HF 44

1st Engrossment - 84th Legislature, 2005 1st Special Session (2005 - 2005) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; various public pension plans;
clarifying and revising various plan provisions;
eliminating obsolete provisions; defining average
salary; modifying the definition of allowable service
to include time on strike; defining covered salary to
include certain employer contributions to supplemental
retirement plans; specifying itemized detail of plan
administrative expenses in annual financial reporting;
excluding police officers of the University of
Minnesota from the public employees police and fire
fund; clarifying collection procedures relating to
charter schools; adding a uniform nonassignment and
legal process exemption provision; providing for
various member and employer contribution rate
increases; adding employees of Bridges Medical
Services, Hutchinson Area Health Care, and Northfield
Hospital to privatization coverage; extending date for
filing special law approval with the secretary of
state for the RenVilla Nursing Home; requiring the
privatization periodic filing of updated copies of
articles of incorporation and bylaws; modifying a
higher education individual retirement account plan
investment option provision; implementing the
recommendations of the Volunteer Firefighter Relief
Association working group of the state auditor;
modifying the trigger date for filing financial
reports; revising the per firefighter financing
requirements for monthly benefit service pensions;
modifying the options for crediting interest on
deferred service pensions; clarifying the deferred
service pension options available to defined
contribution plans; providing for the crediting of
service during military service leaves; requiring the
amortization of experience losses; clarifying the
compliance requirements for the qualification for fire
state aid; modifying a limit on mutual fund
investments; clarifying corporate stock and exchange
traded funds investment authority; modifying the
municipal representation requirements on relief
association governing boards; clarifying exemptions
from process and taxation; providing that certain laws
do not apply to the consolidation of specified
volunteer firefighter relief associations; providing
an ad hoc postretirement adjustment to Eveleth police
and fire trust fund benefit recipients; authorizing
the Maplewood Firefighters Relief Association to
transfer assets to the Oakdale Firefighters Relief
Association to cover service credits earned by certain
individuals; appropriating money; amending Minnesota
Statutes 2004, sections 3A.13; 69.011, subdivision 2b,
by adding a subdivision; 69.021, subdivisions 5, 11;
69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision
4; 69.771; 69.772, subdivisions 3, 4; 69.773,
subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4,
5, 12, 13, 21, 23, by adding a subdivision; 352.021,
subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12;
352.041, subdivisions 1, 2, 3, 5; 352.115,
subdivisions 2, 3; 352.15, subdivisions 1, 3, 4;
352.22, subdivision 10; 352.87, subdivision 3; 352.91,
by adding a subdivision; 352.93, subdivision 1;
352B.01, subdivisions 1, 2, 3, 11; 352B.02,
subdivision 1e; 352B.071; 352C.021, by adding a
subdivision; 352D.01; 352D.015, subdivisions 3, 4;
352D.03; 352D.05, subdivision 4; 352D.085, subdivision
1; 352D.09, subdivision 5; 352D.12; 353.01,
subdivisions 6, 10, 14, 32, 33, by adding a
subdivision; 353.025; 353.026; 353.027; 353.028;
353.14; 353.15, subdivisions 1, 3; 353.27,
subdivisions 2, 3, 3a, 11, by adding a subdivision;
353.271; 353.28, subdivisions 5, 6; 353.29,
subdivision 3; 353.31, subdivision 1c; 353.32,
subdivision 9; 353.33, subdivisions 3, 12; 353.64, by
adding a subdivision; 353.65, subdivisions 2, 3;
353.651, subdivision 3; 353.656, subdivision 1;
353B.02, subdivision 10; 353F.02, subdivision 4;
354.05, subdivisions 7, 35, by adding a subdivision;
354.091; 354.094, subdivision 1; 354.10, subdivisions
1, 3, 4; 354.33, subdivision 5; 354.39; 354.41,
subdivision 2; 354.42, by adding a subdivision;
354.44, subdivisions 2, 6; 354A.011, subdivisions 3a,
24, by adding a subdivision; 354A.021, subdivision 5,
by adding a subdivision; 354A.097, subdivision 1;
354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions
2, 3; 354B.25, subdivision 2; 356.20, subdivision 4;
356.215, subdivision 8; 356.216; 356.47, subdivision
3; 356.551; 356.611, subdivision 1; 356A.06,
subdivision 7; 383B.46, subdivision 2; 383B.47;
383B.48; 383B.49; 422A.01, subdivisions 6, 11, by
adding subdivisions; 422A.06, subdivision 7; 422A.10,
subdivisions 1, 2; 422A.15, subdivision 1; 422A.16,
subdivision 9; 422A.22, subdivisions 1, 3, 4, 6;
422A.231; 422A.24; 423B.01, by adding a subdivision;
423B.05, subdivision 3; 423B.09, subdivision 1, by
adding a subdivision; 423B.10, subdivision 1; 423B.17;
423C.01, by adding a subdivision; 423C.05, subdivision
2; 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04,
subdivision 1; 424B.10, subdivision 1; 471A.10;
490.121, subdivisions 4, 20, 21, by adding a
subdivision; 490.126, subdivision 5; Laws 1999,
chapter 222, article 16, section 16, as amended; Laws
2000, chapter 461, article 4, section 4, as amended;
Laws 2004, chapter 267, article 12, section 4;
proposing coding for new law in Minnesota Statutes,
chapters 356; 383B; 423C; 424A; repealing Minnesota
Statutes 2004, sections 352.119, subdivision 1;
352.15, subdivision 1a; 352C.031, subdivision 3;
353.15, subdivision 2; 353.29, subdivision 2; 353.34,
subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c;
353.46, subdivision 4; 353.651, subdivision 2;
353.663; 353.74; 353.75; 354.10, subdivision 2;
354.59; 422A.22, subdivisions 2, 5; 422A.221.

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

2005 OMNIBUS RETIREMENT BILL

ARTICLE 1

COVERED SALARY; AVERAGE SALARY

Section 1.

Minnesota Statutes 2004, section 352.01,
subdivision 13, is amended to read:

Subd. 13.

Salary.

(a) new text beginSubject to the limitations of
section 356.611, new text end"salary" means wages, or other periodic
compensation, paid to an employee before deductions for deferred
compensation, supplemental retirement plans, or other voluntary
salary reduction programs.

(b) "Salary" does not include:

(1) lump sum sick leave payments;

(2) severance payments;

(3) lump sum annual leave payments and overtime payments
made at the time of separation from state service;

(4) payments in lieu of any employer-paid group insurance
coverage, including the difference between single and family
rates that may be paid to an employee with single coverage;

(5) payments made as an employer-paid fringe benefit;

(6) workers' compensation payments;

(7) employer contributions to a deferred compensation or
tax sheltered annuity program; and

(8) amounts contributed under a benevolent vacation and
sick leave donation program.

(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.

Sec. 2.

Minnesota Statutes 2004, section 352.01, is
amended by adding a subdivision to read:

new text begin Subd. 14a. new text end

new text begin Average salary. new text end

new text begin (a) "Average salary" means
the average of the highest five successive years of salary upon
which the employee has made contributions to the retirement fund
by payroll deductions. Average salary must be based upon all
allowable service if this service is less than five years.
new text end

new text begin (b) "Average salary" does not include the payment of
accrued unused annual leave or overtime paid at time of final
separation from state service if paid in a lump sum nor does it
include the reduced salary, if any, paid during the period the
employee is entitled to workers' compensation benefit payments
for temporary disability.
new text end

new text begin (c) For an employee covered by the correctional state
employees retirement plan, "average salary" means the average of
the monthly salary during the employee's highest five successive
years of salary as an employee covered by the general state
employees retirement plan, or the correctional state employees
retirement plan, or by a combination of the two. If the total
of the covered service is less than five years, the
determination of average salary must be based on all allowable
service.
new text end

Sec. 3.

Minnesota Statutes 2004, section 352.115,
subdivision 2, is amended to read:

Subd. 2.

deleted text beginaverage salary deleted text end new text beginnormal retirement annuity new text end.

The
retirement annuity hereunder payable at normal retirement age or
thereafter must be computed in accordance with the applicable
provisions of the formula stated in subdivision 3, on the basis
of the employee's average salary for the period of allowable
service. This retirement annuity is known as the "normal"
retirement annuity.

deleted text begin For each year of allowable service, "average salary" of an
employee in determining a retirement annuity means the average
of the highest five successive years of salary upon which the
employee has made contributions to the retirement fund by
payroll deductions. Average salary must be based upon all
allowable service if this service is less than five years.
deleted text end

deleted text begin "Average salary" does not include the payment of accrued
unused annual leave or overtime paid at time of final separation
from state service if paid in a lump sum nor does it include the
reduced salary, if any, paid during the period the employee is
entitled to workers' compensation benefit payments for temporary
disability.
deleted text end

Sec. 4.

Minnesota Statutes 2004, section 352.115,
subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

(a) This paragraph,
in conjunction with section 352.116, subdivision 1, applies to a
person who became a covered employee or a member of a pension
fund listed in section 356.30, subdivision 3, before July 1,
1989, unless paragraph (b), in conjunction with section 352.116,
subdivision 1a, produces a higher annuity amount, in which case
paragraph (b) will apply. The employee's average salary, as
defined in new text beginsection 352.01, new text endsubdivision deleted text begin2 deleted text end new text begin14a new text end, multiplied by the
percent specified in section 356.315, subdivision 1, per year of
allowable service for the first ten years and the percent
specified in section 356.315, subdivision 2, for each later year
of allowable service and pro rata for completed months less than
a full year shall determine the amount of the retirement annuity
to which the employee is entitled.

(b) This paragraph applies to a person who has become at
least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become
at least 55 years old and whose annuity amount, when calculated
under this paragraph and in conjunction with section 352.116,
subdivision 1a, is higher than it is when calculated under
paragraph (a), in conjunction with section 352.116, subdivision
1. The employee's average salary, as defined in new text beginsection 352.01,
new text end subdivision deleted text begin2 deleted text end new text begin14a new text end, multiplied by the percent specified in
section 356.315, subdivision 2, for each year of allowable
service and pro rata for months less than a full year shall
determine the amount of the retirement annuity to which the
employee is entitled.

Sec. 5.

Minnesota Statutes 2004, section 352.87,
subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

A person specified
in subdivision 1 deleted text beginwill have deleted text end new text beginis entitled to receive new text enda retirement
annuity applicable for allowable service credit under this
section calculated by multiplying the employee's average salary,
as defined in section deleted text begin352.115 deleted text end new text begin352.01 new text end, subdivision deleted text begin2 deleted text end new text begin14a new text end, by the
percent specified in section 356.315, subdivision 2a, for each
year or portions of a year of allowable service credit. No
reduction for retirement deleted text beginprior to deleted text end new text beginbefore the new text endnormal retirement
age, as specified in section 352.01, subdivision 25, applies to
service to which this section applies.

Sec. 6.

Minnesota Statutes 2004, section 352.93,
subdivision 1, is amended to read:

Subdivision 1.

Basis of annuity; when to apply.

After
separation from state service, an employee covered under section
352.91 who has reached age 55 years and has credit for at least
three years of covered correctional service new text beginor a combination of
covered correctional service new text endand deleted text beginregular Minnesota deleted text end new text begingeneral
employees new text endstate retirement deleted text beginSystem deleted text end new text beginplan new text endservice is entitled upon
application to a retirement annuity under this section new text begin, new text endbased
only on covered correctional employees' service. Application
may be made no earlier than 60 days before the date the employee
is eligible to retire by reason of both age and service
requirements.

deleted text begin In this section, "average salary" means the average of the
monthly salary during the employee's highest five successive
years of salary as an employee covered by the Minnesota State
Retirement System. Average salary must be based upon all
allowable service if this service is less than five years.
deleted text end

Sec. 7.

Minnesota Statutes 2004, section 352B.01,
subdivision 11, is amended to read:

Subd. 11.

Average monthly salary.

(a) new text beginSubject to the
limitations of section 356.611, new text end"average monthly salary" means
the average of the highest monthly salaries for five years of
service as a member upon which contributions were deducted from
pay under section 352B.02, or upon which appropriate
contributions or payments were made to the fund to receive
allowable service and salary credit as specified under the
applicable law. Average monthly salary must be based upon all
allowable service if this service is less than five years.

(b) "Average monthly salary" means the salary of the member
as defined in section 352.01, subdivision 13. "Average monthly
salary" does not include any lump-sum annual leave payments and
overtime payments made at the time of separation from state
service, any amounts of severance pay, or any reduced salary
paid during the period the person is entitled to workers'
compensation benefit payments for temporary disability.

(c) A member on leave of absence receiving temporary
workers' compensation payments and a reduced salary or no salary
from the employer who is entitled to allowable service credit
for the period of absence may make payment to the fund for the
difference between salary received, if any, and the salary the
member would normally receive if not on leave of absence during
the period. The member shall pay an amount equal to the member
and employer contribution rate under section 352B.02,
subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department,
at its option, may pay the employer amount on behalf of the
member. Payment made under this subdivision must include
interest at the rate of 8.5 percent per year, and must be
completed within one year of the return from the leave of
absence.

Sec. 8.

Minnesota Statutes 2004, section 352C.021, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Average salary. new text end

new text begin "Average salary," for purposes
of calculating the normal retirement annuity under section
352C.031, subdivision 4, means the average of the highest five
successive years of salary upon which contributions have been
made under section 352C.09.
new text end

Sec. 9.

Minnesota Statutes 2004, section 353.01,
subdivision 10, is amended to read:

Subd. 10.

Salary.

(a) new text beginSubject to the limitations of
section 356.611, new text end"salary" means:

(1) the periodic compensation of a public employee, before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs, and also
means "wages" and includes net income from fees;

new text begin (2) for a public employee who is covered by a supplemental
retirement plan under section 356.24, subdivision 1, clause (8),
(9), or (10), which require all plan contributions be made by
the employer, the contribution to the applicable supplemental
retirement plan when the contribution is from mandatory
withholdings from employees' wages; new text endand

deleted text begin (2) deleted text end new text begin(3) new text endfor a public employee who has prior service covered
by a local police or firefighters relief association that has
consolidated with the Public Employees Retirement Association or
to which section 353.665 applies and who has elected coverage
either under the public employees police and fire fund benefit
plan under section 353A.08 following the consolidation or under
section 353.665, subdivision 4, the rate of salary upon which
member contributions to the special fund of the relief
association were made prior to the effective date of the
consolidation as specified by law and by bylaw provisions
governing the relief association on the date of the initiation
of the consolidation procedure and the actual periodic
compensation of the public employee after the effective date of
consolidation.

(b) Salary does not mean:

(1) the fees paid to district court reporters, unused
annual vacation or sick leave payments, in lump-sum or periodic
payments, severance payments, reimbursement of expenses,
lump-sum settlements not attached to a specific earnings period,
or workers' compensation payments;

(2) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;

(3) the amount equal to that which the employing
governmental subdivision would otherwise pay toward single or
family insurance coverage for a covered employee when, through a
contract or agreement with some but not all employees, the
employer:

(i) discontinues, or for new hires does not provide,
payment toward the cost of the employee's selected insurance
coverages under a group plan offered by the employer;

(ii) makes the employee solely responsible for all
contributions toward the cost of the employee's selected
insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the
employer; and

(iii) provides increased salary rates for employees who do
not have any employer-paid group insurance coverages;

(4) except as provided in section 353.86 or 353.87,
compensation of any kind paid to volunteer ambulance service
personnel or volunteer firefighters, as defined in subdivision
35 or 36; and

(5) the amount of compensation that exceeds the limitation
provided in section 356.611.

(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.

Sec. 10.

Minnesota Statutes 2004, section 353.01, is
amended by adding a subdivision to read:

new text begin Subd. 17a. new text end

new text begin Average salary. new text end

new text begin (a) "Average salary," for
purposes of calculating a retirement annuity under section
353.29, subdivision 3, means an amount equivalent to the average
of the highest salary of the member, police officer, or
firefighter, whichever applies, upon which employee
contributions were paid for any five successive years of
allowable service, based on dates of salary periods as listed on
salary deduction reports. Average salary must be based upon all
allowable service if this service is less than five years.
new text end

new text begin (b) "Average salary" may not include any reduced salary
paid during a period in which the employee is entitled to
benefit payments from workers' compensation for temporary
disability, unless the average salary is higher, including this
period.
new text end

Sec. 11.

Minnesota Statutes 2004, section 353.29,
subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

(a) This paragraph,
in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
1c, applies to any member who first became a public employee or
a member of a pension fund listed in section 356.30, subdivision
3, before July 1, 1989, unless paragraph (b), in conjunction
with section 353.30, subdivision 5, produces a higher annuity
amount, in which case paragraph (b) will apply. The average
salary as defined in new text beginsection 353.01, new text endsubdivision deleted text begin2 deleted text end new text begin17a new text end,
multiplied by the percent specified in section 356.315,
subdivision 3, for each year of allowable service for the first
ten years and thereafter by the percent specified in section
356.315, subdivision 4, per year of allowable service and
completed months less than a full year for the "basic member,"
and the percent specified in section 356.315, subdivision 1, for
each year of allowable service for the first ten years and
thereafter by the percent specified in section 356.315,
subdivision 2, per year of allowable service and completed
months less than a full year for the "coordinated member," shall
determine the amount of the "normal" retirement annuity.

(b) This paragraph applies to a member who has become at
least 55 years old and first became a public employee after June
30, 1989, and to any other member whose annuity amount, when
calculated under this paragraph and in conjunction with section
353.30, subdivision 5, is higher than it is when calculated
under paragraph (a), in conjunction with section 353.30,
subdivisions 1, 1a, 1b, and 1c. The average salary, as defined
in new text beginsection 353.01, new text endsubdivision deleted text begin2 deleted text end new text begin17a new text end, multiplied by the percent
specified in section 356.315, subdivision 4, for each year of
allowable service and completed months less than a full year for
a basic member and the percent specified in section 356.315,
subdivision 2, per year of allowable service and completed
months less than a full year for a coordinated member, shall
determine the amount of the normal retirement annuity.

Sec. 12.

Minnesota Statutes 2004, section 353.33,
subdivision 3, is amended to read:

Subd. 3.

Computation of benefits.

