not require a public retirement fund to use financial or 
  4.23  actuarial reporting practices or procedures different from those 
  4.24  required by section 356.20 or 356.215. 
  4.25     (b) The commissioner may contract with the consulting 
  4.26  actuary retained by the legislative commission on pensions and 
  4.27  retirement for the preparation of quadrennial projection 
  4.28  valuations as required under section 356.215, subdivisions 2 and 
  4.29  2a.  The initial projection valuation under this paragraph, if 
  4.30  any, is due on May 1, 2003, and subsequent projection valuations 
  4.31  are due on May 1 each fourth year thereafter.  The commissioner 
  4.32  of finance shall assess the applicable statewide and major local 
  4.33  retirement plan or plans the cost of the quadrennial projection 
  4.34  valuation.  
  4.35     Sec. 3.  Minnesota Statutes 1998, section 356.215, 
  4.36  subdivision 1, is amended to read: 
  5.1      Subdivision 1.  [DEFINITIONS.] (a) For the purposes of 
  5.2   sections 3.85 and 356.20 to 356.23, each of the following terms 
  5.3   in the following paragraphs have the meaning given:. 
  5.4      (1) (b) "Actuarial valuation" means a set of calculations 
  5.5   prepared by the actuary retained by the legislative commission 
  5.6   on pensions and retirement if so required under section 3.85, or 
  5.7   otherwise, by an approved actuary, to determine the normal cost 
  5.8   and the accrued actuarial liabilities of a benefit plan, 
  5.9   according to the entry age actuarial cost method and based upon 
  5.10  stated assumptions including, but not limited to rates of 
  5.11  interest, mortality, salary increase, disability, withdrawal, 
  5.12  and retirement and to determine the payment necessary to 
  5.13  amortize over a stated period any unfunded accrued actuarial 
  5.14  liability disclosed as a result of the actuarial valuation of 
  5.15  the benefit plan. 
  5.16     (2) (c) "Approved actuary" means a person who is regularly 
  5.17  engaged in the business of providing actuarial services and who 
  5.18  has at least 15 years of service to major public employee 
  5.19  pension or retirement funds or who is a fellow in the society of 
  5.20  actuaries.  
  5.21     (3) (d) "Entry age actuarial cost method" means an 
  5.22  actuarial cost method under which the actuarial present value of 
  5.23  the projected benefits of each individual currently covered by 
  5.24  the benefit plan and included in the actuarial valuation is 
  5.25  allocated on a level basis over the service of the individual if 
  5.26  the benefit plan is governed by section 69.773 or over the 
  5.27  earnings of the individual if the benefit plan is governed by 
  5.28  any other law between the entry age and the assumed exit age, 
  5.29  with the portion of this actuarial present value which is 
  5.30  allocated to the valuation year to be the normal cost and the 
  5.31  portion of this actuarial present value not provided for at the 
  5.32  valuation date by the actuarial present value of future normal 
  5.33  costs to be the actuarial accrued liability, with aggregation in 
  5.34  the calculation process to be the sum of the calculated result 
  5.35  for each covered individual and with recognition given to any 
  5.36  different benefit formulas which may apply to various periods of 
  6.1   service. 
  6.2      (4) (e) "Experience study" means a report providing 
  6.3   experience data and an actuarial analysis of the adequacy of the 
  6.4   actuarial assumptions on which actuarial valuations are based. 
  6.5      (5) (f) "Current assets" means: 
  6.6      (1) for the July 1, 1999, actuarial valuation, the value of 
  6.7   all assets at cost, including realized capital gains or losses, 
  6.8   plus one-third of any unrealized capital gains or losses.; 
  6.9      (2) for the July 1, 2000, actuarial valuation, the market 
  6.10  value of all assets as of June 30, 2000, reduced by: 
  6.11     (i) 60 percent of the difference between the market value 
  6.12  of all assets as of June 30, 1999, and the actuarial value of 
  6.13  assets used in the July 1, 1999, actuarial valuation, and 
  6.14     (ii) 80 percent of the difference between the actual net 
  6.15  change in the market value of assets between June 30, 1999, and 
  6.16  June 30, 2000, and the computed increase in the market value of 
  6.17  assets between June 30, 1999, and June 30, 2000, if the assets 
  6.18  had increased at the percentage preretirement interest rate 
  6.19  assumption used in the July 1, 1999, actuarial valuation; 
  6.20     (3) for the July 1, 2001, actuarial valuation, the market 
  6.21  value of all assets as of June 30, 2001, reduced by: 
  6.22     (i) 30 percent of the difference between the market value 
  6.23  of all assets as of June 30, 1999, and the actuarial value of 
  6.24  assets used in the July 1, 1999, actuarial valuation; 
  6.25     (ii) 60 percent of the difference between the actual net 
  6.26  change in the market value of assets between June 30, 1999, and 
  6.27  June 30, 2000, and the computed increase in the market value of 
  6.28  assets between June 30, 1999, and June 30, 2000, if the assets 
  6.29  had increased at the percentage preretirement interest rate 
  6.30  assumption used in the July 1, 1999, actuarial valuation; and 
  6.31     (iii) 80 percent of the difference between the actual net 
  6.32  change in the market value of assets between June 30, 2000, and 
  6.33  June 30, 2001, and the computed increase in the market value of 
  6.34  assets between June 30, 2000, and June 30, 2001, if the assets 
  6.35  had increased at the percentage preretirement interest rate 
  6.36  assumption used in the July 1, 2000, actuarial valuation; 
  7.1      (4) for the July 1, 2002, actuarial valuation, the market 
  7.2   value of all assets as of June 30, 2002, reduced by: 
  7.3      (i) ten percent of the difference between the market value 
  7.4   of all assets as of June 30, 1999, and the actuarial value of 
  7.5   assets used in the July 1, 1999, actuarial valuation; 
  7.6      (ii) 40 percent of the difference between the actual net 
  7.7   change in the market value of assets between June 30, 1999, and 
  7.8   June 30, 2000, and the computed increase in the market value of 
  7.9   assets between June 30, 1999, and June 30, 2000, if the assets 
  7.10  had increased at the percentage preretirement interest rate 
  7.11  assumption used in the July 1, 1999, actuarial valuation; 
  7.12     (iii) 60 percent of the difference between the actual net 
  7.13  change in the market value of assets between June 30, 2000, and 
  7.14  June 30, 2001, and the computed increase in the market value of 
  7.15  assets between June 30, 2000, and June 30, 2001, if the assets 
  7.16  had increased at the percentage preretirement interest rate 
  7.17  assumption used in the July 1, 2000, actuarial valuation; and 
  7.18     (iv) 80 percent of the difference between the actual net 
  7.19  change in the market value of assets between June 30, 2001, and 
  7.20  June 30, 2002, and the computed increase in the market value of 
  7.21  assets between June 30, 2001, and June 30, 2002, if the assets 
  7.22  had increased at the percentage preretirement interest rate 
  7.23  assumption used in the July 1, 2001, actuarial valuation; or 
  7.24     (5) for any actuarial valuation after July 1, 2002, the 
  7.25  market value of all assets as of the preceding June 30, reduced 
  7.26  by: 
  7.27     (i) 20 percent of the difference between the actual net 
  7.28  change in the market value of assets between the June 30 that 
  7.29  occurred three years earlier and the June 30 that occurred four 
  7.30  years earlier and the computed increase in the market value of 
  7.31  assets over that fiscal year period if the assets had increased 
  7.32  at the percentage preretirement interest rate assumption used in 
  7.33  the actuarial valuation for the July 1 that occurred four years 
  7.34  earlier; 
  7.35     (ii) 40 percent of the difference between the actual net 
  7.36  change in the market value of assets between the June 30 that 
  8.1   occurred two years earlier and the June 30 that occurred three 
  8.2   years earlier and the computed increase in the market value of 
  8.3   assets over that fiscal year period if the assets had increased 
  8.4   at the percentage preretirement interest rate assumption used in 
  8.5   the actuarial valuation for the July 1 that occurred three years 
  8.6   earlier; 
  8.7      (iii) 60 percent of the difference between the actual net 
  8.8   change in the market value of assets between the June 30 that 
  8.9   occurred one year earlier and the June 30 that occurred two 
  8.10  years earlier and the computed increase in the market value of 
  8.11  assets over that fiscal year period if the assets had increased 
  8.12  at the percentage preretirement interest rate assumption used in 
  8.13  the actuarial valuation for the July 1 that occurred two years 
  8.14  earlier; and 
  8.15     (iv) 80 percent of the difference between the actual net 
  8.16  change in the market value of assets between the immediately 
  8.17  prior June 30 and the June 30 that occurred one year earlier and 
  8.18  the computed increase in the market value of assets over that 
  8.19  fiscal year period if the assets had increased at the percentage 
  8.20  preretirement interest rate assumption used in the actuarial 
  8.21  valuation for the July 1 that occurred one year earlier. 
  8.22     (6) (g) "Unfunded actuarial accrued liability" means the 
  8.23  total current and expected future benefit obligations, reduced 
  8.24  by the sum of current assets and the present value of future 
  8.25  normal costs. 
  8.26     (7) (h) "Pension benefit obligation" means the actuarial 
  8.27  present value of credited projected benefits, determined as the 
  8.28  actuarial present value of benefits estimated to be payable in 
  8.29  the future as a result of employee service attributing an equal 
  8.30  benefit amount, including the effect of projected salary 
  8.31  increases and any step rate benefit accrual rate differences, to 
  8.32  each year of credited and expected future employee service. 
  8.33     Sec. 4.  Minnesota Statutes 1998, section 356.215, 
  8.34  subdivision 2, is amended to read: 
  8.35     Subd. 2.  [REQUIREMENTS.] (a) It is the policy of the 
  8.36  legislature that it is necessary and appropriate to determine 
  9.1   annually the financial status of tax supported retirement and 
  9.2   pension plans for public employees.  To achieve this goal,:  
  9.3      (1) the legislative commission on pensions and retirement 
  9.4   shall have prepared by the actuary retained by the commission 
  9.5   annual actuarial valuations of the retirement plans enumerated 
  9.6   in section 3.85, subdivision 11, paragraph (b), and quadrennial 
  9.7   experience studies of the retirement plans enumerated in section 
  9.8   3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7),; 
  9.9   and 
  9.10     (2) the commissioner of finance may have prepared by the 
  9.11  actuary retained by the commission, two years after each set of 
  9.12  quadrennial experience studies, quadrennial projection 
  9.13  valuations of at least one of the retirement plans enumerated in 
  9.14  section 3.85, subdivision 11, paragraph (b), for which it the 
  9.15  commissioner determines that the analysis may be beneficial.  
  9.16     (b) The governing or managing board or administrative 
  9.17  officials of each public pension and retirement fund or plan 
  9.18  enumerated in section 356.20, subdivision 2, clauses (9), (10), 
  9.19  and (12), shall have prepared by an approved actuary annual 
  9.20  actuarial valuations of their respective funds as provided in 
  9.21  this section.  This requirement also applies to any fund that is 
  9.22  the successor to any organization enumerated in section 356.20, 
  9.23  subdivision 2, or to the governing or managing board or 
  9.24  administrative officials of any newly formed retirement fund or 
  9.25  association operating under the control or supervision of any 
  9.26  public employee group, governmental unit, or institution 
  9.27  receiving a portion of its support through legislative 
  9.28  appropriations, and any local police or fire fund coming within 
  9.29  the provisions of section 356.216. 
  9.30     (b) Subd. 2a.  [PROJECTION VALUATION REQUIREMENTS.] A 
  9.31  quadrennial projection valuation required under paragraph 
  9.32  (a) subdivision 2 is intended to serve as an additional 
  9.33  analytical tool with which policy makers may assess the future 
  9.34  funding status of public plans through forecasting and testing 
  9.35  various potential outcomes over time if certain plan assumptions 
  9.36  or valuation methods were to be modified.  In consultation with 
 10.1   the executive director of the legislative commission on pensions 
 10.2   and retirement, the retirement fund directors, the state 
 10.3   economist, the state demographer, the commissioner of finance, 
 10.4   and the commissioner of employee relations, the actuary retained 
 10.5   by the legislative commission on pensions and retirement shall 
 10.6   perform the quadrennial projection valuations on behalf of the 
 10.7   commissioner of finance, testing future implications for plan 
 10.8   funding by modifying assumptions and methods currently in 
 10.9   place.  The commission-retained actuary shall provide advice to 
 10.10  the commission commissioner as to the periods over which such 
 10.11  projections should be made, the nature and scope of the 
 10.12  scenarios to be analyzed, and the measures of funding status to 
 10.13  be employed, and shall report the results of these analyses in 
 10.14  the same manner as for quadrennial experience studies. 
 10.15     Sec. 5.  Minnesota Statutes 1998, section 356.215, 
 10.16  subdivision 4d, is amended to read: 
 10.17     Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
 10.18  actuarial valuation must use the applicable following 
 10.19  preretirement interest assumption and the applicable following 
 10.20  postretirement interest assumption: 
 10.21                                     preretirement  postretirement 
 10.22                                     interest rate  interest rate 
 10.23              plan                      assumption     assumption 
 10.24       general state employees 
 10.25           retirement plan                  8.5%          5.0 6.0% 
 10.26       correctional state employees 
 10.27           retirement plan                  8.5           5.0 6.0 
 10.28       state patrol retirement plan         8.5           5.0 6.0 
 10.29       legislators retirement plan          8.5           5.0 6.0 
 10.30       elective state officers
 10.31           retirement plan                  8.5           5.0 6.0 
 10.32       judges retirement plan               8.5           5.0 6.0 
 10.33       general public employees 
 10.34           retirement plan                  8.5           5.0 6.0 
 10.35       public employees police and fire 
 10.36           retirement plan                  8.5           5.0 6.0 
 10.37       local government correctional 
 10.38           service retirement plan          8.5           5.0 6.0 
 10.39       teachers retirement plan             8.5           5.0 6.0 
 10.40       Minneapolis employees 
 10.41           retirement plan                  6.0           5.0 
 10.42       Duluth teachers retirement plan      8.5           8.5 
 10.43       Minneapolis teachers retirement
 10.44           plan                             8.5           8.5 
 10.45       St. Paul teachers retirement 
 10.46           plan                             8.5           7.5 8.5 
 10.47       Minneapolis police relief 
 10.48           association                      6.0           6.0 
 10.49       other local police relief 
 10.50           associations                     5.0           5.0 
 10.51       Minneapolis fire department 
 11.1            relief association               6.0           6.0 
 11.2        other local salaried firefighter 
 11.3            relief associations              5.0           5.0 
 11.4        local monthly benefit volunteer 
 11.5            firefighter relief associations  5.0           5.0 
 11.6      (b) The actuarial valuation must use the applicable 
 11.7   following single rate future salary increase assumption or the 
 11.8   applicable following graded rate future salary increase 
 11.9   assumption: 
 11.10     (1) single rate future salary increase assumption 
 11.11                                              future salary 
 11.12              plan                          increase assumption 
 11.13       legislators retirement plan                  5.0% 
 11.14       elective state officers retirement 
 11.15           plan                                     5.0 
 11.16       judges retirement plan                       5.0 
 11.17       Minneapolis employees retirement plan        4.0 
 11.18       Minneapolis police relief association        4.0 
 11.19       other local police relief associations       3.5 
 11.20       Minneapolis fire department relief 
 11.21           association                              4.0 
 11.22       other local salaried firefighter relief 
 11.23           associations                             3.5 
 11.24     (2) modified single rate future salary increase assumption 
 11.25                                              future salary 
 11.26                 plan                       increase assumption
 11.27       Minneapolis employees             prior calendar year amount
 11.28         retirement plan                increased by 1.0198 percent
 11.29                                        to prior fiscal year date
 11.30                                        and by 4.0 percent annually
 11.31                                        for each future year
 11.32     (3) select and ultimate future salary increase assumption 
 11.33  or graded rate future salary increase assumption 
 11.34                                               future salary 
 11.35                 plan                       increase assumption 
 11.36       general state employees             select calculation and
 11.37           retirement plan                      assumption A 
 11.38       correctional state employees 
 11.39           retirement plan                      assumption A H 
 11.40       state patrol retirement plan             assumption A H 
 11.41       general public employees            select calculation and
 11.42           retirement plan                      assumption B 
 11.43       public employees police and fire 
 11.44           fund retirement plan                 assumption C 
 11.45       local government correctional service 
 11.46           retirement plan                      assumption C H 
 11.47       teachers retirement plan                 assumption D 
 11.48       Duluth teachers retirement plan          assumption E 
 11.49       Minneapolis teachers retirement plan     assumption F 
 11.50       St. Paul teachers retirement plan        assumption G 
 11.51       
 11.52       select calculation:
 11.53       during the ten-year select period, 0.2 percent is
 11.54       multiplied by the result of ten minus T, where T is 
 11.55       the number of completed years of service, and is added
 11.56       to the applicable future salary increase assumption.
 11.57       
 11.58       future salary increase assumption:
 11.59       
 11.60       age    A      B      C      D      E      F      G      H 
 12.1        16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 
 12.2            6.95     6.95          8.20                       7.7500
 12.3        17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 
 12.4            6.90     6.90          8.15                       7.7500
 12.5        18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 12.6            6.85     6.85          8.10                       7.7500
 12.7        19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 12.8            6.80     6.80          8.05                       7.7500
 12.9        20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 
 12.10           6.75     6.75          8.00                       7.7500
 12.11       21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 
 12.12           6.70     6.70          7.95                       7.1454
 12.13       22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 
 12.14           6.65     6.65          7.90                       7.0725
 12.15       24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 
 12.16           6.66     6.55          7.80                       7.0363
 12.17       25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 
 12.18           6.50     6.50          7.75                       7.0000
 12.19       26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 
 12.20           6.45     6.45          7.70                       7.0000
 12.21       27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 
 12.22           6.40     6.40          7.65                       7.0000
 12.23       28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 
 12.24           6.35     6.35          7.60                       7.0000
 12.25       29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 
 12.26           6.30     6.30          7.55                       7.0000
 12.27       30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 
 12.28           6.25     6.30          7.50                       7.0000
 12.29       31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 
 12.30           6.20     6.25          7.45                       7.0000
 12.31       32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 
 12.32           6.15     6.21          7.40                       7.0000
 12.33       33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 
 12.34           6.10     6.17          7.30                       7.0000
 12.35       34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 
 12.36           6.05     6.09          7.10                       7.0000
 12.37       35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 
 12.38           6.00     6.05                                     7.0000
 12.39       36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 
 12.40           6.95     6.01          6.85                       6.9019
 12.41       37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 
 12.42           5.90     5.97          6.70                       6.8074
 12.43       38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 
 12.44           5.85     5.93          6.55                       6.7125
 12.45       39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 
 12.46           5.80     5.89          6.40                       6.6054
 12.47       40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 
 12.48           5.75     5.85          6.25                       6.5000
 12.49       41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 
 12.50           5.70     5.81          6.10                       6.3540
 12.51       42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 
 12.52           5.65     5.77          5.95                       6.2087
 12.53       43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 
 12.54           5.60     5.73          5.80                       6.0622
 12.55       44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 
 12.56           5.55     5.69          5.65                       5.9048
 12.57       45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 
 12.58           5.50     5.65          5.50                       5.7500
 12.59       46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 
 12.60           5.45     5.62          5.45                       5.6940
 12.61       47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 
 12.62           5.40     5.59          5.40                       5.6375
 12.63       48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 
 12.64           5.35     5.56          5.35                       5.5822
 12.65       49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 
 12.66           5.30     5.53          5.30                       5.5404
 12.67       50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 
 12.68           5.25     5.50          5.25                       5.5000
 12.69       51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 
 12.70           5.20     5.45          5.20                       5.4384
 12.71       52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 
 13.1            5.15     5.40          5.15                       5.3776
 13.2        53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 
 13.3            5.10     5.35          5.10                       5.3167
 13.4        54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 
 13.5            5.05     5.30          5.05                       5.2826
 13.6        55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 
 13.7            5.00     5.25          5.00                       5.2500
 13.8        56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 
 13.9            5.00     5.20          5.00                       5.2500
 13.10       57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 13.11           5.00     5.15          5.00                       5.2500
 13.12       58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 13.13           5.00     5.10          5.00                       5.2500
 13.14       59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 13.15           5.00     5.05          5.00                       5.2500
 13.16       60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.17           5.00                   5.00                       5.2500
 13.18       61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.19           5.00                   5.00                       5.2500
 13.20       62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.21           5.00                   5.00                       5.2500
 13.22       63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.23           5.00                   5.00                       5.2500
 13.24       64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.25           5.00                   5.00                       5.2500
 13.26       65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.27           5.00                   5.00                       5.2500
 13.28       66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.29           5.00                   5.00                       5.2500
 13.30       67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.31           5.00                   5.00                       5.2500
 13.32       68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.33           5.00                   5.00                       5.2500
 13.34       69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.35           5.00                   5.00                       5.2500
 13.36       70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.37           5.00                   5.00                       5.2500
 13.38       71  5.00     5.00          5.00
 13.39     (c) The actuarial valuation must use the applicable 
 13.40  following payroll growth assumption for calculating the 
 13.41  amortization requirement for the unfunded actuarial accrued 
 13.42  liability where the amortization retirement is calculated as a 
 13.43  level percentage of an increasing payroll: 
 13.44                                                   payroll growth
 13.45                    plan                             assumption 
 13.46       general state employees retirement plan          5.00% 
 13.47       correctional state employees retirement plan     5.00 
 13.48       state patrol retirement plan                     5.00 
 13.49       legislators retirement plan                      5.00 
 13.50       elective state officers retirement plan          5.00 
 13.51       judges retirement plan                           5.00 
 13.52       general public employees retirement plan         6.00 
 13.53       public employees police and fire 
 13.54           retirement plan                              6.00 
 13.55       local government correctional service 
 13.56           retirement plan                              6.00 
 13.57       teachers retirement plan                         5.00 
 13.58       Duluth teachers retirement plan                  5.00 
 13.59       Minneapolis teachers retirement plan             5.00 
 13.60       St. Paul teachers retirement plan                5.00 
 13.61     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
 13.62  356.215, subdivision 4g, is amended to read: 
 14.1      Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 14.2   the exhibit indicating the level normal cost, the actuarial 
 14.3   valuation must contain an exhibit indicating the additional 
 14.4   annual contribution sufficient to amortize the unfunded 
 14.5   actuarial accrued liability.  For funds governed by chapters 3A, 
 14.6   352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 14.7   contribution must be calculated on a level percentage of covered 
 14.8   payroll basis by the established date for full funding in effect 
 14.9   when the valuation is prepared.  For funds governed by chapter 
 14.10  3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 14.11  sections 353.63 through 353.68, and chapters 353C, 354A, and 
 14.12  490, the level percent additional contribution must be 
 14.13  calculated assuming annual payroll growth of 6.5 percent.  For 
 14.14  funds governed by sections 352.01 through 352.86 and chapter 
 14.15  354, the level percent additional contribution must be 
 14.16  calculated assuming an annual payroll growth of five percent.  
 14.17  For the fund governed by sections 353.01 through 353.46, the 
 14.18  level percent additional contribution must be calculated 
 14.19  assuming an annual payroll growth of six percent.  For all other 
 14.20  funds, the additional annual contribution must be calculated on 
 14.21  a level annual dollar amount basis. 
 14.22     (b) For any fund other than the Minneapolis employees 
 14.23  retirement fund, after the first actuarial valuation date 
 14.24  occurring after June 1, 1989, if there has not been a change in 
 14.25  the actuarial assumptions used for calculating the actuarial 
 14.26  accrued liability of the fund, a change in the benefit plan 
 14.27  governing annuities and benefits payable from the fund, a change 
 14.28  in the actuarial cost method used in calculating the actuarial 
 14.29  accrued liability of all or a portion of the fund, or a 
 14.30  combination of the three, which change or changes by themselves 
 14.31  without inclusion of any other items of increase or decrease 
 14.32  produce a net increase in the unfunded actuarial accrued 
 14.33  liability of the fund, the established date for full funding for 
 14.34  the first actuarial valuation made after June 1, 1989, and each 
 14.35  successive actuarial valuation is the first actuarial valuation 
 14.36  date occurring after June 1, 2020.  
 15.1      (c) For any fund or plan other than the Minneapolis 
 15.2   employees retirement fund, after the first actuarial valuation 
 15.3   date occurring after June 1, 1989, if there has been a change in 
 15.4   any or all of the actuarial assumptions used for calculating the 
 15.5   actuarial accrued liability of the fund, a change in the benefit 
 15.6   plan governing annuities and benefits payable from the fund, a 
 15.7   change in the actuarial cost method used in calculating the 
 15.8   actuarial accrued liability of all or a portion of the fund, or 
 15.9   a combination of the three, and the change or changes, by 
 15.10  themselves and without inclusion of any other items of increase 
 15.11  or decrease, produce a net increase in the unfunded actuarial 
 15.12  accrued liability in the fund, the established date for full 
 15.13  funding must be determined using the following procedure:  
 15.14     (i) the unfunded actuarial accrued liability of the fund 
 15.15  must be determined in accordance with the plan provisions 
 15.16  governing annuities and retirement benefits and the actuarial 
 15.17  assumptions in effect before an applicable change; 
 15.18     (ii) the level annual dollar contribution or level 
 15.19  percentage, whichever is applicable, needed to amortize the 
 15.20  unfunded actuarial accrued liability amount determined under 
 15.21  item (i) by the established date for full funding in effect 
 15.22  before the change must be calculated using the interest 
 15.23  assumption specified in subdivision 4d in effect before the 
 15.24  change; 
 15.25     (iii) the unfunded actuarial accrued liability of the fund 
 15.26  must be determined in accordance with any new plan provisions 
 15.27  governing annuities and benefits payable from the fund and any 
 15.28  new actuarial assumptions and the remaining plan provisions 
 15.29  governing annuities and benefits payable from the fund and 
 15.30  actuarial assumptions in effect before the change; 
 15.31     (iv) the level annual dollar contribution or level 
 15.32  percentage, whichever is applicable, needed to amortize the 
 15.33  difference between the unfunded actuarial accrued liability 
 15.34  amount calculated under item (i) and the unfunded actuarial 
 15.35  accrued liability amount calculated under item (iii) over a 
 15.36  period of 30 years from the end of the plan year in which the 
 16.1   applicable change is effective must be calculated using the 
 16.2   applicable interest assumption specified in subdivision 4d in 
 16.3   effect after any applicable change; 
 16.4      (v) the level annual dollar or level percentage 
 16.5   amortization contribution under item (iv) must be added to the 
 16.6   level annual dollar amortization contribution or level 
 16.7   percentage calculated under item (ii); 
 16.8      (vi) the period in which the unfunded actuarial accrued 
 16.9   liability amount determined in item (iii) is amortized by the 
 16.10  total level annual dollar or level percentage amortization 
 16.11  contribution computed under item (v) must be calculated using 
 16.12  the interest assumption specified in subdivision 4d in effect 
 16.13  after any applicable change, rounded to the nearest integral 
 16.14  number of years, but not to exceed 30 years from the end of the 
 16.15  plan year in which the determination of the established date for 
 16.16  full funding using the procedure set forth in this clause is 
 16.17  made and not to be less than the period of years beginning in 
 16.18  the plan year in which the determination of the established date 
 16.19  for full funding using the procedure set forth in this clause is 
 16.20  made and ending by the date for full funding in effect before 
 16.21  the change; and 
 16.22     (vii) the period determined under item (vi) must be added 
 16.23  to the date as of which the actuarial valuation was prepared and 
 16.24  the date obtained is the new established date for full funding.  
 16.25     (d) For the Minneapolis employees retirement fund, the 
 16.26  established date for full funding is June 30, 2020. 
 16.27     (e) For the following retirement plans for which the annual 
 16.28  actuarial valuation indicates an excess of valuation assets over 
 16.29  the actuarial accrued liability, the valuation assets in excess 
 16.30  of the actuarial accrued liability must be recognized in the 
 16.31  following manner: 
 16.32     (1) the public employees retirement association police and 
 16.33  fire plan, the valuation assets in excess of the actuarial 
 16.34  accrued liability serve to reduce as a reduction in the current 
 16.35  contribution requirements by an amount equal to the amortization 
 16.36  of the excess expressed as a level percentage of pay over a 
 17.1   30-year period beginning anew with each annual actuarial 
 17.2   valuation of the plan; and 
 17.3      (2) the correctional employees retirement plan of the 
 17.4   Minnesota state retirement system, and the state patrol 
 17.5   retirement plan, an excess of valuation assets over actuarial 
 17.6   accrued liability must be amortized in the same manner over the 
 17.7   same period as an unfunded actuarial accrued liability but must 
 17.8   serve to reduce the required contribution instead of increasing 
 17.9   it. 
 17.10     Sec. 7.  [EFFECTIVE DATE.] 
 17.11     (a) Section 1 is effective for actuarial valuation costs 
 17.12  incurred on or after July 1, 2000.  
 17.13     (b) Sections 2 to 6 are effective on June 30, 2000, for 
 17.14  actuarial valuations on or after that date. 
 17.15                             ARTICLE 2 
 17.16              REEMPLOYED ANNUITANT EARNINGS LIMITATION 
 17.17                             REVISIONS
 17.18     Section 1.  Minnesota Statutes 1999 Supplement, section 
 17.19  136F.48, is amended to read: 
 17.20     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
 17.21     (a) This section applies to a person who:  
 17.22     (1) retires from the Minnesota state colleges and 
 17.23  universities system with at least ten years of combined service 
 17.24  credit in a system under the jurisdiction of the board of 
 17.25  trustees of the Minnesota state colleges and universities; 
 17.26     (2) was employed on a full-time basis immediately preceding 
 17.27  retirement as a faculty member or as an unclassified 
 17.28  administrator in the Minnesota state colleges and universities 
 17.29  system; 
 17.30     (3) begins drawing a retirement benefit from the individual 
 17.31  retirement account plan or an annuity from the teachers 
 17.32  retirement association, from the general state employees 
 17.33  retirement plan or the unclassified state employees retirement 
 17.34  program of the Minnesota state retirement system, or from a 
 17.35  first class city teacher retirement plan; and 
 17.36     (4) returns to work on not less than a one-third time basis 
 18.1   and not more than a two-thirds time basis in the system from 
 18.2   which the person retired under an agreement in which the person 
 18.3   may not earn a salary of more than $35,000 in a calendar year 
 18.4   from employment after retirement in the system from which the 
 18.5   person retired.  
 18.6      (b) Initial participation, the amount of time worked, and 
 18.7   the duration of participation under this section must be 
 18.8   mutually agreed upon by the president of the institution where 
 18.9   the person returns to work and the employee.  The president may 
 18.10  require up to one-year notice of intent to participate in the 
 18.11  program as a condition of participation under this section.  The 
 18.12  president shall determine the time of year the employee shall 
 18.13  work.  The employer or the president may not require a person to 
 18.14  waive any rights under a collective bargaining agreement as a 
 18.15  condition of participation under this section.  
 18.16     (c) For a person eligible under paragraphs (a) and (b), the 
 18.17  employing board shall make the same employer contribution for 
 18.18  hospital, medical, and dental benefits as would be made if the 
 18.19  person were employed full time.  
 18.20     (d) For work under paragraph (a), a person must receive a 
 18.21  percentage of the person's salary at the time of retirement that 
 18.22  is equal to the percentage of time the person works compared to 
 18.23  full-time work.  
 18.24     (e) If a collective bargaining agreement covering a person 
 18.25  provides for an early retirement incentive that is based on age, 
 18.26  the incentive provided to the person must be based on the 
 18.27  person's age at the time employment under this section ends.  
 18.28  However, the salary used to determine the amount of the 
 18.29  incentive must be the salary that would have been paid if the 
 18.30  person had been employed full time for the year immediately 
 18.31  preceding the time employment under this section ends. 
 18.32     (f) A person who returns to work under this section is a 
 18.33  member of the appropriate bargaining unit and is covered by the 
 18.34  appropriate collective bargaining contract.  Except as provided 
 18.35  in this section, the person's coverage is subject to any part of 
 18.36  the contract limiting rights of part-time employees. 
 19.1      Sec. 2.  Minnesota Statutes 1998, section 352.115, 
 19.2   subdivision 10, is amended to read: 
 19.3      Subd. 10.  [REEMPLOYMENT OF ANNUITANT.] (a) If any retired 
 19.4   employee again becomes entitled to receive salary or wages from 
 19.5   the state, or any employer who employs state employees as that 
 19.6   term is defined in section 352.01, subdivision 2, other than 
 19.7   salary or wages received as a temporary employee of the 
 19.8   legislature during a legislative session, the annuity or 
 19.9   retirement allowance shall cease when the retired employee has 
 19.10  earned an amount equal to the annual maximum earnings allowable 
 19.11  for that age for the continued receipt of full benefit amounts 
 19.12  monthly under the federal old age, survivors, and disability 
 19.13  insurance program as set by the secretary of health and human 
 19.14  services under United States Code, title 42, section 403, in any 
 19.15  calendar year.  If the retired employee has not yet reached the 
 19.16  minimum age for the receipt of social security benefits, the 
 19.17  maximum earnings for the retired employee shall be equal to the 
 19.18  annual maximum earnings allowable for the minimum age for the 
 19.19  receipt of social security benefits.  
 19.20     (b) The balance of the annual retirement annuity after 
 19.21  cessation must be handled or disposed of as provided in section 
 19.22  356.58.  
 19.23     (c) The annuity must be resumed when state service ends, 
 19.24  or, if the retired employee is still employed at the beginning 
 19.25  of the next calendar year, at the beginning of that calendar 
 19.26  year, and payment must again end when the retired employee has 
 19.27  earned the applicable reemployment earnings maximum specified in 
 19.28  this subdivision.  No payroll deductions for the retirement fund 
 19.29  shall be made from the earnings of a reemployed retired 
 19.30  employee.  If the retired employee is granted a sick leave 
 19.31  without pay, but not otherwise, the annuity or retirement 
 19.32  allowance must be resumed during the period of sick leave.  
 19.33     (d) No payroll deductions for the retirement fund may be 
 19.34  made from the earnings of a reemployed retired employee. 
 19.35     (e) No change shall be made in the monthly amount of an 
 19.36  annuity or retirement allowance because of the reemployment of 
 20.1   an annuitant. 
 20.2      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
 20.3   352.1155, subdivision 1, is amended to read: 
 20.4      Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
 20.5   subdivision 4, the annuity reduction provisions of section 
 20.6   352.115, subdivision 10, do not apply to a person who: 
 20.7      (1) retires from the Minnesota state colleges and 
 20.8   universities system with at least ten years of combined service 
 20.9   credit in a system under the jurisdiction of the board of 
 20.10  trustees of the Minnesota state colleges and universities; 
 20.11     (2) was employed on a full-time basis immediately preceding 
 20.12  retirement as a faculty member or as an unclassified 
 20.13  administrator in that system; 
 20.14     (3) begins drawing an annuity from the general state 
 20.15  employees retirement plan of the Minnesota state retirement 
 20.16  system; and 
 20.17     (4) returns to work on not less than a one-third time basis 
 20.18  and not more than a two-thirds time basis in the system from 
 20.19  which the person retired under an agreement in which the person 
 20.20  may not earn a salary of more than $35,000 $46,000 in a calendar 
 20.21  year from employment after retirement in the system from which 
 20.22  the person retired.  
 20.23     Sec. 4.  Minnesota Statutes 1999 Supplement, section 
 20.24  352.1155, subdivision 4, is amended to read: 
 20.25     Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
 20.26  this section who earns more than $35,000 $46,000 in a calendar 
 20.27  year from reemployment in the Minnesota state colleges and 
 20.28  universities system following retirement, the annuity reduction 
 20.29  provisions of section 352.115, subdivision 10, apply only to 
 20.30  income over $35,000 $46,000. 
 20.31     Sec. 5.  Minnesota Statutes 1998, section 353.37, is 
 20.32  amended by adding a subdivision to read: 
 20.33     Subd. 3a.  [DISPOSITION OF SUSPENSION OR REDUCTION AMOUNT.] 
 20.34  The balance of the annual retirement annuity after suspension or 
 20.35  the amount of the retirement annuity reduction must be handled 
 20.36  or disposed of as provided in section 356.58. 
 21.1      Sec. 6.  Minnesota Statutes 1998, section 354.44, 
 21.2   subdivision 5, is amended to read: 
 21.3      Subd. 5.  [RESUMPTION OF TEACHING SERVICE AFTER 
 21.4   RETIREMENT.] (a) Any person who retired under the provisions of 
 21.5   this chapter and has thereafter resumed teaching in any employer 
 21.6   unit to which this chapter applies is eligible to continue to 
 21.7   receive payments in accordance with the annuity except that 
 21.8   annuity payments must be reduced during the calendar year 
 21.9   immediately following any calendar year in which the person's 
 21.10  income from the teaching service is in an amount greater than 
 21.11  the annual maximum earnings allowable for that age for the 
 21.12  continued receipt of full benefit amounts monthly under the 
 21.13  federal old age, survivors and disability insurance program as 
 21.14  set by the secretary of health and human services under United 
 21.15  States Code, title 42, section 403.  The amount of the reduction 
 21.16  must be one-half of the amount in excess of the applicable 
 21.17  reemployment income maximum specified in this subdivision and 
 21.18  must be deducted from the annuity payable for the calendar year 
 21.19  immediately following the calendar year in which the excess 
 21.20  amount was earned.  If the person has not yet reached the 
 21.21  minimum age for the receipt of social security benefits, the 
 21.22  maximum earnings for the person must be equal to the annual 
 21.23  maximum earnings allowable for the minimum age for the receipt 
 21.24  of social security benefits.  
 21.25     (b) If the person is retired for only a fractional part of 
 21.26  the calendar year during the initial year of retirement, the 
 21.27  maximum reemployment income specified in this subdivision must 
 21.28  be prorated for that calendar year.  
 21.29     (c) After a person has reached the age of 70, no 
 21.30  reemployment income maximum is applicable regardless of the 
 21.31  amount of income. 
 21.32     (d) The amount of the retirement annuity reduction must be 
 21.33  handled or disposed of as provided in section 356.58. 
 21.34     (e) For the purpose of this subdivision, income from 
 21.35  teaching service includes, but is not limited to:  
 21.36     (a) (1) all income for services performed as a consultant 
 22.1   or an independent contractor for an employer unit covered by the 
 22.2   provisions of this chapter; and 
 22.3      (b) (2) the greater of either the income received or an 
 22.4   amount based on the rate paid with respect to an administrative 
 22.5   position, consultant, or independent contractor in an employer 
 22.6   unit with approximately the same number of pupils and at the 
 22.7   same level as the position occupied by the person who resumes 
 22.8   teaching service.  
 22.9      Sec. 7.  Minnesota Statutes 1999 Supplement, section 
 22.10  354.445, is amended to read: 
 22.11     354.445 [NO ANNUITY REDUCTION.] 
 22.12     (a) The annuity reduction provisions of section 354.44, 
 22.13  subdivision 5, do not apply to a person who: 
 22.14     (1) retires from the Minnesota state colleges and 
 22.15  universities system with at least ten years of combined service 
 22.16  credit in a system under the jurisdiction of the board of 
 22.17  trustees of the Minnesota state colleges and universities; 
 22.18     (2) was employed on a full-time basis immediately preceding 
 22.19  retirement as a faculty member or as an unclassified 
 22.20  administrator in that system; 
 22.21     (3) begins drawing an annuity from the teachers retirement 
 22.22  association; and 
 22.23     (4) returns to work on not less than a one-third time basis 
 22.24  and not more than a two-thirds time basis in the system from 
 22.25  which the person retired under an agreement in which the person 
 22.26  may not earn a salary of more than $35,000 $46,000 in a calendar 
 22.27  year from employment after retirement in the system from which 
 22.28  the person retired. 
 22.29     (b) Initial participation, the amount of time worked, and 
 22.30  the duration of participation under this section must be 
 22.31  mutually agreed upon by the president of the institution where 
 22.32  the person returns to work and the employee.  The president may 
 22.33  require up to one-year notice of intent to participate in the 
 22.34  program as a condition of participation under this section.  The 
 22.35  president shall determine the time of year the employee shall 
 22.36  work.  The employer or the president may not require a person to 
 23.1   waive any rights under a collective bargaining agreement as a 
 23.2   condition of participation under this section.  
 23.3      (c) Notwithstanding any law to the contrary, a person 
 23.4   eligible under paragraphs (a) and (b) may not, based on 
 23.5   employment to which the waiver in this section applies, earn 
 23.6   further service credit in a Minnesota public defined benefit 
 23.7   plan and is not eligible to participate in a Minnesota public 
 23.8   defined contribution plan, other than a volunteer fire plan 
 23.9   governed by chapter 424A.  No employer or employee contribution 
 23.10  to any of these plans may be made on behalf of such a person. 
 23.11     (d) For a person eligible under paragraphs (a) and (b) who 
 23.12  earns more than $35,000 $46,000 in a calendar year from 
 23.13  employment after retirement due to employment by the Minnesota 
 23.14  state colleges and universities system, the annuity reduction 
 23.15  provisions of section 354.44, subdivision 5, apply only to 
 23.16  income over $35,000 $46,000. 
 23.17     (e) A person who returns to work under this section is a 
 23.18  member of the appropriate bargaining unit and is covered by the 
 23.19  appropriate collective bargaining contract.  Except as provided 
 23.20  in this section, the person's coverage is subject to any part of 
 23.21  the contract limiting rights of part-time employees. 
 23.22     Sec. 8.  Minnesota Statutes 1998, section 354A.31, 
 23.23  subdivision 3, is amended to read: 
 23.24     Subd. 3.  [RESUMPTION OF TEACHING AFTER COMMENCEMENT OF A 
 23.25  RETIREMENT ANNUITY.] (a) Any person who retired and is receiving 
 23.26  a coordinated program retirement annuity under the provisions of 
 23.27  sections 354A.31 to 354A.41 or any person receiving a basic 
 23.28  program retirement annuity under the governing sections in the 
 23.29  articles of incorporation or bylaws and who has resumed teaching 
 23.30  service for the school district in which the teachers retirement 
 23.31  fund association exists is entitled to continue to receive 
 23.32  retirement annuity payments, except that annuity payments must 
 23.33  be reduced during the calendar year immediately following the 
 23.34  calendar year in which the person's income from the teaching 
 23.35  service is in an amount greater than the annual maximum earnings 
 23.36  allowable for that age for the continued receipt of full benefit 
 24.1   amounts monthly under the federal old age, survivors, and 
 24.2   disability insurance program as set by the secretary of health 
 24.3   and human services under United States Code, title 42, section 
 24.4   403.  The amount of the reduction must be one-third the amount 
 24.5   in excess of the applicable reemployment income maximum 
 24.6   specified in this subdivision and must be deducted from the 
 24.7   annuity payable for the calendar year immediately following the 
 24.8   calendar year in which the excess amount was earned.  If the 
 24.9   person has not yet reached the minimum age for the receipt of 
 24.10  social security benefits, the maximum earnings for the person 
 24.11  must be equal to the annual maximum earnings allowable for the 
 24.12  minimum age for the receipt of social security benefits. 
