HF 1990

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to retirement; authorizing the voluntary 
  1.3             consolidation of the Hampton and Randolph volunteer 
  1.4             firefighters relief associations. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [DEFINITIONS.] 
  1.7      Subdivision 1.  [GENERALLY.] When used in this act, each of 
  1.8   the following words and phrases has the meanings given in this 
  1.9   section unless the context clearly indicates otherwise. 
  1.10     Subd. 2.  [ASSETS.] "Assets" means the investment 
  1.11  securities and other items of value held by the special fund of 
  1.12  the relief association. 
  1.13     Subd. 3.  [BENEFICIARY.] "Beneficiary" means the natural 
  1.14  person designated by any active, deferred, or retired member of 
  1.15  a consolidating volunteer firefighter relief association as the 
  1.16  recipient of any remainder interest to the credit of the 
  1.17  designating person under the relief association benefit plan 
  1.18  upon the death of the designating person. 
  1.19     Subd. 4.  [BENEFIT PLAN.] "Benefit plan" means that portion 
  1.20  of a pension plan which deals specifically with the service 
  1.21  pension and retirement benefit coverage provided by the 
  1.22  volunteer firefighter relief association, including but not 
  1.23  limited to, the types of coverage, the initial and continuing 
  1.24  eligibility for and entitlement to service pensions and 
  1.25  retirement benefits, and the amount of service pensions and 
  2.1   retirement benefits. 
  2.2      Subd. 5.  [BOARD OF TRUSTEES.] "Board of trustees" means 
  2.3   the managing board of the volunteer firefighters relief 
  2.4   association. 
  2.5      Subd. 6.  [CHIEF ADMINISTRATIVE OFFICER.] "Chief 
  2.6   administrative officer" means the person who has primary 
  2.7   responsibility for the execution of the administrative affairs 
  2.8   of the municipality, in the case of a municipality, or of the 
  2.9   volunteer firefighters relief association in the case of a 
  2.10  volunteer firefighters relief association or the designee of 
  2.11  that person. 
  2.12     Subd. 7.  [DEFERRED MEMBER.] "Deferred member" means a 
  2.13  person who has credit for sufficient service in the volunteer 
  2.14  firefighters relief association to gain entitlement to an 
  2.15  eventual service pension but who has not yet applied for or 
  2.16  started receipt of that service pension. 
  2.17     Subd. 8.  [EFFECTIVE DATE OF THE CONSOLIDATION.] "Effective 
  2.18  date of the consolidation" means the date on which the 
  2.19  consolidation is designated to occur under section 5. 
  2.20     Subd. 9.  [EXISTING RELIEF ASSOCIATION BENEFIT 
  2.21  PLAN.] "Existing relief association benefit plan" means the 
  2.22  benefit plan of the volunteer firefighters relief association in 
  2.23  effect on the day before the initiation of the consolidation 
  2.24  procedure. 
  2.25     Subd. 10.  [MAJORITY VOTE.] "Majority vote" means one-half 
  2.26  of the number of votes cast on the consolidation question, plus 
  2.27  one vote. 
  2.28     Subd. 11.  [MEMBERSHIP OF THE VOLUNTEER FIREFIGHTERS RELIEF 
  2.29  ASSOCIATION.] "Membership of the volunteer firefighters relief 
  2.30  association" means the active, deferred, disabled, and retired 
  2.31  members and the survivors of the active, deferred, disabled, and 
  2.32  retired members of the volunteer firefighters relief 
  2.33  association, to the extent that the category is eligible to 
  2.34  receive a pension or benefit under the benefit plan of the 
  2.35  relief association. 
  2.36     Subd. 12.  [MINIMUM REQUIRED PROPORTION OF RELIEF 
  3.1   ASSOCIATION MEMBERSHIP.] "Minimum required proportion of relief 
  3.2   association membership" means 20 percent of the membership of 
  3.3   the volunteer firefighters relief association. 