This disability
benefit is an amount equal to the normal annuity payable to a
member who has reached normal retirement age with the same
number of years of allowable service and the same average
salary, as provided in new text beginsection 353.01, subdivision 17a, and
new text end section 353.29, deleted text beginsubdivisions 2 and deleted text end new text beginsubdivision new text end3.

A basic member shall receive a supplementary monthly
benefit of $25 to age 65 or the five-year anniversary of the
effective date of the disability benefit, whichever is later.

If the disability benefits under this subdivision exceed
the average salary as defined in section deleted text begin353.29 deleted text end new text begin353.01 new text end,
subdivision deleted text begin2 deleted text end new text begin17a new text end, the disability benefits must be reduced to an
amount equal to deleted text beginsaid deleted text end new text beginthe new text endaverage salary.

Sec. 13.

Minnesota Statutes 2004, section 353.651,
subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

The average salary
as defined in new text beginsection 353.01, new text endsubdivision deleted text begin2 deleted text end new text begin17a new text end, multiplied by
the percent specified in section 356.315, subdivision 6, per
year of allowable service determines the amount of the normal
retirement annuity. If the member has earned allowable service
for performing services other than those of a police officer or
firefighter, the annuity representing deleted text beginsuch deleted text end new text beginthat new text endservice deleted text beginis deleted text end new text beginmust
be new text endcomputed under sections 353.29 and 353.30.

Sec. 14.

Minnesota Statutes 2004, section 353.656,
subdivision 1, is amended to read:

Subdivision 1.

In line of duty; computation of benefits.

A member of the police and fire plan who becomes disabled and
physically unfit to perform duties as a police officer,
firefighter, or paramedic as defined under section 353.64,
subdivision 10, as a direct result of an injury, sickness, or
other disability incurred in or arising out of any act of duty,
which has or is expected to render the member physically or
mentally unable to perform the duties as a police officer,
firefighter, or paramedic as defined under section 353.64,
subdivision 10, for a period of at least one year, shall receive
disability benefits during the period of such disability. The
benefits must be in an amount equal to 60 percent of the
"average salary" as defined in section deleted text begin353.651 deleted text end new text begin353.01 new text end,
subdivision deleted text begin2 deleted text end new text begin17a new text end, plus an additional percent specified in
section 356.315, subdivision 6, of that average salary for each
year of service in excess of 20 years. If the disability under
this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan,
the disability benefit must be computed on the "average salary"
from which deductions were made for contribution to the police
and fire fund.

Sec. 15.

Minnesota Statutes 2004, section 353B.02,
subdivision 10, is amended to read:

Subd. 10.

Salary.

(a) new text begin"Salary" under this chapter is
subject to the limitations of section 356.611.
new text end

new text begin (b) new text end"Salary" for benefit computation and contribution
purposes means the salary of a first class or first grade
firefighter or patrol officer, whichever applies, for the former
members of the following consolidating relief associations:

(1) Anoka Police Relief Association;

(2) Austin Firefighters Relief Association;

(3) Austin Police Relief Association;

(4) Columbia Heights Fire Department Relief Association,
Paid Division;

(5) Fairmont Police Benefit Association;

(6) Faribault Fire Department Relief Association;

(7) Mankato Fire Department Relief Association;

(8) Minneapolis Fire Department Relief Association;

(9) Minneapolis Police Relief Association;

(10) Richfield Fire Department Relief Association;

(11) Rochester Fire Department Relief Association;

(12) Rochester Police Relief Association;

(13) St. Cloud Fire Department Relief Association;

(14) St. Cloud Police Relief Association;

(15) St. Paul Fire Department Relief Association;

(16) South St. Paul Firefighters Relief Association;

(17) West St. Paul Firefighters Relief Association;

(18) West St. Paul Police Relief Association; and

(19) Winona Fire Department Relief Association.

deleted text begin (b) deleted text end new text begin(c) new text end"Salary" for benefit computation purposes means the
salary of a first grade patrol officer for the second month of
the previous fiscal year and for contribution purposes means the
current salary of a first grade patrol officer, for the former
members of the following consolidating relief associations:

(1) Bloomington Police Relief Association;

(2) Crystal Police Relief Association;

(3) Fridley Police Pension Association;

(4) Richfield Police Relief Association;

(5) St. Louis Park Police Relief Association; and

(6) Winona Police Relief Association.

deleted text begin (c) deleted text end new text begin(d) new text end"Salary" for benefit computation purposes means the
final salary and for contribution purposes means the current
salary for the former members of the following consolidating
relief associations:

(1) Albert Lea Firefighters Relief Association;

(2) Albert Lea Police Relief Association;

(3) Buhl Police Relief Association;

(4) Chisholm Firefighters Relief Association;

(5) Crookston Fire Department Relief Association;

(6) Crookston Police Relief Association;

(7) Faribault Police Benefit Association;

(8) Red Wing Police Relief Association; and

(9) Virginia Fire Department Relief Association.

deleted text begin (d) deleted text end new text begin(e) new text end"Salary" for benefit computation purposes means the
average earnings or salary for the final six months of
employment before retirement and for contribution purposes means
the current salary for the former members of the following
consolidating relief associations:

(1) Chisholm Police Relief Association;

(2) Hibbing Firefighters Relief Association; and

(3) Hibbing Police Relief Association.

deleted text begin (e) deleted text end new text begin(f) new text end"Salary" for benefit computation purposes means the
greater of the final salary at retirement or the highest salary
of a patrol officer and for contribution purposes means the
greater of the current salary or the current highest salary of a
patrol officer for the former members of the following
consolidating relief associations:

(1) Brainerd Police Benefit Association; and

(2) New Ulm Police Relief Association.

deleted text begin (f) deleted text end new text begin(g) new text end"Salary" for benefit computation and contribution
purposes means the following for the former members of the
consolidating relief associations as indicated:

(1) salary of a top grade patrol officer, including
longevity pay and education incentive pay in an amount not to
exceed $235 per month, Columbia Heights Police Relief
Association;

(2) maximum pay of a firefighter, including overtime
payments for a regular workweek of a firefighter mandated by the
federal Fair Labor Standards Act of 1938, as amended, Duluth
Firefighters Relief Association;

(3) salary of a first class patrol officer with 16 years of
service, Duluth Police Pension Association;

(4) base salary for the rank currently held, plus longevity
pay, pay for eligibility for next higher rank and pay for first
aid care, Mankato Police Benefit Association;

(5) average annual salary for highest three paid years for
benefit computation purposes and current salary for contribution
purposes, Red Wing Fire Department Relief Association;

(6) pay of the highest grade full-time firefighter, St.
Louis Park Fire Department Relief Association;

(7) maximum monthly pay of a patrol officer, St. Paul
Police Relief Association;

(8) prevailing base pay of rank held at retirement for
benefit computation purposes and current salary for contribution
purposes, South St. Paul Police Relief Association; and

(9) prevailing pay for rank held for at least six months
before retirement for benefit computation purposes and current
salary for contribution purposes, Virginia Police Relief
Association.

Sec. 16.

Minnesota Statutes 2004, section 354.05, is
amended by adding a subdivision to read:

new text begin Subd. 13a. new text end

new text begin Average salary. new text end

new text begin (a) "Average salary," for the
purpose of determining the member's retirement annuity, means
the average salary upon which contributions were made for the
highest five successive years of formula service credit.
new text end

new text begin (b) "Average salary" may not include any more than the
equivalent of 60 monthly salary payments.
new text end

new text begin (c) "Average salary" must be based upon all years of
formula service credit if this service credit is less than five
years.
new text end

Sec. 17.

Minnesota Statutes 2004, section 354.05,
subdivision 35, is amended to read:

Subd. 35.

Salary.

(a) new text beginSubject to the limitations of
section 356.611, new text end"salary" means the periodic compensation, upon
which member contributions are required before deductions for
deferred compensation, supplemental retirement plans, or other
voluntary salary reduction programs.

(b) "Salary" does not mean:

(1) lump sum annual leave payments;

(2) lump sum wellness and sick leave payments;

(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;

(4) any form of payment made in lieu of any other
employer-paid fringe benefit or expense;

(5) any form of severance payments;

(6) workers' compensation payments;

(7) disability insurance payments, including self-insured
disability payments;

(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;

(9) payments under section 356.24, subdivision 1, clause
(4); and

(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.

(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.

Sec. 18.

Minnesota Statutes 2004, section 354.44,
subdivision 6, is amended to read:

Subd. 6.

Computation of formula program retirement
annuity.

(a) The formula retirement annuity must be computed in
accordance with the applicable provisions of the formulas stated
in paragraph (b) or (d) on the basis of each member's average
salary new text beginunder section 354.05, subdivision 13a, new text endfor the period of
the member's formula service credit.

deleted text begin For all years of formula service credit, "average salary,"
for the purpose of determining the member's retirement annuity,
means the average salary upon which contributions were made and
upon which payments were made to increase the salary limitation
provided in Minnesota Statutes 1971, section 354.511, for the
highest five successive years of formula service credit
provided, however, that such "average salary" shall not include
any more than the equivalent of 60 monthly salary payments.
Average salary must be based upon all years of formula service
credit if this service credit is less than five years.
deleted text end

(b) This paragraph, in conjunction with paragraph (c),
applies to a person who first became a member of the association
or a member of a pension fund listed in section 356.30,
subdivision 3, before July 1, 1989, unless paragraph (d), in
conjunction with paragraph (e), produces a higher annuity
amount, in which case paragraph (d) applies. The average salary
as defined in deleted text beginparagraph (a) deleted text end new text beginsection 354.05, subdivision 13a new text end,
multiplied by the following percentages per year of formula
service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled:

Coordinated Member Basic Member

Each year of service the percent the percent

during first ten specified in specified in

section 356.315, section 356.315,

subdivision 1, subdivision 3,

per year per year

Each year of service the percent the percent

thereafter specified in specified in

section 356.315, section 356.315,

subdivision 2, subdivision 4,

per year per year

(c)(i) This paragraph applies only to a person who first
became a member of the association or a member of a pension fund
listed in section 356.30, subdivision 3, before July 1, 1989,
and whose annuity is higher when calculated under paragraph (b),
in conjunction with this paragraph than when calculated under
paragraph (d), in conjunction with paragraph (e).

(ii) Where any member retires prior to normal retirement
age under a formula annuity, the member shall be paid a
retirement annuity in an amount equal to the normal annuity
provided in paragraph (b) reduced by one-quarter of one percent
for each month that the member is under normal retirement age at
the time of retirement except that for any member who has 30 or
more years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.

(iii) Any member whose attained age plus credited allowable
service totals 90 years is entitled, upon application, to a
retirement annuity in an amount equal to the normal annuity
provided in paragraph (b), without any reduction by reason of
early retirement.

(d) This paragraph applies to a member who has become at
least 55 years old and first became a member of the association
after June 30, 1989, and to any other member who has become at
least 55 years old and whose annuity amount when calculated
under this paragraph and in conjunction with paragraph (e), is
higher than it is when calculated under paragraph (b), in
conjunction with paragraph (c). The average salary, as defined
in deleted text beginparagraph (a) deleted text end new text beginsection 354.05, subdivision 13a, new text endmultiplied by
the percent specified by section 356.315, subdivision 4, for
each year of service for a basic member and by the percent
specified in section 356.315, subdivision 2, for each year of
service for a coordinated member shall determine the amount of
the retirement annuity to which the member is entitled.

(e) This paragraph applies to a person who has become at
least 55 years old and first becomes a member of the association
after June 30, 1989, and to any other member who has become at
least 55 years old and whose annuity is higher when calculated
under paragraph (d) in conjunction with this paragraph than when
calculated under paragraph (b), in conjunction with paragraph
(c). An employee who retires under the formula annuity before
the normal retirement age shall be paid the normal annuity
provided in paragraph (d) reduced so that the reduced annuity is
the actuarial equivalent of the annuity that would be payable to
the employee if the employee deferred receipt of the annuity and
the annuity amount were augmented at an annual rate of three
percent compounded annually from the day the annuity begins to
accrue until the normal retirement age.

(f) No retirement annuity is payable to a former employee
with a salary that exceeds 95 percent of the governor's salary
unless and until the salary figures used in computing the
highest five successive years average salary under paragraph (a)
have been audited by the Teachers Retirement Association and
determined by the executive director to comply with the
requirements and limitations of section 354.05, subdivisions 35
and 35a.

Sec. 19.

Minnesota Statutes 2004, section 354A.011, is
amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Average salary. new text end

new text begin "Average salary," for purposes
of computing a normal coordinated program retirement annuity
under section 354A.31, subdivision 4 or 4a, means an amount
equal to the average salary upon which contributions were made
for the highest five successive years of service credit but may
not, in any event, include any more than the equivalent of 60
monthly salary payments. Average salary must be based upon all
years of service credit if this service credit is less than five
years.
new text end

Sec. 20.

Minnesota Statutes 2004, section 354A.011,
subdivision 24, is amended to read:

Subd. 24.

Salary; covered salary.

(a) new text beginSubject to the
limitations of section 356.611, new text end"salary" or "covered salary"
means the entire compensation, upon which member contributions
are required and made, that is paid to a teacher before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs.

(b) "Salary" does not mean:

(1) lump sum annual leave payments;

(2) lump sum wellness and sick leave payments;

(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage, and certain amounts determined by the
executive secretary or director to be ineligible;

(4) any form of payment that is made in lieu of any other
employer-paid fringe benefit or expense;

(5) any form of severance payments;

(6) workers' compensation payments;

(7) disability insurance payments, including self-insured
disability payments;

(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;

(9) payments under section 356.24, subdivision 1, clause
(4)(ii); and

(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.

(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.

Sec. 21.

Minnesota Statutes 2004, section 354A.31,
subdivision 4, is amended to read:

Subd. 4.

Computation of the normal coordinated retirement
annuity; minneapolis and st. paul funds.

(a) This subdivision
applies to the coordinated programs of the Minneapolis Teachers
Retirement Fund Association and the St. Paul Teachers Retirement
Fund Association.

(b) The normal coordinated retirement annuity deleted text beginshall be deleted text end new text beginis
new text end an amount equal to a retiring coordinated member's average
salary new text beginunder section 354A.011, subdivision 7a, new text endmultiplied by the
retirement annuity formula percentage. deleted text beginAverage salary for
purposes of this section shall mean an amount equal to the
average salary upon which contributions were made for the
highest five successive years of service credit, but which shall
not in any event include any more than the equivalent of 60
monthly salary payments. Average salary must be based upon all
years of service credit if this service credit is less than five
years.
deleted text end

(c) This paragraph, in conjunction with subdivision 6,
applies to a person who first became a member or a member in a
pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, unless paragraph (d), in conjunction with
subdivision 7, produces a higher annuity amount, in which case
paragraph (d) will apply. The retirement annuity formula
percentage for purposes of this paragraph is the percent
specified in section 356.315, subdivision 1, per year for each
year of coordinated service for the first ten years and the
percent specified in section 356.315, subdivision 2, for each
year of coordinated service thereafter.

(d) This paragraph applies to a person who has become at
least 55 years old and who first becomes a member after June 30,
1989, and to any other member who has become at least 55 years
old and whose annuity amount, when calculated under this
paragraph and in conjunction with subdivision 7 is higher than
it is when calculated under paragraph (c), in conjunction with
the provisions of subdivision 6. The retirement annuity formula
percentage for purposes of this paragraph is the percent
specified in section 356.315, subdivision 2, for each year of
coordinated service.

Sec. 22.

Minnesota Statutes 2004, section 354A.31,
subdivision 4a, is amended to read:

Subd. 4a.

Computation of the normal coordinated
retirement annuity; duluth fund.

(a) This subdivision applies
to the new law coordinated program of the Duluth Teachers
Retirement Fund Association.

(b) The normal coordinated retirement annuity is an amount
equal to a retiring coordinated member's average salary new text beginunder
section 354A.011, subdivision 7a, new text endmultiplied by the retirement
annuity formula percentage. deleted text beginAverage salary for purposes of this
section means an amount equal to the average salary upon which
contributions were made for the highest five successive years of
service credit, but may not in any event include any more than
the equivalent of 60 monthly salary payments. Average salary
must be based upon all years of service credit if this service
credit is less than five years.
deleted text end

(c) This paragraph, in conjunction with subdivision 6,
applies to a person who first became a member or a member in a
pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, unless paragraph (d), in conjunction with
subdivision 7, produces a higher annuity amount, in which case
paragraph (d) applies. The retirement annuity formula
percentage for purposes of this paragraph is the percent
specified in section 356.315, subdivision 1, per year for each
year of coordinated service for the first ten years and the
percent specified in section 356.315, subdivision 2, for each
subsequent year of coordinated service.

(d) This paragraph applies to a person who is at least 55
years old and who first becomes a member after June 30, 1989,
and to any other member who is at least 55 years old and whose
annuity amount, when calculated under this paragraph and in
conjunction with subdivision 7, is higher than it is when
calculated under paragraph (c) in conjunction with subdivision
6. The retirement annuity formula percentage for purposes of
this paragraph is the percent specified in section 356.315,
subdivision 2, for each year of coordinated service.

Sec. 23.

Minnesota Statutes 2004, section 356.611,
subdivision 1, is amended to read:

Subdivision 1.

State salary limitations.

(a)
Notwithstanding any provision of law, bylaws, articles of
incorporation, retirement and disability allowance plan
agreements, or retirement plan contracts to the contrary, the
covered salary for pension purposes for a plan participant of a
covered retirement fund enumerated in section 356.30,
subdivision 3, may not exceed deleted text begin95 deleted text end new text begin110 new text endpercent of the salary
established for the governor under section 15A.082 at the time
the person received the salary.

(b) This section does not apply to a salary paid:

(1) to the governor or to a judge;

(2) new text beginto an employee or an elected official who is not
subject to the limit as specified under section 43A.17,
subdivision 9;
new text end

new text begin (3) new text endto an employee of a political subdivision in a position
that is excluded from the limit as specified under section
43A.17, subdivision 9;

deleted text begin (3) deleted text end new text begin(4) new text endto a state employee as defined under section
43A.02, subdivision 21;

deleted text begin (4) deleted text end new text begin(5) new text endto an employee of Gillette Hospital who is covered
by the general state employees retirement plan of the Minnesota
State Retirement System;

deleted text begin (5) deleted text end new text begin(6) new text endto an employee of the Minnesota Crop Improvement
Council; deleted text beginor
deleted text end

deleted text begin (6) deleted text end new text begin(7) new text endto an employee of the Minnesota Historical Society new text begin;
new text end

new text begin (8) to an employee of the Southern Minnesota Municipal
Power Association; or
new text end

new text begin (9) to the director of the Duluth Port Authority new text end.

