1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; various public pension plans; 1.3 expanding the membership of the state correctional 1.4 employees retirement plan to include certain Minnesota 1.5 extended treatment options program employees; 1.6 downsizing the early retirement reduction rates for 1.7 various public safety plans; grandparenting public 1.8 employee police and fire plan coverage for certain 1.9 Rice county correctional employees; requiring Rice 1.10 county to repay certain police state aid amounts; 1.11 providing employer penalties for pension plan 1.12 membership certification failures or errors; providing 1.13 special retirement coverage for certain state fire 1.14 marshal employees; requiring a study; clarifying 1.15 various Minneapolis employees retirement plan survivor 1.16 benefit provisions; increasing the number of vendors 1.17 for certain tax-sheltered annuities for educational 1.18 employees; modifying various benefit provisions for 1.19 certain Minnesota state college and university system 1.20 employees; authorizing the establishment of volunteer 1.21 rescue squad relief associations by Kandiyohi county 1.22 and the city of Litchfield; merging the pre-March 1, 1.23 1999, local police and paid fire consolidation 1.24 accounts into the public employees police and fire 1.25 plan; extending the minimum volunteer firefighter fire 1.26 state aid amount to post-1993 relief association 1.27 members; providing a targeted early retirement 1.28 incentive program for certain employees of the 1.29 metropolitan council; making miscellaneous changes in 1.30 the legislators retirement plan, the Minnesota state 1.31 college and university system individual retirement 1.32 account plan, the Minnesota state retirement system, 1.33 and the teachers retirement association; reducing the 1.34 membership of the legislative commission on pensions 1.35 and retirement; amending Minnesota Statutes 1998, 1.36 sections 3.85, subdivisions 3 and 12; 3A.02, 1.37 subdivision 1b; 43A.27, subdivision 3; 69.021, 1.38 subdivisions 7 and 10; 69.031, subdivision 5; 122A.46, 1.39 subdivision 2; 136F.48; 352.03, subdivision 1; 352.90; 1.40 352.91, by adding a subdivision; 352.93, subdivision 1.41 2a; 352B.08, subdivision 2a; 353.01, subdivisions 2b, 1.42 10, and 16; 353.64, subdivision 1; 353.65, 1.43 subdivisions 2 and 3; 353.651, subdivision 4; 1.44 353A.083, by adding a subdivision; 354.05, subdivision 1.45 40; 354.06, subdivision 1; 354.10, subdivision 4; 1.46 354.445; 354.66, subdivisions 1b, 1c, and 3; 354B.24, 2.1 subdivision 3; 354B.25, subdivisions 2, 3, and 5; 2.2 354C.11; 354C.12, subdivision 4; 356.19, by adding a 2.3 subdivision; 356.215, subdivision 4g; 356.24, 2.4 subdivision 1; 356A.01, subdivisions 7 and 8; 422A.06, 2.5 subdivisions 3 and 6; 422A.101, subdivision 4; 2.6 422A.18, subdivision 2; 422A.22, subdivisions 4 and 5; 2.7 422A.23; and 423A.02, subdivisions 1b, 2, and by 2.8 adding a subdivision; proposing coding for new law in 2.9 Minnesota Statutes, chapters 352; 353; 354B; and 422A; 2.10 proposing coding for new law as Minnesota Statutes, 2.11 chapter 425B; repealing Minnesota Statutes 1998, 2.12 sections 353.65, subdivision 3a; and 422A.16, 2.13 subdivision 3a. 2.14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.15 ARTICLE 1 2.16 CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 2.17 Section 1. Minnesota Statutes 1998, section 352.90, is 2.18 amended to read: 2.19 352.90 [POLICY.] 2.20 It is the policy of the legislature to provide special 2.21 retirement benefits and contributions for certain correctional 2.22 employees who may be required to retire at an early age because 2.23 they lose the mental or physical capacity required to maintain 2.24 the safety, security, discipline, and custody of inmates at 2.25 state correctional facilities or of patients at the Minnesota 2.26 security hospital or at the Minnesota sexual psychopathic 2.27 personality treatment center or of patients in the Minnesota 2.28 extended treatment options on-campus program at Cambridge. 2.29 Sec. 2. Minnesota Statutes 1998, section 352.91, is 2.30 amended by adding a subdivision to read: 2.31 Subd. 3e. [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 2.32 CAMBRIDGE.] "Covered correctional service" means service by a 2.33 state employee in one of the following employment positions with 2.34 the Minnesota extended treatment options on-campus program at 2.35 Cambridge if at least 75 percent of the employee's working time 2.36 is spent in direct contact with patients who are in the 2.37 Minnesota extended treatment options program and if service in 2.38 such a position is certified to the executive director by the 2.39 commissioner of human services, unless the person elects to 2.40 retain current retirement coverage under section 4: 2.41 (1) behavior analyst I; 2.42 (2) human services support specialist; 3.1 (3) mental retardation residential program lead; 3.2 (4) psychologist II; 3.3 (5) recreation program assistant; 3.4 (6) recreation therapist assistant; 3.5 (7) recreation therapist senior; 3.6 (8) registered nurse senior; 3.7 (9) skills development specialist; and 3.8 (10) social worker senior. 3.9 Sec. 3. Minnesota Statutes 1998, section 352.93, 3.10 subdivision 2a, is amended to read: 3.11 Subd. 2a. [EARLY RETIREMENT.] Any covered correctional 3.12 employee, or former employee if service ended after June 30,3.131989,who becomes at least 50 years old and who has at least 3.14 three years of allowable service is entitled upon application to 3.15 a reduced retirement annuity equal to the annuity calculated 3.16 under subdivision 2, reducedso that the reduced annuity is the3.17actuarial equivalent of the annuity that would be payable if the3.18employee deferred receipt of the annuity from the day the3.19annuity begins to accrue to age 55by two-tenths of one percent 3.20 for each month that the correctional employee is under age 55 at 3.21 the time of retirement. 3.22 Sec. 4. [TEMPORARY PROVISION; ELECTION TO RETAIN 3.23 RETIREMENT COVERAGE.] 3.24 (a) An employee in a position specified as qualifying under 3.25 Minnesota Statutes, section 352.91, subdivision 3e, may elect to 3.26 retain coverage under the general employees retirement plan of 3.27 the Minnesota state retirement system or may elect to transfer 3.28 coverage and contribute to the correctional employees retirement 3.29 plan. An employee electing to participate in the correctional 3.30 employees retirement plan shall begin making contributions to 3.31 the correctional plan beginning the first full pay period after 3.32 July 1, 1999, or the first full pay period following filing of 3.33 their election to transfer coverage to the correctional 3.34 employees retirement plan, whichever is later. The election to 3.35 retain coverage or to transfer coverage must be made in writing 3.36 by the person on a form prescribed by the executive director of 4.1 the Minnesota state retirement system and must be filed with the 4.2 executive director no later than December 31, 1999. 4.3 (b) An employee failing to make an election by December 15, 4.4 1999, must be notified by certified mail by the executive 4.5 director of the Minnesota state retirement system of the 4.6 deadline to make a choice. A person who does not submit an 4.7 election form must continue coverage in the general employees 4.8 retirement plan and forfeits all rights to transfer retirement 4.9 coverage to the correctional employees retirement plan. 4.10 (c) The election to retain coverage in the general 4.11 employees retirement plan or the election to transfer retirement 4.12 coverage to the correctional employees retirement plan is 4.13 irrevocable once it is filed with the executive director. 4.14 Sec. 5. [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 4.15 PERSONS.] 4.16 Subdivision 1. [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 4.17 (a) An employee who has future retirement coverage transferred 4.18 to the correctional employees retirement plan under section 4, 4.19 and who does not elect to retain general state employees 4.20 retirement plan coverage, is entitled to elect to obtain prior 4.21 service credit for eligible state service performed on or after 4.22 July 1, 1997, and before the first day of the first full pay 4.23 period beginning after December 31, 1999. All prior service 4.24 credit must be purchased. 4.25 (b) Eligible state service is any period of service on or 4.26 after the date which the employee started employment with the 4.27 Minnesota extended treatment options program in a position 4.28 specified in Minnesota Statutes, section 352.91, subdivision 3e, 4.29 in which at least 75 percent of the employee's working time is 4.30 determined to have been spent in direct contact with Minnesota 4.31 extended treatment options program patients or July 1, 1997, 4.32 whichever is later, and the date the employee joined the 4.33 correctional employees plan. 4.34 (c) The department of human services shall certify eligible 4.35 state service to the executive director of the Minnesota 4.36 retirement system. 5.1 Subd. 2. [PAYMENT FOR PRIOR SERVICE.] (a) An employee 5.2 electing to obtain prior service credit under subdivision 1 must 5.3 pay an additional employee contribution for that prior service. 5.4 The additional member contribution is the contribution 5.5 differential percentage applied to the actual salary paid to the 5.6 employee during the period of the prior eligible state service, 5.7 plus interest at the rate of six percent per annum, compounded 5.8 annually. The contribution differential percentage is the 5.9 difference between 5.5 percent of salary and the applicable 5.10 employee contribution rate of the general state employees 5.11 retirement plan during the prior eligible state service. 5.12 (b) The additional member contribution must be paid only in 5.13 a lump sum. Payment must accompany the election to obtain prior 5.14 service credit. No election or payment may be made by the 5.15 person or accepted by the executive director after June 30, 2001. 5.16 Subd. 3. [TRANSFER OF ASSETS.] Assets must be transferred 5.17 from the general state employees retirement plan to the 5.18 correctional employees retirement plan in an amount equal to the 5.19 present value of benefits earned under the general employees 5.20 retirement plan for each employee transferring to the 5.21 correctional employees retirement plan, as determined by the 5.22 actuary retained by the legislative commission on pensions and 5.23 retirement in accordance with Minnesota Statutes, section 5.24 356.215, multiplied by the accrued liability funding ratio of 5.25 active members as derived from the most recent actuarial 5.26 valuation prepared by the commission-retained actuary. The 5.27 transfer of assets must be made within 45 days after the 5.28 employee elects to transfer coverage to the correctional 5.29 employees retirement plan. 5.30 Subd. 4. [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 5.31 of assets in subdivision 3, service credit in the general state 5.32 employees plan of the Minnesota state retirement system is 5.33 forfeited and may not be reinstated. The service credit and 5.34 transferred assets must be credited to the correctional 5.35 employees retirement plan. 5.36 Subd. 5. [COUNSELING.] (a) The commissioners of human 6.1 services and employee relations and the executive director of 6.2 the Minnesota state retirement system have the joint 6.3 responsibility of providing affected employees with appropriate 6.4 and timely retirement and related benefit counseling. 6.5 (b) Counseling must include the anticipated impact of the 6.6 retirement coverage change on the person's future retirement 6.7 benefit amounts, future retirement eligibility, future 6.8 applicability of mandatory retirement laws, and future 6.9 postemployment insurance coverage. 6.10 (c) The commissioner of human services must consult with 6.11 the appropriate collective bargaining agents of the affected 6.12 employees regarding the content, form, and timing of the 6.13 counseling required by this section. 6.14 Sec. 6. [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 6.15 RIGHTS.] 6.16 (a) Nothing in sections 1, 2, and 4 to 7 may be considered 6.17 to restrict the entitlement of a person under state law to repay 6.18 a previously taken refund of employee or member contributions to 6.19 a Minnesota public pension plan if all qualifying requirements 6.20 are met. 6.21 (b) The period of correctional employees retirement plan 6.22 contributions, plus interest, must be restored upon the 6.23 repayment of the appropriate refund amount if the service was 6.24 correctional employees retirement plan covered service on the 6.25 date when the service was rendered or on the date when the 6.26 refund was taken. 6.27 Sec. 7. [EARLY RETIREMENT INCENTIVE.] 6.28 This section applies to an employee who has future 6.29 retirement coverage transferred to the correctional employee 6.30 retirement plan under section 4 and who is at least 55 years old 6.31 on the effective date of section 4. That employee may 6.32 participate in a health insurance early retirement incentive 6.33 available under the terms of a collective bargaining agreement, 6.34 notwithstanding any provision of the collective bargaining 6.35 agreement that limits participation to persons who select the 6.36 option during the payroll period in which they become 55 years 7.1 old. A person selecting the health insurance early retirement 7.2 incentive under this section must retire by the later of 7.3 December 31, 2000, or within the pay period following the time 7.4 at which the person has at least three years of covered 7.5 correctional service, including any purchased service credit. 7.6 An employee meeting this criteria who wishes to extend the 7.7 person's employment must do so under Minnesota Statutes, section 7.8 43A.34, subdivision 3. 7.9 Sec. 8. [EFFECTIVE DATE.] 7.10 Sections 1, 2, and 4 to 7 are effective on the first day of 7.11 the first full pay period beginning after July 1, 1999. Section 7.12 3 is effective July 1, 1999. 7.13 ARTICLE 2 7.14 PUBLIC SAFETY EMPLOYEE PENSION 7.15 PLAN CHANGES 7.16 Section 1. Minnesota Statutes 1998, section 352B.08, 7.17 subdivision 2a, is amended to read: 7.18 Subd. 2a. [EARLY RETIREMENT.] Any member who has become at 7.19 least 50 years old and who has at least three years of allowable 7.20 service is entitled upon application to a reduced retirement 7.21 annuity equal to the annuity calculated under subdivision 2, 7.22 reduced bytwo-tenthsone-tenth of one percent for each month 7.23 that the member is under age 55 at the time of retirement. 7.24 Sec. 2. Minnesota Statutes 1998, section 353.64, 7.25 subdivision 1, is amended to read: 7.26 Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 7.27 person who prior to July 1, 1961, was a member of the police and 7.28 fire fund, by virtue of being a police officer or firefighter, 7.29 shall, as long as the person remains in either position, 7.30 continue membership in the fund. 7.31 (b) A person who was employed by a governmental subdivision 7.32 as a police officer and was a member of the police and fire fund 7.33 on July 1, 1978, by virtue of being a police officer as defined 7.34 by this section on that date, and if employed by the same 7.35 governmental subdivision in a position in the same department in 7.36 which the person was employed on that date,shall continue8.1membership incontinues to be a member of the fund, whether or 8.2 not that person has the power of arrest by warrant and is 8.3 licensed by the peace officers standards and training board 8.4 after that date. A person who was employed as a correctional 8.5 officer by Rice county before July 1, 1998, for the duration of 8.6 employment in the correctional position held on July 1, 1998, 8.7 continues to be a member of the public employees police and fire 8.8 plan, whether or not the person has the power of arrest by 8.9 warrant and is licensed by the peace officers standards and 8.10 training board after that date. 8.11 (c) A person who was employed by a governmental subdivision 8.12 as a police officer or a firefighter, whichever applies, was an 8.13 active member of the local police or salaried firefighters 8.14 relief association located in that governmental subdivision by 8.15 virtue of that employment as of the effective date of the 8.16 consolidation as authorized by sections 353A.01 to 353A.10, and 8.17 has elected coverage by the public employees police and fire 8.18 fund benefit plan, shall become a member of the police and fire 8.19 fund after that date if employed by the same governmental 8.20 subdivision in a position in the same department in which the 8.21 person was employed on that date. 8.22 (d) Any other employee serving on a full-time basis as a 8.23 police officer as defined in subdivision 2 or as a firefighter 8.24 as defined in subdivision 3 on or after July 1, 1961, shall 8.25 become a member of the public employees police and fire fund. 8.26 (e) An employee serving on less than a full-time basis as a 8.27 police officer shall become a member of the public employees 8.28 police and fire fund only after a resolution stating that the 8.29 employee should be covered by the police and fire fund is 8.30 adopted by the governing body of the governmental subdivision 8.31 employing the person declaring that the position which the 8.32 person holds is that of a police officer. 8.33 (f) An employee serving on less than a full-time basis as a 8.34 firefighter shall become a member of the public employees police 8.35 and fire fund only after a resolution stating that the employee 8.36 should be covered by the police and fire fund is adopted by the 9.1 governing body of the governmental subdivision employing the 9.2 person declaring that the position which the person holds is 9.3 that of a firefighter. 9.4 (g) A police officer or firefighter employed by a 9.5 governmental subdivision who by virtue of that employment is 9.6 required by law to be a member of and to contribute to any 9.7 police or firefighter relief association governed by section 9.8 69.77 which has not consolidated with the public employees 9.9 police and fire fund and any police officer or firefighter of a 9.10 relief association that has consolidated with the association 9.11 for which the employee has not elected coverage by the public 9.12 employees police and fire fund benefit plan as provided in 9.13 sections 353A.01 to 353A.10 shall not become a member of the 9.14 public employees police and fire fund. 9.15 Sec. 3. Minnesota Statutes 1998, section 353.651, 9.16 subdivision 4, is amended to read: 9.17 Subd. 4. [EARLY RETIREMENT.] Any police officer or 9.18 firefighter member who has become at least 50 years old and who 9.19 has at least three years of allowable service is entitled upon 9.20 application to a retirement annuity equal to the normal annuity 9.21 calculated under subdivision 3, reduced bytwo-tenthsone-tenth 9.22 of one percent for each month that the member is under age 55 at 9.23 the time of retirement. 9.24 Sec. 4. [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 9.25 CERTAIN INSTANCES.] 9.26 (a) If a public employee continues in retirement plan 9.27 coverage by the public employees police and fire retirement plan 9.28 by virtue of this article and subsequently is covered by the 9.29 federal old age, survivors, and disability insurance program for 9.30 service as a Rice county correctional officer, the retirement 9.31 annuity of the person under section 353.651 or the disability 9.32 benefit of the person under section 353.656 must be reduced 9.33 dollar-for-dollar for the social security benefit that the 9.34 person is entitled to receive by virtue of Rice county 9.35 correctional service rendered after the effective date of 9.36 section 2. 10.1 (b) To be effective, the retirement annuity or disability 10.2 benefit application form for a Rice county correctional employee 10.3 must include signed, written permission by the person for the 10.4 public employees retirement association to obtain the necessary 10.5 information from the federal old age, survivors, and disability 10.6 insurance program to implement the offset provision in paragraph 10.7 (a). 10.8 Sec. 5. [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 10.9 AND CERTIFICATION FAILURES.] 10.10 (a) If the board of trustees of the public employees 10.11 retirement association, upon the recommendation of the executive 10.12 director, determines that a governmental subdivision has 10.13 certified a public employee for membership in the public 10.14 employees police and fire retirement plan when the public 10.15 employee was not eligible for that retirement plan coverage, the 10.16 public employee must be covered by the correct retirement plan 10.17 for subsequent service, the public employee retains the coverage 10.18 for the period of the misclassification, and the governmental 10.19 subdivision shall pay in a lump sum the difference in the 10.20 actuarial present value of the retirement annuities to which the 10.21 public employee would have been entitled if the public employee 10.22 was properly classified. The government subdivision payment is 10.23 payable within 30 days of the board's determination. If unpaid, 10.24 it must be collected under section 353.28. The lump-sum payment 10.25 must be deposited in the public employees retirement fund. 10.26 (b) If the executive director of the public employees 10.27 retirement association determines that a governmental 10.28 subdivision has failed to certify a person for retirement plan 10.29 membership and coverage under this chapter, in addition to the 10.30 procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 10.31 12a, or 12b, the director shall charge a fine of $....... for 10.32 each membership certification failure. 10.33 Sec. 6. Minnesota Statutes 1998, section 353A.083, is 10.34 amended by adding a subdivision to read: 10.35 Subd. 4. [PRE-1999 CONSOLIDATIONS.] For any consolidation 10.36 account in effect on July 1, 1999, the public employees police 11.1 and fire fund benefit plan applicable to consolidation account 11.2 members who have elected or will elect that benefit plan 11.3 coverage under section 353A.08 is the most recent change adopted 11.4 by the applicable municipality under subdivision 1, 2, or 3, 11.5 unless the applicable municipality approves the extension of the 11.6 post-June 30, 1999, public employees police and fire fund 11.7 benefit plan to the consolidation account. 11.8 Sec. 7. [COLLECTION OF POLICE STATE AID OVERPAYMENTS.] 11.9 As police state aid that was received by Rice county on 11.10 account of correctional officers who were improperly included in 11.11 retirement coverage by the public employees police and fire 11.12 plan, the total of the following amounts must be deducted in 20 11.13 equal annual installments from any police state aid payable to 11.14 Rice county under Minnesota Statutes, chapter 69: 11.15 Amount Year 11.16 $11,543 1994 11.17 19,096 1995 11.18 39,111 1996 11.19 19,170 1997 11.20 13,764 1998 11.21 Sec. 8. [EFFECTIVE DATE.] 11.22 Sections 1, 3, and 7 are effective on July 1, 1999. 11.23 Sections 2, 4, and 6 are effective on the day following final 11.24 enactment. Section 5 is effective on August 1, 2000. 11.25 ARTICLE 3 11.26 SPECIAL RETIREMENT COVERAGE 11.27 FOR CERTAIN STATE FIRE 11.28 MARSHAL EMPLOYEES 11.29 Section 1. [352.87] [STATE FIRE MARSHAL DIVISION 11.30 EMPLOYEES.] 11.31 Subdivision 1. [ELIGIBILITY.] A member of the general plan 11.32 who is employed by the department of public safety, state fire 11.33 marshal division, as a deputy state fire marshal, fire/arson 11.34 investigator, who elects special benefit coverage under 11.35 subdivision 8, is entitled to retirement benefits or disability 11.36 benefits, as applicable, as stated in this section for eligible 12.1 service under this section rendered after July 1, 1999, for 12.2 which allowable service credit is received. The covered member 12.3 must be at least age 55 to qualify for the retirement annuity 12.4 specified in subdivision 3. 12.5 Subd. 2. [RETIREMENT ANNUITY ELIGIBILITY.] A person 12.6 specified in subdivision 1 who meets all eligibility 12.7 requirements specified in this chapter applicable to general 12.8 plan members is eligible for retirement benefits as specified in 12.9 subdivision 3. 