  3.4      Subd. 13.  [OTHER ITEMS OF VALUE.] "Other items of value" 
  3.5   means any real property, personal property, or interest in real 
  3.6   or personal property not evidenced by or appropriately 
  3.7   characterized as a security as that term is defined by Minnesota 
  3.8   Statutes, section 524.1-201, clause (43). 
  3.9      Subd. 14.  [PUBLIC HEARING.] "Public hearing" means a 
  3.10  meeting held by the board of trustees of the volunteer 
  3.11  firefighters relief association or the governing body of the 
  3.12  municipality in which the relief association is located, 
  3.13  whichever applies, in a place and at a time accessible to 
  3.14  members of the general public, which is reasonably calculated to 
  3.15  allow for participation by all affected interest, for which 
  3.16  proper notice has been given and at which the views of the 
  3.17  general public may be heard. 
  3.18     Subd. 15.  [REFERENDUM.] "Referendum" means a vote of the 
  3.19  total membership of a relief association on the question of the 
  3.20  consolidation of two or more volunteer firefighters relief 
  3.21  associations that occurs upon the initiation of the 
  3.22  consolidation and is conducted through the use of a secret, 
  3.23  written ballot in accordance with procedures established by the 
  3.24  board of trustees of the volunteer firefighters relief 
  3.25  association for the issuance and collection of ballots. 
  3.26     Subd. 16.  [STATE BOARD OF INVESTMENT.] "State board of 
  3.27  investment" means the state board of investment established by 
  3.28  article XI, section 8, of the Minnesota Constitution and 
  3.29  operating under Minnesota Statutes, chapter 11A. 
  3.30     Subd. 17.  [SURVIVOR.] "Survivor" means the person who has 
  3.31  or the persons who have, as of the death of the active, 
  3.32  deferred, or retired member of the volunteer firefighters relief 
  3.33  association, the relationship to the member of the legally 
  3.34  married spouse or a dependent minor child as defined or 
  3.35  specified by the benefit plan of the volunteer firefighters 
  3.36  relief association. 
  4.1      Sec. 2.  [VOLUNTARY CONSOLIDATION OPTION.] 
  4.2      Notwithstanding any provision of law to the contrary, the 
  4.3   Hampton and Randolph volunteer firefighters relief associations 
  4.4   may consolidate to form a consolidated volunteer firefighters 
  4.5   relief association. 
  4.6      Sec. 3.  [PROCESSING THE CONSOLIDATION QUESTION.] 
  4.7      Subdivision 1.  [BOARD OF TRUSTEE RESPONSE.] The board of 
  4.8   trustees of each volunteer firefighter relief association shall 
  4.9   hold a public hearing on the consolidation issue and shall 
  4.10  formulate and adopt a board resolution setting forth its 
  4.11  recommendation to the remainder of the volunteer firefighters 
  4.12  relief association membership and to the applicable municipality 
  4.13  on the consolidation issue and setting forth the procedure for a 
  4.14  membership referendum on the consolidation question under 
  4.15  subdivision 2.  The board of trustees resolution must be adopted 
  4.16  at the next regular scheduled meeting following the public 
  4.17  hearing.  The resolution of the board of trustees must be filed 
  4.18  with the chief administrative officer of the applicable 
  4.19  municipality or municipalities, filed with the chief 
  4.20  administrative officers of the other volunteer firefighters 
  4.21  relief association to which the consolidation question also 
  4.22  applies, and made generally available to the membership of the 
  4.23  volunteer firefighters relief association. 
  4.24     Subd. 2.  [MEMBERSHIP REFERENDUM PROCEDURE.] (a) The 
  4.25  resolution of the board of trustees of each volunteer 
  4.26  firefighters relief association setting forth the membership 
  4.27  referendum procedure must provide for a referendum by the 
  4.28  membership of each relief association. 
  4.29     (b) The referendum must be conducted by a secret written 
  4.30  ballot in a manner agreeable to the chief administrative officer 
  4.31  of the relief association and the mayor of each municipality. 
  4.32     (c) The resolution must specify the language of the 
  4.33  referendum question, the time and place for the referendum, the 
  4.34  procedure for referendum balloting, and the form and content of 
  4.35  any informational or explanatory materials that may be 
  4.36  distributed with the referendum ballot. 