(c) The limited covered salary determined under this
section must be used in determining employee and employer
contributions and in determining retirement annuities and other
benefits under the respective covered retirement fund and under
this chapter.

Sec. 24.

Minnesota Statutes 2004, section 422A.01, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Average salary. new text end

new text begin (a) "Average salary" means the
arithmetic average annual salary, wages, or compensation of the
member from the city for any five calendar years out of the last
ten calendar years of service, except as provided for in section
422A.16, which may include the year in which the employee
retires, as selected by the employee.
new text end

new text begin (b) A member with more than five calendar years of service,
but less than ten calendar years, may select any five calendar
years of service to determine the average salary. A member with
less than five years of service with the city shall use all
earnings to determine the average salary.
new text end

Sec. 25.

Minnesota Statutes 2004, section 422A.01, is
amended by adding a subdivision to read:

new text begin Subd. 13a. new text end

new text begin Covered salary. new text end

new text begin "Salary" is subject to the
limitations of section 356.611.
new text end

Sec. 26.

Minnesota Statutes 2004, section 422A.15,
subdivision 1, is amended to read:

Subdivision 1.

Formula pension and annuity.

Except as
otherwise provided in subdivision 3, each contributing member
who, at the time of retirement, fulfills the conditions
necessary to enable the member to retire deleted text begin, shall deleted text end new text beginis entitled to
new text end receive deleted text beginwhat shall be known as deleted text enda "formula pension and annuity"
equal to two percent for each year of allowable service for the
first ten years and thereafter 2.5 percent per year of allowable
service of the deleted text beginarithmetic deleted text endaverage deleted text beginannual deleted text endsalary deleted text begin, wages or
compensation of the member from the city for any five calendar
years out of the last ten calendar years of service except as
provided for in section 422A.16, which may include the year in
which the employee retires, as selected by the employee deleted text end,
multiplied by the years of service credited by the retirement
fund. The formula pension and annuity deleted text beginshall deleted text end new text beginmust new text endbe computed on
the single life plan but subject to the option selections
provided for in section 422A.17.

In order to be entitled to the formula pension and annuity
herein provided for, the retiring employee at the time of
cessation of employment and of actual retirement deleted text beginshall deleted text end new text beginmust new text endhave
attained the age of 60 years or have been employed by the city
not less than 30 years, or meet the qualifications provided for
in section 422A.16, and in addition thereto have contributed to
the retirement fund at the percentage rate prescribed by the
retirement law applicable when the salary, wages or compensation
was paid on all salaries, wages, or compensation received from
the city or from an applicable employing unit. The years of
service to be applied in the formula pension and annuity deleted text beginshall
deleted text end new text begin must new text endbe found and determined by the retirement board, except
that no credit deleted text beginshall deleted text end new text beginmay new text endbe allowed for any year in which a back
charge is owing at time of retirement and the earnings from any
year in which a back charge is owing deleted text beginshall deleted text end new text beginmay new text endnot be used in
determining the average deleted text beginannual deleted text endsalary.

Sec. 27.

Minnesota Statutes 2004, section 422A.16,
subdivision 9, is amended to read:

Subd. 9.

Incompetency or death of member.

Any member of
the contributing class who becomes permanently separated from
the service of the city under subdivision 8, may, by an
instrument in writing, filed with the municipal employees
retirement board within 30 days after deleted text beginsuch deleted text end new text beginthe new text endseparation
becomes permanent, elect to allow the member contributions
to deleted text beginsuch deleted text end new text beginthe new text endfund to the date of separation to remain on deposit
in deleted text beginsuch deleted text end new text beginthe new text endfund, and in deleted text beginsuch deleted text end new text beginthe new text endevent the member deleted text beginshall be
deleted text end new text begin is new text endentitled to receive a retirement allowance at age 65,
provided the member, or someone acting in the member's behalf if
the member be incompetent, deleted text beginshall deleted text end new text beginmust new text endmake new text begina new text endwritten application
for deleted text beginsuch deleted text end new text beginthe new text endretirement allowance in the same manner provided
for in section 422A.17 and in accordance with the provisions of
section 422A.15, subdivision 1 new text begin, new text endexcept for determining
average deleted text beginannual deleted text endsalary. deleted text beginA member with more than five calendar
years of service but less than ten calendar years may select any
five calendar years of service to determine the average annual
salary. A member with less than five years of service with the
city shall use all earnings to determine the average annual
salary.
deleted text end

If the contributing member dies before reaching the age of
65 years, or having attained the age of 65 years without having
made the election provided for herein, the net accumulated
amount of deductions from the member's salary, pay or
compensation, plus interest, to the member's credit on date of
death deleted text beginshall be paid deleted text end new text beginis payable new text endto deleted text beginsuch deleted text end new text beginthe new text endperson or persons as
have been nominated by written designation filed with the
retirement board, in deleted text beginsuch deleted text end new text beginthe new text endform deleted text beginas deleted text end new text beginthat new text endthe retirement board
deleted text begin shall require deleted text end new text beginrequires new text end.

If the employee fails to make a designation, or if the
person or persons designated by deleted text beginsuch deleted text end new text beginthe new text endemployee predeceases
deleted text begin such deleted text end new text beginthe new text endemployee, the net accumulated credit to deleted text beginsuch deleted text end new text beginthe
new text end employee's account on date of death deleted text beginshall be paid deleted text end new text beginis payable new text endto
deleted text begin such deleted text end new text beginthe new text endemployee's estate.

The provisions of subdivisions 4, 5 new text begin, new text endand 6 deleted text beginshall deleted text endalso apply
to any member qualifying for benefits under this subdivision,
except for purposes of this subdivision the age referred to in
subdivision 4 deleted text beginshall be deleted text end new text beginis new text end65 years.

Sec. 28.

Minnesota Statutes 2004, section 423B.01, is
amended by adding a subdivision to read:

new text begin Subd. 22. new text end

new text begin Covered salary. new text end

new text begin "Salary" is subject to the
limitations of section 356.611.
new text end

Sec. 29.

Minnesota Statutes 2004, section 423C.01, is
amended by adding a subdivision to read:

new text begin Subd. 29. new text end

new text begin Covered salary. new text end

new text begin "Salary" is subject to the
limitations of section 356.611.
new text end

Sec. 30.

Minnesota Statutes 2004, section 490.121,
subdivision 21, is amended to read:

Subd. 21.

Final average compensation.

"Final average
compensation" means the total amount of salary payable to a
judge in the highest five years new text beginout new text endof the last ten years deleted text beginprior
to deleted text end new text beginbefore new text endthe deleted text beginevent of maturity of benefits deleted text end new text begintermination of
judicial service new text end, divided by five deleted text begin; provided, however, that deleted text endif
the number of years of service new text beginby the judge equals or exceeds
ten. If the number of years of service by the judge new text endis less
than ten, new text beginbut more than five, new text endthe highest five deleted text beginshall deleted text end new text beginyears of
salary must new text endbe counted deleted text begin, and deleted text end new text begin. new text endIf the number of years new text beginof service
by the judge new text endis less than five, the aggregate salary deleted text beginin such deleted text end new text beginfor
the new text endperiod deleted text beginshall deleted text end new text beginof service must new text endbe divided by the number of
months in deleted text beginsuch deleted text end new text beginthe new text endperiod and multiplied by 12.

Sec. 31.

Minnesota Statutes 2004, section 490.121, is
amended by adding a subdivision to read:

new text begin Subd. 21a. new text end

new text begin Covered salary limitation. new text end

new text begin "Final average
compensation" is subject to the limitations of section 356.611.
new text end

Sec. 32. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 352C.031, subdivision 3;
353.29, subdivision 2; and 353.651, subdivision 2, are repealed.
new text end

Sec. 33. new text beginEFFECTIVE DATE.
new text end

new text begin This article is effective on the day following final
enactment except that section 23 applies retroactively from
April 28, 1994.
new text end

ARTICLE 2

ALLOWABLE SERVICE CREDIT

Section 1.

new text begin [356.195] SERVICE CREDIT PURCHASE PROCEDURES
FOR STRIKE PERIODS.
new text end

new text begin Subdivision 1. new text end

new text begin Covered plans. new text end

new text begin This section applies to
all defined benefit plans specified in section 356.30,
subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Purchase procedure for strike periods. new text end

new text begin (a) An
employee covered by a plan specified in subdivision 1 may
purchase allowable service credit in the applicable plan for any
period of time during which the employee was on a public
employee strike without pay, not to exceed a period of one year,
if the employee makes a payment in lieu of salary deductions as
specified in paragraph (b) or (c), whichever applies. The
employing unit, at its option, may pay the employer portion of
the amount specified in paragraph (b) on behalf of its employees.
new text end

new text begin (b) If payment is received by the applicable pension plan
executive director within one year from the end of the strike,
the payment amount is equal to the applicable employee and
employer contribution rates specified in law for the applicable
plan during the strike period, applied to the employee's rate of
salary in effect at 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 period
until the date payment is received.
new text end

new text begin (c) If payment is received by the applicable pension fund
director after one year and before five years from the end of
the strike, the payment amount is the amount determined under
section 356.551.
new text end

new text begin (d) Payments may not be made more than five years after the
end of the strike.
new text end

Sec. 2.

Minnesota Statutes 2004, section 490.121,
subdivision 4, is amended to read:

Subd. 4.

Allowable service.

new text begin(a) new text end"Allowable service"
means any calendar month, subject to the service credit limit in
subdivision 22, served as a judge at any time, or served as a
referee in probate for all referees in probate who were in
office prior to January 1, 1974.

new text begin (b) "Allowable service" also means a period of authorized
leave of absence for which the judge has made a payment in lieu
of contributions, not in an amount in excess of the service
credit limit under subdivision 22. To obtain the service
credit, the judge shall pay an amount equal to the normal cost
of the judges retirement plan on the date of return from the
leave of absence, as determined in the most recent actuarial
report for the plan filed with the Legislative Commission on
Pensions and Retirement, multiplied by the judge's average
monthly salary rate during the authorized leave of absence and
multiplied by the number of months of the authorized leave of
absence, plus annual compound interest at the rate of 8.5
percent from the date of the termination of the leave to the
date on which payment is made. The payment must be made within
one year of the date on which the authorized leave of absence
terminated. Service credit for an authorized leave of absence
is in addition to a uniformed service leave under section
490.1211.
new text end

Sec. 3.

Laws 1999, chapter 222, article 16, section 16, as
amended by Laws 2002, chapter 392, article 7, section 1, and
Laws 2003, First Special Session chapter 12, article 6, section
2, and Laws 2004, chapter 267, article 17, section 6, is amended
to read:

Sec. 16 new text beginREPEALER.
new text end

(a) Sections 2 to 6 and 8 to 13 are repealed on May 16,
2004.

(b) Sections 1 and 7 are repealed on May 16, deleted text begin2006 deleted text end new text begin2007 new text end.

Sec. 4.

Laws 2000, chapter 461, article 4, section 4, as
amended by Laws 2003, First Special Session chapter 12, article
6, section 3, and Laws 2004, chapter 267, article 17, section 7,
is amended to read:

Sec. 4 new text beginEFFECTIVE DATE; SUNSET REPEALER.
new text end

(a) Sections 1, 2, and 3 are effective deleted text beginon deleted text endthe day following
final enactment.

(b) Sections 1, 2, and 3, are repealed deleted text beginon deleted text endMay 16, deleted text begin2006 deleted text end new text begin2007 new text end.

Sec. 5. new text beginMETRO TRANSIT STRIKE PROVISION.
new text end

new text begin Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a Metro
Transit employee covered by the general state employees
retirement plan of the Minnesota State Retirement System who was
on strike on or after January 1, 2004, and before the effective
date of this section, is authorized to make a payment under that
paragraph on or before one year after the effective date of this
section.
new text end

Sec. 6. new text beginCROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.
new text end

new text begin Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a
Crosby-Ironton public school teacher covered by the Teachers
Retirement Association who was on strike during a period that
included April 1, 2005, and before the effective date of this
section, is authorized to make a payment under that paragraph on
or before one year after the effective date of this section.
new text end

Sec. 7. new text beginUNIVERSITY OF MINNESOTA STRIKE PROVISION.
new text end

new text begin Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a
University of Minnesota employee covered by the Minnesota State
Retirement System who was on strike on or after October 21,
2003, and before the effective date of this section, is
authorized to make a payment under that paragraph on or before
one year after the effective date of this section.
new text end

Sec. 8. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1 and 3 to 7 are effective the day following
final enactment.
new text end

new text begin (b) Section 2 is effective retroactively from January 1,
2005, and applies to any person who was in active service as a
judge on or after that date and applies to an authorized leave
of absence that occurred before or after that date. For a
person for whom section 2 is retroactive, the equivalent
contribution payment must be made on or before July 1, 2006.
new text end

ARTICLE 3

ACTUARIAL FINANCIAL REPORTING AND OTHER
GENERALLY APPLICABLE ADMINISTRATIVE CHANGES

Section 1.

Minnesota Statutes 2004, section 352.01,
subdivision 12, is amended to read:

Subd. 12.

Actuarial equivalent.

"Actuarial equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date at a specified age with each
actuarial present value based on the appropriate mortality table
adopted by the board of directors based on the experience of the
fund as recommended by the actuary retained deleted text beginby the Legislative
Commission on Pensions and Retirement deleted text end new text beginunder section 356.214, and
approved under section 356.215, subdivision 18, new text endand using the
applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.

Sec. 2.

Minnesota Statutes 2004, section 353.01,
subdivision 14, is amended to read:

Subd. 14.

Actuarial equivalent.

"Actuarial equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value
based on the appropriate mortality table adopted by the board of
trustees based on the experience of the fund as recommended by
the actuary retained deleted text beginby the Legislative Commission on Pensions
and Retirement deleted text end new text beginunder section 356.214, and approved under section
356.215, subdivision 18, new text endand using the applicable preretirement
or postretirement interest rate assumption specified in section
356.215, subdivision 8.

Sec. 3.

Minnesota Statutes 2004, section 354.05,
subdivision 7, is amended to read:

Subd. 7.

Actuarial equivalent.

"Actuarial equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value
based on the appropriate mortality table adopted by the board of
trustees based on the experience of the association as
recommended by the actuary retained deleted text beginby the Legislative
Commission on Pensions and Retirement deleted text end new text beginunder section 356.214, and
approved under section 356.215, subdivision 18, new text endand using the
applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.

Sec. 4.

Minnesota Statutes 2004, section 354.094,
subdivision 1, is amended to read:

Subdivision 1.

Service credit contributions.

new text begin(a) new text endUpon
granting any extended leave of absence under section 122A.46 or
136F.43, the employing unit granting the leave must certify the
leave to the association on a form specified by the executive
director. A member granted an extended leave of absence under
section 122A.46 or 136F.43 may pay employee contributions and
receive allowable service credit toward annuities and other
benefits under this chapter, for each year of the leave,
provided that the member and the employing board make the
required employer contribution in any proportion they may agree
upon, during the period of the leave. The employer may enter
into an agreement with the exclusive bargaining representative
of the teachers in the district under which, for an individual
teacher, all or a portion of the employee's contribution is paid
by the employer. Any such agreement must include a sunset of
eligibility to qualify for the payment and must not be a part of
the collective bargaining agreement. The leave period must not
exceed five years. A member may not receive more than five
years of allowable service credit under this section. The
employee and employer contributions must be based upon the rates
of contribution prescribed by section 354.42 for the salary
received during the year immediately preceding the extended
leave.

new text begin (b) Employee contribution new text endpayments for the years for which
a member is receiving service credit while on extended leave
must be made on or before deleted text beginthe later of deleted text endJune 30 of each fiscal
year for which service credit is new text beginto be new text endreceived deleted text beginor within 30
days after first notification of the amount due, if requested by
the member, is given by the association deleted text end. new text beginIf payment is to be
made by a transfer of pretax assets authorized under section
356.441, payment is authorized after June 30 of the fiscal year
providing that authorization for the asset transfer has been
received by the applicable third party administrator by June 30,
and the payment must include interest at a rate of .708 percent
per month from June 30 through the end of the month in which
payment is received. new text endNo payment is permitted after the
following September 30. deleted text beginPayments received after June 30 must
include interest at an annual rate of 8.5 percent from June 30
through the end of the month in which payment is received.
deleted text end

new text begin (c) new text endNotwithstanding the provisions of any agreements to the
contrary, employee and employer contributions may not be made to
receive allowable service credit if the member does not have
full reinstatement rights as provided in section 122A.46 or
136F.43, both during and at the end of the extended leave.

new text begin (d) new text endAny school district paying the employee's retirement
contributions under this section shall forward to the applicable
retirement association or retirement fund a copy of the
agreement executed by the school district and the employee.

Sec. 5.

Minnesota Statutes 2004, section 354A.011,
subdivision 3a, is amended to read:

Subd. 3a.

Actuarial equivalent.

"Actuarial equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value
based on the appropriate mortality table adopted by the
appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary
retained deleted text beginby the Legislative Commission on Pensions and
Retirement deleted text end new text beginunder section 356.214, and approved under section
356.215, subdivision 18, new text endand using the applicable preretirement
or postretirement interest rate assumption specified in section
356.215, subdivision 8.

Sec. 6.

Minnesota Statutes 2004, section 356.20,
subdivision 4, is amended to read:

Subd. 4.

Contents of financial report.