12.10 Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified 12.11 in subdivision 1 will have a retirement annuity applicable for 12.12 allowable service credit under this section calculated by 12.13 multiplying the employee's average salary, as defined in section 12.14 352.115, subdivision 2, by the percentage specified in section 12.15 356.19, subdivision 2a, for each year or portions of a year of 12.16 allowable service credit. No reduction for retirement prior to 12.17 normal retirement age, as specified in section 352.01, 12.18 subdivision 25, applies to service to which this section applies. 12.19 Subd. 4. [NON-JOB-RELATED DISABILITY BENEFITS.] An 12.20 eligible member described in subdivision 1, who is less than 55 12.21 years of age and who becomes disabled and physically or mentally 12.22 unfit to perform the duties of the position because of sickness 12.23 or injury while not engaged in covered employment, is entitled 12.24 to a disability benefit amount equivalent to an annuity computed 12.25 under subdivision 3 assuming the member has 15 years of service 12.26 qualifying under this section and waiving the minimum age 12.27 requirement. If the eligible member becomes disabled under this 12.28 subdivision with more than 15 years of service covered under 12.29 this section, the eligible member is entitled to a disability 12.30 benefit amount equivalent to an annuity computed under 12.31 subdivision 3 based on all years of service credited under this 12.32 section and waiving the minimum age requirement. 12.33 Subd. 5. [JOB-RELATED DISABILITY BENEFITS.] An eligible 12.34 member defined in subdivision 1, who is less than 55 years of 12.35 age and who becomes disabled and physically or mentally unfit to 12.36 perform the duties of the position because of sickness or injury 13.1 while engaged in covered employment, is entitled to a disability 13.2 benefit amount equivalent to an annuity computed under 13.3 subdivision 3 assuming the member has 20 years of service 13.4 qualifying under this section and waiving the minimum age 13.5 requirement. An eligible member who becomes disabled under this 13.6 subdivision with more than 20 years of service credited under 13.7 this section is entitled to a disability benefit amount 13.8 equivalent to an annuity computed under subdivision 3 based on 13.9 all years of service credited under this section and waiving the 13.10 age requirement. 13.11 Subd. 6. [DISABILITY BENEFIT COORDINATION.] If the 13.12 eligible employee is entitled to receive a disability benefit as 13.13 provided in subdivision 4 or 5 and has allowable service credit 13.14 under this section for less service than the length of service 13.15 upon which the disability benefit in subdivision 4 or 5 is 13.16 based, and also has allowable service in the general plan not 13.17 includable in this section, the employee is entitled to a 13.18 disability benefit or deferred retirement annuity based on the 13.19 general plan service not includable in this section only for the 13.20 service that, when combined with the service includable in this 13.21 section, exceeds the number of years on which the disability 13.22 benefit provided in subdivision 4 or 5 is based. The benefit 13.23 recipient under subdivision 4 or 5 who also has credit for 13.24 regular plan service must in all respects qualify under section 13.25 352.113 to be entitled to receive a disability benefit based on 13.26 the general plan service not includable in this section, except 13.27 that the service may be combined to satisfy length of service 13.28 requirements. Any deferred annuity to which the employee may be 13.29 entitled based on general plan service not includable in this 13.30 section must be augmented as provided in section 352.72, 13.31 subdivision 2, while the employee is receiving a disability 13.32 benefit under this section. 13.33 Subd. 7. [ADDITIONAL CONTRIBUTIONS.] The special 13.34 retirement annuity and disability coverage under this section 13.35 shall be financed by an employee contribution of $....... and an 13.36 employer contribution of $....... These contributions are in 14.1 addition to the contributions required by section 352.04, 14.2 subdivisions 2 and 3, and must be made in the manner provided 14.3 for in section 352.04, subdivisions 4 to 6. 14.4 Subd. 8. [ELECTION OF COVERAGE.] To be covered by this 14.5 section, an employee of the department of public safety 14.6 described in subdivision 1 who is employed in a position 14.7 described in that subdivision on or after July 1, 1999, must 14.8 file a notice with the executive director of the Minnesota state 14.9 retirement system on a form prescribed by the executive director 14.10 stating whether or not the employee elects to be covered by this 14.11 section. Notice must be filed by September 1, 1999, or within 14.12 90 days of employment, whichever is later. Elections are 14.13 irrevocable during any period of covered employment. A failure 14.14 to file a timely notice shall be deemed a waiver of coverage by 14.15 this section. 14.16 Sec. 2. Minnesota Statutes 1998, section 356.19, is 14.17 amended by adding a subdivision to read: 14.18 Subd. 2a. [COORDINATED MEMBERS.] The applicable benefit 14.19 accrual rate is 2.0 percent. 14.20 Sec. 3. [EFFECTIVE DATE.] 14.21 Sections 1 and 2 are effective the day following final 14.22 enactment. 14.23 ARTICLE 4 14.24 MNSCU INDIVIDUAL RETIREMENT 14.25 ACCOUNT PLAN CHANGES 14.26 Section 1. Minnesota Statutes 1998, section 43A.27, 14.27 subdivision 3, is amended to read: 14.28 Subd. 3. [RETIRED EMPLOYEES.] (a) A person may elect to 14.29 purchase at personal expense individual and dependent hospital, 14.30 medical, and dental coverages if the person is: 14.31 (1) a retired employee of the state or an organization 14.32 listed in subdivision 2 or section 43A.24, subdivision 2, who, 14.33 at separation of service: 14.34 (i) is immediately eligible to receive a retirement benefit 14.35 under chapter 354B or an annuity under a retirement program 14.36 sponsored by the state or such organization of the stateand; 15.1 (ii) immediately meets the age and service requirements in 15.2 section 352.115, subdivision 1; and 15.3(ii)(iii) has five years of service or meets the service 15.4 requirement of the collective bargaining agreement or plan, 15.5 whichever is greater; or 15.6 (2) a retired employee of the state who is at least 50 15.7 years of age and has at least 15 years of state service. 15.8 (b) The commissioner shall offer at least one plan which is 15.9 actuarially equivalent to those made available through 15.10 collective bargaining agreements or plans establishedpursuant15.11tounder section 43A.18 to employees in positions equivalent to 15.12 that from which retired. 15.13 (c) A spouse of adeceased retired employee who received an15.14annuity under a state retirement programperson eligible under 15.15 paragraph (a) may purchase the coverage listed in this 15.16 subdivision if the spouse was a dependent under the retired 15.17 employee's coverage at the time of theemployee'sretiree's 15.18 death. 15.19 (d) Coverages must be coordinated with relevant health 15.20 insurance benefits provided through the federally sponsored 15.21 Medicare program. Until the retired employee reaches age 65, 15.22 the retired employee and dependents must be pooled in the same 15.23 group as active employees for purposes of establishing premiums 15.24 and coverage for hospital, medical, and dental insurance. 15.25 Coverage for retired employees and their dependents may not 15.26 discriminate on the basis of evidence of insurability or 15.27 preexisting conditions unless identical conditions are imposed 15.28 on active employees in the group that the employee left. 15.29 Appointing authorities shall provide notice to employees no 15.30 later than the effective date of their retirement of the right 15.31 to exercise the option provided in this subdivision. The 15.32 retired employee must notify the commissioner or designee of the 15.33 commissioner within 30 days after the effective date of the 15.34 retirement of intent to exercise this option. 15.35 Sec. 2. Minnesota Statutes 1998, section 136F.48, is 15.36 amended to read: 16.1 136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 16.2 (a) This section applies to a person who: 16.3 (1) retires from the Minnesota state college and university 16.4 system, the technical college system, or the community college16.5system, or from a successor system employing state university,16.6technical college, or community college faculty,with at least 16.7 ten years of combined service credit in a system under the 16.8 jurisdiction of the board of trustees of the Minnesota state 16.9 colleges and universities; 16.10 (2) was employed on a full-time basis immediately preceding 16.11 retirement as astate university, technical college, or16.12community collegefaculty member or as an unclassified 16.13 administrator inone of those systemsthe Minnesota state 16.14 college and university system; 16.15 (3) begins drawing a retirement benefit from the individual 16.16 retirement account plan or an annuity from the teachers 16.17 retirement association, the Minnesota state retirement system, 16.18 orfroma first class city teacher plan; and 16.19 (4) returns to work on not less than a one-third time basis 16.20 and not more than a two-thirds time basis in the system from 16.21 which the person retired under an agreement in which the person 16.22 may not earn a salary of more than $35,000 in a calendar year 16.23 from employment after retirement in the system from which the 16.24 person retired. 16.25 (b) Initial participation, the amount of time worked, and 16.26 the duration of participation under this section must be 16.27 mutually agreed upon by the president of the institution where 16.28 the person returns to work and the employee. The president may 16.29 require up to one-year notice of intent to participate in the 16.30 program as a condition of participation under this section. The 16.31 president shall determine the time of year the employee shall 16.32 work. The employer or the president may not require a person to 16.33 waive any rights under a collective bargaining agreement as a 16.34 condition of participation under this section. 16.35 (c) For a person eligible under paragraphs (a) and (b), the 16.36 employing board shall make the same employer contribution for 17.1 hospital, medical, and dental benefits as would be made if the 17.2 person were employed full time. 17.3 (d) For work under paragraph (a), a person must receive a 17.4 percentage of the person's salary at the time of retirement that 17.5 is equal to the percentage of time the person works compared to 17.6 full-time work. 17.7 (e) If a collective bargaining agreement covering a person 17.8 provides for an early retirement incentive that is based on age, 17.9 the incentive provided to the person must be based on the 17.10 person's age at the time employment under this section ends. 17.11 However, the salary used to determine the amount of the 17.12 incentive must be the salary that would have been paid if the 17.13 person had been employed full time for the year immediately 17.14 preceding the time employment under this section ends. 17.15 (f) A person who returns to work under this section is a 17.16 member of the appropriate bargaining unit and is covered by the 17.17 appropriate collective bargaining contract. Except as provided 17.18 in this section, the person's coverage is subject to any part of 17.19 the contract limiting rights of part-time employees. 17.20 Sec. 3. [352.1155] [NO ANNUITY REDUCTION.] 17.21 Subdivision 1. [ELIGIBILITY.] Except as indicated in 17.22 subdivision 4, the annuity reduction provisions of section 17.23 352.115, subdivision 10, do not apply to a person who: 17.24 (1) retires from the Minnesota state college and university 17.25 system with at least ten years of combined service credit in a 17.26 system under the jurisdiction of the board of trustees of the 17.27 Minnesota state colleges and universities; 17.28 (2) was employed on a full-time basis immediately preceding 17.29 retirement as a faculty member or as an unclassified 17.30 administrator in that system; 17.31 (3) begins drawing an annuity from the Minnesota state 17.32 retirement system general plan; and 17.33 (4) returns to work on not less than a one-third time basis 17.34 and not more than a two-thirds time basis in the system from 17.35 which the person retired under an agreement in which the person 17.36 may not earn a salary of more than $35,000 in a calendar year 18.1 from employment after retirement in the system from which the 18.2 person retired. 18.3 Subd. 2. [APPROVAL REQUIREMENTS.] Initial participation, 18.4 the amount of time worked, and the duration of participation 18.5 under this section must be mutually agreed upon by the president 18.6 of the institution where the person returns to work and the 18.7 employee. The president may require up to a one-year notice of 18.8 intent to participate in the program as a condition of 18.9 participation under this section. The president shall determine 18.10 the time of year the employee shall work. The employer or the 18.11 president may not require a person to waive any rights under a 18.12 collective bargaining agreement as a condition of participation 18.13 under this section. 18.14 Subd. 3. [SERVICE CREDIT PROHIBITION.] Notwithstanding any 18.15 law to the contrary, a person eligible under this section may 18.16 not, based on employment to which the waiver in this section 18.17 applies, earn further service credit in a Minnesota public 18.18 defined benefit plan and is not eligible to participate in a 18.19 Minnesota public defined contribution plan, other than a 18.20 volunteer fire plan governed by chapter 424A. No employer or 18.21 employee contribution to any of these plans may be made on 18.22 behalf of such a person. 18.23 Subd. 4. [EXEMPTION LIMIT.] For a person eligible under 18.24 this section who earns more than $35,000 in a calendar year from 18.25 reemployment in the Minnesota state college and university 18.26 system following retirement, the annuity reduction provisions of 18.27 section 352.115, subdivision 10, apply only to income over 18.28 $35,000. 18.29 Subd. 5. [CONTINUING RIGHTS.] A person who returns to work 18.30 under this section is a member of the appropriate bargaining 18.31 unit and is covered by the appropriate collective bargaining 18.32 contract. Except as provided in this section, the person's 18.33 coverage is subject to any part of the contract limiting rights 18.34 of part-time employees. 18.35 Sec. 4. Minnesota Statutes 1998, section 354.445, is 18.36 amended to read: 19.1 354.445 [NO ANNUITY REDUCTION.] 19.2 (a) The annuity reduction provisions of section 354.44, 19.3 subdivision 5, do not apply to a person who: 19.4 (1) retires from the Minnesota state college and university 19.5 system, technical college system, or the community college19.6system, or from a successor system employing state university,19.7technical college, or community college faculty,with at least 19.8 ten years of combined service credit in a system under the 19.9 jurisdiction of the board of trustees of the Minnesota state 19.10 colleges and universities; 19.11 (2) was employed on a full-time basis immediately preceding 19.12 retirement as astate university, technical college, or19.13community collegefaculty member or as an unclassified 19.14 administrator inone of these systemsthat system; 19.15 (3) begins drawing an annuity from the teachers retirement 19.16 association; and 19.17 (4) returns to work on not less than a one-third time basis 19.18 and not more than a two-thirds time basis in the system from 19.19 which the person retired under an agreement in which the person 19.20 may not earn a salary of more than $35,000 in a calendar year 19.21 from employment after retirement in the system from which the 19.22 person retired. 19.23 (b) Initial participation, the amount of time worked, and 19.24 the duration of participation under this section must be 19.25 mutually agreed upon by the president of the institution where 19.26 the person returns to work and the employee. The president may 19.27 require up to one-year notice of intent to participate in the 19.28 program as a condition of participation under this section. The 19.29 president shall determine the time of year the employee shall 19.30 work. The employer or the president may not require a person to 19.31 waive any rights under a collective bargaining agreement as a 19.32 condition of participation under this section. 19.33 (c) Notwithstanding any law to the contrary, a person 19.34 eligible under paragraphs (a) and (b) may not, based on 19.35 employment to which the waiver in this section applies, earn 19.36 further service credit inthe teachers retirement association20.1and is not eligible to participate in the individual retirement20.2account plan or the supplemental retirement plan established in20.3chapter 354B as a result of service under this sectiona 20.4 Minnesota public defined benefit plan and is not eligible to 20.5 participate in a Minnesota public defined contribution plan, 20.6 other than a volunteer fire plan governed by chapter 424A. No 20.7 employer or employee contribution to any of these plans may be 20.8 made on behalf of such a person. 20.9 (d) For a person eligible under paragraphs (a) and (b) who 20.10 earns more than $35,000 in a calendar year from employment after 20.11 retirementin the system from which the person retireddue to 20.12 employment in the Minnesota state college and university system, 20.13 the annuity reduction provisions of section 354.44, subdivision 20.14 5, apply only to income over $35,000. 20.15 (e) A person who returns to work under this section is a 20.16 member of the appropriate bargaining unit and is covered by the 20.17 appropriate collective bargaining contract. Except as provided 20.18 in this section, the person's coverage is subject to any part of 20.19 the contract limiting rights of part-time employees. 20.20 Sec. 5. Minnesota Statutes 1998, section 354.66, 20.21 subdivision 1b, is amended to read: 20.22 Subd. 1b. [DISTRICT, DEFINED.] For purposes of this 20.23 section, the term "district" means a school district, the20.24communityor the Minnesota state collegesystemandthe state20.25 university system. 20.26 Sec. 6. Minnesota Statutes 1998, section 354.66, 20.27 subdivision 1c, is amended to read: 20.28 Subd. 1c. [PARTICIPATION.] (a) Except as indicated in 20.29 paragraph (b), participation in the part-time mobility program 20.30 must be based on a full fiscal year and the employment pattern 20.31 of the teacher during the most recent fiscal year. 20.32 (b) For a teacher in the Minnesota state college and 20.33 university system who teaches only during the first semester in 20.34 an academic year and retires immediately after the first 20.35 semester, participation in the part-time mobility program must 20.36 be based on one-half of a full fiscal year and the employment 21.1 pattern of the teacher during the most recent one-half of the 21.2 most recent fiscal year. 21.3 Sec. 7. Minnesota Statutes 1998, section 354.66, 21.4 subdivision 3, is amended to read: 21.5 Subd. 3. [PART-TIME TEACHING POSITION, DEFINED.] (a) For 21.6 purposes of this section, the term "part-time teaching position" 21.7 shall mean a teaching position within the district in which the 21.8 teacher is employed for at least 50 full days or a fractional 21.9 equivalent thereof as prescribed in section 354.091, and for 21.10 which the teacher is compensated in an amount not exceeding 80 21.11 percent of the compensation established by the board for a 21.12 full-time teacher with identical education and experience with 21.13 the employing unit. 21.14The compensation of a teacher in the state colleges and21.15universities system may exceed the 80 percent limit if the21.16teacher does not teach just one of the three quarters in the21.17system's full school year, provided no additional services are21.18performed while the teacher participates in the program.(b) 21.19 For a teacher to which subdivision 1c, paragraph (b), applies, 21.20 "part-time teaching position" means a teaching position within 21.21 the district in which the teacher is employed for at least 25 21.22 full days or a fractional equivalent thereof as prescribed in 21.23 section 354.091, and for which the teacher is compensated in an 21.24 amount not exceeding 40 percent of the compensation established 21.25 by the board for a full-time teacher, with identical education 21.26 and experience with the employing unit. 21.27 Sec. 8. Minnesota Statutes 1998, section 354B.24, 21.28 subdivision 3, is amended to read: 21.29 Subd. 3. [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 21.30 addition to contributions required by subdivision 2, a plan 21.31 participant on an approved sabbatical leavemayshall makean21.32optional additionala member contribution. The optional21.33additional member may not exceedbased on theapplicablemember 21.34 contribution rate specified in section 354B.23, subdivision 1, 21.35 applied to the difference between the amount of salary actually 21.36 received during the sabbatical leave and theamount offull-time 22.1 salaryactually received for a comparable period of an identical22.2length tothe member would have received if not on sabbatical 22.3 leavethat occurred during the fiscal year immediately preceding22.4the sabbatical leave. 22.5 (b) Anyoptionaladditional member contribution must be 22.6 madebefore the last day of the fiscal year next following the22.7fiscal year in which the sabbatical leave terminates. The22.8optional additional member contribution may not include interest22.9 through payroll deduction as though the member were employed 22.10 full time. 22.11 (c) When anoptionaladditional member contribution is 22.12 made, the employing unit must make the employer contribution at 22.13 the rateset forthspecified in section 354B.23, subdivision 3, 22.14 on the salary that was the basis for theoptionaladditional 22.15 member contribution under paragraph (a). 22.16 (d) An employer contribution required under this section 22.17 must be made no later than 60 days after the date on which the 22.18 optional additional member contribution was made. 22.19 Sec. 9. Minnesota Statutes 1998, section 354B.25, 22.20 subdivision 2, is amended to read: 22.21 Subd. 2. [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS22.22 INVESTMENT OPTIONS.](a)The plan administrator shall arrange 22.23 for the purchase offixed annuity contracts, variable annuity22.24contracts, a combination of fixed and variable annuity22.25contracts, or custodial accounts from financial institutions22.26which have been selected by the state board of investment under22.27subdivision 3, as the investment vehicle for the retirement22.28coverage of plan participants and to provide retirement benefits22.29to plan participants. Custodial accounts from financial22.30institutions shall include open-end investment companies22.31registered under the federal Investment Company Act of 1940, as22.32amendedinvestment products. 22.33(b)Theannuity contracts or accountsinvestment products 22.34 must be purchased with contributions under section 354B.23 or 22.35 with money or assets otherwise provided by law by authority of 22.36 the boardand deemed acceptable by the applicable financial23.1institution. 23.2(c) In addition to contracts and accounts from financial23.3institutions,The Minnesota supplemental investment fund 23.4 established under section 11A.17 and administered by the state 23.5 board of investment is one of the investmentoptionsproducts 23.6 for the individual retirement account plan. Direct access must 23.7 also be provided to lower expense and no load mutual funds, as 23.8 those terms are defined by the federal Securities and Exchange 23.9 Commission, including stock funds, bond funds, and balanced 23.10 funds. Other investment products or combination of investment 23.11 products which may be included are: 23.12 (1) savings accounts at federally insured financial 23.13 institutions; 23.14 (2) life insurance contracts and fixed and variable annuity 23.15 contracts from companies that are subject to regulation by the 23.16 commerce commissioner; 23.17 (3) investment options from open-ended investment companies 23.18 registered under the federal Investment Company Act of 1940, 23.19 United States Code, title 15, sections 80a-1 to 80a-64; 23.20 (4) investment options from a firm that is a registered 23.21 investment advisor under the federal Investment Advisors Act of 23.22 1940, United States Code, title 15, sections 80b-1 to 80b-21; 23.23 and 23.24 (5) investment options of a bank as defined in United 23.25 States Code, title 80b-2, subsection (a), paragraph (2), or a 23.26 bank holding company as defined in the federal Bank Holding 23.27 Company Act of 1956, United States Code, title 12, section 1841, 23.28 subsection (a), paragraph (1). 