HF 1615

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; consolidating the Minneapolis
Teachers Retirement Fund Association coordinated
program with the Teachers Retirement Association;
authorizing the issuance of revenue bonds;
appropriating money; amending Minnesota Statutes 2004,
sections 354.05, subdivisions 2, 13; 354.42,
subdivisions 2, 3; 354A.12, subdivision 3b; 354A.23,
by adding a subdivision; 423A.02, subdivision 1b;
proposing coding for new law in Minnesota Statutes,
chapters 128D; 354; repealing Minnesota Statutes 2004,
section 354A.28.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [128D.18] FUNDING OF UNFUNDED PENSION
LIABILITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Financing authority. new text end

new text begin Notwithstanding any
other law to the contrary, Special School District No. 1,
Minneapolis, may finance all or a portion of the current and
future unfunded pension liability of the Minneapolis Teachers
Retirement Fund Association through the issuance of pension
obligation bonds issued pursuant to this section; provided that
the following conditions are met:
new text end

new text begin (a) The bonds shall be payable from state funds and other
contributions appropriated to the Minneapolis Teachers
Retirement Fund Association to pay unfunded pension liabilities,
including, without limitation, special direct aid, matching aid,
or other contributions under section 354A.12, subdivision 3a or
3b, the employer additional amount paid in fiscal year 2004
under section 354A.12, subdivision 2a, paragraph (a), clause
(4), which must be continued annually, or any other subsequent
state appropriation for such purpose, and the other sources of
funds set forth in this section.
new text end

new text begin (b) At the time of issuance of the bonds, section 354A.12,
subdivisions 3a and 3b, have not been repealed or amended.
new text end

new text begin (c) The principal amount of bonds issued and outstanding
hereunder shall not exceed the unfunded actuarial accrued
liability determined by the actuary retained by the Legislative
Commission on Pensions and Retirement for the fiscal year ending
June 30, 2004, pursuant to sections 356.215 and 356.216.
new text end

new text begin Subd. 2. new text end

new text begin Use of proceeds. new text end

new text begin The proceeds of the bonds
issued, less costs, shall be paid to the State Board of
Investment to be deposited as an asset of the Minneapolis
Teachers Retirement Fund Association. The proceeds shall be
held in trust by the State Board of Investment for the benefit
of the Minneapolis Teachers Retirement Fund Association and
invested as set forth in subdivision 3. Annually, on the first
banking day of the calendar year, the State Board of Investment
shall pay to the Minneapolis Teachers Retirement Fund
Association from the funds and with investment income thereof,
the amount, if any, needed by the pension fund in any year to
pay retirement annuities and benefits that are due and payable
and the reasonable and necessary administrative expenses of the
retirement plan that are due and payable after all assets held
by the association, other than those assets held by the State
Board of Investment, have been exhausted.
new text end

new text begin Subd. 3. new text end

new text begin Appropriations. new text end

new text begin (a) Notwithstanding any law to
the contrary, special direct state aid, matching aid, and other
contributions levied for the Minneapolis Teachers Retirement
Fund Association under section 354A.12, subdivisions 3a and 3b,
and amortization or supplementary amortization state aid
reallocated to the Minneapolis Teachers Retirement Fund
Association under section 423A.02 are pledged and appropriated
to the payment of the bonds and must be transferred to Special
School District No. 1, Minneapolis, and additional employer
contributions levied by Special School District No. 1,
Minneapolis, under section 354A.12, subdivision 3b, shall be
retained by the district to the extent required to pay debt
service on the bonds for the succeeding 12-month period or a
longer period established pursuant to the resolution of the
district authorizing the bonds.
new text end

new text begin (b) The bond proceeds based on the funding sources for the
Minneapolis Teachers Retirement Fund Association referenced in
paragraph (a) must be invested by the State Board of Investment
in trust for the exclusive benefit of the Minneapolis Teachers
Retirement Fund Association. Notwithstanding any law to the
contrary, section 356A.02 shall not apply to the Minneapolis
Teachers Retirement Fund Association with respect to any bond
proceeds held and invested by the State Board of Investment
pursuant to this section.
new text end

