HF 1482

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; modifying definitions; 
  1.3             modifying disability benefit provisions; changing 
  1.4             early retirement requirements; modifying eligibility 
  1.5             provisions; modifying refund provisions; changing 
  1.6             survivor benefit provisions; making technical changes; 
  1.7             extending a pilot project; amending Minnesota Statutes 
  1.8             2000, sections 3A.03, subdivision 2; 11A.18, 
  1.9             subdivision 7; 352.01, subdivisions 2a, 2b, 13, 26; 
  1.10            352.04, subdivision 8; 352.113, subdivisions 4, 6, 7; 
  1.11            352.12, subdivisions 2, 2a, 2b; 352.22, subdivisions 
  1.12            2, 3, 8; 352.87, subdivisions 4, 5; 352.931, 
  1.13            subdivisions 1, 3; 352.95, subdivisions 4, 5, 7; 
  1.14            352B.01, subdivisions 10, 11; 352B.10, subdivision 3; 
  1.15            352B.101; 352B.11, subdivisions 1, 2; 352C.021, 
  1.16            subdivision 5; 352C.031, subdivision 2; 352D.02, 
  1.17            subdivisions 1, 3; 353.01, subdivision 15a; 353.32, 
  1.18            subdivision 1c; 353.34, subdivision 2; 354.05, 
  1.19            subdivisions 2, 8, 8a; 354.46, subdivisions 1, 2, 2b; 
  1.20            354.48, subdivision 7; 354.49, subdivision 3; 354.52, 
  1.21            subdivision 4; 354.66, subdivision 2; 356.55, 
  1.22            subdivision 7; 490.121, subdivisions 4, 10, 17; 
  1.23            490.124, subdivisions 3, 12. 
  1.24  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.25                             ARTICLE 1 
  1.26                            DEFINITIONS 
  1.27     Section 1.  Minnesota Statutes 2000, section 352.01, 
  1.28  subdivision 13, is amended to read: 
  1.29     Subd. 13.  [SALARY.] "Salary" means wages, or other 
  1.30  periodic compensation, paid to an employee before deductions for 
  1.31  deferred compensation, supplemental retirement plans, or other 
  1.32  voluntary salary reduction programs.  Lump sum sick leave 
  1.33  payments, severance payments, lump sum annual leave payments and 
  1.34  overtime payments made at the time of separation from state 
  2.1   service, payments in lieu of any employer-paid group insurance 
  2.2   coverage, including the difference between single and family 
  2.3   rates that may be paid to an employee with single coverage, and 
  2.4   payments made as an employer-paid fringe benefit, workers' 
  2.5   compensation payments, employer contributions to a deferred 
  2.6   compensation or tax sheltered annuity program, and amounts 
  2.7   contributed under a benevolent vacation and sick leave donation 
  2.8   program are not salary.  Grievance or legal settlements are not 
  2.9   considered salary unless the language of the settlement states 
  2.10  that retirement contributions are applicable. 
  2.11     Sec. 2.  Minnesota Statutes 2000, section 352.01, 
  2.12  subdivision 26, is amended to read: 
  2.13     Subd. 26.  [DEPENDENT CHILD.] "Dependent Child" means a 
  2.14  biological or adopted child of a deceased employee who has not 
  2.15  reached the age of 20 and is dependent upon the employee for 
  2.16  more than one-half of the child's support 22 at the time of the 
  2.17  employee's death.  It also means a child of the member employee 
  2.18  conceived during the member's employee's lifetime and born after 
  2.19  the member's employee's death. 
  2.20     Sec. 3.  Minnesota Statutes 2000, section 352B.01, 
  2.21  subdivision 10, is amended to read: 
  2.22     Subd. 10.  [DEPENDENT CHILD.] "Dependent Child" means a 
  2.23  natural biological or adopted unmarried child of a deceased 
  2.24  member under the age of 18 22 years, including any child of the 
  2.25  member conceived during the lifetime of the member and born 
  2.26  after the death of the member. 
  2.27     Sec. 4.  Minnesota Statutes 2000, section 352B.01, 
  2.28  subdivision 11, is amended to read: 
  2.29     Subd. 11.  [AVERAGE MONTHLY SALARY.] "Average monthly 
  2.30  salary" means the average of the highest monthly salaries for 
  2.31  five years of service as a member.  Average monthly salary must 
  2.32  be based upon all allowable service if this service is less than 
  2.33  five years.  It does not include any lump sum annual leave 
  2.34  payments and overtime payments made at the time of separation 
  2.35  from state service, any amounts of severance pay or any reduced 
  2.36  salary paid during the period the person is entitled to workers' 
  3.1   compensation benefit payments for temporary disability.  A 
  3.2   member on leave of absence receiving temporary workers' 
  3.3   compensation payments and a reduced salary or no salary from the 
  3.4   employer who is entitled to allowable service credit for the 
  3.5   period of absence may make payment to the fund for the 
  3.6   difference between salary received, if any, and the salary the 
  3.7   member would normally receive if not on leave of absence during 
  3.8   the period.  The member shall pay an amount equal to the member 
  3.9   and employer contribution rate under section 352B.02, 
  3.10  subdivisions 1b and 1c, on the differential salary amount for 
  3.11  the period of the leave of absence.  The employing department, 
  3.12  at its option, may pay the employer amount on behalf of the 
  3.13  member.  Payment made under this subdivision must include 
  3.14  interest at the rate of 8.5 percent per year, and must be 
  3.15  completed within one year of the return from the leave of 
  3.16  absence. 
  3.17     Sec. 5.  Minnesota Statutes 2000, section 352C.021, 
  3.18  subdivision 5, is amended to read: 
  3.19     Subd. 5.  [DEPENDENT CHILD.] "Dependent Child" means any 
  3.20  natural a biological or adopted child of a deceased 
  3.21  constitutional officer or a deceased former constitutional 
  3.22  officer who is under the age of 18, or who is under the age of 
  3.23  22 and is a full-time student, and who in either case is 
  3.24  unmarried and was actually dependent for more than one-half of 
  3.25  the child's support upon the constitutional officer or the 
  3.26  former constitutional officer for a period of at least 90 days 
  3.27  immediately prior to the death of the constitutional officer or 
  3.28  the former constitutional officer.  The term shall also include 
  3.29  a posthumous child of the constitutional officer or the former 
  3.30  constitutional officer. 
  3.31     Sec. 6.  Minnesota Statutes 2000, section 353.01, 
  3.32  subdivision 15a, is amended to read: 
  3.33     Subd. 15a.  [DEPENDENT CHILD.] For the purpose of survivor 
  3.34  benefit eligibility under section 353.32, subdivision 1c, 
  3.35  "dependent child" means any biological or adopted child of a 
  3.36  deceased member who has not reached the age of 20 and is 
  4.1   dependent for more than one-half of support upon the member 22.  
  4.2   It also includes any child of the member conceived during the 
  4.3   member's lifetime and born after the member's death. 
  4.4      Sec. 7.  Minnesota Statutes 2000, section 354.05, 
  4.5   subdivision 8, is amended to read: 
  4.6      Subd. 8.  [DEPENDENT CHILD.] "Dependent Child" means a 
  4.7   biological or adopted child of a deceased member who has not 
  4.8   reached the age of 18, or who is under age 22 and is a full-time 
  4.9   student throughout the normal school year, unmarried and 
  4.10  dependent for more than one-half of support upon the member.  It 
  4.11  also means a child of the member conceived during the member's 
  4.12  lifetime and born after the member's death. 
  4.13     Sec. 8.  Minnesota Statutes 2000, section 354.05, 
  4.14  subdivision 8a, is amended to read: 
  4.15     Subd. 8a.  [DEPENDENT CHILD.] For the purpose of survivor 
  4.16  benefit eligibility under section 354.46, subdivision 
  4.17  subdivisions 1 and 2b, "dependent child" means any biological or 
  4.18  adopted child of a deceased member who has not reached the age 
  4.19  of 20 and is dependent for more than one-half of support upon 
  4.20  the member 22.  It also includes any child of the member 
  4.21  conceived while living and born after death. 
  4.22     Sec. 9.  Minnesota Statutes 2000, section 490.121, 
  4.23  subdivision 4, is amended to read: 
  4.24     Subd. 4.  [ALLOWABLE SERVICE.] "Allowable service" means a 
  4.25  whole year, or any fraction thereof any calendar month, subject 
  4.26  to the service credit limit in subdivision 22, served as a judge 
  4.27  at any time, or served as a referee in probate for all referees 
  4.28  in probate who were in office prior to January 1, 1974. 
  4.29     Sec. 10.  Minnesota Statutes 2000, section 490.121, 
  4.30  subdivision 17, is amended to read: 
  4.31     Subd. 17.  [DEPENDENT CHILD.] "Dependent Child" means any 
  4.32  natural a biological or adopted child of a deceased judge who 
  4.33  has not reached the age of 18 years, or having reached the age 
  4.34  of 18, is under age 22 and is a full time student throughout the 
  4.35  normal school year, unmarried and actually dependent for more 
  4.36  than one-half of the child's support upon such judge for a 
  5.1   period of at least 90 days prior to the judge's death.  It also 
  5.2   includes any natural a biological child of the judge born after 
  5.3   the judge's death. 
  5.4      Sec. 11.  [EFFECTIVE DATE.] 
  5.5      Sections 1 to 10 are effective July 1, 2001.  
  5.6                              ARTICLE 2 
  5.7                              DISABILITY 
  5.8      Section 1.  Minnesota Statutes 2000, section 352.113, 
  5.9   subdivision 4, is amended to read: 
  5.10     Subd. 4.  [MEDICAL OR PSYCHOLOGICAL EXAMINATIONS; 
  5.11  AUTHORIZATION FOR PAYMENT OF BENEFIT.] An applicant shall 
  5.12  provide medical or psychological evidence to support an 
  5.13  application for total and permanent disability.  The director 
  5.14  shall have the employee examined by at least one additional 
  5.15  licensed physician or psychologist designated by the medical 
  5.16  adviser.  The physicians or psychologists shall make written 
  5.17  reports to the director concerning the employee's disability 
  5.18  including medical opinions as to whether the employee is 
  5.19  permanently and totally disabled within the meaning of section 
  5.20  352.01, subdivision 17.  The director shall also obtain written 
  5.21  certification from the employer stating whether the employment 
  5.22  has ceased or whether the employee is on sick leave of absence 
  5.23  because of a disability that will prevent further service to the 
  5.24  employer and as a consequence the employee is not entitled to 
  5.25  compensation from the employer.  The medical adviser shall 
  5.26  consider the reports of the physicians, psychologists, and 
  5.27  chiropractors and any other evidence supplied by the employee or 
  5.28  other interested parties.  If the medical adviser finds the 
  5.29  employee totally and permanently disabled, the adviser shall 
  5.30  make appropriate recommendation to the director in writing 
  5.31  together with the date from which the employee has been totally 
  5.32  disabled.  The director shall then determine if the disability 
  5.33  occurred within 180 days of filing the application, while still 
  5.34  in the employment of the state, and the propriety of authorizing 
  5.35  payment of a disability benefit as provided in this section.  A 
  5.36  terminated employee may apply for a disability benefit within 
  6.1   180 days of termination as long as the disability occurred while 
  6.2   in the employment of the state.  The fact that an employee is 
  6.3   placed on leave of absence without compensation because of 
  6.4   disability does not bar that employee from receiving a 
  6.5   disability benefit.  Unless payment of a disability benefit has 
  6.6   terminated because the employee is no longer totally disabled, 
  6.7   or because the employee has reached normal retirement age as 
  6.8   provided in this section, the disability benefit shall cease 
  6.9   with the last payment received by the disabled employee or which 
  6.10  had accrued during the lifetime of the employee unless there is 
  6.11  a spouse surviving; in that event the surviving spouse is 
  6.12  entitled to the disability benefit for the calendar month in 
  6.13  which the disabled employee died.  