23.29 Sec. 10. Minnesota Statutes 1998, section 354B.25, 23.30 subdivision 3, is amended to read: 23.31 Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 23.32 Thefinancial institutionsinvestment options providedforunder 23.33 subdivision 2 must be selected by the state board of 23.34 investment.Financial institutions include open-end investment23.35companies registered under the federal Investment Company Act of23.361940, as amended.24.1(b) The state board of investment may select up to five24.2financial institutions to provide annuity contracts, custodial24.3accounts, or a combination, as investment options for the24.4individual retirement account plan in addition to the Minnesota24.5supplemental investment fund.In making its selection, at a 24.6 minimum, the state board of investment shall considerat least24.7 the following: 24.8 (1) the experience and ability of the financial institution 24.9 to provideretirement and deathbenefits and products that are 24.10 suited to meet the needs of plan participants; 24.11 (2) the relationship of thoseretirement and deathbenefits 24.12 and products provided by the financial institution to their 24.13 cost;and24.14 (3) the financial strength and stability of the financial 24.15 institution; and 24.16 (4) the fees and expenses associated with the investment 24.17 products in comparison to other products of similar risk and 24.18 rates of return. 24.19(c)(b) After selecting a financial institution, the state 24.20 board of investment must periodically review each financial 24.21 institutionselected under paragraph (b)and the offered 24.22 products. The periodic review must occur at least every three 24.23 years. In making its review, the state board of investment may 24.24 retain appropriate consulting services to assist it in its 24.25 periodic review, establish a budget for the cost of the periodic 24.26 review process, and charge a proportional share of these costs 24.27 to the reviewed financial institution. 24.28(d)(c) Contracts with financial institutions under this 24.29 section must be executed by the board and must be approved by 24.30 the state board of investment before execution. 24.31(e)(d) The state board of investment shall also establish 24.32 policies and procedures under section 11A.04, clause (2), to 24.33 carry out the provisions of this subdivision. 24.34 Sec. 11. Minnesota Statutes 1998, section 354B.25, 24.35 subdivision 5, is amended to read: 24.36 Subd. 5. [INDIVIDUAL RETIREMENT ACCOUNT PLAN 25.1 ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 25.2 administrative expenses of the individual retirement account 25.3 planmustmay bepaid bycharged to plan participants by the 25.4 plan sponsor in thefollowing manner:25.5(1) from plan participants with amounts invested in the25.6Minnesota supplemental investment fund, the plan administrator25.7may charge an administrative expense assessment in an amount25.8such that annual total fees charged for plan administration25.9cannot exceed 40/100 of one percent of the assets of the25.10Minnesota supplemental investment funds; and25.11(2) from plan participants with amounts through annuity25.12contracts and custodial accounts purchased under subdivision 2,25.13paragraph (a), the plan administrator may charge an25.14administrative expense assessment of a designated amount, not to25.15exceed two percent of member and employer contributions, as25.16those contributions are madeform of an annual fee, an 25.17 asset-based fee, a percentage of the contributions to the plan, 25.18 or a combination thereof. 25.19 (b) Any administrative expense charge that is not actually 25.20 needed for the administrative expenses of the individual 25.21 retirement account plan must be refunded to member accounts. 25.22 (c) The board of trustees shall report annually, before 25.23 October 1, to the advisory committee created in subdivision 1a 25.24 on administrative expenses of the plan. The report must include 25.25 a detailed accounting of charges for administrative expenses 25.26 collected from plan participants and expenditure of the 25.27 administrative expense charges. The administrative expense 25.28 charges collected from plan participants must be kept in a 25.29 separate account from any other funds under control of the board 25.30 of trustees and may be used only for the necessary and 25.31 reasonable administrative expenses of the plan. 25.32 Sec. 12. [354B.31] [IRAP PART-TIME TEACHER MOBILITY 25.33 PROGRAM.] 25.34 Subdivision 1. [PARTICIPATION REQUIREMENTS.] A faculty 25.35 member who has three years or more of service in the Minnesota 25.36 state college and university system, by agreement with the board 26.1 or with the authorized representative of the board, may be 26.2 assigned to teaching service in a part-time teaching position 26.3 under subdivision 2. 26.4 Subd. 2. [PART-TIME TEACHING POSITION; DEFINED.] For 26.5 purposes of this section, "part-time teaching position" means a 26.6 teaching position within the Minnesota state college and 26.7 university system in which the teacher is employed for at least 26.8 50 full days or a fractional equivalent as prescribed in section 26.9 354.091, and for which the faculty member is compensated in an 26.10 amount not exceeding 80 percent of the compensation established 26.11 by the board for a full-time faculty member with identical 26.12 education and experience with the employing unit. 26.13 Subd. 3. [RETIREMENT CONTRIBUTIONS.] A faculty member 26.14 assigned to a part-time position under this section shall 26.15 continue to make employee contributions to the individual 26.16 retirement account plan during the period of part-time 26.17 employment on the same basis and in the same amounts as would 26.18 have been paid if the person had been employed on a full-time 26.19 basis provided that, prior to June 30 each year, the member and 26.20 the board make that portion of the required employer 26.21 contribution to the plan, in any proportion which they may agree 26.22 upon, that is based on the difference between the amount of 26.23 compensation that would have been paid if the person had been 26.24 employed on a full-time basis and the amount of compensation 26.25 actually received by the person for the services rendered in the 26.26 part-time assignment. The employing unit shall make that 26.27 portion of the required employer contributions to the plan on 26.28 behalf of the person that is based on the amount of compensation 26.29 actually received by the person for the services rendered in the 26.30 part-time assignment. The employee and employer contributions 26.31 shall be based on the rates of contribution prescribed by 26.32 section 354B.23. Employee contributions for part-time teaching 26.33 service pursuant to this section shall not continue for more 26.34 than ten years. 26.35 Subd. 4. [OTHER MEMBERSHIP PRECLUDED.] A faculty member 26.36 entitled to make employee contributions for part-time teaching 27.1 service pursuant to this section shall not be entitled during 27.2 the same period of time to be a member of, accrue allowable 27.3 service credit in, or make employee contributions to any other 27.4 Minnesota public employee pension plan, except a volunteer 27.5 firefighters relief association governed by sections 69.771 to 27.6 69.776. 27.7 Subd. 5. [INSURANCE.] If the board enters into an 27.8 agreement authorized by this section, the board shall continue 27.9 any insurance programs furnished or authorized to a full-time 27.10 teacher on an identical basis and with identical sharing of 27.11 costs for a part-time teacher pursuant to this section. 27.12 However, the requirements of this subdivision may be modified by 27.13 a collective bargaining agreement between the board and an 27.14 exclusive representative pursuant to chapter 179A. Teachers as 27.15 defined in section 136F.43 employed on a less than 75 percent 27.16 time basis pursuant to this section are eligible for state-paid 27.17 insurance benefits as if the teachers were employed full time. 27.18 Subd. 6. [ELIGIBILITY FOR CREDIT.] Only teachers who are 27.19 public employees as defined in section 179A.03, subdivision 14, 27.20 during the school year preceding the period of part-time 27.21 employment pursuant to this section qualify for employee 27.22 contributions to the retirement plan for part-time teaching 27.23 service under subdivision 4. Notwithstanding section 179A.03, 27.24 subdivision 14, clauses (e) and (f), teachers who are employed 27.25 on a part-time basis for purposes of this section and who would 27.26 therefore be disqualified from the bargaining unit by one or 27.27 both of those provisions, continue to be in the bargaining unit 27.28 during the period of part-time employment under this section for 27.29 purposes of compensation, fringe benefits, and the grievance 27.30 procedure. 27.31 Subd. 7. [BOARD POWER NOT RESTRICTED.] This section does 27.32 not limit the authority of the board to assign a teacher to a 27.33 part-time teaching position which does not qualify for full 27.34 accrual of service credit from, and employee contributions to, 27.35 the retirement fund under this section. 27.36 Subd. 8. [SUBSTITUTE TEACHING.] Subdivision 4 does not 28.1 prohibit a teacher who qualifies for full accrual of service 28.2 credit from and employee contributions to the retirement fund 28.3 pursuant to this section in any year from being employed as a 28.4 substitute teacher by any school district during that year. 28.5 Notwithstanding sections 354.091 and 354.42, a teacher may not 28.6 qualify for full accrual of service credit from and employee 28.7 contributions to the retirement fund for other teaching service 28.8 rendered for any part of any year for which the teacher 28.9 qualifies for employee contributions to the retirement plan 28.10 pursuant to this section. 28.11 Sec. 13. Minnesota Statutes 1998, section 354C.12, 28.12 subdivision 4, is amended to read: 28.13 Subd. 4. [ADMINISTRATIVE EXPENSES.] (a) The board of 28.14 trustees of the Minnesota state colleges and universities is 28.15 authorized to pay the necessary and reasonable administrative 28.16 expenses of the supplemental retirement plan and may bill 28.17 participants to recover these expenses. The administrative fees 28.18 or chargesmustmay bepaid bycharged to participantsin the28.19following manner:as an annual fee, an asset-based fee, a 28.20 percentage of contributions to the plan, or a contribution 28.21 thereof. 28.22(1) from participants whose contributions are invested with28.23the state board of investment, the plan administrator may28.24recover administrative expenses in the manner authorized by the28.25Minnesota state colleges and universities in an amount such that28.26annual total fees charged for plan administration cannot exceed28.2740/100 of one percent of the assets of the Minnesota28.28supplemental investment funds; or28.29(2) from participants where contributions are invested28.30through contracts purchased from any other authorized source,28.31the plan administrator may assess an amount of up to two percent28.32of the employee and employer contributions.28.33 (b) Any recovered or assessed amounts that are not needed 28.34 for the necessary and reasonable administrative expenses of the 28.35 plan must be refunded to member accounts. 28.36 (c) The board of trustees shall report annually, before 29.1 October 1, to the advisory committee created in section 354B.25, 29.2 subdivision 1a, on administrative expenses of the plan. The 29.3 report must include a detailed accounting of charges for 29.4 administrative expenses collected from plan participants and 29.5 expenditure of the administrative expense charges. The 29.6 administrative expense charges collected from plan participants 29.7 must be kept in a separate account from any other funds under 29.8 control of the board of trustees and may be used only for the 29.9 necessary and reasonable administrative expenses of the plan. 29.10 Sec. 14. [EFFECTIVE DATE.] 29.11 Sections 1 to 13 are effective on July 1, 1999. 29.12 ARTICLE 5 29.13 EMPLOYER MATCHING CONTRIBUTION 29.14 TAX-SHELTERED ANNUITY 29.15 CHANGES 29.16 Section 1. Minnesota Statutes 1998, section 356.24, 29.17 subdivision 1, is amended to read: 29.18 Subdivision 1. [RESTRICTION; EXCEPTIONS.](a)It is 29.19 unlawful for a school district or other governmental subdivision 29.20 or state agency to levy taxes for, or contribute public funds to 29.21 a supplemental pension or deferred compensation plan that is 29.22 established, maintained, and operated in addition to a primary 29.23 pension program for the benefit of the governmental subdivision 29.24 employees other than: 29.25 (1) to a supplemental pension plan that was established, 29.26 maintained, and operated before May 6, 1971; 29.27 (2) to a plan that provides solely for group health, 29.28 hospital, disability, or death benefits; 29.29 (3) to the individual retirement account plan established 29.30 by chapter 354B; 29.31 (4) to a plan that provides solely for severance pay under 29.32 section 465.72 to a retiring or terminating employee; 29.33 (5) for employees other than personnel employed by the 29.34 state university board or the community college board and 29.35 covered by the board of trustees of the Minnesota state colleges 29.36 and universities supplemental retirement plan under chapter 30.1 354C, if provided for in a personnel policy of the public 30.2 employer or in the collective bargaining agreement between the 30.3 public employer and the exclusive representative of public 30.4 employees in an appropriate unit, in an amount matching employee 30.5 contributions on a dollar for dollar basis, but not to exceed an 30.6 employer contribution of $2,000 a year per employee; 30.7 (i) to the state of Minnesota deferred compensation plan 30.8 under section 352.96; or 30.9 (ii) in payment of the applicable portion of the premium on 30.10 a tax-sheltered annuity contract qualified under section 403(b) 30.11 of the Internal Revenue Code, if purchased from a qualified 30.12 insurance company, or from a qualified investment entity, as 30.13 defined in subdivision 1a, and if the employing unit has 30.14 complied with any applicable pension plan provisions of the 30.15 Internal Revenue Code with respect to the tax-sheltered annuity 30.16 program during the preceding calendar year; or 30.17 (6) for personnel employed by the state university board or 30.18 the community college board and not covered by clause (5), to 30.19 the supplemental retirement plan under chapter 354C, if provided 30.20 for in a personnel policy or in the collective bargaining 30.21 agreement of the public employer with the exclusive 30.22 representative of the covered employees in an appropriate unit, 30.23 in an amount matching employee contributions on a dollar for 30.24 dollar basis, but not to exceed an employer contribution of 30.25 $2,000 a year for each employee. 30.26(b)Subd. 1a. [QUALIFIED INSURANCE COMPANY; QUALIFIED 30.27 INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 30.28 company is a company that: 30.29 (1) meets the definition in section 60A.02, subdivision 4; 30.30 (2) is licensed to engage in life insurance or annuity 30.31 business in the state; 30.32 (3) is determined by the commissioner of commerce to have a 30.33 rating within the top two rating categories by a recognized 30.34 national rating agency or organization that regularly rates 30.35 insurance companies; and 30.36 (4) is determined by the state board of investment to be 31.1 amongthe tenup to 20 applicant insurance companies with 31.2 competitive investment options and investment returnson annuity31.3products. 31.4 (b) A qualified investment entity is an open-end investment 31.5 company that is: 31.6 (1) registered under the federal Investment Company Act of 31.7 1940; 31.8 (2) licensed to do business in the state; 31.9 (3) determined by the commissioner of commerce to be in 31.10 sound financial standing; and 31.11 (4) determined by the state board of investment to be among 31.12 up to five applicant investment entities with competitive 31.13 investment options and investment returns. 31.14 (c) The state board of investment determination must be 31.15 made on or beforeJanuary 1, 1993July 1, 2000, and must be 31.16 reviewed periodically. The state board of investment may retain 31.17 actuarial services to assist it in this determination and in its 31.18 periodic review. The state board of investment may annually 31.19 establish a budget for its costs in any determination and 31.20 periodic review processes. The state board of investment may 31.21 charge a proportional share of all costs related to the periodic 31.22 review to those qualified insurance companies and qualified 31.23 investment entities currently under contract and may charge a 31.24 proportional share of all costs related to soliciting and 31.25 evaluating bids in a determination process to each company and 31.26 investment entity selected by the state board of investment. 31.27 All contracts must be approved before execution by the state 31.28 board of investment. The state board of investment shall 31.29 establish policies and procedures under section 11A.04, clause 31.30 (2), to carry out this paragraph. 31.31(c)Subd. 1b. [VENDOR RESTRICTIONS.] A personnel policy 31.32 for unrepresented employees or a collective bargaining agreement 31.33 may establish limits on the number of vendors underparagraph31.34(b), clause (5),subdivision 1 that it will utilize and 31.35 conditions under which the vendors may contact employees both 31.36 during working hours and after working hours. 32.1 Sec. 2. [COMMISSION STUDY.] 32.2 The legislative commission on pensions and retirement shall 32.3 study the issue of the appropriate means to provide partially 32.4 employer-funded, tax-sheltered savings opportunities for 32.5 educational employees, including the establishment of a single 32.6 comprehensive program structure for all applicable educational 32.7 employers and the elimination of any restriction on investment 32.8 vendors in providing partially employer-funded investment 32.9 opportunities to educational employees. 32.10 Sec. 3. [EFFECTIVE DATE.] 32.11 Section 1 is effective May 15, 2000. Section 2 is 32.12 effective on the day following final enactment. 32.13 ARTICLE 6 32.14 MINNEAPOLIS EMPLOYEES RETIREMENT 32.15 PLAN CHANGES 32.16 Section 1. Minnesota Statutes 1998, section 422A.06, 32.17 subdivision 3, is amended to read: 32.18 Subd. 3. [DEPOSIT ACCUMULATION FUND.] The deposit 32.19 accumulation fund consists of the assets held in the fund, 32.20increased byincluding amounts contributed by or for employees, 32.21 amounts contributed by the city, amounts contributed by 32.22 municipal activities supported in whole or in part by revenues 32.23 other than taxes and amounts contributed by any public 32.24 corporation, amounts paid by the state, and by income from 32.25 investments. There must be paid from the fund the amounts 32.26 required to be transferred to the retirement benefit fund, or 32.27 the disability benefit fund, refunds of contributions,death32.28benefits payable on death before retirement that are not payable32.29from the survivors' benefit fundincluding the 32.30 death-while-active refund specified in section 422A.22, 32.31 subdivision 4, postretirement increases in retirement allowances 32.32 granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 32.33 and expenses of the administration of the retirement fund which 32.34 were not charged by the retirement board against the income of 32.35 the retirement benefit fund from investments as the cost of 32.36 handling the investments of the retirement benefit fund. 33.1 Sec. 2. Minnesota Statutes 1998, section 422A.06, 33.2 subdivision 6, is amended to read: 33.3 Subd. 6. [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 33.4 fundshall consistconsists of the amount held for survivor 33.5 benefits, increased by contributions for survivor benefits made 33.6 by and for employees, including contributions made by the 33.7 employer, by any municipal activity supported in whole or in 33.8 part by revenue other than taxes or by any public corporation. 33.9 A proportionate share of income from investmentsshallmust be 33.10 allocated to this fund.There shall be paid from such fund the33.11 Survivor benefits specified in section 422A.23except that the33.12refund of net accumulated deductions from the salary of a33.13contributing member shall upon death in service be paid from the33.14deposit accumulation fundmust be paid from this fund. 33.15 Sec. 3. Minnesota Statutes 1998, section 422A.101, 33.16 subdivision 4, is amended to read: 33.17 Subd. 4. [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 33.18 INSTANCES.] (a) If a participating employing unit, other than 33.19 the state, has a negative asset balance in the deposit 33.20 accumulation fund, the executive director shall bill the 33.21 employing unit for the amount of the deficiency. Any amount 33.22 billed will include six percent interest, compounded annually, 33.23 for any year or portion of a year from the billing date until 33.24 the date of payment. 33.25 (b) If assets in the deposit accumulation fund are 33.26 insufficient to make a transfer to the retirement benefit fund, 33.27 the city of Minneapolis shall pay the amount of that 33.28 insufficiency to the retirement benefit fund within three days 33.29 of certification of the insufficiency by the executive director 33.30 of the fund. The city of Minneapolis may bill any other 33.31 participating employing unit other than the state for its 33.32 proportion of the amount paid. Any amount billed by the city 33.33 under this paragraph will include interest as specified in 33.34 paragraph (a). 33.35 Sec. 4. Minnesota Statutes 1998, section 422A.18, 33.36 subdivision 2, is amended to read: 34.1 Subd. 2. [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 34.2 disability allowance under this section shall be the amount of 34.3 service allowance to which the employee would be entitled under 34.4 section 422A.15, notwithstanding the age requirements expressed 34.5 therein; or the lesser of the following amounts: 50 percent of 34.6 the final average compensation, or an amount equal to two 34.7 percent of final average compensation for each year of allowable 34.8 service for the first ten years, and thereafter 2.5 percent of 34.9 final average compensation per year of allowable service, 34.10 including in the latter assumed service between the date the 34.11 disability occurred and the 60th birthday of the employee. 34.12If the amount of annuity(b) Annuities payablefrom the34.13Minnesota postretirement investment fund to any class of34.14annuitants is adjusted pursuant to section 11A.18, the amount of34.15benefits payable from the disability benefit fund for that class34.16of annuitantsunder this section shallalsobe adjusted at the 34.17 same time and rate as retirement annuities in the retirement 34.18 benefit fund. 34.19 Sec. 5. Minnesota Statutes 1998, section 422A.22, 34.20 subdivision 4, is amended to read: 34.21 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 34.22 ofa contributingan active memberwhile still in the service of34.23the city, and before reaching the compulsory age of34.24retirementprior to termination of service, there shall be paid 34.25 tosuch personthe beneficiary orpersons asbeneficiaries 34.26 designated by the membershall have nominated by written34.27designationon a form specified by the executive director and 34.28 filed with the retirement board,in such form as the retirement34.29board shall require,the net accumulatedamount ofemployee 34.30 deductions from salary, pay, or compensation, including interest 34.31, to the member's credit on date ofcompounded annually to the 34.32 date of the member's death. The amount must not include any 34.33 contributions made by the employee or on the employee's behalf, 34.34 or any interest or investment earnings on those contributions, 34.35 which were allocated to the survivor benefit fund under section 34.36 422A.06, subdivision 6. 