new text begin (c) For purposes of annual actuarial valuations and annual
financial reports, the assets of the Minneapolis Teachers
Retirement Fund Association held by the State Board of
Investment pursuant to this section must not be considered as
current assets of the Minneapolis Teachers Retirement Fund
Association but may be considered as future assets in a similar
manner as future contributions to the funds.
new text end

new text begin Subd. 4. new text end

new text begin No election. new text end

new text begin No election of the voters of the
district shall be required to issue bonds authorized by this
section.
new text end

new text begin Subd. 5. new text end

new text begin Terms and sale of bonds. new text end

new text begin The bonds issued
pursuant to this section shall bear interest at the rate or
rates and mature on the date or dates not more than 30 years
from the date of issue as the district shall determine by
resolution. Interest may be at a fixed or variable rate. The
bonds may be sold and issued on terms and in a manner that
Special School District No. 1, Minneapolis, determines is in its
best interests and in the best interests of the state.
new text end

new text begin Subd. 6. new text end

new text begin This section prevails. new text end

new text begin Notwithstanding any
other law to the contrary, this section shall apply to the
issuance and sale of the bonds and to the purposes for which the
bonds may be issued.
new text end

new text begin Subd. 7. new text end

new text begin State pledge against impairment of
contracts. new text end

new text begin The state pledges and agrees with the holders of
bonds issued under this section that the state will not limit or
alter the rights vested in Special School District No. 1,
Minneapolis, to fulfill the terms of any agreements made with
the bondholders or in any way impair the rights and remedies of
the holders until the bonds, together with interest on them,
with interest on any unpaid installments of interest, and all
costs and expenses in connection with any action or proceeding
by or on behalf of the bondholders, are fully met and
discharged. The district may include this pledge and agreement
of the state in any agreement with the holders of bonds issued
under this section.
new text end

new text begin Subd. 8. new text end

new text begin Not net debt. new text end

new text begin Bonds ended under this section
not in default shall not be deemed net debt under any law
limiting indebtedness.
new text end

new text begin Subd. 9. new text end

new text begin Certification and budget request. new text end

new text begin (a) To ensure
the payment of the principal of and interest on bonds issued
under this section, the superintendent of schools of Special
School District No. 1, Minneapolis, shall annually determine and
certify to the governor, on or before December 1, the following
amounts:
new text end

new text begin (1) the amount then needed to pay unpaid debt service on
the bonds currently due and payable;
new text end

new text begin (2) the amount of any state aids used to pay debt service
on the bonds pursuant to this section; and
new text end

new text begin (3) the amount required to pay debt service on the bonds
during the then-current fiscal year, less amounts appropriated
and available for debt service pursuant to section 354A.12,
subdivisions 3a and 3b.
new text end

new text begin (b) The legislature shall consider including a separate
line item in the biennial budget for the following fiscal year,
or in a supplemental budget if the biennial budget has
previously been approved, all amounts certified by the
superintendent of schools of Special School District No. 1,
Minneapolis, in accordance with this subdivision.
new text end

new text begin Subd. 10. new text end

new text begin Aid reduction for repayment. new text end

new text begin If the amount
transferred by Special School District No. 1, Minneapolis, to
the paying agent for the bonds is insufficient to pay required
debt service, the paying agent shall notify the commissioner of
finance. The commissioner shall reduce any and all unrestricted
state aids generally available to the school district by the
amount of the deficiency and pay the amounts to the paying agent
for the bonds for the payment of debt service. If the state
aids are reduced pursuant to this subdivision, the district may
levy a tax in the amount of the reduction in state aid.
Notwithstanding any other law to the contrary, no election of
the voters of the district is required for the levy and the levy
is not subject to other levy limitations.
new text end

Sec. 2.

Minnesota Statutes 2004, section 354.05,
subdivision 2, is amended to read:

Subd. 2.

Teacher.