(a) The financial
report required by this section must contain financial
statements and disclosures that indicate the financial
operations and position of the retirement plan and fund. The
report must conform with generally accepted governmental
accounting principles, applied on a consistent basis. The
report must be audited. The report must include, as part of its
exhibits or new text beginits new text endfootnotes, an actuarial disclosure item based on
the actuarial valuation calculations prepared by the
deleted text begin commission-retained deleted text endactuary new text beginretained under section 356.214 new text endor by
the actuary retained by the retirement fund or plan, deleted text beginif
applicable deleted text end new text beginwhichever applies new text end, according to applicable actuarial
requirements enumerated in section 356.215, and specified in the
most recent standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement. The accrued
assets, the accrued liabilities, including accrued reserves, and
the unfunded actuarial accrued liability of the fund or plan
must be disclosed. The disclosure item must contain a
declaration by the actuary retained deleted text beginby the Legislative
Commission on Pensions and Retirement deleted text end new text beginunder section 356.214 new text endor
the actuary retained by the fund or plan, whichever applies,
specifying that the required reserves for any retirement,
disability, or survivor benefits provided under a benefit
formula are computed in accordance with the entry age actuarial
cost method and new text beginin accordance new text endwith the most recent applicable
standards for actuarial work adopted by the Legislative
Commission on Pensions and Retirement.

(b) Assets of the fund or plan contained in the disclosure
item must include the following statement of the actuarial value
of current assets as defined in section 356.215, subdivision 1:

Value Value

at cost at market

Cash, cash equivalents, and

short-term securities ......... .........

Accounts receivable ......... .........

Accrued investment income ......... .........

Fixed income investments ......... .........

Equity investments other

than real estate ......... .........

Real estate investments ......... .........

Equipment ......... .........

deleted text begin Equity deleted text end new text beginParticipation new text endin the Minnesota

postretirement investment

fund new text beginor the retirement
new text end

new text begin benefit fund new text end......... .........

Other ......... .........

Total assets

Value at cost .........

Value at market .........

new text begin Actuarial new text endvalue of current assets .........

(c) The unfunded actuarial accrued liability of the fund or
plan contained in the disclosure item must include the following
measures of unfunded actuarial accrued liability, using
the new text beginactuarial new text endvalue of current assets:

(1) new text beginthe new text endunfunded actuarial accrued liability, determined by
subtracting the current assets and the present value of future
normal costs from the total current and expected future benefit
obligations; and

(2) new text beginthe new text endunfunded pension benefit obligation, determined by
subtracting the current assets from the actuarial present value
of credited projected benefits.

If the current assets of the fund or plan exceed the
actuarial accrued liabilities, the excess must be disclosed and
indicated as a surplus.

(d) The pension benefit obligations schedule included in
the disclosure must contain the following information on the
benefit obligations:

(1) the pension benefit obligation, determined as the
actuarial present value of credited projected benefits on
account of service rendered to date, separately identified as
follows:

(i) for annuitants;
retirement annuities;
disability benefits;
surviving spouse and child benefits;
(ii) for former members without vested rights;
(iii) for deferred annuitants' benefits, including
any augmentation;
(iv) for active employees;
accumulated employee contributions,
including allocated investment income;
employer-financed benefits vested;
employer-financed benefits nonvested;
total pension benefit obligation; and

(2) if there are additional benefits not appropriately
covered by the foregoing items of benefit obligations, a
separate identification of the obligation.

(e) new text beginThe report must contain an itemized exhibit describing
the administrative expenses of the plan, including, but not
limited to, the following items, classified on a consistent
basis from year to year, and with any further meaningful detail:
new text end

new text begin (1) personnel expenses;
new text end

new text begin (2) communication-related expenses;
new text end

new text begin (3) office building and maintenance expenses;
new text end

new text begin (4) professional services fees; and
new text end

new text begin (5) other expenses.
new text end

new text begin (f) The report must contain an itemized exhibit describing
the investment expenses of the plan, including, but not limited
to, the following items, classified on a consistent basis from
year to year, and with any further meaningful detail:
new text end

new text begin (1) internal investment-related expenses; and
new text end

new text begin (2) external investment-related expenses.
new text end

new text begin (g) new text endAny additional statements or exhibits or more detailed
or subdivided itemization of a disclosure item that will enable
the management of the fund to portray a true interpretation of
the fund's financial condition must be included in the
additional statements or exhibits.

Sec. 7.

Minnesota Statutes 2004, section 356.47,
subdivision 3, is amended to read:

Subd. 3.

Payment.

(a) Upon the retired member attaining
the age of 65 years or upon the first day of the month next
following the month occurring one year after the termination of
the reemployment that gave rise to the limitation, whichever is
later, and the filing of a written application, the retired
member is entitled to the payment, in a lump sum, of the value
of the person's amount under subdivision 2, plus interest at the
compound annual rate of six percent from the date that the
amount was deducted from the retirement annuity to the date of
payment.

(b) The written application must be on a form prescribed by
the chief administrative officer of the applicable retirement
plan.

(c) If the retired member dies before the payment provided
for in paragraph (a) is made, the amount is payable, upon
written application, to the deceased person's surviving spouse,
or if none, to the deceased person's designated beneficiary, or
if none, to the deceased person's estate.

new text begin (d) In lieu of the direct payment of the person's amount
under subdivision 2, on or after the payment date under
paragraph (a), if the federal Internal Revenue Code so permits,
the retired member may elect to have all or any portion of the
payment amount under this section paid in the form of a direct
rollover to an eligible retirement plan as defined in section
402(c) of the federal Internal Revenue Code that is specified by
the retired member. If the retired member dies with a balance
remaining payable under this section, the surviving spouse of
the retired member, or if none, the deceased person's designated
beneficiary, or if none, the administrator of the deceased
person's estate may elect a direct rollover under this paragraph.
new text end

Sec. 8.

Minnesota Statutes 2004, section 422A.01,
subdivision 6, is amended to read:

Subd. 6.

Present worth or present value.

"Present worth"
or "present value" means that the present amount of money if
increased at the applicable postretirement or preretirement
interest rate assumption specified in section 356.215,
subdivision 8, and based on the mortality table adopted by the
board of trustees based on the experience of the fund as
recommended by the actuary retained deleted text beginby the Legislative
Commission on Pensions and Retirement deleted text end new text beginunder section 356.214, and
approved under section 356.215, subdivision 18, new text endwill at
retirement equal the actuarial accrued liability of the annuity
already earned.

Sec. 9.

Minnesota Statutes 2004, section 490.121,
subdivision 20, is amended to read:

Subd. 20.

Actuarial equivalent.

"Actuarial equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value
based on the appropriate mortality table adopted by the board of
deleted text begin trustees deleted text end new text begindirectors of the Minnesota State Retirement System
new text end based on the experience of the fund as recommended by
the deleted text begincommission-retained deleted text endactuary new text beginretained under section 356.214,
and approved under section 356.215, subdivision 18, new text endand using
the applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.

Sec. 10. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 5, 8, and 9 are effective July 1, 2005.
new text end

new text begin (b) Section 6 is effective the day following final
enactment and applies to annual financial reporting occurring on
or after June 30, 2005.
new text end

new text begin (c) Section 4 is effective the day following final
enactment.
new text end

new text begin (d) Section 7 is effective July 1, 2005, and applies to
retired members with an amount in a reemployed annuitant's
account on or after that date.
new text end

ARTICLE 4

MEMBERSHIP INCLUSIONS
AND EXCLUSIONS

Section 1.

Minnesota Statutes 2004, section 69.011, is
amended by adding a subdivision to read:

new text begin Subd. 2c. new text end

new text begin Ineligibility of certain police officers. new text end

new text begin A
police officer employed by the University of Minnesota who is
required by the Board of Regents to be a member of the
University of Minnesota faculty retirement plan is not eligible
to be included in any police state-aid certification under this
section.
new text end

Sec. 2.

Minnesota Statutes 2004, section 352.01,
subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) "State employee"
includes:

(1) employees of the Minnesota Historical Society;

(2) employees of the State Horticultural Society;

(3) employees of the Disabled American Veterans, Department
of Minnesota, Veterans of Foreign Wars, Department of Minnesota,
if employed before July 1, 1963;

(4) employees of the Minnesota Crop Improvement
Association;

(5) employees of the adjutant general who are paid from
federal funds and who are not covered by any federal civilian
employees retirement system;

(6) employees of the Minnesota State Colleges and
Universities employed under the university or college activities
program;

(7) currently contributing employees covered by the system
who are temporarily employed by the legislature during a
legislative session or any currently contributing employee
employed for any special service as defined in subdivision 2b,
clause (8);

(8) employees of the Armory Building Commission;

(9) employees of the legislature appointed without a limit
on the duration of their employment and persons employed or
designated by the legislature or by a legislative committee or
commission or other competent authority to conduct a special
inquiry, investigation, examination, or installation;

(10) trainees who are employed on a full-time established
training program performing the duties of the classified
position for which they will be eligible to receive immediate
appointment at the completion of the training period;

(11) employees of the Minnesota Safety Council;

(12) any employees on authorized leave of absence from the
Transit Operating Division of the former Metropolitan Transit
Commission who are employed by the labor organization which is
the exclusive bargaining agent representing employees of the
Transit Operating Division;

(13) employees of the Metropolitan Council, Metropolitan
Parks and Open Space Commission, Metropolitan Sports Facilities
Commission, Metropolitan Mosquito Control Commission, or
Metropolitan Radio Board unless excluded or covered by another
public pension fund or plan under section 473.415, subdivision
3;

(14) judges of the Tax Court;

(15) personnel employed on June 30, 1992, by the University
of Minnesota in the management, operation, or maintenance of its
heating plant facilities, whose employment transfers to an
employer assuming operation of the heating plant facilities, so
long as the person is employed at the University of Minnesota
heating plant by that employer or by its successor organization;
deleted text begin and
deleted text end

(16) seasonal help in the classified service employed by
the Department of Revenue new text begin; and
new text end

new text begin (17) persons employed by the Department of Commerce as a
peace officer in the Insurance Fraud Prevention Division under
section 45.0135 who have attained the mandatory retirement age
specified in section 43A.34, subdivision 4 new text end.

(b) Employees specified in paragraph (a), clause (15), are
included employees under paragraph (a) if employer and employee
contributions are made in a timely manner in the amounts
required by section 352.04. Employee contributions must be
deducted from salary. Employer contributions are the sole
obligation of the employer assuming operation of the University
of Minnesota heating plant facilities or any successor
organizations to that employer.

Sec. 3.

Minnesota Statutes 2004, section 352.91, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Process for evaluating and recommending
potential employment positions for membership inclusion. new text end

new text begin (a)
The Department of Corrections and the Department of Human
Services must establish a procedure for evaluating periodic
requests by department employees for qualification for
recommendation by the commissioner for inclusion of the
employment position in the correctional facility or human
services facility in the correctional retirement plan and for
periodically determining employment positions that no longer
qualify for continued correctional retirement plan coverage.
new text end

new text begin (b) The procedure must provide for an evaluation of the
extent of the employee's working time spent in direct contact
with patients or inmates, the extent of the physical hazard that
the employee is routinely subjected to in the course of
employment, and the extent of intervention routinely expected of
the employee in the event of a facility incident. The
percentage of routine direct contact with inmates or patients
may not be less than 75 percent.
new text end

new text begin (c) The applicable commissioner shall notify the employee
of the determination of the appropriateness of recommending the
employment position for inclusion in the correctional retirement
plan, if the evaluation procedure results in a finding that the
employee:
new text end

new text begin (1) routinely spends 75 percent of the employee's time in
direct contact with inmates or patients; and
new text end

new text begin (2) is regularly engaged in the rehabilitation, treatment,
custody, or supervision of inmates or patients.
new text end

new text begin (d) After providing the affected employee an opportunity to
dispute or clarify any evaluation determinations, if the
commissioner determines that the employment position is
appropriate for inclusion in the correctional retirement plan,
the commissioner shall forward that recommendation and
supporting documentation to the chair of the Legislative
Commission on Pensions and Retirement, the chair of the State
and Local Governmental Operations Committee of the senate, the
chair of the Governmental Operations and Veterans Affairs Policy
Committee of the house of representatives, and the executive
director of the Legislative Commission on Pensions and
Retirement in the form of the appropriate proposed legislation.
The recommendation must be forwarded to the legislature before
January 15 for the recommendation to be considered in that
year's legislative session.
new text end

Sec. 4.

Minnesota Statutes 2004, section 352B.01,
subdivision 2, is amended to read:

Subd. 2.

Member.

"Member" means:

(1) a State Patrol member currently employed after June 30,
1943, under section 299D.03 by the state, who is a peace officer
under section 626.84, and whose salary or compensation is paid
out of state funds;

(2) a conservation officer employed under section 97A.201,
currently employed by the state, whose salary or compensation is
paid out of state funds;

(3) a crime bureau officer who was employed by the crime
bureau and was a member of the Highway Patrolmen's retirement
fund on July 1, 1978, whether or not that person has the power
of arrest by warrant after that date, or who is employed as
police personnel, with powers of arrest by warrant under section
299C.04, and who is currently employed by the state, and whose
salary or compensation is paid out of state funds;

(4) a person who is employed by the state in the Department
of Public Safety in a data processing management position with
salary or compensation paid from state funds, who was a crime
bureau officer covered by the State Patrol retirement plan on
August 15, 1987, and who was initially hired in the data
processing management position within the department during
September 1987, or January 1988, with membership continuing for
the duration of the person's employment in that position,
whether or not the person has the power of arrest by warrant
after August 15, 1987;

(5) a public safety employee defined as a peace officer in
section 626.84, subdivision 1, paragraph (c), and employed with
the Division of Alcohol and Gambling Enforcement under section
299L.01; deleted text beginand
deleted text end

(6) a Fugitive Apprehension Unit officer after October 31,
2000, employed by the Office of Special Investigations of the
Department of Corrections who is a peace officer under section
626.84 new text begin; and
new text end

new text begin (7) an employee of the Department of Commerce defined as a
peace officer in section 626.84, subdivision 1, paragraph (c),
who is employed by the Division of Insurance Fraud Prevention
under section 45.0135 after January 1, 2005, and who has not
attained the mandatory retirement age specified in section
43A.34, subdivision 4 new text end.

Sec. 5.

Minnesota Statutes 2004, section 353.01,
subdivision 6, is amended to read:

Subd. 6.

Governmental subdivision.

(a) "Governmental
subdivision" means a county, city, town, school district within
this state, or a department or unit of state government, or any
public body whose revenues are derived from taxation, fees,
assessments or from other sources.

(b) Governmental subdivision also means the Public
Employees Retirement Association, the League of Minnesota
Cities, the Association of Metropolitan Municipalities, public
hospitals owned or operated by, or an integral part of, a
governmental subdivision or governmental subdivisions, the
Association of Minnesota Counties, the Metropolitan Intercounty
Association, the Minnesota Municipal Utilities Association, the
Metropolitan Airports Commission, new text beginthe University of Minnesota
with respect to police officers covered by the public employees
police and fire retirement plan, new text endthe Minneapolis Employees
Retirement Fund for employment initially commenced after June
30, 1979, the Range Association of Municipalities and Schools,
soil and water conservation districts, economic development
authorities created or operating under sections 469.090 to
469.108, the Port Authority of the city of St. Paul, the Spring
Lake Park Fire Department, incorporated, the Lake Johanna
Volunteer Fire Department, incorporated, the Red Wing
Environmental Learning Center, and the Dakota County
Agricultural Society.

(c) Governmental subdivision does not mean any municipal
housing and redevelopment authority organized under the
provisions of sections 469.001 to 469.047; or any port authority
organized under sections 469.048 to 469.089 other than the Port
Authority of the city of St. Paul; or any hospital district
organized or reorganized prior to July 1, 1975, under sections
447.31 to 447.37 or the successor of the district, nor the
Minneapolis Community Development Agency.

Sec. 6.

Minnesota Statutes 2004, section 353.64, is
amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin University of minnesota police officers;
inclusions and exclusions. new text end

new text begin (a) Unless paragraph (b) applies, a
person who is employed as a peace officer by the University of
Minnesota at any campus or facility of the university, who is
required by the university to be and is licensed as a peace
officer by the Minnesota Peace Officer Standards and Training
Board under sections 626.84 to 626.863, and who has the full
power of arrest is a member of the public employees police and
fire retirement plan.
new text end

new text begin (b) A police officer employed by the University of
Minnesota who is required by the Board of Regents to contribute
to the University of Minnesota faculty retirement plan is not
eligible to be a member of the public employees police and fire
retirement plan.
new text end

Sec. 7.

Minnesota Statutes 2004, section 354B.21,
subdivision 2, is amended to read:

Subd. 2.

Coverage; election.

(a) deleted text beginAn eligible person is
entitled to elect coverage by the plan. If the eligible person
does not make a timely election of coverage by the plan, the
person has the coverage specified in subdivision 3.
deleted text end

deleted text begin (b) deleted text endFor eligible persons who were employed by the former
state university system or the former community college system
before May 1, 1995, the person has the retirement coverage that
the person had for employment immediately before May 1, 1995.

deleted text begin (c) deleted text end new text begin(b) new text endFor all other eligible persons, deleted text beginthe election of
coverage must be made within 90 days of May 10, 1995, or 90 days
of receiving notice from the employer of the options available
under this section, whichever occurs later deleted text end new text beginunless otherwise
specified in this section, the eligible person is authorized to
elect prospective Teachers Retirement Association plan coverage
rather than coverage by the plan established by this chapter.
The election of prospective Teachers Retirement Association plan
coverage shall be made within one year of commencing eligible
Minnesota State Colleges and Universities system employment. If
an election is not made within the specified election period due
to a termination of Minnesota State Colleges and Universities
system employment, an election may be made within 90 days of
returning to eligible Minnesota State Colleges and Universities
system employment. All elections are irrevocable. Prior to
making an election the eligible person shall be covered by the
plan indicated as default coverage under subdivision 3 new text end.

new text begin (c) A purchase of service credit in the Teachers Retirement
Association plan for any period or periods of Minnesota State
Colleges and Universities system employment occurring prior to
the election under paragraph (b) is prohibited.
new text end

Sec. 8.

Minnesota Statutes 2004, section 354B.21,
subdivision 3, is amended to read:

Subd. 3.

Default coverage.