  5.1      (d) Approval or disapproval of the consolidation question 
  5.2   must be determined by majority vote. 
  5.3      (e) A ballot must be provided to each relief association 
  5.4   member and each relief association member is entitled to one 
  5.5   vote.  
  5.6      Subd. 3.  [TIME LIMIT FOR APPROVAL; MUNICIPAL 
  5.7   CONSIDERATION.] (a) The referendum must be conducted within 30 
  5.8   days of the passage of the resolution under subdivision 1. 
  5.9      (b) If the referendum results in membership approval of the 
  5.10  consolidation question in both the Hampton and Randolph 
  5.11  volunteer firefighters relief associations, the governing bodies 
  5.12  of Hampton and Randolph must approve or disapprove the 
  5.13  consolidation question by governing body resolution within two 
  5.14  months of the date of the last membership referendum. 
  5.15     Subd. 4.  [IMPACT OF DISAPPROVAL.] If the consolidation 
  5.16  question is disapproved or a time limit expires, no 
  5.17  consolidation question may be initiated until after January 1 of 
  5.18  the next calendar year following the date of the disapproval or 
  5.19  the time limit expiration. 
  5.20     Subd. 5.  [APPROVAL OR DISAPPROVAL CERTIFICATION.] (a) Upon 
  5.21  action on the consolidation question by the membership 
  5.22  referendum or by the municipality to approve or disapprove, the 
  5.23  result of that action must be certified by the chief 
  5.24  administrative officer of the acting entity to all other 
  5.25  applicable entities. 
  5.26     (b) If the volunteer firefighters relief association 
  5.27  consolidation is approved, the chief administrative officer of 
  5.28  each consolidating volunteer firefighters relief association 
  5.29  must notify the secretary of state, the commissioner of revenue, 
  5.30  and the state auditor of that consolidation. 
  5.31     Sec. 4.  [PRECONSOLIDATION REQUIRED ACTIVITIES.] 
  5.32     Subdivision 1.  [JOINT RELIEF ASSOCIATION BOARD 
  5.33  ACTIONS.] If the consolidation question is approved by both 
  5.34  volunteer firefighters relief associations and by both affected 
  5.35  municipalities, the board of trustees of the volunteer 
  5.36  firefighters relief associations or representatives of the 
  6.1   volunteer firefighters relief association boards of trustees, 
  6.2   duly selected for this purpose, must meet jointly and undertake 
  6.3   the following: 
  6.4      (1) establish the effective date for the relief association 
  6.5   consolidation; 
  6.6      (2) designate the incorporators of the consolidation 
  6.7   volunteer firefighters relief association; 
  6.8      (3) determine the amount of future service pension and 
  6.9   other benefit coverage to be provided by the consolidated 
  6.10  volunteer firefighters relief association, which must be 
  6.11  consistent with chapter 424A; and 
  6.12     (4) adopt the applicable articles of incorporation and 
  6.13  bylaws. 
  6.14     Subd. 2.  [INDIVIDUAL RELIEF ASSOCIATION ACTIONS.] If the 
  6.15  consolidation question is approved by the two volunteer 
  6.16  firefighters relief associations and by the affected 
  6.17  municipalities, the board of trustees of each affected volunteer 
  6.18  firefighters relief association must undertake the following: 
  6.19     (1) direct the chief administrative officer of the 
  6.20  volunteer firefighters relief association to assemble the books 
  6.21  and records of the relief association and, if necessary, update 
  6.22  those books and records; 
  6.23     (2) direct the chief administrative officer of the relief 
  6.24  association to calculate the liability and funding requirements 
  6.25  under Minnesota Statutes, section 69.772, as of the established 
  6.26  effective date of the relief association consolidation; 
  6.27     (3) direct that the current market value of all investment 
  6.28  securities and other assets and items of value be determined if 
  6.29  the security, asset, or item has a readily identifiable market 
  6.30  value, and if not, direct the chief administrative officer of 
  6.31  the relief association to liquidate the asset; 
  6.32     (4) direct the chief administrative officer of the 
  6.33  volunteer firefighters relief association to invest future net 
  6.34  income to the special fund in cash equivalent investment 
  6.35  securities or other short-term debt investments with a maturity 
  6.36  that does not exceed the period remaining until the established 
  7.1   effective date for relief association consolidation; and 
  7.2      (5) direct the chief administrative officer of the 
  7.3   volunteer firefighters relief association to identify the 
  7.4   accounts receivable and assess their prospects for payment or 
  7.5   liquidation. 