 24.13     (b) If the person is retired for only a fractional part of 
 24.14  the calendar year during the initial year of retirement, the 
 24.15  maximum reemployment income specified in this subdivision must 
 24.16  be prorated for that calendar year. 
 24.17     (c) After a person has reached the age of 70, no 
 24.18  reemployment income maximum is applicable regardless of the 
 24.19  amount of any compensation received for teaching service for the 
 24.20  school district in which the teachers retirement fund 
 24.21  association exists.  
 24.22     (d) The amount of the retirement annuity reduction must be 
 24.23  handled or disposed of as provided in section 356.58. 
 24.24     (e) For the purpose of this subdivision, income from 
 24.25  teaching service includes:  (i) all income for services 
 24.26  performed as a consultant or independent contractor; or income 
 24.27  resulting from working with the school district in any capacity; 
 24.28  and (ii) the greater of either the income received or an amount 
 24.29  based on the rate paid with respect to an administrative 
 24.30  position, consultant, or independent contractor in the school 
 24.31  district in which the teachers retirement fund association 
 24.32  exists and at the same level as the position occupied by the 
 24.33  person who resumes teaching service. 
 24.34     Sec. 9.  Minnesota Statutes 1998, section 354A.31, 
 24.35  subdivision 3a, is amended to read: 
 24.36     Subd. 3a.  [NO ANNUITY REDUCTION.] (a) The annuity 
 25.1   reduction provisions of subdivision 3 do not apply to a person 
 25.2   who: 
 25.3      (1) retires from the technical college system with at least 
 25.4   ten years of service credit in the system from which the person 
 25.5   retires; 
 25.6      (2) was employed on a full-time basis immediately preceding 
 25.7   retirement as a technical college faculty member; 
 25.8      (3) begins drawing an annuity from a first class city 
 25.9   teachers retirement association; and 
 25.10     (4) returns to work on not less than a one-third time basis 
 25.11  and not more than a two-thirds time basis in the technical 
 25.12  college system under an agreement in which the person may not 
 25.13  earn a salary of more than $35,000 $46,000 in a calendar year 
 25.14  from the technical college system. 
 25.15     (b) Initial participation, the amount of time worked, and 
 25.16  the duration of participation under this section must be 
 25.17  mutually agreed upon by the employer and the employee.  The 
 25.18  employer may require up to a one-year notice of intent to 
 25.19  participate in the program as a condition of participation under 
 25.20  this section.  The employer shall determine the time of year the 
 25.21  employee shall work. 
 25.22     (c) Notwithstanding any law to the contrary, a person 
 25.23  eligible under paragraphs (a) and (b) may not earn further 
 25.24  service credit in a first class city teachers retirement 
 25.25  association and is not eligible to participate in the individual 
 25.26  retirement account plan or the supplemental retirement plan 
 25.27  established in chapter 354B as a result of service under this 
 25.28  section.  No employer or employee contribution to any of these 
 25.29  plans may be made on behalf of such a person. 
 25.30     Sec. 10.  [356.58] [DISPOSITION OF AMOUNT IN EXCESS OF 
 25.31  REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.] 
 25.32     Subdivision 1.  [APPLICATION.] This section applies to the 
 25.33  balance of annual retirement annuities on the amount of 
 25.34  retirement annuity reductions after reemployed annuitant 
 25.35  earnings limitations for retirement plans governed by sections 
 25.36  352.115, subdivision 10; 353.37; 354.44, subdivision 5; or 
 26.1   354A.31, subdivision 3. 
 26.2      Subd. 2.  [RECORDKEEPING; REPORTING.] The chief 
 26.3   administrative officer of each retirement plan shall keep 
 26.4   records for each reemployed annuitant of the amount of the 
 26.5   annuity reduction.  This amount must be reported to each member 
 26.6   at least once each year. 
 26.7      Subd. 3.  [PAYMENT.] (a) Upon the retired member attaining 
 26.8   the age of 65 years or upon the first day of the month next 
 26.9   following the month occurring one year after the termination of 
 26.10  the reemployment that gave rise to the limitation, whichever is 
 26.11  later, and the filing of a written application, the retired 
 26.12  member is entitled the payment, in a lump sum, of the value of 
 26.13  the person's amount under subdivision 2, plus interest at the 
 26.14  compound annual rate of six percent from the date that the 
 26.15  amount was deducted from the retirement annuity to the date of 
 26.16  payment. 
 26.17     (b) The written application must be on a form prescribed by 
 26.18  the chief administrative officer of the applicable retirement 
 26.19  plan. 
 26.20     (c) If the retired member dies before the payment provided 
 26.21  for in paragraph (a) is made, the amount is payable, upon 
 26.22  written application, to the deceased person's surviving spouse, 
 26.23  or if none, to the deceased person's designated beneficiary, or 
 26.24  if none, to the deceased person's estate. 
 26.25     Sec. 11.  [REPORT.] 
 26.26     The Minnesota state colleges and universities board shall 
 26.27  report to the legislative commission on pensions and retirement 
 26.28  by November 15, 2000, on the utilization of the annuitant 
 26.29  employment program authorized by Minnesota Statutes, sections 
 26.30  136F.48; 352.1155, subdivisions 1 and 4; and 354.445.  The 
 26.31  report must include an evaluation by institutions that have used 
 26.32  the program regarding its effectiveness as a human resource 
 26.33  management tool.  
 26.34     Sec. 12.  [EFFECTIVE DATE.] 
 26.35     Sections 1 to 11 are effective on July 1, 2000. 
 26.36                             ARTICLE 3
 27.1                      ADMINISTRATIVE PROVISIONS
 27.2      Section 1.  Minnesota Statutes 1998, section 352.15, 
 27.3   subdivision 1a, is amended to read: 
 27.4      Subd. 1a.  [AUTOMATIC DEPOSITS.] The executive director may 
 27.5   pay an remit, through an automatic deposit system, annuity, 
 27.6   benefit, or refund payments only to a banking financial 
 27.7   institution, qualified under chapter 48, associated with the 
 27.8   National Automated Clearinghouse Association or a comparable 
 27.9   successor organization that is trustee for a person eligible to 
 27.10  receive the annuity, benefit, or refund.  Upon the request of a 
 27.11  retired, disabled, the retiree, disabilitant, survivor, or 
 27.12  former employee, the executive director may mail remit the 
 27.13  annuity, benefit, or refund check to a banking institution, 
 27.14  savings association, or credit union the applicable financial 
 27.15  institution for deposit to in the employee's person's account 
 27.16  or joint account.  The board of directors may prescribe the 
 27.17  conditions under which payments will be made.  
 27.18     Sec. 2.  Minnesota Statutes 1998, section 352B.01, 
 27.19  subdivision 3, is amended to read: 
 27.20     Subd. 3.  [ALLOWABLE SERVICES SERVICE.] (a) "Allowable 
 27.21  service" means:  
 27.22     (a) (1) for members defined in subdivision 2, clause (a), 
 27.23  monthly service is granted for any month for which payments have 
 27.24  been made to the state patrol retirement fund, and 
 27.25     (b) (2) for members defined in subdivision 2, clauses (b) 
 27.26  and (c), service for which payments have been made to the state 
 27.27  patrol retirement fund, service for which payments were made to 
 27.28  the state police officers retirement fund after June 30, 1961, 
 27.29  and all prior service which was credited to a member for service 
 27.30  on or before June 30, 1961.  
 27.31     (b) Allowable service also includes any period of absence 
 27.32  from duty by a member who, by reason of injury incurred in the 
 27.33  performance of duty, is temporarily disabled and for which 
 27.34  disability the state is liable under the workers' compensation 
 27.35  law, until the date authorized by the executive director for 
 27.36  commencement of payment of a disability benefit or return to 
 28.1   employment.  
 28.2      Sec. 3.  Minnesota Statutes 1998, section 352D.02, 
 28.3   subdivision 1, is amended to read: 
 28.4      Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
 28.5   paragraph (c), clauses (2), (3), (4), and (6) to (15), if they 
 28.6   are in the unclassified service of the state or metropolitan 
 28.7   council and are eligible for coverage under the general state 
 28.8   employees retirement plan under chapter 352, are participants in 
 28.9   the unclassified program plan under this chapter unless the 
 28.10  employee gives notice to the executive director of the Minnesota 
 28.11  state retirement system within one year following the 
 28.12  commencement of employment in the unclassified service that the 
 28.13  employee desires coverage under the general state employees 
 28.14  retirement plan.  For the purposes of this chapter, an employee 
 28.15  who does not file notice with the executive director is deemed 
 28.16  to have exercised the option to participate in the unclassified 
 28.17  plan. 
 28.18     (b) Persons referenced in paragraph (c), clauses (1) and 
 28.19  (5), are participants in the unclassified program under this 
 28.20  chapter unless the person is eligible to elect different 
 28.21  coverage under section 3A.07 or 352C.011 and, after July 1, 
 28.22  1998, elects retirement coverage by the applicable alternative 
 28.23  retirement plan. 
 28.24     (c) Enumerated employees and referenced persons are: 
 28.25     (1) the governor, the lieutenant governor, the secretary of 
 28.26  state, the state auditor, the state treasurer, and the attorney 
 28.27  general; 
 28.28     (2) an employee in the office of the governor, lieutenant 
 28.29  governor, secretary of state, state auditor, state treasurer, 
 28.30  attorney general; 
 28.31     (3) an employee of the state board of investment; 
 28.32     (4) the head of a department, division, or agency created 
 28.33  by statute in the unclassified service, an acting department 
 28.34  head subsequently appointed to the position, or an employee 
 28.35  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
 28.36     (5) a member of the legislature; 
 29.1      (6) a permanent, full-time unclassified employee of the 
 29.2   legislature or a commission or agency of the legislature or a 
 29.3   temporary legislative employee having shares in the supplemental 
 29.4   retirement fund as a result of former employment covered by this 
 29.5   chapter, whether or not eligible for coverage under the 
 29.6   Minnesota state retirement system; 
 29.7      (7) a person who is employed in a position established 
 29.8   under section 43A.08, subdivision 1, clause (3), or in a 
 29.9   position authorized under a statute creating or establishing a 
 29.10  department or agency of the state, which is at the deputy or 
 29.11  assistant head of department or agency or director level; 
 29.12     (8) the regional administrator, or executive director of 
 29.13  the metropolitan council, general counsel, division directors, 
 29.14  operations managers, and other positions as designated by the 
 29.15  council, all of which may not exceed 27 positions at the council 
 29.16  and the chair, provided that upon initial designation of all 
 29.17  positions provided for in this clause, no further designations 
 29.18  or redesignations may be made without approval of the board of 
 29.19  directors of the Minnesota state retirement system; 
 29.20     (9) the executive director, associate executive director, 
 29.21  and not to exceed nine positions of the higher education 
 29.22  services office in the unclassified service, as designated by 
 29.23  the higher education services office before January 1, 1992, or 
 29.24  subsequently redesignated with the approval of the board of 
 29.25  directors of the Minnesota state retirement system, unless the 
 29.26  person has elected coverage by the individual retirement account 
 29.27  plan under chapter 354B; 
 29.28     (10) the clerk of the appellate courts appointed under 
 29.29  article VI, section 2, of the Constitution of the state of 
 29.30  Minnesota; 
 29.31     (11) the chief executive officers of correctional 
 29.32  facilities operated by the department of corrections and of 
 29.33  hospitals and nursing homes operated by the department of human 
 29.34  services; 
 29.35     (12) an employee whose principal employment is at the state 
 29.36  ceremonial house; 
 30.1      (13) an employee of the Minnesota educational computing 
 30.2   corporation; 
 30.3      (14) an employee of the world trade center board; and 
 30.4      (15) an employee of the state lottery board who is covered 
 30.5   by the managerial plan established under section 43A.18, 
 30.6   subdivision 3. 
 30.7      Sec. 4.  Minnesota Statutes 1998, section 352D.05, 
 30.8   subdivision 3, is amended to read: 
 30.9      Subd. 3.  [FULL OR PARTIAL WITHDRAWAL.] After termination 
 30.10  of covered employment or at any time thereafter, a participant 
 30.11  is entitled, upon application, to withdraw the cash value of the 
 30.12  participant's total shares or leave such shares on deposit with 
 30.13  the supplemental retirement fund.  The account is valued at the 
 30.14  end of the month in which application for withdrawal is made.  
 30.15  Shares not withdrawn remain on deposit with the supplemental 
 30.16  retirement fund until the former participant becomes at least 55 
 30.17  years old, and applies for an annuity under section 352D.06, 
 30.18  subdivision 1.  
 30.19     Sec. 5.  Minnesota Statutes 1998, section 352D.06, is 
 30.20  amended to read: 
 30.21     352D.06 [ANNUITIES.] 
 30.22     Subdivision 1.  [ANNUITY; RESERVES.] When a participant 
 30.23  attains at least age 55, is retired terminates from covered 
 30.24  service, and applies for a retirement annuity, the cash value of 
 30.25  the participant's shares shall be transferred to the Minnesota 
 30.26  postretirement investment fund and used to provide an annuity 
 30.27  for the retired employee based upon the participant's age when 
 30.28  the benefit begins to accrue according to the reserve basis used 
 30.29  by the general state employees retirement fund plan in 
 30.30  determining pensions and reserves.  
 30.31     Subd. 2.  [PARTIAL VALUE ANNUITY.] A participant has the 
 30.32  option in an application for an annuity to apply for and receive 
 30.33  the a partial value of one-half of the total shares and 
 30.34  thereafter receive an annuity, as provided in subdivision 1, 
 30.35  based on the remaining value of one-half of the total shares.  
 30.36     Subd. 3.  [ACCRUAL DATE.] An annuity herein shall begin to 
 31.1   accrue under this section accrues the first day of the first 
 31.2   full month after an application is received or after termination 
 31.3   of state service, whichever is later.  Upon the former 
 31.4   employee's request, the annuity may begin to accrue up to six 
 31.5   months before redemption of shares, but not prior to the 
 31.6   termination date from covered service, and must be based on the 
 31.7   account value at redemption and upon the age of the former 
 31.8   employee at the date annuity accrual starts.  The account must 
 31.9   be valued and redeemed on the later of the end of the month of 
 31.10  termination of covered employment, or the end of the month of 
 31.11  receipt of the annuity application for the purpose of computing 
 31.12  the annuity. 
 31.13     Sec. 6.  Minnesota Statutes 1998, section 352D.09, 
 31.14  subdivision 5a, is amended to read: 
 31.15     Subd. 5a.  [SMALL BALANCE ACCOUNTS.] If a former 
 31.16  participant who contributed less than $100 $500 in employee 
 31.17  contributions cannot be contacted by the system for five or more 
 31.18  years, the value of the shares shall be appropriated to the 
 31.19  general employees retirement fund, but upon subsequent contact 
 31.20  by the former employee the account shall be reinstated to the 
 31.21  amount that would have been payable had the money been left in 
 31.22  the unclassified plan. 
 31.23     Sec. 7.  Minnesota Statutes 1998, section 353.01, 
 31.24  subdivision 2, is amended to read: 
 31.25     Subd. 2.  [PUBLIC EMPLOYEE.] "Public employee" means an 
 31.26  employee performing personal services for a governmental 
 31.27  subdivision under subdivision 6, whose salary is paid, in whole 
 31.28  or in part, from revenue derived from taxation, fees, 
 31.29  assessments, or from other sources.  The term also includes 
 31.30  special classes of persons listed in subdivision 2a, but 
 31.31  excludes special classes of persons listed in subdivision 2b for 
 31.32  purposes of membership in the association.  Public employee does 
 31.33  not include independent contractors and their employees.  A 
 31.34  reemployed annuitant under section 353.37 must not be considered 
 31.35  to be a public employee for purposes of that reemployment. 
 31.36     Sec. 8.  Minnesota Statutes 1998, section 353.01, 
 32.1   subdivision 6, is amended to read: 
 32.2      Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
 32.3   subdivision" means a county, city, town, school district within 
 32.4   this state, or a department or unit of state government, or any 
 32.5   public body whose revenues are derived from taxation, fees, 
 32.6   assessments or from other sources. 
 32.7      (b) Governmental subdivision also means the public 
 32.8   employees retirement association, the league of Minnesota 
 32.9   cities, the association of metropolitan municipalities, public 
 32.10  hospitals owned or operated by, or an integral part of, a 
 32.11  governmental subdivision or governmental subdivisions, the 
 32.12  association of Minnesota counties, the metropolitan intercounty 
 32.13  association, the Minnesota municipal utilities association, the 
 32.14  metropolitan airports commission, and the Minneapolis employees 
 32.15  retirement fund for employment initially commenced after June 
 32.16  30, 1979, the range association of municipalities and schools, 
 32.17  soil and water conservation districts, and economic development 
 32.18  authorities created or operating under sections 469.090 to 
 32.19  469.108. 
 32.20     (c) Governmental subdivision does not mean any municipal 
 32.21  housing and redevelopment authority organized under the 
 32.22  provisions of sections 469.001 to 469.047; or any port authority 
 32.23  organized under sections 469.048 to 469.068 469.089; or any 
 32.24  hospital district organized or reorganized prior to July 1, 
 32.25  1975, under sections 447.31 to 447.37 or the successor of the 
 32.26  district, nor the Minneapolis community development agency.  
 32.27     Sec. 9.  Minnesota Statutes 1999 Supplement, section 
 32.28  353.01, subdivision 10, is amended to read: 
 32.29     Subd. 10.  [SALARY.] (a) "Salary" means: 
 32.30     (1) periodic compensation of a public employee, before 
 32.31  deductions for deferred compensation, supplemental retirement 
 32.32  plans, or other voluntary salary reduction programs, and also 
 32.33  means "wages" and includes net income from fees; and 
 32.34     (2) for a public employee who has prior service covered by 
 32.35  a local police or firefighters' relief association that has 
 32.36  consolidated with the public employees retirement association or 
 33.1   to which section 353.665 applies and who has elected coverage 
 33.2   either under the public employees police and fire fund benefit 
 33.3   plan under section 353A.08 following the consolidation or under 
 33.4   section 353.665, subdivision 4, "salary" means the rate of 
 33.5   salary upon which member contributions to the special fund of 
 33.6   the relief association were made prior to the effective date of 
 33.7   the consolidation as specified by law and by bylaw provisions 
 33.8   governing the relief association on the date of the initiation 
 33.9   of the consolidation procedure and the actual periodic 
 33.10  compensation of the public employee after the effective date of 
 33.11  consolidation. 
 33.12     (b) Salary does not mean: 
 33.13     (1) fees paid to district court reporters, unused 
 33.14  annual vacation or sick leave payments, in lump-sum or periodic 
 33.15  payments, severance payments, reimbursement of expenses, 
 33.16  lump-sum settlements not attached to a specific earnings period, 
 33.17  or workers' compensation payments; 
 33.18     (2) employer-paid amounts used by an employee toward the 
 33.19  cost of insurance coverage, employer-paid fringe benefits, 
 33.20  flexible spending accounts, cafeteria plans, health care expense 
 33.21  accounts, day care expenses, or any payments in lieu of any 
 33.22  employer-paid group insurance coverage, including the difference 
 33.23  between single and family rates that may be paid to a member 
 33.24  with single coverage and certain amounts determined by the 
 33.25  executive director to be ineligible; 
 33.26     (3) the amount equal to that which the employing 
 33.27  governmental subdivision would otherwise pay toward single or 
 33.28  family insurance coverage for a covered employee when, through a 
 33.29  contract or agreement with some but not all employees, the 
 33.30  employer: 
 33.31     (i) discontinues, or for new hires does not provide, 
 33.32  payment toward the cost of the employee's selected insurance 
 33.33  coverages under a group plan offered by the employer; 
 33.34     (ii) makes the employee solely responsible for all 
 33.35  contributions toward the cost of the employee's selected 
 33.36  insurance coverages under a group plan offered by the employer, 
 34.1   including any amount the employer makes toward other employees' 
 34.2   selected insurance coverages under a group plan offered by the 
 34.3   employer; and 
 34.4      (iii) provides increased salary rates for employees who do 
 34.5   not have any employer-paid group insurance coverages; and 
 34.6      (4) except as provided in section 353.86 or 353.87, 
 34.7   compensation of any kind paid to volunteer ambulance service 
 34.8   personnel or volunteer firefighters, as defined in subdivisions 
 34.9   subdivision 35 and or 36.  
 34.10     Sec. 10.  Minnesota Statutes 1998, section 353.01, 
 34.11  subdivision 11a, is amended to read: 
 34.12     Subd. 11a.  [TERMINATION OF PUBLIC SERVICE.] 
 34.13  (a) "Termination of public service" occurs when a member resigns 
 34.14  or is dismissed from public service by the employing 
 34.15  governmental subdivision, as evidenced by appropriate written 
 34.16  record transmitted to the association, or when a position ends 
 34.17  and the member who held the position is not considered by the 
 34.18  governmental subdivision to be on a temporary layoff, and the 
 34.19  employee does not, within 30 days of resignation or dismissal 
 34.20  the date the employment relationship ended, return to a 
 34.21  nontemporary an employment position in the same governmental 
 34.22  subdivision. 
 34.23     (b) The termination of public service must be recorded in 
 34.24  the association records upon receipt of an appropriate notice 
 34.25  from the governmental subdivision. 
 34.26     Sec. 11.  Minnesota Statutes 1998, section 353.01, 
 34.27  subdivision 28, is amended to read: 
 34.28     Subd. 28.  [RETIREMENT.] (a) "Retirement" means the 
 34.29  commencement of payment of an annuity based on a date designated 
 34.30  by the board of trustees.  This date determines the rights under 
 34.31  this chapter which occur either before or after retirement.  A 
 34.32  right to retirement is subject to termination of public service 
 34.33  under subdivision 11a or termination of membership under 
 34.34  subdivision 11b, the earlier of which will determine the date 
 34.35  membership and coverage cease.  A right to retirement must not 
 34.36  accrue without requires a complete and continuous separation for 
 35.1   30 days from employment as a public employee under subdivision 2 
 35.2   and from the provision of paid services to that employer. 
 35.3      (b) An individual who separates from employment as a public 
 35.4   employee and who, within 30 days of separation, returns to 
 35.5   provide service to a governmental subdivision as an independent 
 35.6   contractor or as an employee of an independent contractor, has 
 35.7   not satisfied separation requirements under paragraph (a). 
 35.8      (c) A former member of the basic or police and fire fund 
 35.9   who becomes a coordinated member upon returning to eligible, 
 35.10  nontemporary public service, terminates employment before 
 35.11  obtaining six months' allowable service under subdivision 16, 
 35.12  paragraph (a), in the coordinated fund, and is eligible to 
 35.13  receive an annuity the first day of the month after the most 
 35.14  recent termination date shall not accrue a right to a retirement 
 35.15  annuity under the coordinated fund.  An annuity otherwise 
 35.16  payable to the former member must be based on the laws in effect 
 35.17  on the date of termination of the most recent service under the 
 35.18  basic or police and fire fund and shall be retroactive to the 
 35.19  first day of the month following that termination date or one 
 35.20  year preceding the filing of an application for retirement 
 35.21  annuity as provided by section 353.29, subdivision 7, whichever 
 35.22  is later.  The annuity payment must be suspended or reduced 
 35.23  under the provisions of section 353.37, if earned compensation 
 35.24  for the reemployment equals or exceeds the amounts indicated 
 35.25  under that section.  The association will refund the employee 
 35.26  deductions made to the coordinated fund, with interest under 
 35.27  section 353.34, subdivision 2, return the accompanying employer 
 35.28  contributions, and remove the allowable service credits covering 
 35.29  the deductions refunded. 
 35.30     (b) (d) Notwithstanding the 30-day separation requirement 
 35.31  under paragraph (a), a member of the defined benefit plan under 
 35.32  this chapter, who also participates in the public employees 
 35.33  defined contribution plan under chapter 353D for other public 
 35.34  service, may be paid, if eligible, a retirement annuity from the 
 35.35  defined benefit plan while participating in the defined 
 35.36  contribution plan. 
 36.1      Sec. 12.  Minnesota Statutes 1998, section 353.01, 
 36.2   subdivision 32, is amended to read: 
 36.3      Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
 36.4   any public employee, including any public hospital employee, 
 36.5   covered by any agreement or modification made between the state 
 36.6   and the Secretary of Health, Education and Welfare, making the 
 36.7   provisions of the federal Old Age, Survivors and Disability 
 36.8   Insurance Act applicable to the member if membership eligibility 
 36.9   criteria are met under this chapter.  A coordinated member also 
 36.10  means is a former basic member who terminates public service 
 36.11  under subdivision 11a, has a complete and continuous separation 
 36.12  for at least 30 days from employment as a public employee 
 36.13  meeting the requirements specified in subdivision 28, paragraphs 
 36.14  (a) and (b), and who reenters public service in a nontemporary 
 36.15  position, as a public employee and meets the membership 
 36.16  eligibility criteria under this chapter. 
 36.17     Sec. 13.  Minnesota Statutes 1998, section 353.15, 
 36.18  subdivision 2, is amended to read: 
 36.19     Subd. 2.  [AUTOMATIC DEPOSITS.] The association may pay an 
 36.20  remit, through an automatic deposit system, annuity, benefit, or 
 36.21  refund payments only to a trust company, qualified under chapter 
 36.22  48, financial institution associated with the National Automated 
 36.23  Clearinghouse Association or a comparable successor organization 
 36.24  that is the trustee for a person eligible to receive such the 
 36.25  annuity, benefit, or refund.  Upon the request of a retired, 
 36.26  disabled the retiree, disabilitant, survivor, or former member, 
 36.27  the association may mail or send by electronic transfer the 
 36.28  annuity, benefit or refund check to a banking institution, 
 36.29  savings association or credit union the applicable financial 
 36.30  institution for deposit to such in the person's account or joint 
 36.31  account with a spouse.  The association may prescribe the 
 36.32  conditions under which such payment will be made.  
 36.33     Sec. 14.  Minnesota Statutes 1998, section 353.27, 
 36.34  subdivision 4, is amended to read: 
 36.35     Subd. 4.  [EMPLOYERS EMPLOYER REPORTING REQUIREMENTS; 
 36.36  CONTRIBUTIONS; MEMBER STATUS.] (a) A representative authorized 
 37.1   by the head of each department shall deduct employee 
 37.2   contributions from the salary of each member employee who 
 37.3   qualifies for membership under this chapter and issue or approve 
 37.4   one warrant remit payment in a manner prescribed by the 
 37.5   executive director for the aggregate amount of the employee 
 37.6   contributions, the employer contributions and the additional 
 37.7   employer contributions to be received within 20 14 calendar days 
 37.8   in the office of the association.  The head of each 
 37.9   department or the person's designee shall, for each pay period 
 37.10  in which employee contributions are deducted, submit to the 
 37.11  association a salary deduction report, in the form format 
 37.12  prescribed by the executive director, showing.  Data to be 
 37.13  submitted as part of salary deduction reporting must include, 
 37.14  but are not limited to:  
 37.15     (a) (1) the legal names and the association membership 
 37.16  numbers, listed in alphabetical order, social security numbers 
 37.17  of employees who are members; 
 37.18     (b) (2) the legal names of all new public employees and the 
 37.19  effective dates of appointment; (c) the amount of each 
 37.20  employee's salary deduction; (d) 
 37.21     (3) the amount of salary from which each deduction was 
 37.22  made; (e) effective dates of member terminations of public 
 37.23  service accompanied by the applicable status code as set by the 
 37.24  association for those terminations caused by death or 
 37.25  retirement; (f) effective dates of all temporary layoffs and 
 37.26  leaves of absence accompanied by the applicable status code as 
 37.27  set by the association; and (g) 
 37.28     (4) the beginning and ending dates of the payroll period 
 37.29  covered and the date of actual payment; and 
 37.30     (5) adjustments or corrections covering past pay periods.  
 37.31     Reports of contributions must be accompanied by a 
 37.32  membership enrollment form 
 37.33     (b) Employers must furnish the data required for enrollment 
 37.34  for each new employee who qualifies for membership in the form 
 37.35  format prescribed by the executive director.  The required 
 37.36  enrollment forms from data on new employees must be collected by 
 38.1   the employer and submitted to the association within 30 days 
 38.2   following the date of employment prior to or concurrent with the 
 38.3   submission of the initial employee salary deduction.  The 
 38.4   employer shall also report to the association all member 
 38.5   employment status changes, such as leaves of absence, 
 38.6   terminations, and death, and the effective dates of those 
 38.7   changes, on an ongoing basis for the payroll cycle in which they 
 38.8   occur.  The employer shall furnish such additional data, forms, 
 38.9   and reports on magnetic media on other forms as may be requested 
 38.10  required by the executive director for proper administration of 
 38.11  the retirement system.  Before implementing new or different 
 38.12  computerized reporting requirements, the executive director 
 38.13  shall give appropriate advance notice to governmental 
 38.14  subdivisions to allow time for system modifications. 
 38.15     (b) (c) Notwithstanding paragraph (a), the association may 
 38.16  provide for less frequent reporting and payments for small 
 38.17  employers. 
 38.18     Sec. 15.  Minnesota Statutes 1998, section 353.27, 
 38.19  subdivision 12, is amended to read: 
 38.20     Subd. 12.  [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] (a) In 
 38.21  the case of omission of required deductions from the salary of 
 38.22  an employee, the department head or designee shall immediately, 
 38.23  upon discovery, report the employee for membership and deduct 
 38.24  the employee deductions under subdivision 4.  Upon receipt of 
 38.25  billing from the association, during the current pay period or 
 38.26  during the pay period immediately following the discovery of the 
 38.27  omission.  Payment for the omitted obligations may only be made 
 38.28  in accordance with reporting procedures and methods established 
 38.29  by the executive director. 
 38.30     (b) When the entire omission period of an employee does not 
 38.31  exceed 60 days, the governmental subdivision may report and 
 38.32  submit payment of the omitted employee deductions and the 
 38.33  omitted employer contributions through the reporting processes 
 38.34  under subdivision 4. 
 38.35     (c) When the omission period of an employee exceeds 60 
 38.36  days, the governmental subdivision shall furnish to the 
 39.1   association sufficient data and documentation upon which the 
 39.2   obligation for omitted employee and employer contributions can 
 39.3   be calculated.  The omitted employee deductions must be deducted 
 39.4   from the employee's next subsequent salary payment or payments 
 39.5   and remitted to the association.  The employee shall pay omitted 
 39.6   employee deductions due for the 60 days prior to the end of the 
 39.7   last pay period in the omission period during which salary was 
 39.8   earned.  The employer shall pay any remaining omitted employee 
 39.9   deductions and any omitted employer contributions, plus 
 39.10  cumulative interest at an annual rate of 8.5 percent compounded 
 39.11  annually, from the date or dates each omitted employee 
 39.12  contribution was first payable.  
 39.13     (b) (d) An employer shall not hold an employee liable for 
 39.14  omitted employee deductions beyond the pay period dates under 
 39.15  paragraph (a) (c), nor attempt to recover from the employee 
 39.16  those employee deductions paid by the employer on behalf of the 
 39.17  employee.  Omitted deductions due under paragraph (a) (c) which 
 39.18  are not paid by the employee constitute a liability of the 
 39.19  employer that failed to deduct the omitted deductions from the 
 39.20  employee's salary.  The employer shall make payment with 
 39.21  interest at an annual rate of 8.5 percent compounded annually.  
 39.22  Omitted employee deductions are no longer due if an employee 
 39.23  terminates public service before making payment of omitted 
 39.24  employee deductions to the association, but the employer remains 
 39.25  liable to pay omitted employer contributions plus interest at an 
 39.26  annual rate of 8.5 percent compounded annually from the date the 
 39.27  contributions were first payable.  
 39.28     (c) (e) The association may not commence action for the 
 39.29  recovery of omitted employee deductions and employer 
 39.30  contributions after the expiration of three calendar years after 
 39.31  the calendar year in which the contributions and deductions were 
 39.32  omitted.  Except as provided under paragraph (b), no payment may 
 39.33  be made or accepted unless the association has already commenced 
 39.34  action for recovery of omitted deductions.  An action for 
 39.35  recovery commences on the date of the mailing of any written 
 39.36  correspondence from the association requesting information from 
 40.1   the governmental subdivision upon which to determine whether or 
 40.2   not omitted deductions occurred. 
 40.3      Sec. 16.  Minnesota Statutes 1998, section 353.33, 
 40.4   subdivision 2, is amended to read: 
 40.5      Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
 40.6   or demand for a total and permanent disability benefit must be 
 40.7   initiated by written application in the manner and form 
 40.8   prescribed by the executive director showing compliance with the 
 40.9   statutory conditions qualifying the applicant for a total and 
 40.10  permanent disability benefit and filed with the executive 
 40.11  director.  A member or former member who became totally and 
 40.12  permanently disabled during a period of membership shall file 
 40.13  application for total and permanent disability benefits within 
 40.14  three years next following termination of public service.  This 
 40.15  benefit begins to accrue the day following the commencement of 
 40.16  disability, 90 days preceding the filing of the application, or, 
 40.17  if annual or sick leave is paid for more than the 90-day period, 
 40.18  from the date salary ceased, whichever is later.  No member is 
 40.19  entitled to receive a disability benefit payment when there 
 40.20  remains to the member's credit any unused annual leave or sick 
 40.21  leave or under any other circumstances when, during the period 
 40.22  of disability, there has been no impairment of the person's 
 40.23  salary.  Payment must not accrue beyond the end of the month in 
 40.24  which entitlement has terminated.  If the disabilitant dies 
 40.25  prior to negotiating the check for the month in which death 
 40.26  occurs, payment is made to the surviving spouse, or if none, to 
 40.27  the designated beneficiary, or if none, to the estate.  An 
 40.28  applicant for total and permanent disability benefits may file a 
 40.29  retirement annuity application under section 353.29, subdivision 
 40.30  4, simultaneously with an application for total and permanent 
 40.31  disability benefits.  The retirement annuity application is void 
 40.32  upon the determination of the entitlement for disability 
 40.33  benefits by the executive director.  If disability benefits are 
 40.34  denied, the retirement annuity application must be initiated and 
 40.35  processed. 
 40.36     Sec. 17.  Minnesota Statutes 1998, section 353.33, 
 41.1   subdivision 6, is amended to read: 
 41.2      Subd. 6.  [CONTINUING ELIGIBILITY FOR BENEFITS.] The 
 41.3   association shall determine eligibility for continuation of 
 41.4   disability benefits and require periodic examinations and 
 41.5   evaluations of disabled members as frequently as deemed 
 41.6   necessary.  The association shall require the disabled member to 
 41.7   provide and authorize release of medical evidence, including all 
 41.8   medical records and information from any source, relating to an 
 41.9   application for continuation of disability benefits.  Disability 
 41.10  benefits are contingent upon a disabled person's participation 
 41.11  in a vocational rehabilitation program if the executive director 
 41.12  determines that the disabled person may be able to return to a 
 41.13  gainful occupation.  If a member is found to be no longer 
 41.14  totally and permanently disabled and is reinstated to the 
 41.15  payroll, payments must cease the first of the month following 
 41.16  the reinstatement to the payroll expiration of a 30-day period 
 41.17  after the member receives a certified letter notifying the 
 41.18  member that payments will cease. 
 41.19     Sec. 18.  Minnesota Statutes 1998, section 353.34, 
 41.20  subdivision 1, is amended to read: 
 41.21     Subdivision 1.  [REFUND OR DEFERRED ANNUITY.] (a) A former 
 41.22  member is entitled to a refund of accumulated employee 
 41.23  deductions under subdivision 2, or to a deferred annuity under 
 41.24  subdivision 3.  An active member of a fund enumerated in section 
 41.25  356.30, subdivision 3, clause (7), (8), or (14), who terminates 
 41.26  public service in any of those funds and becomes a member of 
 41.27  another fund enumerated in those clauses may receive a refund of 
 41.28  employee contributions plus six percent interest compounded 
 41.29  annually from the fund in which the member terminated service.  
 41.30  Application for a refund may not be made prior to the date of 
 41.31  termination of public service or the termination of membership, 
 41.32  whichever is sooner.  Except as specified in paragraph (b), a 
 41.33  refund must be paid within 120 days following receipt of the 
 41.34  application unless the applicant has again become a public 
 41.35  employee required to be covered by the association.  
 41.36     (b) If an individual was granted an authorized temporary 
 42.1   layoff, a refund is not payable before termination of membership 
 42.2   under section 353.01, subdivision 11b, clause (3). 
 42.3      (c) An individual who terminates public service covered by 
 42.4   the public employees retirement association general plan, the 
 42.5   public employees retirement association police and fire plan, or 
 42.6   the public employees local government corrections service 
 42.7   retirement plan, and who becomes an active member covered by one 
 42.8   of the other two plans, may receive a refund of employee 
 42.9   contributions plus six percent interest compounded annually from 
 42.10  the plan in which the member terminated service. 
 42.11     Sec. 19.  Minnesota Statutes 1999 Supplement, section 
 42.12  353.64, subdivision 1, is amended to read: 
 42.13     Subdivision 1.  [POLICE AND FIRE FUND PLAN MEMBERSHIP; 
 42.14  MANDATORY.] A governmental subdivision must report a public 
 42.15  employee for membership in the police and fire plan if the 
 42.16  employee is employed full-time as specified in clause (1), (2), 
 42.17  or (3): 
 42.18     (1) a full-time police officer or a person in charge of a 
 42.19  designated police or sheriff's department, who by virtue of that 
 42.20  employment is required by the employing governmental subdivision 
 42.21  to be and is licensed by the Minnesota peace officer standards 
 42.22  and training board under sections 626.84 to 626.863, who is 
 42.23  charged with the prevention and detection of crime, who has the 
 42.24  full power of arrest, who is assigned to a designated police or 
 42.25  sheriff's department, and whose primary job is the enforcement 
 42.26  of the general criminal laws of the state; 
 42.27     (2) a full-time firefighter or a person in charge of a 
 42.28  designated fire company or companies who is engaged in the 
 42.29  hazards of fire fighting; or 
 42.30     (3) a full-time police officer or firefighter meeting all 
 42.31  requirements of clause (1) or (2), as applicable, who as part of 
 42.32  the employment position is periodically assigned to employment 
 42.33  duties in the same department that are not within the scope of 
 42.34  this subdivision. 
 42.35     An individual to which clause (3) applies must contribute 
 42.36  as a member of the police and fire plan for both the primary and 
 43.1   secondary services that are provided to the employing 
 43.2   governmental subdivision.  
 43.3      Subd. 1a.  [POLICE AND FIRE PLAN; OTHER MEMBERS.] (a) A 
 43.4   person who prior to July 1, 1961, was a member of the police and 
 43.5   fire fund plan, by virtue of being a police officer or 
 43.6   firefighter, shall, as long as the person remains in either 
 43.7   position, continue membership in the fund plan.  
 43.8      (b) A person who was employed by a governmental subdivision 
 43.9   as a police officer and was a member of the police and fire fund 
 43.10  plan on July 1, 1978, by virtue of being a police officer as 
 43.11  defined by this section on that date, and if employed by the 
 43.12  same governmental subdivision in a position in the same 
 43.13  department in which the person was employed on that date, 
 43.14  continues to be a member of the fund plan, whether or not that 
 43.15  person has the power of arrest by warrant and is licensed by the 
 43.16  peace officers standards and training board after that date. 
 43.17     (c) A person who was employed as a correctional officer by 
 43.18  Rice county before July 1, 1998, for the duration of employment 
 43.19  in the correctional position held on July 1, 1998, continues to 
 43.20  be a member of the public employees police and fire plan, 
 43.21  whether or not the person has the power of arrest by warrant and 
 43.22  is licensed by the peace officers standards and training board 
 43.23  after that date. 
 43.24     (c) (d) A person who was employed by a governmental 
 43.25  subdivision as a police officer or a firefighter, whichever 
 43.26  applies, was an active member of the local police or salaried 
 43.27  firefighters relief association located in that governmental 
 43.28  subdivision by virtue of that employment as of the effective 
 43.29  date of the consolidation as authorized by sections 353A.01 to 
 43.30  353A.10, and has elected coverage by the public employees police 
 43.31  and fire fund benefit plan, shall become a member of the police 
 43.32  and fire fund plan after that date if employed by the same 
 43.33  governmental subdivision in a position in the same department in 
 43.34  which the person was employed on that date. 
 43.35     (d) Any other employee serving on a full-time basis as a 
 43.36  police officer as defined in subdivision 2 or as a firefighter 
 44.1   as defined in subdivision 3 on or after July 1, 1961, shall 
 44.2   become a member of the public employees police and fire fund.  
 44.3      (e) An employee serving on less than a full-time basis as a 
 44.4   police officer shall become a member of the public employees 
 44.5   police and fire fund only after a resolution stating that the 
 44.6   employee should be covered by the police and fire fund is 
 44.7   adopted by the governing body of the governmental subdivision 
 44.8   employing the person declaring that the position which the 
 44.9   person holds is that of a police officer. 
 44.10     (f) An employee serving on less than a full-time basis as a 
 44.11  firefighter shall become a member of the public employees police 
 44.12  and fire fund only after a resolution stating that the employee 
 44.13  should be covered by the police and fire fund is adopted by the 
 44.14  governing body of the governmental subdivision employing the 
 44.15  person declaring that the position which the person holds is 
 44.16  that of a firefighter. 
 44.17     (g) A police officer or firefighter employed by a 
 44.18  governmental subdivision who by virtue of that employment is 
 44.19  required by law to be a member of and to contribute to any 
 44.20  police or firefighter relief association governed by section 
 44.21  69.77 which has not consolidated with the public employees 
 44.22  police and fire fund, (e) Any police officer or firefighter of a 
 44.23  relief association that has consolidated with the association 
 44.24  for which the employee has not elected coverage by the public 
 44.25  employees police and fire fund benefit plan as provided in 
 44.26  sections 353A.01 to 353A.10, or any police officer or 
 44.27  firefighter to whom section 353.665 applies who has not elected 
 44.28  coverage by the public employees police and fire fund benefit 
 44.29  plan as provided in section 353.665, subdivision 4, shall must 
 44.30  not become a member of the public employees police and fire fund 
 44.31  plan, but is not subject to the provisions of sections 353.651 
 44.32  to 353.659 unless an election for such coverage is made under 
 44.33  section 353.665, subdivision 4. 
 44.34     Sec. 20.  Minnesota Statutes 1998, section 353.64, 
 44.35  subdivision 2, is amended to read: 
 44.36     Subd. 2.  [POLICE AND FIRE FUND MEMBERSHIP; PART-TIME 
 45.1   EMPLOYMENT COVERAGE OPTION.] Before a (a) The governing body of 
 45.2   a governmental subdivision may adopt a resolution, subject to 
 45.3   requirements specified in paragraph (b), declaring that a public 
 45.4   employee employed in a position on a part-time basis by that 
 45.5   governmental subdivision is covered by the police and fire plan 
 45.6   for that employment. 