  6.14     Sec. 2.  Minnesota Statutes 2000, section 352.113, 
  6.15  subdivision 6, is amended to read: 
  6.16     Subd. 6.  [REGULAR MEDICAL OR PSYCHOLOGICAL EXAMINATIONS.] 
  6.17  At least once each year during the first five years following 
  6.18  the allowance of a disability benefit to any employee, and at 
  6.19  least once in every three-year period thereafter, the director 
  6.20  may require any disabled employee to undergo a medical or 
  6.21  psychological examination.  The examination must be made at the 
  6.22  place of residence of the employee, or at any place mutually 
  6.23  agreed upon, by a physician or physicians designated by the 
  6.24  medical adviser and engaged by the director.  If any examination 
  6.25  indicates to the medical adviser that the employee is no longer 
  6.26  permanently and totally disabled, or is engaged in or can engage 
  6.27  in a gainful occupation, payments of the disability benefit by 
  6.28  the fund must be discontinued.  The payments shall discontinue 
  6.29  as soon as the employee is reinstated to the payroll following 
  6.30  sick leave, but in no case shall payment be made for more than 
  6.31  60 days after the medical adviser finds that the employee is no 
  6.32  longer permanently and totally disabled.  
  6.33     Sec. 3.  Minnesota Statutes 2000, section 352.113, 
  6.34  subdivision 7, is amended to read: 
  6.35     Subd. 7.  [PARTIAL REEMPLOYMENT.] If the disabled employee 
  6.36  resumes a gainful occupation from which earnings are less than 
  7.1   the employee's salary at the date of disability or the salary 
  7.2   currently paid for similar positions, the director shall, after 
  7.3   a six-month trial period, continue the disability benefit in an 
  7.4   amount which when added to earnings does not exceed the salary 
  7.5   at the date of disability, provided the disability benefit in 
  7.6   this case does not exceed the disability benefit originally 
  7.7   allowed.  Deductions for the retirement fund must not be taken 
  7.8   from the salary of a disabled employee who is receiving a 
  7.9   disability benefit as provided in this subdivision. 
  7.10     Sec. 4.  Minnesota Statutes 2000, section 352.87, 
  7.11  subdivision 4, is amended to read: 
  7.12     Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
  7.13  eligible member described in subdivision 1, who is less than 55 
  7.14  years of age and who becomes disabled and physically or mentally 
  7.15  unfit to perform the duties of the position because of sickness 
  7.16  or injury while not engaged in covered employment, is entitled 
  7.17  to a disability benefit amount equivalent to an annuity computed 
  7.18  under subdivision 3 assuming the member has 15 years of service 
  7.19  qualifying under this section and waiving the minimum age 
  7.20  requirement.  If the eligible member becomes disabled under this 
  7.21  subdivision with more than 15 years of service covered under 
  7.22  this section, the eligible member is entitled to a disability 
  7.23  benefit amount equivalent to an annuity computed under 
  7.24  subdivision 3 based on all years of service credited under this 
  7.25  section and waiving the minimum age requirement. 
  7.26     Sec. 5.  Minnesota Statutes 2000, section 352.87, 
  7.27  subdivision 5, is amended to read: 
  7.28     Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
  7.29  member defined in subdivision 1, who is less than 55 years of 
  7.30  age and who becomes disabled and physically or mentally unfit to 
  7.31  perform the duties of the position because of sickness or injury 
  7.32  while engaged in covered employment, is entitled to a disability 
  7.33  benefit amount equivalent to an annuity computed under 
  7.34  subdivision 3 assuming the member has 20 years of service 
  7.35  qualifying under this section and waiving the minimum age 
  7.36  requirement.  An eligible member who becomes disabled under this 
  8.1   subdivision with more than 20 years of service credited under 
  8.2   this section is entitled to a disability benefit amount 
  8.3   equivalent to an annuity computed under subdivision 3 based on 
  8.4   all years of service credited under this section and waiving the 
  8.5   age requirement. 
  8.6      Sec. 6.  Minnesota Statutes 2000, section 352.95, 
  8.7   subdivision 4, is amended to read: 
  8.8      Subd. 4.  [MEDICAL OR PSYCHOLOGICAL EVIDENCE.] An applicant 
  8.9   shall provide medical or psychological evidence to support an 
  8.10  application for disability benefits.  The director shall have 
  8.11  the employee examined by at least one additional licensed 
  8.12  physician or psychologist designated by the medical adviser.  
  8.13  The physicians shall make written reports to the director 
  8.14  concerning the employee's disability, including medical opinions 
  8.15  as to whether the employee is disabled within the meaning of 
  8.16  this section.  The director shall also obtain written 
  8.17  certification from the employer stating whether the employee is 
  8.18  on sick leave of absence because of a disability that will 
  8.19  prevent further service to the employer, and as a consequence 
  8.20  the employee is not entitled to compensation from the employer.  
  8.21     If on considering the physicians' reports and any other 
  8.22  evidence supplied by the employee or others, the medical adviser 
  8.23  finds the employee disabled within the meaning of this section, 
  8.24  the advisor shall make appropriate recommendation to the 
  8.25  director in writing, together with the date from which the 
  8.26  employee has been disabled.  The director shall then determine 
  8.27  the propriety of authorizing payment of a disability benefit as 
  8.28  provided in this section.  
  8.29     Unless payment of a disability benefit has terminated 
  8.30  because the employee is no longer disabled, or because the 
  8.31  employee has reached age 62 65 or the five-year anniversary of 
  8.32  the effective date of the disability benefit, whichever is 
  8.33  later, the disability benefit shall cease with the last payment 
  8.34  received by the disabled employee or which had accrued during 
  8.35  the employee's lifetime.  While disability benefits are paid, 
  8.36  the director has the right at reasonable times to require the 
  9.1   disabled employee to submit proof of the continuance of the 
  9.2   disability claimed.  If any examination indicates to the medical 
  9.3   adviser that the employee is no longer disabled, the disability 
  9.4   payment must be discontinued upon reinstatement to state service 
  9.5   or within 60 days of the finding, whichever is sooner.  
  9.6      Sec. 7.  Minnesota Statutes 2000, section 352.95, 
  9.7   subdivision 5, is amended to read: 
  9.8      Subd. 5.  [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.] The 
  9.9   disability benefit paid to a disabled correctional employee 
  9.10  under this section shall terminate at the end of the month in 
  9.11  which the employee reaches age 62 65, or the five-year 
  9.12  anniversary of the effective date of the disability benefit, 
  9.13  whichever is later.  If the disabled correctional employee is 
  9.14  still disabled when the employee reaches age 62, the employee 
  9.15  shall be deemed to be a retired employee.  If the employee had 
  9.16  elected an optional annuity under subdivision 1a, the employee 
  9.17  shall receive an annuity in accordance with the terms of the 
  9.18  optional annuity previously elected.  If the employee had not 
  9.19  elected an optional annuity under subdivision 1a, the employee 
  9.20  may within 90 days of attaining age 65 or reaching the five-year 
  9.21  anniversary of the effective date of the disability benefit, 
  9.22  whichever is later, either elect to receive a normal retirement 
  9.23  annuity computed in the manner provided in section 352.93 or 
  9.24  elect to receive an optional annuity as provided in section 
  9.25  352.116, subdivision 3, based on the same length of service as 
  9.26  used in the calculation of the disability benefit.  Election of 
  9.27  an optional annuity must be made within 90 days before attaining 
  9.28  age 65 or reaching the five-year anniversary of the effective 
  9.29  date of the disability benefit, whichever is later.  If an 
  9.30  optional annuity is elected, the optional annuity shall begin to 
  9.31  accrue on the first of the month following the month in which 
  9.32  the employee reaches age 65 or the five-year anniversary of the 
  9.33  effective date of the disability benefit, whichever is later. 
  9.34     Sec. 8.  Minnesota Statutes 2000, section 352.95, 
  9.35  subdivision 7, is amended to read: 
  9.36     Subd. 7.  [RESUMPTION OF EMPLOYMENT.] If the disabled 
 10.1   employee resumes a gainful occupation from which earnings are 
 10.2   less than the salary received at the date of disability or the 
 10.3   salary currently paid for similar positions, or if the employee 
 10.4   is entitled to receive workers' compensation benefits work, the 
 10.5   disability benefit must be continued in an amount which when 
 10.6   added to current earnings and workers' compensation benefits 
 10.7   does not exceed the salary received at the date of disability or 
 10.8   the salary currently paid for similar positions, whichever is 
 10.9   higher, if the disability benefit in that case does not exceed 
 10.10  the disability benefit originally authorized and in effect rate 
 10.11  at the date of disability as adjusted by the same percentage 
 10.12  increase in United States average wages used by social security 
 10.13  in calculating average indexed monthly earnings.  
 10.14     Sec. 9.  Minnesota Statutes 2000, section 352B.10, 
 10.15  subdivision 3, is amended to read: 
 10.16     Subd. 3.  [ANNUAL AND SICK LEAVE; WORK AT LOWER PAY.] No 
 10.17  member shall receive any disability benefit payment when the 
 10.18  member has unused annual leave or sick leave or under any other 
 10.19  circumstances, when during the period of disability there has 
 10.20  been no impairment of salary.  Should the member or former 
 10.21  member resume gainful work and earn less than the salary 
 10.22  received at the date of disability or the salary currently paid 
 10.23  for similar positions, the disability benefit must be continued 
 10.24  in an amount which when added to current earnings does not 
 10.25  exceed the salary rate received at the date of disability or the 
 10.26  salary currently paid for similar positions, whichever is 
 10.27  higher.  The disability benefit must not exceed the disability 
 10.28  benefit originally allowed as adjusted by the same percentage 
 10.29  increase in United States average wages used by social security 
 10.30  in calculating average indexed monthly earnings. 