  7.6      Subd. 3.  [DISPOSITION OF CERTAIN ASSETS.] (a) If there is 
  7.7   a relief association asset without a readily identifiable market 
  7.8   value that is not able to be liquidated in a timely fashion for 
  7.9   an amount equal or greater than its book value as of the 
  7.10  initiation of the consolidation question, the municipality or 
  7.11  independent nonprofit firefighting corporation, whichever 
  7.12  applies, must transfer cash to the relief association's special 
  7.13  fund equal to that book value.  Upon the transfer of cash, the 
  7.14  applicable municipality or independent nonprofit firefighting 
  7.15  corporation becomes the owner of the affected asset. 
  7.16     (b) Accounts receivable without a high assessed prospect 
  7.17  for payment or liquidation by the established effective date for 
  7.18  relief association consolidation may not be included in the 
  7.19  ascertained value of the assets of the special fund of the 
  7.20  relief association.  The successor consolidated volunteer 
  7.21  firefighter relief association retains ownership of the accounts 
  7.22  receivable after consolidation. 
  7.23     Sec. 5.  [CONSOLIDATION PROCEDURES.] 
  7.24     Subdivision 1.  [ARTICLES OF INCORPORATION AND BYLAWS.] (a) 
  7.25  Before the established effective date of the consolidation, the 
  7.26  officers of the consolidating volunteer firefighters relief 
  7.27  associations must incorporate the new consolidated volunteer 
  7.28  firefighters relief association under Minnesota Statutes, 
  7.29  chapters 317A, 422A, and this act.  Three representatives from 
  7.30  each consolidating volunteer firefighters relief association are 
  7.31  the incorporators of the new consolidated volunteer firefighters 
  7.32  relief association. 
  7.33     (b) The incorporators of the new consolidated volunteer 
  7.34  firefighters relief association must adopt articles of 
  7.35  incorporation and bylaws for the relief association. 
  7.36     Subd. 2.  [GOVERNANCE.] (a) The incorporators of the 
  8.1   consolidated volunteer firefighters relief association shall 
  8.2   function as the board of trustees of the relief association 
  8.3   until the board of trustees under paragraph (b) is assembled. 
  8.4      (b) The composition of the board of trustees of the 
  8.5   consolidated volunteer firefighters relief association must 
  8.6   comply with Minnesota Statutes, section 424A.04, except that: 
  8.7      (1) the mayors of the respective municipalities are not ex 
  8.8   officio members of the board; 
  8.9      (2) the chief finance person of each applicable 
  8.10  municipality or independent nonprofit firefighting corporation 
  8.11  is an ex officio member of the board; 
  8.12     (3) the fire chief of each applicable fire department is an 
  8.13  ex officio member of the board; and 
  8.14     (4) the active membership of the relief association 
  8.15  representation is equal to the number of ex officio members of 
  8.16  the board, elected by the active membership to three-year terms, 
  8.17  which must be staggered. 
  8.18     (c) The officers of the consolidated volunteer firefighters 
  8.19  relief association must be elected by the membership, are not 
  8.20  required to be board of trustee members, and may be ex officio 
  8.21  members of the board of trustees. 
  8.22     Subd. 3.  [RELIEF ASSOCIATION ADMINISTRATION.] (a) On the 
  8.23  established date for relief association consolidation, the 
  8.24  administration of the consolidated relief association is the 
  8.25  responsibility of the consolidated relief association board of 
  8.26  trustees and officers. 