 45.7      (b) If the public employee's position is related to police 
 45.8   service, the resolution is valid if the conditions specified in 
 45.9   paragraph (c) are met.  If the public employee's position is 
 45.10  related to fire service, the resolution is valid if the 
 45.11  conditions specified in paragraph (d) are met.  If the public 
 45.12  employee in the applicable position is periodically assigned to 
 45.13  employment duties not within the scope of this subdivision, the 
 45.14  resolution is considered valid if the governing body of the 
 45.15  governmental subdivision declares that the public employee's 
 45.16  position, for primary services provided, satisfies all of the 
 45.17  requirements of subdivision 1, clause (3), other than the 
 45.18  requirement of full-time employment. 
 45.19     (c) For the governing body may of the governmental 
 45.20  subdivision to declare a position to be that of a police 
 45.21  officer, the duties and qualifications of the person so employed 
 45.22  must, as at a minimum, include employment as an officer of a 
 45.23  designated police department or sheriff's office or person in 
 45.24  charge of a designated police department or sheriff's office 
 45.25  whose primary job it is to enforce the law, who is licensed by 
 45.26  the Minnesota board of peace officer standards and training 
 45.27  under sections 626.84 to 626.863, who is engaged in the hazards 
 45.28  of protecting the safety and property of others, and who has the 
 45.29  power to arrest by warrant. 
 45.30     A police officer who is periodically assigned to employment 
 45.31  duties not within the scope of this subdivision may contribute 
 45.32  to the public employees police and fire fund for all service, if 
 45.33  a resolution declaring that the primary position held by the 
 45.34  person is that of a police officer, is adopted by the governing 
 45.35  body of the department, and is promptly submitted to the 
 45.36  executive director. satisfy all of the requirements of 
 46.1   subdivision 1, clause (1), other than the requirement of 
 46.2   full-time employment. 
 46.3      (d) For the governing body of a governmental subdivision to 
 46.4   declare a position to be that of a firefighter, the duties and 
 46.5   qualifications of the person so employed must, at a minimum, 
 46.6   satisfy all of the requirements of subdivision 1, clause (2), 
 46.7   other than the requirement of full-time employment. 
 46.8      Sec. 21.  Minnesota Statutes 1998, section 353.64, 
 46.9   subdivision 3, is amended to read: 
 46.10     Subd. 3.  [POLICE AND FIRE FUND MEMBERSHIP; EXCLUSION.] 
 46.11  Before a governing body may declare a position to be that of a 
 46.12  firefighter, the duties of the person so employed must, as a 
 46.13  minimum, include services as an employee of a designated fire 
 46.14  company or person in charge of a designated fire company or 
 46.15  companies who is engaged in the hazards of fire fighting.  A 
 46.16  firefighter who is periodically assigned to employment duties 
 46.17  outside the scope of firefighting may contribute to the public 
 46.18  employees police and fire fund for all service, if a resolution 
 46.19  declaring that the primary position held by the person is that 
 46.20  of a firefighter, is adopted by the governing body of the 
 46.21  company or companies, and is promptly submitted to the executive 
 46.22  director.  A police officer or firefighter employed by a 
 46.23  governmental subdivision who by virtue of that employment is 
 46.24  required by law to be a member of and to contribute to any 
 46.25  police or firefighter relief association governed by section 
 46.26  69.77 which has not consolidated with the public employees 
 46.27  police and fire plan is not eligible to become a member of the 
 46.28  public employees police and fire plan. 
 46.29     Sec. 22.  Minnesota Statutes 1998, section 353.64, 
 46.30  subdivision 4, is amended to read: 
 46.31     Subd. 4.  [RESOLUTION FILING.] (a) A copy of the resolution 
 46.32  of the governing body declaring a position to be that of police 
 46.33  officer or firefighter shall be promptly filed with the board of 
 46.34  trustees and shall be irrevocable.  
 46.35     (b) Following the receipt of adequate notice from the 
 46.36  association, if a valid resolution is not filed with the public 
 47.1   employees retirement association within six months following the 
 47.2   date of that notice, any contributions or deductions made to the 
 47.3   police and fire fund for the applicable employment are deemed to 
 47.4   be contributions or deductions transmitted in error under 
 47.5   section 353.27, subdivision 7a. 
 47.6      Sec. 23.  Minnesota Statutes 1998, section 353.656, 
 47.7   subdivision 1, is amended to read: 
 47.8      Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
 47.9   A member of the police and fire fund plan who becomes disabled 
 47.10  and physically unfit to perform duties as a police officer or, 
 47.11  firefighter subsequent to June 30, 1973, or paramedic as defined 
 47.12  under section 353.64, subdivision 10, as a direct result of an 
 47.13  injury, sickness, or other disability incurred in or arising out 
 47.14  of any act of duty, which has or is expected to render the 
 47.15  member physically or mentally unable to perform the duties as a 
 47.16  police officer or, firefighter, or paramedic as defined under 
 47.17  section 353.64, subdivision 10, for a period of at least one 
 47.18  year, shall receive disability benefits during the period of 
 47.19  such disability.  The benefits must be in an amount equal to 60 
 47.20  percent of the "average salary" under as defined in section 
 47.21  353.651, subdivision 3 2, plus an additional percent specified 
 47.22  in section 356.19, subdivision 6, of said that average salary 
 47.23  for each year of service in excess of 20 years.  Should If the 
 47.24  disability under this subdivision occur occurs before the member 
 47.25  has at least five years of allowable service credit in the 
 47.26  police and fire fund plan, the disability benefit must be 
 47.27  computed on the "average salary" from which deductions were made 
 47.28  for contribution to the police and fire fund. 
 47.29     Sec. 24.  Minnesota Statutes 1998, section 353.656, 
 47.30  subdivision 3, is amended to read: 
 47.31     Subd. 3.  [NONDUTY DISABILITY BENEFIT.] Any member of the 
 47.32  police and fire plan who becomes disabled after not less than 
 47.33  one year of allowable service because of sickness or injury 
 47.34  occurring while not on duty as a police officer or, firefighter, 
 47.35  or paramedic as defined under section 353.64, subdivision 10, 
 47.36  and by reason of that sickness or injury the member has been or 
 48.1   is expected to be unable to perform the duties as a police 
 48.2   officer or, firefighter, or paramedic as defined under section 
 48.3   353.64, subdivision 10, for a period of at least one year, is 
 48.4   entitled to receive a disability benefit.  The benefit must be 
 48.5   paid in the same manner as if the benefit were paid under 
 48.6   section 353.651.  If a disability under this subdivision occurs 
 48.7   after one but in less than 15 years of allowable service, the 
 48.8   disability benefit must be the same as though the member had at 
 48.9   least 15 years service.  For a member who is employed as a 
 48.10  full-time firefighter by the department of military affairs of 
 48.11  the state of Minnesota, allowable service as a full-time state 
 48.12  military affairs department firefighter credited by the 
 48.13  Minnesota state retirement system may be used in meeting the 
 48.14  minimum allowable service requirement of this subdivision. 
 48.15     Sec. 25.  Minnesota Statutes 1998, section 353.71, 
 48.16  subdivision 2, is amended to read: 
 48.17     Subd. 2.  [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) 
 48.18  The deferred annuity, if any, accruing under subdivision 1, or 
 48.19  under sections 353.34, subdivision 3, and 353.68, subdivision 4, 
 48.20  must be computed in the manner provided in said sections, on the 
 48.21  basis of allowable service prior to the termination of public 
 48.22  service and augmented as provided herein in this paragraph.  The 
 48.23  required reserves applicable to a deferred annuity, or to an 
 48.24  annuity for which a former member was eligible but had not 
 48.25  applied, or to any deferred segment of an annuity shall must be 
 48.26  determined as of the date the annuity begins to accrue and shall 
 48.27  be augmented from the first day of the month following the month 
 48.28  in which the former member ceased to be a public employee, or 
 48.29  July 1, 1971, whichever is later, to the first day of the month 
 48.30  in which the annuity begins to accrue,.  These required reserves 
 48.31  must be augmented at the rate of five percent per annum annually 
 48.32  compounded annually until January 1, 1981, and at the rate of 
 48.33  three percent thereafter until January 1 of the year following 
 48.34  the year in which the former member attains age 55.  From that 
 48.35  date to the effective date of retirement, the rate is five 
 48.36  percent per annum compounded annually.  If a person has more 
 49.1   than one period of uninterrupted service, the required reserves 
 49.2   related to each period shall must be augmented by interest 
 49.3   pursuant to this subdivision as specified in this paragraph.  
 49.4   The sum of the augmented required reserves so determined shall 
 49.5   be is the present value of the annuity.  Uninterrupted service 
 49.6   for the purpose of this subdivision shall mean means periods of 
 49.7   covered employment during which the employee has not been 
 49.8   separated from public service for more than two years.  If a 
 49.9   person repays a refund, the restored service restored thereby 
 49.10  shall must be considered as continuous with the next period of 
 49.11  service for which the employee has credit with this association. 
 49.12  The formula percentages used for each period of uninterrupted 
 49.13  service shall be those as would be applicable to a new employee. 
 49.14  This section shall must not reduce the annuity otherwise payable 
 49.15  under this chapter.  This subdivision paragraph shall apply 
 49.16  applies to individuals who become deferred annuitants of record 
 49.17  on or after July 1, 1971, and to employees who thereafter become 
 49.18  deferred annuitants; it shall also apply.  For a member who 
 49.19  became a deferred annuitant before July 1, 1971, the paragraph 
 49.20  applies from July 1, 1971, to if the former members who make 
 49.21  application active member applies for an annuity after July 1, 
 49.22  1973. 
 49.23     (b) The retirement annuity or disability benefit of, or the 
 49.24  survivor benefit payable on behalf of, a former member who 
 49.25  terminated service before July 1, 1997, or the survivor benefit 
 49.26  payable on behalf of a basic or police and fire member who was 
 49.27  receiving disability benefits before July 1, 1997, which is not 
 49.28  first payable until after June 30, 1997, must be increased on an 
 49.29  actuarial equivalent basis to reflect the change in the 
 49.30  postretirement interest rate actuarial assumption under section 
 49.31  356.215, subdivision 4d, from five percent to six percent under 
 49.32  a calculation procedure and tables adopted by the board and 
 49.33  approved by the actuary retained by the legislative commission 
 49.34  on pensions and retirement. 
 49.35     Sec. 26.  Minnesota Statutes 1998, section 353B.11, 
 49.36  subdivision 3, is amended to read: 
 50.1      Subd. 3.  [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 
 50.2   surviving spouse benefit shall be 30 percent of the salary base 
 50.3   for the former members of the following consolidating relief 
 50.4   associations:  
 50.5      (1) Albert Lea firefighters relief association; 
 50.6      (2) Albert Lea police relief association; 
 50.7      (3) Anoka police relief association; 
 50.8      (4) Austin police relief association; 
 50.9      (5) Brainerd police benefit association; 
 50.10     (6) Crookston police relief association; 
 50.11     (7) Faribault fire department relief association; and 
 50.12     (8) West St. Paul firefighters relief association.  
 50.13     (b) The surviving spouse benefit shall be 25 percent of the 
 50.14  salary base for the former members of the following 
 50.15  consolidating relief associations:  
 50.16     (1) Chisholm police relief association; 
 50.17     (2) Duluth firefighters relief association; 
 50.18     (3) Duluth police pension association; 
 50.19     (4) Fairmont police benefit association; 
 50.20     (5) Red Wing fire department relief association; 
 50.21     (6) South St. Paul police relief association; and 
 50.22     (7) West St. Paul police relief association. 
 50.23     (c) The surviving spouse benefit shall be 24 percent of the 
 50.24  salary base for the former members of the following 
 50.25  consolidating relief associations: 
 50.26     (1) Fridley police pension association; 
 50.27     (2) Richfield police relief association; 
 50.28     (3) Rochester fire department relief association; 
 50.29     (4) Rochester police relief association; 
 50.30     (5) Winona fire department relief association; and 
 50.31     (6) Winona police relief association. 
 50.32     (d) The surviving spouse benefit shall be 40 percent of the 
 50.33  salary base for the former members of the following 
 50.34  consolidating relief associations: 
 50.35     (1) Columbia Heights fire department relief association, 
 50.36  paid division; and 
 51.1      (2) New Ulm police relief association.  
 51.2      (e) The surviving spouse benefit shall be $250 per month 30 
 51.3   percent of the salary base for the former members of the 
 51.4   following consolidating relief associations: 
 51.5      (1) Hibbing firefighters relief association; and 
 51.6      (2) Hibbing police relief association. 
 51.7      (f) The surviving spouse benefit shall be 23.75 percent of 
 51.8   the salary base for the former members of the following 
 51.9   consolidating relief associations: 
 51.10     (1) Crystal police relief associations; and 
 51.11     (2) Minneapolis police relief association.  
 51.12     (g) The surviving spouse benefit shall be 32 percent of the 
 51.13  salary base for the former members of the following 
 51.14  consolidating relief associations: 
 51.15     (1) St. Cloud fire department relief association; and 
 51.16     (2) St. Cloud police relief association. 
 51.17     (h) The surviving spouse benefit shall be one-half of the 
 51.18  service pension or disability benefit which the deceased member 
 51.19  was receiving as of the date of death, or of the service pension 
 51.20  which the deferred member would have been receiving if the 
 51.21  service pension had commenced as of the date of death or of the 
 51.22  service pension which the active member would have received 
 51.23  based on the greater of the allowable service credit of the 
 51.24  person as of the date of death or 20 years of allowable service 
 51.25  credit if the person would have been eligible as of the date of 
 51.26  death, for the former members of the following consolidating 
 51.27  relief associations: 
 51.28     (1) Virginia fire department relief association; and 
 51.29     (2) Virginia police relief association. 
 51.30     (i) The surviving spouse benefit shall be the following for 
 51.31  the former members of the consolidating relief associations as 
 51.32  indicated: 
 51.33     (1) 30 percent of the salary base, reduced by any amount 
 51.34  awarded or payable from the service pension or disability 
 51.35  benefit of the deceased former firefighter to a former spouse of 
 51.36  the member by virtue of the legal dissolution of the member's 
 52.1   marriage to the former spouse if the surviving spouse married 
 52.2   the member after the time of separation from active service, 
 52.3   Austin firefighters relief association; 
 52.4      (2) 27.333 percent of the salary base, or one-half of the 
 52.5   service pension payable to or accrued by the deceased former 
 52.6   member, whichever is greater, Bloomington police relief 
 52.7   association; 
 52.8      (3) 72.25 percent of the salary base, Buhl police relief 
 52.9   association; 
 52.10     (4) 50 percent of the service pension which the active 
 52.11  member would have received based on allowable service credit to 
 52.12  the date of death and prospective service from the date of death 
 52.13  until the date on which the person would have attained the 
 52.14  normal retirement age, 50 percent of the service pension which 
 52.15  the deferred member would have been receiving if the service 
 52.16  pension had commenced as of the date of death or $175 per month 
 52.17  if the deceased member was receiving a service pension or 
 52.18  disability benefit as of the date of death, Chisholm 
 52.19  firefighters relief association; 
 52.20     (5) two-thirds of the service pension or disability benefit 
 52.21  which the deceased member was receiving as of the date of death, 
 52.22  or of the service pension which the deferred member would have 
 52.23  been receiving if the service pension had commenced as of the 
 52.24  date of death or of the service pension which the active member 
 52.25  would have received based on the greater of the allowable 
 52.26  service credit of the person as of the date of death or 20 years 
 52.27  of allowable service credit if the person would have been 
 52.28  eligible as of the date of death, Columbia Heights police relief 
 52.29  association; 
 52.30     (6) the greater of $300 per month or one-half of the 
 52.31  service pension or disability benefit which the deceased member 
 52.32  was receiving as of the date of death, or of the service pension 
 52.33  which the deferred member would have been receiving if the 
 52.34  service pension had commenced as of the date of death or of the 
 52.35  service pension which the active member would have received 
 52.36  based on the allowable service credit of the person as of the 
 53.1   date of death if the person would have been eligible as of the 
 53.2   date of death, Crookston fire department relief association; 
 53.3      (7) $100 per month, Faribault police benefit association; 
 53.4      (8) 60 percent of the service pension or disability benefit 
 53.5   which the deceased member was receiving as of the date of death, 
 53.6   or of the service pension which the deferred member would have 
 53.7   been receiving if the service pension had commenced as of the 
 53.8   date of death or of the service pension which the active member 
 53.9   would have received based on the allowable service credit of the 
 53.10  person as of the date of death if the person would have been 
 53.11  eligible as of the date of death, Mankato fire department relief 
 53.12  association; 
 53.13     (9) $175 per month, Mankato police benefit association; 
 53.14     (10) 26.25 percent of the salary base, Minneapolis fire 
 53.15  department relief association; 
 53.16     (11) equal to the service pension or disability benefit 
 53.17  which the deceased member was receiving as of the date of death, 
 53.18  or of the service pension which the deferred member would have 
 53.19  been receiving if the service pension had commenced as of the 
 53.20  date of death or of the service pension which the active member 
 53.21  would have received based on the allowable service credit of the 
 53.22  person as of the date of death if the person would have been 
 53.23  eligible as of the date of death, Red Wing police relief 
 53.24  association; 
 53.25     (12) 78.545 percent of the benefit amount payable prior to 
 53.26  the death of the deceased active, disabled, deferred, or retired 
 53.27  firefighter if that firefighter's benefit was 55 percent of 
 53.28  salary or would have been 55 percent of salary if the 
 53.29  firefighter had survived to begin benefit receipt; or 80 percent 
 53.30  of the benefit amount payable prior to the death of the deceased 
 53.31  active, disabled, deferred, or retired firefighter if that 
 53.32  firefighter's benefit was 54 percent of salary or would have 
 53.33  been 54 percent of salary if the firefighter had survived to 
 53.34  begin benefit receipt, Richfield fire department relief 
 53.35  association; 
 53.36     (13) 40 percent of the salary base for a surviving spouse 
 54.1   of a deceased active member, disabled member, or retired or 
 54.2   deferred member with at least 20 years of allowable service, or 
 54.3   the prorated portion of 40 percent of the salary base that bears 
 54.4   the same relationship to 40 percent that the deceased member's 
 54.5   years of allowable service bear to 20 years of allowable service 
 54.6   for the surviving spouse of a deceased retired or deferred 
 54.7   member with at least ten but less than 20 years of allowable 
 54.8   service, St. Louis Park fire department relief association; 
 54.9      (14) 26.6667 percent of the salary base, St. Louis Park 
 54.10  police relief association; 
 54.11     (15) 27.5 percent of the salary base, St. Paul fire 
 54.12  department relief association; 
 54.13     (16) 20 27.5 percent of the salary base, St. Paul police 
 54.14  relief association; and 
 54.15     (17) 27 percent of the salary base, South St. Paul 
 54.16  firefighters relief association. 
 54.17     Sec. 27.  Minnesota Statutes 1998, section 354.05, 
 54.18  subdivision 2, is amended to read: 
 54.19     Subd. 2.  [TEACHER.] (a) "Teacher" means: 
 54.20     (1) a person who renders service as a teacher, supervisor, 
 54.21  principal, superintendent, librarian, nurse, counselor, social 
 54.22  worker, therapist, or psychologist in the public schools of the 
 54.23  state located outside of the corporate limits of the cities of 
 54.24  the first class as those cities were so classified on January 1, 
 54.25  1979, or in the Minnesota state colleges and universities 
 54.26  system, or in any charitable, penal, or correctional 
 54.27  institutions of a governmental subdivision, or who is engaged in 
 54.28  educational administration in connection with the state public 
 54.29  school system, including the Minnesota state colleges and 
 54.30  university universities system, but excluding the University of 
 54.31  Minnesota, whether the position be a public office or an 
 54.32  employment, not including members or officers of any general 
 54.33  governing or managing board or body; 
 54.34     (2) an employee of the teachers retirement association 
 54.35  unless the employee is covered by the Minnesota state retirement 
 54.36  system by virtue of due to prior employment by the association 
 55.1   that system; 
 55.2      (3) a person who renders teaching service on a part-time 
 55.3   basis and who also renders other services for a single employing 
 55.4   unit.  In such cases, the executive director shall determine 
 55.5   whether all or none of the combined service is covered by the 
 55.6   association, however A person whose teaching service comprises 
 55.7   at least 50 percent of the combined employment salary is a 
 55.8   member of the association for all services with the single 
 55.9   employing unit.  If the person's teaching service comprises less 
 55.10  than 50 percent of the combined employment salary, the executive 
 55.11  director must determine whether all or none of the combined 
 55.12  service is covered by the association. 
 55.13     (b) The term Teacher does not mean: 
 55.14     (1) an employee described in section 352D.02, subdivision 
 55.15  1a, who is hired after the effective date of Laws 1986, chapter 
 55.16  458; 
 55.17     (2) a person who works for a school or institution as an 
 55.18  independent contractor as defined by the Internal Revenue 
 55.19  Service; 
 55.20     (3) (2) a person employed in subsidized on-the-job 
 55.21  training, work experience or public service employment as an 
 55.22  enrollee under the federal Comprehensive Employment and Training 
 55.23  Act from and after March 30, 1978, unless the person has, as of 
 55.24  the later of March 30, 1978, or the date of employment, 
 55.25  sufficient service credit in the retirement association to meet 
 55.26  the minimum vesting requirements for a deferred retirement 
 55.27  annuity, or the employer agrees in writing on forms prescribed 
 55.28  by the executive director to make the required employer 
 55.29  contributions, including any employer additional contributions, 
 55.30  on account of that person from revenue sources other than funds 
 55.31  provided under the federal Comprehensive Training and Employment 
 55.32  Act, or the person agrees in writing on forms prescribed by the 
 55.33  executive director to make the required employer contribution in 
 55.34  addition to the required employee contribution; 
 55.35     (4) (3) a person holding a part-time adult supplementary 
 55.36  technical college license who renders part-time teaching service 
 56.1   or a customized trainer as defined by the Minnesota state 
 56.2   colleges and universities system in a technical college if (i) 
 56.3   the service is incidental to the regular nonteaching occupation 
 56.4   of the person; and (ii) the applicable technical college 
 56.5   stipulates annually in advance that the part-time teaching 
 56.6   service or customized training service will not exceed 300 hours 
 56.7   in a fiscal year and retains the stipulation in its records; and 
 56.8   (iii) the part-time teaching service or customized training 
 56.9   service actually does not exceed 300 hours in a fiscal year; or 
 56.10     (5) (4) a person exempt from licensure pursuant to under 
 56.11  section 122A.30. 
 56.12     Sec. 28.  Minnesota Statutes 1998, section 354.05, 
 56.13  subdivision 35, is amended to read: 
 56.14     Subd. 35.  [SALARY.] (a) "Salary" means the periodic 
 56.15  compensation, upon which member contributions are required and 
 56.16  made, that is paid to a teacher before employee-paid fringe 
 56.17  benefits, tax sheltered annuities, deferred compensation, or any 
 56.18  combination of these employee-paid items are deducted before 
 56.19  deductions for deferred compensation, supplemental retirement 
 56.20  plans, or other voluntary salary reduction programs. 
 56.21     (b) "Salary" does not mean: 
 56.22     (1) lump sum annual leave payments; 
 56.23     (2) lump sum wellness and sick leave payments; 
 56.24     (3) payments in lieu of any employer-paid group insurance 
 56.25  coverage; 
 56.26     (4) payments for the difference between single and family 
 56.27  premium rates that may be paid to a member with single coverage; 
 56.28     (5) employer-paid fringe benefits including, but not 
 56.29  limited to, flexible spending accounts, cafeteria plans, health 
 56.30  care expense accounts, day care expenses, or automobile 
 56.31  allowances and expenses; employer-paid amounts used by an 
 56.32  employee toward the cost of insurance coverage, employer-paid 
 56.33  fringe benefits, flexible spending accounts, cafeteria plans, 
 56.34  health care expense accounts, day care expenses, or any payments 
 56.35  in lieu of any employer-paid group insurance coverage, including 
 56.36  the difference between single and family rates that may be paid 
 57.1   to a member with single coverage and certain amounts determined 
 57.2   by the executive director to be ineligible; 
 57.3      (6) (4) any form of payment made in lieu of any other 
 57.4   employer-paid fringe benefit or expense; 
 57.5      (7) (5) any form of severance payments; 
 57.6      (8) (6) workers' compensation payments; 
 57.7      (9) (7) disability insurance payments including 
 57.8   self-insured disability payments; 
 57.9      (10) (8) payments to school principals and all other 
 57.10  administrators for services in addition to the normal work year 
 57.11  contract if these additional services are performed on an 
 57.12  extended duty day, Saturday, Sunday, holiday, annual leave day, 
 57.13  sick leave day, or any other nonduty day; 
 57.14     (11) (9) payments under section 356.24, subdivision 1, 
 57.15  clause (4); and 
 57.16     (12) (10) payments made under section 122A.40, subdivision 
 57.17  12, except for payments for sick leave accumulated under the 
 57.18  provisions of a uniform school district policy that applies 
 57.19  equally to all similarly situated persons in the district. 
 57.20     Sec. 29.  Minnesota Statutes 1998, section 354.091, is 
 57.21  amended to read: 
 57.22     354.091 [SERVICE CREDIT.] 
 57.23     (a) In computing the time of service of a teacher, the 
 57.24  length of a legal school year in the district or institution 
 57.25  where such service was rendered must constitute a year under 
 57.26  sections 354.05 to 354.10, provided the year is not less than 
 57.27  the legal minimum school year of this state. service credit, 
 57.28  no person teacher shall receive credit for more than one year of 
 57.29  teaching service for any fiscal year.  Commencing July 1, 1961,: 
 57.30     (1) if a teacher teaches only a fractional part of a day, 
 57.31  credit must be given for a day of teaching service for each less 
 57.32  than five hours taught, and in a day, service credit must be 
 57.33  given for the fractional part of the day as the term of service 
 57.34  performed bears to five hours; 
 57.35     (2) if a teacher teaches five or more hours in a day, 
 57.36  service credit must be given for only one day; 
 58.1      (3) if a teacher teaches at least 170 full days in any 
 58.2   fiscal year, service credit must be given for a full year of 
 58.3   teaching service,; and 
 58.4      (3) (4) if a teacher teaches for only a fractional part of 
 58.5   the year, service credit must be given for such fractional part 
 58.6   of the year as the term period of service rendered performed 
 58.7   bears to 170 days. 
 58.8      (b) A person who teaches in the state colleges and 
 58.9   university system teacher shall receive a full year of service 
 58.10  credit based on the number of days in the system's employer's 
 58.11  full school year if it is less than 170 days.  Teaching service 
 58.12  performed prior to before July 1, 1961, must be computed under 
 58.13  the law in effect at the time it was rendered performed. 
 58.14     (c) A teacher shall does not lose or gain retirement 
 58.15  service credit as a result of the employer converting to 
 58.16  a four-day work week flexible or alternate work schedule.  If 
 58.17  the employer does convert converts to a four-day work week 
 58.18  flexible or alternate work schedule, the forms for reporting and 
 58.19  the procedures for determining service credit shall must be 
 58.20  determined by the executive director with the approval of the 
 58.21  board of trustees.  
 58.22     Sec. 30.  Minnesota Statutes 1998, section 354.092, 
 58.23  subdivision 2, is amended to read: 
 58.24     Subd. 2.  [PAY RATE; CERTIFICATION.] A sabbatical leave 
 58.25  must be compensated by a minimum of one-third of the salary that 
 58.26  the member received for a comparable period during the prior 
 58.27  fiscal year.  Before the end of the fiscal year during which any 
 58.28  sabbatical leave is granted Upon granting a sabbatical leave, 
 58.29  the employing unit granting the leave must certify the leave to 
 58.30  the association on a form specified by the executive director.  
 58.31     Sec. 31.  Minnesota Statutes 1998, section 354.093, is 
 58.32  amended to read: 
 58.33     354.093 [PARENTAL OR MATERNITY LEAVE.] 
 58.34     Before the end of the fiscal year during which any parental 
 58.35  or maternity leave is granted Upon granting a parental leave for 
 58.36  the birth or adoption of a child, the employing unit granting 
 59.1   the leave must certify the leave to the association on a form 
 59.2   specified by the executive director.  A member of the 
 59.3   association granted parental or maternity leave of absence by 
 59.4   the employing unit is entitled to service credit not to exceed 
 59.5   one year for the period of leave upon payment to the association 
 59.6   by the end of the fiscal year following the fiscal year in which 
 59.7   the leave of absence terminated.  This payment must include 
 59.8   equal the total required employee, and employer contributions, 
 59.9   and amortization contributions, if any, for the period of leave 
 59.10  prescribed in section 354.42.  The payment must be based on the 
 59.11  member's average full-time monthly salary rate on the date the 
 59.12  leave of absence commenced, and must be without interest.  
 59.13  Notwithstanding the provisions of any agreements to the 
 59.14  contrary, employee and employer the contributions specified in 
 59.15  this section may not be made to receive allowable service credit 
 59.16  under this section if the member does not retain the right to 
 59.17  full reinstatement at the end of the leave. 
 59.18     Sec. 32.  Minnesota Statutes 1998, section 354.094, 
 59.19  subdivision 1, is amended to read: 
 59.20     Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] Before the 
 59.21  end of the fiscal year during which Upon granting any extended 
 59.22  leave of absence is granted pursuant to under section 122A.46 or 
 59.23  136F.43, the employing unit granting the leave must certify the 
 59.24  leave to the association on a form specified by the executive 
 59.25  director.  A member granted an extended leave of absence 
 59.26  pursuant to under section 122A.46 or 136F.43 may pay employee 
 59.27  contributions and receive allowable service credit toward 
 59.28  annuities and other benefits under this chapter, for each year 
 59.29  of the leave, provided that the member and the employing board 
 59.30  make the required employer contribution in any proportion they 
 59.31  may agree upon, during the period of the leave.  which shall The 
 59.32  leave period must not exceed five years.  A member may not 
 59.33  receive more than five years of allowable service credit under 
 59.34  this section.  The employee and employer contributions must be 
 59.35  based upon the rates of contribution prescribed by section 
 59.36  354.42 for the salary received during the year immediately 
 60.1   preceding the extended leave.  Payments for the years for which 
 60.2   a member is receiving service credit while on extended leave 
 60.3   must be made on or before the later of June 30 of each fiscal 
 60.4   year for which service credit is received or within 30 days 
 60.5   after first notification of the amount due, if requested by the 
 60.6   member, is given by the association.  No payment is permitted 
 60.7   after the following September 30.  Payments received after June 
 60.8   30 must include interest at an annual rate of 8.5 percent from 
 60.9   June 30 through the end of the month in which payment is 
 60.10  received.  Notwithstanding the provisions of any agreements to 
 60.11  the contrary, employee and employer contributions may not be 
 60.12  made to receive allowable service credit if the member does not 
 60.13  have full reinstatement rights as provided in section 122A.46 or 
 60.14  136F.43, both during and at the end of the extended leave. 
 60.15     Sec. 33.  Minnesota Statutes 1998, section 354.10, 
 60.16  subdivision 2, is amended to read: 
 60.17     Subd. 2.  [AUTOMATIC DEPOSITS.] Upon receipt of the 
 60.18  properly completed forms as provided by the executive director, 
 60.19  the annuity or, benefit or refund amount may be electronically 
 60.20  transferred or the annuity or benefit check may be mailed to a 
 60.21  banking institution, savings association, or credit union any 
 60.22  financial institution associated with the National Automated 
 60.23  Clearinghouse Association or a comparable successor organization 
 60.24  for deposit to the recipient's individual account or joint 
 60.25  account with the recipient's spouse or any other person 
 60.26  designated by the recipient.  An overpayment to a joint account 
 60.27  after the death of the annuity or benefit recipient must be 
 60.28  repaid to the fund by the joint tenant if the overpayment is not 
 60.29  repaid to the fund by the banking institution, savings 
 60.30  association, or credit union financial institution associated 
 60.31  with the National Automated Clearinghouse Association or its 
 60.32  successor.  The board may prescribe the conditions which govern 
 60.33  these procedures. 
 60.34     Sec. 34.  Minnesota Statutes 1998, section 354.35, is 
 60.35  amended to read: 
 60.36     354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 
 61.1   65 NORMAL RETIREMENT AGE.] 
 61.2      Any coordinated member who retires before age 65 may elect 
 61.3   to receive an optional accelerated retirement annuity from the 
 61.4   association which provides for different annuity amounts over 
 61.5   different periods of retirement.  The election of this optional 
 61.6   accelerated retirement annuity is exercised by making an 
 61.7   application to the board on a form provided by the executive 
 61.8   director.  The optional accelerated retirement annuity must take 
 61.9   the form of an annuity payable for the period before the member 
 61.10  attains age 65 in a greater amount than the amount of the 
 61.11  annuity calculated under section 354.44 on the basis of the age 
 61.12  of the member at retirement, but the optional accelerated 
 61.13  retirement annuity must be the actuarial equivalent of the 
 61.14  member's annuity computed on the basis of the member's age at 
 61.15  retirement.  The greater amount must be paid until the retiree 
 61.16  reaches age 65 and at that time the payment from the association 
 61.17  must be reduced.  For each year the retiree is under age 65, up 
 61.18  to five percent of the total life annuity required reserves may 
 61.19  be used to accelerate the optional retirement annuity under this 
 61.20  section.  At retirement, members who retire before age 62 may 
 61.21  elect to have the age specified in this section be 62 instead of 
 61.22  65.  This election is irrevocable and may be made only once on 
 61.23  the application form provided by the executive director.  The 
 61.24  method of computing the optional accelerated retirement annuity 
 61.25  provided in this section is established by the board of 
 61.26  trustees.  In establishing the method of computing the optional 
 61.27  accelerated retirement annuity, the board of trustees must 
 61.28  obtain the written approval of the commission-retained actuary.  
 61.29  The written approval must be a part of the permanent records of 
 61.30  the board of trustees.  The election of an optional accelerated 
 61.31  retirement annuity is exercised by making an application on a 
 61.32  form provided by the executive director.  
 61.33     Sec. 35.  Minnesota Statutes 1998, section 354.46, 
 61.34  subdivision 2a, is amended to read: 
 61.35     Subd. 2a.  [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 
 61.36  100 percent optional annuity under subdivision 2, or a refund 
 62.1   under section 354.47, subdivision 1, the surviving spouse of a 
 62.2   deceased member may elect to receive survivor coverage in a term 
 62.3   certain of five, ten, 15, or 20 years, but monthly payments must 
 62.4   not exceed 75 percent of the average high-five monthly salary of 
 62.5   the deceased member.  The monthly term certain annuity must be 
 62.6   actuarially equivalent to the 100 percent optional annuity under 
 62.7   subdivision 2. 
 62.8      If a surviving spouse elects a term certain payment and 
 62.9   dies before the expiration of the specified term certain period, 
 62.10  the commuted value of the remaining annuity payments must be 
 62.11  paid in a lump sum to the survivor's surviving spouse's estate. 
 62.12     Sec. 36.  Minnesota Statutes 1998, section 354.47, 
 62.13  subdivision 1, is amended to read: 
 62.14     Subdivision 1.  [DEATH BEFORE RETIREMENT.] (1) (a) If a 
 62.15  member dies before retirement and is covered under section 
 62.16  354.44, subdivision 2, and neither an optional annuity, nor a 
 62.17  reversionary annuity, nor a benefit under section 354.46, 
 62.18  subdivision 1, is payable to the survivors if the member was a 
 62.19  basic member, then the surviving spouse, or if there is no 
 62.20  surviving spouse, the designated beneficiary is entitled to an 
 62.21  amount equal to the member's accumulated deductions with 
 62.22  interest credited to the account of the member to the date of 
 62.23  death of the member.  If the designated beneficiary is a minor, 
 62.24  interest must be credited to the date the beneficiary reaches 
 62.25  legal age, or the date of receipt, whichever is earlier. 
 62.26     (2) (b) If a member dies before retirement and is covered 
 62.27  under section 354.44, subdivision 6, and neither an optional 
 62.28  annuity, nor reversionary annuity, nor the benefit described in 
 62.29  section 354.46, subdivision 1, is payable to the survivors if 
 62.30  the member was a basic member, then the surviving spouse, or if 
 62.31  there is no surviving spouse, the designated beneficiary is 
 62.32  entitled to an amount equal to the member's accumulated 
 62.33  deductions credited to the account of the member as of June 30, 
 62.34  1957, and from July 1, 1957, to the date of death of the member, 
 62.35  the member's accumulated deductions plus six percent interest at 
 62.36  the rate of six percent per annum compounded annually. 
 63.1      (c) If the designated beneficiary under paragraph (b) is a 
 63.2   minor, any interest credited under that paragraph must be 
 63.3   credited to the date the beneficiary reaches legal age, or the 
 63.4   date of receipt, whichever is earlier. 
 63.5      Sec. 37.  Minnesota Statutes 1998, section 354.48, 
 63.6   subdivision 6, is amended to read: 
 63.7      Subd. 6.  [REGULAR PHYSICAL EXAMINATIONS.] At least once 
 63.8   each year during the first five years following the allowance of 
 63.9   a disability benefit to any member, and at least once in every 
 63.10  three-year period thereafter, the executive director shall 
 63.11  require the disability beneficiary to undergo a medical 
 63.12  examination to be made at the place of residence of such person, 
 63.13  or at any other place mutually agreed upon, by a physician or 
 63.14  physicians engaged by the executive director.  If any 
 63.15  examination indicates that the member is no longer permanently 
 63.16  and totally disabled or that the member is engaged or is able to 
 63.17  engage in a substantial gainful occupation, payments of the 
 63.18  disability benefit by the association shall be discontinued.  
 63.19  The payments shall discontinue as soon as the member is 
 63.20  reinstated to the payroll following sick leave, but payment may 
 63.21  not be made for more than 60 days after physicians engaged by 
 63.22  the executive director find that the person is no longer 
 63.23  permanently and totally disabled. 
 63.24     Sec. 38.  Minnesota Statutes 1998, section 354.49, 
 63.25  subdivision 1, is amended to read: 
 63.26     Subdivision 1.  [ENTITLEMENT, APPLICATION.] A person who 
 63.27  ceases to render teaching service in any school or institution 
 63.28  to which the provisions of this chapter apply is entitled to a 
 63.29  refund provided in subdivision 2, or a deferred retirement 
 63.30  annuity under section 354.55, subdivision 11.  An application 
 63.31  for a refund must not be made sooner than 30 days after 
 63.32  termination of teaching service if the applicant has not again 
 63.33  become a teacher.  This payment must be made within 90 45 days 
 63.34  after the receipt of an application for a refund or upon 
 63.35  completion of processing the report made pursuant to section 
 63.36  354.52, subdivision 2 the receipt of member reporting data under 
 64.1   section 354.52, subdivision 4a, and payroll cycle data under 
 64.2   section 354.52, subdivision 4b, whichever is later. 
 64.3      Sec. 39.  Minnesota Statutes 1998, section 354.52, 
 64.4   subdivision 3, is amended to read: 
 64.5      Subd. 3.  [DUTY OF FINANCE OFFICIALS DEDUCTION 
 64.6   REQUIREMENTS.] It is the duty of each person, officer, school 
 64.7   board, or managing body required by law to draw the warrants or 
 64.8   orders for payment of salaries to teachers to Every pay period, 
 64.9   each employer shall deduct and withhold from all the salary paid 
 64.10  each pay period to of every teacher who is a member of the fund 
 64.11  the amount which the teacher is required to pay into the fund 
 64.12  and, required under section 354.42.  At the time of each 
 64.13  deduction, to the employer shall also furnish to each teacher a 
 64.14  statement showing the amount of the deduction.  
 64.15     Sec. 40.  Minnesota Statutes 1998, section 354.52, 
 64.16  subdivision 4, is amended to read: 
 64.17     Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
 64.18  once each month, a representative authorized by An employing 
 64.19  unit employer shall transmit remit all amounts due to the 
 64.20  association and furnish a signed statement indicating the amount 
 64.21  due and transmitted with any other information required by the 
 64.22  executive director.  Signing the statement has the force and 
 64.23  effect of an oath as to the correctness of the amount due and 
 64.24  transmitted.  If an amount due and is not transmitted 
 64.25  received by the association within seven calendar days of the 
 64.26  payroll warrant, the amount accrues interest at an annual rate 
 64.27  of 8.5 percent compounded annually commencing 15 days after from 
 64.28  the due date first due until the amount is transmitted and must 
 64.29  be paid by the employing unit.  These payments received by the 
 64.30  association.  All amounts due and other employing unit employer 
 64.31  obligations not remitted within 60 days of notification by the 
 64.32  association must be certified to the commissioner of finance who 
 64.33  shall deduct the amount from any state aid or appropriation 
 64.34  amount applicable to the employing unit. 
 64.35     Sec. 41.  Minnesota Statutes 1998, section 354.52, 
 64.36  subdivision 4a, is amended to read: 
 65.1      Subd. 4a.  [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 
 65.2   employing unit shall must initially provide the following member 
 65.3   data specified in paragraph (b) or any of that data not 
 65.4   previously provided to the association for payroll warrants 
 65.5   dated after June 30, 1995, in a format prescribed by the 
 65.6   executive director.  Data changes and the dates of those changes 
 65.7   under this subdivision must be reported to the association on an 
 65.8   ongoing basis for within 14 calendar days after the date of the 
 65.9   end of the payroll cycle in which they occur.  These data 
 65.10  changes must be reported with the payroll cycle data under 
 65.11  subdivision 4b. 
 65.12     (b) Data on the member includes:  
 65.13     (1) legal name, address, date of birth, association member 
 65.14  number, employer-assigned employee number, and social security 
 65.15  number; 
 65.16     (2) association status, including, but not limited to, 
 65.17  basic, coordinated, exempt annuitant, exempt technical college 
 65.18  teacher, and exempt independent contractor or consultant; 
 65.19     (3) employment status, including, but not limited to, full 
 65.20  time, part time, intermittent, substitute, or part-time 
 65.21  mobility; 
 65.22     (4) employment position, including, but not limited to, 
 65.23  teacher, superintendent, principal, administrator, or other; 
 65.24     (5) employment activity, including, but not limited to, 
 65.25  hire, termination, resumption of employment, disability, or 
 65.26  death; 
 65.27     (6) leaves of absence; 
 65.28     (7) county district number assigned by the association for 
 65.29  the employing unit; 
 65.30     (8) data center identification number, if applicable; and 
 65.31     (9) other information as may be required by the executive 
 65.32  director. 