 10.31     Sec. 10.  Minnesota Statutes 2000, section 352B.101, is 
 10.32  amended to read: 
 10.33     352B.101 [APPLICATION FOR DISABILITY BENEFIT.] 
 10.34     A member claiming a disability benefit must file a written 
 10.35  application for benefits in the office of the system in a form 
 10.36  and manner prescribed by the executive director.  The member 
 11.1   shall provide medical or psychological evidence to support the 
 11.2   application.  The benefit begins to accrue the day following the 
 11.3   start of disability or the day following the last day for which 
 11.4   the member was paid, whichever is later, but not earlier than 
 11.5   180 days before the date the application is filed with the 
 11.6   executive director.  
 11.7      Sec. 11.  Minnesota Statutes 2000, section 354.48, 
 11.8   subdivision 7, is amended to read: 
 11.9      Subd. 7.  [PARTIAL REEMPLOYMENT.] If the disabled person 
 11.10  resumes a gainful occupation in which earnings are less than the 
 11.11  person's salary at the date of disability, the amount of 
 11.12  earnings plus the disability benefit originally granted may not 
 11.13  exceed the salary at the date of disability as adjusted by the 
 11.14  same percentage increase in United States average wages used by 
 11.15  social security in calculating average indexed monthly earnings. 
 11.16  If the sum of earnings plus the disability benefit originally 
 11.17  granted exceeds the salary at the date of disability as 
 11.18  adjusted, the amount of excess earnings must be deducted from 
 11.19  the disability benefit payable during the following calendar 
 11.20  year.  The provisions of this subdivision shall not prohibit the 
 11.21  executive director from making a determination that a member is 
 11.22  no longer totally and permanently disabled or that the member is 
 11.23  engaged or is able to engage in a substantial gainful occupation 
 11.24  based on the results of the regular physical examinations 
 11.25  required by subdivision 6 or any other physical examinations 
 11.26  required by the board.  Payment of the disability benefit 
 11.27  provided in this subdivision during a period of partial 
 11.28  reemployment shall be discontinued if the executive director 
 11.29  finds that the member is no longer totally and permanently 
 11.30  disabled.  
 11.31     Sec. 12.  [EFFECTIVE DATE.] 
 11.32     Sections 1 to 11 are effective July 1, 2001.  
 11.33                             ARTICLE 3 
 11.34                          EARLY RETIREMENT 
 11.35     Section 1.  Minnesota Statutes 2000, section 352C.031, 
 11.36  subdivision 2, is amended to read: 
 12.1      Subd. 2.  [REDUCED RETIREMENT ALLOWANCE.] Upon separation 
 12.2   from service, a former constitutional officer who has attained 
 12.3   the age of at least 60 55 years and who has at least eight years 
 12.4   of allowable service is entitled upon making written application 
 12.5   on forms supplied by the director to a retirement allowance in 
 12.6   an amount equal to a normal retirement allowance reduced by 
 12.7   one-half of one percent for each month that the former 
 12.8   constitutional officer is under age 62. 
 12.9      Sec. 2.  Minnesota Statutes 2000, section 490.121, 
 12.10  subdivision 10, is amended to read: 
 12.11     Subd. 10.  [EARLY RETIREMENT DATE.] "Early retirement date" 
 12.12  means the last day of any month after a judge attains the age of 
 12.13  62 55 until normal retirement date. 
 12.14     Sec. 3.  Minnesota Statutes 2000, section 490.124, 
 12.15  subdivision 3, is amended to read: 
 12.16     Subd. 3.  [EARLY RETIREMENT.] The retirement annuity 
 12.17  provided by subdivision 1 of any judge electing to retire at an 
 12.18  early retirement date shall be reduced by the lesser of the 
 12.19  following:  (1) one-half of one percent per month from the 
 12.20  retirement date to normal retirement date; or (2) an amount so 
 12.21  that the reduced annuity is actuarially equivalent to the 
 12.22  annuity that would be payable to the employee if the employee 
 12.23  deferred receipt of the annuity from retirement date to normal 
 12.24  retirement. 
 12.25     Sec. 4.  [EFFECTIVE DATE.] 
 12.26     Sections 1 to 3 are effective July 1, 2001.  
 12.27                             ARTICLE 4 
 12.28                            ELIGIBILITY 
 12.29     Section 1.  Minnesota Statutes 2000, section 352.01, 
 12.30  subdivision 2a, is amended to read: 
 12.31     Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
 12.32  includes: 
 12.33     (1) employees of the Minnesota historical society; 
 12.34     (2) employees of the state horticultural society; 
 12.35     (3) employees of the Disabled American Veterans, Department 
 12.36  of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
 13.1   if employed before July 1, 1963; 
 13.2      (4) employees of the Minnesota crop improvement 
 13.3   association; 
 13.4      (5) employees of the adjutant general who are paid from 
 13.5   federal funds and who are not covered by any federal civilian 
 13.6   employees retirement system; 
 13.7      (6) employees of the Minnesota state colleges and 
 13.8   universities employed under the university or college activities 
 13.9   program; 
 13.10     (7) currently contributing employees covered by the system 
 13.11  who are temporarily employed by the legislature during a 
 13.12  legislative session or any currently contributing employee 
 13.13  employed for any special service as defined in subdivision 2b, 
 13.14  clause (8); 
 13.15     (8) employees of the armory building commission; 
 13.16     (9) employees of the legislature appointed without a limit 
 13.17  on the duration of their employment and persons employed or 
 13.18  designated by the legislature or by a legislative committee or 
 13.19  commission or other competent authority to conduct a special 
 13.20  inquiry, investigation, examination, or installation; 
 13.21     (10) trainees who are employed on a full-time established 
 13.22  training program performing the duties of the classified 
 13.23  position for which they will be eligible to receive immediate 
 13.24  appointment at the completion of the training period; 
 13.25     (11) employees of the Minnesota safety council; 
 13.26     (12) any employees on authorized leave of absence from the 
 13.27  transit operating division of the former metropolitan transit 
 13.28  commission who are employed by the labor organization which is 
 13.29  the exclusive bargaining agent representing employees of the 
 13.30  transit operating division; 
 13.31     (13) employees of the metropolitan council, metropolitan 
 13.32  parks and open space commission, metropolitan sports facilities 
 13.33  commission, metropolitan mosquito control commission, or 
 13.34  metropolitan radio board unless excluded or covered by another 
 13.35  public pension fund or plan under section 473.415, subdivision 
 13.36  3; 
 14.1      (14) judges of the tax court; 
 14.2      (15) personnel employed on June 30, 1992, by the University 
 14.3   of Minnesota in the management, operation, or maintenance of its 
 14.4   heating plant facilities, whose employment transfers to an 
 14.5   employer assuming operation of the heating plant facilities, so 
 14.6   long as the person is employed at the University of Minnesota 
 14.7   heating plant by that employer or by its successor organization; 
 14.8   and 
 14.9      (16) seasonal help in the classified service employed by 
 14.10  the department of revenue; and. 
 14.11     (17) a person who renders teaching or other service for the 
 14.12  Minnesota state colleges and universities system and who also 
 14.13  renders service on a part-time basis for an employer with 
 14.14  employees covered by the general state employees retirement plan 
 14.15  of the Minnesota state retirement system, for all service with 
 14.16  the Minnesota state colleges and universities system, if the 
 14.17  person's nonteaching service comprises at least 50 percent of 
 14.18  the combined total salary received by the person as determined 
 14.19  by the chancellor of the Minnesota state colleges and 
 14.20  universities system or if the person is certified for general 
 14.21  state employees retirement plan coverage by the chancellor of 
 14.22  the Minnesota state colleges and universities system. 
 14.23     (b) Employees specified in paragraph (a), clause (15), are 
 14.24  included employees under paragraph (a) if employer and employee 
 14.25  contributions are made in a timely manner in the amounts 
 14.26  required by section 352.04.  Employee contributions must be 
 14.27  deducted from salary.  Employer contributions are the sole 
 14.28  obligation of the employer assuming operation of the University 
 14.29  of Minnesota heating plant facilities or any successor 
 14.30  organizations to that employer. 