(a) new text beginPrior to making an
election under subdivision 2, or new text endif an eligible person fails to
elect coverage by the plan under subdivision 2 or if the person
fails to make a timely election, the following retirement
coverage applies:

(1) for employees of the board who are employed in faculty
positions in the technical colleges, in the state universities
or in the community colleges, the retirement coverage is by the
plan established by this chapter;

(2) for employees of the board who are employed in faculty
positions in the technical colleges, the retirement coverage is
by the plan established by this chapter unless on June 30, 1997,
the employee was a member of the Teachers Retirement Association
established under chapter 354 and then the retirement coverage
is by the Teachers Retirement Association, or, unless the
employee was a member of a first class city teacher retirement
fund established under chapter 354A on June 30, 1995, and then
the retirement coverage is by the Duluth Teachers Retirement
Fund Association if the person was a member of that plan on June
30, 1995, or the Minneapolis Teachers Retirement Fund
Association if the person was a member of that plan on June 30,
1995, or the St. Paul Teachers Retirement Fund Association if
the person was a member of that plan on June 30, 1995; and

(3) for employees of the board who are employed in eligible
unclassified administrative positions, the retirement coverage
is by the plan established by this chapter.

(b) If an employee fails to correctly certify prior
membership in the Teachers Retirement Association to the
Minnesota State colleges and Universities system, the system
shall not pay interest on employee contributions, employer
contributions, and additional employer contributions to the
Teachers Retirement Association under section 354.52,
subdivision 4.

Sec. 9. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1, 3, 5, and 6 are effective July 1, 2005.
new text end

new text begin (b) Sections 2 and 4 are effective retroactively from
January 1, 2005.
new text end

new text begin (c) Sections 7 and 8 are effective the day following final
enactment.
new text end

ARTICLE 5

RETIREMENT CONTRIBUTIONS

Section 1.

Minnesota Statutes 2004, section 353.27,
subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) The employee
contribution is the following applicable percentage of new text beginthe new text endtotal
salary amount for a "basic member" and for a "coordinated
member":

Basic Coordinated
Program Program
deleted text begin Before January 1, 2002 deleted text end deleted text begin8.75 deleted text end deleted text begin4.75
Effective January 1, 2002
deleted text end new text begin Effective before January 1, 2006 new text end9.10 5.10
new text begin Effective January 1, 2006 new text end new text begin9.10 new text end new text begin5.50
Effective January 1, 2007 new text end new text begin9.10 new text end new text begin5.75
Effective January 1, 2008 new text end new text begin9.10 new text end new text begin6.00 plus any
contribution
rate adjustment
under
subdivision 3b
new text end

(b) These contributions must be made by deduction from
salary new text beginas defined in section 353.01, subdivision 10, new text endin the
manner provided in subdivision 4. deleted text beginWhere deleted text end new text beginIf new text endany portion of a
member's salary is paid from other than public funds, deleted text beginsuch deleted text end new text beginthe
new text end member's employee contribution must be based on the total salary
received new text beginby the member new text endfrom all sources.

Sec. 2.

Minnesota Statutes 2004, section 353.27,
subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

(a) The employer
contribution is the following applicable percentage of new text beginthe new text endtotal
salary amount new text beginfor "basic members" and for "coordinated members" new text end:

Basic Coordinated
Program Program
deleted text begin Before January 1, 2002 deleted text end deleted text begin8.75 deleted text end deleted text begin4.75
Effective January 1, 2002
deleted text end new text begin Effective before January 1, 2006 new text end9.10 5.10
new text begin Effective January 1, 2006 new text end new text begin9.10 new text end new text begin5.50
Effective January 1, 2007 new text end new text begin9.10 new text end new text begin5.75
Effective January 1, 2008 new text end new text begin9.10 new text end new text begin6.00 plus any
contribution
rate adjustment
under
subdivision 3b
new text end

(b) This contribution must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.

Sec. 3.

Minnesota Statutes 2004, section 353.27,
subdivision 3a, is amended to read:

Subd. 3a.

Additional employer contribution.

(a) An
additional employer contribution must be made equal to deleted text begin(1) 2.68
percent of deleted text endthe new text beginfollowing applicable percentage of the new text endtotal
salary deleted text beginof each deleted text end new text beginamount for new text end"basic deleted text beginmember deleted text end new text beginmembers new text end" deleted text begin; deleted text endand deleted text begin(2)
.43 percent of the total salary of each deleted text end new text beginfor new text end"coordinated deleted text beginmember.
deleted text end new text begin members new text end" new text begin:
new text end

new text begin Basic new text end new text begin Coordinated
Program new text end new text begin Program
Effective before January 1, 2006 new text end new text begin 2.68 new text end new text begin .43
Effective January 1, 2006 new text end new text begin 2.68 new text end new text begin .50
Effective January 1, 2009 new text end new text begin 2.68 new text end new text begin .75
Effective January 1, 2010 new text end new text begin 2.68 new text end new text begin 1.00
new text end

These contributions must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.

(b) new text beginThe coordinated program contribution rates set forth in
paragraph (a) effective for January 1, 2009, or January 1, 2010,
must not be implemented if, following receipt of the July 1,
2008, or July 1, 2009, annual actuarial valuation reports under
section 356.215, respectively, the actuarially required
contributions are equal to or less than the total rates under
this section in effect as of January 1, 2008.
new text end

new text begin (c) new text endThis subdivision is repealed once the actuarial value
of the assets of the plan equal or exceed the actuarial accrued
liability of the plan as determined by the actuary retained by
the Legislative Commission on Pensions and Retirement under
section 356.215. The repeal is effective on the first day of
the first full pay period occurring after March 31 of the
calendar year following the issuance of the actuarial valuation
upon which the repeal is based.

Sec. 4.

Minnesota Statutes 2004, section 353.27, is
amended by adding a subdivision to read:

new text begin Subd. 3b. new text end

new text begin Change in employee and employer contributions
in certain instances. new text end

new text begin (a) For purposes of this section, a
contribution sufficiency exists if the total of the employee
contribution under subdivision 2, the employer contribution
under subdivision 3, the additional employer contribution under
subdivision 3a, and any additional contribution previously
imposed under this subdivision exceeds the total of the normal
cost, the administrative expenses, and the amortization
contribution of the retirement plan as reported in the most
recent actuarial valuation of the retirement plan prepared by
the actuary retained under section 356.214 and prepared under
section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirement. For purposes
of this section, a contribution deficiency exists if the total
of the employee contributions under subdivision 2, the employer
contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional
contribution previously imposed under this subdivision is less
than the total of the normal cost, the administrative expenses,
and the amortization contribution of the retirement plan as
reported in the most recent actuarial valuation of the
retirement plan prepared by the actuary retained under section
356.214 and prepared under section 356.215 and the standards for
actuarial work of the Legislative Commission on Pensions and
Retirement.
new text end

new text begin (b) Employee and employer contributions under subdivisions
2 and 3 must be adjusted:
new text end

new text begin (1) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a contribution sufficiency under
paragraph (a) equal to or greater than 0.5 percent of covered
payroll for two consecutive years, the coordinated program
employee and employer contribution rates must be decreased as
determined under paragraph (c) to a level such that the
sufficiency equals no more than 0.25 percent of covered payroll
based on the most recent actuarial valuation; or
new text end

new text begin (2) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a deficiency equal to or greater than 0.5
percent of covered payroll for two consecutive years, the
coordinated program employee and employer contribution rates
must be increased as determined under paragraph (c) to a level
such that no deficiency exists based on the most recent
actuarial valuation.
new text end

new text begin (c) The contribution rate increase or decrease must be
determined by the executive director of the Public Employees
Retirement Association, must be reported to the chair and the
executive director of the Legislative Commission on Pensions and
Retirement on or before the next February 1, and, if the
Legislative Commission on Pensions and Retirement does not
recommend against the rate change or does not recommend a
modification in the rate change, is effective on the next July 1
following the determination by the executive director that a
contribution deficiency or sufficiency has existed for two
consecutive fiscal years based on the most recent actuarial
valuations under section 356.215. If the actuarially required
contribution exceeds or is less than the total support provided
by the combined employee and employer contribution rates by more
than 0.5 percent of covered payroll, the coordinated program
employee and employer contribution rates must be adjusted
incrementally over one or more years to a level such that there
remains a contribution sufficiency of no more than 0.25 percent
of covered payroll.
new text end

new text begin (d) No incremental adjustment may exceed 0.25 percent for
either the coordinated program employee and employer
contribution rates per year in which any adjustment is
implemented. A contribution rate adjustment under this
subdivision must not be made until at least two years have
passed since fully implementing a previous adjustment under this
subdivision.
new text end

Sec. 5.

Minnesota Statutes 2004, section 353.28,
subdivision 5, is amended to read:

Subd. 5.

Interest deleted text begincharges deleted text end new text beginchargeable on amounts due new text end.

Any
amount due under this section or section 353.27, subdivision 4,
is payable with interest at an annual new text begincompound new text endrate of 8.5
percent deleted text begincompounded annually deleted text endfrom the date due until the date
payment is received by the association, with a minimum interest
charge of $10. deleted text beginInterest for past due payments of excess police
state aid under section 69.031, subdivision 5, must be charged
at an annual rate of 8.5 percent compounded annually.
deleted text end

Sec. 6.

Minnesota Statutes 2004, section 353.28,
subdivision 6, is amended to read:

Subd. 6.

deleted text beginfailure to pay deleted text end new text begincollection of unpaid amounts new text end.

new text begin(a)
new text end If deleted text beginthe deleted text end new text begina new text endgovernmental subdivision new text beginwhich receives the direct
proceeds of property taxation new text endfails to pay deleted text beginamounts deleted text end new text beginan amount new text enddue
under deleted text beginchapters deleted text end new text beginchapter new text end353, 353A, 353B, 353C, deleted text beginand deleted text end new text beginor new text end353D deleted text beginor
fails to make payments of excess police state aid to the public
employees police and fire fund under section 69.031, subdivision
5 deleted text end, the executive director shall certify deleted text beginthose amounts deleted text end new text beginthe amount
new text end to the governmental subdivision for payment. If the
governmental subdivision fails to remit the sum so due in a
timely fashion, the executive director shall certify deleted text beginamounts deleted text end new text beginthe
amount new text endto the new text beginapplicable new text endcounty auditor for collection. The
county auditor shall collect deleted text beginsuch amounts deleted text end new text beginthe amount new text endout of the
revenue of the governmental subdivision, or shall add deleted text beginthem deleted text end new text beginthe
amount new text endto the levy of the governmental subdivision and make
payment directly to the association. This tax deleted text beginshall deleted text end new text beginmust new text endbe
levied, collected, and apportioned in the manner new text beginthat new text endother
taxes are levied, collected, and apportioned.

new text begin (b) If a governmental subdivision which is not funded
directly from the proceeds of property taxation fails to pay an
amount due under this chapter, the executive director shall
certify the amount to the governmental subdivision for payment.
If the governmental subdivision fails to pay the amount for a
period of 60 days after certification, the executive director
shall certify the amount to the commissioner of finance, who
shall deduct the amount from any subsequent state-aid payment or
state appropriation amount applicable to the governmental
subdivision.
new text end

Sec. 7.

Minnesota Statutes 2004, section 353.65,
subdivision 2, is amended to read:

Subd. 2.

Employee contribution rate.

new text begin(a) new text endThe employee
contribution is an amount equal to deleted text begin6.2 deleted text end new text beginthe new text endpercent of the total
salary of the member new text beginspecified in paragraph (b) new text end. This
contribution must be made by deduction from salary in the manner
provided in subdivision 4. Where any portion of a member's
salary is paid from other than public funds, the member's
employee contribution is based on the total salary received from
all sources.

new text begin (b) For calendar year 2006, the employee contribution rate
is 7.0 percent. For calendar year 2007, the employee
contribution rate is 7.8 percent. For calendar year 2008, the
employee contribution rate is 8.6 percent. For calendar year
2009 and thereafter, the employee contribution rate is 9.4
percent.
new text end

Sec. 8.

Minnesota Statutes 2004, section 353.65,
subdivision 3, is amended to read:

Subd. 3.

Employer contribution rate.

new text begin(a) new text endThe employer
contribution shall be an amount equal to deleted text begin9.3 deleted text end new text beginthe new text endpercent of the
total salary of every member new text beginas specified in paragraph (b) new text end.
This contribution shall be made from funds available to the
employing subdivision by the means and in the manner provided in
section 353.28.

new text begin (b) For calendar year 2006, the employer contribution rate
is 10.5 percent. For calendar year 2007, the employer
contribution rate is 11.7 percent. For calendar year 2008, the
employer contribution rate is 12.9 percent. For calendar year
2009 and thereafter, the employer contribution rate is 14.1
percent.
new text end

Sec. 9. new text beginPUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST
ON SERVICE CREDIT PURCHASE PAYMENT RETURN.
new text end

new text begin If a former employee of the Minneapolis Community
Development Agency made a prior service credit purchase payment
under Minnesota Statutes 2002, section 356.55, in an amount that
is greater than the actually required payment amount because of
the use of an inaccurate salary figure or other similar
reporting or clerical error, the general employees retirement
plan of the Public Employees Retirement Association may pay
interest on the overage amount at an annual compound rate of six
percent per year.
new text end

Sec. 10. new text beginRETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT
FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.
new text end

new text begin (a) An eligible person, upon written application, may
receive a return of a prior service credit purchase payment
under Minnesota Statutes 2002, section 356.55, plus interest on
the amount at an annual compound rate of six percent per year.
The return amount and interest must be made in an
institution-to-institution transfer to a federal tax qualified
retirement plan or account and may not be paid directly to an
individual.
new text end

new text begin (b) An eligible person is a person who was an employee of
the Minneapolis Community Development Agency and made a payment
for the purchase of prior service credit under Laws 2003,
chapter 127, article 12, section 31, subdivision 4, and
Minnesota Statutes 2002, section 356.55, in an erroneous amount
because of an inaccurate salary figure supplied by the employing
agency.
new text end

Sec. 11. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 5 and 6 are effective retroactive to July 1,
2005.
new text end

new text begin (b) Sections 9 and 10 are effective the day following final
enactment.
new text end

new text begin (c) Section 10 expires June 30, 2005.
new text end

ARTICLE 6

PENSION BENEFITS UPON PRIVATIZATION

Section 1.

Minnesota Statutes 2004, section 353F.02,
subdivision 4, is amended to read:

Subd. 4.

Medical facility.

"Medical facility" means:

(1) new text beginBridges Medical Services;
new text end

new text begin (2) new text endthe Fair Oaks Lodge, Wadena;

deleted text begin (2) deleted text end new text begin(3) new text endthe Glencoe Area Health Center;

deleted text begin (3) deleted text end new text begin (4) the Hutchinson Area Health Care;
new text end

new text begin (5) new text endthe Kanabec Hospital;

deleted text begin (4) deleted text end new text begin(6) new text endthe Luverne Public Hospital;

new text begin (7) the Northfield Hospital;
new text end

deleted text begin (5) deleted text end new text begin(8) new text endthe RenVilla Nursing Home;

deleted text begin (6) deleted text end new text begin(9) new text endthe Renville County Hospital in Olivia;

deleted text begin (7) deleted text end new text begin(10) new text endthe St. Peter Community Healthcare Center; and

deleted text begin (8) deleted text end new text begin(11) new text endthe Waconia-Ridgeview Medical Center.

Sec. 2.

Minnesota Statutes 2004, section 471A.10, is
amended to read:

471A.10 PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING
FACILITY.

(a) Unless expressly provided therein, and except as
provided in this section, no state law, charter provision, or
ordinance of a municipality relating to public employees shall
apply to a person solely by reason of that person's employment
by a private vendor in connection with services rendered under a
service contract.

(b) A private vendor purchasing or leasing existing related
facilities from a municipality or operating or maintaining the
facility shall recognize all exclusive bargaining
representatives and existing labor agreements and those
agreements shall remain in force until they expire by their
terms. Persons deleted text beginwho are not deleted text end new text beginwho were new text endemployed by a municipality
in a related facility deleted text beginat the time of deleted text end new text beginand who were members of the
Public Employees Retirement Association general plan due to that
employment are not permitted to remain as active members of the
plan following new text enda lease or purchase of the facility by deleted text beginthe deleted text end new text begina
new text end private vendor deleted text beginare not "public employees" within the meaning of
the Public Employees Retirement Act, chapter 353. Persons
employed by a municipality in a related facility at the time of
a lease or purchase of the facility by a private vendor shall
continue to be considered to be "public employees" within the
meaning of the Public Employees Retirement Act, chapter 353, but
may elect to terminate their participation in the Public
Employees Retirement Association as provided in this section.
Each such employee may exercise the election annually on the
anniversary of the person's initial employment by the
municipality. An employee electing to terminate participation
in the association is entitled to benefits that the employee
would be entitled to if terminating public employment and may
participate in a retirement program established by the private
vendor deleted text end.

Sec. 3.

Laws 2004, chapter 267, article 12, section 4, is
amended to read:

Sec. 4 new text beginEFFECTIVE DATE.
new text end

(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
effective upon the latter of:

(1) the day after the governing body of Todd County and its
chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3; and

(2) the day after the governing body of Wadena County and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

(b) Section 1, relating to the RenVilla Nursing Home, is
effective upon the latter of:

(1) the day after the governing body of the city of
Renville and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3 new text begin, except that the certificate of approval
must be filed before January 1, 2006 new text end; and

(2) the first day of the month next following certification
to the governing body of the city of Renville by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized RenVilla Nursing Home
employees under section 1 does not exceed the actuarial gain
otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement new text begin, or the
actuary retained under Minnesota Statutes, section 356.214,
whichever is applicable new text end.

(c) The cost of the actuarial calculations must be borne by
the city of Renville or the purchaser of the RenVilla Nursing
Home.

(d) Section 1, relating to the St. Peter Community
Healthcare Center, is effective upon the latter of:

(1) the day after the governing body of the city of St.
Peter and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and

(2) the first day of the month next following certification
to the governing body of the city of St. Peter by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized St. Peter Community
Healthcare Center employees under section 1 does not exceed the
actuarial gain otherwise to be accrued by the Public Employees
Retirement Association, as calculated by the consulting actuary
retained by the Legislative Commission on Pensions and
Retirement new text begin, or the actuary retained under Minnesota Statutes,
section 356.214, whichever is applicable new text end.

(e) The cost of the actuarial calculations must be borne by
the city of St. Peter or the purchaser of the St. Peter
Community Healthcare Center.

(f) If the required actions under paragraphs (b) and (c)
occur, section 1 applies retroactively to the RenVilla Nursing
Home as of the date of privatization.

(g) If the required actions under paragraph (a) occur,
section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
of January 1, 2004.