(a) "Teacher" means:

(1) a person who renders service as a teacher, supervisor,
principal, superintendent, librarian, nurse, counselor, social
worker, therapist, or psychologist in a public school of the
state located outside of the corporate limits of deleted text begin a city of the
first class deleted text end new text begin the city of Duluth or the city of St. Paul new text end , or in
any charter school, irrespective of the location of the school,
or in any charitable, penal, or correctional institutions of a
governmental subdivision, or who is engaged in educational
administration in connection with the state public school
system, but excluding the University of Minnesota, whether the
position be a public office or an employment, and not including
the members or officers of any general governing or managing
board or body;

(2) an employee of the Teachers Retirement Association;

(3) new text begin a coordinated member employee of the Minneapolis
Teachers Retirement Fund Association;
new text end

new text begin (4) new text end a person who renders teaching service on a part-time
basis and who also renders other services for a single employing
unit. A person whose teaching service comprises at least 50
percent of the combined employment salary is a member of the
association for all services with the single employing unit. If
the person's teaching service comprises less than 50 percent of
the combined employment salary, the executive director must
determine whether all or none of the combined service is covered
by the association; or

deleted text begin (4) deleted text end new text begin (5) new text end a person who is not covered by the plans
established under chapter 352D, 354A, or 354B and who is
employed by the Board of Trustees of the Minnesota State
Colleges and Universities system in an unclassified position as:

(i) a president, vice-president, or dean;

(ii) a manager or a professional in an academic or an
academic support program other than specified in item (i);

(iii) an administrative or a service support faculty
position; or

(iv) a teacher or a research assistant.

(b) "Teacher" does not mean:

(1) a person who works for a school or institution as an
independent contractor as defined by the Internal Revenue
Service;

(2) a person who renders part-time teaching service or who
is a customized trainer as defined by the Minnesota State
Colleges and Universities system if (i) the service is
incidental to the regular nonteaching occupation of the person;
and (ii) the employer stipulates annually in advance that the
part-time teaching service or customized training service will
not exceed 300 hours in a fiscal year and retains the
stipulation in its records; and (iii) the part-time teaching
service or customized training service actually does not exceed
300 hours in a fiscal year; or

(3) a person exempt from licensure under section 122A.30.

Sec. 3.

Minnesota Statutes 2004, section 354.05,
subdivision 13, is amended to read:

Subd. 13.

Allowable service.

"Allowable service" means:

(1) Any service rendered by a teacher for which on or
before July 1, 1957, the teacher's account in the retirement
fund was credited by reason of employee contributions in the
form of salary deductions, payments in lieu of salary
deductions, or in any other manner authorized by Minnesota
Statutes 1953, sections 135.01 to 135.13, as amended by Laws
1955, chapters 361, 549, 550, 611, or

(2) Any service rendered by a teacher for which on or
before July 1, 1961, the teacher elected to obtain credit for
service by making payments to the fund pursuant to Minnesota
Statutes 1980, section 354.09 and section 354.51, or

(3) Any service rendered by a teacher after July 1, 1957,
for any calendar month when the member receives salary from
which deductions are made, deposited and credited in the fund,
or

(4) Any service rendered by a person after July 1, 1957,
for any calendar month where payments in lieu of salary
deductions are made, deposited and credited into the fund as
provided in Minnesota Statutes 1980, section 354.09, subdivision
4, and section 354.53, or

(5) Any service rendered by a teacher for which the teacher
elected to obtain credit for service by making payments to the
fund pursuant to Minnesota Statutes 1980, section 354.09,
subdivisions 1 and 4, sections 354.50, 354.51, Minnesota
Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes
1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973
Supplement, section 354.09, subdivision 3, or

(6) Both service during years of actual membership in the
course of which contributions were currently made and service in
years during which the teacher was not a member but for which
the teacher later elected to obtain credit by making payments to
the fund as permitted by any law then in effect, or

(7) Any service rendered where contributions were made and
no allowable service credit was established because of the
limitations contained in Minnesota Statutes 1957, section
135.09, subdivision 2, as determined by the ratio between the
amounts of money credited to the teacher's account in a fiscal
year and the maximum retirement contribution allowable for that
year, or

(8) MS 2002 (Expired)