  8.27     (b) The secretary of each consolidating volunteer 
  8.28  firefighters relief association must transfer all books and 
  8.29  records of the consolidating relief association to the secretary 
  8.30  of the consolidated relief association as soon as is practicable 
  8.31  following the established effective date for consolidation.  The 
  8.32  treasurer of each consolidating volunteer firefighters relief 
  8.33  association must transfer the entire assets of the consolidating 
  8.34  relief association to the consolidated volunteer firefighters 
  8.35  relief association as soon as is practicable following the 
  8.36  established effective date for consolidation, with the special 
  9.1   fund assets kept separate from the general fund. 
  9.2      (c) As of the established effective date for consolidation, 
  9.3   legal title for all assets of the applicable consolidating 
  9.4   volunteer firefighters relief association is vested in the board 
  9.5   of trustees of the consolidated volunteer firefighters relief 
  9.6   association which has management responsibility for any 
  9.7   transferred assets as trustees for any person having a 
  9.8   beneficial interest arising out of benefit coverage provided by 
  9.9   the consolidating volunteer firefighters relief association or 
  9.10  by the consolidated volunteer firefighters relief association. 
  9.11     (d) The consolidated volunteer firefighters relief 
  9.12  association is the successor in interest for all claims for and 
  9.13  against the consolidating volunteer firefighters relief 
  9.14  association, except for claims against the consolidating relief 
  9.15  association or any person connected with the consolidating 
  9.16  relief association in a fiduciary capacity, based on any act or 
  9.17  acts that were not done in good faith and which constituted a 
  9.18  breach of fiduciary obligation.  As a successor in interest, the 
  9.19  consolidated volunteer firefighters relief association may 
  9.20  assert all applicable defenses in any judicial proceeding that 
  9.21  the board of the consolidating volunteer firefighters relief 
  9.22  association would otherwise have been entitled to assist. 
  9.23     Sec. 6.  [TERMINATION OF CONSOLIDATING RELIEF 
  9.24  ASSOCIATIONS.] 
  9.25     Upon the transfer of records and assets of the 
  9.26  consolidating volunteer firefighters relief association to the 
  9.27  consolidated volunteer firefighters relief association, the 
  9.28  consolidating relief association ceases to exist as a legal 
  9.29  entity. 
  9.30     Sec. 7.  [FUTURE BENEFIT COVERAGE UNDER THE CONSOLIDATED 
  9.31  RELIEF ASSOCIATION.] 
  9.32     Unless the board of trustees, with municipal approval, 
  9.33  provides otherwise in the articles of incorporation or bylaws of 
  9.34  the consolidated volunteer firefighters relief association, the 
  9.35  future service pension rate and other relevant benefit coverage 
  9.36  provisions are those in effect for the applicable individual on 
 10.1   the day before the established effective date for consolidation 
 10.2   if the person was a volunteer firefighter covered by a 
 10.3   consolidating volunteer firefighters relief association on that 
 10.4   date or the average rate or coverage provisions on the 
 10.5   established effective date for consolidation if the person was 
 10.6   not a volunteer firefighter covered by a consolidating volunteer 
 10.7   firefighters relief association on that date. 
 10.8      Sec. 8.  [FUTURE INVESTMENT AUTHORITY.] 
 10.9      The consolidated volunteer firefighters relief association 
 10.10  special fund portfolio may be invested by or on behalf of the 
 10.11  board of trustees of the relief association, in accord with the 
 10.12  applicable provisions of Minnesota Statutes, sections 356A.04, 
 10.13  356A.05, and 356A.06. 
 10.14     Sec. 9.  [STATUS OF MUNICIPAL CONTRIBUTION.] 
 10.15     A municipal contribution to the consolidated volunteer 
 10.16  firefighters relief association is not to be considered to be an 
 10.17  obligation under chapter 475. 
 10.18     Sec. 10.  [EFFECTIVE DATE.] 
 10.19     Sections 1 to 9 are effective the day following final 
 10.20  enactment, provided that the final consolidation may occur only 
 10.21  after approval of the city councils of both the city of Hampton 
 10.22  and the city of Randolph, and in compliance with Minnesota 
 10.23  Statutes, section 645.021, subdivision 3.