(h) Sections 2 and 3 are effective deleted text beginon deleted text endthe day following
final enactment.

Sec. 4. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Section 1, relating to Bridges Medical Services, is
effective upon the later of:
new text end

new text begin (1) the day after the governing body of the city of Ada and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
new text end

new text begin (2) the first day of the month next following certification
to the governing body of the city of Ada by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Bridges Medical
Services employees under section 1 does not exceed the actuarial
gain otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained
under Minnesota Statutes, section 356.214.
new text end

new text begin (b) Section 1, relating to the Hutchinson Area Health Care,
is effective upon the later of:
new text end

new text begin (1) the day after the governing body of the city of
Hutchinson and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
new text end

new text begin (2) the first day of the month next following certification
to the governing body of the city of Hutchinson by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Hutchinson Area Health
Care employees under section 1 does not exceed the actuarial
gain otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement.
new text end

new text begin (c) Section 1, relating to the Northfield Hospital, is
effective upon the later of:
new text end

new text begin (1) the day after the governing body of the city of
Northfield and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
new text end

new text begin (2) the first day of the month next following certification
to the governing body of the city of Northfield by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Northfield Hospital
employees under section 1 does not exceed the actuarial gain
otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement.
new text end

new text begin (d) The cost of the actuarial calculations must be borne by
the facility, the city in which the facility is located, or the
purchaser of the facility.
new text end

new text begin (e) If the required actions in paragraphs (a), (b), or (c)
and (d) occur, section 1 applies retroactively to the date of
privatization.
new text end

new text begin (f) Section 3 is effective the day following final
enactment.
new text end

new text begin (g) Section 2 is effective the day following final
enactment and applies to privatizations occurring on or after
the effective date.
new text end

ARTICLE 7

FIRST CLASS CITY TEACHER
RETIREMENT FUND ASSOCIATIONS

Section 1.

Minnesota Statutes 2004, section 354A.021, is
amended by adding a subdivision to read:

new text begin Subd. 9. new text end

new text begin Updated articles of incorporation and bylaws;
filing. new text end

new text begin (a) On or before July 1, 2006, and within six months of
the date of the approval of any amendment to the articles of
incorporation or bylaws, the chief administrative officer of
each first class city teacher retirement fund association shall
prepare and publish an updated compilation of the articles of
incorporation and the bylaws of the association.
new text end

new text begin (b) The chief administrative officer of the first class
city teacher retirement fund association must certify the
accuracy and the completeness of the compilation.
new text end

new text begin (c) The compilation of the articles of incorporation and
bylaws of a first class city teacher retirement fund association
must contain an index.
new text end

new text begin (d) The compilation must be made available to association
members and other interested parties. The association may
charge a fee for a copy that reflects the price of printing or
otherwise producing the copy. Two copies of the compilation
must be filed, without charge, by each retirement fund
association with the Legislation Commission on Pensions and
Retirement, the Legislative Reference Library, the state
auditor, the commissioner of education, the chancellor of the
Minnesota State Colleges and Universities system, and the
superintendent of the applicable school district.
new text end

new text begin (e) A first class city teacher retirement fund association
may contract with the revisor of statutes for the preparation of
the compilation.
new text end

new text begin (f) If a first class city teacher retirement fund
association makes an updated copy of its articles of
incorporation and bylaws available on its Web site, the
retirement fund association is not obligated to file a hard copy
of the documents under paragraph (d) for the applicable filing
period.
new text end

Sec. 2. new text beginEFFECTIVE DATE.
new text end

new text begin Section 1 is effective July 1, 2005.
new text end

ARTICLE 8

MINNESOTA STATE COLLEGES AND UNIVERSITIES
INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES

Section 1.

Minnesota Statutes 2004, section 354B.25,
subdivision 2, is amended to read:

Subd. 2.

Investment options.

new text begin(a) new text endThe plan administrator
shall arrange for the purchase of investment products.

new text begin (b) new text endThe investment products must be purchased with
contributions under section 354B.23 or with money or assets
otherwise provided by law by authority of the board.

new text begin (c) Various investment accounts offered through new text endthe
Minnesota supplemental investment fund established under section
11A.17 and administered by the State Board of Investment deleted text beginis one
of the deleted text end new text beginmay be included as new text endinvestment products for the individual
retirement account plan. Direct access must also be provided to
lower expense and no-load mutual funds, as those terms are
defined by the federal Securities and Exchange Commission,
including stock funds, bond funds, and balanced funds. Other
investment products or combination of investment products which
may be included are:

(1) savings accounts at federally insured financial
institutions;

(2) life insurance contracts, fixed and variable annuity
contracts from companies that are subject to regulation by the
commerce commissioner;

(3) investment options from open-ended investment companies
registered under the federal Investment Company Act of 1940,
United States Code, title 15, sections 80a-1 to 80a-64;

(4) investment options from a firm that is a registered
investment advisor under the federal Investment Advisers Act of
1940, United States Code, title 15, sections 80b-1 to 80b-21;
and

(5) investment options of a bank as defined in United
States Code, title 15, section 80b-2, subsection (a), paragraph
2, or a bank holding company as defined in the Bank Holding
Company Act of 1956, United States Code, title 12, section 1841,
subsection (a), paragraph (1).

Sec. 2. new text beginEFFECTIVE DATE.
new text end

new text begin Section 1 is effective the day following final enactment.
new text end

ARTICLE 9

VOLUNTEER FIREFIGHTER RELIEF
ASSOCIATION CHANGES

Section 1.

Minnesota Statutes 2004, section 69.051,
subdivision 1, is amended to read:

Subdivision 1.

Financial report and audit.

The board of
each salaried firefighters relief association, police relief
association, and volunteer firefighters relief association as
defined in section 424A.001, subdivision 4, with assets of at
least $200,000 or liabilities of at least $200,000 new text beginin the prior
year or in any previous year new text end, according to the deleted text beginmost recent
deleted text end new text begin applicable new text endactuarial valuation or financial report if no
valuation is required, shall:

(1) prepare a financial report covering the special and
general funds of the relief association for the preceding fiscal
year on a form prescribed by the state auditor. The financial
report deleted text beginshall deleted text end new text beginmust new text endcontain financial statements and disclosures
which present the true financial condition of the relief
association and the results of relief association operations in
conformity with generally accepted accounting principles and in
compliance with the regulatory, financing and funding provisions
of this chapter and any other applicable laws. The financial
report deleted text beginshall deleted text end new text beginmust new text endbe countersigned by the municipal clerk or
clerk-treasurer of the municipality in which the relief
association is located if the relief association is a
firefighters relief association which is directly associated
with a municipal fire department or is a police relief
association, or countersigned by the secretary of the
independent nonprofit firefighting corporation and by the
municipal clerk or clerk-treasurer of the largest municipality
in population which contracts with the independent nonprofit
firefighting corporation if the new text beginvolunteer firefighter new text endrelief
association is a subsidiary of an independent nonprofit
firefighting corporation;

(2) file the financial report in its office for public
inspection and present it to the city council after the close of
the fiscal year. One copy of the financial report deleted text beginshall deleted text end new text beginmust new text endbe
furnished to the state auditor after the close of the fiscal
year; and

(3) submit to the state auditor audited financial
statements which have been attested to by a certified public
accountant, public accountant, or the state auditor within 180
days after the close of the fiscal year. The state auditor may
accept this report in lieu of the report required in clause (2).

Sec. 2.

Minnesota Statutes 2004, section 69.051,
subdivision 1a, is amended to read:

Subd. 1a.

Financial statement.

(a) The board of each
volunteer firefighters relief association, as defined in section
424A.001, subdivision 4, deleted text beginwith assets of less than $200,000 and
liabilities less than $200,000, according to the most recent
financial report, shall deleted text end new text beginthat is not required to file a financial
report and audit under subdivision 1 must new text endprepare a detailed
statement of the financial affairs for the preceding fiscal year
of the relief association's special and general funds in the
style and form prescribed by the state auditor. The detailed
statement must show the sources and amounts of all money
received; all disbursements, accounts payable and accounts
receivable; the amount of money remaining in the treasury; total
assets including a listing of all investments; the accrued
liabilities; and all items necessary to show accurately the
revenues and expenditures and financial position of the relief
association.

(b) The detailed financial statement required under
paragraph (a) must be certified by an independent public
accountant or auditor or by the auditor or accountant who
regularly examines or audits the financial transactions of the
municipality. In addition to certifying the financial condition
of the special and general funds of the relief association, the
accountant or auditor conducting the examination shall give an
opinion as to the condition of the special and general funds of
the relief association, and shall comment upon any exceptions to
the report. The independent accountant or auditor deleted text beginshall deleted text end new text beginmust
new text end have at least five years of public accounting, auditing, or
similar experience, and deleted text beginshall deleted text end new text beginmust new text endnot be an active, inactive,
or retired member of the relief association or the fire or
police department.

(c) The detailed statement required under paragraph (a)
must be countersigned by the municipal clerk or clerk-treasurer
of the municipality, or, where applicable, by the secretary of
the independent nonprofit firefighting corporation and by the
municipal clerk or clerk-treasurer of the largest municipality
in population which contracts with the independent nonprofit
firefighting corporation if the relief association is a
subsidiary of an independent nonprofit firefighting corporation.

(d) The volunteer firefighters' relief association board
must file the detailed statement required under paragraph (a) in
the relief association office for public inspection and present
it to the city council within 45 days after the close of the
fiscal year, and must submit a copy of the detailed statement to
the state auditor within 90 days of the close of the fiscal year.

Sec. 3.

Minnesota Statutes 2004, section 69.771, is
amended to read:

69.771 VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
FINANCING GUIDELINES ACT; APPLICATION.

Subdivision 1.

Covered relief associations.

The
applicable provisions of sections 69.771 to 69.776 deleted text beginshall deleted text endapply
to any firefighters' relief association other than a relief
association enumerated in section 69.77, subdivision 1a, which
is organized under any laws of this state, which is composed of
volunteer firefighters or new text beginis new text endcomposed partially of volunteer
firefighters and partially of salaried firefighters with
retirement coverage provided by the public employees police and
fire fund and which new text begin, in either case, new text endoperates subject to the
service pension minimum requirements for entitlement and
maximums contained in section 424A.02, or new text beginsubject to new text enda special
law modifying those requirements or maximums.

Subd. 2.

Authorized employer support for a relief
association.

Notwithstanding any law to the contrary, a
municipality may lawfully contribute public funds, including new text beginthe
transfer of new text endany applicable fire state aid, or new text beginmay new text endlevy property
taxes for the support of a firefighters' relief association
specified in subdivision 1, however organized, which provides
retirement coverage or pays a service pension to retired
firefighter or a retirement benefit to a disabled firefighter or
a surviving dependent of either an active or retired firefighter
for the operation and maintenance of the relief association only
if the municipality and the relief association new text beginboth new text endcomply with
the new text beginapplicable new text endprovisions of sections 69.771 to 69.776.

Subd. 3.

Remedy for noncompliance; determination.

deleted text begin Any deleted text end new text begin(a) A new text endmunicipality in which there exists a firefighters'
relief association as specified in subdivision 1 which does not
comply with the applicable provisions of sections 69.771 to
69.776 or the provisions of any applicable special law relating
to the funding or financing of the association deleted text beginshall deleted text end new text begindoes new text endnot
qualify initially to receive, deleted text beginor be deleted text end new text beginand is not new text endentitled
subsequently to retain, fire state aid deleted text beginpursuant to deleted text end new text beginunder
new text end sections 69.011 to 69.051 until the reason for new text beginthe
new text end disqualification new text beginspecified by the state auditor new text endis remedied,
whereupon the municipality or relief association, if otherwise
qualified, deleted text beginshall be deleted text end new text beginis new text endentitled to again receive fire state aid
for the year occurring immediately subsequent to the year in
which the disqualification is remedied.

new text begin (b) new text endThe state auditor shall determine if a municipality to
which a firefighters' relief association is directly associated
or a firefighters' relief association fails to comply with the
provisions of sections 69.771 to 69.776 or the funding or
financing provisions of any applicable special law based upon
the information contained in the annual financial report of the
firefighters' relief association required deleted text beginpursuant to deleted text end new text beginunder
new text end section 69.051 deleted text begin. deleted text end new text begin, the actuarial valuation of the relief
association, if applicable, the relief association officers'
financial requirements of the relief association and minimum
municipal obligation determination documentation under section
69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
69.774, subdivision 2, if requested to be filed by the state
auditor, the applicable municipal or nonprofit firefighting
corporation budget, if requested to be filed by the state
auditor, and any other relevant documents or reports obtained by
the state auditor.
new text end

new text begin (c) The municipality or nonprofit firefighting corporation
and the associated relief association are not eligible to
receive or to retain fire state aid if:
new text end

new text begin (1) the relief association fails to prepare or to file the
financial report or financial statement under section 69.051;
new text end

new text begin (2) the relief association treasurer is not bonded in the
manner and in the amount required by section 69.051, subdivision
2;
new text end

new text begin (3) the relief association officers fail to determine or
improperly determine the accrued liability and the annual
accruing liability of the relief association under section
69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
applicable;
new text end

new text begin (4) if applicable, the relief association officers fail to
obtain and file a required actuarial valuation or the officers
file an actuarial valuation that does not contain the special
fund actuarial liability calculated under the entry age normal
actuarial cost method, the special fund current assets, the
special fund unfunded actuarial accrued liability, the special
fund normal cost under the entry age normal actuarial cost
method, the amortization requirement for the special fund
unfunded actuarial accrued liability by the applicable target
date, a summary of the applicable benefit plan, a summary of the
membership of the relief association, a summary of the actuarial
assumptions used in preparing the valuation, and a signed
statement by the actuary attesting to its results and certifying
to the qualifications of the actuary as an approved actuary
under section 356.215, subdivision 1, paragraph (c);
new text end

new text begin (5) the municipality failed to provide a municipal
contribution, or the nonprofit firefighting corporation failed
to provide a corporate contribution, in the amount equal to the
minimum municipal obligation if the relief association is
governed under section 69.772, or the amount necessary, when
added to the fire state aid actually received in the plan year
in question, to at least equal in total the calculated annual
financial requirements of the special fund of the relief
association if the relief association is governed under section
69.773, and, if the municipal or corporate contribution is
deficient, the municipality failed to include the minimum
municipal obligation certified under section 69.772, subdivision
3, or 69.773, subdivision 5, in its budget and tax levy or the
nonprofit firefighting corporation failed to include the minimum
corporate obligation certified under section 69.774, subdivision
2, in the corporate budget;
new text end

new text begin (6) the relief association did not receive municipal
ratification for the most recent plan amendment when municipal
ratification was required under section 69.772, subdivision 6;
69.773, subdivision 6; or 424A.02, subdivision 10;
new text end

new text begin (7) the relief association invested special fund assets in
an investment security that is not authorized under section
69.775;
new text end

new text begin (8) the relief association had an administrative expense
that is not authorized under section 69.80 or 424A.05,
subdivision 3, or the municipality had an expenditure that is
not authorized under section 424A.08;
new text end

new text begin (9) the relief association officers fail to provide a
complete and accurate public pension plan investment portfolio
and performance disclosure under section 356.219;
new text end

new text begin (10) the relief association fails to obtain the
acknowledgment from a broker of the statement of investment
restrictions under section 356A.06, subdivision 8b;
new text end

new text begin (11) the relief association officers permitted to occur a
prohibited transaction under section 356A.06, subdivision 9, or
424A.001, subdivision 7, or failed to undertake correction of a
prohibited transaction that did occur; or
new text end

new text begin (12) the relief association pays a defined benefit service
pension in an amount that is in excess of the applicable service
pension maximum under section 424A.02, subdivision 3.
new text end

Sec. 4.

Minnesota Statutes 2004, section 69.772,
subdivision 3, is amended to read:

Subd. 3.