35.1 (b) If the employee fails to make a designation, or if 35.2 theperson or personsbeneficiary or beneficiaries designated by 35.3suchthe employee predeceasessuchthe employee, thenet35.4accumulated amount of deductions from salary, pay, or35.5compensation including interest, to the credit of such employee35.6on date of death shallbenefit specified in paragraph (a) must 35.7 be paid tosuchthe deceased employee's estate. 35.8 (c) A benefit payable under this subdivision is in addition 35.9 to any applicable survivor benefit under section 422A.23. 35.10 Sec. 6. Minnesota Statutes 1998, section 422A.22, 35.11 subdivision 5, is amended to read: 35.12 Subd. 5. [REPAYMENT OF REFUND.] Uponreinstatement35.13 reemployment of a former covered employeeto the service,in 35.14 employment covered by the Minneapolis employees retirement fund, 35.15 service credit forsuchpast serviceor for any part thereof35.16shallwhich was forfeited by taking a refund must begranted35.17 reinstated only upon repayment of the amount of the separation 35.18 refund, with interest, from the time ofseparationpayment of 35.19 the refund until the date repaid. 35.20 Sec. 7. Minnesota Statutes 1998, section 422A.23, is 35.21 amended to read: 35.22 422A.23 [SURVIVOR BENEFITS.] 35.23 Subdivision 1. [PAYMENT OF CITY INSTALLMENT ACCUMULATED 35.24 AMOUNT.] (a) Ifa contributingan active or deferred member dies 35.25after having been in the servicewith ten or more years of 35.26 service credit,and before actual retirement, as determined by35.27the retirement board, the present worth of the city's annual35.28installments of $60 then to the credit of the contributing35.29member, shall be paid to a beneficiary designated by such35.30contributing member in such form as the retirement board shall35.31require, who shall be the surviving spouse, or surviving child,35.32or children of such member or, if there be no surviving spouse35.33or surviving child or children, then to a person actually35.34dependent on and receiving principal support from such member or35.35surviving mother or father, or grandchildren, or surviving35.36brother or sister, or surviving children of the deceased brother36.1or sister of such memberexcept as noted in paragraph (d), the 36.2 individual specified in paragraph (b) is eligible to receive the 36.3 benefit specified in paragraph (c). 36.4 (b) An individual eligible for the benefit specified in 36.5 paragraph (c) is a beneficiary designated by the member on a 36.6 form specified by the executive director. If thebeneficiary36.7designated by the member is not one of the class of persons36.8named in the preceding sentence, such benefit from the36.9accumulation of city deposits shall be paid in the following36.10order: (1) to the surviving spouse, the whole thereof; (2) if36.11there be no surviving spouse, to the surviving children, share36.12and share alike; (3) if there be no surviving spouse or child or36.13children, to the dependent or dependents as those terms are36.14herein defined, of the member, share and share alike; (4) if36.15there be no surviving spouse, child or children, or dependents,36.16to the surviving mother and father, share and share alike; (5)36.17if there be no surviving mother and father, to the36.18grandchildren, in equal shares; if there be no grandchildren, to36.19the surviving brothers and sisters of the member, in equal36.20shares; (6) if there be no surviving brothers and sisters, to36.21the surviving children of the deceased brothers and sisters of36.22the member, in equal shares; or (7) if there is none of the36.23foregoing persons who survives the member, the accumulation of36.24the city deposits shall be applied to the funeral expenses of36.25themember failed to designate a beneficiary, or if the 36.26 beneficiary or beneficiaries designated by the employee 36.27 predeceases the employee, the benefit in paragraph (c) is 36.28 payable to the deceased employee's estate. 36.29 (c) The benefit is a lump-sum payment of the present value 36.30 of the city's or other contributing employer's annual 36.31 installments of $60 to the credit of the member. 36.32 (d) No benefit is payable under this subdivision if a 36.33 monthly survivor benefit is paid under another subdivision of 36.34 this section. 36.35 Subd. 2. [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 36.36 active member dies prior to termination of service with at least 37.1 18 months but less than 20 years of service credit, the 37.2 surviving spouse or surviving child or children is eligible to 37.3 receive the survivor benefit specified in paragraph (b) or (c), 37.4 as applicable. Payment of a benefit for any surviving child 37.5 under the age of 18 years shall be made to the surviving parent, 37.6 or if there be none, to the legal guardian of the surviving 37.7 child.For purposes of this subdivision, a surviving child is37.8an unmarried child of the deceased member under the age of 18,37.9or under the age of 22 if a full-time student at an accredited37.10school, college, or university.37.11 (b) If the surviving spouse or surviving child benefit 37.12 commenced before July 1, 1983, the surviving spouse benefit is 37.13 increased from $500 per month to $750 per month and the 37.14 surviving child benefit is $225 per month, beginning with the 37.15 first monthly payment payable after May 28, 1998. The sum of 37.16 surviving spouse and surviving child benefits payable under this 37.17 paragraph shall not exceed $900 per month. The increased cost 37.18 resulting from the benefit increases under this paragraph must 37.19 be allocated to each employing unit listed in section 422A.101, 37.20 subdivisions 1a, 2, and 2a, on the basis of the additional 37.21 accrued liability resulting from increased benefits paid to the 37.22 survivors of employees from that unit. 37.23 (c) If the surviving spouse or surviving child benefit 37.24 commences after June 30, 1983, the surviving spouse benefit is 37.25 30 percent of the member's average salary in effect over the 37.26 last six months of allowable service preceding the month in 37.27 which death occurs. The surviving child benefit is ten percent 37.28 of the member's average salary in effect over the last six 37.29 months of allowable service preceding the month in which death 37.30 occurs. The sum of surviving spouse and surviving child 37.31 benefits payable under this paragraph shall not exceed 50 37.32 percent of the member's average salary in effect over the last 37.33 six months of allowable service. 37.34 (d) Any surviving child benefit or surviving spouse benefit 37.35 computed under paragraph (c) and in effect for the month 37.36 immediately prior to May 28, 1998, is increased by 15 percent as 38.1 of the first payment on or after May 28, 1998. 38.2 (e) Surviving child benefits under this subdivision 38.3 terminate when the child no longer meets the definition of 38.4 surviving child. 38.5 Subd. 5. [ADMINISTRATION.] Benefitshereinprovidedshall38.6 in this section following the death of an active employee or 38.7 deferred member, as applicable, commencewithon the first day 38.8 of the month following the month in which the active employee or 38.9 deferred member dies and shall end with the last day of the 38.10 month preceding the month in which eligibility 38.11 ceases.Eligibility for the benefits herein provided shall be38.12determined by the retirement board and its determination shall38.13be final. Each beneficiary or parent or guardian of a dependent38.14child or legal representative shall furnish suchInformationas38.15the board may deemdeemed necessary by the executive director to 38.16 determine eligibility for the benefits provided by this section,38.17andmust be submitted. Failure to furnish any required 38.18 information shall be sufficient grounds forthedenial or 38.19 discontinuance of benefits. A determination made by the 38.20 executive director may be appealed to the retirement board, 38.21 whose determination is final. If the surviving spouse of the 38.22 deceased active employee or deferred member becomes entitled to 38.23 a retirement allowance by reason of membership in this fund, the 38.24 surviving spouseshallis authorized to receive the retirement 38.25 allowance in addition totheall applicable survivingspouse's38.26benefitspouse benefits to which the surviving spouse is 38.27 entitled as specified in this section and section 422A.22, 38.28 subdivision 4, if applicable. The cost of allmonthly38.29survivor'sbenefits provided in this sectionshall beis an 38.30 obligation of the members and of the city, any of its boards, 38.31 departments, commissions or public corporations or other 38.32 applicable employing units. 38.33 Subd. 6. [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 38.34 retirement board shall create a reserve account for survivor's 38.35 benefits from which shall be paid on an actuarial basis all 38.36 survivor benefits due and payable. At the end of each fiscal 39.1 year, as part of the annual actuarial valuation of the fund 39.2 prepared by the commission-retained actuary, a determination of 39.3 the normal cost of the benefits payable from the survivor's 39.4 benefit account shall be made and the board shall reduce or 39.5 increase the employee contribution rateof one-fourth of one39.6percentif and when it is determined based on the annual 39.7 actuarial valuation that the member contribution rate is in 39.8 excess of or is less than the amount necessary to pay for 50 39.9 percent of the calculated normal cost of the survivor benefits 39.10 provided in this section. 39.11 Subd. 7. [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 39.12 COVERAGE.] (a) If thecontributingactive or deferred member 39.13 diesafter having been in the service of the city 20 or more39.14years, and before the effective date of retirement, as39.15determined by the retirement board, the board shall paywith 20 39.16 or more years of service credit, a beneficiary, as defined in 39.17 paragraph (b), is eligible to receive the benefit specified in 39.18 paragraph (c). 39.19 (b) The beneficiary eligible for a benefit under paragraph 39.20 (c) is the surviving spouse of the deceased employee. If there 39.21 is no surviving spouse, the beneficiary may be a dependent 39.22 surviving child of the member or dependent parent designated by 39.23 the employee on a form prescribed by the executive director. 39.24 (c) The benefit payable to the beneficiary designated in 39.25 paragraph (b) is a monthly allowance for lifeto the designated39.26beneficiary of the employee. The monthly allowanceherein39.27provided for shall beis the actuarial equivalent of a single 39.28 life service allowance specified in section 422A.15, subdivision 39.29 1, which would have been payable to the employee on the date of 39.30 death, notwithstanding the age requirement stated in section 39.31 422A.15, subdivision 1. For purposes of this section, the 39.32 amount of any excess contributions or voluntary additions by the 39.33 member shall not be included in the calculations in determining 39.34 the monthly allowance. 39.35The survivor allowance under this subdivision shall be39.36computed and determined under a procedure specified by the40.1commission-retained actuary utilizing the appropriate mortality40.2table established by the board of trustees based on the40.3experience of the fund as recommended by the commission-retained40.4actuary and using the applicable postretirement interest rate40.5assumption specified in section 356.215, subdivision 4d.40.6 (d) For benefits payable under this subdivision following 40.7 the death of a deferred member, the benefit must be calculated 40.8 as of the date of termination from service and increased by five 40.9 percent per year until January 1, 1981, and by three percent per 40.10 year thereafter, compounded annually. 40.11 Subd. 8. [SURVIVING CHILD; DEPENDENT DEFINITION.]The40.12beneficiary designated by the employee shall be the surviving40.13spouse of such employee. If there is no surviving spouse, the40.14designated beneficiary may be a dependent surviving child or40.15dependent parent of such employee as dependency is defined in40.16sections 422A.01 to 422A.25. If the beneficiary designated by40.17the employee is not of the class of persons provided for in this40.18subdivision, or if the designated beneficiary predeceases the40.19employee, a refund shall be made as provided for in section40.20422A.22, in lieu of a life income. If the employee does not40.21elect to designate a beneficiary to receive a life income as40.22herein provided, the designated beneficiary, if of the class of40.23persons set forth in this subdivision, may elect within 60 days40.24after the date of death of the employee to receive a life income40.25computed and determined as though the employee had retired on40.26the date of death under the option 2 plan of retirement, as40.27provided for in sections 422A.01 to 422A.25, and had designated40.28such person as beneficiary.For purposes of subdivision 2, a 40.29 surviving child is an unmarried child of the deceased member 40.30 under the age of 18, or under the age of 22 if a full-time 40.31 student at an accredited school, college, or university. For 40.32 purposes of subdivision 7, a dependent surviving child or 40.33 dependent parent must meet the definition of dependent, as 40.34 defined in section 422A.01, subdivision 12, at the time of the 40.35 active or deferred member's death. 40.36 Subd. 9. [LUMP-SUM DEATH BENEFIT.]If any employee who has41.1contributed to the survivor's benefit account as herein provided41.2dies before the effective date of retirement on a service or41.3disability pension and is not survived by a beneficiary eligible41.4to receive a monthly allowance as herein providedIf no monthly 41.5 survivor benefit is payable under subdivision 2 or 7, there 41.6 shall be paid from thesurvivor'ssurvivor benefit account to a 41.7 beneficiary designated by the employee on a form prescribed by 41.8 the executive director a lump-sum death benefit of $750 if death 41.9 occurs prior to the end of the employee's tenth year of 41.10 service credit or of $1500 if the employee hadprior to death41.11completedten or morecalendaryears of service credit.Upon41.12reinstatement of a former employee to the service, credit for41.13such past service or for any part thereof shall be granted only41.14upon repayment of the amount of the separation refund, with41.15interest, from the time of separationAny benefit under this 41.16 subdivision may be paid in addition to a benefit payable under 41.17 subdivision 1. 41.18 Subd. 10. [BENEFIT INCREASES.]If the amount of annuity41.19payable from the Minnesota postretirement investment fund to any41.20class of annuitants is adjusted pursuant to section 11A.18, the41.21amount of benefits payable from the survivor's benefit fund41.22pursuant to subdivisions 7 or 8 for that class of annuitants41.23shall also be adjusted at the same time and rate.Annuities 41.24 payable under this section shall be adjusted at the same time 41.25 and rate as retirement annuities in the retirement benefit fund. 41.26 Subd. 11. [EFFECT OF SPOUSE REMARRIAGE.] A monthly 41.27 survivor benefitismust notsuspended,be discontinued or 41.28 terminated, or otherwise stoppeddue to a surviving spouse's 41.29 remarriage. 41.30 Subd. 12. [DETERMINATION OF ANNUITY.] The survivor 41.31 annuities payable under this section shall be computed and 41.32 determined under a procedure specified by the actuary retained 41.33 by the legislative commission on pensions and retirement 41.34 utilizing the appropriate mortality table based on the 41.35 experience of the fund as recommended by that actuary and 41.36 approved by the legislative commission on pensions and 42.1 retirement and using the applicable postretirement interest rate 42.2 assumption specified in section 356.215, subdivision 4d. 42.3 Sec. 8. [422A.231] [COST ALLOCATION.] 42.4 Notwithstanding any law to the contrary, all current and 42.5 future contribution requirements due to this act are payable by 42.6 the participating contributing employing units other than the 42.7 state. 42.8 Sec. 9. [REPEALER.] 42.9 Minnesota Statutes 1998, section 422A.16, subdivision 3a, 42.10 is repealed. 42.11 Sec. 10. [EFFECTIVE DATE.] 42.12 Sections 1 to 9 are effective upon approval by the 42.13 Minneapolis city council and compliance with Minnesota Statutes, 42.14 section 645.021. 42.15 ARTICLE 7 42.16 KANDIYOHI COUNTY AND LITCHFIELD CITY 42.17 VOLUNTEER RESCUE SQUAD RELIEF 42.18 ASSOCIATION AUTHORIZATION 42.19 Section 1. Minnesota Statutes 1998, section 356A.01, 42.20 subdivision 7, is amended to read: 42.21 Subd. 7. [COVERED GOVERNMENTAL ENTITY.] "Covered 42.22 governmental entity" means a governmental subdivision or other 42.23 governmental entity that employs persons who are plan 42.24 participants in a covered pension plan and who are eligible for 42.25 that participation because of their employment. Covered 42.26 governmental entity also means a governmental subdivision or 42.27 other governmental entity that establishes a relief association 42.28 under chapter 425B. 42.29 Sec. 2. Minnesota Statutes 1998, section 356A.01, 42.30 subdivision 8, is amended to read: 42.31 Subd. 8. [COVERED PENSION PLAN.] "Covered pension plan" 42.32 means a pension plan or fund listed in section 356.20, 42.33 subdivision 2, or 356.30, subdivision 3, or the special fund of 42.34 any relief association established under chapter 425B. 42.35 Sec. 3. [425B.01] [DEFINITIONS.] 42.36 Subdivision 1. [TERMS DEFINED.] As used in this chapter, 43.1 the terms defined in this section have the meanings given. 43.2 Subd. 2. [RESCUE SQUAD.] "Rescue squad" includes a 43.3 municipal or county rescue squad and independent nonprofit 43.4 rescue squad corporation that performs emergency management 43.5 services (EMS). Rescue squad does not include any rescue squad 43.6 that is affiliated with a fire department or ambulance service 43.7 and whose members are eligible for membership in that fire 43.8 department's or ambulance's relief association or comparable 43.9 pension plan. 43.10 Subd. 3. [MUNICIPALITY.] "Municipality" means the city of 43.11 Litchfield in Meeker county. 43.12 Subd. 4. [COUNTY.] "County" means Kandiyohi county. 43.13 Sec. 4. [425B.02] [VOLUNTEER RESCUE SQUAD RELIEF 43.14 ASSOCIATION; AUTHORIZATION.] 43.15 Notwithstanding any provision of section 356.24 or 356.25 43.16 to the contrary, the governing body of a municipality or county 43.17 is authorized to establish a rescue squad relief association as 43.18 provided in this chapter. 43.19 Sec. 5. [425B.03] [RELIEF ASSOCIATION SELF-GOVERNING.] 43.20 Subdivision 1. [INCORPORATION.] (a) The relief association 43.21 must be incorporated under chapter 317A. 43.22 (b) The incorporators of the relief association are the 43.23 members of the governing body of the municipality or county. 43.24 Subd. 2. [BOARD OF TRUSTEES; COMPOSITION.] (a) The relief 43.25 association must be governed by a board of trustees. 43.26 (b) The relief association board of trustees consists of 43.27 nine persons. Six members of the board of trustees must be 43.28 elected by and from the membership of the relief association. 43.29 The remaining members of the board of trustees must be appointed 43.30 by the governing body of the municipality or county. 43.31 (c) The relief association must have three officers, which 43.32 are a president, secretary, and treasurer. The officers must be 43.33 elected by and from the membership of the relief association. 43.34 (d) Initially, the term of office of the elected members of 43.35 the board of trustees is one year for board members designated 43.36 "A" and "B," two years for board members designated "C" and "D," 44.1 and three years for board members designated "E" and "F." 44.2 Thereafter, the term of office of all elected members of the 44.3 board of trustees is three years. The term of office of ex 44.4 officio members of the board of trustees is the term of office 44.5 of the person that gave rise to board membership. The term of 44.6 office of an officer of the relief association is two years or 44.7 the balance of the board member's term of office as a board 44.8 member, whichever is shorter. 44.9 (e) The board of trustees must administer the affairs of 44.10 the relief association consistent with this chapter and the 44.11 applicable provisions of chapters 317A and 356A. 44.12 Subd. 3. [SPECIAL AND GENERAL FUNDS.] (a) The relief 44.13 association shall establish and maintain a special fund and may 44.14 establish and maintain a general fund. 44.15 (b) The special fund must be credited with all money 44.16 received by the relief association from the municipality or 44.17 county or any money received from any other source for the 44.18 purpose of providing retirement benefits for rescue squad 44.19 members, any money or property that is donated, given, granted, 44.20 or devised by any person for the benefit of the rescue squad 44.21 relief association special fund, and any investment income 44.22 earned on the invested assets of the relief association. 44.23 (c) The treasurer of the relief association is the 44.24 custodian of the assets of the special fund and must be the 44.25 recipient, on behalf of the special fund, of all revenues 44.26 payable to the special fund. The treasurer shall maintain 44.27 adequate records documenting any transaction involving the 44.28 assets or the revenues of the special fund. The record of the 44.29 treasurer is public record and must be open for inspection by 44.30 any member of the relief association, any officer or employee of 44.31 the state of Minnesota or of the municipality or county, or any 44.32 member of the public, at reasonable times and places. 44.33 (d) Disbursements from the special fund may be made only 44.34 for one of the following purposes: 44.35 (1) for the payment of service pensions to retired members 44.36 of the relief association; 45.1 (2) for the payment of disability pensions to disabled 45.2 members of the relief association; 45.3 (3) for the payment of survivor benefits to the surviving 45.4 spouse, surviving dependent children, or estate of a deceased 45.5 member of the relief association; and 45.6 (4) for the payment of administrative expenses of the 45.7 relief association if the expenses are of the kind and type 45.8 authorized by section 69.80. 45.9 (e) All pension and benefit payments must be authorized by 45.10 and paid in accordance with the applicable law, the articles of 45.11 incorporation, and the bylaws of the relief association. 45.12 (f) The assets of the special fund must be invested only in 45.13 securities that comply with or are authorized by sections 45.14 356A.04 and 356A.06. 45.15 (g) The general fund, if established, must be operated as 45.16 provided in the articles of incorporation or bylaws of the 45.17 relief association. 45.18 Sec. 6. [425B.04] [MEMBERSHIP; ELIGIBILITY.] 45.19 Subdivision 1. [MEMBERSHIP.] The municipality or county, 45.20 by resolution, must specify the personnel providing rescue squad 45.21 service who may be members of the relief association. 45.22 Subd. 2. [ELIGIBILITY.] The bylaws of the relief 45.23 association must specify any additional eligibility requirements 45.24 for persons specified under subdivision 1 for relief association 45.25 membership. 45.26 Sec. 7. [425B.05] [BENEFITS.] 45.27 A relief association must either be a defined contribution 45.28 plan or a flexible service plan, as established by the 45.29 municipality or county. 45.30 Sec. 8. [425B.06] [DEFINED CONTRIBUTION PLAN OPTION.] 45.31 Subdivision 1. [INDIVIDUAL ACCOUNTS.] (a) The relief 45.32 association must establish individual accounts within the 45.33 special fund of the relief association for each relief 45.34 association member. 45.35 (b) To each individual account there must be credited an 45.36 equal share of any contribution made by the governing body of 46.1 the municipality or county; any gift, bequeath, devise, or other 46.2 transfer to the special fund; and any amount forfeited by a 46.3 former member who terminates active service with the rescue 46.4 squad before reaching the vesting requirements set forth in 46.5 subdivision 2, paragraph (b), and who does not return within 46.6 five years of the date of termination. Any investment income of 46.7 the special fund must be credited to the individual accounts in 46.8 proportion to the balances in those accounts. 