 65.33     Sec. 42.  Minnesota Statutes 1998, section 354.52, 
 65.34  subdivision 4b, is amended to read: 
 65.35     Subd. 4b.  [PAYROLL CYCLE REPORTING REQUIREMENTS.] An 
 65.36  employing unit shall provide the following data to the 
 66.1   association for payroll warrants dated after June 30, 1995, for 
 66.2   each on an ongoing basis within 14 calendar days after the date 
 66.3   of the payroll cycle warrant in a format prescribed by the 
 66.4   executive director:  
 66.5      (1) association member number; 
 66.6      (2) employer-assigned employee number; 
 66.7      (3) social security number; 
 66.8      (4) amount of each salary deduction; 
 66.9      (5) amount of salary as defined in section 354.05, 
 66.10  subdivision 35, from which each deduction was made; 
 66.11     (6) reason for payment; 
 66.12     (7) service credit; 
 66.13     (8) the beginning and ending dates of the payroll period 
 66.14  covered and the date of actual payment; 
 66.15     (9) fiscal year of salary earnings; 
 66.16     (10) total remittance amount including employee, employer, 
 66.17  and additional employer contributions; and 
 66.18     (11) other information as may be required by the executive 
 66.19  director. 
 66.20     Sec. 43.  Minnesota Statutes 1998, section 354.63, 
 66.21  subdivision 2, is amended to read: 
 66.22     Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
 66.23  (1) The required reserves for retirement annuities as determined 
 66.24  in accordance with under this chapter shall must be transferred 
 66.25  to the Minnesota postretirement investment fund as of no later 
 66.26  than the last business day of the month in which the retirement 
 66.27  annuity begins.  The required reserves shall be determined in 
 66.28  accordance with the appropriate annuity table of mortality 
 66.29  adopted by the board of trustees as provided in section 354.07, 
 66.30  subdivision 1, based on the experience of the fund as 
 66.31  recommended by the commission-retained actuary and using the 
 66.32  interest assumption specified in section 356.215, subdivision 4d.
 66.33     (2) Annuity payments shall be adjusted as provided in 
 66.34  accordance with the provisions of section 11A.18.  In making 
 66.35  these adjustments, members who retire effective July 1 shall be 
 66.36  considered to have retired effective the preceding June 
 67.1   30.  This section applies to persons who retired effective July 
 67.2   1, 1982, or later.  
 67.3      (3) An increase in annuity payments pursuant to under this 
 67.4   section will be made automatically unless written notice is 
 67.5   filed by the annuitant with the executive director of the 
 67.6   teachers retirement association requesting that the increase 
 67.7   shall not be made. 
 67.8      Sec. 44.  Minnesota Statutes 1998, section 356.30, 
 67.9   subdivision 1, is amended to read: 
 67.10     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] 
 67.11  (1) (a) Notwithstanding any provisions to the contrary of the 
 67.12  laws governing the funds plans enumerated in subdivision 3, a 
 67.13  person who has met the qualifications of clause (2) paragraph 
 67.14  (b) may elect to receive a retirement annuity from each fund 
 67.15  plan in which the person has at least six months one-half year 
 67.16  of allowable service, based on the allowable service in 
 67.17  each fund plan, subject to the provisions of clause 
 67.18  (3) paragraph (c).  
 67.19     (2) (b) A person may receive upon retirement a retirement 
 67.20  annuity from each fund plan in which the person has at least six 
 67.21  months one-half year of allowable service, and augmentation of a 
 67.22  deferred annuity calculated under the laws governing each public 
 67.23  pension plan or fund named in subdivision 3, from the date the 
 67.24  person terminated all public service if: 
 67.25     (a) (1) the person has allowable service totaling an amount 
 67.26  that allows the person to receive an annuity in any two or more 
 67.27  of the enumerated funds plans; and 
 67.28     (b) (2) the person has not begun to receive an annuity from 
 67.29  any enumerated fund plan or the person has made application for 
 67.30  benefits from all funds each applicable plan and the effective 
 67.31  dates of the retirement annuity with each fund plan under which 
 67.32  the person chooses to receive an annuity are within a one-year 
 67.33  period.  
 67.34     (3) (c) The retirement annuity from each fund plan must be 
 67.35  based upon the allowable service, accrual rates, and average 
 67.36  salary in each fund, except that the applicable plan as further 
 68.1   specified or modified in the following clauses:  
 68.2      (a) (1) the laws governing annuities must be the law in 
 68.3   effect on the date of termination from the last period of public 
 68.4   service under a covered fund plan with which the person earned a 
 68.5   minimum of one-half year of allowable service credit during that 
 68.6   employment.; 
 68.7      (b) (2) the "average salary" on which the annuity from each 
 68.8   covered fund plan in which the employee has credit in a formula 
 68.9   plan shall be based on the employee's highest five successive 
 68.10  years of covered salary during the entire service in 
 68.11  covered funds. plans; 
 68.12     (c) (3) The formula percentages accrual rates to be used by 
 68.13  each fund plan must be those percentages prescribed by 
 68.14  each fund's plan's formula as continued for the respective years 
 68.15  of allowable service from one fund plan to the next, recognizing 
 68.16  all previous allowable service with the other 
 68.17  covered funds. plans; 
 68.18     (d) (4) allowable service in all the funds plans must be 
 68.19  combined in determining eligibility for and the application of 
 68.20  each fund's plan's provisions in respect to actuarial reduction 
 68.21  in the annuity amount for retirement prior to normal retirement. 
 68.22  age; and 
 68.23     (e) (5) the annuity amount payable for any allowable 
 68.24  service under a nonformula plan of a covered fund plan must not 
 68.25  be affected but such service and covered salary must be used in 
 68.26  the above calculation.  
 68.27     (f) (d) This section shall does not apply to any person 
 68.28  whose final termination from the last public service under a 
 68.29  covered fund plan is prior to May 1, 1975.  
 68.30     (g) (e) For the purpose of computing annuities under this 
 68.31  section the formula percentages accrual rates used by any 
 68.32  covered fund plan, except the public employees police and 
 68.33  fire fund plan and the state patrol retirement fund plan, must 
 68.34  not exceed the percent specified in section 356.19, subdivision 
 68.35  4, per year of service for any year of service or fraction 
 68.36  thereof.  The formula percentage accrual rate used by the public 
 69.1   employees police and fire fund plan and the state patrol 
 69.2   retirement fund plan must not exceed the percent specified in 
 69.3   section 356.19, subdivision 6, per year of service for any year 
 69.4   of service or fraction thereof.  The formula percentage accrual 
 69.5   rate or rates used by the legislators retirement plan and the 
 69.6   elective state officers retirement plan must not exceed 2.5 
 69.7   percent, but this limit does not apply to the adjustment 
 69.8   provided under section 3A.02, subdivision 1, paragraph (c), or 
 69.9   352C.031, paragraph (b). 
 69.10     (h) (f) Any period of time for which a person has credit in 
 69.11  more than one of the covered funds plans must be used only once 
 69.12  for the purpose of determining total allowable service.  
 69.13     (i) (g) If the period of duplicated service credit is more 
 69.14  than six months one-half year, or the person has credit for more 
 69.15  than six months one-half year, with each of the funds plans, 
 69.16  each fund shall plan must apply its formula to a prorated 
 69.17  service credit for the period of duplicated service based on a 
 69.18  fraction of the salary on which deductions were paid to that 
 69.19  fund for the period divided by the total salary on which 
 69.20  deductions were paid to all funds plans for the period.  
 69.21     (j) (h) If the period of duplicated service credit is less 
 69.22  than six months one-half year, or when added to other service 
 69.23  credit with that fund plan is less than six months one-half 
 69.24  year, the service credit must be ignored and a refund of 
 69.25  contributions made to the person in accord with that fund's 
 69.26  plan's refund provisions. 
 69.27     Sec. 45.  [356.90] [COMBINED PAYMENT.] 
 69.28     (a) The public employees retirement association and the 
 69.29  Minnesota state retirement system are permitted to combine 
 69.30  payments to retirees.  The total payment must be equal to the 
 69.31  amount that is payable if payments were kept separate.  The 
 69.32  retiree must agree, in writing, to have the payment combined. 
 69.33     (b) Each plan must calculate the benefit amounts under the 
 69.34  laws governing the plan and the required reserves and future 
 69.35  mortality losses or gains must be paid or accrued to the plan 
 69.36  from which the service was earned.  Each plan must account for 
 70.1   their portion of the payment separately, and there may be no 
 70.2   additional liabilities realized by either fund. 
 70.3      (c) The fund making payment would be responsible for 
 70.4   issuing one payment, making address changes, tax withholding 
 70.5   changes, and other administrative functions needed to process 
 70.6   the payment. 
 70.7      Sec. 46.  [INSTRUCTION TO REVISOR.] 
 70.8      The revisor of statutes shall change the term "six months" 
 70.9   to "one-half year" wherever it appears in Minnesota Statutes, 
 70.10  sections 356.302 and 356.303. 
 70.11     Sec. 47.  [REPEALER.] 
 70.12     Minnesota Statutes 1998, sections 353.024; and 354.52, 
 70.13  subdivision 2, are repealed. 
 70.14     Sec. 48.  [EFFECTIVE DATE.] 
 70.15     (a) Sections 1 to 47 are effective on July 1, 2000. 
 70.16     (b) Section 26 is not intended to increase or decrease any 
 70.17  surviving spouse benefit compared to the surviving spouse 
 70.18  benefit payable immediately prior to July 1, 2000. 
 70.19                             ARTICLE 4
 70.20                      MILITARY SERVICE CREDIT
 70.21                       PURCHASE AUTHORIZATION
 70.22     Section 1.  [352.275] [UNCREDITED MILITARY SERVICE CREDIT 
 70.23  PURCHASE.] 
 70.24     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 70.25  state employee who has at least three years of allowable service 
 70.26  with the Minnesota state retirement system and who performed 
 70.27  service in the United States armed forces before becoming a 
 70.28  state employee, or who failed to obtain service credit for a 
 70.29  military leave of absence under section 352.27, is entitled to 
 70.30  purchase allowable service credit for the initial period of 
 70.31  enlistment, induction, or call to active duty without any 
 70.32  voluntary extension by making payment under section 356.55 if 
 70.33  the employee is not entitled to receive a current or deferred 
 70.34  retirement annuity from a United States armed forces pension 
 70.35  plan and has not purchased service credit from any other defined 
 70.36  benefit public employee pension plan for the same period of 
 71.1   service. 
 71.2      Subd. 2.  [APPLICATION AND DOCUMENTATION.] An employee who 
 71.3   desires to purchase service credit under subdivision 1 must 
 71.4   apply with the executive director to make the purchase.  The 
 71.5   application must include all necessary documentation of the 
 71.6   employee's qualifications to make the purchase, signed written 
 71.7   permission to allow the executive director to request and 
 71.8   receive necessary verification of applicable facts and 
 71.9   eligibility requirements, and any other relevant information 
 71.10  that the executive director may require. 
 71.11     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 71.12  for the purchase period must be granted by the Minnesota state 
 71.13  retirement system to the purchasing employee upon receipt of the 
 71.14  purchase payment amount.  Payment must be made before the 
 71.15  employee's effective date of retirement. 
 71.16     Sec. 2.  Minnesota Statutes 1998, section 352B.01, is 
 71.17  amended by adding a subdivision to read: 
 71.18     Subd. 3a.  [UNCREDITED MILITARY SERVICE CREDIT 
 71.19  PURCHASE.] (a) A member who has at least three years of 
 71.20  allowable service with the state patrol retirement plan under 
 71.21  subdivision 3 and who performed service in the United States 
 71.22  armed forces before becoming a member is entitled to purchase 
 71.23  allowable service credit for the initial period of enlistment, 
 71.24  induction, or call to active duty without any voluntary 
 71.25  extension by making payment under section 356.55, if the 
 71.26  employee is not entitled to receive a current or deferred 
 71.27  retirement annuity from a United States armed forces pension 
 71.28  plan and has not purchased service credit from any other defined 
 71.29  benefit public employee pension plan for the same period of 
 71.30  service. 
 71.31     (b) A member who desires to purchase service credit under 
 71.32  paragraph (a) must apply with the executive director to make the 
 71.33  purchase.  The application must include all necessary 
 71.34  documentation of the member's qualifications to make the 
 71.35  purchase, signed written permission to allow the executive 
 71.36  director to request and receive necessary verification of 
 72.1   applicable facts and eligibility requirements, and any other 
 72.2   relevant information that the executive director may require. 
 72.3      (c) Allowable service credit for the purchase period must 
 72.4   be granted by the state patrol retirement plan to the purchasing 
 72.5   employee upon receipt of the purchase payment amount.  Payment 
 72.6   must be made before the effective date of retirement of the 
 72.7   member. 
 72.8      Sec. 3.  Minnesota Statutes 1998, section 353.01, is 
 72.9   amended by adding a subdivision to read: 
 72.10     Subd. 16a.  [UNCREDITED MILITARY SERVICE CREDIT PURCHASE.] 
 72.11  (a) A public employee who has at least three years of allowable 
 72.12  service with the public employees retirement association or the 
 72.13  public employees police and fire plan and who performed service 
 72.14  in the United States armed forces before becoming a public 
 72.15  employee, or who failed to obtain service credit for a military 
 72.16  leave of absence under subdivision 16, paragraph (h), is 
 72.17  entitled to purchase allowable service credit for the initial 
 72.18  period of enlistment, induction, or call to active duty without 
 72.19  any voluntary extension by making payment under section 356.55 
 72.20  if the public employee is not entitled to receive a current or 
 72.21  deferred retirement annuity from a United States armed forces 
 72.22  pension plan and has not purchased service credit from any other 
 72.23  defined benefit public employee pension plan for the same period 
 72.24  of service. 
 72.25     (b) A public employee who desires to purchase service 
 72.26  credit under paragraph (a) must apply with the executive 
 72.27  director to make the purchase.  The application must include all 
 72.28  necessary documentation of the public employee's qualifications 
 72.29  to make the purchase, signed written permission to allow the 
 72.30  executive director to request and receive necessary verification 
 72.31  of applicable facts and eligibility requirements, and any other 
 72.32  relevant information that the executive director may require. 
 72.33     (c) Allowable service credit for the purchase period must 
 72.34  be granted by the public employees association or the public 
 72.35  employees police and fire plan, whichever applies, to the 
 72.36  purchasing public employee upon receipt of the purchase payment 
 73.1   amount.  Payment must be made before the effective date of 
 73.2   retirement of the public employee. 
 73.3      Sec. 4.  [EFFECTIVE DATE; SUNSET REPEALER.] 
 73.4      (a) Sections 1, 2, and 3 are effective on the day following 
 73.5   final enactment. 
 73.6      (b) Sections 1, 2, and 3 are repealed on May 16, 2003. 
 73.7                              ARTICLE 5
 73.8                  RETIREMENT HEALTH CARE PROVISIONS
 73.9      Section 1.  [POSTRETIREMENT AND ACTIVE EMPLOYEE HEALTH CARE 
 73.10  TASK FORCE.] 
 73.11     (a) The commissioner of employee relations shall convene a 
 73.12  task force on postretirement and active employee health care.  
 73.13  The task force shall identify strategies for providing 
 73.14  postretirement and active employee health care coverage for 
 73.15  public employees and make recommendations regarding the most 
 73.16  appropriate and efficient manner for providing postretirement 
 73.17  and active employee health care. 
 73.18     (b) One-half of the task force membership must be composed 
 73.19  of employees and the other half of the membership must be 
 73.20  composed of employers. The task force must include, but is not 
 73.21  limited to, the following: 
 73.22     (1) a representative of the department of employee 
 73.23  relations; 
 73.24     (2) a representative of the Minnesota state retirement 
 73.25  system; 
 73.26     (3) a representative of the teachers retirement 
 73.27  association; 
 73.28     (4) a representative of the public employees retirement 
 73.29  association; 
 73.30     (5) a representative of the first class city teacher 
 73.31  retirement fund associations; 
 73.32     (6) a representative of the first class city police and 
 73.33  fire department relief associations; 
 73.34     (7) a representative of the Minneapolis employees 
 73.35  retirement fund; 
 73.36     (8) a representative of the legislative coordinating 
 74.1   commission subcommittee on employee relations; 
 74.2      (9) one representative each from the Minnesota school 
 74.3   boards association, Minnesota service cooperatives, the 
 74.4   association of Minnesota counties, the Minnesota association of 
 74.5   townships, and the league of Minnesota cities; 
 74.6      (10) representatives of the exclusive representatives of 
 74.7   affected public employees; and 
 74.8      (11) representatives of major public employers. 
 74.9      (c) The task force shall report its findings and 
 74.10  recommendations to the legislature by November 15, 2000.  The 
 74.11  report shall address: 
 74.12     (1) alternative methods of providing and paying for 
 74.13  postretirement and active employee health care; 
 74.14     (2) the estimated cost of providing postretirement and 
 74.15  active employee health care under various alternatives, 
 74.16  including statewide, regional, or market alternatives; 
 74.17     (3) the most efficient administrative structure for 
 74.18  providing for postretirement and active employee health care; 
 74.19  and 
 74.20     (4) issues of adverse selection, cost containment, consumer 
 74.21  choice, and options for dealing with other employee concerns. 
 74.22     (d) The task force shall conduct the study and assemble 
 74.23  data in a manner that will provide for the ability to conduct 
 74.24  analysis for subsets of the groups being studied by employer and 
 74.25  employee types. 
 74.26     Sec. 2.  [EFFECTIVE DATE.] 
 74.27     Section 1 is effective on the day following final enactment.
 74.28                             ARTICLE 6
 74.29                 MSRS-CORRECTIONAL PLAN MEMBERSHIP 
 74.30                             INCLUSIONS 
 74.31     Section 1.  Minnesota Statutes 1998, section 352.91, 
 74.32  subdivision 3c, is amended to read: 
 74.33     Subd. 3c.  [NURSING PERSONNEL.] (a) "Covered correctional 
 74.34  service" means service by a state employee in one of the 
 74.35  employment positions at a correctional facility or at the 
 74.36  Minnesota security hospital specified in paragraph (b), provided 
 75.1   that at least 75 percent of the employee's working time is spent 
 75.2   in direct contact with inmates or patients and the fact of this 
 75.3   direct contact is certified to the executive director by the 
 75.4   appropriate commissioner, unless the person elects to retain the 
 75.5   current retirement coverage under Laws 1996, chapter 408, 
 75.6   article 8, section 21. 
 75.7      (b) The employment positions are as follows: 
 75.8      (1) registered nurse - senior; 
 75.9      (2) registered nurse; 
 75.10     (3) registered nurse - principal; and 
 75.11     (4) licensed practical nurse 2; and 
 75.12     (5) registered nurse practitioner. 
 75.13     Sec. 2.  Minnesota Statutes 1998, section 352.91, 
 75.14  subdivision 3d, is amended to read: 
 75.15     Subd. 3d.  [OTHER CORRECTIONAL PERSONNEL.] (a) "Covered 
 75.16  correctional service" means service by a state employee in one 
 75.17  of the employment positions at a correctional facility or at the 
 75.18  Minnesota security hospital specified in paragraph (b), provided 
 75.19  that at least 75 percent of the employee's working time is spent 
 75.20  in direct contact with inmates or patients and the fact of this 
 75.21  direct contact is certified to the executive director by the 
 75.22  appropriate commissioner, unless the person elects to retain the 
 75.23  current retirement coverage under Laws 1996, chapter 408, 
 75.24  article 8, section 21. 
 75.25     (b) The employment positions are as follows:  baker, 
 75.26  chemical dependency counselor supervisor, chief cook, cook, cook 
 75.27  coordinator, corrections behavior therapist, corrections 
 75.28  behavior therapist specialist, corrections parent education 
 75.29  coordinator, corrections security caseworker, corrections 
 75.30  security caseworker career, corrections teaching assistant, 
 75.31  dentist, electrician supervisor, general repair worker, 
 75.32  library/information research services specialist, 
 75.33  library/information research services specialist senior, plumber 
 75.34  supervisor, psychologist 3, recreation therapist, recreation 
 75.35  therapist coordinator, recreation program assistant, recreation 
 75.36  therapist senior, stores clerk senior, water treatment plant 
 76.1   operator, work therapy technician, work therapy assistant, work 
 76.2   therapy program coordinator. 
 76.3      (c) "Covered correctional service" also means service as 
 76.4   the director or as an assistant group supervisor of the 
 76.5   Phoenix/Pomiga treatment/behavior change program of the 
 76.6   department of corrections. 
 76.7      Sec. 3.  Minnesota Statutes 1998, section 352.91, is 
 76.8   amended by adding a subdivision to read: 
 76.9      Subd. 3f.  [ADDITIONAL DEPARTMENT OF HUMAN SERVICES 
 76.10  PERSONNEL.] (a) "Covered correctional service" means service by 
 76.11  a state employee in one of the employment positions specified in 
 76.12  paragraph (b) at the Minnesota security hospital or the 
 76.13  Minnesota sexual psychopathic personality treatment center, 
 76.14  provided that at least 75 percent of the employee's working time 
 76.15  is spent in direct contact with patients and the fact of this 
 76.16  direct contact is certified to the executive director by the 
 76.17  commissioner of human services. 
 76.18     (b) The employment positions are: 
 76.19     (1) behavior analyst 2; 
 76.20     (2) licensed practical nurse 1; 
 76.21     (3) office and administrative specialist senior; 
 76.22     (4) psychologist 2; 
 76.23     (5) social worker specialist; 
 76.24     (6) behavior analyst 3; and 
 76.25     (7) social worker senior. 
 76.26     Sec. 4.  Minnesota Statutes 1998, section 352.91, is 
 76.27  amended by adding a subdivision to read: 
 76.28     Subd. 3g.  [ADDITIONAL CORRECTIONS DEPARTMENT 
 76.29  PERSONNEL.] (a) "Covered correctional service" means service by 
 76.30  a state employee in one of the employment positions at the 
 76.31  designated Minnesota correctional facility specified in 
 76.32  paragraph (b), provided that at least 75 percent of the 
 76.33  employee's working time is spent in direct contact with inmates 
 76.34  and the fact of this direct contact is certified to the 
 76.35  executive director by the commissioner of corrections. 
 76.36     (b) The employment positions and correctional facilities 
 77.1   are: 
 77.2      (1) corrections discipline unit supervisor, at the 
 77.3   Minnesota correctional facility-Faribault, the Minnesota 
 77.4   correctional facility-Lino Lakes, the Minnesota correctional 
 77.5   facility-Oak Park Heights, and the Minnesota correctional 
 77.6   facility-St. Cloud; 
 77.7      (2) dental assistant registered, at the Minnesota 
 77.8   correctional facility-Faribault, the Minnesota correctional 
 77.9   facility-Lino Lakes, the Minnesota correctional facility-Moose 
 77.10  Lake, the Minnesota correctional facility-Oak Park Heights, and 
 77.11  the Minnesota correctional facility-Red Wing; 
 77.12     (3) dental hygienist, at the Minnesota correctional 
 77.13  facility-Shakopee; 
 77.14     (4) psychologist 2, at the Minnesota correctional 
 77.15  facility-Faribault, the Minnesota correctional facility-Lino 
 77.16  Lakes, the Minnesota correctional facility-Moose Lake, the 
 77.17  Minnesota correctional facility-Oak Park Heights, the Minnesota 
 77.18  correctional facility-Red Wing, the Minnesota correctional 
 77.19  facility-St. Cloud, the Minnesota correctional 
 77.20  facility-Shakopee, and the Minnesota correctional 
 77.21  facility-Stillwater; and 
 77.22     (5) sentencing to service crew leader involved with the 
 77.23  inmate community work crew program, at the Minnesota 
 77.24  correctional facility-Faribault and the Minnesota correctional 
 77.25  facility-Lino Lakes. 
 77.26     Sec. 5.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 77.27  PERSONS.] 
 77.28     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE 
 77.29  COVERAGE.] (a) An employee who has future retirement coverage 
 77.30  transferred to the correctional employees retirement plan under 
 77.31  section 1, 3, or 4, or an employee who has retirement coverage 
 77.32  for past correctional service transferred to the correctional 
 77.33  employees retirement plan under sections 1 to 4, is entitled to 
 77.34  elect to obtain prior service credit for eligible state service 
 77.35  performed after June 30, 1975, and before the first day of the 
 77.36  first full pay period beginning after June 30, 2000, with the 
 78.1   department of corrections or the department of human services at 
 78.2   the Minnesota security hospital or the Minnesota sexual 
 78.3   psychopathic personality treatment center.  All eligible prior 
 78.4   service credit must be purchased. 
 78.5      (b) For purposes of section 1, 3, or 4, eligible state 
 78.6   service with the department of corrections or the department of 
 78.7   human services is any prior period of continuous service after 
 78.8   June 30, 1975, performed as an employee of the department of 
 78.9   corrections or the department of human services that would have 
 78.10  been eligible for the correctional employees retirement plan 
 78.11  coverage under section 1, 3, or 4 if that prior service had been 
 78.12  performed after the first day of the first full pay period 
 78.13  beginning after June 30, 2000, rather than before that date.  
 78.14  Service is continuous if there has been no period of 
 78.15  discontinuation of eligible state service for a period greater 
 78.16  than 180 calendar days.  For purposes of section 2, paragraph 
 78.17  (c), eligible state service is any period of service on or after 
 78.18  the date which the employee started employment with the Phoenix 
 78.19  treatment/behavior change program in a position specified in 
 78.20  Minnesota Statutes, section 352.91, subdivision 3d, paragraph 
 78.21  (c), in which at least 75 percent of the employee's working time 
 78.22  is determined to have been spent in direct contact with program 
 78.23  participants, and the date the employee joined the correctional 
 78.24  employees plan. 
 78.25     (c) The commissioner of corrections or the commissioner of 
 78.26  human services shall certify eligible state service to the 
 78.27  executive director of the Minnesota state retirement system. 
 78.28     (d) A covered correctional plan employee employed on July 
 78.29  1, 2000, who has past service in a job classification covered 
 78.30  under sections 1 to 4 on July 1, 2000, is entitled to purchase 
 78.31  the past service if the applicable department certifies that the 
 78.32  employee met the eligibility requirements for coverage.  The 
 78.33  employee shall pay the difference between the employee 
 78.34  contributions actually paid during the period and what should 
 78.35  have been paid under the correctional employees retirement 
 78.36  plan.  Payment for past service must be completed by June 30, 
 79.1   2002. 
 79.2      Subd. 2.  [PAYMENT FOR PAST SERVICE.] (a) An employee 
 79.3   electing to obtain prior service credit under subdivision 1 must 
 79.4   pay an additional employee contribution for that prior service.  
 79.5   The additional member contribution is the contribution 
 79.6   differential percentage applied to the actual salary paid to the 
 79.7   employee during the period of the prior eligible state service, 
 79.8   plus interest at the rate of six percent per annum, compounded 
 79.9   annually.  The contribution differential percentage is the 
 79.10  difference between 4.9 percent of salary and the applicable 
 79.11  employee contribution rate of the general state employees 
 79.12  retirement plan during the prior eligible state service. 
 79.13     (b) The additional member contribution must be paid only in 
 79.14  a lump sum.  Payment must accompany the election to obtain prior 
 79.15  service credit.  No election of payment may be made by the 
 79.16  person or accepted by the executive director after June 30, 2002.
 79.17     Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 79.18  from the general state employees retirement plan to the 
 79.19  correctional employees retirement plan, in an amount equal to 
 79.20  the present value of benefits earned under the general employees 
 79.21  retirement plan for each employee transferring to the 
 79.22  correctional employees retirement plan, as determined by the 
 79.23  actuary retained by the legislative commission on pensions and 
 79.24  retirement in accordance with Minnesota Statutes, section 
 79.25  356.215.  The transfer of assets must be made within 45 days 
 79.26  after the employee elects to transfer coverage to the 
 79.27  correctional employees retirement plan. 
 79.28     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon transfer of 
 79.29  assets in subdivision 3, service credit in the general state 
 79.30  employees plan of the Minnesota state retirement system is 
 79.31  forfeited and may not be reinstated.  The service credit and 
 79.32  transferred assets must be credited to the correctional 
 79.33  employees retirement plan. 
 79.34     Subd. 5.  [PAYMENT OF ACTUARIAL CALCULATION COSTS.] (a) The 
 79.35  expense of the legislative commission on pensions and retirement 
 79.36  attributable to the calculations of its consulting actuary under 
 80.1   subdivision 3 must be reimbursed by the department of 
 80.2   corrections and the department of human services. 
 80.3      (b) The expense reimbursement under paragraph (a) must be 
 80.4   allocated between the two departments in a manner that is 
 80.5   jointly agreeable.  If no allocation procedure is developed by 
 80.6   the commissioner of corrections and the commissioner of human 
 80.7   services, the cost must be allocated on an equally shared basis. 
 80.8      (c) Payment of the expense reimbursement to the legislative 
 80.9   commission on pensions and retirement is due 30 days after the 
 80.10  receipt of the reimbursement request from the executive director 
 80.11  of the legislative commission on pensions and retirement. 
 80.12     Sec. 6.  [REPEALER.] 
 80.13     Minnesota Statutes 1998, section 352.91, subdivision 4, is 
 80.14  repealed. 
 80.15     Sec. 7.  [EFFECTIVE DATE.] 
 80.16     Sections 1 to 6 are effective July 1, 2000. 
 80.17                             ARTICLE 7
 80.18              PERA AND PERA-P&F MEMBERSHIP INCLUSIONS
 80.19     Section 1.  Minnesota Statutes 1999 Supplement, section 
 80.20  353.01, subdivision 2b, is amended to read: 
 80.21     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 80.22  employees shall not participate as members of the association 
 80.23  with retirement coverage by the public employees retirement plan 
 80.24  or the public employees police and fire retirement plan: 
 80.25     (1) elected public officers, or persons appointed to fill a 
 80.26  vacancy in an elective office, who do not elect to participate 
 80.27  in the association by filing an application for membership; 
 80.28     (2) election officers; 
 80.29     (3) patient and inmate personnel who perform services in 
 80.30  charitable, penal, or correctional institutions of a 
 80.31  governmental subdivision; 
 80.32     (4) employees who are hired for a temporary position under 
 80.33  subdivision 12a, and employees who resign from a nontemporary 
 80.34  position and accept a temporary position within 30 days in the 
 80.35  same governmental subdivision, but not those employees who are 
 80.36  hired for an unlimited period but are serving a probationary 
 81.1   period.  If the period of employment extends beyond six 
 81.2   consecutive months and the employee earns more than $425 from 
 81.3   one governmental subdivision in any one calendar month, the 
 81.4   department head shall report the employee for membership and 
 81.5   require employee deductions be made on behalf of the employee 
 81.6   under section 353.27, subdivision 4. 
 81.7      Membership eligibility of an employee who resigns or is 
 81.8   dismissed from a temporary position and within 30 days accepts 
 81.9   another temporary position in the same governmental subdivision 
 81.10  is determined on the total length of employment rather than on 
 81.11  each separate position.  Membership eligibility of an employee 
 81.12  who holds concurrent temporary and nontemporary positions in one 
 81.13  governmental subdivision is determined by the length of 
 81.14  employment and salary of each separate position; 
 81.15     (5) employees whose actual salary from one governmental 
 81.16  subdivision does not exceed $425 per month, or whose annual 
 81.17  salary from one governmental subdivision does not exceed a 
 81.18  stipulation prepared in advance, in writing, that the salary 
 81.19  must not exceed $5,100 per calendar year or per school year for 
 81.20  school employees for employment expected to be of a full year's 
 81.21  duration or more than the prorated portion of $5,100 per 
 81.22  employment period for employment expected to be of less than a 
 81.23  full year's duration; 
 81.24     (6) employees who are employed by reason of work emergency 
 81.25  caused by fire, flood, storm, or similar disaster; 
 81.26     (7) employees who by virtue of their employment in one 
 81.27  governmental subdivision are required by law to be a member of 
 81.28  and to contribute to any of the plans or funds administered by 
 81.29  the Minnesota state retirement system, the teachers retirement 
 81.30  association, the Duluth teachers retirement fund association, 
 81.31  the Minneapolis teachers retirement association, the St. Paul 
 81.32  teachers retirement fund association, the Minneapolis employees 
 81.33  retirement fund, or any police or firefighters relief 
 81.34  association governed by section 69.77 that has not consolidated 
 81.35  with the public employees retirement association, or any local 
 81.36  police or firefighters consolidation account but who have not 
 82.1   elected the type of benefit coverage provided by the public 
 82.2   employees police and fire fund under sections 353A.01 to 
 82.3   353A.10, or any persons covered by section 353.665, subdivision 
 82.4   4, 5, or 6, who have not elected public employees police and 
 82.5   fire plan benefit coverage.  This clause must not be construed 
 82.6   to prevent a person from being a member of and contributing to 
 82.7   the public employees retirement association and also belonging 
 82.8   to and contributing to another public pension fund for other 
 82.9   service occurring during the same period of time.  A person who 
 82.10  meets the definition of "public employee" in subdivision 2 by 
 82.11  virtue of other service occurring during the same period of time 
 82.12  becomes a member of the association unless contributions are 
 82.13  made to another public retirement fund on the salary based on 
 82.14  the other service or to the teachers retirement association by a 
 82.15  teacher as defined in section 354.05, subdivision 2; 
 82.16     (8) persons who are excluded from coverage under the 
 82.17  federal Old Age, Survivors, Disability, and Health Insurance 
 82.18  Program for the performance of service as specified in United 
 82.19  States Code, title 42, section 410(a)(8)(A), as amended through 
 82.20  January 1, 1987, if no irrevocable election of coverage has been 
 82.21  made under section 3121(r) of the Internal Revenue Code of 1954, 
 82.22  as amended; 
 82.23     (9) full-time students who are enrolled and are regularly 
 82.24  attending classes at an accredited school, college, or 
 82.25  university and who are part-time employees as defined by a 
 82.26  governmental subdivision; 
 82.27     (10) resident physicians, medical interns, and pharmacist 
 82.28  residents and pharmacist interns who are serving in a degree or 
 82.29  residency program in public hospitals; 
 82.30     (11) students who are serving in an internship or residency 
 82.31  program sponsored by an accredited educational institution; 
 82.32     (12) persons who hold a part-time adult supplementary 
 82.33  technical college license who render part-time teaching service 
 82.34  in a technical college; 
 82.35     (13) foreign citizens working for a governmental 
 82.36  subdivision with a work permit of less than three years, or an 
 83.1   H-1b visa valid for less than three years of employment.  Upon 
 83.2   notice to the association that the work permit or visa extends 
 83.3   beyond the three-year period, the foreign citizens are eligible 
 83.4   for membership from the date of the extension; 
 83.5      (14) public hospital employees who elected not to 
 83.6   participate as members of the association before 1972 and who 
 83.7   did not elect to participate from July 1, 1988, to October 1, 
 83.8   1988; 
 83.9      (15) except as provided in section 353.86, volunteer 
 83.10  ambulance service personnel, as defined in subdivision 35, but 
 83.11  persons who serve as volunteer ambulance service personnel may 
 83.12  still qualify as public employees under subdivision 2 and may be 
 83.13  members of the public employees retirement association and 
 83.14  participants in the public employees retirement fund or the 
 83.15  public employees police and fire fund on the basis of 
 83.16  compensation received from public employment service other than 
 83.17  service as volunteer ambulance service personnel; 
 83.18     (16) except as provided in section 353.87, volunteer 
 83.19  firefighters, as defined in subdivision 36, engaging in 
 83.20  activities undertaken as part of volunteer firefighter duties; 
 83.21  provided that a person who is a volunteer firefighter may still 
 83.22  qualify as a public employee under subdivision 2 and may be a 
 83.23  member of the public employees retirement association and a 
 83.24  participant in the public employees retirement fund or the 
 83.25  public employees police and fire fund on the basis of 
 83.26  compensation received from public employment activities other 
 83.27  than those as a volunteer firefighter; and 
 83.28     (17) pipefitters and associated trades personnel employed 
 83.29  by independent school district No. 625, St. Paul, with coverage 
 83.30  by the pipefitters local 455 pension plan under a collective 
 83.31  bargaining agreement who were either first employed after May 1, 
 83.32  1997, or, if first employed before May 2, 1997, elected to be 
 83.33  excluded under Laws 1997, chapter 241, article 2, section 12; 
 83.34  and 
 83.35     (18) electrical workers, plumbers, carpenters, and 
 83.36  associated trades personnel employed by independent school 
 84.1   district No. 625, St. Paul, or the city of St. Paul, with 
 84.2   coverage by the electrical workers local 110 pension plan, the 
 84.3   united association plumbers local 34 pension plan, or the 
 84.4   carpenters local 87 pension plan under a collective bargaining 
 84.5   agreement who were either first employed after May 1, 2000, or, 
 84.6   if first employed before May 2, 2000, elected to be excluded 
 84.7   under section 5. 
 84.8      Sec. 2.  Minnesota Statutes 1998, section 353.64, is 
 84.9   amended by adding a subdivision to read: 
 84.10     Subd. 11.  [PENSION COVERAGE FOR CERTAIN TRIBAL POLICE 
 84.11  OFFICERS EXERCISING STATE ARREST POWERS.] (a) The governing body 
 84.12  of a tribal police department which is exercising state arrest 
 84.13  powers under section 626.90, 626.91, 626.92, or 626.93 may 
 84.14  request by resolution to the executive director that its police 
 84.15  officers be considered public employees under section 353.01, 
 84.16  subdivision 2, be considered a police officer under section 
 84.17  353.64, subdivision 1, and become members of the public 
 84.18  employees police and fire retirement plan and that the tribal 
 84.19  police department be considered a governmental subdivision under 
 84.20  section 353.01, subdivision 6.  
 84.21     (b) The executive director of the association must approve 
 84.22  the request by a tribal police department under paragraph (a) if 
 84.23  a ruling made by the federal Internal Revenue Service provides 
 84.24  that: 
 84.25     (1) the tribal police department is an agency or 
 84.26  instrumentality of the state of Minnesota for purposes of 
 84.27  enforcing state law; and 
 84.28     (2) contributions made by the tribal police department to a 
 84.29  retirement plan on behalf of employees of the tribal police 
 84.30  department are contributions to a governmental plan within the 
 84.31  meaning of section 414(d) of the federal Internal Revenue Code. 
 84.32     (c) Following the approval of the request by the executive 
 84.33  director, the head of the police department or that person's 
 84.34  designee must immediately report for membership in the police 
 84.35  and fire fund a person who is employed as a full-time or 
 84.36  part-time police officer in a position that meets the conditions 
 85.1   in sections 353.01, subdivision 2a, and 353.64, subdivisions 1 
 85.2   and 2.  The police department head or that person's designee 
 85.3   must deduct the employee contributions from the salary of each 
 85.4   eligible police officer as required by section 353.65, 
 85.5   subdivision 2, and make the employer contributions required by 
 85.6   section 353.65, subdivision 3.  The head of the police 
 85.7   department or that person's designee must meet the reporting 
 85.8   requirements in section 353.65, subdivision 4. 
 85.9      Sec. 3.  [353.666] [PAST SERVICE CREDIT FOR CERTAIN MEMBERS 
 85.10  EXTENDED COVERAGE.] 
 85.11     (a) A member to whom public employees police and fire 
 85.12  retirement plan membership was extended under section 353.64, 
 85.13  subdivision 11, may receive retroactive service credit in the 
 85.14  public employees police and fire retirement plan for service as 
 85.15  a tribal police officer rendered before the effective date of 
 85.16  membership of the tribal police department employee in the 
 85.17  police and fire fund, provided that the employee and the police 
 85.18  department did not make contributions into a qualified 
 85.19  tax-deferred retirement plan for that employment period.  
 85.20     (b) The request for retroactive coverage must be in writing 
 85.21  and must be filed with the association within 60 days of when 
 85.22  police and fire fund membership commenced.  The prior service 
 85.23  credit purchase payment is governed by section 356.55, except 
 85.24  that the member must pay an amount equal to the employee salary 
 85.25  deductions.  The employee salary deductions for the retroactive 
 85.26  period must be based on the police and fire pension plan member 
 85.27  contribution rates in effect when the service was rendered and 
 85.28  applied to the salary amount that was earned and paid to the 
 85.29  police officer.  The employer must pay the balance of the prior 
 85.30  service credit purchase payment amount within 30 days of the 
 85.31  member contribution payment. 
 85.32     Sec. 4.  Laws 1965, chapter 705, section 1, subdivision 4, 
 85.33  as amended by Laws 1995, First Special Session chapter 3, 
 85.34  article 8, section 14, and Laws 1997, chapter 241, article 2, 
 85.35  section 8, is amended to read: 
 85.36     Subd. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 625; 
 86.1   APPLICABILITY OF CERTAIN LAWS.] (a) As of July 1, 1965, the 
 86.2   organization, operation, maintenance and conduct of the affairs 
 86.3   of the converted district shall be governed by general laws 
 86.4   relating to independent districts, except as otherwise provided 
 86.5   in Extra Session Laws 1959, Chapter 71, as amended, and all 
 86.6   special laws and charter provisions relating only to the 
 86.7   converted district are repealed.  
 86.8      (b) Where an existing pension law is applicable to 
 86.9   employees of the special district, such law shall continue to be 
 86.10  applicable in the same manner and to the same extent to 
 86.11  employees of the converted district.  Notwithstanding this 
 86.12  requirement, pipefitters and associated trades personnel with 
 86.13  coverage by the pipefitters local 455 pension plan under a 
 86.14  collective bargaining agreement who either were first employed 
 86.15  after May 1, 1997, or, if first employed before May 2, 1997, 
 86.16  elected exclusion from coverage under section 12 and electrical 
 86.17  workers, carpenters, and associated trades personnel with 
 86.18  coverage by the electrical workers local 110 pension plan, the 
 86.19  united association plumbers local 34 pension plan, or the 
 86.20  carpenters local 87 pension plan under a collective bargaining 
 86.21  agreement who either were first employed after May 1, 2000, or, 
 86.22  if first employed before May 2, 2000, elected exclusion from 
 86.23  coverage under section 5, are not covered by the public 
 86.24  employees retirement association.  
 86.25     (c) General laws applicable to independent school districts 
 86.26  wholly or partly within cities of the first class shall not be 
 86.27  applicable to the converted district.  