 14.31     Sec. 2.  Minnesota Statutes 2000, section 352.01, 
 14.32  subdivision 2b, is amended to read: 
 14.33     Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
 14.34  include: 
 14.35     (1) elective state officers; 
 14.36     (2) students employed by the University of Minnesota, or 
 15.1   the state colleges and universities, and community colleges 
 15.2   unless approved for coverage by the board of regents or the 
 15.3   board of trustees of the Minnesota state colleges and 
 15.4   universities, as the case may be; 
 15.5      (3) (2) employees who are eligible for membership in the 
 15.6   state teachers retirement association except employees of the 
 15.7   department of children, families, and learning who have chosen 
 15.8   or may choose to be covered by the Minnesota state retirement 
 15.9   system instead of the teachers retirement association; 
 15.10     (4) (3) employees of the University of Minnesota who are 
 15.11  excluded from coverage by action of the board of regents; 
 15.12     (5) (4) officers and enlisted personnel in the national 
 15.13  guard and the naval militia who are assigned to permanent 
 15.14  peacetime duty and who under federal law are or are required to 
 15.15  be members of a federal retirement system; 
 15.16     (6) (5) election officers; 
 15.17     (7) (6) persons engaged in public work for the state but 
 15.18  employed by contractors when the performance of the contract is 
 15.19  authorized by the legislature or other competent authority; 
 15.20     (8) (7) officers and employees of the senate and house of 
 15.21  representatives or a legislative committee or commission who are 
 15.22  temporarily employed; 
 15.23     (9) (8) receivers, jurors, notaries public, and court 
 15.24  employees who are not in the judicial branch as defined in 
 15.25  section 43A.02, subdivision 25, except referees and adjusters 
 15.26  employed by the department of labor and industry; 
 15.27     (10) (9) patient and inmate help in state charitable, 
 15.28  penal, and correctional institutions including the Minnesota 
 15.29  veterans home; 
 15.30     (11) (10) persons employed for professional services where 
 15.31  the service is incidental to regular professional duties and 
 15.32  whose compensation is paid on a per diem basis; 
 15.33     (12) (11) employees of the Sibley House Association; 
 15.34     (13) (12) the members of any state board or commission who 
 15.35  serve the state intermittently and are paid on a per diem basis; 
 15.36  the secretary, secretary-treasurer, and treasurer of those 
 16.1   boards if their compensation is $5,000 or less per year, or, if 
 16.2   they are legally prohibited from serving more than three years; 
 16.3   and the board of managers of the state agricultural society and 
 16.4   its treasurer unless the treasurer is also its full-time 
 16.5   secretary; 
 16.6      (14) (13) state troopers; 
 16.7      (15) (14) temporary employees of the Minnesota state fair 
 16.8   employed on or after July 1 for a period not to extend beyond 
 16.9   October 15 of that year; and persons employed at any time by the 
 16.10  state fair administration for special events held on the 
 16.11  fairgrounds; 
 16.12     (16) (15) emergency employees in the classified service; 
 16.13  except that if an emergency employee, within the same pay 
 16.14  period, becomes a provisional or probationary employee on other 
 16.15  than a temporary basis, the employee shall be considered a 
 16.16  "state employee" retroactively to the beginning of the pay 
 16.17  period; 
 16.18     (17) (16) persons described in section 352B.01, subdivision 
 16.19  2, clauses (2) to (5); 
 16.20     (18) (17) temporary employees in the classified service, 
 16.21  and temporary employees in the unclassified service appointed 
 16.22  for a definite period of not more than six months and employed 
 16.23  less than six months in any one-year period; 
 16.24     (19) (18) trainee employees, except those listed in 
 16.25  subdivision 2a, clause (10); 
 16.26     (20) (19) persons whose compensation is paid on a fee 
 16.27  basis; 
 16.28     (21) (20) state employees who in any year have credit for 
 16.29  12 months service as teachers in the public schools of the state 
 16.30  and as teachers are members of the teachers retirement 
 16.31  association or a retirement system in St. Paul, Minneapolis, or 
 16.32  Duluth as enumerated in section 43A.08, subdivision 1, clause 
 16.33  (9); 
 16.34     (22) (21) employees of the adjutant general employed on an 
 16.35  unlimited intermittent or temporary basis in the classified and 
 16.36  unclassified service for the support of army and air national 
 17.1   guard training facilities; 
 17.2      (23) (22) chaplains and nuns who are excluded from coverage 
 17.3   under the federal Old Age, Survivors, Disability, and Health 
 17.4   Insurance Program for the performance of service as specified in 
 17.5   United States Code, title 42, section 410(a)(8)(A), as amended, 
 17.6   if no irrevocable election of coverage has been made under 
 17.7   section 3121(r) of the Internal Revenue Code of 1986, as amended 
 17.8   through December 31, 1992; 
 17.9      (24) (23) examination monitors employed by departments, 
 17.10  agencies, commissions, and boards to conduct examinations 
 17.11  required by law; 
 17.12     (25) (24) persons appointed to serve as members of 
 17.13  fact-finding commissions or adjustment panels, arbitrators, or 
 17.14  labor referees under chapter 179; 
 17.15     (26) (25) temporary employees employed for limited periods 
 17.16  under any state or federal program for training or 
 17.17  rehabilitation including persons employed for limited periods 
 17.18  from areas of economic distress except skilled and supervisory 
 17.19  personnel and persons having civil service status covered by the 
 17.20  system; 
 17.21     (27) (26) full-time students employed by the Minnesota 
 17.22  historical society intermittently during part of the year and 
 17.23  full-time during the summer months; 
 17.24     (28) (27) temporary employees, appointed for not more than 
 17.25  six months, of the metropolitan council and of any of its 
 17.26  statutory boards, if the board members are appointed by the 
 17.27  metropolitan council; 
 17.28     (29) (28) persons employed in positions designated by the 
 17.29  department of employee relations as student workers; 
 17.30     (30) (29) members of trades employed by the successor to 
 17.31  the metropolitan waste control commission with trade union 
 17.32  pension plan coverage under a collective bargaining agreement 
 17.33  first employed after June 1, 1977; 
 17.34     (31) (30) persons employed in subsidized on-the-job 
 17.35  training, work experience, or public service employment as 
 17.36  enrollees under the federal Comprehensive Employment and 
 18.1   Training Act after March 30, 1978, unless the person has as of 
 18.2   the later of March 30, 1978, or the date of employment 
 18.3   sufficient service credit in the retirement system to meet the 
 18.4   minimum vesting requirements for a deferred annuity, or the 
 18.5   employer agrees in writing on forms prescribed by the director 
 18.6   to make the required employer contributions, including any 
 18.7   employer additional contributions, on account of that person 
 18.8   from revenue sources other than funds provided under the federal 
 18.9   Comprehensive Employment and Training Act, or the person agrees 
 18.10  in writing on forms prescribed by the director to make the 
 18.11  required employer contribution in addition to the required 
 18.12  employee contribution; 
 18.13     (32) (31) off-duty peace officers while employed by the 
 18.14  metropolitan council; 
 18.15     (33) (32) persons who are employed as full-time police 
 18.16  officers by the metropolitan council and as police officers are 
 18.17  members of the public employees police and fire fund; 
 18.18     (34) (33) persons who are employed as full-time 
 18.19  firefighters by the department of military affairs and as 
 18.20  firefighters are members of the public employees police and fire 
 18.21  fund; 
 18.22     (35) (34) foreign citizens with a work permit of less than 
 18.23  three years, or an H-1b/JV visa valid for less than three years 
 18.24  of employment, unless notice of extension is supplied which 
 18.25  allows them to work for three or more years as of the date the 
 18.26  extension is granted, in which case they are eligible for 
 18.27  coverage from the date extended; and 
 18.28     (36) (35) persons who are employed by the board of trustees 
 18.29  of the Minnesota state colleges and universities and who elect 
 18.30  to remain members of the public employees retirement association 
 18.31  or the Minneapolis employees retirement fund, whichever applies, 
 18.32  under section 136C.75. 
 18.33     Sec. 3.  Minnesota Statutes 2000, section 352D.02, 
 18.34  subdivision 1, is amended to read: 
 18.35     Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
 18.36  paragraph (c), clauses (2), (3), (4), and (6) to (14), if they 
 19.1   are in the unclassified service of the state or metropolitan 
 19.2   council and are eligible for coverage under the general state 
 19.3   employees retirement plan under chapter 352, are participants in 
 19.4   the unclassified plan under this chapter unless the employee 
 19.5   gives notice to the executive director of the Minnesota state 
 19.6   retirement system within one year following the commencement of 
 19.7   employment in the unclassified service that the employee desires 
 19.8   coverage under the general state employees retirement plan.  For 
 19.9   the purposes of this chapter, an employee who does not file 
 19.10  notice with the executive director is deemed to have exercised 
 19.11  the option to participate in the unclassified plan. 
 19.12     (b) Persons referenced in paragraph (c), clauses (1) and 
 19.13  (5), are participants in the unclassified program plan under 
 19.14  this chapter unless the person is eligible to elect different 
 19.15  coverage under section 3A.07 or 352C.011 and, after July 1, 
 19.16  1998, elects retirement coverage by the applicable alternative 
 19.17  retirement plan.  Persons referenced in paragraph (c), clause 
 19.18  (15), are participants in the unclassified program under this 
 19.19  chapter for judicial employment in excess of the service credit 
 19.20  limit in section 490.121, subdivision 22. 
 19.21     (c) Enumerated employees and referenced persons are: 
 19.22     (1) the governor, the lieutenant governor, the secretary of 
 19.23  state, the state auditor, the state treasurer, and the attorney 
 19.24  general; 
 19.25     (2) an employee in the office of the governor, lieutenant 
 19.26  governor, secretary of state, state auditor, state treasurer, 
 19.27  attorney general; 
 19.28     (3) an employee of the state board of investment; 
 19.29     (4) the head of a department, division, or agency created 
 19.30  by statute in the unclassified service, an acting department 
 19.31  head subsequently appointed to the position, or an employee 
 19.32  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
 19.33     (5) a member of the legislature; 
 19.34     (6) a full-time unclassified employee of the legislature or 
 19.35  a commission or agency of the legislature who is appointed 
 19.36  without a limit on the duration of the employment or a temporary 
 20.1   legislative employee having shares in the supplemental 
 20.2   retirement fund as a result of former employment covered by this 
 20.3   chapter, whether or not eligible for coverage under the 
 20.4   Minnesota state retirement system; 
 20.5      (7) a person who is employed in a position established 
 20.6   under section 43A.08, subdivision 1, clause (3), or in a 
 20.7   position authorized under a statute creating or establishing a 
 20.8   department or agency of the state, which is at the deputy or 
 20.9   assistant head of department or agency or director level; 
 20.10     (8) the regional administrator, or executive director of 
 20.11  the metropolitan council, general counsel, division directors, 
 20.12  operations managers, and other positions as designated by the 
 20.13  council, all of which may not exceed 27 positions at the council 
 20.14  and the chair; 
 20.15     (9) the executive director, associate executive director, 
 20.16  and not to exceed nine positions of the higher education 
 20.17  services office in the unclassified service, as designated by 
 20.18  the higher education services office before January 1, 1992, or 
 20.19  subsequently redesignated with the approval of the board of 
 20.20  directors of the Minnesota state retirement system, unless the 
 20.21  person has elected coverage by the individual retirement account 
 20.22  plan under chapter 354B; 
 20.23     (10) the clerk of the appellate courts appointed under 
 20.24  article VI, section 2, of the Constitution of the state of 
 20.25  Minnesota; 
 20.26     (11) the chief executive officers of correctional 
 20.27  facilities operated by the department of corrections and of 
 20.28  hospitals and nursing homes operated by the department of human 
 20.29  services; 
 20.30     (12) an employee whose principal employment is at the state 
 20.31  ceremonial house; 
 20.32     (13) an employee of the Minnesota educational computing 
 20.33  corporation; 
 20.34     (14) an employee of the state lottery board who is covered 
 20.35  by the managerial plan established under section 43A.18, 
 20.36  subdivision 3; and 
 21.1      (15) (14) a judge who has exceeded the service credit limit 
 21.2   in section 490.121, subdivision 22. 