Financial requirements of relief association;
minimum obligation of municipality.

new text begin(a) new text endDuring the month of
July, the officers of the relief association shall determine the
overall funding balance of the special fund for the current
calendar year, the financial requirements of the special fund
for the following calendar year and the minimum obligation of
the municipality with respect to the special fund for the
following calendar year in accordance with the requirements of
this subdivision.

deleted text begin (1) deleted text end new text begin(b) new text endThe overall funding balance of the special fund for
the current calendar year deleted text beginshall deleted text end new text beginmust new text endbe determined in the
following manner:

deleted text begin (a) deleted text end new text begin(1) new text endThe total accrued liability of the special fund for
all active and deferred members of the relief association as of
December 31 of the current year deleted text beginshall deleted text end new text beginmust new text endbe calculated
deleted text begin pursuant to deleted text end new text beginunder new text endsubdivisions 2 and 2a, if applicable.

deleted text begin (b) deleted text end new text begin(2) new text endThe total present assets of the special fund
projected to December 31 of the current year, including receipts
by and disbursements from the special fund anticipated to occur
on or before December 31 deleted text beginshall deleted text end new text begin, must new text endbe calculated. To the
extent possible, for those assets for which a market value is
readily ascertainable, the current market value as of the date
of the calculation for those assets deleted text beginshall deleted text end new text beginmust new text endbe utilized in
making this calculation. For any asset for which no market
value is readily ascertainable, the cost value or the book
value, whichever is applicable, deleted text beginshall deleted text end new text beginmust new text endbe utilized in making
this calculation.

deleted text begin (c) deleted text end new text begin(3) new text endThe amount of the total present assets of the
special fund calculated deleted text beginpursuant to deleted text end new text beginunder new text endclause deleted text begin(b) shall deleted text end new text begin(2)
must new text endbe subtracted from the amount of the total accrued
liability of the special fund calculated deleted text beginpursuant to deleted text end new text beginunder
new text end clause deleted text begin(a) deleted text end new text begin(1) new text end. If the amount of total present assets exceeds
the amount of the total accrued liability, then the special fund
deleted text begin shall be deleted text end new text beginis new text endconsidered to have a surplus over full funding. If
the amount of the total present assets is less than the amount
of the total accrued liability, then the special fund deleted text beginshall be
deleted text end new text begin is new text endconsidered to have a deficit from full funding. If the
amount of total present assets is equal to the amount of the
total accrued liability, then the special fund deleted text beginshall be deleted text end new text beginis
new text end considered to be fully funded.

deleted text begin (2) deleted text end new text begin(c) new text endThe financial requirements of the special fund for
the following calendar year deleted text beginshall deleted text end new text beginmust new text endbe determined in the
following manner:

deleted text begin (a) deleted text end new text begin(1) new text endThe total accrued liability of the special fund for
all active and deferred members of the relief association as of
December 31 of the calendar year next following the current
calendar year deleted text beginshall deleted text end new text beginmust new text endbe calculated deleted text beginpursuant to deleted text end new text beginunder
new text end subdivisions 2 and 2a, if applicable.

deleted text begin (b) deleted text end new text begin(2) new text endThe increase in the total accrued liability of the
special fund for the following calendar year over the total
accrued liability of the special fund for the current year deleted text beginshall
deleted text end new text begin must new text endbe calculated.

deleted text begin (c) deleted text end new text begin(3) new text endThe amount of anticipated future administrative
expenses of the special fund deleted text beginshall deleted text end new text beginmust new text endbe calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent new text beginprior calendar new text endyear by the
factor of 1.035.

deleted text begin (d) deleted text end new text begin(4) new text endIf the special fund is fully funded, the financial
deleted text begin requirement deleted text end new text beginrequirements new text endof the special fund for the following
calendar year deleted text beginshall be deleted text end new text beginare new text endthe deleted text beginfigure which represents the
increase in the deleted text endtotal deleted text beginaccrued liability deleted text endof the deleted text beginspecial fund as
deleted text end new text begin amounts new text endcalculated deleted text beginpursuant to subclause (b) deleted text end new text beginunder clauses (2)
and (3) new text end.

deleted text begin (e) deleted text end new text begin(5) new text endIf the special fund has a deficit from full
funding, the financial requirements of the special fund for the
following calendar year deleted text beginshall be deleted text end new text beginare new text endthe financial requirements
of the special fund calculated as though the special fund were
fully funded deleted text beginpursuant to subclause (d) deleted text end new text beginunder clause (4) new text endplus an
amount equal to one-tenth of the new text beginoriginal new text endamount of the deficit
from full funding of the special fund as determined deleted text beginpursuant to
this section for the calendar year 1971 until that deficit from
full funding is fully retired, and plus an amount equal to
one-tenth of the increase in the deficit from full funding of
the special fund deleted text end new text beginunder clause (2) new text endresulting new text begineither new text endfrom an
increase in the amount of the service pension deleted text beginaccruing after
December 31, 1971 deleted text end new text beginoccurring in the last ten years or from a net
annual investment loss occurring during the last ten years new text enduntil
each increase in the deficit from full funding is fully
retired. new text beginThe annual amortization contribution under this clause
may not exceed the amount of the deficit from full funding.
new text end

deleted text begin (f) deleted text end new text begin(6) new text endIf the special fund has a surplus over full
funding, the financial requirements of the special fund for the
following calendar year deleted text beginshall be deleted text end new text beginare new text endthe financial requirements
of the special fund calculated as though the special fund were
fully funded deleted text beginpursuant to subclause (d) deleted text end new text beginunder clause (4) new text endreduced
by an amount equal to one-tenth of the amount of the surplus
over full funding of the special fund.

deleted text begin (3) deleted text end new text begin(d) new text endThe minimum obligation of the municipality with
respect to the special fund deleted text beginshall be deleted text end new text beginis new text endthe financial
requirements of the special fund reduced by the amount of any
fire state aid payable deleted text beginpursuant to deleted text end new text beginunder new text endsections 69.011 to
69.051 new text beginreasonably new text endanticipated to be received by the municipality
for transmittal to the special fund during the following
calendar year, an amount of interest on the assets of the
special fund projected to the beginning of the following
calendar year calculated at the rate of five percent per annum,
and the amount of any deleted text beginanticipated deleted text endcontributions to the special
fund new text beginrequired new text endby the new text beginrelief association bylaws from the active
new text end members of the relief association new text beginreasonably anticipated to be
received new text endduring the following calendar year. new text beginA reasonable
amount of anticipated fire state aid is an amount that does not
exceed the fire state aid actually received in the prior year
multiplied by the factor 1.035.
new text end

Sec. 5.

Minnesota Statutes 2004, section 69.772,
subdivision 4, is amended to read:

Subd. 4.

Certification of financial requirements and
minimum municipal obligation; levy.

new text begin(a) new text endThe officers of the
relief association shall certify the financial requirements of
the special fund of the relief association and the minimum
obligation of the municipality with respect to the special fund
of the relief association as determined deleted text beginpursuant to deleted text end new text beginunder
new text end subdivision 3 to the governing body of the municipality on or
before August 1 of each year. new text beginThe financial requirements of the
relief association and the minimum municipal obligation must be
included in the financial report or financial statement under
section 69.051.
new text end

new text begin (b) new text endThe municipality shall provide for at least the minimum
obligation of the municipality with respect to the special fund
of the relief association by tax levy or from any other source
of public revenue.

new text begin (c) new text endThe municipality may levy taxes for the payment of the
minimum municipal obligation without any limitation as to rate
or amount and irrespective of any limitations imposed by other
provisions of law upon the rate or amount of taxation until the
balance of the special fund or any fund of the relief
association has attained a specified level. In addition, any
taxes levied deleted text beginpursuant to deleted text end new text beginunder new text endthis section deleted text beginshall deleted text end new text beginmust new text endnot cause
the amount or rate of any other taxes levied in that year or to
be levied in a subsequent year by the municipality which are
subject to a limitation as to rate or amount to be reduced.

new text begin (d) new text endIf the municipality does not include the full amount of
the minimum municipal obligations in its levy for any year, the
officers of the relief association shall certify that amount to
the county auditor, who shall spread a levy in the amount of the
new text begin certified new text endminimum municipal obligation new text beginon the taxable property
of the municipality new text end.

new text begin (e) If the state auditor determines that a municipal
contribution actually made in a plan year was insufficient under
section 69.771, subdivision 3, paragraph (c), clause (5), the
state auditor may request a copy of the certifications under
this subdivision from the relief association or from the city.
The relief association or the city, whichever applies, must
provide the certifications within 14 days of the date of the
request from the state auditor.
new text end

Sec. 6.

Minnesota Statutes 2004, section 69.773,
subdivision 4, is amended to read:

Subd. 4.

Financial requirements of special fund.

deleted text beginPrior
to deleted text end new text begin(a) On or before new text endAugust 1 of each year, the officers of the
relief association shall determine the financial requirements of
the special fund of the relief association in accordance with
the requirements of this subdivision.

new text begin (b) new text endThe financial requirements of the relief
association deleted text beginshall deleted text end new text beginmust new text endbe based on the most recent actuarial
valuation of the special fund prepared in accordance with
subdivision 2. If the relief association has an unfunded
actuarial accrued liability as reported in the most recent
actuarial valuation, the financial requirements deleted text beginshall deleted text end new text beginmust new text endbe
determined by adding the figures calculated deleted text beginpursuant to deleted text end new text beginunder
paragraph (d), new text endclauses deleted text begin(a) deleted text end new text begin(1) new text end, deleted text begin(b) deleted text end new text begin(2) new text end, and deleted text begin(c) deleted text end new text begin(3) new text end. If
the relief association does not have an unfunded actuarial
accrued liability as reported in the most recent actuarial
valuation, the financial requirements deleted text beginshall deleted text end new text beginmust new text endbe an amount
equal to the figure calculated deleted text beginpursuant to deleted text end new text beginunder paragraph (d),
new text end clauses deleted text begin(a) deleted text end new text begin(1) new text endand deleted text begin(b) deleted text end new text begin(2) new text end, reduced by an amount equal to
one-tenth of the amount of any assets in excess of the actuarial
accrued liability of the relief association.

new text begin (c) new text endThe determination of whether or not the relief
association has an unfunded actuarial accrued liability
deleted text begin shall deleted text end new text beginmust new text endbe based on the current market value of assets for
which a market value is readily ascertainable and the cost or
book value, whichever is applicable, for assets for which no
market value is readily ascertainable.

deleted text begin (a) deleted text end new text begin (d) The components of the financial requirements of the
relief association are the following:
new text end

new text begin (1) new text endThe normal level cost requirement for the following
year, expressed as a dollar amount, deleted text beginshall be deleted text end new text beginis new text endthe figure for
the normal level cost of the relief association as reported in
the actuarial valuation.

deleted text begin (b) deleted text end new text begin(2) new text endThe amount of anticipated future administrative
expenses of the special fund deleted text beginshall deleted text end new text beginmust new text endbe calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent new text beginprior calendar new text endyear by the
factor of 1.035.

deleted text begin (c) deleted text end new text begin(3) new text endThe amortization contribution requirement to retire
the current unfunded actuarial accrued liability by the
established date for full funding deleted text beginshall be deleted text end new text beginis new text endthe figure for the
amortization contribution as reported in the actuarial
valuation. If there has not been a change in the actuarial
assumptions used for calculating the actuarial accrued liability
of the special fund, a change in the bylaws of the relief
association governing the service pensions, retirement benefits,
or both new text begin, new text endpayable from the special fund new text begin, new text endor a change in the
actuarial cost method used to value all or a portion of the
special fund which change or changes, which by themselves new text begin,
new text end without inclusion of any other items of increase or decrease,
produce a net increase in the unfunded actuarial accrued
liability of the special fund deleted text beginsince December 31, 1970 deleted text end, the
established date for full funding deleted text beginshall be deleted text end new text beginis the new text endDecember 31 deleted text begin,
1990 deleted text end new text beginoccurring ten years later new text end. If there has been a change in
the actuarial assumptions used for calculating the actuarial
accrued liability of the special fund, a change in the bylaws of
the relief association governing the service pensions,
retirement benefits, or both payable from the special fund or a
change in the actuarial cost method used to value all or a
portion of the special fund and the change or changes, by
themselves and without inclusion of any other items of increase
or decrease, produce a net increase in the unfunded actuarial
accrued liability of the special fund deleted text beginsince December 31, 1970,
but prior to January 1, 1979 deleted text end new text beginwithin the past 20 years new text end, the
established date for full funding deleted text beginshall be December 31, 1998,
and if there has been a change since December 31, 1978, the
established date for full funding shall deleted text end new text beginmust new text endbe determined using
the following procedure:

(i) new text beginthe unfunded actuarial accrued liability of the special
fund attributable to experience losses that have occurred since
the most recent prior actuarial valuation must be determined and
the level annual dollar contribution needed to amortize the
experience loss over a period of ten years ending on the
December 31 occurring ten years later must be calculated;
new text end

new text begin (ii) new text endthe unfunded actuarial accrued liability of the
special fund deleted text beginshall deleted text end new text beginmust new text endbe determined in accordance with the
provisions governing service pensions, retirement benefits, and
actuarial assumptions in effect before an applicable change;

deleted text begin (ii) deleted text end new text begin(iii) new text endthe level annual dollar contribution needed to
amortize this unfunded actuarial accrued liability amount by the
date for full funding in effect deleted text beginprior to deleted text end new text beginbefore new text endthe change deleted text beginshall
deleted text end new text begin must new text endbe calculated using the interest assumption specified in
section 356.215, subdivision 8, in effect before any applicable
change;

deleted text begin (iii) deleted text end new text begin(iv) new text endthe unfunded actuarial accrued liability of the
special fund deleted text beginshall deleted text end new text beginmust new text endbe determined in accordance with any new
provisions governing service pensions, retirement benefits, and
actuarial assumptions and the remaining provisions governing
service pensions, retirement benefits, and actuarial assumptions
in effect before an applicable change;

deleted text begin (iv) deleted text end new text begin(v) new text endthe level annual dollar contribution needed to
amortize the difference between the unfunded actuarial accrued
liability amount calculated deleted text beginpursuant to subclause (i) deleted text end new text beginunder item
(ii) new text endand the unfunded actuarial accrued liability amount
calculated deleted text beginpursuant to subclause (iii) deleted text end new text beginunder item (iv) new text endover a
period of 20 years starting December 31 of the year in which the
change is effective deleted text beginshall deleted text end new text beginmust new text endbe calculated using the interest
assumption specified in section 356.215, subdivision 8, in
effect after any applicable change;

deleted text begin (v) deleted text end new text begin(vi) new text endthe annual amortization contribution calculated
deleted text begin pursuant to subclause (iv) shall deleted text end new text beginunder item (v) must new text endbe added to
the annual amortization contribution calculated deleted text beginpursuant to
subclause (ii) deleted text end new text beginunder items (i) and (iii) new text end;

deleted text begin (vi) deleted text end new text begin(vii) new text endthe period in which the unfunded actuarial
accrued liability amount determined in deleted text beginsubclause (iii) deleted text end new text beginitem (iv)
new text end will be amortized by the total annual amortization contribution
computed deleted text beginpursuant to subclause (v) shall deleted text end new text beginunder item (vi) must new text endbe
calculated using the interest assumption specified in section
356.215, subdivision 8, in effect after any applicable change,
rounded to the nearest integral number of years, but which deleted text beginshall
deleted text end new text begin must new text endnot exceed a period of 20 years from the end of the year in
which the determination of the date for full funding using this
procedure is made and which deleted text beginshall deleted text end new text beginmust new text endnot be less than the
period of years beginning in the year in which the determination
of the date for full funding using this procedure is made and
ending by the date for full funding in effect before the change;

deleted text begin (vii) deleted text end new text begin(viii) new text endthe period determined deleted text beginpursuant to subclause
(vi) shall deleted text end new text beginunder item (vii) must new text endbe added to the date as of
which the actuarial valuation was prepared and the resulting
date deleted text beginshall be deleted text end new text beginis new text endthe new date for full funding.

Sec. 7.

Minnesota Statutes 2004, section 69.773,
subdivision 5, is amended to read:

Subd. 5.

Minimum municipal obligation.

new text begin(a) new text endThe officers
of the relief association shall determine the minimum obligation
of the municipality with respect to the special fund of the
relief association for the following calendar year deleted text beginprior to deleted text end new text beginon
or before new text endAugust 1 of each year in accordance with the
requirements of this subdivision.

new text begin (b) new text endThe minimum obligation of the municipality with respect
to the special fund deleted text beginshall be deleted text end new text beginis new text endan amount equal to the financial
requirements of the special fund of the relief association
determined deleted text beginpursuant to deleted text end new text beginunder new text endsubdivision 4, reduced by the
estimated amount of any fire state aid payable deleted text beginpursuant to deleted text end new text beginunder
new text end sections 69.011 to 69.051 new text beginreasonably new text endanticipated to be received
by the municipality for transmittal to the special fund of the
relief association during the following year and the amount of
any anticipated contributions to the special fund new text beginrequired new text endby
the new text beginrelief association bylaws from the active new text endmembers of the
relief association new text beginreasonably anticipated to be received new text endduring
the following calendar year. new text beginA reasonable amount of anticipated
fire state aid is an amount that does not exceed the fire state
aid actually received in the prior year multiplied by the factor
1.035.
new text end

new text begin (c) new text endThe officers of the relief association shall certify
the financial requirements of the special fund of the relief
association and the minimum obligation of the municipality with
respect to the special fund of the relief association as
determined deleted text beginpursuant to deleted text end new text beginunder new text endsubdivision 4 and this subdivision
to the governing body of the municipality by August 1 of each
year. new text beginThe financial requirements of the relief association and
the minimum municipal obligation must be included in the
financial report or financial statement under section 69.051.
new text end

new text begin (d) new text endThe municipality shall provide for at least the minimum
obligation of the municipality with respect to the special fund
of the relief association by tax levy or from any other source
of public revenue. The municipality may levy taxes for the
payment of the minimum municipal obligation without any
limitation as to rate or amount and irrespective of any
limitations imposed by other provisions of law or charter upon
the rate or amount of taxation until the balance of the special
fund or any fund of the relief association has attained a
specified level. In addition, any taxes levied deleted text beginpursuant to
deleted text end new text begin under new text endthis section deleted text beginshall deleted text end new text beginmust new text endnot cause the amount or rate of
any other taxes levied in that year or to be levied in a
subsequent year by the municipality which are subject to a
limitation as to rate or amount to be reduced.

new text begin (e) new text endIf the municipality does not include the full amount of
the minimum municipal obligation in its levy for any year, the
officers of the relief association shall certify that amount to
the county auditor, who shall spread a levy in the amount of the
minimum municipal obligation new text beginon the taxable property of the
municipality new text end.

new text begin (f) If the state auditor determines that a municipal
contribution actually made in a plan year was insufficient under
section 69.771, subdivision 3, paragraph (c), clause (5), the
state auditor may request from the relief association or from
the city a copy of the certifications under this subdivision.
The relief association or the city, whichever applies, must
provide the certifications within 14 days of the date of the
request from the state auditor.
new text end

Sec. 8.

Minnesota Statutes 2004, section 69.775, is
amended to read:

69.775 INVESTMENTS.

new text begin (a) new text endThe special fund assets of deleted text beginthe deleted text end new text begina new text endrelief deleted text beginassociations
deleted text end new text begin association new text endgoverned by sections 69.771 to 69.776 must be
invested in securities that are authorized investments under
section 356A.06, subdivision 6 or 7.

new text begin (b) new text endNotwithstanding the foregoing, up to 75 percent of the
market value of the assets of the new text beginspecial new text endfund new text begin, not including
any money market mutual funds, new text endmay be invested in open-end
investment companies registered under the federal Investment
Company Act of 1940, if the portfolio investments of the
investment companies comply with the type of securities
authorized for investment under section 356A.06, subdivision 7.

new text begin (c) new text endSecurities held by the associations before June 2,
1989, that do not meet the requirements of this section may be
retained after that date if they were proper investments for the
association on that date.

new text begin (d) new text endThe governing board of the association may select and
appoint investment agencies to act for and in its behalf or may
certify special fund assets for investment by the State Board of
Investment under section 11A.17.

new text begin (e) new text endThe governing board of the association may certify
general fund assets of the relief association for investment by
the State Board of Investment in fixed income pools or in a
separately managed account at the discretion of the State Board
of Investment as provided in section 11A.14.

new text begin (f) new text endThe governing board of the association may select and
appoint a qualified private firm to measure management
performance and return on investment, and the firm shall use the
formula or formulas developed by the state board under section
11A.04, clause (11).