 86.28     (d) The provision of the statutes applicable only to 
 86.29  teachers retirement fund associations in cities of the first 
 86.30  class, limiting the amount of annuity to be paid from public 
 86.31  funds, limiting the taxes to be levied to carry out the plan of 
 86.32  such associations, and limiting the amount of annuities to be 
 86.33  paid to beneficiaries shall not be applicable to such converted 
 86.34  district, but the statutes applicable to such special district 
 86.35  prior to the conversion shall continue to be applicable and the 
 86.36  pension plan in operation prior to the conversion shall continue 
 87.1   in operation until changed in accordance with law, and the 
 87.2   teacher tenure law applicable to the special district shall 
 87.3   continue to apply to the converted district in the same manner 
 87.4   and to the same extent to teachers in the converted district; 
 87.5   provided further, where existing civil service provisions of any 
 87.6   law or charter are applicable to special district employees, 
 87.7   such provision may continue to be applicable in the same manner 
 87.8   and to the same extent to employees of the converted district, 
 87.9   unless the board and city governing body each adopt a resolution 
 87.10  declaring that civil service bureau (city human resources 
 87.11  department) functions would be more efficiently and effectively 
 87.12  administered separately in each jurisdiction.  Notwithstanding 
 87.13  any contrary provision of Extra Session Laws 1959, Chapter 71, 
 87.14  as amended, if there was in the special district a teachers 
 87.15  retirement fund association operating and existing under the 
 87.16  provisions of Laws 1909, Chapter 343, and all acts amendatory 
 87.17  thereof, then such teachers retirement fund association shall 
 87.18  continue to exist and operate in the converted district under 
 87.19  and to be subject to the provisions of Laws 1909, Chapter 343, 
 87.20  and all acts amendatory thereof, to the same extent and in the 
 87.21  same manner as before the conversion, and, without limiting the 
 87.22  generality of the foregoing, such teachers retirement fund 
 87.23  association shall continue, after the conversion as before the 
 87.24  conversion, to certify to the same authorities the amount 
 87.25  necessary to raise by taxation in order to carry out its 
 87.26  retirement plan, and it shall continue, after the conversion as 
 87.27  before the conversion, to be the duty of said authorities to 
 87.28  include in the tax levy for the ensuing year a tax in addition 
 87.29  to all other taxes sufficient to produce so much of the sums so 
 87.30  certified as said authorities shall approve, and such teachers 
 87.31  retirement fund association shall not be subject after the 
 87.32  conversion to any limitation on payments to any beneficiary from 
 87.33  public funds or on taxes to be levied to carry out the plan of 
 87.34  such association to which it was not subject before the 
 87.35  conversion. 
 87.36     Sec. 5.  [PUBLIC PENSION COVERAGE EXCLUSION FOR CERTAIN 
 88.1   TRADES PERSONNEL.] 
 88.2      Subdivision 1.  [EXCLUSION ELECTION.] (a) An electrical 
 88.3   worker, plumber, carpenter, or an associated trades person who 
 88.4   is employed by independent school district No. 625, St. Paul, or 
 88.5   the city of St. Paul, on the effective date of this section and 
 88.6   who has pension coverage by the electrical workers 110 pension 
 88.7   plan, the united association plumbers local 34 pension plan, or 
 88.8   the carpenters local 87 pension plan under a collective 
 88.9   bargaining agreement may elect to be excluded from pension 
 88.10  coverage by the public employees retirement association. 
 88.11     (b) The exclusion election under this section must be made 
 88.12  in writing on a form prescribed by the executive director of the 
 88.13  public employees retirement association and must be filed with 
 88.14  the executive director.  The exclusion election is irrevocable.  
 88.15  Authority to make the coverage exclusion expires on January 1, 
 88.16  2001. 
 88.17     Subd. 2.  [ELIGIBILITY FOR MEMBER CONTRIBUTION REFUND.] A 
 88.18  person who has less than three years of allowable service in the 
 88.19  public employees retirement association and who elects the 
 88.20  pension coverage exclusion under subdivision 1 is entitled to 
 88.21  immediately apply for a refund under Minnesota Statutes, section 
 88.22  353.34, subdivisions 1 and 2, following the effective date of 
 88.23  the exclusion election. 
 88.24     Subd. 3.  [DEFERRED ANNUITY ELIGIBILITY.] In lieu of the 
 88.25  refund under subdivision 2, a person who elects the pension 
 88.26  coverage exclusion under subdivision 1 is entitled to a deferred 
 88.27  retirement annuity under Minnesota Statutes, sections 353.34, 
 88.28  subdivision 3, and 353.71, subdivision 2, based on any length of 
 88.29  allowable service credit under Minnesota Statutes, section 
 88.30  353.01, subdivision 16, to the credit of the person as of the 
 88.31  date of the coverage exclusion election. 
 88.32     Sec. 6.  [PERA GENERAL AND PERA P&F; PRIOR SERVICE CREDIT 
 88.33  PURCHASE.] 
 88.34     Subdivision 1.  [ELIGIBILITY.] (a) Except as restricted 
 88.35  under subdivision 4, an eligible person described in paragraph 
 88.36  (b) is entitled to purchase allowable service credit for the 
 89.1   period or periods specified in paragraph (d) in the public 
 89.2   employees retirement association general plan.  Except as 
 89.3   restricted under subdivision 4, an eligible person described in 
 89.4   paragraph (c) is entitled to purchase allowable service credit 
 89.5   for the period or periods specified in paragraph (d) in the 
 89.6   public employees retirement association police and fire plan. 
 89.7      (b) An eligible person is a person who: 
 89.8      (1) is a full-time salaried employee or permanent part-time 
 89.9   salaried employee of the Spring Lake Park Fire Department, 
 89.10  Incorporated; 
 89.11     (2) became a member of the public employees retirement 
 89.12  association general plan due to that employment on June 1, 1999; 
 89.13  and 
 89.14     (3) was employed by the Spring Lake Park Fire Department, 
 89.15  Incorporated, during all or part of the period from January 1, 
 89.16  1996, to June 1, 1999. 
 89.17     (c) An eligible person is a person who meets requirements 
 89.18  specified in paragraph (b), clauses (1) and (3), and who became 
 89.19  a member of the public employees retirement association police 
 89.20  and fire plan or the public employees retirement association 
 89.21  general plan, whichever applies, due to applicable employment 
 89.22  with the Spring Lake Park Fire Department, Incorporated, on June 
 89.23  1, 1999. 
 89.24     (d) The period or periods eligible for service credit 
 89.25  purchase in the public employees retirement association general 
 89.26  plan or public employees retirement association police and fire 
 89.27  plan, as applicable, is the period or periods from January 1, 
 89.28  1996, to June 1, 1999, during which an eligible individual 
 89.29  described in paragraph (b) or (c), as applicable, provided 
 89.30  service to the Spring Lake Park Fire Department, Incorporated, 
 89.31  which would have been eligible service for coverage by the 
 89.32  applicable public employees retirement association plan if that 
 89.33  service had been provided on or after June 1, 1999, rather than 
 89.34  before. 
 89.35     Subd. 2.  [PAYMENT REQUIREMENTS.] Minnesota Statutes, 
 89.36  section 356.55, applies to service credit purchases authorized 
 90.1   under this section. 
 90.2      Subd. 3.  [DOCUMENTATION; SERVICE CREDIT GRANT.] (a) An 
 90.3   eligible person described in subdivision 1, paragraph (b) or 
 90.4   (c), must provide any documentation related to eligibility to 
 90.5   make this service credit purchase required by the executive 
 90.6   director of the public employees retirement association. 
 90.7      (b) Allowable service credit for the purchase period or 
 90.8   periods must be granted in the applicable public employees 
 90.9   retirement association plan on behalf of the eligible person 
 90.10  upon receipt of the prior service credit purchase payment amount.
 90.11     Subd. 4.  [RESTRICTIONS.] (a) An eligible person as 
 90.12  specified in subdivision 1, paragraph (c), is not authorized to 
 90.13  purchase service credit in the public employees retirement 
 90.14  association police and fire plan under this section if the 
 90.15  eligible person, or the eligible person and the Spring Lake Park 
 90.16  Fire Department, Incorporated, made contributions on that 
 90.17  person's behalf to the social security old age insurance program 
 90.18  during all or part of the period from January 1, 1996, to June 
 90.19  1, 1999, and coverage under that program for the applicable 
 90.20  period remains in effect. 
 90.21     (b) If paragraph (a) applies to the eligible person, that 
 90.22  eligible person may purchase service credit under this section 
 90.23  in the public employees retirement association general plan. 
 90.24     (c) If contributions are made by an eligible person 
 90.25  specified in paragraph (a) or by that eligible person and the 
 90.26  Spring Lake Park Fire Department, Incorporated, or a successor 
 90.27  organization, to the social security old age insurance program 
 90.28  after June 1, 1999, due to employment for which coverage in the 
 90.29  public employees retirement association police and fire plan 
 90.30  commenced on June 1, 1999, coverage by the public employees 
 90.31  retirement association police and fire plan terminates and 
 90.32  coverage by the public employees retirement association general 
 90.33  plan commences, if the employment otherwise meets requirements 
 90.34  in law for that coverage.  If public employees retirement 
 90.35  association police and fire plan contributions have been 
 90.36  received on or after June 1, 1999, for any periods where 
 91.1   contributions were also made to the social security old age 
 91.2   insurance program as specified in this paragraph, the 
 91.3   contributions to the public employees retirement association 
 91.4   police and fire plan for the applicable period or periods on or 
 91.5   after June 1, 1999, must be treated as contributions made in 
 91.6   error under Minnesota Statutes, section 353.27, subdivision 7a. 
 91.7      Sec. 7. [EFFECTIVE DATE.] 
 91.8      (a) Sections 2 and 3 are effective on July 1, 2000. 
 91.9      (b) Section 6 is effective on the day following final 
 91.10  enactment. 
 91.11     (c) Sections 1, 4, and 5 are effective for electrical 
 91.12  workers, plumbers, and associated trades personnel employed by 
 91.13  independent school district No. 625, St. Paul, on the day 
 91.14  following approval by majority vote of the board of independent 
 91.15  school district No. 625, St. Paul, and compliance with Minnesota 
 91.16  Statutes, section 645.021. 
 91.17     (d) Sections 1, 4, and 5 are effective for electrical 
 91.18  workers, plumbers, and associated trades personnel employed by 
 91.19  the city of St. Paul on the day following approval by majority 
 91.20  vote of the St. Paul city council and compliance with Minnesota 
 91.21  Statutes, section 645.021. 
 91.22                             ARTICLE 8
 91.23                       PENSION COVERAGE UPON
 91.24                      EMPLOYMENT PRIVATIZATION
 91.25     Section 1.  Minnesota Statutes 1999 Supplement, section 
 91.26  353F.02, subdivision 5, is amended to read: 
 91.27     Subd. 5.  [OTHER PUBLIC EMPLOYING UNIT.] "Other public 
 91.28  employing unit" means: 
 91.29     (1) Metro II, a joint powers organization formed under 
 91.30  section 471.59; and 
 91.31     (2) the St. Paul civic center authority. 
 91.32     Sec. 2.  [EFFECTIVE DATE.] 
 91.33     Section 1 is effective on the first day of the month next 
 91.34  following certification by the executive director of the public 
 91.35  employees retirement association that the actuarial accrued 
 91.36  liability of the special benefit coverage proposed for extension 
 92.1   to the privatized St. Paul civic center authority employees 
 92.2   under this article does not exceed the actuarial gain otherwise 
 92.3   to be accrued by the public employees retirement association, as 
 92.4   calculated by the consulting actuary retained by the legislative 
 92.5   commission on pensions and retirement.  The cost of the 
 92.6   actuarial calculations must be borne by the St. Paul civic 
 92.7   center authority. 
 92.8                              ARTICLE 9
 92.9          FORMER LOCAL POLICE AND FIRE CONSOLIDATION ACCOUNT
 92.10                   MODIFICATIONS AND CORRECTIONS
 92.11     Section 1.  Minnesota Statutes 1999 Supplement, section 
 92.12  423A.02, subdivision 1b, is amended to read: 
 92.13     Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 92.14  Annually, on October 1, the commissioner of revenue shall 
 92.15  allocate the additional amortization state aid transferred under 
 92.16  section 69.021, subdivision 11, to: 
 92.17     (1) all police or salaried firefighter relief associations 
 92.18  governed by and in full compliance with the requirements of 
 92.19  section 69.77, that had an unfunded actuarial accrued liability 
 92.20  in the actuarial valuation prepared under sections 356.215 and 
 92.21  356.216 as of the preceding December 31; 
 92.22     (2) all local police or salaried firefighter consolidation 
 92.23  accounts governed by chapter 353A that are certified by the 
 92.24  executive director of the public employees retirement 
 92.25  association as having for the current fiscal year an additional 
 92.26  municipal contribution amount under section 353A.09, subdivision 
 92.27  5, paragraph (b), and that have implemented section 353A.083, 
 92.28  subdivision 1, if the effective date of the consolidation 
 92.29  preceded May 24, 1993, and that have implemented section 
 92.30  353A.083, subdivision 2, if the effective date of the 
 92.31  consolidation preceded June 1, 1995; and 
 92.32     (3) the public employees police and fire fund on behalf of 
 92.33  municipalities that received amortization aid in 1999 and are 
 92.34  required to make an additional municipal contribution under 
 92.35  section 353.665, subdivision 8, for the duration of the required 
 92.36  additional contribution. 
 93.1      (b) The commissioner shall allocate the state aid on the 
 93.2   basis of the proportional share of the relief association or 
 93.3   consolidation account of the total unfunded actuarial accrued 
 93.4   liability of all recipient relief associations and consolidation 
 93.5   accounts as of December 31, 1993, for relief associations, and 
 93.6   as of June 30, 1994, for consolidation accounts. 
 93.7      (c) Beginning October 1, 2000, and annually thereafter, the 
 93.8   commissioner shall allocate the state aid, including any state 
 93.9   aid in excess of the limitation in subdivision 4, on the 
 93.10  following basis of: 
 93.11     (1) 64.5 percent to the public employees police and fire 
 93.12  fund or local consolidation account, whichever applies, on 
 93.13  behalf of municipalities to which section 353.665, subdivision 
 93.14  8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), 
 93.15  apply for distribution in accordance with paragraph (b) and 
 93.16  subject to the limitation in subdivision 4,; 
 93.17     (2) 34.2 percent to the city of Minneapolis to fund any 
 93.18  unfunded actuarial accrued liability in the actuarial valuation 
 93.19  prepared under sections 356.215 and 356.216 as of the preceding 
 93.20  December 31 for the Minneapolis police relief association or the 
 93.21  Minneapolis fire department relief association,; and 
 93.22     (3) 1.3 percent to the city of Virginia to fund any 
 93.23  unfunded actuarial accrued liability in the actuarial valuation 
 93.24  prepared under sections 356.215 and 356.216 as of the preceding 
 93.25  December 31 for the Virginia fire department relief association. 
 93.26     In the event that If there is no unfunded actuarial accrued 
 93.27  liability in both the Minneapolis police relief association and 
 93.28  the Minneapolis fire department relief association as disclosed 
 93.29  in the most recent actuarial valuations for the relief 
 93.30  associations prepared under sections 356.215 and 356.216, the 
 93.31  commissioner shall allocate that 34.2 percent of the aid as 
 93.32  follows:  49 percent to the Minneapolis teachers retirement fund 
 93.33  association, provided that, 21 percent to the St. Paul teachers 
 93.34  retirement fund association, and 30 percent as additional 
 93.35  funding to support minimum fire state aid for volunteer 
 93.36  firefighter relief associations.  If there is no unfunded 
 94.1   actuarial accrued liability in the Virginia fire department 
 94.2   relief association as disclosed in the most recent actuarial 
 94.3   valuation for the relief association prepared under sections 
 94.4   356.215 and 356.216, the commissioner shall allocate that 1.3 
 94.5   percent of the aid as follows:  49 percent to the Minneapolis 
 94.6   teachers retirement fund association, 21 percent to the St. Paul 
 94.7   teachers retirement fund association, and 30 percent as 
 94.8   additional funding to support minimum fire state aid for 
 94.9   volunteer firefighter relief associations.  The allocation must 
 94.10  be made by the commissioner at the same time and under the same 
 94.11  procedures as specified in subdivision 3.  With respect to the 
 94.12  Minneapolis teachers retirement fund association or the St. Paul 
 94.13  teachers retirement fund association, annually, beginning on 
 94.14  July 1, 2005, if a the applicable teacher's association 
 94.15  five-year average time-weighted rate of investment return does 
 94.16  not equal or exceed the performance of a composite portfolio 
 94.17  assumed passively managed (indexed) invested ten percent in cash 
 94.18  equivalents, 60 percent in bonds and similar debt securities, 
 94.19  and 30 percent in domestic stock calculated using the formula 
 94.20  under section 11A.04, clause (11), the aid allocation to that 
 94.21  retirement fund under this section ceases until the five-year 
 94.22  annual rate of investment return equals or exceeds the 
 94.23  performance of a that composite portfolio., 21 percent to the 
 94.24  St. Paul teachers retirement fund association, provided that, 
 94.25  annually, beginning on July 1, 2005, if a teacher's association 
 94.26  five-year average time-weighted rate of investment return does 
 94.27  not equal or exceed the performance of a composite portfolio 
 94.28  assumed passively managed (indexed) invested ten percent in cash 
 94.29  equivalents, 60 percent bonds and similar debt securities, and 
 94.30  30 percent in domestic stock calculated using the formula under 
 94.31  section 11A.04, clause (11), the aid under this section ceases 
 94.32  until the five-year annual rate of return equals or exceeds the 
 94.33  performance of a composite portfolio, and 30 percent as 
 94.34  additional funding to support minimum fire state aid for 
 94.35  volunteer firefighter relief associations, with the allocation 
 94.36  made at the same time and under the same procedures in 
 95.1   subdivision 3.  In the event there is no actuarial accrued 
 95.2   unfunded liability in the Virginia fire department relief 
 95.3   association, the commissioner shall allocate that 1.3 percent of 
 95.4   the aid as follows:  49 percent to the Minneapolis teachers 
 95.5   retirement fund association, provided that, annually, beginning 
 95.6   on July 1, 2005, if a teacher's association five-year average 
 95.7   time-weighted rate of investment return does not equal or exceed 
 95.8   the performance of a composite portfolio assumed passively 
 95.9   managed (indexed) invested ten percent in cash equivalents, 60 
 95.10  percent bonds and similar debt securities, and 30 percent in 
 95.11  domestic stock calculated using the formula under section 
 95.12  11A.04, clause (11), the aid under this section ceases until the 
 95.13  five-year annual rate of return equals or exceeds the 
 95.14  performance of a composite portfolio, 21 percent to the St. Paul 
 95.15  teachers retirement fund association, provided that, annually, 
 95.16  beginning on July 1, 2005, if a teacher's association five-year 
 95.17  average time-weighted rate of investment return does not equal 
 95.18  or exceed the performance of a composite portfolio assumed 
 95.19  passively managed (indexed) invested ten percent in cash 
 95.20  equivalents, 60 percent bonds and similar debt securities, and 
 95.21  30 percent in domestic stock calculated using the formula under 
 95.22  section 11A.04, clause (11), the aid under this section ceases 
 95.23  until the five-year annual rate of return equals or exceeds the 
 95.24  performance of a composite portfolio, and 30 percent as 
 95.25  additional funding to support minimum fire state aid for 
 95.26  volunteer firefighter relief associations, with the allocation 
 95.27  made at the same time and under the same procedures in 
 95.28  subdivision 3.  
 95.29     (d) Additional amortization state aid payable to the public 
 95.30  employees retirement association on behalf of a municipality 
 95.31  must be credited by the executive director of the public 
 95.32  employees retirement association against any additional 
 95.33  municipal contribution to which the applicable municipality is 
 95.34  obligated to make under section 353A.09, subdivision 5, or under 
 95.35  section 353.665, subdivision 8. 
 95.36     (e) The amounts required under this subdivision are 
 96.1   annually appropriated to the commissioner of revenue. 
 96.2      Sec. 2.  Minnesota Statutes 1999 Supplement, section 
 96.3   423A.02, subdivision 4, is amended to read: 
 96.4      Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 96.5   total of amortization aid, supplemental amortization aid, and 
 96.6   additional amortization aid under this section payable to the 
 96.7   executive director of the public employees retirement 
 96.8   association on behalf of a municipality to which section 
 96.9   353.665, subdivision 8, paragraph (b), applies, may not exceed 
 96.10  the amount of the additional municipal contribution payable by 
 96.11  an individual municipality under section 353.665, subdivision 8, 
 96.12  paragraph (b). 
 96.13     (b) Any aid amount in excess of the limit under this 
 96.14  subdivision for an individual municipality must be redistributed 
 96.15  to the other municipalities to which section 353.665, 
 96.16  subdivision 8, paragraph (b), applies.  The excess aid must be 
 96.17  distributed in proportion to each municipality's additional 
 96.18  municipal contribution under section 353.665, subdivision 8, 
 96.19  paragraph (b). 
 96.20     (c) When the total aid for each municipality under this 
 96.21  section equals the limit under paragraph (a), any aid in excess 
 96.22  of the limit must be redistributed under subdivisions 1, 1a, and 
 96.23  subdivision 1b. 
 96.24     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
 96.25  423A.02, subdivision 5, is amended to read: 
 96.26     Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
 96.27  amortization state aid, supplemental amortization state aid, and 
 96.28  additional amortization state aid programs terminate as of the 
 96.29  December 31, next following the date of the actuarial valuation 
 96.30  when the assets of the Minneapolis teachers retirement fund 
 96.31  association equal the actuarial accrued liability of that plan 
 96.32  and when the assets of the St. Paul teachers retirement fund 
 96.33  association equal the actuarial accrued liability of that 
 96.34  plan or December 31, 2009, whichever is later. 
 96.35     Sec. 4.  [PUBLIC EMPLOYEES POLICE AND FIRE PLAN; ONE-TIME 
 96.36  SPECIAL OPTIONAL ANNUITY ELECTION FOR CERTAIN FORMER 
 97.1   CONSOLIDATION ACCOUNT RETIREES.] 
 97.2      Subdivision 1.  [ELIGIBILITY.] An individual who was a 
 97.3   deferred annuitant, a service pension annuitant, or who was 
 97.4   receiving disability benefits from the relief association on the 
 97.5   effective date of the consolidation of the applicable local 
 97.6   police or paid firefighter relief association, and who chose 
 97.7   annual adjustments applicable to the public employees retirement 
 97.8   association police and fire plan in elections provided under 
 97.9   Minnesota Statutes, section 353.615, subdivisions 5 and 6 or 
 97.10  353A.08, subdivision 1 or 2, may elect an optional annuity form 
 97.11  under subdivision 2 to provide additional payments to a 
 97.12  surviving spouse. 
 97.13     Subd. 2.  [OPTIONAL ANNUITIES.] The optional annuity form 
 97.14  may be either a 15 percent or a 25 percent joint and survivor 
 97.15  annuity and is without reinstatement in the event of the 
 97.16  surviving spouse predeceasing the member.  The optional annuity 
 97.17  forms must be actuarially equivalent to the service pension 
 97.18  currently paid to the retired consolidated member without 
 97.19  consideration of the value of survivor benefits payable under 
 97.20  Minnesota Statutes, section 353B.11, and must be based upon the 
 97.21  age of the member and the age of the spouse of the member as of 
 97.22  October 1, 2000.  
 97.23     Subd. 3.  [ADDITIONAL SURVIVOR BENEFIT.] An optional 
 97.24  annuity under subdivision 2 is payable in addition to any 
 97.25  applicable survivor benefit payable under Minnesota Statutes, 
 97.26  section 353.11.  An optional annuity under subdivision 2 when 
 97.27  combined with applicable survivor benefits under Minnesota 
 97.28  Statutes, section 353.11, must not exceed the benefit payable to 
 97.29  the deceased service or disability pensioner immediately prior 
 97.30  to death.  
 97.31     Subd. 4.  [ELECTION.] (a) To be valid, an optional annuity 
 97.32  form under subdivision 2 must be elected in writing on a form 
 97.33  prescribed by the executive director of the public employees 
 97.34  retirement association and signed by the eligible service 
 97.35  pensioner or disabilitant before October 1, 2000.  Once 
 97.36  selected, the optional annuity is irrevocable. 
 98.1      (b) The executive director of the public employees 
 98.2   retirement association shall provide counseling to members 
 98.3   regarding the election of an optional annuity form under this 
 98.4   section, including the impact on current benefit levels payable 
 98.5   if an option annuity form is elected. 
 98.6      Sec. 5.  [EFFECTIVE DATE.] 
 98.7      Sections 1 to 4 are effective on the day following final 
 98.8   enactment. 
 98.9                              ARTICLE 10
 98.10                 PERA LOCAL CORRECTIONAL RETIREMENT
 98.11                         PLAN MODIFICATIONS
 98.12     Section 1.  Minnesota Statutes 1999 Supplement, section 
 98.13  353E.02, is amended to read: 
 98.14     353E.02 [CORRECTIONAL SERVICE EMPLOYEES RETIREMENT PLAN 
 98.15  MEMBERSHIP.] 
 98.16     Subdivision 1.  [RETIREMENT COVERAGE.] Local government 
 98.17  correctional service employees are members of the local 
 98.18  government correctional service retirement plan established by 
 98.19  this chapter. 
 98.20     Subd. 2.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 98.21  EMPLOYEE.] (a) A local government correctional service employee, 
 98.22  for purposes of subdivision 1, is a person who whom the employer 
 98.23  certifies: 
 98.24     (1) is employed in a county-administered jail or 
 98.25  correctional facility or in a regional correctional facility 
 98.26  administered by multiple counties county correctional 
 98.27  institution as a correctional guard or officer, a joint 
 98.28  jailer/dispatcher, or as a supervisor of correctional guards or 
 98.29  officers or of joint jailers/dispatchers; 
 98.30     (2) spends at least 95 percent of the employee's working 
 98.31  time in direct contact with persons confined in the jail or 
 98.32  facility, as certified in writing, in advance, by the employer 
 98.33  to the executive director of the association is directly 
 98.34  responsible for the direct security, custody, and control of the 
 98.35  county correctional institution and its inmates; 
 98.36     (3) is expected to respond to incidents within the county 
 99.1   correctional institution as part of the person's regular 
 99.2   employment duties and is trained to do so; and 
 99.3      (3) (4) is a "public employee" as defined in section 
 99.4   353.01, but is not a member of the public employees police and 
 99.5   fire fund. 
 99.6      (b) The certification required under paragraph (a) must be 
 99.7   made in writing on a form prescribed by the executive director 
 99.8   of the public employees retirement association. 
 99.9      (c) A person who was a member of the local government 
 99.10  correctional service retirement plan on the day before the 
 99.11  effective date of this section remains a member of the plan 
 99.12  after the effective date of this section for the duration of the 
 99.13  person's employment in that county correctional institution 
 99.14  position, even if the person's subsequent service in this 
 99.15  position does not meet the requirements set forth in paragraph 
 99.16  (a). 
 99.17     Subd. 3.  [COUNTY CORRECTIONAL INSTITUTION.] A county 
 99.18  correctional institution is: 
 99.19     (1) a jail administered by a county; 
 99.20     (2) a correctional facility administered by a county; or 
 99.21     (3) a regional correctional facility administered by or on 
 99.22  behalf of multiple counties. 
 99.23     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
 99.24  353E.03, is amended to read: 
 99.25     353E.03 [CORRECTIONAL SERVICE PLAN CONTRIBUTIONS.] 
 99.26     Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
 99.27  correctional service employee shall make an employee 
 99.28  contribution in an amount equal to 5.83 6.01 percent of salary. 
 99.29     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
 99.30  contribute for a local government correctional service employee 
 99.31  an amount equal to 8.75 9.02 percent of salary. 
 99.32     Sec. 3.  [EFFECTIVE DATE.] 
 99.33     Section 1 is effective on the day following final enactment.
 99.34  Section 2 is effective on the first day of the first full pay 
 99.35  period beginning after January 1, 2002. 
 99.36                             ARTICLE 11
100.1                        TEACHER RETIREMENT AND
100.2                           RELATED CHANGES
100.3      Section 1.  Minnesota Statutes 1998, section 122A.46, 
100.4   subdivision 1, is amended to read: 
100.5      Subdivision 1.  [TEACHERS DEFINED.] As used in this 
100.6   section, the term "teachers" shall have the meaning given it in 
100.7   section 122A.15, subdivision 1.  The term "teachers" also 
100.8   includes any teacher in the classifications included in the 
100.9   professional state residential instructional unit, under section 
100.10  179A.10, subdivision 2, clause (16). 
100.11     Sec. 2.  Minnesota Statutes 1998, section 122A.46, is 
100.12  amended by adding a subdivision to read: 
100.13     Subd. 1a.  [APPOINTING AUTHORITY.] For purposes of teachers 
100.14  included in the professional state residential instructional 
100.15  unit, the term "school board" includes the appointing authority 
100.16  as defined in section 43A.02, subdivision 5. 
100.17     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
100.18  354.536, subdivision 1, is amended to read: 
100.19     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
100.20  teacher who has at least three years of allowable service credit 
100.21  with the teachers retirement association is entitled to purchase 
100.22  up to ten years of allowable and formula service credit for 
100.23  nonprofit community-based corporation, private, or parochial 
100.24  school teaching service by making payment under section 356.55, 
100.25  provided that the teacher is not entitled to receive a current 
100.26  or deferred age and service retirement annuity or disability 
100.27  benefit from the applicable employer-sponsored pension plan and 
100.28  has not purchased service credit from the applicable defined 
100.29  benefit employer-sponsored pension plan for that service. 
100.30     Sec. 4.  [354A.051] [MTRFA COVERAGE FOR UNION BUSINESS 
100.31  AGENTS.] 
100.32     Subdivision 1.  [AUTHORIZATION.] A member of the 
100.33  Minneapolis teachers retirement fund association on a leave of 
100.34  absence from a teaching position with special school district 
100.35  No. 1, and who is employed by an employee organization 
100.36  representing Minneapolis teachers retirement fund association 
101.1   active members, may elect under subdivision 2 to be a member of 
101.2   the coordinated program of the association for service with that 
101.3   employee organization, subject to the limitations specified in 
101.4   subdivisions 3, 4, and 5. 
101.5      Subd. 2.  [ELECTION.] Except as indicated in subdivision 3, 
101.6   a person described in subdivision 1 must be covered by the 
101.7   Minneapolis teachers retirement fund association coordinated 
101.8   program for employment with the employer organization if the 
101.9   person files a written election to be covered with the executive 
101.10  director of the teachers retirement fund association within 90 
101.11  days of first being employed by the employee organization, or 
101.12  within 90 days of the start of the first leave of absence due to 
101.13  service as an employee organization business agent, whichever is 
101.14  later. 
101.15     Subd. 3.  [WAIVER OF LEAVE COVERAGE.] Coverage under this 
101.16  section does not apply to any leave period or portion of a leave 
101.17  period for which a person has received service credit or is 
101.18  eligible to receive service credit for the leave period under 
101.19  any leave of absence provision in chapter 354A, any other 
101.20  applicable law, or bylaws or articles of incorporation of the 
101.21  association.  The person may waive eligibility to receive 
101.22  service credit under a leave of absence provision and be covered 
101.23  by this section for the applicable period by filing a waiver 
101.24  with the executive director within 90 days of the start of the 
101.25  leave. 
101.26     Subd. 4.  [COVERED SALARY LIMITATION.] (a) The covered 
101.27  salary for an employee of the employee organization covered by 
101.28  the coordinated program of the Minneapolis teachers retirement 
101.29  fund association under this section is limited to the lesser of: 
101.30     (1) the person's actual salary from the employee 
101.31  organization as defined in section 354A.011, subdivision 24; or 
101.32     (2) 75 percent of the salary of the governor as set under 
101.33  section 15A.082. 
101.34     (b) The limited covered salary determined under this 
101.35  paragraph must be used in determining member, employer, and 
101.36  employer additional contributions under section 354A.12, and in 
102.1   determining annuities and other benefits under sections 354A.30 
102.2   to 354A.41 and chapter 356. 
102.3      Subd. 5.  [ANNUITY RECEIPT REQUIREMENTS.] A retirement 
102.4   annuity is only payable from the coordinated program of the 
102.5   Minneapolis teachers retirement fund association to a person 
102.6   described in subdivision 1 if the person has met all applicable 
102.7   requirements, including the termination by the person from 
102.8   employment by the employee organization and by the school 
102.9   district.  The reemployed annuitant earnings limitation in 
102.10  section 354A.31, subdivision 3, applies if the person retires 
102.11  and is subsequently reemployed while an annuitant by the 
102.12  employee organization or by any other entity employing persons 
102.13  who are members of the applicable teachers retirement fund 
102.14  association by virtue of that employment. 
102.15     Subd. 6.  [CONTRIBUTION REQUIREMENTS.] The member, 
102.16  employer, and employer additional contributions required by 
102.17  section 354A.12 are the obligation of the person who elects 
102.18  coverage by the coordinated program of the Minneapolis teachers 
102.19  retirement fund association, but the employee organization may 
102.20  pay the employer and employer additional contributions.  
102.21  Contributions made by the person must be made by salary 
102.22  deduction.  Contributions made by the employee organization must 
102.23  be made as provided in section 354A.12. 
102.24     Subd. 7.  [BOARD INELIGIBILITY.] A person employed by an 
102.25  employee organization who retains active membership in the 
102.26  teachers retirement fund association under this section is not 
102.27  eligible for election to the board of trustees of the teachers 
102.28  retirement fund association. 
102.29     Sec. 5.  Minnesota Statutes 1999 Supplement, section 
102.30  354A.101, subdivision 1, is amended to read: 
102.31     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
102.32  teacher who has at least three years of allowable service credit 
102.33  with the teachers retirement fund association is entitled to 
102.34  purchase up to ten years of allowable service credit 
102.35  for nonprofit community-based corporation, private, or parochial 
102.36  school teaching service by making payment under section 356.55, 
103.1   provided that the teacher is not entitled to receive a current 
103.2   or deferred age and service retirement annuity or disability 
103.3   benefit from the applicable employer-sponsored pension plan and 
103.4   has not purchased service credit from the applicable defined 
103.5   benefit employer-sponsored pension plan for that service. 
103.6      Sec. 6.  [ELECTION OF COVERAGE BY EMPLOYEE OF EMPLOYEE 
103.7   ORGANIZATION REPRESENTING MINNEAPOLIS TEACHERS RETIREMENT FUND 
103.8   ASSOCIATION ACTIVE MEMBERS.] 
103.9      Subdivision 1.  [ELIGIBILITY ELECTION.] Notwithstanding the 
103.10  election date requirements in section 354A.051, subdivision 2, a 
103.11  person who is currently employed as a business agent by an 
103.12  employee organization representing Minneapolis teachers 
103.13  retirement fund association active members and who has been on a 
103.14  mobility leave or leaves from special school district No. 1 
103.15  since March 23, 1998, may make a written election to be covered 
103.16  under section 354A.051.  To be valid, that written election must 
103.17  be on a form specified by the executive director of the 
103.18  Minneapolis teachers retirement fund association and must be 
103.19  filed with the executive director within 90 days following the 
103.20  effective date of this section. 
103.21     Subd. 2.  [PAYMENT REQUIREMENTS.] If a valid election is 
103.22  made under subdivision 1, an eligible individual under 
103.23  subdivision 1 is required to pay, in a lump sum within 90 days 
103.24  of the effective date of this section, any additional employee, 
103.25  employer, and employer additional contributions based on the 
103.26  eligible individual's salary and employment with the employee 
103.27  organization, as required by the election, compared to amounts 
103.28  previously paid or payable.  These amounts are in addition to 
103.29  any amounts previously payable.  The additional contribution 
103.30  requirements are to be computed from March 23, 1998, to the date 
103.31  payroll deductions are first made on the high contribution 
103.32  requirements.  The lump sum payment under this subdivision must 
103.33  include 8.5 percent annual interest.  The amounts required under 
103.34  this subdivision are the obligation of the eligible individual, 
103.35  but the employee organization may pay the additional employer 
103.36  and employer additional amounts with applicable interest. 
104.1      Subd. 3.  [SALARY CREDIT GRANT.] The additional salary 
104.2   credit is to be granted to the account of the eligible 
104.3   individual upon payment of amounts required under this section. 
104.4      Sec. 7.  [SPECIAL PART-TIME TEACHER PROGRAM AUTHORITY; 
104.5   CERTAIN TEACHERS.] 
104.6      (a) Notwithstanding the requirement in Minnesota Statutes, 
104.7   section 354.66, subdivision 2, that part-time teacher program 
104.8   agreements must be executed before October 1 of the school year 
104.9   for which the teacher requests to make retirement contributions 
104.10  described in the part-time teacher program, an eligible teacher 
104.11  under paragraph (b) is authorized to participate in the 
104.12  part-time teacher program under Minnesota Statutes, section 
104.13  354.66, during the 1999-2000 school year. 
104.14     (b) An eligible teacher is a teacher: 
104.15     (1) employed by school district No. 11 (Anoka-Hennepin); 
104.16     (2) whose part-time teaching agreement under Minnesota 
104.17  Statutes, section 354.66, was executed after October 1, 1999, 
104.18  but before the end of the 1999-2000 school year; and 
104.19     (3) was born on October 16, 1947, or October 19, 1957. 
104.20     (c) If full-time equivalent employee contributions were not 
104.21  made for the full period covered by the part-time teaching 
104.22  agreement indicated under paragraph (b), any omission or 
104.23  deficiency in employee contributions must be paid by the 
104.24  employee on or before the due date of any payment required under 
104.25  Minnesota Statutes, section 354.66, subdivision 4. 
104.26     (d) Notwithstanding Minnesota Statutes, section 354.66, 
104.27  subdivision 2, one-quarter of the fine required under that 
104.28  subdivision is waived if the part-time teaching agreement is 
104.29  filed with the teachers retirement association by May 30, 2000.  
104.30  If a part-time teaching agreement referred to under paragraph 
104.31  (b) is not filed with the teachers retirement association before 
104.32  July 1, 2000, the authority provided by this section is voided. 
104.33     Sec. 8.  [EFFECTIVE DATE.] 
104.34     Sections 1 to 7 are effective on the day following final 
104.35  enactment. 
104.36                             ARTICLE 12
105.1                        MNSCU PENSION COVERAGE
105.2                         AND RELATED CHANGES
105.3      Section 1.  Minnesota Statutes 1998, section 136F.43, 
105.4   subdivision 1, is amended to read: 
105.5      Subdivision 1.  [DEFINITION.] As used in this section, 
105.6   "teacher" means a person on the instructional or administrative 
105.7   staff of the state colleges and universities who is a member of 
105.8   the teachers retirement association under chapter 354, who is a 
105.9   member of a teachers retirement fund association under chapter 
105.10  354A, or who is covered by the unclassified employees plan under 
105.11  chapter 352D or individual retirement account plan under chapter 
105.12  354B.  It shall not include a chancellor, deputy chancellor, or 
105.13  vice-chancellor. 
105.14     Sec. 2.  Minnesota Statutes 1998, section 136F.43, 
105.15  subdivision 2, is amended to read: 
105.16     Subd. 2.  [GRANTING AUTHORITY.] The board may grant an 
105.17  extended leave of absence without salary to a full-time teacher 
105.18  who has been employed by the board for at least five years and 
105.19  has at least ten years of allowable service as defined in 
105.20  section 354.05, subdivision 13 one or a combination of the 
105.21  retirement plans specified in subdivision 1.  The maximum 
105.22  duration of an extended leave of absence pursuant to this 
105.23  section shall be determined by mutual agreement of the board and 
105.24  the teacher at the time the leave is granted and shall be at 
105.25  least three but no more than five years.  An extended leave of 
105.26  absence under this section shall be taken by mutual consent of 
105.27  the board and the teacher.  No teacher may receive more than one 
105.28  leave of absence under this section.  
105.29     Sec. 3.  Minnesota Statutes 1998, section 136F.43, 
105.30  subdivision 6, is amended to read: 
105.31     Subd. 6.  [ALTERNATE LEAVE.] The board may grant a teacher 
105.32  a leave of absence which is not subject to the provisions of 
105.33  this section and either section 354.094 or section 354A.091. 
105.34     Sec. 4.  Minnesota Statutes 1998, section 136F.45, 
105.35  subdivision 1a, is amended to read: 
105.36     Subd. 1a.  [SUBSEQUENT VENDOR CONTRACTS.] (a) The board may 
106.1   limit the number of vendors under subdivision 1. 
106.2      (b) In addition to any other tax-sheltered annuity program 
106.3   investment options, the board may offer as an investment option 
106.4   the Minnesota supplemental investment fund administered by the 
106.5   state board of investment under section 11A.17. 
106.6      (c) For the tax-sheltered annuity program vendor contracts 
106.7   to be executed for the period beginning after July 1, 2000, the 
106.8   board shall actively solicit participation of and shall include 
106.9   as vendors lower expense and "no-load" mutual funds or 
106.10  equivalent investment products as those terms are defined by the 
106.11  federal securities and exchange commission.  To the extent 
106.12  possible, in addition to a range of insurance annuity contract 
106.13  providers and other mutual fund provider arrangements, the board 
106.14  must assure that no less than five insurance annuity providers 
106.15  and no less than one nor more than three lower expense and 
106.16  "no-load" mutual funds or equivalent investment products will be 
106.17  made available for direct-access by employee participants.  To 
106.18  the extent that offering a lower expense "no-load" product 
106.19  increases the total necessary and reasonable expenses of the 
106.20  program and if the board is unable to negotiate a rebate of fees 
106.21  from the mutual fund or equivalent investment product providers, 
106.22  the board may charge the participants utilizing the lower 
106.23  expense "no-load" mutual fund products a fee to cover those 
106.24  expenses.  The participant fee may not exceed one percent of the 
106.25  participant's annual contributions or $20 per participant per 
106.26  year, whichever is greater.  Any excess fee revenue generated 
106.27  under this subdivision must be reimbursed to participant 
106.28  accounts in the manner provided in subdivision 3a. 
106.29     Sec. 5.  [354.539] [USE OF COLLEGE SUPPLEMENTAL RETIREMENT 
106.30  FUNDS TO PURCHASE SERVICE CREDIT.] 
106.31     (a) Unless prohibited by or subject to a penalty under 
106.32  federal law, a teacher who is a participant in the college 
106.33  supplemental retirement plan established under chapter 354C may 
106.34  utilize the teacher's supplemental plan account to purchase 
106.35  service credit under sections 354.53, 354.533, 354.534, 354.535, 
106.36  354.536, 354.537, and 354.538. 
107.1      (b) At the request of a member, if determined by the 
107.2   executive director to be eligible to purchase service credit, 
107.3   the executive director shall notify the board of the Minnesota 
107.4   state colleges and universities system of the cost of the 
107.5   purchase and shall request the transfer of funds from the 
107.6   member's college supplemental retirement account to the teachers 
107.7   retirement association.  Upon receipt of the full prior service 
107.8   credit purchase payment amount, the teachers retirement 
107.9   association shall grant the requested allowable and formula 
107.10  service credit. 