 21.3      Sec. 4.  Minnesota Statutes 2000, section 352D.02, 
 21.4   subdivision 3, is amended to read: 
 21.5      Subd. 3.  [ELECTION IRREVOCABLE REVERSION TO GENERAL PLAN.] 
 21.6   An election to not participate is irrevocable during any period 
 21.7   of covered employment.  An employee who became a covered state 
 21.8   employee as provided in section 352.01 or 352D.02, subdivision 
 21.9   1, before July 1, 2001, and credited with employee shares in the 
 21.10  unclassified program, after acquiring credit for ten years of 
 21.11  allowable service but prior to and within six months following 
 21.12  termination of covered employment, may, notwithstanding other 
 21.13  provisions of this subdivision, elect to terminate participation 
 21.14  in the unclassified plan and be covered by the regular general 
 21.15  plan by filing such election with the executive director.  The 
 21.16  executive director shall thereupon redeem the employee's total 
 21.17  shares and shall credit to the employee's account in the regular 
 21.18  general plan the amount of contributions that would have been so 
 21.19  credited had the employee been covered by the regular general 
 21.20  plan during the employee's entire covered employment.  The 
 21.21  balance of money so redeemed and not credited to the employee's 
 21.22  account shall be transferred to the state contribution reserve 
 21.23  of the state employees retirement fund, except that (1) the 
 21.24  employee contribution paid to the unclassified plan must be 
 21.25  compared to (2) the employee contributions that would have been 
 21.26  paid to the general plan for the comparable period, if the 
 21.27  individual had been covered by that plan.  If clause (1) is 
 21.28  greater than clause (2), the difference must be refunded to the 
 21.29  employee as provided in section 352.22.  If clause (2) is 
 21.30  greater than clause (1), the difference must be paid by the 
 21.31  employee within six months of electing general plan coverage or 
 21.32  before the effective date of the annuity, whichever is sooner.  
 21.33     Sec. 5.  Minnesota Statutes 2000, section 354.05, 
 21.34  subdivision 2, is amended to read: 
 21.35     Subd. 2.  [TEACHER.] (a) "Teacher" means: 
 21.36     (1) a person who renders service as a teacher, supervisor, 
 22.1   principal, superintendent, librarian, nurse, counselor, social 
 22.2   worker, therapist, or psychologist in the public schools of the 
 22.3   state located outside of the corporate limits of the cities of 
 22.4   the first class or in the Minnesota state colleges and 
 22.5   universities system, or in any charitable, penal, or 
 22.6   correctional institutions of a governmental subdivision, or who 
 22.7   is engaged in educational administration in connection with the 
 22.8   state public school system, including the Minnesota state 
 22.9   colleges and universities system, but excluding the University 
 22.10  of Minnesota, whether the position be a public office or an 
 22.11  employment, not including members or officers of any general 
 22.12  governing or managing board or body; 
 22.13     (2) an employee of the teachers retirement association 
 22.14  unless the employee is covered by the Minnesota state retirement 
 22.15  system due to prior employment by that system; 
 22.16     (3) a person who renders teaching service on a part-time 
 22.17  basis and who also renders other services for a single employing 
 22.18  unit.  A person whose teaching service comprises at least 50 
 22.19  percent of the combined employment salary is a member of the 
 22.20  association for all services with the single employing unit.  If 
 22.21  the person's teaching service comprises less than 50 percent of 
 22.22  the combined employment salary, the executive director must 
 22.23  determine whether all or none of the combined service is covered 
 22.24  by the association; or 
 22.25     (4) a person employed by the Minnesota state colleges and 
 22.26  universities system in a position enumerated in section 43A.08, 
 22.27  subdivision 1, clause (9), who is not covered by the plans 
 22.28  established under chapters 352D and 354B, but excluding all 
 22.29  student employees and other rendered services under clause (3). 
 22.30     (b) Teacher does not mean: 
 22.31     (1) a person who works for a school or institution as an 
 22.32  independent contractor as defined by the Internal Revenue 
 22.33  Service; 
 22.34     (2) a person employed in subsidized on-the-job training, 
 22.35  work experience or public service employment as an enrollee 
 22.36  under the federal Comprehensive Employment and Training Act from 
 23.1   and after March 30, 1978, unless the person has, as of the later 
 23.2   of March 30, 1978, or the date of employment, sufficient service 
 23.3   credit in the retirement association to meet the minimum vesting 
 23.4   requirements for a deferred retirement annuity, or the employer 
 23.5   agrees in writing on forms prescribed by the executive director 
 23.6   to make the required employer contributions, including any 
 23.7   employer additional contributions, on account of that person 
 23.8   from revenue sources other than funds provided under the federal 
 23.9   Comprehensive Training and Employment Act, or the person agrees 
 23.10  in writing on forms prescribed by the executive director to make 
 23.11  the required employer contribution in addition to the required 
 23.12  employee contribution; 
 23.13     (3) a person holding a part-time adult supplementary 
 23.14  technical college license who renders part-time teaching service 
 23.15  or a customized trainer as defined by the Minnesota state 
 23.16  colleges and universities system in a technical college if (i) 
 23.17  the service is incidental to the regular nonteaching occupation 
 23.18  of the person; and (ii) the applicable technical college 
 23.19  stipulates annually in advance that the part-time teaching 
 23.20  service or customized training service will not exceed 300 hours 
 23.21  in a fiscal year and retains the stipulation in its records; and 
 23.22  (iii) the part-time teaching service or customized training 
 23.23  service actually does not exceed 300 hours in a fiscal year; or 
 23.24     (4) a person exempt from licensure under section 122A.30. 
 23.25     Sec. 6.  [EFFECTIVE DATE.] 
 23.26     Sections 1 to 5 are effective July 1, 2001.  
 23.27                             ARTICLE 5 
 23.28                              REFUNDS 
 23.29     Section 1.  Minnesota Statutes 2000, section 352.22, 
 23.30  subdivision 2, is amended to read: 
 23.31     Subd. 2.  [AMOUNT OF REFUND.] Except as provided in 
 23.32  subdivision 3, the refund payable to a person who ceased to 
 23.33  be is no longer a state employee by reason of termination of 
 23.34  state service and applies for a refund after July 1, 2001, 
 23.35  regardless of termination date and only applies for amounts not 
 23.36  yet refunded, is in an amount equal to employee accumulated 
 24.1   contributions plus interest at the rate of six percent per year 
 24.2   compounded annually.  Included with the refund is any interest 
 24.3   paid as part of repayment of a past refund, plus interest 
 24.4   thereon from the date of repayment.  Interest must be computed 
 24.5   to the first day of the month in which the refund is processed 
 24.6   and must be based on fiscal year or monthly balances, whichever 
 24.7   applies. 
 24.8      Sec. 2.  Minnesota Statutes 2000, section 352B.11, 
 24.9   subdivision 1, is amended to read: 
 24.10     Subdivision 1.  [REFUND OF PAYMENTS.] A member who has not 
 24.11  received other benefits under this chapter is entitled to a 
 24.12  refund of payments made by salary deduction, plus interest, if 
 24.13  the member is separated no longer a state employee, either 
 24.14  voluntarily or involuntarily, from state service that entitled 
 24.15  the member to membership and applies for a refund after July 1, 
 24.16  2001, regardless of termination date and only applies for 
 24.17  amounts not yet refunded.  In the event of the member's death, 
 24.18  if there are no survivor benefits payable under this chapter, a 
 24.19  refund is payable to the last designated beneficiary on a form 
 24.20  filed with the director before death, or if no designation is 
 24.21  filed, the refund is payable to the member's estate.  Interest 
 24.22  must be computed at the rate of six percent a year, compounded 
 24.23  annually.  To receive a refund, application must be made on a 
 24.24  form prescribed by the executive director. 
 24.25     Sec. 3.  Minnesota Statutes 2000, section 353.34, 
 24.26  subdivision 2, is amended to read: 
 24.27     Subd. 2.  [REFUND WITH INTEREST.] Except as provided in 
 24.28  subdivision 1, any person who ceases to be a public employee and 
 24.29  applies for a refund after July 1, 2001, shall receive a refund 
 24.30  in an amount equal to accumulated deductions with interest to 
 24.31  the first day of the month in which the refund is processed at 
 24.32  the rate of six percent compounded annually based on fiscal year 
 24.33  balances.  If a person repays a refund and subsequently applies 
 24.34  for another refund, the repayment amount, including interest, is 
 24.35  added to the fiscal year balance in which the repayment was made.
 24.36     Sec. 4.  Minnesota Statutes 2000, section 354.49, 
 25.1   subdivision 3, is amended to read: 
 25.2      Subd. 3.  [REFUND IN CERTAIN INSTANCES.] Any person not 
 25.3   covered by the formula program who has attained normal 
 25.4   retirement age with less than the minimum service required for 
 25.5   an annuity and who ceases to be a member because of termination 
 25.6   of teaching service is entitled upon application to a refund in 
 25.7   an amount equal to the person's accumulated deductions plus 
 25.8   interest at the rates used to compute annuities under section 
 25.9   354.44, subdivision 2 in lieu of a proportionate annuity 
 25.10  pursuant to section 356.32.  If a person who has attained normal 
 25.11  retirement age is eligible for an annuity or is covered by the 
 25.12  formula program, the refund is an amount equal to the 
 25.13  accumulated deductions credited to the person's account as of 
 25.14  June 30, 1957, and after July 1, 1957, the accumulated 
 25.15  deductions plus interest at the rate of six percent compounded 
 25.16  annually regardless of when the employee terminated.  For the 
 25.17  purpose of this subdivision, interest must be computed on fiscal 
 25.18  year end balances to the first day of the month in which the 
 25.19  refund is issued. 
 25.20     Sec. 5.  Minnesota Statutes 2000, section 490.124, 
 25.21  subdivision 12, is amended to read: 
 25.22     Subd. 12.  [REFUND.] (a) Any person who ceases to be a 
 25.23  judge but who does not qualify for a retirement annuity or other 
 25.24  benefit under section 490.121 shall be entitled to a refund in 
 25.25  an amount equal to all the person's contributions to the judges' 
 25.26  retirement fund, regardless of when they were made, plus 
 25.27  interest computed to the first day of the month in which the 
 25.28  refund is processed based on fiscal year balances at an annual 
 25.29  rate of five six percent compounded annually and applies to any 
 25.30  refund issued after July 1, 2001.  
 25.31     (b) A refund of contributions under paragraph (a) 
 25.32  terminates all service credits and all rights and benefits of 
 25.33  the judge and the judge's survivors.  A person who becomes a 
 25.34  judge again after taking a refund under paragraph (a) may 
 25.35  reinstate previously terminated service credits, rights, and 
 25.36  benefits by repaying all refunds.  A repayment must include 
 26.1   interest at an annual rate of 8.5 percent compounded annually. 
 26.2      Sec. 6.  [EFFECTIVE DATE.] 
 26.3      Sections 1 to 5 are effective July 1, 2001.  
 26.4                              ARTICLE 6 
 26.5                          SURVIVOR BENEFITS 
 26.6      Section 1.  Minnesota Statutes 2000, section 352.12, 
 26.7   subdivision 2, is amended to read: 
 26.8      Subd. 2.  [SURVIVING SPOUSE BENEFIT.] (a) If an employee or 
 26.9   former employee has credit for at least three years allowable 
 26.10  service and dies before an annuity or disability benefit has 
 26.11  become payable, notwithstanding any designation of beneficiary 
 26.12  to the contrary, the surviving spouse of the employee may elect 
 26.13  to receive, in lieu of the refund with interest under 
 26.14  subdivision 1, an annuity equal to the joint and 100 percent 
 26.15  survivor annuity which the employee or former employee could 
 26.16  have qualified for on the date of death had earned based on 
 26.17  length of service, average salary, and age the employee would 
 26.18  have been at the date payment begins. 