46.9 (c) Amounts to be credited to individual accounts may be 46.10 allocated only after the deduction of any reasonable and 46.11 necessary administrative expenses payable. 46.12 Subd. 2. [SERVICE PENSION.] (a) The service pension amount 46.13 is the balance in the member's individual account. 46.14 (b) The service pension is not payable until the member 46.15 terminates active service with the rescue squad, has credit for 46.16 at least five years of service as an active member of the rescue 46.17 squad and five years as an active member of the relief 46.18 association, and has attained the age of at least 50 years. 46.19 (c) The retiring member must apply for the service pension. 46.20 Subd. 3. [DISABILITY PENSION.] (a) The disability pension 46.21 amount is the balance in the member's individual account. 46.22 (b) The disability pension is not payable until the member 46.23 terminates active service with the rescue squad by virtue of any 46.24 injury or illness that renders the member incapable of 46.25 performing rescue squad duties. 46.26 Subd. 4. [DEATH BENEFIT.] The death benefit amount is the 46.27 balance in the deceased member's individual account. 46.28 Subd. 5. [PAYMENT.] All pensions and benefits under this 46.29 section are payable in a single lump-sum payment. 46.30 Sec. 9. [425B.07] [FLEXIBLE SERVICE PLAN OPTION.] 46.31 A municipality or county may develop and implement its own 46.32 flexible service plan for payment of pensions to eligible 46.33 members out of the special fund. The plan, as enacted by the 46.34 municipality or county as an ordinance, in the discretion of the 46.35 municipality or county, must include provisions for vesting 46.36 requirements; contribution levels; payment amounts; disability 47.1 pension provisions; death benefits; payment terms; the method of 47.2 payment, including lump sum, monthly, or annually; and such 47.3 other terms as the municipality or county deems necessary. 47.4 Sec. 10. [425B.08] [FUNDING.] 47.5 (a) A municipality or county, annually, must include in its 47.6 budget a contribution to the relief association. 47.7 (b) The contribution amount must be transmitted to the 47.8 relief association treasurer annually on the payment date 47.9 specified by the governing body of the municipality or county. 47.10 Sec. 11. [425B.09] [AUDIT.] 47.11 The rescue squad relief association must be audited 47.12 annually by the state auditor. 47.13 Sec. 12. [425B.10] [SPECIAL BENEFITS FOR EXISTING 47.14 MEMBERS.] 47.15 A municipality or county may, under such terms and 47.16 conditions as it approves, provide pensions under either the 47.17 defined contribution plan option or flexible service plan option 47.18 to existing members of the rescue squad as of the date the 47.19 relief association is incorporated through waivers of length of 47.20 service vesting requirements. The terms and conditions must be 47.21 included in the bylaws of the relief association at the time of 47.22 incorporation. 47.23 Sec. 13. [425B.11] [NONAPPLICABILITY OF CHAPTERS 144C AND 47.24 424A.] 47.25 No member of the rescue squad relief association may 47.26 participate in or be eligible to receive any benefit or award 47.27 amount from the ambulance service personnel longevity award and 47.28 incentive program established under chapter 144E, or from any 47.29 volunteer firefighter relief association under chapter 424A, by 47.30 virtue of service rendered on behalf of the rescue squad. 47.31 Sec. 14. [EFFECTIVE DATE.] 47.32 Sections 1 to 13 are effective on the day following final 47.33 enactment. 47.34 ARTICLE 8 47.35 MERGER INTO PERA-P&F OF 47.36 LOCAL POLICE AND FIRE 48.1 CONSOLIDATION ACCOUNTS 48.2 Section 1. Minnesota Statutes 1998, section 3.85, 48.3 subdivision 12, is amended to read: 48.4 Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The 48.5 commission shall assess each retirement plan specified in 48.6 subdivision 11, paragraph (b), the compensation paid to the 48.7 actuary retained by the commission for the actuarial valuation 48.8 calculations, quadrennial projection valuations, and quadrennial 48.9 experience studies. The assessment is 100 percent of the amount 48.10 of contract compensation for the actuarial consulting firm 48.11 retained by the commission for actuarial valuation calculations, 48.12 including the public employees police and fire plan 48.13 consolidation accounts of the public employees retirement 48.14 association established after March 1, 1999, annual experience 48.15 data collection and processing, and quadrennial experience 48.16 studies and quadrennial projection valuations. 48.17 The portion of the total assessment payable by each 48.18 retirement system or pension plan must be determined as follows: 48.19 (1) Each pension plan specified in subdivision 11, 48.20 paragraph (b), clauses (1) to (13), must pay the following 48.21 indexed amount based on its total active, deferred, inactive, 48.22 and benefit recipient membership: 48.23 up to 2,000 members, inclusive $2.55 per member 48.24 2,001 through 10,000 members $1.13 per member 48.25 over 10,000 members $0.11 per member 48.26 The amount specified is applicable for the assessment of 48.27 the July 1, 1991, to June 30, 1992, fiscal year actuarial 48.28 compensation amounts. For the July 1, 1992, to June 30, 1993, 48.29 fiscal year and subsequent fiscal year actuarial compensation 48.30 amounts, the amount specified must be increased at the same 48.31 percentage increase rate as the implicit price deflator for 48.32 state and local government purchases of goods and services for 48.33 the 12-month period ending with the first quarter of the 48.34 calendar year following the completion date for the actuarial 48.35 valuation calculations, as published by the federal Department 48.36 of Commerce, and rounded upward to the nearest full cent. 49.1 (2) The total per-member portion of the allocation must be 49.2 determined, and that total per-member amount must be subtracted 49.3 from the total amount for allocation. Of the remainder dollar 49.4 amount, the following per-retirement system and per-pension plan 49.5 charges must be determined and the charges must be paid by the 49.6 system or plan: 49.7 (i) 37.87 percent is the total additional per-retirement 49.8 system charge, of which one-seventh must be paid by each 49.9 retirement system specified in subdivision 11, paragraph (b), 49.10 clauses (1), (2), (6), (7), (9), (10), and (11). 49.11 (ii) 62.13 percent is the total additional per-pension plan 49.12 charge, of which one-thirteenth must be paid by each pension 49.13 plan specified in subdivision 11, paragraph (b), clauses (1) to 49.14 (13). 49.15 (b) The assessment must be made following the completion of 49.16 the actuarial valuation calculations and the experience 49.17 analysis. The amount of the assessment is appropriated from the 49.18 retirement fund applicable to the retirement plan. Receipts 49.19 from assessments must be deposited in the state treasury and 49.20 credited to the general fund. 49.21 Sec. 2. Minnesota Statutes 1998, section 69.021, 49.22 subdivision 10, is amended to read: 49.23 Subd. 10. [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 49.24 (a) The commissioner of revenue shall reduce the apportionment 49.25 of police state aid under subdivisions 5, paragraph (b), 6, and 49.26 7a, for eligible employer units by any excess police state aid. 49.27 (b) "Excess police state aid" is: 49.28 (1) for counties and for municipalities in which police 49.29 retirement coverage is provided wholly by the public employees 49.30 police and fire fund and all police officers are members of the 49.31 plan governed by sections 353.63 to 353.657, the amount in 49.32 excess of the employer's total prior calendar year obligation as 49.33 defined in paragraph (c), as certified by the executive director 49.34 of the public employees retirement association; 49.35 (2) for municipalities in which police retirement coverage 49.36 is provided in part by the public employees police and fire fund 50.1 governed by sections 353.63 to 353.657 and in part by a local 50.2 police consolidation account governed by chapter 353A, and 50.3 established after March 1, 1999, the amount in excess of the 50.4 employer's total prior calendar year obligation as defined in 50.5 paragraph (c), plus the amount of the employer's total prior 50.6 calendar year obligation under section 353A.09, subdivision 5, 50.7 paragraphs (a) and (b), as certified by the executive director 50.8 of the public employees retirement association; 50.9 (3) for municipalities in which police retirement coverage 50.10 is provided by the public employees police and fire plan 50.11 governed by sections 353.63 to 353.657, in which police 50.12 retirement coverage was provided by a police consolidation 50.13 account under chapter 353A before July 1, 1999, and for which 50.14 the municipality has an additional municipal contribution under 50.15 section 353.665, subdivision 8, paragraph (b), the amount in 50.16 excess of the employer's total prior calendar year obligation as 50.17 defined in paragraph (c), plus the amount of any additional 50.18 municipal contribution under section 353.665, subdivision 8, 50.19 paragraph (b), until the year 2010, as certified by the 50.20 executive director of the public employees retirement 50.21 association; 50.22 (4) for municipalities in which police retirement coverage 50.23 is provided in part by the public employees police and fire fund 50.24 governed by sections 353.63 to 353.657 and in part by a local 50.25 police relief association governed by sections 69.77 and 50.26 423A.01, the amount in excess of the employer's total prior 50.27 calendar year obligation as defined in paragraph (c), as 50.28 certified by the executive director of the public employees 50.29 retirement association, plus the amount of the financial 50.30 requirements of the relief association certified to the 50.31 applicable municipality during the prior calendar year under 50.32 section 69.77, subdivisions 2b and 2c, reduced by the amount of 50.33 member contributions deducted from the covered salary of the 50.34 relief association during the prior calendar year under section 50.35 69.77, subdivision 2a, as certified by the chief administrative 50.36 officer of the applicable municipality; 51.1(4)(5) for the metropolitan airports commission, if there 51.2 are police officers hired before July 1, 1978, with retirement 51.3 coverage by the Minneapolis employees retirement fund remaining, 51.4 the amount in excess of the commission's total prior calendar 51.5 year obligation as defined in paragraph (c), as certified by the 51.6 executive director of the public employees retirement 51.7 association, plus the amount determined by expressing the 51.8 commission's total prior calendar year contribution to the 51.9 Minneapolis employees retirement fund under section 422A.101, 51.10 subdivisions 2 and 2a, as a percentage of the commission's total 51.11 prior calendar year covered payroll for commission employees 51.12 covered by the Minneapolis employees retirement fund and 51.13 applying that percentage to the commission's total prior 51.14 calendar year covered payroll for commission police officers 51.15 covered by the Minneapolis employees retirement fund, as 51.16 certified by the chief administrative officer of the 51.17 metropolitan airports commission; and 51.18(5)(6) for the department of natural resources and for the 51.19 department of public safety, the amount in excess of the 51.20 employer's total prior calendar year obligation under section 51.21 352B.02, subdivision 1c, for plan members who are peace officers 51.22 under section 69.011, subdivision 1, clause (g), as certified by 51.23 the executive director of the Minnesota state retirement system. 51.24 (c) The employer's total prior calendar year obligation 51.25 with respect to the public employees police and fire plan is the 51.26 total prior calendar year obligation under section 353.65, 51.27 subdivision 3, for police officers as defined in section 353.64, 51.28 subdivision 2, and the actual total prior calendar year 51.29 obligation under section 353.65, subdivision 3, for 51.30 firefighters, as defined in section 353.64, subdivision 3, but 51.31 not to exceed for those firefighters the applicable following 51.32 amounts: 51.33 Municipality Maximum Amount 51.34 Albert Lea $54,157.01 51.35 Anoka 10,399.31 51.36 Apple Valley 5,442.44 52.1 Austin 49,864.73 52.2 Bemidji 27,671.38 52.3 Brooklyn Center 6,605.92 52.4 Brooklyn Park 24,002.26 52.5 Burnsville 15,956.00 52.6 Cloquet 4,260.49 52.7 Coon Rapids 39,920.00 52.8 Cottage Grove 8,588.48 52.9 Crystal 5,855.00 52.10 East Grand Forks 51,009.88 52.11 Edina 32,251.00 52.12 Elk River 5,216.55 52.13 Ely 13,584.16 52.14 Eveleth 16,288.27 52.15 Fergus Falls 6,742.00 52.16 Fridley 33,420.64 52.17 Golden Valley 11,744.61 52.18 Hastings 16,561.00 52.19 Hopkins 4,324.23 52.20 International Falls 14,400.69 52.21 Lakeville 782.35 52.22 Lino Lakes 5,324.00 52.23 Little Falls 7,889.41 52.24 Maple Grove 6,707.54 52.25 Maplewood 8,476.69 52.26 Minnetonka 10,403.00 52.27 Montevideo 1,307.66 52.28 Moorhead 68,069.26 52.29 New Hope 6,739.72 52.30 North St. Paul 4,241.14 52.31 Northfield 770.63 52.32 Owatonna 37,292.67 52.33 Plymouth 6,754.71 52.34 Red Wing 3,504.01 52.35 Richfield 53,757.96 52.36 Rosemount 1,712.55 53.1 Roseville 9,854.51 53.2 St. Anthony 33,055.00 53.3 St. Louis Park 53,643.11 53.4 Thief River Falls 28,365.04 53.5 Virginia 31,164.46 53.6 Waseca 11,135.17 53.7 West St. Paul 15,707.20 53.8 White Bear Lake 6,521.04 53.9 Woodbury 3,613.00 53.10 any other municipality 0.00 53.11 (d) The total amount of excess police state aid must be 53.12 deposited in the excess police state-aid account in the general 53.13 fund, administered and distributed as provided in subdivision 11. 53.14 Sec. 3. Minnesota Statutes 1998, section 69.031, 53.15 subdivision 5, is amended to read: 53.16 Subd. 5. [DEPOSIT OF STATE AID.] (a) The municipal 53.17 treasurer shall, within 30 days after receipt, transmit the fire 53.18 state aid to the treasurer of the duly incorporated 53.19 firefighters' relief association if there is one organized and 53.20 the association has filed a financial report with the 53.21 municipality. If the relief association has not filed a 53.22 financial report with the municipality, the municipal treasurer 53.23 shall delay transmission of the fire state aid to the relief 53.24 association until the complete financial report is filed. If 53.25 there is no relief association organized, or if the association 53.26 has dissolved, or has been removed as trustees of state aid, 53.27 then the treasurer of the municipality shall deposit the money 53.28 in the municipal treasury as provided for in section 424A.08 and 53.29 the money may be disbursed only for the purposes and in the 53.30 manner set forth in that section. 53.31 (b) The municipal treasurer, upon receipt of the police 53.32 state aid, shall disburse the police state aid in the following 53.33 manner: 53.34 (1) For a municipality in which a local police relief 53.35 association exists and all peace officers are members of the 53.36 association, the total state aid must be transmitted to the 54.1 treasurer of the relief association within 30 days of the date 54.2 of receipt, and the treasurer of the relief association shall 54.3 immediately deposit the total state aid in the special fund of 54.4 the relief association; 54.5 (2) For a municipality in which police retirement coverage 54.6 is provided by the public employees police and fire fund and all 54.7 peace officers are members of the fund, including municipalities 54.8 covered by section 353.665, the total state aid must be applied 54.9 toward the municipality's employer contribution to the public 54.10 employees police and fire fund undersectionsections 353.65, 54.11 subdivision 3, and 353.665, subdivision 8, paragraph (b), if 54.12 applicable; or 54.13 (3) For a municipality other than a city of the first class 54.14 with a population of more than 300,000 in which both a police 54.15 relief association exists and police retirement coverage is 54.16 provided in part by the public employees police and fire fund, 54.17 the municipality may elect at its option to transmit the total 54.18 state aid to the treasurer of the relief association as provided 54.19 in clause (1), to use the total state aid to apply toward the 54.20 municipality's employer contribution to the public employees 54.21 police and fire fund subject to all the provisions set forth in 54.22 clause (2), or to allot the total state aid proportionately to 54.23 be transmitted to the police relief association as provided in 54.24 this subdivision and to apply toward the municipality's employer 54.25 contribution to the public employees police and fire fund 54.26 subject to the provisions of clause (2) on the basis of the 54.27 respective number of active full-time peace officers, as defined 54.28 in section 69.011, subdivision 1, clause (g). 54.29 For a city of the first class with a population of more 54.30 than 300,000, in addition, the city may elect to allot the 54.31 appropriate portion of the total police state aid to apply 54.32 toward the employer contribution of the city to the public 54.33 employees police and fire fund based on the covered salary of 54.34 police officers covered by the fund each payroll period and to 54.35 transmit the balance to the police relief association; or 54.36 (4) For a municipality in which police retirement coverage 55.1 is provided in part by the public employees police and fire fund 55.2 and in part by a local police consolidation account governed by 55.3 chapter 353A and established after March 1, 1999, the total 55.4 police state aid must be applied towards the municipality's 55.5 total employer contribution to the public employees police and 55.6 fire fund and to the local police consolidation account under 55.7 sections 353.65, subdivision 3, and 353A.09, subdivision 5. 55.8 (c) The county treasurer, upon receipt of the police state 55.9 aid for the county, shall apply the total state aid toward the 55.10 county's employer contribution to the public employees police 55.11 and fire fund under section 353.65, subdivision 3. 55.12 (d) The designated metropolitan airports commission 55.13 official, upon receipt of the police state aid for the 55.14 metropolitan airports commission, shall apply the total police 55.15 state aid first toward the commission's employer contribution 55.16 for police officers to the Minneapolis employees retirement fund 55.17 under section 422A.101, subdivision 2a, and, if there is any 55.18 amount of police state aid remaining, shall apply that remainder 55.19 toward the commission's employer contribution for police 55.20 officers to the public employees police and fire plan under 55.21 section 353.65, subdivision 3. 55.22 (e) The police state aid apportioned to the departments of 55.23 public safety and natural resources under section 69.021, 55.24 subdivision 7a, is appropriated to the commissioner of finance 55.25 for transfer to the funds and accounts from which the salaries 55.26 of peace officers certified under section 69.011, subdivision 55.27 2a, are paid. The commissioner of revenue shall certify to the 55.28 commissioners of public safety, natural resources, and finance 55.29 the amounts to be transferred from the appropriation for police 55.30 state aid. The commissioners of public safety and natural 55.31 resources shall certify to the commissioner of finance the 55.32 amounts to be credited to each of the funds and accounts from 55.33 which the peace officers employed by their respective 55.34 departments are paid. Each commissioner must allocate the 55.35 police state aid first for employer contributions for employees 55.36 funded from the general fund and then for employer contributions 56.1 for employees funded from other funds. For peace officers whose 56.2 salaries are paid from the general fund, the amounts transferred 56.3 from the appropriation for police state aid must be canceled to 56.4 the general fund. 56.5 Sec. 4. Minnesota Statutes 1998, section 353.01, 56.6 subdivision 2b, is amended to read: 56.7 Subd. 2b. [EXCLUDED EMPLOYEES.] The following public 56.8 employees shall not participate as members of the association 56.9 with retirement coverage by the public employees retirement plan 56.10 or the public employees police and fire retirement plan: 56.11 (1) elected public officers, or persons appointed to fill a 56.12 vacancy in an elective office, who do not elect to participate 56.13 in the association by filing an application for membership; 56.14 (2) election officers; 56.15 (3) patient and inmate personnel who perform services in 56.16 charitable, penal, or correctional institutions of a 56.17 governmental subdivision; 56.18 (4) employees who are hired for a temporary position under 56.19 subdivision 12a, and employees who resign from a nontemporary 56.20 position and accept a temporary position within 30 days in the 56.21 same governmental subdivision, but not those employees who are 56.22 hired for an unlimited period but are serving a probationary 56.23 period. If the period of employment extends beyond six 56.24 consecutive months and the employee earns more than $425 from 56.25 one governmental subdivision in any one calendar month, the 56.26 department head shall report the employee for membership and 56.27 require employee deductions be made on behalf of the employee 56.28 under section 353.27, subdivision 4. 56.29 Membership eligibility of an employee who resigns or is 56.30 dismissed from a temporary position and within 30 days accepts 56.31 another temporary position in the same governmental subdivision 56.32 is determined on the total length of employment rather than on 56.33 each separate position. Membership eligibility of an employee 56.34 who holds concurrent temporary and nontemporary positions in one 56.35 governmental subdivision is determined by the length of 56.36 employment and salary of each separate position; 57.1 (5) employees whose actual salary from one governmental 57.2 subdivision does not exceed $425 per month, or whose annual 57.3 salary from one governmental subdivision does not exceed a 57.4 stipulation prepared in advance, in writing, that the salary 57.5 must not exceed $5,100 per calendar year or per school year for 57.6 school employees for employment expected to be of a full year's 57.7 duration or more than the prorated portion of $5,100 per 57.8 employment period for employment expected to be of less than a 57.9 full year's duration; 57.10 (6) employees who are employed by reason of work emergency 57.11 caused by fire, flood, storm, or similar disaster; 57.12 (7) employees who by virtue of their employment in one 57.13 governmental subdivision are required by law to be a member of 57.14 and to contribute to any of the plans or funds administered by 57.15 the Minnesota state retirement system, the teachers retirement 57.16 association, the Duluth teachers retirement fund association, 57.17 the Minneapolis teachers retirement association, the St. Paul 57.18 teachers retirement fund association, the Minneapolis employees 57.19 retirement fund, or any police or firefighters relief 57.20 association governed by section 69.77 that has not consolidated 57.21 with the public employees retirement association, or any local 57.22 police or firefightersrelief association that has consolidated57.23with the public employees retirement associationconsolidation 57.24 account butwhose memberswho have not elected the type of 57.25 benefit coverage provided by the public employees police and 57.26 fire fund under sections 353A.01 to 353A.10, or any persons 57.27 covered by section 353.665, subdivision 4, 5, or 6, who have not 57.28 elected public employee police and fire plan benefit coverage. 