107.11     Sec. 6.  Minnesota Statutes 1998, section 354A.091, 
107.12  subdivision 1, is amended to read: 
107.13     Subdivision 1.  [RETIREMENT CONTRIBUTIONS.] Notwithstanding 
107.14  any provision to the contrary of this chapter or the articles of 
107.15  incorporation or bylaws of an association relating to the salary 
107.16  figure to be used for the determination of contributions or the 
107.17  accrual of service credit an elementary, secondary, or technical 
107.18  college teacher in the public schools of a city of the first 
107.19  class who is granted an extended leave of absence pursuant to 
107.20  section 122A.46, or a teacher who is granted an extended leave 
107.21  of absence under section 136F.43, may pay employee contributions 
107.22  to the applicable association and shall be entitled to receive 
107.23  allowable service credit in that association for each year of 
107.24  leave, provided the member and the employing board make the 
107.25  required employer contributions, in any proportion they may 
107.26  agree upon, to that association during the period of leave which 
107.27  shall not exceed five years.  The state shall not make an 
107.28  employer contribution on behalf of the teacher.  The employee 
107.29  and employer contributions shall be based upon the rates of 
107.30  contribution prescribed by section 354A.12 as applied to a 
107.31  salary figure equal to the teacher's actual covered salary for 
107.32  the plan year immediately preceding the leave.  Payment of the 
107.33  employee and employer contributions authorized pursuant to this 
107.34  section shall be made on or before June 30 of the fiscal year 
107.35  for which service credit is to be received.  No allowable 
107.36  service with respect to a year of extended leave of absence 
108.1   shall be credited to a teacher until payment of the required 
108.2   employee and employer contributions has been received by the 
108.3   association. 
108.4      Sec. 7.  Minnesota Statutes 1998, section 354A.091, 
108.5   subdivision 2, is amended to read: 
108.6      Subd. 2.  [MEMBERSHIP RETENTION.] A teacher on extended 
108.7   leave pursuant to under either section 122A.46 or 136F.43 whose 
108.8   employee and employer contributions are made to the applicable 
108.9   teachers retirement fund association pursuant to subdivision 1 
108.10  shall retain membership in the association for each year during 
108.11  which the contributions are made, under the same terms and 
108.12  conditions as if the teacher had continued to teach in the 
108.13  district. 
108.14     Sec. 8.  Minnesota Statutes 1998, section 354A.091, 
108.15  subdivision 3, is amended to read: 
108.16     Subd. 3.  [EFFECT OF NONPAYMENT.] A teacher on extended 
108.17  leave pursuant to under either section 122A.46 or 136F.43 who 
108.18  does not make employee contributions or whose employer 
108.19  contribution is not made to the applicable teachers retirement 
108.20  fund association in any year shall be deemed to have ceased to 
108.21  be an active member of the association and to have ceased to 
108.22  render teaching services beginning in that year for purposes of 
108.23  this chapter and the articles of incorporation and bylaws of the 
108.24  association, and may not pay employee or employer contributions 
108.25  into the fund in any subsequent year of the leave.  Nonpayment 
108.26  of contributions into the fund shall not affect the rights or 
108.27  obligations of the teacher or the employing school district 
108.28  under section 122A.46 or the Minnesota state colleges and 
108.29  universities system under section 136F.43. 
108.30     Sec. 9.  Minnesota Statutes 1998, section 354A.091, 
108.31  subdivision 5, is amended to read: 
108.32     Subd. 5.  [APPLICABILITY.] The provisions of this section 
108.33  shall not apply to a teacher who is discharged pursuant to 
108.34  section 122A.41 while the teacher is on an extended leave of 
108.35  absence pursuant to section 122A.46.  The provisions of this 
108.36  section also do not apply to a teacher who is discharged for 
109.1   cause while the teacher is on an extended leave of absence under 
109.2   section 136F.43. 
109.3      Sec. 10.  Minnesota Statutes 1998, section 354A.091, 
109.4   subdivision 6, is amended to read: 
109.5      Subd. 6.  A teacher who makes employee contributions to and 
109.6   receives allowable service credit in the applicable teacher's 
109.7   retirement fund association pursuant to this section may not 
109.8   make employee contributions or receive allowable service credit 
109.9   for the same period of time in any other Minnesota public 
109.10  employee pension plan, except a volunteer firefighters' relief 
109.11  association governed by sections 69.771 to 69.776.  This 
109.12  subdivision shall not be construed to prohibit a member who pays 
109.13  employee contributions and receives allowable service credit in 
109.14  the fund pursuant to this section in any year from being 
109.15  employed as a substitute teacher by any school district during 
109.16  that year.  Notwithstanding the provisions of this chapter or 
109.17  the bylaws of a retirement association, a teacher may not pay 
109.18  retirement contributions or receive allowable service credit in 
109.19  the fund for teaching service rendered for any part of any year 
109.20  for which the teacher pays retirement contributions or receives 
109.21  allowable service credit pursuant to section 354.094 or this 
109.22  section while on an extended leave of absence pursuant to under 
109.23  either section 122A.46 or section 136F.43. 
109.24     Sec. 11.  [354A.106] [USE OF COLLEGE SUPPLEMENTAL 
109.25  RETIREMENT FUNDS TO PURCHASE SERVICE CREDIT.] 
109.26     (a) Unless prohibited by or subject to a penalty under 
109.27  federal law, a teacher who is a participant in the college 
109.28  supplemental retirement plan established under chapter 354C may 
109.29  utilize the teacher's supplemental plan account to purchase 
109.30  service credit under sections 354A.097, 354A.098, 354A.099, 
109.31  354A.101, 354A.102, 354A.103, and 354A.104. 
109.32     (b) At the request of a member, if determined by the 
109.33  executive director of the applicable teachers retirement fund 
109.34  association to be eligible to purchase service credit, the 
109.35  executive director shall notify the board of the Minnesota state 
109.36  colleges and universities system of the cost of the purchase and 
110.1   shall request the transfer of funds from the member's college 
110.2   supplemental retirement account to the applicable teachers 
110.3   retirement fund association.  Upon receipt of the full prior 
110.4   service credit purchase payment amount, the applicable teachers 
110.5   retirement fund association shall grant the requested allowable 
110.6   and formula service credit. 
110.7      Sec. 12.  Minnesota Statutes 1998, section 354B.23, 
110.8   subdivision 5a, is amended to read: 
110.9      Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
110.10  to the plan exceed limits imposed by federal law or 
110.11  regulation and it is necessary to return contributions to comply 
110.12  with the federal limits, the excess employee contributions must 
110.13  be returned to the employee and to the excess employer in the 
110.14  same proportions as the contributions were made contributions 
110.15  must be reallocated in accordance with section 415 of the 
110.16  federal Internal Revenue Code, as amended, and the applicable 
110.17  federal regulations and revenue rulings. 
110.18     (b) When an employer contribution required under section 
110.19  354B.24 due to a sabbatical leave is made after completion of 
110.20  the leave or an employer contribution is made due to omitted 
110.21  deductions under subdivision 5, and these employer contributions 
110.22  cause or would cause total contributions to the plan to exceed 
110.23  limits imposed by federal law or regulation, the employer must 
110.24  make that portion of the contribution that would exceed the 
110.25  federal limit during the next calendar year. 
110.26     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
110.27  subdivision 1a, is amended to read: 
110.28     Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
110.29  to the plan exceed limits imposed by federal law or 
110.30  regulation and it is necessary to return contributions to comply 
110.31  with the federal limits, one-half of the excess contributions 
110.32  must be returned to, the excess employee contributions must be 
110.33  returned to the employee and one-half to the excess employer 
110.34  contributions must be reallocated in accordance with section 415 
110.35  of the federal Internal Revenue Code, as amended, and the 
110.36  applicable federal regulations and revenue rulings. 
111.1      (b) When an employer contribution is made due to omitted 
111.2   deductions under subdivision 2, and these employer contributions 
111.3   cause or would cause total contributions to the plan to exceed 
111.4   limits imposed by federal law or regulation, the employer must 
111.5   make that portion of the contribution that would exceed the 
111.6   federal limit during the next calendar year. 
111.7      Sec. 14.  Minnesota Statutes 1998, section 354C.165, is 
111.8   amended to read: 
111.9      354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
111.10  DISTRIBUTIONS.] 
111.11     (a) Except as provided in paragraph (c), no participant may 
111.12  obtain a loan from the plan or obtain any distribution from the 
111.13  plan at a time before the participant terminates the employment 
111.14  that gave rise to plan coverage. 
111.15     (b) No amounts to the credit of the plan are assignable 
111.16  either in law or in equity, are subject to state estate tax, or 
111.17  are subject to execution, levy, attachment, garnishment, or 
111.18  other legal process, except as provided in section 518.58, 
111.19  518.581, or 518.6111.  
111.20     (c) Unless prohibited by or subject to a penalty under 
111.21  federal law, a teacher who is a participant in the supplemental 
111.22  retirement plan may request, in writing, a transfer of all or a 
111.23  portion of the funds accumulated in the person's supplemental 
111.24  plan account to the teachers retirement association to purchase 
111.25  service credit under sections 354.53, 354.533, 354.534, 354.535, 
111.26  354.536, 354.537, and 354.538 or to the teachers retirement fund 
111.27  association to purchase service credit under sections 354A.097, 
111.28  354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.  
111.29  Upon receipt of a valid request, the board shall execute the 
111.30  transfer.  The transfer must be a fund-to-fund transfer, and in 
111.31  no event shall the participant directly receive any of the funds 
111.32  while still employed by the board.  In no event may the board 
111.33  transfer more than the participant's account balance.  The 
111.34  board, in cooperation with the executive director of the 
111.35  teachers retirement association, shall develop the forms for 
111.36  requesting a transfer and the procedures for executing the 
112.1   requested transfers. 
112.2      Sec. 15.  Minnesota Statutes 1999 Supplement, section 
112.3   356.24, subdivision 1, is amended to read: 
112.4      Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
112.5   for a school district or other governmental subdivision or state 
112.6   agency to levy taxes for, or contribute public funds to a 
112.7   supplemental pension or deferred compensation plan that is 
112.8   established, maintained, and operated in addition to a primary 
112.9   pension program for the benefit of the governmental subdivision 
112.10  employees other than: 
112.11     (1) to a supplemental pension plan that was established, 
112.12  maintained, and operated before May 6, 1971; 
112.13     (2) to a plan that provides solely for group health, 
112.14  hospital, disability, or death benefits; 
112.15     (3) to the individual retirement account plan established 
112.16  by chapter 354B; 
112.17     (4) to a plan that provides solely for severance pay under 
112.18  section 465.72 to a retiring or terminating employee; 
112.19     (5) for employees other than personnel employed by the 
112.20  state university board or the community college board and 
112.21  covered by the board of trustees of the Minnesota state colleges 
112.22  and universities supplemental retirement plan under chapter 
112.23  354C, if provided for in a personnel policy of the public 
112.24  employer or in the collective bargaining agreement between the 
112.25  public employer and the exclusive representative of public 
112.26  employees in an appropriate unit, in an amount matching employee 
112.27  contributions on a dollar for dollar basis, but not to exceed an 
112.28  employer contribution of $2,000 a year per employee; 
112.29     (i) to the state of Minnesota deferred compensation plan 
112.30  under section 352.96; or 
112.31     (ii) in payment of the applicable portion of the premium on 
112.32  a tax-sheltered annuity contract qualified under section 403(b) 
112.33  of the Internal Revenue Code, if purchased from a qualified 
112.34  insurance company, or to a qualified investment entity, as 
112.35  defined in subdivision 1a, and, in either case, if the employing 
112.36  unit has complied with any applicable pension plan provisions of 
113.1   the Internal Revenue Code with respect to the tax-sheltered 
113.2   annuity program during the preceding calendar year; or 
113.3      (6) for personnel employed by the state university board or 
113.4   the community college board and not covered by clause (5), to 
113.5   the supplemental retirement plan under chapter 354C, if provided 
113.6   for in a personnel policy or in the collective bargaining 
113.7   agreement of the public employer with the exclusive 
113.8   representative of the covered employees in an appropriate unit, 
113.9   in an amount matching employee contributions on a dollar for 
113.10  dollar basis, but not to exceed an employer contribution of 
113.11  $2,000 $2,700 a year for each employee. 
113.12     Sec. 16.  Minnesota Statutes 1998, section 356A.01, 
113.13  subdivision 8, is amended to read: 
113.14     Subd. 8.  [COVERED PENSION PLAN.] "Covered pension plan" 
113.15  means a pension plan or fund listed in section 356.20, 
113.16  subdivision 2, or section 356.30, subdivision 3, or a plan 
113.17  established under chapter 353D, 354B, 354C, or 354D. 
113.18     Sec. 17.  Minnesota Statutes 1998, section 356A.02, is 
113.19  amended to read: 
113.20     356A.02 [FIDUCIARY STATUS AND ACTIVITIES.] 
113.21     Subdivision 1.  [FIDUCIARY STATUS.] For purposes of this 
113.22  chapter, the following persons are fiduciaries: 
113.23     (1) any member of the governing board of a covered pension 
113.24  plan; 
113.25     (2) the chief administrative officer of a covered pension 
113.26  plan or of the state board of investment; 
113.27     (3) any member of the state board of investment; and 
113.28     (4) any member of the investment advisory council; and 
113.29     (5) any member of the advisory committee established under 
113.30  section 354B.25. 
113.31     Subd. 2.  [FIDUCIARY ACTIVITY.] The activities of a 
113.32  fiduciary identified in subdivision 1 that must be carried out 
113.33  in accordance with the requirements of section 356A.04 include, 
113.34  but are not limited to: 
113.35     (1) the investment and reinvestment of plan assets; 
113.36     (2) the determination of benefits; 
114.1      (3) the determination of eligibility for membership or 
114.2   benefits; 
114.3      (4) the determination of the amount or duration of 
114.4   benefits; 
114.5      (5) the determination of funding requirements or the 
114.6   amounts of contributions; 
114.7      (6) the maintenance of membership or financial records; and 
114.8      (7) the expenditure of plan assets; and 
114.9      (8) the selection of financial institutions and investment 
114.10  products. 
114.11     Sec. 18.  Minnesota Statutes 1998, section 356A.06, is 
114.12  amended by adding a subdivision to read: 
114.13     Subd. 10.  [DEFINED CONTRIBUTION PLANS; APPLICATION.] (a) 
114.14  To the extent that a plan governed by chapter 352D, 353D, 354B, 
114.15  354C, or 354D permits a participant or beneficiary to select 
114.16  among investment products for the person's account and the 
114.17  participant or beneficiary exercises that investment 
114.18  self-direction, no fiduciary is liable for any loss which may 
114.19  result from the participant's or beneficiary's exercise of that 
114.20  investment self-direction. 
114.21     (b) Subdivisions 1, 2, 6, 8, and 8a do not apply to plans 
114.22  governed by chapter 354B or 354C. 
114.23     Sec. 19.  [VENDOR CONTRACT EXTENSION OPTION.] 
114.24     Notwithstanding Minnesota Statutes, section 136F.45, 
114.25  subdivision 1a, paragraph (c), the board of trustees of the 
114.26  Minnesota state colleges and universities may, with the 
114.27  agreement of the parties involved, extend the vendor contracts 
114.28  in effect immediately before July 1, 2000, with any revisions 
114.29  that are mutually agreeable to the parties, for up to an 
114.30  additional two years duration. 
114.31     Sec. 20.  [EFFECTIVE DATE.] 
114.32     (a) Sections 4, 5, and 11 to 20 are effective on the day 
114.33  following final enactment. 
114.34     (b) Sections 1, 2, 3, and 6 to 10 are effective on the day 
114.35  following final enactment and apply retroactively to a faculty 
114.36  member of the Lake Superior College who was granted an extended 
115.1   leave of absence under article 19, section 4, of the united 
115.2   technical college educators master agreement for the 1999-2000 
115.3   academic year prior to March 20, 2000. 
115.4      (c) Sections 5, 11, and 14, paragraph (c), expire on May 
115.5   16, 2002. 
115.6                              ARTICLE 13
115.7                    EMPLOYER MATCHING CONTRIBUTION
115.8                    TAX SHELTERED ANNUITY CHANGES
115.9      Section 1.  Minnesota Statutes 1999 Supplement, section 
115.10  356.24, subdivision 1, is amended to read: 
115.11     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
115.12  for a school district or other governmental subdivision or state 
115.13  agency to levy taxes for, or contribute public funds to a 
115.14  supplemental pension or deferred compensation plan that is 
115.15  established, maintained, and operated in addition to a primary 
115.16  pension program for the benefit of the governmental subdivision 
115.17  employees other than: 
115.18     (1) to a supplemental pension plan that was established, 
115.19  maintained, and operated before May 6, 1971; 
115.20     (2) to a plan that provides solely for group health, 
115.21  hospital, disability, or death benefits; 
115.22     (3) to the individual retirement account plan established 
115.23  by chapter 354B; 
115.24     (4) to a plan that provides solely for severance pay under 
115.25  section 465.72 to a retiring or terminating employee; 
115.26     (5) for employees other than personnel employed by the 
115.27  state university board or the community college board and 
115.28  covered by the board of trustees of the Minnesota state colleges 
115.29  and universities supplemental retirement plan under chapter 
115.30  354C, if provided for in a personnel policy of the public 
115.31  employer or in the collective bargaining agreement between the 
115.32  public employer and the exclusive representative of public 
115.33  employees in an appropriate unit, in an amount matching employee 
115.34  contributions on a dollar for dollar basis, but not to exceed an 
115.35  employer contribution of $2,000 a year per employee; 
115.36     (i) to the state of Minnesota deferred compensation plan 
116.1   under section 352.96; or 
116.2      (ii) in payment of the applicable portion of the premium on 
116.3   a tax-sheltered annuity contract qualified contribution made to 
116.4   any investment eligible under section 403(b) of the Internal 
116.5   Revenue Code, if purchased from a qualified insurance company, 
116.6   or to a qualified investment entity, as defined in subdivision 
116.7   1a, and, in either case, if the employing unit has complied with 
116.8   any applicable pension plan provisions of the Internal Revenue 
116.9   Code with respect to the tax-sheltered annuity program during 
116.10  the preceding calendar year; or 
116.11     (6) for personnel employed by the state university board or 
116.12  the community college board and not covered by clause (5), to 
116.13  the supplemental retirement plan under chapter 354C, if provided 
116.14  for in a personnel policy or in the collective bargaining 
116.15  agreement of the public employer with the exclusive 
116.16  representative of the covered employees in an appropriate unit, 
116.17  in an amount matching employee contributions on a dollar for 
116.18  dollar basis, but not to exceed an employer contribution of 
116.19  $2,000 a year for each employee.  
116.20     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
116.21  356.24, subdivision 1b, is amended to read: 
116.22     Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy for 
116.23  unrepresented employees or a collective bargaining agreement or 
116.24  a school board may establish limits on the number of vendors 
116.25  under subdivision 1 that it will utilize and conditions under 
116.26  which the vendors may contact employees both during working 
116.27  hours and after working hours. 
116.28     Sec. 3.  Minnesota Statutes 1998, section 356.24, is 
116.29  amended by adding a subdivision to read: 
116.30     Subd. 1c.  [STATE BOARD OF INVESTMENT REVIEW.] Any 
116.31  insurance company, mutual fund company, or similar company 
116.32  providing investments eligible under section 403(b) of the 
116.33  Internal Revenue Code and eligible to receive employer 
116.34  contributions under this section may request the state board of 
116.35  investment, in conjunction with the department of commerce, to 
116.36  review the financial standing of the company, the 
117.1   competitiveness of its investment options and returns, and the 
117.2   level of all charges and fees impacting those returns.  The 
117.3   state board of investment may establish a fee for each review.  
117.4   The state board of investment must maintain and have available a 
117.5   list of all reviewed companies.  In reviewing companies under 
117.6   this section, the state board of investment must not be 
117.7   considered to be acting as a fiduciary or to be engaged in a 
117.8   fiduciary activity under chapter 356A or common law. 
117.9      Sec. 4.  [REPEALER.] 
117.10     Minnesota Statutes 1999 Supplement, section 356.24, 
117.11  subdivision 1a, is repealed. 
117.12     Sec. 5.  [EFFECTIVE DATE.] 
117.13     Sections 1 to 4 are effective on the day following final 
117.14  enactment. 
117.15                             ARTICLE 14
117.16                        RETIREMENT GENERALLY
117.17     Section 1.  [REPEALER.] 
117.18     Minnesota Statutes 1999 Supplement, section 356.61, is 
117.19  repealed. 
117.20     Sec. 2.  [EFFECTIVE DATE.] 
117.21     Section 1 is effective retroactively to July 1, 1999. 
117.22                             ARTICLE 15
117.23                    VOLUNTEER FIREFIGHTER RELIEF
117.24                        ASSOCIATION CHANGES
117.25     Section 1.  Minnesota Statutes 1999 Supplement, section 
117.26  69.021, subdivision 7, is amended to read: 
117.27     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
117.28  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
117.29  shall apportion the fire state aid relative to the premiums 
117.30  reported on the Minnesota Firetown Premium Reports filed under 
117.31  this chapter to each municipality and/or firefighters' relief 
117.32  association.  
117.33     (b) The commissioner shall calculate an initial fire state 
117.34  aid allocation amount for each municipality or fire department 
117.35  under paragraph (c) and a minimum fire state aid allocation 
117.36  amount for each municipality or fire department under paragraph 
118.1   (d).  The municipality or fire department must receive the 
118.2   larger fire state aid amount. 
118.3      (c) The initial fire state aid allocation amount is the 
118.4   amount available for apportionment as fire state aid under 
118.5   subdivision 5, without inclusion of any additional funding 
118.6   amount to support a minimum fire state aid amount under section 
118.7   423A.02, subdivision 3, allocated one-half in proportion to the 
118.8   population as shown in the last official statewide federal 
118.9   census for each fire town and one-half in proportion to the 
118.10  market value of each fire town, including (1) the market value 
118.11  of tax exempt property and (2) the market value of natural 
118.12  resources lands receiving in lieu payments under sections 
118.13  477A.11 to 477A.14, but excluding the market value of minerals.  
118.14  In the case of incorporated or municipal fire departments 
118.15  furnishing fire protection to other cities, towns, or townships 
118.16  as evidenced by valid fire service contracts filed with the 
118.17  commissioner, the distribution must be adjusted proportionately 
118.18  to take into consideration the crossover fire protection 
118.19  service.  Necessary adjustments shall be made to subsequent 
118.20  apportionments.  In the case of municipalities or independent 
118.21  fire departments qualifying for the aid, the commissioner shall 
118.22  calculate the state aid for the municipality or relief 
118.23  association on the basis of the population and the market value 
118.24  of the area furnished fire protection service by the fire 
118.25  department as evidenced by duly executed and valid fire service 
118.26  agreements filed with the commissioner.  If one or more fire 
118.27  departments are furnishing contracted fire service to a city, 
118.28  town, or township, only the population and market value of the 
118.29  area served by each fire department may be considered in 
118.30  calculating the state aid and the fire departments furnishing 
118.31  service shall enter into an agreement apportioning among 
118.32  themselves the percent of the population and the market value of 
118.33  each service area.  The agreement must be in writing and must be 
118.34  filed with the commissioner. 
118.35     (d) The minimum fire state aid allocation amount is the 
118.36  amount in addition to the initial fire state allocation amount 
119.1   that is derived from any additional funding amount to support a 
119.2   minimum fire state aid amount under section 423A.02, subdivision 
119.3   3, and allocated to municipalities with volunteer firefighter 
119.4   relief associations based on the number of active volunteer 
119.5   firefighters who are members of the relief association as 
119.6   reported in the annual financial reporting for the calendar year 
119.7   1993 to the office of the state auditor, but not to exceed 30 
119.8   active volunteer firefighters, so that all municipalities or 
119.9   fire departments with volunteer firefighter relief associations 
119.10  receive in total at least a minimum fire state aid amount per 
119.11  1993 active volunteer firefighter to a maximum of 30 
119.12  firefighters.  If a relief association did not exist in is 
119.13  established after calendar year 1993 and before calendar year 
119.14  2000, the number of active volunteer firefighters who are 
119.15  members of the relief association as reported in the annual 
119.16  financial reporting for calendar year 1998 to the office of the 
119.17  state auditor, but not to exceed 30 active volunteer 
119.18  firefighters, shall be used in this determination.  If a relief 
119.19  association is established after calendar year 1999, the number 
119.20  of active volunteer firefighters who are members of the relief 
119.21  association as reported in the first annual financial reporting 
119.22  submitted to the office of the state auditor, but not to exceed 
119.23  20 active volunteer firefighters, must be used in this 
119.24  determination. 
119.25     (e) The fire state aid must be paid to the treasurer of the 
119.26  municipality where the fire department is located and the 
119.27  treasurer of the municipality shall, within 30 days of receipt 
119.28  of the fire state aid, transmit the aid to the relief 
119.29  association if the relief association has filed a financial 
119.30  report with the treasurer of the municipality and has met all 
119.31  other statutory provisions pertaining to the aid apportionment. 
119.32     (f) The commissioner may make rules to permit the 
119.33  administration of the provisions of this section.  
119.34     (g) Any adjustments needed to correct prior misallocations 
119.35  must be made to subsequent apportionments. 
119.36     Sec. 2.  [69.041] [SHORTFALL FROM GENERAL FUND.] 
120.1      (a) If the annual funding requirements of fire or police 
120.2   relief associations or consolidation accounts under section 
120.3   69.77, sections 69.771 to 69.775, or section 353A.09, exceed all 
120.4   applicable revenue sources of a given year, including the 
120.5   insurance premium taxes funding the applicable fire or police 
120.6   state aid as set under section 60A.15, subdivision 1, paragraph 
120.7   (e), clauses (1) to (3), the shortfall in the annual funding 
120.8   requirements must be paid from the general fund to the extent 
120.9   appropriated by the legislature. 
120.10     (b) Nothing in this section may be deemed to relieve any 
120.11  municipality from its obligation to a relief association or 
120.12  consolidation account under law. 
120.13     Sec. 3.  Minnesota Statutes 1998, section 69.773, 
120.14  subdivision 1, is amended to read: 
120.15     Subdivision 1.  [APPLICATION.] (a) This section shall apply 
120.16  applies to any firefighters' relief association specified in 
120.17  section 69.771, subdivision 1, which pays or allows for an 
120.18  option of a monthly service pension to a retiring firefighter 
120.19  when at least the minimum requirements for entitlement to a 
120.20  service pension specified in section 424A.02, any applicable 
120.21  special legislation and the articles of incorporation or bylaws 
120.22  of the relief association have been met.  Each firefighters' 
120.23  relief association to which this section applies shall determine 
120.24  the actuarial condition and funding costs of the special fund of 
120.25  the relief association in accordance with subdivisions 2 and 3, 
120.26  the financial requirements of the special fund of the relief 
120.27  association in accordance with subdivision 4 and the minimum 
120.28  obligation of the municipality with respect to the special fund 
120.29  of the relief association in accordance with subdivision 5. 
120.30     (b) If a firefighters relief association that previously 
120.31  provided a monthly benefit service pension discontinues that 
120.32  practice and either replaces the monthly benefit amount with a 
120.33  lump sum benefit amount consistent with section 424A.02, 
120.34  subdivision 3, or purchases an annuity in the same amount as the 
120.35  monthly benefit from an insurance company licensed to do 
120.36  business in this state, the actuarial condition and funding 
121.1   costs, financial, and minimum municipal obligation requirements 
121.2   of section 69.772 apply rather than this section. 
121.3      Sec. 4.  Minnesota Statutes 1998, section 424A.001, 
121.4   subdivision 9, is amended to read: 
121.5      Subd. 9.  [SEPARATE FROM ACTIVE SERVICE.] "Separate from 
121.6   active service" means to permanently cease to perform fire 
121.7   suppression duties with a particular volunteer fire department, 
121.8   to permanently cease to perform fire prevention duties, 
121.9   to permanently cease to supervise fire suppression duties, and 
121.10  to permanently cease to supervise fire prevention duties. 
121.11     Sec. 5.  Minnesota Statutes 1998, section 424A.02, 
121.12  subdivision 3, is amended to read: 
121.13     Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) On or 
121.14  before August 1 of each year as part of the certification of the 
121.15  financial requirements and minimum municipal obligation made 
121.16  pursuant to section 69.772, subdivision 4, or 69.773, 
121.17  subdivision 5, the secretary or some other official of the 
121.18  relief association designated in the bylaws of each relief 
121.19  association shall calculate and certify to the governing body of 
121.20  the applicable qualified municipality the average amount of 
121.21  available financing per active covered firefighter for the most 
121.22  recent three-year period.  The amount of available financing 
121.23  shall include any amounts of fire state aid received or 
121.24  receivable by the relief association, any amounts of municipal 
121.25  contributions to the relief association raised from levies on 
121.26  real estate or from other available revenue sources exclusive of 
121.27  fire state aid, and one-tenth of the amount of assets in excess 
121.28  of the accrued liabilities of the relief association calculated 
121.29  pursuant to sections 69.772, subdivision 2; 69.773, subdivisions 
121.30  2 and 4; or 69.774, subdivision 2, if any.  
121.31     (b) The maximum service pension which the relief 
121.32  association has authority to provide for in its bylaws for 
121.33  payment to a member retiring after the calculation date when the 
121.34  minimum age and service requirements specified in subdivision 1 
121.35  are met must be determined using the table in paragraph (c) or 
121.36  (d), whichever applies. 
122.1      (c) For a relief association where the governing bylaws 
122.2   provide for a monthly service pension to a retiring member, the 
122.3   maximum monthly service pension amount per month for each year 
122.4   of service credited that may be provided for in the bylaws is 
122.5   the maximum service pension figure corresponding to the average 
122.6   amount of available financing per active covered firefighter: 
122.7     Minimum Average Amount of      Maximum Service Pension
122.8     Available Financing per        Amount Payable per Month
122.9          Firefighter               for Each Year of Service
122.10           $...                             $ .25
122.11             42                               .50
122.12             84                              1.00
122.13            126                              1.50
122.14            168                              2.00
122.15            209                              2.50
122.16            252                              3.00
122.17            294                              3.50
122.18            335                              4.00
122.19            378                              4.50
122.20            420                              5.00
122.21            503                              6.00
122.22            587                              7.00
122.23            672                              8.00
122.24            755                              9.00
122.25            839                             10.00
122.26            923                             11.00
122.27           1007                             12.00
122.28           1090                             13.00
122.29           1175                             14.00
122.30           1259                             15.00
122.31           1342                             16.00
122.32           1427                             17.00
122.33           1510                             18.00
122.34           1594                             19.00
122.35           1677                             20.00
122.36           1762                             21.00
123.1            1845                             22.00
123.2            1888                             22.50
123.3            1929                             23.00
123.4            2014                             24.00
123.5            2098                             25.00
123.6            2183                             26.00
123.7            2267                             27.00
123.8            2351                             28.00
123.9            2436                             29.00
123.10           2520                             30.00
123.11           2604                             31.00
123.12           2689                             32.00
123.13           2773                             33.00
123.14           2857                             34.00
123.15           2942                             35.00
123.16           3026                             36.00
123.17           3110                             37.00
123.18           3963                             38.00
123.19           4047                             39.00
123.20           4137                             40.00
123.21           any amount more than 4137        40.00
123.22     Effective beginning December 31, 2000: 
123.23           4227                             41.00
123.24           4317                             42.00
123.25           4407                             43.00
123.26           4497                             44.00
123.27     Effective beginning December 31, 2001: 
123.28           4587                             45.00
123.29           4677                             46.00
123.30           4767                             47.00
123.31           4857                             48.00
123.32     Effective beginning December 31, 2002: 
123.33           4947                             49.00
123.34           5037                             50.00
123.35           5127                             51.00
123.36           5217                             52.00
124.1      Effective beginning December 31, 2003: 
124.2            5307                             53.00
124.3            5397                             54.00
124.4            5487                             55.00
124.5            5577                             56.00
124.6      (d) For a relief association in which the governing bylaws 
124.7   provide for a lump sum service pension to a retiring member, the 
124.8   maximum lump sum service pension amount for each year of service 
124.9   credited that may be provided for in the bylaws is the maximum 
124.10  service pension figure corresponding to the average amount of 
124.11  available financing per active covered firefighter for the 
124.12  applicable specified period: 
124.13   Minimum Average Amount         Maximum Lump Sum Service
124.14   of Available Financing         Pension Amount Payable
124.15      per Firefighter             for Each Year of Service
124.16          $..                              $10
124.17           11                               20
124.18           16                               30
124.19           23                               40
124.20           27                               50
124.21           32                               60
124.22           43                               80
124.23           54                              100
124.24           65                              120
124.25           77                              140
124.26           86                              160
124.27           97                              180
124.28          108                              200
124.29          131                              240
124.30          151                              280
124.31          173                              320
124.32          194                              360
124.33          216                              400
124.34          239                              440
124.35          259                              480
124.36          281                              520
125.1           302                              560
125.2           324                              600
125.3           347                              640
125.4           367                              680
125.5           389                              720
125.6           410                              760
125.7           432                              800
125.8           486                              900
125.9           540                             1000
125.10          594                             1100
125.11          648                             1200
125.12          702                             1300
125.13          756                             1400
125.14          810                             1500
125.15          864                             1600
125.16          918                             1700
125.17          972                             1800
125.18         1026                             1900
125.19         1080                             2000
125.20         1134                             2100
125.21         1188                             2200
125.22         1242                             2300
125.23         1296                             2400
125.24         1350                             2500
125.25         1404                             2600
125.26         1458                             2700
125.27         1512                             2800
125.28         1566                             2900
125.29         1620                             3000
125.30         1672                             3100
125.31         1726                             3200
125.32         1753                             3250
125.33         1780                             3300
125.34         1820                             3375
125.35         1834                             3400
125.36         1888                             3500
126.1          1942                             3600
126.2          1996                             3700
126.3          2023                             3750
126.4          2050                             3800
126.5          2104                             3900
126.6          2158                             4000
126.7          2212                             4100
126.8          2265                             4200
126.9          2319                             4300
126.10         2373                             4400
126.11         2427                             4500
126.12         2481                             4600
126.13         2535                             4700
126.14         2589                             4800
126.15         2643                             4900
126.16         2697                             5000
126.17         2751                             5100
126.18         2805                             5200
126.19         2859                             5300
126.20         2913                             5400
126.21         2967                             5500
126.22         any amount more than 2967        5500
126.23     Effective beginning December 31, 2000: 
126.24         3021                             5600
126.25         3075                             5700
126.26         3129                             5800
126.27         3183                             5900
126.28         3237                             6000
126.29     Effective beginning December 31, 2001: 
126.30         3291                             6100
126.31         3345                             6200
126.32         3399                             6300
126.33         3453                             6400
126.34         3507                             6500
126.35     Effective beginning December 31, 2002: 
126.36         3561                             6600
127.1          3615                             6700
127.2          3669                             6800
127.3          3723                             6900
127.4          3777                             7000
127.5      Effective beginning December 31, 2003: 
127.6          3831                             7100
127.7          3885                             7200
127.8          3939                             7300
127.9          3993                             7400
127.10         4047                             7500
127.11     (e) For a relief association in which the governing bylaws 
127.12  provide for a monthly benefit service pension as an alternative 
127.13  form of service pension payment to a lump sum service pension, 
127.14  the maximum service pension amount for each pension payment type 
127.15  must be determined using the applicable table contained in this 
127.16  subdivision. 
127.17     (f) If a relief association establishes a service pension 
127.18  in compliance with the applicable maximum contained in paragraph 
127.19  (c) or (d) and the minimum average amount of available financing 
127.20  per active covered firefighter is subsequently reduced because 
127.21  of a reduction in fire state aid or because of an increase in 
127.22  the number of active firefighters, the relief association may 
127.23  continue to provide the prior service pension amount specified 
127.24  in its bylaws, but may not increase the service pension amount 
127.25  until the minimum average amount of available financing per 
127.26  firefighter under the table in paragraph (c) or (d), whichever 
127.27  applies, permits. 
127.28     (g) No relief association is authorized to provide a 
127.29  service pension in an amount greater than $40 per month per year 
127.30  of service credit or in an amount greater than $5,500 lump sum 
127.31  per year of service credit even if the minimum average amount of 
127.32  available financing per firefighter for a relief association 
127.33  providing a monthly benefit service pension is greater than 
127.34  $4,137, or, for a relief association providing a lump sum 
127.35  service pension, is greater than $2,967.  No relief association 
127.36  is authorized to provide a service pension in an amount greater 
128.1   than the largest applicable flexible service pension maximum 
128.2   amount even if the amount of available financing per firefighter 
128.3   is greater than the financing amount associated with the largest 
128.4   applicable flexible service pension maximum. 
128.5      Sec. 6.  Minnesota Statutes 1998, section 424A.02, 
128.6   subdivision 7, is amended to read: 
128.7      Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
128.8   relief association to which this section applies is entitled to 
128.9   a deferred service pension if the member: 
128.10     (1) has completed the lesser of the minimum period of 
128.11  active service with the fire department specified in the bylaws 
128.12  or 20 years of active service with the fire department; 
128.13     (2) has completed at least five years of active membership 
128.14  in the relief association; and 
128.15     (3) separates from active service and membership before 
128.16  reaching age 50 or the minimum age for retirement and 
128.17  commencement of a service pension specified in the bylaws 
128.18  governing the relief association if that age is greater than age 
128.19  50.  
128.20     (b) The deferred service pension starts when the former 
128.21  member reaches age 50 or the minimum age specified in the bylaws 
128.22  governing the relief association if that age is greater than age 
128.23  50 and when the former member makes a valid written application. 
128.24     (c) A relief association that provides a lump sum service 
128.25  pension may, when its governing bylaws so provide, pay interest 
128.26  on the deferred lump sum service pension during the period of 
128.27  deferral.  If provided for in the bylaws, interest must be paid 
128.28  at the rate actually earned on that portion of the assets if the 
128.29  deferred benefit amount is invested by the relief association, 
128.30  but not to exceed the interest rate specified in section 
128.31  356.215, subdivision 4d, and must be in a separate account 
128.32  established and maintained by the relief association or in a 
128.33  separate investment vehicle held by the relief association or, 
128.34  if not, at the interest rate of five percent, compounded 
128.35  annually based on calendar year balances.  
128.36     (d) For a deferred service pension that is transferred to a 
129.1   separate account established and maintained by the relief 
129.2   association or separate investment vehicle held by the relief 
129.3   association, the deferred member bears the full investment risk 
129.4   subsequent to transfer and in calculating the accrued liability 
129.5   of the volunteer firefighter relief association that pays a lump 
129.6   sum service pension, the accrued liability for deferred service 
129.7   pensions is equal to the separate relief association account 
129.8   balance or the fair market value of the separate investment 
129.9   vehicle held by the relief association. 
129.10     (e) The deferred service pension is governed by and must be 
129.11  calculated under the general statute, special law, relief 
129.12  association articles of incorporation, or and relief association 
129.13  bylaw provisions applicable on the date on which the member 
129.14  separated from active service with the fire department and 
129.15  active membership in the relief association. 
129.16     Sec. 7.  Minnesota Statutes 1998, section 424A.02, 
129.17  subdivision 9, is amended to read: 
129.18     Subd. 9.  [LIMITATION ON ANCILLARY BENEFITS.] Any relief 
129.19  association, including any volunteer firefighters relief 
129.20  association governed by section 69.77 or any volunteer 
129.21  firefighters division of a relief association governed by 
129.22  chapter 424, may only pay ancillary benefits which would 
129.23  constitute an authorized disbursement as specified in section 
129.24  424A.05 subject to the following requirements or limitations: 
129.25     (a) (1) With respect to a relief association in which 
129.26  governing bylaws provide for a lump sum service pension to a 
129.27  retiring member, no ancillary benefit may be paid to any former 
129.28  member or paid to any person on behalf of any former member 
129.29  after the former member (1) (i) terminates active service with 
129.30  the fire department and active membership in the relief 
129.31  association; and (2) (ii) commences receipt of a service pension 
129.32  as authorized pursuant to under this section; and 
129.33     (b) (2) With respect to any relief association, no 
129.34  ancillary benefit paid or payable to any member, to any former 
129.35  member, or to any person on behalf of any member or former 
129.36  member, may exceed in amount the total earned service pension of 
130.1   the member or former member.  The total earned service 
130.2   pension shall must be calculated using the service pension 
130.3   amount specified in the bylaws of the relief association and the 
130.4   years of service credited to the member or former member.  The 
130.5   years of service shall must be determined as of (1) (i) the date 
130.6   the member or former member became entitled to the ancillary 
130.7   benefit; or (2) (ii) the date the member or former member died 
130.8   entitling a survivor or the estate of the member or former 
130.9   member to an ancillary benefit.  The ancillary benefit shall 
130.10  must be calculated (1) (i) without regard to whether the member 
130.11  or former member had attained the minimum amount of service and 
130.12  membership credit specified in the governing bylaws; 
130.13  and (2) (ii) without regard to the percentage amounts specified 
130.14  in subdivision 2; except that the bylaws of any relief 
130.15  association may provide for the payment of a survivor benefit in 
130.16  an amount not to exceed five times the yearly service pension 
130.17  amount specified in the bylaws on behalf of any member who dies 
130.18  before having performed five years of active service in the fire 
130.19  department with which the relief association is affiliated. 
130.20     Sec. 8.  Minnesota Statutes 1998, section 424A.02, is 
130.21  amended by adding a subdivision to read: 
130.22     Subd. 9b.  [REPAYMENT OF SERVICE PENSION IN CERTAIN 
130.23  INSTANCES.] If a retired volunteer firefighter does not 
130.24  permanently separate from active firefighting service as 
130.25  required by subdivision 1 and section 424A.001, subdivision 9, 
130.26  by resuming active service as a firefighter in the same 
130.27  volunteer fire department or as a person in charge of 
130.28  firefighters in the same volunteer fire department, no 
130.29  additional service pension amount is payable to the person, no 
130.30  additional service is creditable to the person, and the person 
130.31  shall repay any previously received service pension. 
130.32     Sec. 9.  Minnesota Statutes 1998, section 424A.02, 
130.33  subdivision 13, is amended to read: 
130.34     Subd. 13.  [COMBINED SERVICE PENSIONS.] (a) If the articles 
130.35  of incorporation or bylaws of the associations so provide, a 
130.36  volunteer firefighter with credit for service as an active 
131.1   firefighter in more than one volunteer firefighters relief 
131.2   association is entitled, when the applicable requirements of 
131.3   paragraph (b) are met and when otherwise qualified, to a 
131.4   prorated service credit from each relief association. 
131.5      (b) A volunteer firefighter receiving a prorated service 
131.6   pension under this subdivision must have total service credit of 
131.7   ten years or more, if every affected relief association does not 
131.8   require only a five-year service vesting requirement, or five 
131.9   years or more, if every affected relief association requires 
131.10  only a five-year service vesting requirement, as a member of two 
131.11  or more relief associations is entitled, when otherwise 
131.12  qualified, to a prorated service pension from each association 
131.13  in which.  The member has must have one year or more of service 
131.14  credit in each relief association.  The prorated service pension 
131.15  must be based on the service pension amount in effect for the 
131.16  relief association on the date on which active volunteer 
131.17  firefighting services covered by that relief association 
131.18  terminate.  To receive a service pension under this subdivision, 
131.19  the firefighter must become a member of the second or succeeding 
131.20  association and must give notice of membership to the prior 
131.21  association within two years of the date of termination of 
131.22  active service with the prior association.  The notice must be 
131.23  attested to by the second or subsequent association secretary. 