(9) A period of time during which a teacher who is a state
employee was on strike without pay, not to exceed a period of
one year, if the teacher makes a payment in lieu of salary
deductions or makes a prior service credit purchase payment,
whichever applies. If the payment is made within 12 months, the
payment by the teacher must be an amount equal to the employee
and employer contribution rates set forth in section 354.42,
subdivisions 2 and 3, applied to the teacher's rate of salary in
effect on the conclusion of the strike for the period of the
strike without pay, plus compound interest at a monthly rate of
0.71 percent from the last day of the strike until the date of
payment. If the payment by the employee is not made within 12
months, the payment must be in an amount equal to the payment
amount determined under section 356.55 or 356.551, whichever
applies new text begin , or
new text end

new text begin (10) A period of service prior to July 1, 2005, rendered by
a coordinated member teacher as an employee of Special School
District No. 1, Minneapolis, or a coordinated member employee of
the Minneapolis Teachers Retirement Fund Association, who was a
member of the Minneapolis Teachers Retirement Fund Association
by virtue of that employment, who has not begun receiving an
annuity or other retirement benefit from the former Minneapolis
Teachers Retirement Fund Association calculated in whole or in
part on that service before July 1, 2005, and who has not taken
a refund of member contributions related to that service unless
the refund is repaid under section 354.50, subdivision 4 new text end .

Sec. 4.

Minnesota Statutes 2004, section 354.42,
subdivision 2, is amended to read:

Subd. 2.

Employee.

new text begin (a) new text end The employee contribution to the
fund is an amount equal to new text begin the following percentage of the
salary of a member:
new text end

new text begin (1) after July 1, 2005, for a teacher employed by Special
School District No. 1, Minneapolis, 5.0 percent if the teacher
is a coordinated member;
new text end

new text begin (2) for every other teacher, new text end 5.0 percent deleted text begin of deleted text end new text begin if new text end the deleted text begin salary
of every deleted text end new text begin teacher is a new text end coordinated member and 9.0 percent deleted text begin of deleted text end new text begin if
new text end the deleted text begin salary of every deleted text end new text begin teacher is a new text end basic member.

new text begin (b) new text end This contribution must be made by deduction from
salary. Where any portion of a member's salary is paid from
other than public funds, the member's employee contribution must
be based on the entire salary received.

Sec. 5.

Minnesota Statutes 2004, section 354.42,
subdivision 3, is amended to read:

Subd. 3.

Employer.

new text begin (a) The employer contribution to the
fund by Special School District No. 1, Minneapolis, is an amount
equal to 5.0 percent of the salary of each of its teachers who
is a coordinated member.
new text end

new text begin (b) new text end The employer contribution to the fund new text begin for every other
employer new text end is an amount equal to 5.0 percent of the salary of each
coordinated member and 9.0 percent of the salary of each basic
member.

Sec. 6.

new text begin [354.70] CONSOLIDATION OF THE MINNEAPOLIS
TEACHERS RETIREMENT FUND ASSOCIATION COORDINATED PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Membership transfer. new text end

new text begin All active,
inactive, and retired members of the Minneapolis Teachers
Retirement Fund Association coordinated program established
under section 354A.30 are transferred to the Teachers Retirement
Association and are no longer members of the Minneapolis
Teachers Retirement Fund Association as of the effective date of
this section.
new text end

new text begin Subd. 2. new text end

new text begin Tra membership. new text end

new text begin A person first hired as a
teacher by Special School District No. 1, Minneapolis, after the
effective date of this section and who is a teacher as defined
in section 354.05, subdivision 2, is a member of the Teachers
Retirement Association for the person's teaching service.
new text end

new text begin Subd. 3. new text end

new text begin Service credit and liability transfer. new text end

new text begin All
allowable service and salary credit of the members and other
individuals transferred under subdivision 1 as specified in the
records of the Minneapolis Teachers Retirement Fund Association
on the transfer date is allowable service credit under section
354.05, subdivision 13, formula service credit under section
354.05, subdivision 25, and salary credit under section 354.05,
subdivision 35, for the Teachers Retirement Association.
new text end

new text begin Subd. 4. new text end

new text begin Transfer of records. new text end

new text begin On or before December 31,
2006, the chief administrative officer of the Minneapolis
Teachers Retirement Fund Association shall effect a transfer of
all records and documents relating to the funds and the benefit
plans of the association to the executive director of the
Teachers Retirement Association. To the extent possible,
original copies of all records and documents must be transferred.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of assets. new text end

new text begin (a) On December 31, 2005,
the chief administrative officer of the Minneapolis Teachers
Retirement Fund Association shall transfer to the Teachers
Retirement Association an amount equal to the market value
liabilities of the coordinated annuitants as of June 30, 2005,
calculated by the actuary hired according to section 356.214.
These liabilities must be transferred at the market value funded
level of the Teachers Retirement Association on June 30, 2005.
new text end