57.29 This clause must not be construed to prevent a person from being 57.30 a member of and contributing to the public employees retirement 57.31 association and also belonging to and contributing to another 57.32 public pension fund for other service occurring during the same 57.33 period of time. A person who meets the definition of "public 57.34 employee" in subdivision 2 by virtue of other service occurring 57.35 during the same period of time becomes a member of the 57.36 association unless contributions are made to another public 58.1 retirement fund on the salary based on the other service or to 58.2 the teachers retirement association by a teacher as defined in 58.3 section 354.05, subdivision 2; 58.4 (8) persons who are excluded from coverage under the 58.5 federal Old Age, Survivors, Disability, and Health Insurance 58.6 Program for the performance of service as specified in United 58.7 States Code, title 42, section 410(a)(8)(A), as amended through 58.8 January 1, 1987, if no irrevocable election of coverage has been 58.9 made under section 3121(r) of the Internal Revenue Code of 1954, 58.10 as amended; 58.11 (9) full-time students who are enrolled and are regularly 58.12 attending classes at an accredited school, college, or 58.13 university and who are part-time employees as defined by a 58.14 governmental subdivision; 58.15 (10) resident physicians, medical interns, and pharmacist 58.16 residents and pharmacist interns who are serving in a degree or 58.17 residency program in public hospitals; 58.18 (11) students who are serving in an internship or residency 58.19 program sponsored by an accredited educational institution; 58.20 (12) persons who hold a part-time adult supplementary 58.21 technical college license who render part-time teaching service 58.22 in a technical college; 58.23 (13) foreign citizens working for a governmental 58.24 subdivision with a work permit of less than three years, or an 58.25 H-1b visa valid for less than three years of employment. Upon 58.26 notice to the association that the work permit or visa extends 58.27 beyond the three-year period, the foreign citizens are eligible 58.28 for membership from the date of the extension; 58.29 (14) public hospital employees who elected not to 58.30 participate as members of the association before 1972 and who 58.31 did not elect to participate from July 1, 1988, to October 1, 58.32 1988; 58.33 (15) except as provided in section 353.86, volunteer 58.34 ambulance service personnel, as defined in subdivision 35, but 58.35 persons who serve as volunteer ambulance service personnel may 58.36 still qualify as public employees under subdivision 2 and may be 59.1 members of the public employees retirement association and 59.2 participants in the public employees retirement fund or the 59.3 public employees police and fire fund on the basis of 59.4 compensation received from public employment service other than 59.5 service as volunteer ambulance service personnel; 59.6 (16) except as provided in section 353.87, volunteer 59.7 firefighters, as defined in subdivision 36, engaging in 59.8 activities undertaken as part of volunteer firefighter duties; 59.9 provided that a person who is a volunteer firefighter may still 59.10 qualify as a public employee under subdivision 2 and may be a 59.11 member of the public employees retirement association and a 59.12 participant in the public employees retirement fund or the 59.13 public employees police and fire fund on the basis of 59.14 compensation received from public employment activities other 59.15 than those as a volunteer firefighter; and 59.16 (17) pipefitters and associated trades personnel employed 59.17 by independent school district No. 625, St. Paul, with coverage 59.18 by the pipefitters local 455 pension plan under a collective 59.19 bargaining agreement who were either first employed after May 1, 59.20 1997, or, if first employed before May 2, 1997, elected to be 59.21 excluded under Laws 1997, chapter 241, article 2, section 12. 59.22 Sec. 5. Minnesota Statutes 1998, section 353.01, 59.23 subdivision 10, is amended to read: 59.24 Subd. 10. [SALARY.] (a) "Salary" means: 59.25 (1) periodic compensation of a public employee, before 59.26 deductions for deferred compensation, supplemental retirement 59.27 plans, or other voluntary salary reduction programs, and also 59.28 means "wages" and includes net income from fees; and 59.29 (2) for a public employee who has prior service covered by 59.30 a local police or firefighters' relief association that has 59.31 consolidated with the public employees retirement association or 59.32 to which section 353.665 applies and who has elected 59.33 coverage either under the public employees police and fire fund 59.34 benefit plan under section 353A.08 following the 59.35 consolidation or under section 353.665, subdivision 4, "salary" 59.36 means the rate of salary upon which member contributions to the 60.1 special fund of the relief association were made prior to the 60.2 effective date of the consolidation as specified by law and by 60.3 bylaw provisions governing the relief association on the date of 60.4 the initiation of the consolidation procedure and the actual 60.5 periodic compensation of the public employee after the effective 60.6 date of consolidation. 60.7 (b) Salary does not mean: 60.8 (1) fees paid to district court reporters, unused annual or 60.9 sick leave payments, in lump-sum or periodic payments, severance 60.10 payments, reimbursement of expenses, lump-sum settlements not 60.11 attached to a specific earnings period, or workers' compensation 60.12 payments; 60.13 (2) employer-paid amounts used by an employee toward the 60.14 cost of insurance coverage, employer-paid fringe benefits, 60.15 flexible spending accounts, cafeteria plans, health care expense 60.16 accounts, day care expenses, or any payments in lieu of any 60.17 employer-paid group insurance coverage, including the difference 60.18 between single and family rates that may be paid to a member 60.19 with single coverage and certain amounts determined by the 60.20 executive director to be ineligible; 60.21 (3) the amount equal to that which the employing 60.22 governmental subdivision would otherwise pay toward single or 60.23 family insurance coverage for a covered employee when, through a 60.24 contract or agreement with some but not all employees, the 60.25 employer: 60.26 (i) discontinues, or for new hires does not provide, 60.27 payment toward the cost of the employee's selected insurance 60.28 coverages under a group plan offered by the employer; 60.29 (ii) makes the employee solely responsible for all 60.30 contributions toward the cost of the employee's selected 60.31 insurance coverages under a group plan offered by the employer, 60.32 including any amount the employer makes toward other employees' 60.33 selected insurance coverages under a group plan offered by the 60.34 employer; and 60.35 (iii) provides increased salary rates for employees who do 60.36 not have any employer-paid group insurance coverages; and 61.1 (4) except as provided in section 353.86 or 353.87, 61.2 compensation of any kind paid to volunteer ambulance service 61.3 personnel or volunteer firefighters, as defined in subdivisions 61.4 35 and 36. 61.5 Sec. 6. Minnesota Statutes 1998, section 353.01, 61.6 subdivision 16, is amended to read: 61.7 Subd. 16. [ALLOWABLE SERVICE.] (a) "Allowable service" 61.8 means service during years of actual membership in the course of 61.9 which employee contributions were made, periods covered by 61.10 payments in lieu of salary deductions under section 353.35, and 61.11 service in years during which the public employee was not a 61.12 member but for which the member later elected, while a member, 61.13 to obtain credit by making payments to the fund as permitted by 61.14 any law then in effect. 61.15 (b) "Allowable service" also means a period of authorized 61.16 leave of absence with pay from which deductions for employee 61.17 contributions are made, deposited, and credited to the fund. 61.18 (c) "Allowable service" also means a period of authorized 61.19 leave of absence without pay that does not exceed one year, and 61.20 during or for which a member obtained credit by payments to the 61.21 fund made in place of salary deductions, provided that the 61.22 payments are made in an amount or amounts based on the member's 61.23 average salary on which deductions were paid for the last six 61.24 months of public service, or for that portion of the last six 61.25 months while the member was in public service, to apply to the 61.26 period in either case immediately preceding commencement of the 61.27 leave of absence. If the employee elects to pay employee 61.28 contributions for the period of any leave of absence without 61.29 pay, or for any portion of the leave, the employee shall also, 61.30 as a condition to the exercise of the election, pay to the fund 61.31 an amount equivalent to both the required employer and 61.32 additional employer contributions for the employee. The payment 61.33 must be made within one year from the expiration of the leave of 61.34 absence or within 20 days after termination of public service 61.35 under subdivision 11a. The employer by appropriate action of 61.36 its governing body, made a part of its official records, before 62.1 the date of the first payment of the employee contribution, may 62.2 certify to the association in writing its commitment to pay the 62.3 employer and additional employer contributions from the proceeds 62.4 of a tax levy made under section 353.28. Payments under this 62.5 paragraph must include interest at an annual rate of 8.5 percent 62.6 compounded annually from the date of the termination of the 62.7 leave of absence to the date payment is made. An employee shall 62.8 return to public service and receive a minimum of three months 62.9 of allowable service to be eligible to pay employee and employer 62.10 contributions for a subsequent authorized leave of absence 62.11 without pay. 62.12 (d) "Allowable service" also means a periodic, repetitive 62.13 leave that is offered to all employees of a governmental 62.14 subdivision. The leave program may not exceed 208 hours per 62.15 annual normal work cycle as certified to the association by the 62.16 employer. A participating member obtains service credit by 62.17 making employee contributions in an amount or amounts based on 62.18 the member's average salary that would have been paid if the 62.19 leave had not been taken. The employer shall pay the employer 62.20 and additional employer contributions on behalf of the 62.21 participating member. The employee and the employer are 62.22 responsible to pay interest on their respective shares at the 62.23 rate of 8.5 percent a year, compounded annually, from the end of 62.24 the normal cycle until full payment is made. An employer shall 62.25 also make the employer and additional employer contributions, 62.26 plus 8.5 percent interest, compounded annually, on behalf of an 62.27 employee who makes employee contributions but terminates public 62.28 service. The employee contributions must be made within one 62.29 year after the end of the annual normal working cycle or within 62.30 20 days after termination of public service, whichever is 62.31 sooner. The association shall prescribe the manner and forms to 62.32 be used by a governmental subdivision in administering a 62.33 periodic, repetitive leave. 62.34 (e) "Allowable service" also means a period during which a 62.35 member is on an authorized sick leave of absence, without pay, 62.36 limited to one year. An employee who has received one year of 63.1 allowable service shall return to public service and receive a 63.2 minimum of three months of allowable service to receive 63.3 allowable service for a subsequent authorized sick leave of 63.4 absence. 63.5 (f) "Allowable service" also means an authorized temporary 63.6 layoff under subdivision 12, limited to three months allowable 63.7 service per authorized temporary layoff in one calendar year. 63.8 An employee who has received the maximum service allowed for an 63.9 authorized temporary layoff shall return to public service and 63.10 receive a minimum of three months of allowable service to 63.11 receive allowable service for a subsequent authorized temporary 63.12 layoff. 63.13 (g) Notwithstanding any law to the contrary, "allowable 63.14 service" also means a parental leave. The association shall 63.15 grant a maximum of two months service credit for a parental 63.16 leave, within six months after the birth or adoption, upon 63.17 documentation from the member's governmental subdivision or 63.18 presentation of a birth certificate or other evidence of birth 63.19 or adoption to the association. 63.20 (h) "Allowable service" also means a period during which a 63.21 member is on an authorized leave of absence to enter military 63.22 service, provided that the member returns to public service upon 63.23 discharge from military service under section 192.262 and pays 63.24 into the fund employee contributions based upon the employee's 63.25 salary at the date of return from military service. Payment 63.26 must be made within five years of the date of discharge from the 63.27 military service. The amount of these contributions must be in 63.28 accord with the contribution rates and salary limitations, if 63.29 any, in effect during the leave, plus interest at an annual rate 63.30 of 8.5 percent compounded annually from the date of return to 63.31 public service to the date payment is made. The matching 63.32 employer contribution and additional employer contribution under 63.33 section 353.27, subdivisions 3 and 3a, must be paid by the 63.34 governmental subdivision employing the member upon return to 63.35 public service if the member makes the employee contributions. 63.36 The governmental subdivision involved may appropriate money for 64.1 those payments. A member may not receive credit for a voluntary 64.2 extension of military service at the instance of the member 64.3 beyond the initial period of enlistment, induction, or call to 64.4 active duty. 64.5 (i) For calculating benefits under sections 353.30, 353.31, 64.6 353.32, and 353.33 for state officers and employees displaced by 64.7 the Community Corrections Act, chapter 401, and transferred into 64.8 county service under section 401.04, "allowable service" means 64.9 combined years of allowable service as defined in paragraphs (a) 64.10 to (i) and section 352.01, subdivision 11. 64.11 (j) For a public employee who has prior service covered by 64.12 a local police or firefighters relief association that has 64.13 consolidated with the public employees retirement association or 64.14 to which section 353.665 applies, and who has elected the type 64.15 of benefit coverage provided by the public employees police and 64.16 fire fund either under section 353A.08 following the 64.17 consolidation or under section 353.665, subdivision 4, 64.18 "applicable service" is a period of service credited by the 64.19 local police or firefighters relief association as of the 64.20 effective date of the consolidation based on law and on bylaw 64.21 provisions governing the relief association on the date of the 64.22 initiation of the consolidation procedure. 64.23 Sec. 7. Minnesota Statutes 1998, section 353.64, 64.24 subdivision 1, is amended to read: 64.25 Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 64.26 person who prior to July 1, 1961, was a member of the police and 64.27 fire fund, by virtue of being a police officer or firefighter, 64.28 shall, as long as the person remains in either position, 64.29 continue membership in the fund. 64.30 (b) A person who was employed by a governmental subdivision 64.31 as a police officer and was a member of the police and fire fund 64.32 on July 1, 1978, by virtue of being a police officer as defined 64.33 by this section on that date, and if employed by the same 64.34 governmental subdivision in a position in the same department in 64.35 which the person was employed on that date, shall continue 64.36 membership in the fund whether or not that person has the power 65.1 of arrest by warrant after that date. 65.2 (c) A person who was employed by a governmental subdivision 65.3 as a police officer or a firefighter, whichever applies, was an 65.4 active member of the local police or salaried firefighters 65.5 relief association located in that governmental subdivision by 65.6 virtue of that employment as of the effective date of the 65.7 consolidation as authorized by sections 353A.01 to 353A.10, and 65.8 has elected coverage by the public employees police and fire 65.9 fund benefit plan, shall become a member of the police and fire 65.10 fund after that date if employed by the same governmental 65.11 subdivision in a position in the same department in which the 65.12 person was employed on that date. 65.13 (d) Any other employee serving on a full-time basis as a 65.14 police officer or firefighter on or after July 1, 1961, shall 65.15 become a member of the public employees police and fire fund. 65.16 (e) An employee serving on less than a full-time basis as a 65.17 police officer shall become a member of the public employees 65.18 police and fire fund only after a resolution stating that the 65.19 employee should be covered by the police and fire fund is 65.20 adopted by the governing body of the governmental subdivision 65.21 employing the person declaring that the position which the 65.22 person holds is that of a police officer. 65.23 (f) An employee serving on less than a full-time basis as a 65.24 firefighter shall become a member of the public employees police 65.25 and fire fund only after a resolution stating that the employee 65.26 should be covered by the police and fire fund is adopted by the 65.27 governing body of the governmental subdivision employing the 65.28 person declaring that the position which the person holds is 65.29 that of a firefighter. 65.30 (g) A police officer or firefighter employed by a 65.31 governmental subdivision who by virtue of that employment is 65.32 required by law to be a member of and to contribute to any 65.33 police or firefighter relief association governed by section 65.34 69.77 which has not consolidated with the public employees 65.35 police and fire fundand, any police officer or firefighter of a 65.36 relief association that has consolidated with the association 66.1 for which the employee has not elected coverage by the public 66.2 employees police and fire fund benefit plan as provided in 66.3 sections 353A.01 to 353A.10, or any police officer or 66.4 firefighter to whom section 353.665 applies who has not elected 66.5 coverage by the public employees police and fire fund benefit 66.6 plan as provided in section 353.665, subdivision 4, shall not 66.7 become a member of the public employees police and fire fund. 66.8 Sec. 8. Minnesota Statutes 1998, section 353.65, 66.9 subdivision 2, is amended to read: 66.10 Subd. 2. [EMPLOYEE CONTRIBUTION RATE.] The employee 66.11 contribution is an amount equal to7.66.2 percent of the total 66.12 salary of the member. This contribution must be made by 66.13 deduction from salary in the manner provided in subdivision 4. 66.14 Where any portion of a member's salary is paid from other than 66.15 public funds, the member's employee contribution is based on the 66.16 total salary received from all sources. 66.17 Sec. 9. Minnesota Statutes 1998, section 353.65, 66.18 subdivision 3, is amended to read: 66.19 Subd. 3. [EMPLOYER CONTRIBUTION RATE.] The employer 66.20 contribution shall be an amount equal to11.49.3 percent of the 66.21 total salary of every member. This contribution shall be made 66.22 from funds available to the employing subdivision by the means 66.23 and in the manner provided in section 353.28. 66.24 Sec. 10. [353.665] [MERGER OF CERTAIN CONSOLIDATION 66.25 ACCOUNTS INTO PERA-P&F.] 66.26 Subdivision 1. [MERGER REQUIRED.] (a) Notwithstanding any 66.27 law to the contrary, unless the applicable municipality elects 66.28 otherwise under paragraph (b), every local police and fire 66.29 consolidation account under chapter 353A in existence on March 66.30 1, 1999, becomes a part of the public employees police and fire 66.31 plan and fund governed by sections 353.63 to 353.659 on July 1, 66.32 1999. 66.33 (b) If a municipality desires to retain its consolidation 66.34 account or consolidation accounts, the governing body of the 66.35 municipality must adopt a resolution to that effect and must 66.36 file a copy of the resolution with the secretary of state, state 67.1 auditor, legislative auditor, finance commissioner, revenue 67.2 commissioner, executive director of the public employees 67.3 retirement association, and executive director of the 67.4 legislative commission on pensions and retirement. The 67.5 retention resolution must be adopted and filed with all 67.6 recipients before June 15, 1999. 67.7 Subd. 2. [TRANSFER OF LIABILITIES.] All current and future 67.8 liabilities of a former local police or fire consolidation 67.9 account are the liabilities of the public employees police and 67.10 fire fund as of July 1, 1999. 67.11 Subd. 3. [TRANSFER OF ASSETS.] Upon transfer, the 67.12 actuarial value of the assets of a former local police or fire 67.13 consolidation account less an amount equal to the residual 67.14 assets as determined under subdivision 7, paragraph (f), are the 67.15 assets of the public employees police and fire fund as of July 67.16 1, 1999. The participation of a consolidation account in the 67.17 Minnesota postretirement investment fund becomes part of the 67.18 participation of the public employees police and fire fund in 67.19 the Minnesota postretirement investment fund. The remaining 67.20 assets, excluding the amounts for distribution under subdivision 67.21 7, paragraph (f), become an asset of the public employees police 67.22 and fire fund. The public employees police and fire fund also 67.23 must be credited as an asset with the amount of receivable 67.24 assets under subdivision 7, paragraph (e). 67.25 Subd. 4. [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 67.26 person who is a police officer or a firefighter who, as such, is 67.27 an active member of a local police or fire consolidation account 67.28 on June 30, 1999, and who has not previously elected benefit 67.29 coverage under the relevant provisions of the public employees 67.30 police and fire fund benefit plan under section 353A.08, 67.31 subdivision 3, may elect benefit coverage under the relevant 67.32 provisions of the public employees police and fire fund benefit 67.33 plan. This election must be made in writing on a form 67.34 prescribed by the executive director before September 1, 1999, 67.35 and is irrevocable. 67.36 (b) If an eligible person makes no affirmative election of 68.1 benefit coverage before September 1, 1999, the person retains 68.2 the benefit coverage provided by the relief association benefit 68.3 plan in effect on the effective date of the consolidation of the 68.4 local police or fire consolidation account as reflected in the 68.5 applicable provisions of chapter 353B and may elect benefit 68.6 coverage under the relevant provisions of the public employees 68.7 police and fire fund benefit plan when the person terminates 68.8 active employment for purposes of receiving a service pension, 68.9 disability benefit, or within 90 days of the date the member 68.10 terminates active employment and defers receipt of a service 68.11 pension, whichever applies. 68.12 (c) Notwithstanding any provision of section 353A.083 and 68.13 any municipal action under authority of that section to the 68.14 contrary, the provisions of the public employees police and fire 68.15 fund benefit plan applicable to active members of the local 68.16 police or fire consolidation accounts who elect the public 68.17 employees police and fire fund benefit plan under paragraph (a) 68.18 or section 353A.08, subdivision 3, are the applicable provisions 68.19 of sections 353.63 to 353.659. 68.20 Subd. 5. [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 68.21 RECIPIENTS.] (a) A person who received a service pension, a 68.22 disability pension or benefit, or a survivor benefit from a 68.23 local police or fire consolidation account for the month of June 68.24 1999, and who has not previously elected participation in the 68.25 Minnesota postretirement investment fund for any future 68.26 postretirement adjustments rather than the postretirement 68.27 adjustment mechanism or mechanisms of the relief association 68.28 benefit plan under section 353A.08, subdivision 1, may elect 68.29 participation in the Minnesota postretirement investment fund 68.30 for any future postretirement adjustments or retention of the 68.31 postretirement adjustment mechanism or mechanisms of the relief 68.32 association benefit plan in effect on the effective date of the 68.33 consolidation of the local police or fire consolidation account 68.34 as reflected in the applicable provisions of chapter 353B. This 68.35 election must be in writing on a form prescribed by the 68.36 executive director and must be made before September 1, 1999. 