131.24     Sec. 10.  Minnesota Statutes 1998, section 424A.04, 
131.25  subdivision 1, is amended to read: 
131.26     Subdivision 1.  [MEMBERSHIP.] (a) Every relief association 
131.27  directly associated with a municipal fire department shall be 
131.28  managed by a board of trustees consisting of nine members.  Six 
131.29  trustees shall be elected from the membership of the relief 
131.30  association and three trustees shall be drawn from the officials 
131.31  of the municipalities served by the fire department to which the 
131.32  relief association is directly associated.  The bylaws of a 
131.33  relief association may provide that one of the six trustees 
131.34  elected from the relief association may be a retired member 
131.35  receiving a monthly pension who is elected by the membership of 
131.36  the relief association.  The three ex officio trustees shall be 
132.1   the mayor, the clerk, clerk-treasurer or finance director, and 
132.2   the chief of the municipal fire department.  
132.3      (b) Every relief association that is a subsidiary of an 
132.4   independent nonprofit firefighting corporation shall be managed 
132.5   by a board of trustees consisting of ten members.  Six trustees 
132.6   shall be elected from the membership of the relief association, 
132.7   three trustees shall be drawn from the officials of the 
132.8   municipalities served by the fire department to which the relief 
132.9   association is directly associated, and one trustee shall be the 
132.10  fire chief.  The bylaws of a relief association may provide that 
132.11  one of the six trustees elected from the relief association may 
132.12  be a retired member receiving a monthly pension who is elected 
132.13  by the membership of the relief association.  The three ex 
132.14  officio trustees who are the elected officials shall be selected 
132.15  as follows:  
132.16     (1) if only one municipality contracts with the independent 
132.17  nonprofit firefighting corporation, the ex officio trustees 
132.18  shall be three elected officials of the contracting municipality 
132.19  who are designated by the governing body of the municipality; 
132.20     (2) if two municipalities contract with the independent 
132.21  nonprofit firefighting corporation, the ex officio trustees 
132.22  shall be two elected officials of the largest municipality in 
132.23  population and one elected official of the next largest 
132.24  municipality in population who are designated by the governing 
132.25  bodies of the applicable municipalities; or 
132.26     (3) if three or more municipalities contract with the 
132.27  independent nonprofit corporation, the ex officio trustees shall 
132.28  be one elected official of each of the three largest 
132.29  municipalities in population who are designated by the governing 
132.30  bodies of the applicable municipalities. 
132.31     (c) If a relief association lacks the ex officio board 
132.32  members provided for in paragraph (a) or (b) because the fire 
132.33  department is not located in or associated with an organized 
132.34  municipality, the ex officio board members must be appointed 
132.35  from the fire department service area by the board of 
132.36  commissioners of the applicable county.  The term of these 
133.1   appointed ex officio board members is three years or until the 
133.2   person's successor is qualified, whichever is later. 
133.3      (d) An ex officio trustee under paragraph (a), (b), or (c) 
133.4   shall have all the rights and duties accorded to any other 
133.5   trustee except the right to be an officer of the board of 
133.6   trustees.  
133.7      (e) A board shall have at least three officers, which shall 
133.8   be a president, a secretary and a treasurer.  These officers 
133.9   shall be elected from among the elected trustees by either the 
133.10  full board of trustees or by the membership, as specified in the 
133.11  bylaws, and in no event shall any trustee hold more than one 
133.12  officer position at any one time.  The terms of the elected 
133.13  trustees and of the officers of the board shall be specified in 
133.14  the bylaws of the relief association, but shall not exceed three 
133.15  years.  If the term of the elected trustees exceeds one year, 
133.16  the election of the various trustees elected from the membership 
133.17  shall initially and shall thereafter continue to be staggered on 
133.18  as equal a basis as is practicable. 
133.19     Sec. 11.  Minnesota Statutes 1998, section 424A.05, 
133.20  subdivision 3, is amended to read: 
133.21     Subd. 3.  [AUTHORIZED DISBURSEMENTS FROM THE SPECIAL 
133.22  FUND.] (a) Disbursements from the special fund shall are not 
133.23  permitted to be made for any purpose other than one of the 
133.24  following: 
133.25     (1) For the payment of service pensions to retired members 
133.26  of the relief association if authorized and paid pursuant to law 
133.27  and the bylaws governing the relief association; 
133.28     (2) For the payment of temporary or permanent disability 
133.29  benefits to disabled members of the relief association if 
133.30  authorized and paid pursuant to law and specified in amount in 
133.31  the bylaws governing the relief association; 
133.32     (3) For the payment of survivor benefits to surviving 
133.33  spouses and surviving children, or if none, to designated 
133.34  beneficiaries, of deceased members of the relief association if 
133.35  authorized by and paid pursuant to law and specified in amount 
133.36  in the bylaws governing the relief association; 
134.1      (4) For the payment of any funeral benefits to the 
134.2   surviving spouse, or if no surviving spouse, the estate, of the 
134.3   deceased member of the relief association if authorized by law 
134.4   and specified in amount in the bylaws governing the relief 
134.5   association; 
134.6      (5) For the payment of the fees, dues and assessments to 
134.7   the Minnesota state fire department association and, to the 
134.8   Minnesota area relief association coalition, and to the state 
134.9   volunteer firefighters' benefit association in order to entitle 
134.10  relief association members to membership in and the benefits of 
134.11  these state associations or organizations; and 
134.12     (6) For the payment of administrative expenses of the 
134.13  relief association as authorized pursuant to section 69.80. 
134.14     (b) For purposes of this chapter, a designated beneficiary 
134.15  must be a natural person. 
134.16     Sec. 12.  [VOLUNTEER FIREFIGHTERS LUMP SUM SERVICE 
134.17  BENEFITS.] 
134.18     Subdivision 1.  [APPLICATION.] This section applies to a 
134.19  surviving spouse of a person who: 
134.20     (1) was born on August 18, 1941; 
134.21     (2) was employed as a building inspector by the city of St. 
134.22  Paul; 
134.23     (3) died during the course of his employment duties as a 
134.24  building inspector on December 24, 1997; 
134.25     (4) began service as a volunteer firefighter for the 
134.26  Woodbury fire department in 1980 and continued that service up 
134.27  to the time of his death; and 
134.28     (5) would have been eligible to retire as a volunteer 
134.29  firefighter and receive a lump sum service pension calculated at 
134.30  the rate of $4,000 for each year of service on January 1, 1998. 
134.31     Subd. 2.  [ELIGIBILITY FOR BENEFIT.] Notwithstanding any 
134.32  law to the contrary, the eligible person described in 
134.33  subdivision 1 is entitled to receive a survivor benefit from the 
134.34  Woodbury fire department relief association benefit plan 
134.35  calculated at the rate that would have been in effect had the 
134.36  person described in subdivision 1 lived until January 1, 1998. 
135.1      Subd. 3.  [RESTRICTIONS.] This section does not authorize 
135.2   payment of more than a single survivor benefit to the eligible 
135.3   individual specified in subdivision 1.  If a survivor benefit 
135.4   has been paid to the eligible individual by the Woodbury fire 
135.5   department relief association, this section authorizes payment 
135.6   to the eligible individual of the difference between the amount 
135.7   previously paid and the amount payable under the Woodbury fire 
135.8   department relief association benefit plan in effect on January 
135.9   1, 1998, assuming the volunteer firefighter survived and 
135.10  provided service to that date. 
135.11     Sec. 13.  [EFFECTIVE DATE.] 
135.12     (a) Sections 1 to 5 and 7 to 11 are effective on the day 
135.13  following final enactment. 
135.14     (b) Section 6 is effective on the day following final 
135.15  enactment and, with the appropriate bylaw amendment and 
135.16  municipal approval, applies to deferred service pensions where 
135.17  deferral began before the effective date of the municipal 
135.18  approval.  
135.19     (c) For a deferred service pension under section 6 that is 
135.20  invested in a separate account or separate investment vehicle, 
135.21  interest is payable up to the date of the transfer consistent 
135.22  with the law and bylaw provisions in effect when the firefighter 
135.23  terminated active firefighting service and actual investment 
135.24  performance thereafter. 
135.25     (d) Section 12 is effective on the day after the date on 
135.26  which the Woodbury city council and the chief clerical officer 
135.27  of the city of Woodbury complete, in a timely manner, their 
135.28  compliance with Minnesota Statutes, section 645.021, 
135.29  subdivisions 2 and 3. 
135.30                             ARTICLE 16
135.31                  DISSOLUTIONS AND CONSOLIDATIONS 
135.32            OF VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS
135.33     Section 1.  [424B.01] [DEFINITIONS.] 
135.34     Subdivision 1.  [GENERALLY.] Unless the context of the 
135.35  provision indicates that a different meaning is intended, each 
135.36  of the terms in the following subdivisions have the meaning 
136.1   indicated. 
136.2      Subd. 2.  [APPLICABLE MUNICIPALITY.] "Applicable 
136.3   municipality" means the municipality or municipalities in which 
136.4   a consolidating relief association is located and to which a 
136.5   consolidating relief association is associated by virtue of the 
136.6   presence of at least one municipal official on the relief 
136.7   association board of trustees under section 424A.04. 
136.8      Subd. 3.  [CONSOLIDATING RELIEF 
136.9   ASSOCIATION.] "Consolidating relief association" means a 
136.10  volunteer firefighter relief association organized under chapter 
136.11  317A and governed by chapter 424A that has initiated or has 
136.12  completed the process of consolidating with one or more other 
136.13  relief associations under this chapter. 
136.14     Subd. 4.  [PRIOR RELIEF ASSOCIATIONS.] "Prior relief 
136.15  associations" means the two or more volunteer firefighter relief 
136.16  associations that have initiated the consolidation process under 
136.17  this chapter by action of the board of trustees of the relief 
136.18  association. 
136.19     Subd. 5.  [RELIEF ASSOCIATION MEMBERSHIP.] "Relief 
136.20  association membership" means all active members of the 
136.21  volunteer firefighter relief association, all deferred retirees 
136.22  and other vested inactive members of the volunteer firefighter 
136.23  relief association, and any persons regularly receiving a 
136.24  service pension or other retirement benefit from the volunteer 
136.25  firefighters relief association. 
136.26     Subd. 6.  [SUBSEQUENT RELIEF ASSOCIATION.] "Subsequent 
136.27  relief association" means the volunteer firefighters relief 
136.28  association that is designated to be the successor relief 
136.29  association in the consolidation initiative resolutions of the 
136.30  board of trustees of the prior relief associations or the 
136.31  volunteer firefighters relief association organized under 
136.32  chapters 317A and 424A for the purpose of operating as the 
136.33  successor relief association after consolidation under this 
136.34  chapter. 
136.35     Sec. 2.  [424B.02] [CONSOLIDATION AUTHORIZED.] 
136.36     Subdivision 1.  [INITIATION.] (a) With the approval of the 
137.1   governing body of each applicable municipality, two or more 
137.2   relief associations associated with fire departments serving 
137.3   contiguous fire districts may initiate the consolidation of the 
137.4   relief associations into a subsequent relief association. 
137.5      (b) Initiation of a consolidation action must occur through 
137.6   the proposal of a consolidation resolution to the board of 
137.7   trustees of each volunteer firefighter relief association 
137.8   notification of the relief association membership of the 
137.9   potential consolidation and after conducting a public meeting on 
137.10  the consolidation question. 
137.11     Subd. 2.  [INITIATIVE PROCESSING; FILING.] (a) After a 
137.12  consolidation initiative resolution has been filed with the 
137.13  relief association board of trustees by one or more members of 
137.14  the board, the relief association secretary shall provide 
137.15  written notification of the initiative to the relief association 
137.16  membership.  After notification of the relief association 
137.17  membership, the board of trustees must hold a public hearing on 
137.18  the initiative.  After the hearing, the board of trustees shall 
137.19  act on the consolidation resolution. 
137.20     (b) If the consolidation resolution is adopted by majority 
137.21  vote of the board of trustees, the secretary shall file a copy 
137.22  of the resolution with the other relief association or 
137.23  associations also considering consolidation. 
137.24     (c) If two or more volunteer firefighter relief 
137.25  associations adopt a consolidation resolution, those relief 
137.26  associations are consolidated effective the next following 
137.27  January 1. 
137.28     (d) Within 30 days of the adoption of the consolidation 
137.29  resolution by all prior relief associations, the secretaries of 
137.30  the applicable prior relief associations shall jointly notify in 
137.31  writing the state auditor, the commissioner of revenue, and the 
137.32  secretary of state of the consolidation. 
137.33     Sec. 3.  [424B.03] [SUBSEQUENT RELIEF ASSOCIATION.] 
137.34     Subdivision 1.  [NEW RELIEF ASSOCIATION.] If the subsequent 
137.35  relief association is a new volunteer firefighter relief 
137.36  association, the consolidated volunteer firefighters relief 
138.1   association must be incorporated under chapter 317A.  The 
138.2   incorporators of the consolidated relief association must 
138.3   include at least one board member of each of the former 
138.4   volunteer firefighters relief associations. 
138.5      Subd. 2.  [SUCCESSOR RELIEF ASSOCIATION.] If the subsequent 
138.6   relief association is one of the prior relief associations, the 
138.7   articles of incorporation and bylaws must be appropriately 
138.8   revised, effective on the consolidation effective date, and a 
138.9   revised board of trustees must be elected before the 
138.10  consolidation effective date. 
138.11     Sec. 4.  [424B.04] [GOVERNANCE OF CONSOLIDATED VOLUNTEER 
138.12  FIREFIGHTERS RELIEF ASSOCIATION.] 
138.13     Subdivision 1.  [BOARD OF TRUSTEES.] The consolidated 
138.14  volunteer firefighters relief association is governed by a board 
138.15  of trustees as provided in section 424A.04, subdivision 1. 
138.16     Subd. 2.  [COMPOSITION OF BOARD.] The board must have three 
138.17  officers, including a president, a secretary, and a treasurer.  
138.18  The membership of the consolidated volunteer firefighters relief 
138.19  association must elect the three officers from the board 
138.20  members.  A board of trustees member may not hold more than one 
138.21  officer position at the same time. 
138.22     Subd. 3.  [BOARD ADMINISTRATION.] The board of trustees 
138.23  must administer the affairs of the relief association consistent 
138.24  with this chapter and the applicable provisions of chapters 69, 
138.25  356A, and 424A. 
138.26     Sec. 5.  [424B.05] [SPECIAL AND GENERAL FUNDS.] 
138.27     The consolidated volunteer firefighters relief association 
138.28  must establish and maintain a special fund and a general fund.  
138.29  The special fund must be established and maintained as provided 
138.30  in section 424A.05.  The general fund must be established and 
138.31  maintained as provided in section 424A.06. 
138.32     Sec. 6.  [424B.06] [TRANSFERS.] 
138.33     Subdivision 1.  [GENERALLY.] On the effective date of 
138.34  consolidation, the records, assets, and liabilities of the prior 
138.35  volunteer firefighter relief associations are transferred to the 
138.36  consolidated volunteer firefighters relief association.  On the 
139.1   effective date of consolidation, the prior volunteer 
139.2   firefighters relief associations cease to exist as legal 
139.3   entities, except for the purposes of winding up association 
139.4   affairs as provided by this chapter. 
139.5      Subd. 2.  [TRANSFER OF ADMINISTRATION.] On the effective 
139.6   date of consolidation, the administration of the prior relief 
139.7   associations is transferred to the board of trustees of the 
139.8   subsequent volunteer firefighters relief association. 
139.9      Subd. 3.  [TRANSFER OF RECORDS.] On the effective date of 
139.10  consolidation, the secretary and the treasurer of the prior 
139.11  volunteer firefighters relief associations shall transfer all 
139.12  records and documents relating to the prior relief associations 
139.13  to the secretary and treasurer of the subsequent volunteer 
139.14  firefighters relief association. 
139.15     Subd. 4.  [TRANSFER OF SPECIAL FUND ASSETS AND 
139.16  LIABILITIES.] (a) On the effective date of consolidation, the 
139.17  secretary and the treasurer of a prior volunteer firefighters 
139.18  relief association shall transfer the assets of the special fund 
139.19  of the applicable relief association to the special fund of the 
139.20  subsequent relief association.  Unless the appropriate secretary 
139.21  and treasurer decide otherwise, the assets may be transferred as 
139.22  investment securities rather than cash.  The transfer must 
139.23  include any accounts receivable.  The appropriate secretary must 
139.24  settle any accounts payable from the special fund of the relief 
139.25  association before the effective date of consolidation. 
139.26     (b) Upon the transfer of the assets of the special fund of 
139.27  a prior relief association, the pension liabilities of that 
139.28  special fund become the obligation of the special fund of the 
139.29  subsequent volunteer firefighters relief association. 
139.30     (c) Upon the transfer of the prior relief association 
139.31  special fund assets, the board of trustees of the subsequent 
139.32  volunteer firefighters relief association has legal title to and 
139.33  management responsibility for the transferred assets as trustees 
139.34  for persons having a beneficial interest in those assets arising 
139.35  out of the benefit coverage provided by the prior relief 
139.36  association. 
140.1      (d) The subsequent volunteer firefighters relief 
140.2   association is the successor in interest in all claims for and 
140.3   against the special funds of the prior volunteer firefighters 
140.4   relief associations or the applicable municipalities with 
140.5   respect to the special funds of the prior relief associations.  
140.6   The status of successor in interest does not apply to any claim 
140.7   against a prior relief association, the municipality in which 
140.8   that relief association is located, or any person connected with 
140.9   the prior relief association or the municipality, based on any 
140.10  act or acts that were not done in good faith and that 
140.11  constituted a breach of fiduciary responsibility under common 
140.12  law or chapter 356A. 
140.13     Sec. 7.  [424B.07] [DISSOLUTION OF PRIOR GENERAL FUND 
140.14  BALANCES.] 
140.15     Before the effective date of consolidation, the secretaries 
140.16  of the volunteer firefighters relief associations shall settle 
140.17  any accounts payable from the respective general fund or any 
140.18  other relief association fund in addition to the relief 
140.19  association special fund.  Investments held by a fund of the 
140.20  prior relief associations in addition to the special fund must 
140.21  be liquidated before the effective date of consolidation as the 
140.22  bylaws of the relief association provide.  Before the effective 
140.23  date of consolidation, the respective relief associations must 
140.24  pay all applicable general fund expenses from their respective 
140.25  general funds.  Any balance remaining in the general fund or in 
140.26  a fund other than the relief association special fund as of the 
140.27  effective date of consolidation must be paid to the new general 
140.28  fund of the subsequent volunteer firefighter relief association. 
140.29     Sec. 8.  [424B.08] [TERMINATION OF PRIOR RELIEF 
140.30  ASSOCIATIONS.] 
140.31     Following the transfer of administration, records, special 
140.32  fund assets, and special fund liabilities from the prior relief 
140.33  associations to the subsequent volunteer firefighters relief 
140.34  association, the prior volunteer firefighter relief associations 
140.35  cease to exist as legal entities for any purpose.  The 
140.36  subsequent relief association secretary shall notify the 
141.1   following governmental officials of the termination of the 
141.2   respective volunteer firefighter relief associations and of the 
141.3   establishment of the subsequent volunteer firefighters relief 
141.4   association: 
141.5      (1) Minnesota secretary of state; 
141.6      (2) Minnesota state auditor; 
141.7      (3) Minnesota commissioner of revenue; and 
141.8      (4) commissioner of the federal Internal Revenue Service. 
141.9      Sec. 9.  [424B.09] [ADMINISTRATIVE EXPENSES.] 
141.10     The payment of authorized administrative expenses of the 
141.11  subsequent volunteer firefighters relief association must be 
141.12  from the special fund of the subsequent volunteer firefighters 
141.13  relief association in accordance with section 69.80, and as 
141.14  provided for in the bylaws of the subsequent volunteer 
141.15  firefighters relief association and approved by the board of 
141.16  trustees of the subsequent volunteer firefighters relief 
141.17  association.  The payment of any other expenses of the 
141.18  subsequent volunteer firefighters relief association must be 
141.19  from the general fund of the subsequent volunteer firefighters 
141.20  relief association in accordance with section 69.80 and as 
141.21  provided for in the bylaws of the subsequent volunteer 
141.22  firefighters relief association and approved by the board of 
141.23  trustees of the subsequent volunteer firefighters relief 
141.24  association. 
141.25     Sec. 10.  [424B.10] [BENEFITS; FUNDING.] 
141.26     Subdivision 1.  [BENEFITS.] (a) Notwithstanding section 
141.27  424A.02, subdivision 3, to the contrary, the service pension of 
141.28  the subsequent relief association as of the effective date of 
141.29  consolidation is the highest dollar amount service pension 
141.30  amount of any prior volunteer firefighters relief association in 
141.31  effect immediately before the consolidation initiation if the 
141.32  pension amount was implemented consistent with section 424A.02. 
141.33     (b) Any increase in the service pension amount beyond the 
141.34  amount implemented under paragraph (a) must conform with the 
141.35  requirements and limitations of sections 69.771 to 69.775 and 
141.36  424A.02. 
142.1      Subd. 2.  [FUNDING.] (a) Unless the applicable 
142.2   municipalities agree in writing to allocate the minimum 
142.3   municipal obligation in a different manner, the minimum 
142.4   municipal obligation under section 69.772 or 69.773, whichever 
142.5   applies, must be allocated between the applicable municipalities 
142.6   in proportion to their fire state aid. 
142.7      (b) If any applicable municipality fails to meet its 
142.8   portion of the minimum municipal obligation to the subsequent 
142.9   relief association, all other applicable municipalities are 
142.10  jointly obligated to provide the required funding upon 
142.11  certification by the relief association secretary.  An 
142.12  applicable municipality that pays the minimum municipal 
142.13  obligation for another applicable municipality, the municipality 
142.14  may collect the payment amount, plus a 25 percent surcharge, 
142.15  from the responsible applicable municipality by any available 
142.16  means, including deduction from any state aid or payment amount 
142.17  payable to the responsible municipality upon certification of 
142.18  the necessary information to the commissioner of finance. 
142.19     Sec. 11.  [424B.20] [DISSOLUTION WITHOUT CONSOLIDATION.] 
142.20     Subdivision 1.  [APPLICABLE DISSOLUTIONS.] This section 
142.21  applies if the fire department associated with a volunteer 
142.22  firefighter relief association is dissolved or eliminated by 
142.23  action of the governing body of the municipality in which the 
142.24  fire department was located or by the independent nonprofit 
142.25  firefighting corporation, whichever applies, and no 
142.26  consolidation with another volunteer firefighter relief 
142.27  association under sections 424B.01 to 424B.10 is sought, or if a 
142.28  volunteer firefighter relief association is dissolved or 
142.29  eliminated with municipal approval, but the fire department 
142.30  associated with the volunteer firefighter relief association is 
142.31  not dissolved or eliminated, and no consolidation with another 
142.32  volunteer firefighter relief association under sections 424B.01 
142.33  to 424B.10 is applicable. 
142.34     Subd. 2.  [PROCEDURES.] As part of the dissolution process, 
142.35  all legal obligations of the relief association other than 
142.36  service pensions and benefits must be settled under subdivision 
143.1   3, a benefit trust must be established under subdivision 4, and 
143.2   the affairs of the relief association must be concluded under 
143.3   subdivision 5. 
143.4      Subd. 3.  [SETTLEMENT OF NONBENEFIT LEGAL OBLIGATIONS.] (a) 
143.5   Prior to the effective date of the dissolution of the volunteer 
143.6   firefighter relief association established by the relief 
143.7   association board of trustees, the board shall determine the 
143.8   following: 
143.9      (1) the fair market value of the assets of the special 
143.10  fund; 
143.11     (2) the total amount of the accounts payable and other 
143.12  legal obligations of the special fund, excluding the accrued 
143.13  liability of the special fund for service pensions and other 
143.14  benefits; and 
143.15     (3) the accrued liability of the special fund for service 
143.16  pensions and other benefits payable or accrued under the 
143.17  applicable bylaws of the relief association and chapter 424A. 
143.18     (b) On or before the effective date of the dissolution of 
143.19  the volunteer firefighter relief association, the board shall 
143.20  liquidate sufficient special fund assets to pay the legal 
143.21  obligations of the special fund and must settle those legal 
143.22  obligations. 
143.23     (c) On or before the effective date of the dissolution of 
143.24  the volunteer firefighter relief association, the board shall 
143.25  settle the legal obligations of the general fund of the relief 
143.26  association. 
143.27     Subd. 4.  [BENEFIT TRUST FUND ESTABLISHMENT.] (a) After the 
143.28  settlement of nonbenefit legal obligations of the special fund 
143.29  of the volunteer firefighter relief association under 
143.30  subdivision 3, the board of the relief association shall 
143.31  transfer the remaining assets of the special fund, as securities 
143.32  or in cash, as applicable, to the chief financial official of 
143.33  the municipality in which the associated fire department was 
143.34  located if the fire department was a municipal fire department 
143.35  or to the chief financial official of the municipality with the 
143.36  largest population served by the fire department if the fire 
144.1   department was an independent nonprofit firefighting 
144.2   corporation.  The board shall also compile a schedule of the 
144.3   relief association members to whom a service pension is or will 
144.4   be owed, any beneficiary to whom a benefit is owed, the amount 
144.5   of the service pension or benefit payable based on the 
144.6   applicable bylaws and state law and the service rendered to the 
144.7   date of the dissolution, and the date on which the pension or 
144.8   benefit would first be payable under the bylaws of the relief 
144.9   association and state law. 
144.10     (b) The municipality in which is located a volunteer 
144.11  firefighter relief association that is dissolving under this 
144.12  section shall establish a separate account in the municipal 
144.13  treasury which must function as a trust fund for members of the 
144.14  volunteer firefighter relief association and their beneficiaries 
144.15  to whom the volunteer firefighter relief association owes a 
144.16  service pension or other benefit under the bylaws of the relief 
144.17  association and state law.  Upon proper application, on or after 
144.18  the initial date on which the service pension or benefit is 
144.19  payable, the municipal treasurer shall pay the pension or 
144.20  benefit due, based on the schedule prepared under paragraph (a) 
144.21  and the other records of the dissolved relief association.  The 
144.22  trust fund under this section must be invested and managed 
144.23  consistent with section 69.775 and chapter 356A.  Upon payment 
144.24  of the last service pension or benefit due and owing, any 
144.25  remaining assets in the trust fund cancel to the general fund of 
144.26  the municipality.  If the special fund of the volunteer 
144.27  firefighter relief association had an unfunded actuarial accrued 
144.28  liability upon dissolution, the municipality is liable for that 
144.29  unfunded actuarial accrued liability. 
144.30     Subd. 5.  [RELIEF ASSOCIATION AFFAIRS WIND-UP.] Upon 
144.31  dissolution, the board of trustees of the volunteer firefighter 
144.32  relief association shall transfer the records of the relief 
144.33  association to the chief administrative officer of the 
144.34  applicable municipality.  The board shall also notify the 
144.35  commissioner of revenue, the state auditor, and the secretary of 
144.36  state of the dissolution within 30 days of the effective date of 
145.1   the dissolution. 
145.2      Sec. 12.  [424B.21] [ANNUITY PURCHASES UPON DISSOLUTION.] 
145.3      The board of trustees of a volunteer firefighter relief 
145.4   association that is scheduled for dissolution may purchase 
145.5   annuity contracts under section 424A.02, subdivision 8a, instead 
145.6   of transferring special fund assets to a municipal trust fund 
145.7   under section 424B.20, subdivision 4.  Payment of an annuity for 
145.8   which a contract is purchased may not commence before the 
145.9   retirement age specified in the relief association bylaws and in 
145.10  compliance with section 424A.02, subdivision 1.  Legal title to 
145.11  the annuity contract transfers to the municipal trust fund under 
145.12  section 424B.20, subdivision 4. 
145.13     Sec. 13.  [REPEALER.] 
145.14     Minnesota Statutes 1998, section 424A.02, subdivision 11, 
145.15  is repealed. 
145.16     Sec. 14.  [EFFECTIVE DATE.] 
145.17     Sections 1 to 13 are effective on July 1, 2000. 
145.18                             ARTICLE 17
145.19                MINNEAPOLIS POLICE AND FIREFIGHTERS
145.20                     RELIEF ASSOCIATION CHANGES
145.21     Section 1.  Minnesota Statutes 1998, section 423B.01, is 
145.22  amended to read: 
145.23     423B.01 [MINNEAPOLIS POLICE RELIEF ASSOCIATION; 
145.24  DEFINITIONS.] 
145.25     Subdivision 1.  [TERMS.] For purposes of sections 423B.01 
145.26  to 423B.18, unless the context clearly indicates otherwise, each 
145.27  of the terms defined in this section has the indicated meaning. 
145.28     Subd. 2.  [ACTIVE MEMBER.] "Active member" means a person 
145.29  who was hired and duly appointed by the city of Minneapolis 
145.30  before May 1, 1959, as a police stenographer, police clerk, 
145.31  police telephone operator, police radio operator, or police 
145.32  mechanic or before June 15, 1980, as a police officer, police 
145.33  matron, or assistant police matron, who is regularly entered on 
145.34  the payroll of the police department, and who serves on active 
145.35  duty. 
145.36     Subd. 3.  [ACTIVE MEMBER PERCENTAGE.] The "active member 
146.1   percentage" is the total number of units accrued by active 
146.2   members of the association divided by the sum of the total 
146.3   number of units to which eligible members are entitled and 
146.4   active members of the association have accrued. 
146.5      Subd. 4.  [AGE.] "Age" means a person's age at the person's 
146.6   latest birthday. 
146.7      Subd. 4 5.  [ANNUAL POSTRETIREMENT PAYMENT.] "Annual 
146.8   postretirement payment" means the payment of a lump sum 
146.9   postretirement benefit under section 423B.15 to an eligible 
146.10  member on June 1 following the determination date in any year. 
146.11     Subd. 5 6.  [ASSOCIATION.] "Association" means the 
146.12  Minneapolis police relief association. 
146.13     Subd. 7.  [CITY.] "City" means the city of Minneapolis. 
146.14     Subd. 8.  [DETERMINATION DATE.] "Determination date" means 
146.15  December 31 of each year. 
146.16     Subd. 6 9.  [DISABILITY.] "Disability" means a physical or 
146.17  mental incapacity of an active member to perform the duties of 
146.18  the person's position in the service of the police department. 
146.19     Subd. 7 10.  [DISCHARGE.] "Discharge" means a complete 
146.20  separation from service in the police department. 
146.21     Subd. 8 11.  [ELIGIBLE MEMBER.] "Eligible member" means a 
146.22  person, including a service pensioner, a disability pensioner, a 
146.23  survivor, or dependent of a deceased active member, service 
146.24  pensioner, or disability pensioner, who received a pension or 
146.25  benefit from the relief association during the 12 months before 
146.26  the determination date. 
146.27     Subd. 9 12.  [EXCESS INVESTMENT INCOME.] "Excess investment 
146.28  income" means the amount, if any, by which the average time 
146.29  weighted total rate of return earned by the fund in the most 
146.30  recent prior five fiscal years has exceeded the actual average 
146.31  percentage increase in the current monthly salary of a first 
146.32  grade patrol officer in the most recent prior five fiscal years 
146.33  plus two percent, and must be expressed as a dollar amount.  The 
146.34  amount may not exceed one percent of the total assets of the 
146.35  fund, except when the actuarial value of assets of the fund 
146.36  according to the most recent annual actuarial valuation prepared 
147.1   in accordance with sections 356.215 and 356.216 is greater than 
147.2   102 percent of its actuarial accrued liabilities, in which case 
147.3   the amount must not exceed 1-1/2 percent of the total assets of 
147.4   the fund, and does not exist unless the yearly average 
147.5   percentage increase of the time weighted total rate of return of 
147.6   the fund for the previous five years exceeds by two percent the 
147.7   yearly average percentage increase in monthly salary of a first 
147.8   grade patrol officer during the previous five calendar years. 
147.9      Subd. 10 13.  [FUND.] "Fund" means the special fund of the 
147.10  relief association. 
147.11     Subd. 14.  [NET EXCESS ASSET AMOUNT PAYMENT.] "Net excess 
147.12  asset amount payment" means the payment of an additional 
147.13  postretirement payment under section 2 to an eligible member on 
147.14  June 1 following the determination date in the given year. 
147.15     Subd. 15.  [NET TOTAL EXCESS ASSET AMOUNT.] "Net total 
147.16  excess asset amount" is the total excess asset amount stated in 
147.17  dollars and multiplied by the quantity one minus the active 
147.18  member percentage. 
147.19     Subd. 11 16.  [RETIRED MEMBER.] "Retired member" means a 
147.20  former active member who has terminated active service in the 
147.21  police department and who is entitled to receive a pension or 
147.22  benefit under sections 423B.01 to 423B.18, as amended, or any 
147.23  predecessor law. 
147.24     Subd. 12 17.  [SURVIVING SPOUSE MEMBER.] "Surviving spouse 
147.25  member" means the person who was the legally married spouse of 
147.26  the member, who was residing with the decedent, and who was 
147.27  married while or before the time the decedent was an active 
147.28  member and was on the payroll of the police department, and who, 
147.29  in case the deceased member was a pensioner or deferred 
147.30  pensioner, was legally married to the member at least one year 
147.31  before the decedent's termination of active service with the 
147.32  police department.  The term does not include the surviving 
147.33  spouse who has deserted a member or who has not been dependent 
147.34  upon the member for support, nor does it include the surviving 
147.35  common law spouse of a member. 
147.36     Subd. 13 18.  [TIME WEIGHTED TOTAL RATE OF RETURN.] "Time 
148.1   weighted total rate of return" means the percentage amount 
148.2   determined by using the formula or formulas established by the 
148.3   state board of investment under section 11A.04, clause (11), and 
148.4   in effect on January 1, 1987. 
148.5      Subd. 19.  [TOTAL EXCESS ASSET AMOUNT.] (a) "Total excess 
148.6   asset amount" means the difference, if positive, expressed in 
148.7   dollars, between the fund's market value of assets after any 
148.8   deductions required by section 423B.15, subdivision 2, and 110 
148.9   percent of the actuarial accrued liabilities based on the 
148.10  actuarial valuation indicated in paragraph (b). 
148.11     (b) The total excess asset amount in paragraph (a) exists 
148.12  if the actuarial liability funding ratio, according to the most 
148.13  recent annual actuarial valuation for the fund prepared in 
148.14  accordance with sections 69.77, 356.215, and 356.216, with 
148.15  adjustments required by section 423B.15, subdivision 2, equals 
148.16  or exceeds 110 percent. 
148.17     Subd. 14 20.  [UNIT.] "Unit" means one-eightieth of the 
148.18  current monthly salary of a first grade patrol officer. 
148.19     Subd. 15 21.  [ACTUARIAL EQUIVALENT.] "Actuarial 
148.20  equivalent" or "actuarially equivalent" means the condition of 
148.21  one annuity or benefit having an equal actuarial present value 
148.22  as another annuity or benefit, determined as of a given date at 
148.23  a specified age with each actuarial present value based on the 
148.24  appropriate mortality table adopted by the board of directors 
148.25  based on the experience of the fund and approved by the actuary 
148.26  retained by the legislative commission on pensions and 
148.27  retirement and using the applicable preretirement or 
148.28  postretirement interest rate assumptions specified in section 
148.29  356.216. 
148.30     Sec. 2.  [423B.151] [EXCESS ASSET AMOUNT PAYMENT.] 
148.31     Subdivision 1.  [DETERMINATION OF NET TOTAL EXCESS AMOUNT.] 
148.32  The board of the association shall determine by May 1 of each 
148.33  year whether the fund has a total excess asset amount for that 
148.34  year.  If a total excess asset amount exists for the given year, 
148.35  the net total excess asset amount shall be determined.  The 
148.36  total excess asset amount and net total excess asset amount 
149.1   shall be reported to the chief administrative officer of the 
149.2   association, the mayor and governing body of the city, the state 
149.3   auditor, the commissioner of finance, and the executive director 
149.4   of the legislative commission on pensions and retirement.  The 
149.5   portion of the net excess asset amount which is distributed 
149.6   under this section must not be considered as income to or assets 
149.7   of the fund for actuarial valuations of the fund for that year 
149.8   under sections 69.77, 356.215, 356.216, and this act, except to 
149.9   offset the amount distributed. 
149.10     Subd. 2.  [TOTAL AVAILABLE FOR PAYMENT.] Twenty percent of 
149.11  the net total excess asset amount determined under subdivision 1 
149.12  is available for excess asset amount payments under subdivision 
149.13  3. 
149.14     Subd. 3.  [NET EXCESS ASSET AMOUNT PAYMENTS.] Except as 
149.15  limited under subdivision 4, the net excess asset amount payment 
149.16  to an eligible member is equal to the amount determined under 
149.17  subdivision 2 multiplied by the units applicable to the eligible 
149.18  member and divided by the total units of all eligible members. 
149.19     Subd. 4.  [ENTITLEMENT; PRIORITY.] A person who is an 
149.20  eligible member for the entire 12 months before the 
149.21  determination date is eligible for a full excess asset amount 
149.22  payment under subdivision 2.  A person who is an eligible member 
149.23  for less than 12 months before the determination date is 
149.24  eligible for a prorated excess asset amount payment.  If an 
149.25  eligible member dies after the determination date and before the 
149.26  excess asset amount payment commences, the association must pay 
149.27  the eligible member's excess asset amount payment to the 
149.28  eligible member's surviving spouse or, if no surviving spouse, 
149.29  to the member's estate. 
149.30     Subd. 5.  [PAYMENT METHOD.] The excess asset amount 
149.31  payments determined under this section commence on June 1 
149.32  following the determination date.  These amounts may be paid as 
149.33  a lump sum, disbursed to the eligible members in 12 equal 
149.34  monthly installments, or any other manner which the board shall 
149.35  determine. 
149.36     Subd. 6.  [NO GUARANTEE OF ANNUAL RESIDUAL INVESTMENT 
150.1   PAYMENT.] No provision of this act may be interpreted or relied 
150.2   upon by any member of the association to guarantee or entitle a 
150.3   member to a net excess asset amount payment relating to any year 
150.4   in which there is no net total excess asset amount. 
150.5      Sec. 3.  [423B.19] [CITY OF MINNEAPOLIS; NORMAL COST 
150.6   CONTRIBUTION ADJUSTMENT.] 
150.7      Notwithstanding section 69.77, 356.215, 356.216, or any 
150.8   other law to the contrary, the required city contributions 
150.9   toward the association's normal cost, as determined by the 
150.10  actuary, are reduced below that otherwise payable by the full 
150.11  amount of active member contributions required by law to be 
150.12  directed to the association's health insurance escrow account 
150.13  rather than to the special fund. 
150.14     Sec. 4.  [423B.20] [SUSPENSION OF NORMAL COST 
150.15  CONTRIBUTIONS.] 
150.16     Notwithstanding the provisions of section 69.77 or any 
150.17  other law to the contrary, if a total excess asset amount 
150.18  exists, as defined in section 423B.01, subdivision 19, the city 
150.19  is not required to make a contribution to the fund for the 
150.20  normal cost of active members. 
150.21     Sec. 5.  [423B.21] [CHANGE IN AMORTIZATION PERIOD.] 
150.22     Subdivision 1.  [AMORTIZATION TREATMENT.] Notwithstanding 
150.23  section 69.77, subdivision 2b; 356.215; 356.216; or any other 
150.24  law to the contrary, if the actuarial report for the association 
150.25  indicates an unfunded actuarial accrued liability after the fund 
150.26  has first achieved 100 percent funding, the unfunded obligation 
150.27  is to be amortized on a level dollar basis by December 31 of the 
150.28  year occurring 15 years later.  If subsequent actuarial 
150.29  valuations determine a net actuarial experience loss incurred 
150.30  during the year which ended as of the day before the most recent 
150.31  actuarial valuation date, any unfunded liability due to that 
150.32  loss is to be amortized on a level dollar basis by December 31 
150.33  of the year occurring 15 years later. 
150.34     Subd. 2.  [LIMITATION.] Notwithstanding subdivision 1, the 
150.35  amortization period may not exceed the average life expectancy 
150.36  of the remaining members. 
151.1      Sec. 6.  [MINNEAPOLIS FIRE RELIEF ASSOCIATION; SURVIVOR 
151.2   BENEFIT PAYMENT.] 
151.3      Subdivision 1.  [SURVIVING SPOUSE BENEFIT ELIGIBILITY.] (a) 
151.4   Notwithstanding Laws 1997, chapter 233, article 4, section 12, 
151.5   or other law to the contrary, an eligible individual specified 
151.6   in paragraph (b) is authorized to receive the benefit specified 
151.7   in subdivision 2. 
151.8      (b) An eligible individual is an individual born on May 27, 
151.9   1927, who married a Minneapolis fire relief association retiree 
151.10  on January 16, 1993, and who is a surviving spouse due to the 
151.11  death of that retired firefighter on October 2, 1997. 
151.12     Subd. 2.  [BENEFIT.] (a) An eligible individual under 
151.13  subdivision 1, paragraph (b), is entitled to a surviving spouse 
151.14  benefit computed under paragraph (f), as added by Laws 1997, 
151.15  chapter 233, article 4, section 12. 
151.16     (b) Benefits payable as a result of the benefit authorized 
151.17  in paragraph (a) commence on the first of the month following 
151.18  the effective date of this section. 
151.19     Sec. 7.  [DEFINITIONS.] 
151.20     Subdivision 1.  [DEFINITIONS.] Unless the context clearly 
151.21  indicates otherwise, the following terms have the meaning given 
151.22  in this section. 
151.23     Subd. 2.  [ACTIVE MEMBER PERCENTAGE.] The "active member 
151.24  percentage" is the total number of units accrued by active 
151.25  members of the association divided by the sum of the total 
151.26  number of units to which eligible members are entitled and 
151.27  active members of the association have accrued. 
151.28     Subd. 3.  [ASSOCIATION.] "Association" means the 
151.29  Minneapolis firefighters relief association. 
151.30     Subd. 4.  [CITY.] "City" means the city of Minneapolis. 
151.31     Subd. 5.  [ELIGIBLE MEMBER.] "Eligible member" is a person 
151.32  who receives a service, survivor, or disability pension payable 
151.33  from the special fund of the association. 
151.34     Subd. 6.  [FUND.] "Fund" means the association's special 
151.35  fund. 
151.36     Subd. 7.  [NET EXCESS ASSET AMOUNT PAYMENT.] "Net excess 
152.1   asset amount payment" means the payment of an additional 
152.2   postretirement payment under section 3 to an eligible member on 
152.3   June 1 following the determination date in the given year. 
152.4      Subd. 8.  [NET TOTAL EXCESS ASSET AMOUNT.] "Net total 
152.5   excess asset amount" is the total excess asset amount stated in 
152.6   dollars and multiplied by the quantity one minus the active 
152.7   member percentage. 