new text begin (b) As of January 1, 2006, subject to the authority of the
State Board of Investment, the board of directors of the
Teachers Retirement Association has legal title to and
management responsibility for any transferred assets under this
subdivision as trustees for any person having a beneficial
interest in the coordinated program of the Minneapolis Teachers
Retirement Fund Association. The Board of Trustees of the
Minneapolis Teachers Retirement Fund Association shall retain
legal title and management responsibilities for the assets of
the basic program. The Teachers Retirement Association is the
successor in interest for all claims for and against the former
coordinated program of the Minneapolis Teachers Retirement Fund
Association with respect to the retirement fund association,
except a claim against the Minneapolis Teachers Retirement Fund
Association or any person connected with the fund association in
a fiduciary capacity, based on any act or acts by that person
which were not done in good faith and which constituted a breach
of the obligation of the person as a fiduciary. As the
successor in interest, the Teachers Retirement Association may
assert any applicable defense in any judicial proceeding which
the board of the Minneapolis Teachers Retirement Fund
Association would have otherwise been entitled to assert
relating to the coordinated program.
new text end

new text begin (c) From the assets of the Minneapolis Teachers Retirement
Fund Association coordinated program transferred to the Teachers
Retirement Association, an amount equal to the market value
liabilities calculated on June 30, 2005, of the coordinated
program annuitants, must be transferred to the Minnesota
postretirement investment fund.
new text end

new text begin Subd. 6. new text end

new text begin Benefit calculation. new text end

new text begin (a) For every deferred,
inactive, disabled, and retired coordinated member of the
Minneapolis Teachers Retirement Fund Association transferred
under subdivision 1, and the survivors of these members,
annuities or benefits earned before the date of transfer, other
than future postretirement adjustments, must be calculated and
paid by the Teachers Retirement Association under the
Minneapolis Teachers Retirement Fund Association laws that were
in effect relative to the person on the date of the person's
termination of active service covered by the Minneapolis
Teachers Retirement Fund Association.
new text end

new text begin (b) Retired former Minneapolis Teachers Retirement Fund
Association coordinated members must receive postretirement
adjustments after December 31, 2005, as provided in section
11A.18. All other benefit recipients of the former Minneapolis
Teachers Retirement Fund Association must receive postretirement
adjustments after December 31, 2005, as provided in section
356.41.
new text end

Sec. 7.

new text begin [354.75] MINNEAPOLIS EMPLOYEES RETIREMENT FUND
APPROPRIATION REDEDICATED.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin The amount appropriated in
Laws 2003, First Special Session chapter 1, article 1, section
27, for the financial requirements of the Minneapolis Employees
Retirement Fund under section 422A.101, subdivision 3, is
annually appropriated from the general fund to the commissioner
of finance for deposit in the Minneapolis Teachers Retirement
Fund Association to offset all or a portion of the current and
future unfunded pension liability of the Minneapolis Teachers
Retirement Fund Association basic program.
new text end

new text begin Subd. 2. new text end

new text begin Financial requirements. new text end

new text begin The appropriation in
subdivision 1 is available to the extent that financial
requirements of the Minneapolis Employees Retirement Fund under
section 422A.101, subdivision 3, have been satisfied.
new text end

Sec. 8.

new text begin [354.76] COVERAGE BY TEACHERS RETIREMENT
ASSOCIATION.
new text end

new text begin Notwithstanding any other law to the contrary, any person
whose employment by the Minneapolis Teachers Retirement Fund
Association initially commences on or after July 1, 2005, shall
be a member of the Teachers Retirement Association. In no event
shall there be any new members of the contributing class of the
Minneapolis Teachers Retirement Fund Association on or after
July 1, 2005.
new text end

Sec. 9.

Minnesota Statutes 2004, section 354A.12,
subdivision 3b, is amended to read:

Subd. 3b.

Special direct state matching aid to the
minneapolis teachers retirement fund association.