69.1 (b) If an eligible person is a minor, the election must be 69.2 made by the person's parent or legal guardian. If the eligible 69.3 person makes no affirmative election under this subdivision, the 69.4 person retains the postretirement adjustment mechanism or 69.5 mechanisms of the relief association benefit plan in effect on 69.6 the effective date of the consolidation of the local police or 69.7 fire consolidation account as reflected in the applicable 69.8 provisions of chapter 353B. 69.9 (c) The survivor benefit payable on behalf of any service 69.10 pension or disability benefit recipient who elects participation 69.11 in the Minnesota postretirement investment fund must be 69.12 calculated under the relief association benefit plan in effect 69.13 on the effective date of consolidation under chapter 353A as 69.14 reflected in the applicable provisions of chapter 353B. 69.15 Subd. 6. [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 69.16 who terminated active employment as a police officer or a 69.17 firefighter that gave rise to membership in a local relief 69.18 association that consolidated with the public employees police 69.19 and fire plan under chapter 353A before July 1, 1999, and had 69.20 sufficient service credit to entitle the person to an eventual 69.21 service pension retains the benefit plan in effect for the 69.22 applicable local police or paid fire relief association in 69.23 effect on the effective date of consolidation under chapter 353A 69.24 as reflected in the applicable provisions of chapter 353B, 69.25 except that the deferred member may elect before September 1, 69.26 1999, to participate, upon retirement, in the Minnesota 69.27 postretirement investment fund. Any election to participate in 69.28 the Minnesota postretirement investment fund is applicable to 69.29 any survivor benefit attributable to a deferred member covered 69.30 by this subdivision. 69.31 Subd. 7. [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 69.32 June 30, 1999, the actuary retained by the legislative 69.33 commission on pensions and retirement shall determine the final 69.34 funded status of local police and fire consolidation accounts 69.35 under chapter 353A as provided in this subdivision. 69.36 (b) The final funded status calculation must be made using 70.1 the benefit plan provisions applicable to the consolidation 70.2 account and the actuarial assumptions used for the June 30, 70.3 1998, actuarial valuation of the account. 70.4 (c) The actuary must calculate the total actuarial accrued 70.5 liability of the consolidation account, which is the sum of the 70.6 actuarial accrued liability for all consolidation account 70.7 members who are not included in the participation of the account 70.8 in the Minnesota postretirement investment fund calculated by 70.9 the entry age normal actuarial cost method. The actuary also 70.10 must calculate any account unfunded accrued liability or any 70.11 account funding surplus. An account unfunded accrued liability 70.12 is the actuarial accrued liability reduced by the amount of the 70.13 current value of assets, if the resulting number is positive. 70.14 An account funding surplus is the actuarial accrued liability 70.15 reduced by the amount of the current value of assets, if the 70.16 resulting number is negative. 70.17 (d) The actuary also must calculate the amortizable base 70.18 for every consolidation account. The amortizable base is the 70.19 present value of future benefits for all account members who are 70.20 not included in the participation of the account in the 70.21 Minnesota postretirement investment fund reduced by the present 70.22 value of 19 percent of future covered salary and further reduced 70.23 by the current value of account assets other than its 70.24 participation in the Minnesota postretirement investment fund, 70.25 after adjustment for fiscal year 1999 net mortality gains and 70.26 losses and for the net actuarial affect of the election of 70.27 postretirement adjustment coverage under subdivision 5. 70.28 (e) If the amortizable base under paragraph (d) is a 70.29 positive number, the receivable assets are an amount equal to 70.30 the amortizable base number. 70.31 (f) If the amortizable base under paragraph (d) is a 70.32 negative number, the actuary must calculate the residual asset 70.33 amount. The residual asset amount is: 70.34 (1) one-half of the amount by which the current assets of 70.35 the account exceed 100 percent of the total actuarial accrued 70.36 liability up to that percentage of the total actuarial accrued 71.1 liability that equals the public employees police and fire fund 71.2 funded ratio on June 30, 1999; and 71.3 (2) the amount by which the current assets of the account 71.4 exceed that percentage of the total actuarial accrued liability 71.5 that equals the public employees police and fire fund funded 71.6 ratio on June 30, 1999. Following the calculation of the 71.7 residual asset amount for each applicable municipality and the 71.8 verification of the amount by the legislative auditor, the 71.9 executive director of the public employees retirement 71.10 association shall pay the applicable residual asset amount with 71.11 interest equal to the average yield on the invested treasurer's 71.12 cash fund from July 1, 1999, to the first of the month in which 71.13 the payment is issued to each qualifying municipality. The 71.14 residual asset amount must be used by the municipality to defray 71.15 fire department expenditure items if the residual asset amount 71.16 was derived from a fire consolidation account or to defray 71.17 police department expenditure items if the residual asset amount 71.18 was derived from a police consolidation account. The residual 71.19 asset amount must be deposited in a special fund or account in 71.20 the municipal treasury established for that purpose. The 71.21 special fund or account must be invested and any investment 71.22 return attributable to the residual asset amount must be 71.23 credited to that special fund or account and its disbursement 71.24 similarly restricted. The special fund or account must be 71.25 audited periodically by the state auditor. 71.26 Subd. 8. [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 71.27 Effective for the first pay period following July 1, 1999, the 71.28 employee contribution rate for former consolidation account 71.29 active members is the rate specified in section 353.65, 71.30 subdivision 2, and the regular municipal contribution rate on 71.31 behalf of former consolidation account active members is the 71.32 rate specified in section 353.65, subdivision 3. 71.33 (b) The municipality associated with a former local 71.34 consolidation account that had a positive value amortizable base 71.35 calculation under subdivision 7, paragraph (d), must make an 71.36 additional municipal contribution to the public employees police 72.1 and fire plan for the period from January 1, 2000, to December 72.2 31, 2009. The amount of the additional municipal contribution 72.3 is the amount calculated by the actuary retained by the 72.4 legislative commission on pensions and retirement and certified 72.5 by the executive director of the public employees retirement 72.6 association by which the amortizable base amount would be 72.7 amortized on a level dollar annual end-of-the-year contribution 72.8 basis, using an 8.5 percent interest rate assumption. 72.9 Subd. 9. [BENEFIT PLAN COVERAGE.] Unless modified by an 72.10 election authorized under subdivision 4, 5, or 6, the benefit 72.11 plan election by any person or on behalf of any person under 72.12 section 353A.08 remains binding. Former consolidation account 72.13 members who elected the entirety of the public employees police 72.14 and fire benefit plan are entitled to an applicable annuity or 72.15 benefit under the provisions of sections 353.63 to 353.68 in 72.16 effect on the day that the former consolidation account member 72.17 terminated active service as a police officer or firefighter, 72.18 whichever applies. 72.19 Subd. 10. [CONSOLIDATION ACCOUNT TERMINATION.] Upon the 72.20 payment of all residual asset amounts under subdivision 7 and 72.21 the transfer of all liabilities and remaining assets under 72.22 subdivisions 2 and 3, the local consolidation accounts under 72.23 chapter 353A in existence on March 1, 1999, are terminated. 72.24 Sec. 11. Minnesota Statutes 1998, section 356.215, 72.25 subdivision 4g, is amended to read: 72.26 Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 72.27 the exhibit indicating the level normal cost, the actuarial 72.28 valuation must contain an exhibit indicating the additional 72.29 annual contribution sufficient to amortize the unfunded 72.30 actuarial accrued liability. For funds governed by chapters 3A, 72.31 352, 352B, 352C, 353, 354, 354A, and 490, the additional 72.32 contribution must be calculated on a level percentage of covered 72.33 payroll basis by the established date for full funding in effect 72.34 when the valuation is prepared. For funds governed by chapter 72.35 3A, sections 352.90 through 352.951, chapters 352B, 352C, 72.36 sections 353.63 through 353.68, and chapters 353C, 354A, and 73.1 490, the level percent additional contribution must be 73.2 calculated assuming annual payroll growth of 6.5 percent. For 73.3 funds governed by sections 352.01 through 352.86 and chapter 73.4 354, the level percent additional contribution must be 73.5 calculated assuming an annual payroll growth of five percent. 73.6 For the fund governed by sections 353.01 through 353.46, the 73.7 level percent additional contribution must be calculated 73.8 assuming an annual payroll growth of six percent. For all other 73.9 funds, the additional annual contribution must be calculated on 73.10 a level annual dollar amount basis. 73.11 (b) For any fund other than the Minneapolis employees 73.12 retirement fund, after the first actuarial valuation date 73.13 occurring after June 1, 1989, if there has not been a change in 73.14 the actuarial assumptions used for calculating the actuarial 73.15 accrued liability of the fund, a change in the benefit plan 73.16 governing annuities and benefits payable from the fund, a change 73.17 in the actuarial cost method used in calculating the actuarial 73.18 accrued liability of all or a portion of the fund, or a 73.19 combination of the three, which change or changes by themselves 73.20 without inclusion of any other items of increase or decrease 73.21 produce a net increase in the unfunded actuarial accrued 73.22 liability of the fund, the established date for full funding for 73.23 the first actuarial valuation made after June 1, 1989, and each 73.24 successive actuarial valuation is the first actuarial valuation 73.25 date occurring after June 1, 2020. 73.26 (c) For any fund or plan other than the Minneapolis 73.27 employees retirement fund, after the first actuarial valuation 73.28 date occurring after June 1, 1989, if there has been a change in 73.29 any or all of the actuarial assumptions used for calculating the 73.30 actuarial accrued liability of the fund, a change in the benefit 73.31 plan governing annuities and benefits payable from the fund, a 73.32 change in the actuarial cost method used in calculating the 73.33 actuarial accrued liability of all or a portion of the fund, or 73.34 a combination of the three, and the change or changes, by 73.35 themselves and without inclusion of any other items of increase 73.36 or decrease, produce a net increase in the unfunded actuarial 74.1 accrued liability in the fund, the established date for full 74.2 funding must be determined using the following procedure: 74.3 (i) the unfunded actuarial accrued liability of the fund 74.4 must be determined in accordance with the plan provisions 74.5 governing annuities and retirement benefits and the actuarial 74.6 assumptions in effect before an applicable change; 74.7 (ii) the level annual dollar contribution or level 74.8 percentage, whichever is applicable, needed to amortize the 74.9 unfunded actuarial accrued liability amount determined under 74.10 item (i) by the established date for full funding in effect 74.11 before the change must be calculated using the interest 74.12 assumption specified in subdivision 4d in effect before the 74.13 change; 74.14 (iii) the unfunded actuarial accrued liability of the fund 74.15 must be determined in accordance with any new plan provisions 74.16 governing annuities and benefits payable from the fund and any 74.17 new actuarial assumptions and the remaining plan provisions 74.18 governing annuities and benefits payable from the fund and 74.19 actuarial assumptions in effect before the change; 74.20 (iv) the level annual dollar contribution or level 74.21 percentage, whichever is applicable, needed to amortize the 74.22 difference between the unfunded actuarial accrued liability 74.23 amount calculated under item (i) and the unfunded actuarial 74.24 accrued liability amount calculated under item (iii) over a 74.25 period of 30 years from the end of the plan year in which the 74.26 applicable change is effective must be calculated using the 74.27 applicable interest assumption specified in subdivision 4d in 74.28 effect after any applicable change; 74.29 (v) the level annual dollar or level percentage 74.30 amortization contribution under item (iv) must be added to the 74.31 level annual dollar amortization contribution or level 74.32 percentage calculated under item (ii); 74.33 (vi) the period in which the unfunded actuarial accrued 74.34 liability amount determined in item (iii) is amortized by the 74.35 total level annual dollar or level percentage amortization 74.36 contribution computed under item (v) must be calculated using 75.1 the interest assumption specified in subdivision 4d in effect 75.2 after any applicable change, rounded to the nearest integral 75.3 number of years, but not to exceed 30 years from the end of the 75.4 plan year in which the determination of the established date for 75.5 full funding using the procedure set forth in this clause is 75.6 made and not to be less than the period of years beginning in 75.7 the plan year in which the determination of the established date 75.8 for full funding using the procedure set forth in this clause is 75.9 made and ending by the date for full funding in effect before 75.10 the change; and 75.11 (vii) the period determined under item (vi) must be added 75.12 to the date as of which the actuarial valuation was prepared and 75.13 the date obtained is the new established date for full funding. 75.14 (d) For the Minneapolis employees retirement fund, the 75.15 established date for full funding is June 30, 2020. 75.16 (e) For the following plans for which the annual actuarial 75.17 valuation indicates an excess of valuation assets over the 75.18 actuarial accrued liability, the valuation assets in excess of 75.19 the actuarial accrued liability must be recognized in the 75.20 following manner: 75.21 (1) the public employees retirement association police and 75.22 fire plan, the valuation assets in excess of the actuarial 75.23 accrued liability serve to reduce the current contribution 75.24 requirements by an amount equal to the amortization of the 75.25 excess expressed as a level percentage of pay over a 30-year 75.26 period beginning anew with each annual actuarial valuation of 75.27 the plan; and 75.28 (2) the correctional employees retirement plan of the 75.29 Minnesota state retirement system, and the state patrol 75.30 retirement plan, an excess of valuation assets over actuarial 75.31 accrued liability must be amortized in the same manner over the 75.32 same period as an unfunded actuarial accrued liability but must 75.33 serve to reduce the required contribution instead of increasing 75.34 it. 75.35 Sec. 12. Minnesota Statutes 1998, section 423A.02, 75.36 subdivision 1b, is amended to read: 76.1 Subd. 1b. [ADDITIONAL AMORTIZATION STATE AID.] (a) 76.2 Annually, on October 1, the commissioner of revenue shall 76.3 allocate the additional amortization state aid transferred under 76.4 section 69.021, subdivision 11, to: 76.5 (1) all police or salaried firefighter relief associations 76.6 governed by and in full compliance with the requirements of 76.7 section 69.77, that had an unfunded actuarial accrued liability 76.8 in the actuarial valuation prepared under sections 356.215 and 76.9 356.216 as of the preceding December 31;and76.10 (2) all local police or salaried firefighter consolidation 76.11 accounts governed by chapter 353A that are certified by the 76.12 executive director of the public employees retirement 76.13 association as having for the current fiscal year an additional 76.14 municipal contribution amount under section 353A.09, subdivision 76.15 5, paragraph (b), and that have implemented section 353A.083, 76.16 subdivision 1, if the effective date of the consolidation 76.17 preceded May 24, 1993, and that have implemented section 76.18 353A.083, subdivision 2, if the effective date of the 76.19 consolidation preceded June 1, 1995.; and 76.20 (3) municipalities that received amortization aid in 1999 76.21 and are required to make an additional municipal contribution 76.22 under section 353.665, subdivision 8, for the duration of the 76.23 required additional contribution. 76.24 (b) The commissioner shall allocate the state aid on the 76.25 basis of the proportional share of the relief association or 76.26 consolidation account of the total unfunded actuarial accrued 76.27 liability of all recipient relief associations and consolidation 76.28 accounts as of December 31, 1993, for relief associations, and 76.29 as of June 30, 1994, for consolidation accounts. 76.30 (c) Beginning October 1, 2000, and annually thereafter, the 76.31 commissioner shall allocate the state aid on the basis of 64.5 76.32 percent to municipalities to which section 353.665, subdivision 76.33 8, paragraph (b), applies for distribution in accordance with 76.34 paragraph (b) and subject to the limitation in subdivision 4, 76.35 34.2 percent to the city of Minneapolis to fund any unfunded 76.36 actuarial accrued liability in the actuarial valuation prepared 77.1 under sections 356.215 and 356.216 as of the preceding December 77.2 31 for the Minneapolis police relief association or the 77.3 Minneapolis fire department relief association, and 1.3 percent 77.4 to the city of Virginia to fund any unfunded actuarial accrued 77.5 liability in the actuarial valuation prepared under sections 77.6 356.215 and 356.216 as of the preceding December 31 for the 77.7 Virginia fire department relief association. In the event that 77.8 there is no unfunded actuarial accrued liability in either the 77.9 Minneapolis police relief association or the Minneapolis fire 77.10 department relief association, the commissioner shall allocate 77.11 that 34.2 percent of the aid as follows: 49 percent to the 77.12 Minneapolis teachers retirement fund association, if the 77.13 association has a five-year average, time-weighted rate of 77.14 investment return equal to or in excess of the combined return 77.15 for the same period of the state board of investment for the 77.16 basic retirement funds and the Minnesota postretirement 77.17 investment fund calculated using the formula promulgated under 77.18 section 11A.04, clause (11), 21 percent to the St. Paul teachers 77.19 retirement fund association, if the association has a five-year 77.20 average, time-weighted rate of investment return equal to or in 77.21 excess of the combined return for the same period of the state 77.22 board of investment for the basic retirement funds and the 77.23 Minnesota postretirement investment fund calculated using the 77.24 formula promulgated under section 11A.04, clause (11), and 30 77.25 percent as additional funding to support minimum fire state aid 77.26 for volunteer firefighter relief associations, with the 77.27 allocation made at the same time and under the same procedures 77.28 in subdivision 3. In the event there is no actuarial accrued 77.29 unfunded liability in the Virginia fire department relief 77.30 association, the commissioner shall allocate that 1.3 percent of 77.31 the aid as follows: 49 percent to the Minneapolis teachers 77.32 retirement fund association, if the association has a five-year 77.33 average, time-weighted rate of investment return equal to or in 77.34 excess of the combined return for the same period of the state 77.35 board of investment for the basic retirement funds and the 77.36 Minnesota postretirement investment fund calculated using the 78.1 formula promulgated under section 11A.04, clause (11), 21 78.2 percent to the St. Paul teachers retirement fund association, if 78.3 the association has a five-year average, time-weighted rate of 78.4 investment return equal to or in excess of the combined return 78.5 for the same period of the state board of investment for the 78.6 basic retirement funds and the Minnesota postretirement 78.7 investment fund calculated using the formula promulgated under 78.8 section 11A.04, clause (11), and 30 percent as additional 78.9 funding to support minimum fire state aid for volunteer 78.10 firefighter relief associations, with the allocation made at the 78.11 same time and under the same procedures in subdivision 3. 78.12 (d) The amounts required under this subdivision are 78.13 annually appropriated to the commissioner of revenue. 78.14 Sec. 13. Minnesota Statutes 1998, section 423A.02, 78.15 subdivision 2, is amended to read: 78.16 Subd. 2. [CONTINUED ELIGIBILITY.] A municipality that has 78.17 qualified for amortization state aid under subdivision 1 on 78.18 December 31, 1984, and has an additional municipal contribution 78.19 payable under section 353A.09, subdivision 5, paragraph (b), as 78.20 of the most recent December 31, continues upon application to be 78.21 entitled to receive amortization state aid under subdivision 1 78.22 and supplementary amortization state aid under subdivision 1a, 78.23 after the local police or salaried firefighters' relief 78.24 association has been consolidated into the public employees 78.25 police and fire fund. If a municipality loses entitlement for 78.26 amortization state aid and supplementary amortization state aid 78.27 in any year because of not having an additional municipal 78.28 contribution, the municipality is not entitled to the aid 78.29 amounts in any subsequent year.If the actuarial assumptions78.30specified in section 356.215 are changed in 1997, and the change78.31results in a municipality having an additional municipal78.32contribution, and the municipality had previously lost78.33entitlement for amortization aid and supplementary amortization78.34due to not having an additional municipal contribution, then the78.35municipality is again entitled to receive amortization aid and78.36supplementary amortization aid in the same amount as it79.1previously received.A municipality that received amortization 79.2 aid in 1999 and is required to make an additional municipal 79.3 contribution under section 353.665, subdivision 8, continues to 79.4 qualify for the amortization state aid and the supplemental 79.5 amortization aid for the duration of the required additional 79.6 contribution. 79.7 Sec. 14. Minnesota Statutes 1998, section 423A.02, is 79.8 amended by adding a subdivision to read: 79.9 Subd. 4. [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 79.10 total of amortization aid, supplemental amortization aid, and 79.11 additional amortization aid under this section payable to a 79.12 municipality to which section 353.665, subdivision 8, paragraph 79.13 (b), applies, may not exceed the amount of the additional 79.14 municipal contribution payable by an individual municipality 79.15 under section 353.665, subdivision 8, paragraph (b). 79.16 (b) Any aid amount in excess of the limit under this 79.17 subdivision for an individual municipality must be redistributed 79.18 to the other municipalities to which section 353.665, 79.19 subdivision 8, paragraph (b), applies. The excess aid must be 79.20 distributed in proportion to each municipality's additional 79.21 municipal contribution under section 353.665, subdivision 8, 79.22 paragraph (b). 