152.8      Subd. 9.  [TOTAL EXCESS ASSET AMOUNT.] (a) "Total excess 
152.9   asset amount" means the difference, if positive, expressed in 
152.10  dollars, between the fund's market value of assets after any 
152.11  deductions required by Laws 1989, chapter 319, article 19, 
152.12  section 7, subdivision 3, as amended, and 110 percent of the 
152.13  actuarial accrued liabilities based on the actuarial valuation 
152.14  indicated in paragraph (b). 
152.15     (b) The total excess asset amount in paragraph (a) exists 
152.16  if the actuarial liability funding ratio, according to the most 
152.17  recent annual actuarial valuation for the fund prepared in 
152.18  accordance with Minnesota Statutes, sections 69.77, 356.215, and 
152.19  356.216, with adjustments required by Laws 1989, chapter 319, 
152.20  article 19, section 7, subdivision 3, as amended, equals or 
152.21  exceeds 110 percent. 
152.22     Sec. 8.  [DETERMINATION OF NET TOTAL EXCESS ASSET AMOUNT.] 
152.23     The board of the association shall determine by May 1 of 
152.24  each year whether the fund has a total excess asset amount for 
152.25  that year.  If a total excess asset amount exists for the given 
152.26  year, the net total excess asset amount shall be determined.  
152.27  The total excess asset amount and net total excess asset amount 
152.28  shall be reported to the chief administrative officer of the 
152.29  association, the mayor and governing body of the city, the state 
152.30  auditor, the commissioner of finance, and the executive director 
152.31  of the legislative commission on pensions and retirement.  The 
152.32  portion of the net excess asset amount which is distributed 
152.33  under section 9 must not be considered as income to or assets of 
152.34  the fund for actuarial valuations of the fund for that year 
152.35  under Minnesota Statutes, sections 69.77, 356.215, and 356.216, 
152.36  and this act, except to offset the amount distributed.  
153.1      Sec. 9.  [AMOUNT OF NET EXCESS ASSET AMOUNT PAYMENT.] 
153.2      Subdivision 1.  [TOTAL AVAILABLE FOR PAYMENT.] Twenty 
153.3   percent of the net total excess asset amount determined under 
153.4   section 8 is available for net excess asset amount payments 
153.5   under subdivision 2. 
153.6      Subd. 2.  [NET EXCESS ASSET AMOUNT PAYMENTS.] Except as 
153.7   limited under subdivision 3, the net excess asset amount payment 
153.8   to an eligible member is equal to the amount determined under 
153.9   subdivision 1 multiplied by the units applicable to the eligible 
153.10  member and divided by the total units of all eligible members. 
153.11     Subd. 3.  [ENTITLEMENT; PRIORITY.] A person who is an 
153.12  eligible member for the entire 12 months before the 
153.13  determination date is eligible for a full net excess asset 
153.14  amount payment under subdivision 2.  A person who is an eligible 
153.15  member for less than 12 months before the determination date is 
153.16  eligible for a prorated net excess asset amount payment.  If an 
153.17  eligible member dies after the determination date and before the 
153.18  excess asset amount payment commences, the association must pay 
153.19  that eligible member's net excess asset amount payment to the 
153.20  eligible member's estate. 
153.21     Subd. 4.  [PAYMENT METHOD.] The net excess asset amount 
153.22  payments determined under subdivisions 2 and 3 commence on June 
153.23  1 following the determination date.  These amounts may be paid 
153.24  as a lump sum, disbursed to the eligible members in 12 equal 
153.25  monthly installments, or any other manner which the board shall 
153.26  determine. 
153.27     Sec. 10.  [CITY NORMAL COST CONTRIBUTION ADJUSTMENT.] 
153.28     Notwithstanding Minnesota Statutes, sections 69.77, 
153.29  356.215, and 356.216, or other law to the contrary, the required 
153.30  city contributions toward the association's normal cost, as 
153.31  determined by the actuary, are reduced below that otherwise 
153.32  payable by the full amount of active member contributions 
153.33  required by law to be directed to the association's health 
153.34  insurance escrow account rather than to the special fund. 
153.35     Sec. 11.  [SUSPENSION OF NORMAL COST CONTRIBUTIONS.] 
153.36     Notwithstanding the provisions of Minnesota Statutes, 
154.1   section 69.77, or any other law to the contrary, if a total 
154.2   excess asset amount exists, as defined in section 7, subdivision 
154.3   9, the city is not required to make a contribution to the fund 
154.4   for the normal cost of active members. 
154.5      Sec. 12.  [NO GUARANTEE OF ANNUAL RESIDUAL INVESTMENT 
154.6   PAYMENT.] 
154.7      No provision of this act may be interpreted or relied upon 
154.8   by any member of the association to guarantee or entitle a 
154.9   member to a net excess asset amount payment relating to any year 
154.10  in which there is no net total excess asset amount. 
154.11     Sec. 13.  [CHANGE IN AMORTIZATION PERIOD.] 
154.12     Subdivision 1.  [AMORTIZATION TREATMENT.] Notwithstanding 
154.13  Minnesota Statutes, section 69.77, subdivision 2b; 356.215; 
154.14  356.216; or any other law to the contrary, if the actuarial 
154.15  report for the Minneapolis firefighters relief association 
154.16  indicates an unfunded actuarial accrued liability, the unfunded 
154.17  obligation is to be amortized on a level dollar basis by 
154.18  December 31 of the year occurring 15 years later.  If subsequent 
154.19  actuarial valuations determine a net actuarial experience loss 
154.20  incurred during the year which ended as of the day before the 
154.21  most recent actuarial valuation date, any unfunded liability due 
154.22  to that loss is to be amortized on a level dollar basis by 
154.23  December 31 of the year occurring 15 years later. 
154.24     Subd. 2.  [LIMITATION.] Notwithstanding subdivision 1, the 
154.25  amortization period may not exceed the average life expectancy 
154.26  of the remaining members.  
154.27     Sec. 14.  [EFFECTIVE DATE.] 
154.28     (a) Sections 1 to 5 are effective on the day after the date 
154.29  on which the Minneapolis city council and the chief clerical 
154.30  officer of the city of Minneapolis complete, in a timely manner, 
154.31  their compliance with Minnesota Statutes, section 645.021, 
154.32  subdivisions 2 and 3. 
154.33     (b) Section 6 is effective on the day after the date on 
154.34  which the Minneapolis city council and the chief clerical 
154.35  officer of the city of Minneapolis complete, in a timely manner, 
154.36  their compliance with Minnesota Statutes, section 645.021, 
155.1   subdivisions 2 and 3.  Section 5, if approved, applies 
155.2   retroactively to contributions beginning after July 1, 1990. 
155.3      (c) Sections 7 to 13 are effective on the day after the 
155.4   date on which the Minneapolis city council and the chief 
155.5   clerical officer of the city of Minneapolis complete, in a 
155.6   timely manner, their compliance with Minnesota Statutes, section 
155.7   645.021, subdivisions 2 and 3.  Section 5, if approved, applies 
155.8   retroactively to contributions beginning after July 1, 1990. 
155.9                              ARTICLE 18
155.10                       JUDGES RETIREMENT PLAN
155.11                           MODIFICATIONS
155.12     Section 1.  Minnesota Statutes 1998, section 352D.02, 
155.13  subdivision 1, is amended to read: 
155.14     Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
155.15  paragraph (c), clauses (2), (3), (4), and (6) to (15), if they 
155.16  are in the unclassified service of the state or metropolitan 
155.17  council and are eligible for coverage under the general state 
155.18  employees retirement plan under chapter 352, are participants in 
155.19  the unclassified program under this chapter unless the employee 
155.20  gives notice to the executive director of the Minnesota state 
155.21  retirement system within one year following the commencement of 
155.22  employment in the unclassified service that the employee desires 
155.23  coverage under the general state employees retirement plan.  For 
155.24  the purposes of this chapter, an employee who does not file 
155.25  notice with the executive director is deemed to have exercised 
155.26  the option to participate in the unclassified plan. 
155.27     (b) Persons referenced in paragraph (c), clauses (1) and 
155.28  (5), are participants in the unclassified program under this 
155.29  chapter unless the person is eligible to elect different 
155.30  coverage under section 3A.07 or 352C.011 and, after July 1, 
155.31  1998, elects retirement coverage by the applicable alternative 
155.32  retirement plan.  Persons referenced in paragraph (c), clause 
155.33  (16), are participants in the unclassified program under this 
155.34  chapter for judicial employment in excess of the service credit 
155.35  limit in section 490.121, subdivision 22. 
155.36     (c) Enumerated employees and referenced persons are: 
156.1      (1) the governor, the lieutenant governor, the secretary of 
156.2   state, the state auditor, the state treasurer, and the attorney 
156.3   general; 
156.4      (2) an employee in the office of the governor, lieutenant 
156.5   governor, secretary of state, state auditor, state treasurer, 
156.6   attorney general; 
156.7      (3) an employee of the state board of investment; 
156.8      (4) the head of a department, division, or agency created 
156.9   by statute in the unclassified service, an acting department 
156.10  head subsequently appointed to the position, or an employee 
156.11  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
156.12     (5) a member of the legislature; 
156.13     (6) a permanent, full-time unclassified employee of the 
156.14  legislature or a commission or agency of the legislature or a 
156.15  temporary legislative employee having shares in the supplemental 
156.16  retirement fund as a result of former employment covered by this 
156.17  chapter, whether or not eligible for coverage under the 
156.18  Minnesota state retirement system; 
156.19     (7) a person who is employed in a position established 
156.20  under section 43A.08, subdivision 1, clause (3), or in a 
156.21  position authorized under a statute creating or establishing a 
156.22  department or agency of the state, which is at the deputy or 
156.23  assistant head of department or agency or director level; 
156.24     (8) the regional administrator, or executive director of 
156.25  the metropolitan council, general counsel, division directors, 
156.26  operations managers, and other positions as designated by the 
156.27  council, all of which may not exceed 27 positions at the council 
156.28  and the chair, provided that upon initial designation of all 
156.29  positions provided for in this clause, no further designations 
156.30  or redesignations may be made without approval of the board of 
156.31  directors of the Minnesota state retirement system; 
156.32     (9) the executive director, associate executive director, 
156.33  and not to exceed nine positions of the higher education 
156.34  services office in the unclassified service, as designated by 
156.35  the higher education services office before January 1, 1992, or 
156.36  subsequently redesignated with the approval of the board of 
157.1   directors of the Minnesota state retirement system, unless the 
157.2   person has elected coverage by the individual retirement account 
157.3   plan under chapter 354B; 
157.4      (10) the clerk of the appellate courts appointed under 
157.5   article VI, section 2, of the Constitution of the state of 
157.6   Minnesota; 
157.7      (11) the chief executive officers of correctional 
157.8   facilities operated by the department of corrections and of 
157.9   hospitals and nursing homes operated by the department of human 
157.10  services; 
157.11     (12) an employee whose principal employment is at the state 
157.12  ceremonial house; 
157.13     (13) an employee of the Minnesota educational computing 
157.14  corporation; 
157.15     (14) an employee of the world trade center board; and 
157.16     (15) an employee of the state lottery board who is covered 
157.17  by the managerial plan established under section 43A.18, 
157.18  subdivision 3; and 
157.19     (16) a judge who has exceeded the service credit limit in 
157.20  section 490.121, subdivision 22. 
157.21     Sec. 2.  Minnesota Statutes 1998, section 352D.04, 
157.22  subdivision 2, is amended to read: 
157.23     Subd. 2.  [CONTRIBUTION RATES.] (a) The money used to 
157.24  purchase shares under this section is the employee and employer 
157.25  contributions provided in this subdivision. 
157.26     (b) The employee contribution is an amount equal to the 
157.27  employee contribution specified in section 352.04, subdivision 2.
157.28     (c) The employer contribution is an amount equal to six 
157.29  percent of salary.  
157.30     (d) These contributions must be made in the manner provided 
157.31  in section 352.04, subdivisions 4, 5, and 6.  
157.32     (e) For members of the legislature, the contributions under 
157.33  this subdivision also must be made on per diem payments received 
157.34  during a regular or special legislative session, but may not be 
157.35  made on per diem payments received outside of a regular or 
157.36  special legislative session, on the additional compensation 
158.1   attributable to a leadership position under section 3.099, 
158.2   subdivision 3, living expense payments under section 3.101, or 
158.3   special session living expense payments under section 3.103. 
158.4      (f) For a judge who is a member of the unclassified plan 
158.5   under section 352D.02, subdivision 1, paragraph (c), clause 
158.6   (16), the employee contribution rate is eight percent of salary, 
158.7   and there is no employer contribution. 
158.8      Sec. 3.  Minnesota Statutes 1998, section 356.30, 
158.9   subdivision 1, is amended to read: 
158.10     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
158.11  Notwithstanding any provisions to the contrary of the laws 
158.12  governing the funds enumerated in subdivision 3, a person who 
158.13  has met the qualifications of clause (2) may elect to receive a 
158.14  retirement annuity from each fund in which the person has at 
158.15  least six months allowable service, based on the allowable 
158.16  service in each fund, subject to the provisions of clause (3).  
158.17     (2) A person may receive upon retirement a retirement 
158.18  annuity from each fund in which the person has at least six 
158.19  months allowable service, and augmentation of a deferred annuity 
158.20  calculated under the laws governing each public pension plan or 
158.21  fund named in subdivision 3, from the date the person terminated 
158.22  all public service if: 
158.23     (a) the person has allowable service totaling an amount 
158.24  that allows the person to receive an annuity in any two or more 
158.25  of the enumerated funds; and 
158.26     (b) the person has not begun to receive an annuity from any 
158.27  enumerated fund or the person has made application for benefits 
158.28  from all funds and the effective dates of the retirement annuity 
158.29  with each fund under which the person chooses to receive an 
158.30  annuity are within a one-year period.  
158.31     (3) The retirement annuity from each fund must be based 
158.32  upon the allowable service in each fund, except that:  
158.33     (a) The laws governing annuities must be the law in effect 
158.34  on the date of termination from the last period of public 
158.35  service under a covered fund with which the person earned a 
158.36  minimum of one-half year of allowable service credit during that 
159.1   employment.  
159.2      (b) The "average salary" on which the annuity from each 
159.3   covered fund in which the employee has credit in a formula plan 
159.4   shall be based on the employee's highest five successive years 
159.5   of covered salary during the entire service in covered funds.  
159.6      (c) The formula percentages to be used by each fund must be 
159.7   those percentages prescribed by each fund's formula as continued 
159.8   for the respective years of allowable service from one fund to 
159.9   the next, recognizing all previous allowable service with the 
159.10  other covered funds.  
159.11     (d) Allowable service in all the funds must be combined in 
159.12  determining eligibility for and the application of each fund's 
159.13  provisions in respect to actuarial reduction in the annuity 
159.14  amount for retirement prior to normal retirement.  
159.15     (e) The annuity amount payable for any allowable service 
159.16  under a nonformula plan of a covered fund must not be affected 
159.17  but such service and covered salary must be used in the above 
159.18  calculation.  
159.19     (f) This section shall not apply to any person whose final 
159.20  termination from the last public service under a covered fund is 
159.21  prior to May 1, 1975.  
159.22     (g) For the purpose of computing annuities under this 
159.23  section the formula percentages used by any covered fund, except 
159.24  the public employees police and fire fund, the judges' 
159.25  retirement fund, and the state patrol retirement fund, must not 
159.26  exceed the percent specified in section 356.19, subdivision 4, 
159.27  per year of service for any year of service or fraction 
159.28  thereof.  The formula percentage used by the public employees 
159.29  police and fire fund and the state patrol retirement fund must 
159.30  not exceed the percent specified in section 356.19, subdivision 
159.31  6, per year of service for any year of service or fraction 
159.32  thereof.  The formula percentage used by the judges' retirement 
159.33  fund must not exceed the percent specified in section 356.19, 
159.34  subdivision 8, per year of service for any year of service or 
159.35  fraction thereof.  The formula percentage used by the 
159.36  legislators retirement plan and the elective state officers 
160.1   retirement must not exceed 2.5 percent, but this limit does not 
160.2   apply to the adjustment provided under section 3A.02, 
160.3   subdivision 1, paragraph (c), or 352C.031, paragraph (b). 
160.4      (h) Any period of time for which a person has credit in 
160.5   more than one of the covered funds must be used only once for 
160.6   the purpose of determining total allowable service.  
160.7      (i) If the period of duplicated service credit is more than 
160.8   six months, or the person has credit for more than six months 
160.9   with each of the funds, each fund shall apply its formula to a 
160.10  prorated service credit for the period of duplicated service 
160.11  based on a fraction of the salary on which deductions were paid 
160.12  to that fund for the period divided by the total salary on which 
160.13  deductions were paid to all funds for the period.  
160.14     (j) If the period of duplicated service credit is less than 
160.15  six months, or when added to other service credit with that fund 
160.16  is less than six months, the service credit must be ignored and 
160.17  a refund of contributions made to the person in accord with that 
160.18  fund's refund provisions.  
160.19     Sec. 4.  Minnesota Statutes 1998, section 490.121, 
160.20  subdivision 4, is amended to read: 
160.21     Subd. 4.  [ALLOWABLE SERVICE.] "Allowable service" means a 
160.22  whole year, or any fraction thereof, subject to the service 
160.23  credit limit in subdivision 22, served as a judge at any time, 
160.24  or served as a referee in probate for all referees in probate 
160.25  who were in office prior to January 1, 1974. 
160.26     Sec. 5.  Minnesota Statutes 1998, section 490.121, is 
160.27  amended by adding a subdivision to read: 
160.28     Subd. 22.  [SERVICE CREDIT LIMIT.] "Service credit limit" 
160.29  means the greater of:  (1) 24 years of allowable service under 
160.30  chapter 490; or (2) for judges with allowable service rendered 
160.31  prior to July 1, 1980, the number of years of allowable service 
160.32  under chapter 490, which, when multiplied by the percentage 
160.33  listed in section 356.19, subdivision 7 or 8, whichever is 
160.34  applicable to each year of service, equals 76.8. 
160.35     Sec. 6.  Minnesota Statutes 1998, section 490.123, 
160.36  subdivision 1a, is amended to read: 
161.1      Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
161.2   covered by the federal old age, survivors, disability, and 
161.3   health insurance program whose service does not exceed the 
161.4   service credit limit in section 490.121, subdivision 22, shall 
161.5   contribute to the fund from each salary payment a sum equal to 
161.6   8.00 percent of salary.  
161.7      (b) A judge not so covered whose service does not exceed 
161.8   the service credit limit in section 490.121, subdivision 22, 
161.9   shall contribute to the fund from each salary payment a sum 
161.10  equal to 8.15 percent of salary. 
161.11     (c) The contribution under this subdivision is payable by 
161.12  salary deduction. 
161.13     Sec. 7.  Minnesota Statutes 1998, section 490.123, 
161.14  subdivision 1b, is amended to read: 
161.15     Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
161.16  contribution rate to the fund on behalf of a judge is 20.5 
161.17  percent of salary and continues after a judge exceeds the 
161.18  service credit limit in section 490.121, subdivision 22. 
161.19     The employer contribution must be paid by the state court 
161.20  administrator and is payable at the same time as member 
161.21  contributions under subdivision 1a or employee contributions to 
161.22  the unclassified plan in chapter 352D for judges whose service 
161.23  exceeds the limit in section 490.121, subdivision 22, are 
161.24  remitted. 
161.25     Sec. 8.  Minnesota Statutes 1998, section 490.124, 
161.26  subdivision 1, is amended to read: 
161.27     Subdivision 1.  [BASIC RETIREMENT ANNUITY.] Except as 
161.28  qualified hereinafter from and after mandatory retirement date, 
161.29  normal retirement date, early retirement date, or one year from 
161.30  the disability retirement date, as the case may be, a retirement 
161.31  annuity shall be payable to a retiring judge from the judges' 
161.32  retirement fund in an amount equal to:  (1) the percent 
161.33  specified in section 356.19, subdivision 7, multiplied by the 
161.34  judge's final average compensation multiplied by the number of 
161.35  years and fractions of years of allowable service rendered prior 
161.36  to July 1, 1980; plus (2) the percent specified in section 
162.1   356.19, subdivision 8, multiplied by the judge's final average 
162.2   compensation multiplied by the number of years and fractions of 
162.3   years of allowable service rendered after June 30, 1980; 
162.4   provided that the annuity must not exceed 70 percent of the 
162.5   judge's annual salary for the 12 months immediately preceding 
162.6   retirement.  Service that exceeds the service credit limit in 
162.7   section 490.121, subdivision 22, must be excluded in calculating 
162.8   the retirement annuity, but compensation earned during this 
162.9   service must be used in determining a judge's final average 
162.10  compensation and calculating the retirement annuity.  
162.11     Sec. 9.  [PRIOR SERVICE.] 
162.12     This section applies to a person who is a judge on July 1, 
162.13  2000, and whose service under Minnesota Statutes, chapter 490, 
162.14  on that date exceeds the service credit limit in Minnesota 
162.15  Statutes, section 490.121, subdivision 22.  A judge to whom this 
162.16  section applies may elect to have money transferred from the 
162.17  judges' plan to the judge's account in the unclassified 
162.18  employees plan in Minnesota Statutes, chapter 352D.  The amount 
162.19  to be transferred is eight percent of the salary the judge 
162.20  earned after reaching the service credit limit defined in 
162.21  Minnesota Statutes, section 490.121, subdivision 22.  A judge 
162.22  electing this transfer forfeits all service credit under 
162.23  Minnesota Statutes, chapter 490, that exceeds the limit in 
162.24  Minnesota Statutes, section 490.121, subdivision 22.  An 
162.25  election under this section must be made before retirement as a 
162.26  judge, and within 120 days of the effective date of this 
162.27  section.  The election must be made on a form and in a manner 
162.28  specified by the executive director of the Minnesota state 
162.29  retirement system. 
162.30     Sec. 10.  [EFFECTIVE DATE.] 
162.31     Sections 1 to 9 are effective on July 1, 2000. 
162.32                             ARTICLE 19
162.33                 VARIOUS INDIVIDUAL AND SMALL GROUP  
162.34                         PENSION PROVISIONS
162.35     Section 1.  [MSRS-GENERAL; LATE DISABILITY BENEFIT 
162.36  APPLICATION AUTHORIZED.] 
163.1      (a) Notwithstanding any provision of Minnesota Statutes, 
163.2   section 352.113, subdivision 4, to the contrary, a person 
163.3   described in paragraph (b) is authorized to apply for a 
163.4   disability benefit from the general state employees retirement 
163.5   plan of the Minnesota state retirement system under Minnesota 
163.6   Statutes, section 352.113. 
163.7      (b) An eligible person is a person who: 
163.8      (1) was born on October 3, 1952; 
163.9      (2) was employed by the department of economic security 
163.10  from August 1978 to December 1994; 
163.11     (3) is disabled within the meaning of Minnesota Statutes, 
163.12  section 352.01, subdivision 17; 
163.13     (4) began receiving social security disability insurance 
163.14  benefits in January 1995; and 
163.15     (5) began part-time employment in January 1998 and 
163.16  continues in that employment with the Minnesota state council on 
163.17  disability. 
163.18     (c) The eligible person under paragraph (b) must provide, 
163.19  in conjunction with the disability application, any relevant 
163.20  evidence that the executive director of the Minnesota state 
163.21  retirement system requires about the existence of a total and 
163.22  permanent disability as defined in Minnesota Statutes, section 
163.23  352.01, subdivision 17, and about the date on which the 
163.24  disability occurred and its relationship to the termination of 
163.25  active service in December 1994. 
163.26     (d) If the eligible person files a disability benefit 
163.27  application and if the eligible person provides sufficient 
163.28  evidence of disability and the occurrence of the disability 
163.29  under paragraph (c), the disability benefit becomes payable for 
163.30  the first month next following the application and applicable 
163.31  evidence.  The disability benefit must be calculated under the 
163.32  laws in effect at the time that the eligible person terminated 
163.33  active service in December 1994.  The disability benefit must 
163.34  include any applicable deferred annuities augmentation under 
163.35  Minnesota Statutes, section 352.72, subdivision 2. 
163.36     (e) Nothing in this section may be deemed to exempt the 
164.1   eligible person from the partial reemployment of a disabilitant 
164.2   provision described in Minnesota Statutes, section 352.113, 
164.3   subdivision 7. 
164.4      Sec. 2.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SERVICE 
164.5   CREDIT PURCHASE FOR UNCREDITED HENNEPIN COUNTY EMPLOYMENT.] 
164.6      (a) An eligible person described in paragraph (b) is 
164.7   entitled to obtain one year of allowable service credit from the 
164.8   general employees retirement plan of the public employees 
164.9   retirement association. 
164.10     (b) An eligible person is a person who: 
164.11     (1) was born April 12, 1936; 
164.12     (2) retired from the teachers retirement association on 
164.13  July 1, 1997; 
164.14     (3) is currently a recipient of a retirement annuity from 
164.15  the teachers retirement association and a retirement annuity 
164.16  from the general state employees retirement plan of the 
164.17  Minnesota state retirement system; and 
164.18     (4) was employed during the period September 1966 through 
164.19  September 1967 by Hennepin county as a parole officer, when 
164.20  member contributions for retirement coverage were deducted, but 
164.21  for which no allowable service credit in the general employees 
164.22  retirement plan of the public employees retirement association 
164.23  was recorded. 
164.24     (c) Notwithstanding any provision of Minnesota Statutes, 
164.25  sections 353.29, subdivision 7, and 356.30, to the contrary, an 
164.26  eligible person may file an application for a retirement annuity 
164.27  from the general employees retirement plan of the public 
164.28  employees retirement association retroactive to July 1, 1997, 
164.29  with benefits paid retroactive to that date, and may have the 
164.30  annuity calculated as a combined service annuity. 
164.31     (d) The allowable service credit must be granted by the 
164.32  public employees retirement association upon the filing of a 
164.33  valid retirement application by the eligible person. 
164.34     (e) Within 30 days of the receipt of that application by 
164.35  the public employees retirement association and notification by 
164.36  the public employees retirement association to the county 
165.1   administrator, Hennepin county may pay one-half of the prior 
165.2   service credit purchase payment amount calculated under 
165.3   Minnesota Statutes, section 356.55.  If Hennepin county does not 
165.4   pay the required amount in a timely fashion, the executive 
165.5   director of the public employees retirement association shall 
165.6   notify the commissioner of finance of that fact and the 
165.7   commissioner shall deduct from any state aid or state 
165.8   appropriation payable to Hennepin county that amount, plus 
165.9   interest on that amount of 1.5 percent per month for each month 
165.10  or portion of a month from the filing of the retirement 
165.11  application under paragraph (d) to the date of deduction. 
165.12     (f) An amount equal to one-half of the prior service credit 
165.13  purchase payment amount calculated under Minnesota Statutes, 
165.14  section 356.55, must be charged against the public employees 
165.15  retirement association as an administrative expense. 
165.16     (g) This allowable service credit provision expires on 
165.17  January 1, 2001. 
165.18     Sec. 3.  [PAYMENT OF OMITTED SALARY DEDUCTIONS.] 
165.19     Subdivision 1.  [APPLICATION.] A person who was born on 
165.20  October 23, 1943, was employed by Dakota county as a part-time 
165.21  maintenance employee on October 16, 1985, and first had public 
165.22  employees retirement association member contributions deducted 
165.23  as of September 15, 1986, is entitled to purchase eight months 
165.24  of service credit from the public employees retirement 
165.25  association. 
165.26     Subd. 2.  [PAYMENT.] The purchase payment amount for the 
165.27  service credit purchase authorized in subdivision 1 is governed 
165.28  by Minnesota Statutes, section 356.55.  Notwithstanding any 
165.29  provision of Minnesota Statutes, section 356.55, subdivision 5, 
165.30  to the contrary, the eligible person must pay, on or before June 
165.31  1, 2001, an amount equal to the employee contribution rate 
165.32  applied to the person's actual salary rate in effect between 
165.33  January 17, 1986, and September 15, 1986, plus annual compound 
165.34  interest at the rate of 8.5 percent from the date that the 
165.35  employer contributions should have been paid and the date of 
165.36  actual payment.  Dakota county shall pay the balance of the 
166.1   required purchase payment amount within 30 days of the payment 
166.2   by the eligible person.  If Dakota county fails to pay its 
166.3   required amount, the executive director of the public employees 
166.4   retirement association may notify the commissioner of finance of 
166.5   that fact and the commissioner of finance may order that the 
166.6   required amount be deducted from any subsequent state payment to 
166.7   Dakota county and transmitted to the public employees retirement 
166.8   association. 
166.9      Subd. 3.  [APPLICATION; DOCUMENTATION.] A person described 
166.10  in subdivision 1 must apply with the executive director of the 
166.11  public employees retirement association to make the purchase.  
166.12  The application must be in writing and must include all 
166.13  necessary documentation of the applicability of this section and 
166.14  any other relevant information that the executive director may 
166.15  require. 
166.16     Subd. 4.  [LIMITATION.] Authority under this section 
166.17  expires on July 1, 2001. 
166.18     Sec. 4.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; REDUCED 
166.19  SERVICE CREDIT REQUIREMENT FOR DISABILITY BENEFIT APPLICATION.] 
166.20     (a) An eligible person described in paragraph (b) is 
166.21  entitled to apply for a disability benefit from the general 
166.22  employees retirement plan of the public employees retirement 
166.23  association with 14 months of service credit subsequent to the 
166.24  person's last termination of membership, notwithstanding any 
166.25  provision to the contrary of Minnesota Statutes, section 353.33, 
166.26  subdivision 1.  
166.27     (b) An eligible person is a person who: 
166.28     (1) was born on May 30, 1945; 
166.29     (2) began public employment with Todd county in November 
166.30  1978; 
166.31     (3) first terminated public employment in August 1982; 
166.32     (4) resumed public employment with Morrison county in 
166.33  October 1987; 
166.34     (5) subsequently terminated public employment with Meeker 
166.35  county in November 1997; 
166.36     (6) resumed public employment with Todd county in August 
167.1   1998; and 
167.2      (7) subsequently terminated public employment October 8, 
167.3   1999. 
167.4      Sec. 5.  [TEACHERS RETIREMENT ASSOCIATION; REFUND OF 
167.5   CERTAIN INTEREST CHARGES.] 
167.6      (a) Upon filing a written demand for the interest refund, a 
167.7   person described in paragraph (b) is entitled to receive a 
167.8   refund of interest specified in paragraph (c) for the period 
167.9   during which the teachers retirement association was negligent 
167.10  in providing accurate information to the eligible person or was 
167.11  negligent in making timely reports to other Minnesota public 
167.12  pension plans in which the eligible person has service credit. 
167.13     (b) An eligible person is a person who: 
167.14     (1) retired from the teachers retirement association 
167.15  effective September 1, 1999; 
167.16     (2) repaid a previously taken refund to the teachers 
167.17  retirement association on August 23, 1999, restoring 10.979 
167.18  years of allowable service credit; 
167.19     (3) began the retirement application and refund repayment 
167.20  process in February 1999 and was first able to file retirement 
167.21  forms with the teachers retirement association office on August 
167.22  27, 1999; and 
167.23     (4) was charged interest on the repayment of refund for the 
167.24  period during which the teachers retirement association failed 
167.25  to provide requested information and failed to contact the 
167.26  public employees retirement association and the St. Paul 
167.27  teachers retirement fund association. 
167.28     (c) The refund interest rate is 0.708 percent per month, 
167.29  compounded monthly, on the refund repayment amount that would 
167.30  have been payable on April 15, 1999, applied to the period April 
167.31  15, 1999, to August 23, 1999, and 8.5 percent per year, 
167.32  compounded annually, on that initially determined amount from 
167.33  August 23, 1999, until the interest repayment is made. 
167.34     (d) The interest refund is payable on the first day of the 
167.35  month next following the date on which the eligible person files 
167.36  the written demand under paragraph (a). 
168.1      Sec. 6.  [MTRFA; PRIOR SERVICE CREDIT PURCHASE FOR 
168.2   UNCREDITED TEACHING SERVICE PERIODS.] 
168.3      (a) An eligible person described in paragraph (b) is 
168.4   entitled to purchase allowable service credit from the 
168.5   Minneapolis teachers retirement fund association basic program 
168.6   for the periods of teaching employment specified in paragraph 
168.7   (c) by making the payment required under Minnesota Statutes, 
168.8   section 356.55. 
168.9      (b) An eligible person is a person who: 
168.10     (1) was employed by special school district No. 1 
168.11  (Minneapolis) as a long call reserve teacher from October 1972 
168.12  to June 1973 and was covered by the Minneapolis employees 
168.13  retirement fund; 
168.14     (2) was employed by special school district No. 1 
168.15  (Minneapolis) as a school social worker at Franklin junior high 
168.16  school from August 28, 1973, through June 12, 1974, and from 
168.17  August 29, 1974, through June 11, 1975, without retirement 
168.18  coverage; 
168.19     (3) was employed by special school district No. 1 
168.20  (Minneapolis) as a school social worker at North high school 
168.21  from August 29, 1975, through December 19, 1975, covered by the 
168.22  Minneapolis teachers retirement fund association; 
168.23     (4) was retained by special school district No. 1 
168.24  (Minneapolis) in the capacity of a school social worker at North 
168.25  high school as an hourly wage social worker from August 1976 
168.26  through June 1983 without retirement coverage; and 
168.27     (5) is currently employed by Hennepin county covered by the 
168.28  public employees retirement association. 
168.29     (c) The periods for allowable service credit purchase are 
168.30  August 28, 1973, through June 12, 1974; and August 29, 1974, 
168.31  through June 11, 1975. 
168.32     (d) An eligible person must provide any relevant 
168.33  documentation related to eligibility to make this service credit 
168.34  purchase required by the executive director of the Minneapolis 
168.35  teachers retirement fund association. 
168.36     (e) Allowable service credit for the purchase periods must 
169.1   be granted by the Minneapolis teachers retirement fund 
169.2   association to the account of the eligible person upon receipt 
169.3   of the prior service credit purchase payment amount. 
169.4      (f) The prior service credit purchase payment amount shall 
169.5   be computed by the actuary retained by the legislative 
169.6   commission on pensions and retirement.  That computation must, 
169.7   in applying the process stated in Minnesota Statutes, section 
169.8   356.55, give recognition to the liabilities that would be 
169.9   created in the Minneapolis teachers retirement fund association 
169.10  and other Minnesota public pension funds due to the service 
169.11  credit purchase. 
169.12     (g) Following receipt of that purchase payment amount, the 
169.13  executive director of the Minneapolis teachers retirement fund 
169.14  association shall allocate and transmit that amount to the 
169.15  applicable pension administrations, as determined under 
169.16  paragraph (f). 
169.17     Sec. 7.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
169.18  PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
169.19     (a) Notwithstanding any provision of law to the contrary, a 
169.20  person described in paragraph (b) is authorized to purchase 
169.21  allowable service credit from the basic program of the 
169.22  Minneapolis teachers retirement fund association for the period 
169.23  described in paragraph (c) by making the payment specified in 
169.24  paragraph (d). 
169.25     (b) An eligible person for purposes of paragraph (a) is a 
169.26  person who: 
169.27     (1) was born on October 1, 1942; 
169.28     (2) is currently employed by special school district No. 1 
169.29  (Minneapolis) and is currently a member of the Minneapolis 
169.30  teachers retirement fund association; 
169.31     (3) was initially hired by special school district No. 1 
169.32  (Minneapolis) on November 13, 1967, and taught at Sanford junior 
169.33  high school until June 1968; 
169.34     (4) was reemployed by special school district No. 1 
169.35  (Minneapolis) as an adult basic education English and social 
169.36  studies teacher on May 25, 1970, and continued to teach in that 
170.1   program until December 17, 1984; and 
170.2      (5) as a result of binding arbitration of an employment 
170.3   dispute, was employed by special school district No. 1 
170.4   (Minneapolis) as an English teacher at Franklin junior high 
170.5   school on December 17, 1984. 
170.6      (c) The service credit purchase period is any period 
170.7   between May 25, 1970, to December 17, 1984, that has not 
170.8   previously been credited by the Minneapolis teachers retirement 
170.9   fund association. 
170.10     (d) To purchase the allowable service credit, the eligible 
170.11  person must pay to the Minneapolis teachers retirement fund 
170.12  association the prior service credit purchase payment calculated 
170.13  under Minnesota Statutes, section 356.55. 
170.14     (e) The eligible person must provide all relevant 
170.15  documentation of the applicability of the requirements set forth 
170.16  in paragraph (b) and any other applicable information that the 
170.17  executive director of the Minneapolis teachers retirement fund 
170.18  association may request.  
170.19     (f) This prior service credit purchase authority expires on 
170.20  July 1, 2001, or on the date of the eligible person's 
170.21  termination of active service with special school district No. 1 
170.22  (Minneapolis), whichever is earlier. 
170.23     Sec. 8.  [MTRFA; PRIOR SERVICE CREDIT PURCHASE FOR 
170.24  INDEPENDENT CONTRACT UNCREDITED TEACHING SERVICE PERIOD.] 
170.25     (a) An eligible person described in paragraph (b) is 
170.26  authorized to purchase allowable service credit from the 
170.27  Minneapolis teachers retirement fund association for the period 
170.28  of teaching employment specified in paragraph (c) by making the 
170.29  payment required under Minnesota Statutes, section 356.55, by 
170.30  the last date authorized for receiving payment under that 
170.31  section, or the eligible person's effective date of retirement, 
170.32  whichever is earlier. 
170.33     (b) An eligible person is a person who: 
170.34     (1) was born on May 22, 1939; 
170.35     (2) was employed by special school district No. 1 
170.36  (Minneapolis) and covered as an active member by the Minneapolis 
171.1   teachers retirement fund association from July 27, 1962, to June 
171.2   11, 1967; and 
171.3      (3) was retained by special school district No. 1 
171.4   (Minneapolis) at an hourly wage rate as a teacher in the adult 
171.5   basic education program from April 23, 1980, to September 28, 
171.6   1992. 
171.7      (c) The period for allowable service credit purchase is 
171.8   from April 23, 1980, to September 28, 1992.  
171.9      (d) An eligible person under paragraph (b) must provide any 
171.10  relevant documentation related to eligibility to make this 
171.11  service credit purchase which is required by the executive 
171.12  director of the Minneapolis teachers retirement fund association.
171.13     (e) Allowable service credit for the purchase periods must 
171.14  be granted by the Minneapolis teachers retirement fund 
171.15  association to the account of the eligible person upon receipt 
171.16  of the prior service credit purchase payment amount. 
171.17     (f) A service credit purchase is not authorized for any 
171.18  portion of the April 23, 1980, to September 28, 1992, period for 
171.19  which the eligible individual signed an independent contract 
171.20  which waives pension coverage by the Minneapolis teachers 
171.21  retirement fund association for the period covered by the 
171.22  contract, or for any period for which administrators for special 
171.23  school district No. 1 (Minneapolis) or the Minneapolis teachers 
171.24  retirement fund association determine that the individual was 
171.25  serving as an independent contractor. 
171.26     Sec. 9.  [MERF; PRIOR SERVICE CREDIT PURCHASE FOR TEMPORARY 
171.27  EMPLOYMENT PERIOD.] 
171.28     (a) An eligible person described in paragraph (b) is 
171.29  entitled to purchase allowable service credit from the 
171.30  Minneapolis employees retirement fund for the period of 
171.31  temporary employment specified in paragraph (c) by making the 
171.32  payment required under Minnesota Statutes, section 356.55. 
171.33     (b) An eligible person is a person who: 
171.34     (1) was born on August 15, 1951; 
171.35     (2) was hired by the city of Minneapolis as a maintenance 
171.36  worker/truck driver on June 1, 1976, and was covered by the 
172.1   Minneapolis employees retirement fund for that employment; and 
172.2      (3) is currently employed by the city of Minneapolis and 
172.3   covered by the Minneapolis employees retirement association. 
172.4      (c) The period for allowable service credit purchase is a 
172.5   period during 1975 during which the eligible person was employed 
172.6   by the city of Minneapolis as a temporary employee. 
172.7      (d) An eligible person must provide any relevant 
172.8   documentation related to eligibility to make this service credit 
172.9   purchase required by the executive director of the Minneapolis 
172.10  employees retirement fund. 
172.11     (e) Allowable service credit for the purchase periods must 
172.12  be granted by the Minneapolis employees retirement fund to the 
172.13  account of the eligible person upon receipt of the prior service 
172.14  credit purchase payment amount.  To receive the service credit, 
172.15  the service credit purchase must be received by the Minneapolis 
172.16  employees retirement fund by October 1, 2001, or prior to 
172.17  retirement, whichever is earlier. 
172.18     Sec. 10.  [MERF; PRIOR SERVICE CREDIT PURCHASE FOR 
172.19  TEMPORARY EMPLOYMENT PERIOD.] 
172.20     (a) An eligible person described in paragraph (b) is 
172.21  entitled to purchase allowable service credit from the 
172.22  Minneapolis employees retirement fund for the period or periods 
172.23  of temporary employment specified in paragraph (c) by making the 
172.24  payment required under Minnesota Statutes, section 356.55. 
172.25     (b) An eligible person is a person who: 
172.26     (1) was born on December 17, 1953; 
172.27     (2) was hired by the city of Minneapolis as a full-time 
172.28  maintenance worker on February 2, 1974, and was covered by the 
172.29  Minneapolis employees retirement fund for that employment; and 
172.30     (3) is currently employed by the city of Minneapolis, 
172.31  covered by the Minneapolis employees retirement association. 
172.32     (c) The periods for allowable service credit purchase are 
172.33  periods during 1974 and 1975 during which the eligible person 
172.34  was employed by the city of Minneapolis as a temporary employee. 
172.35     (d) An eligible person must provide any relevant 
172.36  documentation related to eligibility to make this service credit 
173.1   purchase required by the executive director of the Minneapolis 
173.2   employees retirement fund. 
173.3      (e) Allowable service credit for the purchase periods must 
173.4   be granted by the Minneapolis employees retirement fund to the 
173.5   account of the eligible person upon receipt of the prior service 
173.6   credit purchase payment amount.  To receive the service credit, 
173.7   the service credit purchase must be received by the Minneapolis 
173.8   employees retirement fund by October 1, 2001, or prior to 
173.9   retirement, whichever is earlier. 
173.10     Sec. 11.  [EFFECTIVE DATE.] 
173.11     (a) Sections 1, 2, and 4 to 10 are effective on the day 
173.12  following final enactment. 
173.13     (b) Section 3 is effective on the day after the date on 
173.14  which the Dakota county board of commissioners and the chief 
173.15  clerical officer of Dakota county complete, in a timely manner, 
173.16  their compliance with Minnesota Statutes, section 645.021, 
173.17  subdivisions 2 and 3. 
173.18     (c) Section 1 expires, if not utilized, on December 31, 
173.19  2000.