 26.19     (b) If the employee was under age 55 and has credit for at 
 26.20  least 30 years of allowable service on the date of death, the 
 26.21  surviving spouse may elect to receive a 100 percent joint and 
 26.22  survivor annuity based on the age of the employee would have 
 26.23  been and the age of the surviving spouse on the date of death 
 26.24  payment begins.  The annuity is payable using the full early 
 26.25  retirement reduction under section 352.116, subdivision 1, 
 26.26  paragraph (a), to age 55 and one-half of the early retirement 
 26.27  reduction from age 55 to the age payment begins. 
 26.28     (c) If the employee was under age 55 and has credit for at 
 26.29  least three years of allowable service credit on the date of 
 26.30  death but did not yet qualify for retirement, the surviving 
 26.31  spouse may elect to receive a 100 percent joint and survivor 
 26.32  annuity based on the age of the deceased employee would have 
 26.33  been and the age of the surviving spouse at the time of death 
 26.34  date payment begins.  The annuity is payable using the full 
 26.35  early retirement reduction under section 352.116, subdivision 1 
 26.36  or 1a, from age of full retirement to age 55 and one-half of the 
 27.1   early retirement reduction from age 55 to the age payment begins.
 27.2      The surviving spouse of a former employee eligible for 
 27.3   benefits under paragraph (a) may apply for the annuity at any 
 27.4   time after the date on which the employee or former employee 
 27.5   would have attained the required age for retirement based on the 
 27.6   allowable service earned.  The surviving spouse eligible for 
 27.7   surviving spouse benefits under paragraph (b) or (c) may apply 
 27.8   for the annuity at any time after the employee's death.  The 
 27.9   annuity must be computed under sections 352.115, subdivisions 1, 
 27.10  2, and 3, and 352.116, subdivisions 1, 1a, and 3.  Sections 
 27.11  352.22, subdivision 3, and 352.72, subdivision 2, apply to a 
 27.12  deferred annuity or surviving spouse benefit payable under this 
 27.13  subdivision.  The annuity must cease with the last payment 
 27.14  received by the surviving spouse in the lifetime of the 
 27.15  surviving spouse, or upon expiration of a term certain benefit 
 27.16  payment to a surviving spouse under subdivision 2a.  An amount 
 27.17  equal to the excess, if any, of the accumulated contributions 
 27.18  credited to the account of the deceased employee in excess of 
 27.19  the total of the benefits paid and payable to the surviving 
 27.20  spouse must be paid to the deceased employee's or former 
 27.21  employee's last designated beneficiary or, if none, as specified 
 27.22  under subdivision 1 surviving spouse's estate.  
 27.23     Any employee or former employee may request in writing that 
 27.24  this subdivision not apply and that payment be made only to a 
 27.25  designated beneficiary as otherwise provided by this chapter. 
 27.26     Sec. 2.  Minnesota Statutes 2000, section 352.12, 
 27.27  subdivision 2a, is amended to read: 
 27.28     Subd. 2a.  [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In 
 27.29  lieu of the 100 percent optional annuity under subdivision 2, or 
 27.30  refund under subdivision 1, the surviving spouse of a deceased 
 27.31  employee or former employee may elect to receive survivor 
 27.32  coverage in a term certain of five, ten, 15, or 20 years, but 
 27.33  monthly payments must not exceed 75 percent of the average 
 27.34  high-five monthly salary of the deceased employee or former 
 27.35  employee.  The monthly term certain annuity must be actuarially 
 27.36  equivalent to the 100 percent optional annuity under subdivision 
 28.1   2. 
 28.2      If a survivor elects a term certain annuity and dies before 
 28.3   the expiration of the specified term certain period, the 
 28.4   commuted value of the remaining annuity payments must be paid in 
 28.5   a lump sum to the survivor's estate. 
 28.6      Sec. 3.  Minnesota Statutes 2000, section 352.12, 
 28.7   subdivision 2b, is amended to read: 
 28.8      Subd. 2b.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 28.9   no surviving spouse eligible for benefits under subdivision 2, a 
 28.10  dependent child or children as defined in section 352.01, 
 28.11  subdivision 26, is eligible for monthly payments.  Payments to a 
 28.12  dependent child must be paid from the date of the employee's 
 28.13  death to the date the dependent child attains age 20 22 if the 
 28.14  child is under age 15 17.  If the child is 15 17 years or older 
 28.15  on the date of death, payment must be made for five years.  The 
 28.16  payment to a dependent child is an amount actuarially equivalent 
 28.17  to the value of a 100 percent optional annuity under subdivision 
 28.18  2 using the age of the employee and age of the dependent child 
 28.19  at the date of death in lieu of the age of the surviving 
 28.20  spouse.  If there is more than one dependent child, each 
 28.21  dependent child shall receive a proportionate share of the 
 28.22  actuarial value of the employee's account.  
 28.23     Sec. 4.  Minnesota Statutes 2000, section 352.931, 
 28.24  subdivision 1, is amended to read: 
 28.25     Subdivision 1.  [SURVIVING SPOUSE BENEFIT.] (a) If the 
 28.26  correctional employee was at least age 50, has credit for at 
 28.27  least three years of allowable service, and dies before an 
 28.28  annuity or disability benefit has become payable, 
 28.29  notwithstanding any designation of beneficiary to the contrary, 
 28.30  the surviving spouse of the employee may elect to receive, in 
 28.31  lieu of the refund under section 352.12, subdivision 1, an 
 28.32  annuity for life equal to the joint and 100 percent survivor 
 28.33  annuity which the employee could have qualified for had the 
 28.34  employee terminated service on the date of death.  The election 
 28.35  may be made at any time after the date of death of the 
 28.36  employee.  The surviving spouse benefit begins to accrue as of 
 29.1   the first of the month next following the date on which the 
 29.2   application for the benefit was filed. 
 29.3      (b) If the employee was under age 50, dies, and had credit 
 29.4   for at least three years of allowable service credit on the date 
 29.5   of death but did not yet qualify for retirement, the surviving 
 29.6   spouse may elect to receive a 100 percent joint and survivor 
 29.7   annuity based on the age of the employee and surviving spouse at 
 29.8   the time of death the benefit begins.  The annuity is payable 
 29.9   using the early retirement reduction under section 352.93, 
 29.10  subdivision 2a, to age 50, and one-half of the early retirement 
 29.11  reduction from age 50 to the age payment begins.  The surviving 
 29.12  spouse eligible for surviving spouse benefits under this 
 29.13  paragraph may apply for the annuity at any time after the 
 29.14  employee's death.  Sections 352.22, subdivision 3, and 352.72, 
 29.15  subdivision 2, apply to a deferred annuity or surviving spouse 
 29.16  benefit payable under this subdivision.  
 29.17     (c) The annuity must cease with the last payment received 
 29.18  by the surviving spouse in the lifetime of the surviving 
 29.19  spouse.  Any employee may request in writing that this 
 29.20  subdivision not apply and that payment be made only to a 
 29.21  designated beneficiary as otherwise provided by this chapter. 
 29.22     Sec. 5.  Minnesota Statutes 2000, section 352.931, 
 29.23  subdivision 3, is amended to read: 
 29.24     Subd. 3.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 29.25  no surviving spouse eligible for benefits under subdivision 1, a 
 29.26  dependent child as defined in section 352.01, subdivision 26, is 
 29.27  eligible for a dependent child survivor benefit.  Benefits to 
 29.28  a dependent child must be paid from the date of the employee's 
 29.29  death to the date the dependent child attains age 20 22 if the 
 29.30  child is under age 15 17 on the date of death.  If the child 
 29.31  is 15 17 years or older on the date of death, the benefit is 
 29.32  payable for five years.  The payment to a dependent child is an 
 29.33  amount actuarially equivalent to the value of a 100 percent 
 29.34  joint and survivor optional annuity using the age of the 
 29.35  employee and age of the dependent child at the date of death in 
 29.36  lieu of the age of the surviving spouse.  If there is more than 
 30.1   one dependent child, each dependent child shall receive a 
 30.2   proportionate share of the actuarial value of the employee's 
 30.3   account, with the amount of the benefit payable to each child to 
 30.4   be determined based on the portion of the total eligibility 
 30.5   period that each child is eligible.  The process for calculating 
 30.6   the dependent child survivor benefit must be approved by the 
 30.7   actuary retained by the legislative commission on pensions and 
 30.8   retirement. 
 30.9      Sec. 6.  Minnesota Statutes 2000, section 352B.11, 
 30.10  subdivision 2, is amended to read: 
 30.11     Subd. 2.  [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a 
 30.12  member serving actively as a member, or a member or former 
 30.13  member receiving the disability benefit before attaining age 65 
 30.14  or reaching the five-year anniversary of the effective date of 
 30.15  the disability benefit, whichever is later, provided by section 
 30.16  352B.10, subdivisions 1 and 2, dies from any cause before 
 30.17  attaining age 65 or reaching the five-year anniversary of the 
 30.18  effective date of the disability benefit, whichever is later, 
 30.19  the surviving spouse and dependent children are entitled to 
 30.20  benefit payments as follows: 
 30.21     (a) A member with at least three years of allowable service 
 30.22  is deemed to have elected a 100 percent joint and survivor 
 30.23  annuity payable to a surviving spouse only on or after the date 
 30.24  the member or former member became or would have become 55. 
 30.25     (b) The surviving spouse of a member who had credit for 
 30.26  less than three years of service shall receive, for life, a 
 30.27  monthly annuity equal to 50 percent of that part of the average 
 30.28  monthly salary of the member from which deductions were made for 
 30.29  retirement.  
 30.30     (c) The surviving spouse of a member who had credit for at 
 30.31  least three years service and who died after becoming 55 years 
 30.32  old, may elect to receive a 100 percent joint and survivor 
 30.33  annuity, for life, notwithstanding a subsequent remarriage, in 
 30.34  lieu of the annuity prescribed in paragraph (b). 
 30.35     (d) The surviving spouse of any member who had credit for 
 30.36  three years or more and who was not 55 years old at death, shall 
 31.1   receive the benefit equal to 50 percent of the average monthly 
 31.2   salary as described in clause (b) until the deceased member 
 31.3   would have become 55 years old, and beginning the first of the 
 31.4   month following that date, may elect to receive the 100 percent 
 31.5   joint and survivor annuity.  