(a) Special
School District No. 1 deleted text begin may deleted text end new text begin must new text end make an additional employer
contribution to the Minneapolis Teachers Retirement Fund
Association. The city of Minneapolis deleted text begin may deleted text end new text begin must new text end make a
contribution to the Minneapolis Teachers Retirement Fund
Association. This contribution deleted text begin may deleted text end new text begin must new text end be made by a levy of
the board of estimate and taxation of the city of Minneapolis
and the levy, if made, is classified as that of a special taxing
district for purposes of sections 275.065 and 276.04, and for
all other property tax purposes.

(b) For every $1,000 contributed in equal proportion by
Special School District No. 1 and by the city of Minneapolis to
the Minneapolis Teachers Retirement Fund Association under
paragraph (a), the state shall pay to the Minneapolis Teachers
Retirement Fund Association $1,000, but not to exceed $2,500,000
in total in fiscal year 1994. The superintendent of Special
School District No. 1, the mayor of the city of Minneapolis, and
the executive director of the Minneapolis Teachers Retirement
Fund Association shall jointly certify to the commissioner of
finance the total amount that has been contributed by Special
School District No. 1 and by the city of Minneapolis to the
Minneapolis Teachers Retirement Fund Association. Any
certification to the commissioner of education must be made
quarterly. If the total certifications for a fiscal year exceed
the maximum annual direct state matching aid amount in any
quarter, the amount of direct state matching aid payable to the
Minneapolis Teachers Retirement Fund Association must be limited
to the balance of the maximum annual direct state matching aid
amount available. The amount required under this paragraph,
subject to the maximum direct state matching aid amount, is
appropriated annually to the commissioner of finance.

(c) The commissioner of finance may prescribe the form of
the certifications required under paragraph (b).

Sec. 10.

Minnesota Statutes 2004, section 354A.23, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Minneapolis teachers retirement fund
association postconsolidation funding. new text end

new text begin (a) After the
consolidation of the Minneapolis Teachers Retirement Fund
Association coordinated program and after all funds available to
the association to pay basic member benefits and administrative
expenses have been exhausted, basic member benefits and
administrative expenses will be funded under the terms of this
subdivision.
new text end

new text begin (b) Annually, the board of trustees of the Minneapolis
Teachers Retirement Fund Association shall certify to the
commissioner of finance the amount necessary to pay basic member
benefits and administrative expenses for the following year.
The commissioner of finance shall then deduct one-third of the
certified amount from the local government aid payment made to
the city of Minneapolis and one-third of the certified amount
from education aid payments made to Special School District No.
1, Minneapolis, and remit the funds to the Minneapolis Teachers
Retirement Fund Association. One-third of the certified amount
is appropriated annually from the general fund of the state of
Minnesota to the commissioner of finance for transfer to the
Minneapolis Teachers Retirement Fund Association.
new text end

new text begin (c) Any postretirement increases provided to basic members
of the Minneapolis Teachers Retirement Fund Association must not
exceed five percent per year.
new text end

Sec. 11.

Minnesota Statutes 2004, section 423A.02,
subdivision 1b, is amended to read:

Subd. 1b.

Additional amortization state aid.

(a)
Annually, on October 1, the commissioner of revenue shall
allocate the additional amortization state aid transferred under
section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations
governed by and in full compliance with the requirements of
section 69.77, that had an unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and
356.216 as of the preceding December 31;

(2) all local police or salaried firefighter consolidation
accounts governed by chapter 353A that are certified by the
executive director of the public employees retirement
association as having for the current fiscal year an additional
municipal contribution amount under section 353A.09, subdivision
5, paragraph (b), and that have implemented section 353A.083,
subdivision 1, if the effective date of the consolidation
preceded May 24, 1993, and that have implemented section
353A.083, subdivision 2, if the effective date of the
consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an
additional municipal contribution under section 353.665,
subdivision 8, for the duration of the required additional
contribution.

(b) The commissioner shall allocate the state aid on the
basis of the proportional share of the relief association or
consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation
accounts as of December 31, 1993, for relief associations, and
as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the
commissioner shall allocate the state aid, including any state
aid in excess of the limitation in subdivision 4, on the
following basis:

(1) 64.5 percent to the municipalities to which section
353.665, subdivision 8, paragraph (b), or 353A.09, subdivision
5, paragraph (b), apply for distribution in accordance with
paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any
unfunded actuarial accrued liability in the actuarial valuation
prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Minneapolis Police Relief Association or the
Minneapolis Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any
unfunded actuarial accrued liability in the actuarial valuation
prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.