79.23 (c) When the total aid for each municipality under this 79.24 section equals the limit under paragraph (a), any aid in excess 79.25 of the limit must be redistributed under subdivisions 1, 1a, and 79.26 1b. 79.27 Sec. 15. [1999 PERA-P&F ACTUARIAL VALUATION.] 79.28 (a) As of July 1, 1999, no actuarial valuations of the 79.29 local police and fire consolidation accounts in existence before 79.30 March 1, 1999, are required. 79.31 (b) The actuary retained by the legislative commission on 79.32 pensions and retirement shall prepare all calculations required 79.33 under Minnesota Statutes, section 353.665, and shall present 79.34 them to the commission in a separate report. 79.35 (c) The calculated actuarial accrued liability of the 79.36 public employees police and fire plan for July 1, 1999, must 80.1 contain all liabilities associated with the former local police 80.2 and fire consolidation accounts affected by Minnesota Statutes, 80.3 section 353.665. 80.4 (d) The asset value of the public employees police and fire 80.5 plan for July 1, 1999, is the sum of the following: 80.6 (1) the current assets of the public employees police and 80.7 fire plan as of June 30, 1999, without reference to any local 80.8 consolidation accounts in existence on March 1, 1999; 80.9 (2) the amount of assets transferred from the Minnesota 80.10 postretirement investment fund with respect to local 80.11 consolidation accounts under Minnesota Statutes, section 80.12 353.665, subdivision 3; 80.13 (3) that portion of the market value of assets of the local 80.14 consolidation accounts after subtracting the amount in clause (2) 80.15 determined by multiplying the total by the ratio that the 80.16 current asset value of public employee police and fire fund 80.17 assets other than the participation in the Minnesota 80.18 postretirement investment fund as of June 30, 1999, without 80.19 reference to any local consolidation accounts in existence on 80.20 March 1, 1999, bears to the market value of the same assets; and 80.21 (4) a receivable amount equal to the present value of the 80.22 future additional municipal contributions required under 80.23 Minnesota Statutes, section 353.665, subdivision 8, paragraph 80.24 (b). 80.25 Sec. 16. [REPEALER.] 80.26 Minnesota Statutes 1998, section 353.65, subdivision 3a, is 80.27 repealed. 80.28 Sec. 17. [EFFECTIVE DATE.] 80.29 Sections 1 to 10 and 12 to 16 are effective on the day 80.30 following final enactment. Section 11 is effective on July 1, 80.31 2000. 80.32 ARTICLE 9 80.33 MINIMUM VOLUNTEER FIREFIGHTER 80.34 STATE AID AMOUNT CHANGES 80.35 Section 1. Minnesota Statutes 1998, section 69.021, 80.36 subdivision 7, is amended to read: 81.1 Subd. 7. [APPORTIONMENT OF FIRE STATE AID TO 81.2 MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 81.3 shall apportion the fire state aid relative to the premiums 81.4 reported on the Minnesota Firetown Premium Reports filed under 81.5 this chapter to each municipality and/or firefighters' relief 81.6 association. 81.7 (b) The commissioner shall calculate an initial fire state 81.8 aid allocation amount for each municipality or fire department 81.9 under paragraph (c) and a minimum fire state aid allocation 81.10 amount for each municipality or fire department under paragraph 81.11 (d). The municipality or fire department must receive the 81.12 larger fire state aid amount. 81.13 (c) The initial fire state aid allocation amount is the 81.14 amount available for apportionment as fire state aid under 81.15 subdivision 5, without inclusion of any additional funding 81.16 amount to support a minimum fire state aid amount under section 81.17 423A.02, subdivision 3, allocated one-half in proportion to the 81.18 population as shown in the last official statewide federal 81.19 census for each fire town and one-half in proportion to the 81.20 market value of each fire town, including (1) the market value 81.21 of tax exempt property and (2) the market value of natural 81.22 resources lands receiving in lieu payments under sections 81.23 477A.11 to 477A.14, but excluding the market value of minerals. 81.24 In the case of incorporated or municipal fire departments 81.25 furnishing fire protection to other cities, towns, or townships 81.26 as evidenced by valid fire service contracts filed with the 81.27 commissioner, the distribution must be adjusted proportionately 81.28 to take into consideration the crossover fire protection 81.29 service. Necessary adjustments shall be made to subsequent 81.30 apportionments. In the case of municipalities or independent 81.31 fire departments qualifying for the aid, the commissioner shall 81.32 calculate the state aid for the municipality or relief 81.33 association on the basis of the population and the market value 81.34 of the area furnished fire protection service by the fire 81.35 department as evidenced by duly executed and valid fire service 81.36 agreements filed with the commissioner. If one or more fire 82.1 departments are furnishing contracted fire service to a city, 82.2 town, or township, only the population and market value of the 82.3 area served by each fire department may be considered in 82.4 calculating the state aid and the fire departments furnishing 82.5 service shall enter into an agreement apportioning among 82.6 themselves the percent of the population and the market value of 82.7 each service area. The agreement must be in writing and must be 82.8 filed with the commissioner. 82.9 (d) The minimum fire state aid allocation amount is the 82.10 amount in addition to the initial fire state allocation amount 82.11 that is derived from any additional funding amount to support a 82.12 minimum fire state aid amount under section 423A.02, subdivision 82.13 3, and allocated to municipalities with volunteer firefighter 82.14 relief associations based on the number of active volunteer 82.15 firefighters who are members of the relief association as 82.16 reported in the annual financial reporting for the calendar year 82.17 1993 to the office of the state auditor, but not to exceed 30 82.18 active volunteer firefighters, so that all municipalities or 82.19 fire departments with volunteer firefighter relief associations 82.20 receive in total at least a minimum fire state aid amount per 82.21 1993 active volunteer firefighter to a maximum of 30 82.22 firefighters. If a relief association did not exist in calendar 82.23 year 1993, the number of active volunteer firefighters who are 82.24 members of the relief association as reported in the annual 82.25 financial reporting for calendar year 1998 to the office of the 82.26 state auditor, but not to exceed 30 active volunteer 82.27 firefighters, shall be used in this determination. 82.28 (e) The fire state aid must be paid to the treasurer of the 82.29 municipality where the fire department is located and the 82.30 treasurer of the municipality shall, within 30 days of receipt 82.31 of the fire state aid, transmit the aid to the relief 82.32 association if the relief association has filed a financial 82.33 report with the treasurer of the municipality and has met all 82.34 other statutory provisions pertaining to the aid apportionment. 82.35 (f) The commissioner may make rules to permit the 82.36 administration of the provisions of this section. Any 83.1 adjustments needed to correct prior misallocations must be made 83.2 to subsequent apportionments. 83.3 Sec. 2. [EFFECTIVE DATE.] 83.4 Section 1 is effective on the day following final enactment 83.5 and applies to the first fire state aid and minimum fire state 83.6 aid allocation occurring after that date. 83.7 ARTICLE 10 83.8 METROPOLITAN COUNCIL TARGETED 83.9 EARLY RETIREMENT INCENTIVE 83.10 Section 1. [RETIREMENT INCENTIVE.] 83.11 The metropolitan council may offer its eligible employees, 83.12 as specified in sections 2 and 3, the retirement incentive 83.13 provided in section 4. 83.14 Sec. 2. [INCLUSION.] 83.15 If the metropolitan council chooses to offer the retirement 83.16 incentive under section 4, it must designate the positions or 83.17 group of positions within the council divisions specified in 83.18 section 3, clause (1), that will qualify for participation in 83.19 its retirement incentive program and may exclude otherwise 83.20 eligible employees. After initially designating the qualified 83.21 positions or group of positions, the council may at any time 83.22 modify its designation in order to further limit the qualified 83.23 positions or group of positions. 83.24 Sec. 3. [ELIGIBILITY.] 83.25 An employee of the metropolitan council is eligible to 83.26 participate in the retirement incentive program if the employee: 83.27 (1) was employed in the environmental services, community 83.28 development, or regional administration divisions of the council 83.29 on January 1, 1999; 83.30 (2) notifies, on or after the effective date of this act, 83.31 the council's regional administrator in writing of the 83.32 employee's intention to retire, the plan or plans from which the 83.33 individual will retire, and the employee's date of separation 83.34 from employment with the council; 83.35 (3) is, on the date the council receives the employee's 83.36 written notice of intention to retire, within the positions or 84.1 group of positions then currently designated by the council 84.2 under section 2; 84.3 (4) has, on the date of retirement, at least 25 years of 84.4 combined allowable service in any covered fund or funds listed 84.5 in Minnesota Statutes, section 356.30, subdivision 3; 84.6 (5) is, on the date of retirement, at least 55 years of 84.7 age; 84.8 (6) is, upon retirement, immediately eligible for a 84.9 retirement annuity from a defined benefit plan listed in 84.10 Minnesota Statutes, section 356.30, subdivision 3; and 84.11 (7) has a retirement annuity accrual date in the applicable 84.12 plan or plans on or after July 1, 1999, and before July 1, 2000. 84.13 Sec. 4. [RETIREMENT INCENTIVE.] 84.14 Subdivision 1. [FORMULA INCREASE.] For an eligible 84.15 employee who elects to participate in the retirement incentive 84.16 program, the multiplier percentage or percentages used to 84.17 calculate the retirement annuity from each defined benefit plan 84.18 listed in Minnesota Statutes, section 356.30, subdivision 3, 84.19 from which the employee is eligible to receive a retirement 84.20 annuity must be increased by .25 percentage points for each year 84.21 of allowable service, and pro rata for completed months less 84.22 than a full year, in the applicable plan or plans. If the 84.23 eligible employee has more than 30 years of combined service in 84.24 covered plans, the .25 percentage point increase applies only to 84.25 the first 30 years of allowable service in such covered funds. 84.26 Subd. 2. [CERTIFICATION OF ELIGIBILITY.] Before applying 84.27 the formula increase in subdivision 1, the applicable retirement 84.28 plan or plans must receive a certification from the council's 84.29 regional administrator that the employee meets the eligibility 84.30 criteria in section 3, clauses (1) to (3). 84.31 Subd. 3. [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 84.32 metropolitan council chooses to offer a retirement incentive 84.33 under this section, it must make an additional employer 84.34 contribution or contributions as specified in paragraph (b) to 84.35 the applicable retirement plan or plans from which the eligible 84.36 individual retired under the incentive program. 85.1 (b) The additional employer contribution for the applicable 85.2 employee to each applicable plan is an amount equal to the 85.3 difference in the actuarial present value of the annuity payable 85.4 by the plan for the employee, with and without the retirement 85.5 incentive under subdivision 1. 85.6 (c) An additional employer contribution under paragraph (b) 85.7 must be paid within 60 days from the effective date of the 85.8 applicable annuity for the eligible employee who elects to 85.9 participate in the retirement incentive. 85.10 Sec. 5. [LIMIT ON REHIRING AND FUTURE SERVICES.] 85.11 The metropolitan council may not rehire or contract for 85.12 services from an employee who retires under this act. 85.13 Sec. 6. [APPLICATION OF OTHER LAWS.] 85.14 Unilateral implementation of retirement incentives under 85.15 this act by the metropolitan council is not an unfair labor 85.16 practice for purposes of Minnesota Statutes, chapter 179A. 85.17 Sec. 7. [EFFECTIVE DATE.] 85.18 Sections 1 to 6 are effective on the day following final 85.19 enactment. 85.20 ARTICLE 11 85.21 MISCELLANEOUS PENSION CHANGES 85.22 Section 1. Minnesota Statutes 1998, section 3A.02, 85.23 subdivision 1b, is amended to read: 85.24 Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 85.25 separation from service after the beginning of the 1981 85.26 legislative session, a former member of the legislature who has 85.27 attained the ageof at least 60 yearsset by the board of 85.28 directors of the Minnesota state retirement system and who is 85.29 otherwise qualified in accordance with subdivision 1 is entitled 85.30 upon making written application on forms supplied by the 85.31 director to a retirement allowance in an amount equal to the 85.32 retirement allowance specified in subdivision 1 reduced so that 85.33 the reduced annuity is the actuarial equivalent of the annuity 85.34 that would be payable if the former member of the legislature 85.35 deferred receipt of the annuity and the annuity amount were 85.36 augmented at an annual rate of three percent compounded annually 86.1 from the date the annuity begins to accrue until age 62. 86.2 (b) The age set by the board of directors under paragraph 86.3 (a) cannot be less than the early retirement age under section 86.4 352.116, subdivision 1a. 86.5 (c) If there is an actuarial cost to the plan of resetting 86.6 the early retirement age under paragraph (a), the retired 86.7 legislator is required to pay an additional amount to cover the 86.8 full actuarial value. 86.9 (d) Authority for the board of directors to reset the early 86.10 retirement age expires on January 15, 2000, and the early 86.11 reduced retirement allowance age thereafter is age 60. 86.12 (e) The executive director of the Minnesota state 86.13 retirement system shall report to the legislative commission on 86.14 pensions and retirement on the utilization of this provision on 86.15 or before September 1, 2000. 86.16 Sec. 2. Minnesota Statutes 1998, section 122A.46, 86.17 subdivision 2, is amended to read: 86.18 Subd. 2. [LEAVE OF ABSENCE.] The board of any district may 86.19 grant an extended leave of absence without salary to any full- 86.20 or part-time elementary or secondary teacher who has been 86.21 employed by the district for at least five years and has at 86.22 least ten years of allowable service, as defined in section 86.23 354.05, subdivision 13, or the bylaws of the appropriate 86.24 retirement association or ten years of full-time teaching 86.25 service in Minnesota public elementary and secondary schools. 86.26 Themaximumduration of an extended leave of absencepursuant to86.27 under this section must be determined by mutual agreement of the 86.28 board and the teacher at the time the leave is granted and shall 86.29 be at least three but no more than five years. An extended 86.30 leave of absencepursuant tounder this section shall be taken 86.31 by mutual consent of the board and the teacher. If the school 86.32 board denies a teacher's request, it must provide reasonable 86.33 justification for the denial. 86.34 Sec. 3. Minnesota Statutes 1998, section 352.03, 86.35 subdivision 1, is amended to read: 86.36 Subdivision 1. [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 87.1 policy-making function of the system is vested in a board of 11 87.2 members, who must beknown as the board of directors. This 87.3 board shall consist of three members appointed by the governor, 87.4 one of whom must be a constitutional officer or appointed state 87.5 official and two of whom must be public members knowledgeable in 87.6 pension matters, four state employees elected by state employees 87.7 covered by the system excluding employees in categories 87.8 specifically authorized to designate or elect a member by this 87.9 subdivision, one employeeof the transit operating divisionof 87.10 the metropolitan council's transitcommissionoperations or its 87.11 successor agency designated by the executive committee of the 87.12 labor organization that is the exclusive bargaining agent 87.13 representing employees of the transit division, one member of 87.14 the state patrol retirement fund elected by members of that fund 87.15 at a time and in a manner fixed by the board, one employee 87.16 covered by the correctional employees plan elected by employees 87.17 covered by that plan, and one retired employee elected by 87.18 disabled and retired employees of all plans administered by the 87.19 system at a time and in a manner to be fixed by the board. Two 87.20 state employee members, whose terms of office begin on the first 87.21 Monday in May after their election, must be elected biennially. 87.22 Elected members and the appointed member of the metropolitan 87.23 council'soffice oftransit operations hold office for a term of 87.24 four years, except the retired member whose term is two years,87.25 and until their successors are elected or appointed, and have 87.26 qualified. An employee of the system is not eligible for 87.27 membership on the board of directors. A state employee on leave 87.28 of absence is not eligible for election or reelection to 87.29 membership on the board of directors. The term of any board 87.30 member who is on leave for more than six months automatically 87.31 ends on expiration ofthis periodthe term of office. 87.32 Sec. 4. Minnesota Statutes 1998, section 354.05, 87.33 subdivision 40, is amended to read: 87.34 Subd. 40. [TIMELY RECEIPT.] An application, payment, 87.35 return, claim, or other document that is not personally 87.36 delivered to the association on or before the applicable due 88.1 date is considered to be a timely receipt ifofficially88.2postmarkedreceived on or before the due date or if delivered or 88.3 filed under section 645.151. 88.4 Sec. 5. Minnesota Statutes 1998, section 354.06, 88.5 subdivision 1, is amended to read: 88.6 Subdivision 1. The management of the association is vested 88.7 in a board of eight trustees known as the board of trustees of 88.8 the teachers retirement association. It is composed of the 88.9 following persons: the commissioner of children, families, and 88.10 learning, the commissioner of finance, a representative of the 88.11 Minnesota school boards association, four members of the 88.12 association elected by the members of the association, and one 88.13 retiree elected by the retirees of the association. The five 88.14 elected members of the board of trustees must be chosen bytwofour years commencing on the first of 88.22 July next succeeding the election. The filing of candidacy for 88.23 a retiree election must include a petition of endorsement signed 88.24 by at least ten retirees of the association. Each election must 88.25 be completed by June first of each succeeding odd-numbered 88.26 year. In the case of elective members, any vacancy must be 88.27 filled by appointment by the remainder of the board, and the 88.28 appointee shall serve until the members or retirees of the 88.29 association at the next regular election have elected a trustee 88.30 to serve for the unexpired term caused by the vacancy. No 88.31 member or retiree may be appointed by the board, or elected by 88.32 the members of the association as a trustee, if the person is 88.33 not a member or retiree of the association in good standing at 88.34 the time of the appointment or election. 88.35 Sec. 6. Minnesota Statutes 1998, section 354.10, 88.36 subdivision 4, is amended to read: 89.1 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.] Any 89.2 beneficiary designated by a retiree or member under section 89.3 354.05, subdivision 22, may be changed or revoked by the retiree 89.4 or member on a form provided by the executive director. A 89.5 change or revocation made under this subdivision is valid only 89.6 if the properly completed form is received by the association 89.7postmarkedon or before the date of death of the retiree or the 89.8 member. If a designated beneficiary dies before the retiree or 89.9 member designating the beneficiary, and a new beneficiary is not 89.10 designated, the retiree's or member's estate is the beneficiary. 89.11 Sec. 7. Minnesota Statutes 1998, section 354C.11, is 89.12 amended to read: 89.13 354C.11 [COVERAGE.] 89.14 Subdivision 1. [AUTHORIZATION.]PersonnelIndividuals 89.15 employed by the board of trustees of the Minnesota state 89.16 colleges and universitieswhoarein the unclassified service of89.17the state, and who have completed at least two years of89.18employment by the board or a predecessor board with a full-time89.19contract are participantsauthorized to participate in the 89.20 supplemental retirement plan, effective on the next following 89.21 July 1,if the person is employed in an eligibleafter meeting 89.22 eligibility requirements specified in subdivision 2. 89.23 Subd. 2. [ELIGIBILITY.] (a) An individual is a participant 89.24 in the supplemental retirement plan if the individual is 89.25 employed by the board of trustees in the unclassified service of 89.26 the state and has completed at least two years with a full-time 89.27 contract of applicable unclassified employment with the board or 89.28 an applicable predecessor board in any of the positions 89.29 specified in paragraph (b). 89.30 (b) Eligible positions or employment classifications are: 89.31 (1) an unclassified administrative position as defined in 89.32 section 354B.20, subdivision 6, or is employed in; 89.33 (2) an employment classification included in one of the 89.34 following collective bargaining units under section 179A.10, 89.35 subdivision 2: 89.36(1)(i) the state university instructional unit; 90.1(2)(ii) the community college instructional unit; 90.2(3)(iii) the technical college instructional unit; and 90.3(4)(iv) the state university administrative unit; or 90.4 (3) an unclassified employee of the board included in the 90.5 general professional unit or supervisory employees unit under 90.6 section 179A.10, subdivision 2. 90.7 Subd. 3. [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 90.8 person qualifies for participation in the 90.9 supplemental retirement plan, all subsequent service by the 90.10 person as an unclassified employee of thestate university90.11board, the state board for community colleges, the higher90.12education board, or the technical collegesboard of trustees in 90.13 a position or employment classification listed in subdivision 2, 90.14 paragraph (b), is covered by the supplemental retirement plan. 90.15 Sec. 8. [EFFECTIVE DATE.] 90.16 Sections 1 and 3 to 7 are effective on the day following 90.17 final enactment. Section 2 is effective on July 1, 1999. 90.18 ARTICLE 12 90.19 OTHER CHANGES 90.20 Section 1. Minnesota Statutes 1998, section 3.85, 90.21 subdivision 3, is amended to read: 90.22 Subd. 3. [MEMBERSHIP.] The commission consists ofsixfive 90.23 members of the senate appointed by the subcommittee on 90.24 committees of the committee on rules and administration andsix90.25 five members of the house of representatives appointed by the 90.26 speaker. Members shall be appointed at the commencement of each 90.27 regular session of the legislature for a two-year term beginning 90.28 January 16 of the first year of the regular session. Vacancies 90.29 that occur while the legislature is in session shall be filled 90.30 like regular appointments. If the legislature is not in 90.31 session, senate vacancies shall be filled by the last 90.32 subcommittee on committees of the senate committee on rules and 90.33 administration or other appointing authority designated by the 90.34 senate rules, and house vacancies shall be filled by the last 90.35 speaker of the house, or if the speaker is not available, by the 90.36 last chair of the house rules committee. 91.1 Sec. 2. [EFFECTIVE DATE.] 91.2 Section 1 is effective on the day following final enactment.