 31.6      (e) Each dependent child shall receive a monthly annuity 
 31.7   equal to ten twelve and one-half percent of that part of the 
 31.8   average monthly salary of the former member from which 
 31.9   deductions were made for retirement.  A dependent child over 18 
 31.10  and under 23 years of age also may receive the monthly benefit 
 31.11  provided in this section, if the child is continuously attending 
 31.12  an accredited school as a full-time student during the normal 
 31.13  school year as determined by the director.  If the child does 
 31.14  not continuously attend school but separates from full-time 
 31.15  attendance during any part of a school year, the annuity shall 
 31.16  cease at the end of the month of separation.  In addition, a 
 31.17  payment of $20 per month shall be prorated equally to surviving 
 31.18  dependent children when the former member is survived by one or 
 31.19  more dependent children.  Payments for the benefit of 
 31.20  any qualified dependent minor child must be made to the 
 31.21  surviving spouse, or if there is none, to the legal guardian of 
 31.22  the child.  The maximum monthly benefit for any one family must 
 31.23  not be less than 50 nor exceed 70 percent of the average monthly 
 31.24  salary for any number of children. 
 31.25     (f) If the member dies under circumstances that entitle the 
 31.26  surviving spouse and dependent children to receive benefits 
 31.27  under the workers' compensation law, the workers' compensation 
 31.28  benefits received by them must not be deducted from the benefits 
 31.29  payable under this section. 
 31.30     (g) The surviving spouse of a deceased former member who 
 31.31  had credit for three or more years of allowable service, but not 
 31.32  the spouse of a former member receiving a disability benefit 
 31.33  under section 352B.10, subdivision 2, is entitled to receive the 
 31.34  100 percent joint and survivor annuity at the time the deceased 
 31.35  member would have become 55 years old.  If a former member dies 
 31.36  who does not qualify for other benefits under this chapter, the 
 32.1   surviving spouse or, if none, the children or heirs the member's 
 32.2   estate are entitled to a refund of the accumulated deductions 
 32.3   left in the fund plus interest at the rate of six percent per 
 32.4   year compounded annually. 
 32.5      Sec. 7.  Minnesota Statutes 2000, section 353.32, 
 32.6   subdivision 1c, is amended to read: 
 32.7      Subd. 1c.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 32.8   no surviving spouse eligible for benefits under subdivision 1a, 
 32.9   a dependent child or children as defined in section 353.01, 
 32.10  subdivision 15a, is eligible for monthly payments.  Payments to 
 32.11  a dependent child must be paid from the date of the member's 
 32.12  death to the date the dependent child attains age 20 22 if the 
 32.13  child is under age 15 17.  If the child is 15 17 years or older 
 32.14  on the date of death, payment must be made for five years.  The 
 32.15  payment to a dependent child is an amount actuarially equivalent 
 32.16  to the value of a 100 percent optional annuity under subdivision 
 32.17  1a using the age of the member and age of the dependent child at 
 32.18  the date of death in lieu of the age of the surviving spouse.  
 32.19  If there is more than one dependent child, each dependent child 
 32.20  shall receive a proportionate share of the actuarial value of 
 32.21  the employee's account.  
 32.22     Sec. 8.  Minnesota Statutes 2000, section 354.46, 
 32.23  subdivision 1, is amended to read: 
 32.24     Subdivision 1.  [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 
 32.25  CHILDREN OF TEACHER.] If a basic member who has at least 18 
 32.26  months of allowable service credit and who has an average salary 
 32.27  as defined in section 354.44, subdivision 6, equal to or greater 
 32.28  than $75 dies prior to retirement or if a former basic member 
 32.29  who, at the time of death, was totally and permanently disabled 
 32.30  and receiving disability benefits pursuant to section 354.48 
 32.31  dies before attaining age 65 or reaching the five-year 
 32.32  anniversary of the effective date of the disability benefit, 
 32.33  whichever is later, the surviving spouse and dependent children 
 32.34  of the basic member or former basic member are entitled to 
 32.35  receive a monthly benefit as follows: 
 32.36    (a) Surviving
 33.1     spouse .....50 percent of the basic member's monthly
 33.2                 average salary paid in the last full
 33.3                 fiscal year preceding death
 33.4     (b) Each
 33.5     dependent
 33.6     child ......ten percent of the basic member's
 33.7                 monthly average salary paid in the
 33.8                 last full fiscal year preceding death
 33.9      Payments for the benefit of any dependent minor child under 
 33.10  the age of 22 years must be made to the surviving parent, or if 
 33.11  there be none, to the legal guardian of the child.  The maximum 
 33.12  monthly benefit must not exceed $1,000 for any one family, and 
 33.13  the minimum benefit per family must not be less than 50 percent 
 33.14  of the basic member's average salary, subject to the foregoing 
 33.15  maximum.  The surviving dependent children's benefit must be 
 33.16  reduced pro tanto when any surviving child is no longer 
 33.17  dependent under the age of 22 years. 
 33.18     If the basic member and the surviving spouse are killed in 
 33.19  a common disaster and if the total of all survivors benefits 
 33.20  payable pursuant to this subdivision is less than the 
 33.21  accumulated deductions plus interest payable, the surviving 
 33.22  dependent children shall receive the difference in a lump sum 
 33.23  payment. 
 33.24     If the survivor benefits provided in this subdivision 
 33.25  exceed in total the monthly average salary of the deceased basic 
 33.26  member, these benefits must be reduced to an amount equal to the 
 33.27  deceased basic member's monthly average salary. 
 33.28     Prior to payment of any survivor benefit pursuant to this 
 33.29  subdivision, in lieu of that benefit, the surviving spouse may 
 33.30  elect to receive the joint and survivor annuity provided 
 33.31  pursuant to subdivision 2, or may elect to receive a refund of 
 33.32  accumulated deductions with interest in a lump sum as provided 
 33.33  pursuant to section 354.47, subdivision 1.  If there are any 
 33.34  surviving dependent children, the surviving spouse may elect to 
 33.35  receive the refund of accumulated deductions only with the 
 33.36  consent of the district court of the district in which the 
 34.1   surviving dependent child or children reside. 
 34.2      Sec. 9.  Minnesota Statutes 2000, section 354.46, 
 34.3   subdivision 2, is amended to read: 
 34.4      Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
 34.5   BENEFIT.] (a) The surviving spouse of any member or former 
 34.6   member who has credit for at least three years of allowable 
 34.7   service is entitled to joint and survivor annuity coverage in 
 34.8   the event of death of the member prior to retirement.  If the 
 34.9   surviving spouse does not elect to receive a surviving spouse 
 34.10  benefit under subdivision 1, if applicable, or does not elect to 
 34.11  receive a refund of accumulated member contributions under 
 34.12  section 354.47, subdivision 1, the surviving spouse is entitled 
 34.13  to receive, upon written application on a form prescribed by the 
 34.14  executive director, a benefit equal to the second portion of a 
 34.15  100 percent joint and survivor annuity specified under section 
 34.16  354.45, based on the age of the member would have been and the 
 34.17  age of the surviving spouse at the time of death of the member, 
 34.18  and the benefit accrues computed under section 354.44, 
 34.19  subdivision 2 or 6, whichever is applicable.  
 34.20     (b) If the member was under age 55 and has credit for at 
 34.21  least 30 years of allowable service on the date of death, the 
 34.22  surviving spouse may elect to receive a 100 percent joint and 
 34.23  survivor annuity based on the age of the member would have been 
 34.24  and the age of the surviving spouse on the date of death the 
 34.25  benefit accrues.  The annuity is payable using the full early 
 34.26  retirement reduction under section 354.44, subdivision 6, 
 34.27  paragraph (3)(ii), to age 55 and one-half of the early 
 34.28  retirement reduction from age 55 to the age payment begins. 
 34.29     (c) If the member was under age 55 and has credit for at 
 34.30  least three years of allowable service on the date of death but 
 34.31  did not yet qualify for retirement, the surviving spouse may 
 34.32  elect to receive the 100 percent joint and survivor annuity 
 34.33  based on the age of the member would have been and the age of 
 34.34  the surviving spouse at the time of death the benefit accrues.  
 34.35  The annuity is calculated using the full early retirement 
 34.36  reduction under section 354.44, subdivision 6, to age 55 and 
 35.1   one-half of the early retirement reduction from age 55 to the 
 35.2   age the annuity begins.  The surviving spouse eligible for a 
 35.3   surviving spouse benefit under paragraph (a) may apply for the 
 35.4   annuity at any time after the date on which the deceased 
 35.5   employee would have attained the required age for retirement 
 35.6   based on the employee's allowable service.  The surviving spouse 
 35.7   eligible for surviving spouse benefits under paragraph (b) or 
 35.8   (c) may apply for the annuity any time after the member's death. 
 35.9   This benefit accrues from the day following the date of the 
 35.10  member's death but may not begin to accrue more than six months 
 35.11  before the date the application is filed with the executive 
 35.12  director.  Sections 354.55, subdivision 11, and 354.60 apply to 
 35.13  a deferred annuity payable under this section.  The benefit is 
 35.14  payable for life. 
 35.15     Sec. 10.  Minnesota Statutes 2000, section 354.46, 
 35.16  subdivision 2b, is amended to read: 
 35.17     Subd. 2b.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 35.18  no surviving spouse eligible for benefits under subdivision 2, a 
 35.19  dependent child or children as defined in section 354.05, 
 35.20  subdivision 8a, is eligible for monthly payments.  Payments to a 
 35.21  dependent child must be paid from the date of the member's death 
 35.22  to the date the dependent child attains age 20 22 if the child 
 35.23  is under age 15 17.  If the child is 15 17 years or older on the 
 35.24  date of death, payment must be made for five years.  The payment 
 35.25  to a dependent child is an amount actuarially equivalent to the 
 35.26  value of a 100 percent optional annuity under subdivision 2 
 35.27  using the age of the member and age of the dependent child at 
 35.28  the date of death in lieu of the age of the member and the 
 35.29  spouse.  If there is more than one dependent child, each 
 35.30  dependent child shall receive a proportionate share of the 
 35.31  actuarial value of the member's account.  
 35.32     Sec. 11.  [EFFECTIVE DATE.] 
 35.33     Sections 1 to 10 are effective July 1, 2001. 
 35.34                             ARTICLE 7 
 35.35                             TECHNICAL 
 35.36     Section 1.  Minnesota Statutes 2000, section 3A.03, 
 36.1   subdivision 2, is amended to read: 
 36.2      Subd. 2.  [REFUND.] (1) Any person former member who has 
 36.3   made contributions pursuant to subdivision 1 who is no longer a 
 36.4   member of the legislature is entitled to receive upon 
 36.5   application to the director a refund of all contributions 
 36.6   credited to the member's account with interest at an annual rate 
 36.7   of six percent compounded annually.  