If there is no unfunded actuarial accrued liability in both
the Minneapolis Police Relief Association and the Minneapolis
Fire Department Relief Association as disclosed in the most
recent actuarial valuations for the relief associations prepared
under sections 356.215 and 356.216, the commissioner shall
allocate that 34.2 percent of the aid as follows: 49 percent to
the Minneapolis Teachers Retirement Fund Association, 21 percent
to the St. Paul Teachers Retirement Fund Association, and 30
percent as additional funding to support minimum fire state aid
for volunteer firefighters relief associations. If there is no
unfunded actuarial accrued liability in the Virginia Fire
Department Relief Association as disclosed in the most recent
actuarial valuation for the relief association prepared under
sections 356.215 and 356.216, the commissioner shall allocate
that 1.3 percent of the aid as follows: 49 percent to the
Minneapolis Teachers Retirement Fund Association, 21 percent to
the St. Paul Teachers Retirement Fund Association, and 30
percent as additional funding to support minimum fire state aid
for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the
same procedures as specified in subdivision 3. deleted text begin With respect to
the Minneapolis Teachers Retirement Fund Association or the St.
Paul Teachers Retirement Fund Association, annually, beginning
on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does
not equal or exceed the performance of a composite portfolio
assumed passively managed (indexed) invested ten percent in cash
equivalents, 60 percent in bonds and similar debt securities,
and 30 percent in domestic stock calculated using the formula
under section 11A.04, clause (11), the aid allocation to that
retirement fund under this section ceases until the five-year
annual rate of investment return equals or exceeds the
performance of that composite portfolio.
deleted text end

(d) The amounts required under this subdivision are
annually appropriated to the commissioner of revenue.

Sec. 12. new text begin SUCCESSOR FOR CERTAIN STATE AID AMOUNTS.
new text end

new text begin Upon the consolidation of the Minneapolis Teachers
Retirement Fund Association, any state aid payable to the
Minneapolis Teachers Retirement Fund Association under Minnesota
Statutes, sections 354A.12, subdivisions 3a and 3b, and 423A.02,
subdivision 3, becomes payable to Special School District No. 1,
Minneapolis, and may only be expended to pay the debt service on
bonds issued by the school district to defray a portion of the
unfunded accrued liability of the former Minneapolis Teachers
Retirement Fund Association, or if no bonds have been issued,
transferred to the Teachers Retirement Association in addition
to the employer contributions otherwise payable by the school
district.
new text end

Sec. 13. new text begin FULL FUNDING DATE.
new text end

new text begin Notwithstanding any other law to the contrary, for the
Minneapolis Teachers Retirement Fund, the established date for
full funding is 2030.
new text end

Sec. 14. new text begin PROTECTIONS FOR EMPLOYEES.
new text end

new text begin In addition to any other protection, no employee of the
Minneapolis Teachers Retirement Fund Association shall suffer
job loss, have a salary reduced, or have employment benefits
reduced as a result of the reorganization of the association
mandated by this act. No action taken after July 1, 2009, shall
be considered a result of the reorganization of the association
mandated by this act for the purposes of this section.
new text end

Sec. 15. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin (a) If the revisor of statutes can readily determine a
substitute reference for the "Minneapolis Teachers Retirement
Fund Association coordinated program" in Minnesota Statutes,
chapters 354A, 355, 356, 356A, and 423A, in Minnesota Statutes
2006 and subsequent editions, the revisor of statutes shall
substitute the appropriate reference.
new text end

new text begin (b) For references to the "Minneapolis Teachers Retirement
Fund Association coordinated program" in Minnesota Statutes,
chapters 354A, 355, 356, 356A, and 423A, for which the revisor
of statutes is unable to readily determine a substitute
reference, the revisor of statutes shall prepare draft proposed
legislation for introduction during the 2006 legislative session
providing proposed substitute references.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 354A.28, is repealed.
new text end

Sec. 17. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 9 are effective the day following final
enactment. Sections 2 to 8 and 14 are effective July 1, 2005.
new text end