 36.8      (2) The refund of contributions as provided in clause (1) 
 36.9   terminates all rights of a former member of the legislature or 
 36.10  survivors of the former member under this chapter.  Should the 
 36.11  former member of the legislature again be a member of the 
 36.12  legislature after having taken a refund as provided above, the 
 36.13  member shall be considered a new member.  However, a new member 
 36.14  may reinstate the rights and credit for service forfeited, 
 36.15  provided the new member repays all refunds taken plus interest 
 36.16  at an annual rate of 8.5 percent compounded annually.  
 36.17     (3) No person shall be required to apply for or accept a 
 36.18  refund. 
 36.19     Sec. 2.  Minnesota Statutes 2000, section 11A.18, 
 36.20  subdivision 7, is amended to read: 
 36.21     Subd. 7.  [PARTICIPATION AND FINANCIAL REPORTING IN FUND.] 
 36.22  (a) Each participating public retirement fund or plan which has 
 36.23  transferred money to the state board for investment in the 
 36.24  postretirement investment fund shall have an undivided 
 36.25  participation in the fund.  The participation on any valuation 
 36.26  date shall be determined by adding to the participation on the 
 36.27  prior valuation date:  (a) (1) funds transferred in accordance 
 36.28  with subdivision 6, (b) (2) the amount of required investment 
 36.29  income on its participation as defined in subdivision 9, clause 
 36.30  (1)(c) paragraph (c), clauses (1) and (c) (3) the reserves for 
 36.31  any benefit adjustment made as of the current valuation date 
 36.32  with the result adjusted for any mortality gains or losses 
 36.33  determined pursuant to subdivision 11.  
 36.34     (b) The total fair market value of the postretirement fund 
 36.35  must be calculated in accordance with generally accepted 
 36.36  accounting principles.  The fair market value share of each fund 
 37.1   participating in the postretirement investment fund shall be 
 37.2   allocated by adding to the fair market value at the beginning of 
 37.3   the fiscal year:  (1) 100 percent of the funds transferred in 
 37.4   accordance with subdivision 6; and (2) a pro rata distribution 
 37.5   of unrealized gains or losses, based on a weighted percentage of 
 37.6   participation at the end of each month of the fiscal year. 
 37.7      Sec. 3.  Minnesota Statutes 2000, section 352.04, 
 37.8   subdivision 8, is amended to read: 
 37.9      Subd. 8.  [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 
 37.10  DEDUCTIONS.] (a) If a department fails to take deductions past 
 37.11  due for a period of 60 30 days or less from an employee's salary 
 37.12  as provided in this section, those deductions must be taken on 
 37.13  later payroll abstracts.  
 37.14     (b) If a department fails to take deductions past due for a 
 37.15  period in excess of 60 30 days from an employee's salary as 
 37.16  provided in this section, the department, and not the employee, 
 37.17  must pay on later payroll abstracts the employee and employer 
 37.18  contributions and an amount equivalent to 8.5 percent of the 
 37.19  total amount due in lieu of interest, or if the delay in payment 
 37.20  exceeds one year, 8.5 percent compound annual interest.  
 37.21     (c) If a department fails to take deductions past due for a 
 37.22  period of 60 30 days or less and the employee is no longer in 
 37.23  state service so that the required deductions cannot be taken 
 37.24  from the salary of the employee, the department must 
 37.25  nevertheless pay the required employer contributions.  If any 
 37.26  department fails to take deductions past due for a period in 
 37.27  excess of 60 30 days and the employee is no longer in state 
 37.28  service, the omitted contributions must be recovered under 
 37.29  paragraph (b).  
 37.30     (d) If an employee from whose salary required deductions 
 37.31  were past due for a period of 60 30 days or less leaves state 
 37.32  service before the payment of the omitted deductions and 
 37.33  subsequently returns to state service, the unpaid amount is 
 37.34  considered the equivalent of a refund.  The employee accrues no 
 37.35  right by reason of the unpaid amount, except that the employee 
 37.36  may pay the amount of omitted deductions as provided in section 
 38.1   352.23. 
 38.2      Sec. 4.  Minnesota Statutes 2000, section 352.22, 
 38.3   subdivision 3, is amended to read: 
 38.4      Subd. 3.  [DEFERRED ANNUITY.] (a) An employee who has at 
 38.5   least three years of allowable service when termination occurs 
 38.6   may elect to leave the accumulated contributions in the fund and 
 38.7   be entitled to a deferred retirement annuity.  The annuity must 
 38.8   be computed under the law in effect when state service 
 38.9   terminated, on the basis of allowable service before termination 
 38.10  of service. 
 38.11     (b) An employee on layoff or on leave of absence without 
 38.12  pay, except a leave of absence for health reasons, who does not 
 38.13  return to state service shall have an annuity, deferred annuity, 
 38.14  or other benefit to which the employee may become entitled 
 38.15  computed under the law in effect on the employee's last working 
 38.16  day. 
 38.17     (c) No application for a deferred annuity may be made more 
 38.18  than 60 180 days before the time the former employee reaches the 
 38.19  required age for entitlement to the payment of the annuity.  The 
 38.20  deferred annuity begins to accrue no earlier than 60 180 days 
 38.21  before the date the application is filed in the office of the 
 38.22  system, but not (1) before the date the employee reaches the 
 38.23  required age for entitlement to the annuity nor (2) before the 
 38.24  day following the termination of state service in a position not 
 38.25  covered by the retirement system. 
 38.26     (d) Application for the accumulated contributions left on 
 38.27  deposit with the fund may be made at any time after 30 days 
 38.28  following the date of termination of service. 
 38.29     Sec. 5.  Minnesota Statutes 2000, section 352.22, 
 38.30  subdivision 8, is amended to read: 
 38.31     Subd. 8.  [REFUND SPECIFICALLY LIMITED.] If a former 
 38.32  employee covered by the system does not apply for refund within 
 38.33  five years after the last deduction was taken from salary for 
 38.34  the retirement fund, and does not have enough service to qualify 
 38.35  for a deferred annuity, accumulated contributions must be 
 38.36  credited to and become a part of the retirement fund.  If the 
 39.1   former employee returns to state service and becomes a state 
 39.2   employee covered by the system, the amount credited to the 
 39.3   retirement fund, if more than $2 $25, shall be restored to the 
 39.4   individual account.  If the amount credited to the fund is over 
 39.5   $2 $25 and the former employee applies for refund or an annuity 
 39.6   under section 352.72, the amount must be restored to the former 
 39.7   employee's individual account and refund made or annuity paid 
 39.8   whichever applies. 
 39.9      Sec. 6.  Minnesota Statutes 2000, section 354.52, 
 39.10  subdivision 4, is amended to read: 
 39.11     Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] An 
 39.12  employer shall remit all amounts due to the association and 
 39.13  furnish a statement indicating the amount due and transmitted 
 39.14  with any other information required by the executive director.  
 39.15  If an amount due is not received by the association within seven 
 39.16  14 calendar days of the payroll warrant, the amount accrues 
 39.17  interest at an annual rate of 8.5 percent compounded annually 
 39.18  from the due date until the amount is received by the 
 39.19  association.  All amounts due and other employer obligations not 
 39.20  remitted within 60 days of notification by the association must 
 39.21  be certified to the commissioner of finance who shall deduct the 
 39.22  amount from any state aid or appropriation amount applicable to 
 39.23  the employing unit. 
 39.24     Sec. 7.  Minnesota Statutes 2000, section 354.66, 
 39.25  subdivision 2, is amended to read: 
 39.26     Subd. 2.  [QUALIFIED PART-TIME TEACHER PROGRAM 
 39.27  PARTICIPATION REQUIREMENTS.] (a) A teacher in a Minnesota public 
 39.28  elementary school, a Minnesota secondary school, or the 
 39.29  Minnesota state colleges and universities system who has three 
 39.30  years or more of allowable service in the association or three 
 39.31  years or more of full-time teaching service in Minnesota public 
 39.32  elementary schools, Minnesota secondary schools, or the 
 39.33  Minnesota state colleges and universities system, by agreement 
 39.34  with the board of the employing district or with the authorized 
 39.35  representative of the board, may be assigned to teaching service 
 39.36  in a part-time teaching position under subdivision 3.  The 
 40.1   agreement must be executed before October 1 of the year for 
 40.2   which the teacher requests to make retirement contributions 
 40.3   under subdivision 4.  A copy of the executed agreement must be 
 40.4   filed with the executive director of the association.  If the 
 40.5   copy of the executed agreement is filed with the association 
 40.6   after October 1 of the year for which the teacher requests to 
 40.7   make retirement contributions under subdivision 4, the employing 
 40.8   unit shall pay the fine specified in section 354.52, subdivision 
 40.9   6, for each calendar day that elapsed since the October 1 due 
 40.10  date.  The association may not accept an executed agreement that 
 40.11  is received by the association more than 15 months late.  The 
 40.12  association may not waive the fine required by this section. 
 40.13     (b) Notwithstanding any contrary provision of paragraph 
 40.14  (a), if the teacher also is a legislator: 
 40.15     (1) the agreement in paragraph (a) must be executed before 
 40.16  March 1 of the fiscal year for which the teacher requests to 
 40.17  make retirement contributions under subdivision 4; and 
 40.18     (2) fines specified in paragraph (a) apply if the employing 
 40.19  unit does not file the executed agreement with the executive 
 40.20  director of the association by March 1.  
 40.21     Sec. 8.  Minnesota Statutes 2000, section 356.55, 
 40.22  subdivision 7, is amended to read: 
 40.23     Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
 40.24  PROCEDURE.] (a) This section expires and is repealed on July 1, 
 40.25  2001 May 16, 2002. 
 40.26     (b) Authority for any public pension plan to accept a prior 
 40.27  service credit payment calculated in a timely fashion under this 
 40.28  section expires on October 1, 2001 May 16, 2003. 
 40.29     Sec. 9.  [EFFECTIVE DATE; TRANSITIONAL PROVISION.] 
 40.30     Sections 1 to 6 and 8 are effective July 1, 2001.  Section 
 40.31  7 is effective the day following final enactment.  In 2001, a 
 40.32  teacher who also is a legislator may execute an agreement under 
 40.33  Minnesota Statutes, section 354.66, at any time before June 30, 
 40.34  2001.  The employing unit must file a copy with the executive 
 40.35  director of the association within 30 days after the agreement 
 40.36  is executed.