Sec. 9.

Minnesota Statutes 2004, section 356A.06,
subdivision 7, is amended to read:

Subd. 7.

Expanded list of authorized investment
securities.

(a) [AUTHORITY.] Except to the extent otherwise
authorized by law or bylaws, a covered pension plan not
described by subdivision 6, paragraph (a), may invest its assets
only in accordance with this subdivision.

(b) [SECURITIES GENERALLY.] The covered pension plan has
the authority to purchase, sell, lend, or exchange the
securities specified in paragraphs (c) to deleted text begin(g) deleted text end new text begin(h) new text end, including
puts and call options and future contracts traded on a contract
market regulated by a governmental agency or by a financial
institution regulated by a governmental agency. These
securities may be owned as units in commingled trusts that own
the securities described in paragraphs (c) to deleted text begin(g) deleted text end new text begin(h) new text end.

(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may
invest funds in governmental bonds, notes, bills, mortgages, and
other evidences of indebtedness provided the issue is backed by
the full faith and credit of the issuer or the issue is rated
among the top four quality rating categories by a nationally
recognized rating agency. The obligations in which funds may be
invested under this paragraph include guaranteed or insured
issues of (1) the United States, its agencies, its
instrumentalities, or organizations created and regulated by an
act of Congress; (2) Canada and its provinces, provided the
principal and interest is payable in United States dollars; (3)
the states and their municipalities, political subdivisions,
agencies, or instrumentalities; (4) the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank,
or any other United States government sponsored organization of
which the United States is a member, provided the principal and
interest is payable in United States dollars.

(d) [CORPORATE OBLIGATIONS.] The covered pension plan may
invest funds in bonds, notes, debentures, transportation
equipment obligations, or any other longer term evidences of
indebtedness issued or guaranteed by a corporation organized
under the laws of the United States or any state thereof, or the
Dominion of Canada or any province thereof if they conform to
the following provisions:

(1) the principal and interest of obligations of
corporations incorporated or organized under the laws of the
Dominion of Canada or any province thereof must be payable in
United States dollars; and

(2) obligations must be rated among the top four quality
categories by a nationally recognized rating agency.

(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may
invest funds in bankers acceptances, certificates of deposit,
deposit notes, commercial paper, mortgage participation
certificates and pools, asset backed securities, repurchase
agreements and reverse repurchase agreements, guaranteed
investment contracts, savings accounts, and guaranty fund
certificates, surplus notes, or debentures of domestic mutual
insurance companies if they conform to the following provisions:

(i) bankers acceptances and deposit notes of United States
banks are limited to those issued by banks rated in the highest
four quality categories by a nationally recognized rating
agency;

(ii) certificates of deposit are limited to those issued by
(A) United States banks and savings institutions that are rated
in the highest four quality categories by a nationally
recognized rating agency or whose certificates of deposit are
fully insured by federal agencies; or (B) credit unions in
amounts up to the limit of insurance coverage provided by the
National Credit Union Administration;

(iii) commercial paper is limited to those issued by United
States corporations or their Canadian subsidiaries and rated in
the highest two quality categories by a nationally recognized
rating agency;

(iv) mortgage participation or pass through certificates
evidencing interests in pools of first mortgages or trust deeds
on improved real estate located in the United States where the
loan to value ratio for each loan as calculated in accordance
with section 61A.28, subdivision 3, does not exceed 80 percent
for fully amortizable residential properties and in all other
respects meets the requirements of section 61A.28, subdivision
3;

(v) collateral for repurchase agreements and reverse
repurchase agreements is limited to letters of credit and
securities authorized in this section;

(vi) guaranteed investment contracts are limited to those
issued by insurance companies or banks rated in the top four
quality categories by a nationally recognized rating agency or
to alternative guaranteed investment contracts where the
underlying assets comply with the requirements of this
subdivision;

(vii) savings accounts are limited to those fully insured
by federal agencies; and

(viii) asset backed securities must be rated in the top
four quality categories by a nationally recognized rating agency.

(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
not apply to certificates of deposit and collateralization
agreements executed by the covered pension plan under clause
(1), item (ii).

(3) In addition to investments authorized by clause (1),
item (iv), the covered pension plan may purchase from the
Minnesota Housing Finance Agency all or any part of a pool of
residential mortgages, not in default, that has previously been
financed by the issuance of bonds or notes of the agency. The
covered pension plan may also enter into a commitment with the
agency, at the time of any issue of bonds or notes, to purchase
at a specified future date, not exceeding 12 years from the date
of the issue, the amount of mortgage loans then outstanding and
not in default that have been made or purchased from the
proceeds of the bonds or notes. The covered pension plan may
charge reasonable fees for any such commitment and may agree to
purchase the mortgage loans at a price sufficient to produce a
yield to the covered pension plan comparable, in its judgment,
to the yield available on similar mortgage loans at the date of
the bonds or notes. The covered pension plan may also enter
into agreements with the agency for the investment of any
portion of the funds of the agency. The agreement must cover
the period of the investment, withdrawal privileges, and any
guaranteed rate of return.

(f) [CORPORATE STOCKS.] The covered pension plan may
invest funds in stocks or convertible issues of any corporation
organized under the laws of the United States or the states
thereof, new text beginany corporation organized under the laws of new text endthe
Dominion of Canada or its provinces, or any corporation listed
on deleted text beginthe New York Stock Exchange or the American Stock Exchange deleted text end new text beginan
exchange regulated by an agency of the United States or of the
Canadian national government new text end, if they conform to the following
provisions:

(1) the aggregate value of corporate stock investments, as
adjusted for realized profits and losses, must not exceed 85
percent of the market or book value, whichever is less, of a
fund, less the aggregate value of investments according to
deleted text begin subdivision 6 deleted text end new text beginparagraph (h) new text end;

(2) investments must not exceed five percent of the total
outstanding shares of any one corporation.

(g) [EXCHANGE TRADED FUNDS.] new text beginThe covered pension plan may
invest funds in exchange traded funds, subject to the maximums,
the requirements, and the limitations set forth in paragraph
(d), (e), (f), or (h), whichever applies.
new text end

new text begin (h) new text end[OTHER INVESTMENTS.] (1) In addition to the
investments authorized in paragraphs (b) to deleted text begin(f) deleted text end new text begin(g) new text end, and subject
to the provisions in clause (2), the covered pension plan may
invest funds in:

(i) venture capital investment businesses through
participation in limited partnerships and corporations;

(ii) real estate ownership interests or loans secured by
mortgages or deeds of trust through investment in limited
partnerships, bank sponsored collective funds, trusts, and
insurance company commingled accounts, including separate
accounts;

(iii) regional and mutual funds through bank sponsored
collective funds and open-end investment companies registered
under the Federal Investment Company Act of 1940;

(iv) resource investments through limited partnerships,
private placements, and corporations; and

(v) international securities.

(2) The investments authorized in clause (1) must conform
to the following provisions:

(i) the aggregate value of all investments made according
to clause (1) may not exceed 35 percent of the market value of
the fund for which the covered pension plan is investing;

(ii) there must be at least four unrelated owners of the
investment other than the deleted text beginstate board deleted text end new text begincovered pension plan new text endfor
investments made under clause (1), item (i), (ii), (iii), or
(iv);

(iii) covered pension plan participation in an investment
vehicle is limited to 20 percent thereof for investments made
under clause (1), item (i), (ii), (iii), or (iv); and

(iv) covered pension plan participation in a limited
partnership does not include a general partnership interest or
other interest involving general liability. The covered pension
plan may not engage in any activity as a limited partner which
creates general liability.

Sec. 10.

Minnesota Statutes 2004, section 424A.02,
subdivision 3, is amended to read:

Subd. 3.

Flexible service pension maximums.

(a) Annually
on or before August 1 as part of the certification of the
financial requirements and minimum municipal obligation
determined under section 69.772, subdivision 4, or 69.773,
subdivision 5, as applicable, the secretary or some other
official of the relief association designated in the bylaws of
each relief association shall calculate and certify to the
governing body of the applicable qualified municipality the
average amount of available financing per active covered
firefighter for the most recent three-year period. The amount
of available financing shall include any amounts of fire state
aid received or receivable by the relief association, any
amounts of municipal contributions to the relief association
raised from levies on real estate or from other available
revenue sources exclusive of fire state aid, and one-tenth of
the amount of assets in excess of the accrued liabilities of the
relief association calculated under section 69.772, subdivision
2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
any.

(b) The maximum service pension which the relief
association has authority to provide for in its bylaws for
payment to a member retiring after the calculation date when the
minimum age and service requirements specified in subdivision 1
are met must be determined using the table in paragraph (c) or
(d), whichever applies.

(c) For a relief association where the governing bylaws
provide for a monthly service pension to a retiring member, the
maximum monthly service pension amount per month for each year
of service credited that may be provided for in the bylaws is
the new text begingreater of the service pension amount provided for in the
bylaws on the date of the calculation of the average amount of
the available financing per active covered firefighter or the
new text end maximum service pension figure corresponding to the average
amount of available financing per active covered firefighter:

Minimum Average Amount of Maximum Service Pension
Available Financing per Amount Payable per Month
Firefighter for Each Year of Service

$... $ .25
deleted text begin 42 deleted text end new text begin41 new text end.50
deleted text begin 84 deleted text end new text begin81 new text end1.00
deleted text begin 126 deleted text end new text begin122 new text end1.50
deleted text begin 168 deleted text end new text begin162 new text end2.00
deleted text begin 209 deleted text end new text begin203 new text end2.50
deleted text begin 252 deleted text end new text begin243 new text end3.00
deleted text begin 294 deleted text end new text begin284 new text end3.50
deleted text begin 335 deleted text end new text begin324 new text end4.00
deleted text begin 378 deleted text end new text begin365 new text end4.50
deleted text begin 420 deleted text end new text begin405 new text end5.00
deleted text begin 503 deleted text end new text begin486 new text end6.00
deleted text begin 587 deleted text end new text begin567 new text end7.00
deleted text begin 672 deleted text end new text begin648 new text end8.00
deleted text begin 755 deleted text end new text begin729 new text end9.00
deleted text begin 839 deleted text end new text begin810 new text end10.00
deleted text begin 923 deleted text end new text begin891 new text end11.00
deleted text begin 1007 deleted text end new text begin972 new text end12.00
deleted text begin 1090 deleted text end new text begin1053 new text end13.00
deleted text begin 1175 deleted text end new text begin1134 new text end14.00
deleted text begin 1259 deleted text end new text begin1215 new text end15.00
deleted text begin 1342 deleted text end new text begin1296 new text end16.00
deleted text begin 1427 deleted text end new text begin1377 new text end17.00
deleted text begin 1510 deleted text end new text begin1458 new text end18.00
deleted text begin 1594 deleted text end new text begin1539 new text end19.00
deleted text begin 1677 deleted text end new text begin1620 new text end20.00
deleted text begin 1762 deleted text end new text begin1701 new text end21.00
deleted text begin 1845 deleted text end new text begin1782 new text end22.00
deleted text begin 1888 deleted text end new text begin1823 new text end22.50
deleted text begin 1929 deleted text end new text begin1863 new text end23.00
deleted text begin 2014 deleted text end new text begin1944 new text end24.00
deleted text begin 2098 deleted text end new text begin2025 new text end25.00
deleted text begin 2183 deleted text end new text begin2106 new text end26.00
deleted text begin 2267 deleted text end new text begin2187 new text end27.00
deleted text begin 2351 deleted text end new text begin2268 new text end28.00
deleted text begin 2436 deleted text end new text begin2349 new text end29.00
deleted text begin 2520 deleted text end new text begin2430 new text end30.00
deleted text begin 2604 deleted text end new text begin2511 new text end31.00
deleted text begin 2689 deleted text end new text begin2592 new text end32.00
deleted text begin 2773 deleted text end new text begin2673 new text end33.00
deleted text begin 2857 deleted text end new text begin2754 new text end34.00
deleted text begin 2942 deleted text end new text begin2834 new text end35.00
deleted text begin 3026 deleted text end new text begin2916 new text end36.00
deleted text begin 3110 deleted text end new text begin2997 new text end37.00
deleted text begin 3194 deleted text end new text begin3078 new text end38.00
deleted text begin 3278 deleted text end new text begin3159 new text end39.00
deleted text begin 3362 deleted text end new text begin3240 new text end40.00
deleted text begin 3446 deleted text end new text begin3321 new text end41.00
deleted text begin 3530 deleted text end new text begin3402 new text end42.00
deleted text begin 3614 deleted text end new text begin3483 new text end43.00
deleted text begin 3698 deleted text end new text begin3564 new text end44.00
deleted text begin 3782 deleted text end new text begin3645 new text end45.00
deleted text begin 3866 deleted text end new text begin3726 new text end46.00
deleted text begin 3950 deleted text end new text begin3807 new text end47.00
deleted text begin 4034 deleted text end new text begin3888 new text end48.00
deleted text begin 4118 deleted text end new text begin3969 new text end49.00
deleted text begin 4202 deleted text end new text begin4050 new text end50.00
deleted text begin 4286 deleted text end new text begin4131 new text end51.00
deleted text begin 4370 deleted text end new text begin4212 new text end52.00

deleted text begin Effective beginning December 31, 2003:
deleted text end

deleted text begin 4454 deleted text end new text begin4293 new text end53.00
deleted text begin 4538 deleted text end new text begin4374 new text end54.00
deleted text begin 4622 deleted text end new text begin4455 new text end55.00
deleted text begin 4706 deleted text end new text begin4536 new text end56.00

(d) For a relief association in which the governing bylaws
provide for a lump sum service pension to a retiring member, the
maximum lump sum service pension amount for each year of service
credited that may be provided for in the bylaws is the new text begingreater
of the service pension amount provided for in the bylaws on the
date of the calculation of the average amount of the available
financing per active covered firefighter or the new text endmaximum service
pension figure corresponding to the average amount of available
financing per active covered firefighter for the applicable
specified period:

Minimum Average Amount Maximum Lump Sum Service
of Available Financing Pension Amount Payable
per Firefighter for Each Year of Service

$.. $10
11 20
16 30
23 40
27 50
32 60
43 80
54 100
65 120
77 140
86 160
97 180
108 200
131 240
151 280
173 320
194 360
216 400
239 440
259 480
281 520
302 560
324 600
347 640
367 680
389 720
410 760
432 800
486 900
540 1000
594 1100
648 1200
702 1300
756 1400
810 1500
864 1600
918 1700
972 1800
1026 1900
1080 2000
1134 2100
1188 2200
1242 2300
1296 2400
1350 2500
1404 2600
1458 2700
1512 2800
1566 2900
1620 3000
1672 3100
1726 3200
1753 3250
1780 3300
1820 3375

1834 3400
1888 3500

1942 3600
1996 3700
2023 3750

2050 3800
2104 3900
2158 4000

2212 4100
2265 4200
2319 4300
2373 4400
2427 4500
2481 4600
2535 4700
2589 4800
2643 4900
2697 5000
2751 5100
2805 5200
2859 5300
2913 5400
2967 5500

3021 5600

3075 5700

3129 5800

3183 5900

3237 6000

3291 6100

3345 6200

3399 6300

3453 6400

3507 6500

3561 6600

3615 6700

3669 6800

3723 6900

3777 7000

deleted text begin Effective beginning December 31, 2003:
deleted text end

3831 7100

3885 7200

3939 7300

3993 7400

4047 7500

(e) For a relief association in which the governing bylaws
provide for a monthly benefit service pension as an alternative
form of service pension payment to a lump sum service pension,
the maximum service pension amount for each pension payment type
must be determined using the applicable table contained in this
subdivision.

(f) If a relief association establishes a service pension
in compliance with the applicable maximum contained in paragraph
(c) or (d) and the minimum average amount of available financing
per active covered firefighter is subsequently reduced because
of a reduction in fire state aid or because of an increase in
the number of active firefighters, the relief association may
continue to provide the prior service pension amount specified
in its bylaws, but may not increase the service pension amount
until the minimum average amount of available financing per
firefighter under the table in paragraph (c) or (d), whichever
applies, permits.

(g) No relief association is authorized to provide a
service pension in an amount greater than the largest applicable
flexible service pension maximum amount even if the amount of
available financing per firefighter is greater than the
financing amount associated with the largest applicable flexible
service pension maximum.

Sec. 11.

Minnesota Statutes 2004, section 424A.02,
subdivision 4, is amended to read:

Subd. 4.

Defined contribution lump sum service
pensions.

new text begin(a) new text endIf the bylaws governing the relief association so
provide exclusively, the relief association may pay a defined
contribution lump sum service pension in lieu of any defined
benefit service pension governed by subdivision 2.

new text begin (b) new text endAn individual account for each firefighter who is a
member of the relief association deleted text beginshall deleted text end new text beginmust new text endbe established. To
each individual new text beginactive new text endmember account deleted text beginshall deleted text end new text beginmust new text endbe credited deleted text begina
right to deleted text endan equal share of: deleted text begin(a) deleted text end new text begin(1) new text endany amounts of fire state
aid received by the relief association; deleted text begin(b) deleted text end new text begin(2) new text endany amounts of
municipal contributions to the relief association raised from
levies on real estate or from other available revenue sources
exclusive of fire state aid; and deleted text begin(c) deleted text end new text begin(3) new text endany amounts equal to
the share of the assets of the special fund to the credit
of: deleted text begin(1) deleted text end new text begin(i) new text endany former member who terminated active service
with the fire department to which the relief association is
associated deleted text beginprior to deleted text end new text beginbefore new text endmeeting the minimum service
requirement provided for in subdivision 1 and has not returned
to active service with the fire department for a period no
shorter than five years; or deleted text begin(2) deleted text end new text begin(ii) new text endany retired member who
retired deleted text beginprior to deleted text end new text beginbefore new text endobtaining a full nonforfeitable interest
in the amounts credited to the individual member
account deleted text beginpursuant to deleted text end new text beginunder new text endsubdivision 2 and any applicable
provision of the bylaws of the relief association. In addition,
any deleted text begininterest or deleted text endinvestment deleted text beginincome earned deleted text end new text beginreturn new text endon the assets of
the special fund deleted text beginshall deleted text end new text beginmust new text endbe credited in proportion to the
share of the assets of the special fund to the credit of each
individual new text beginactive new text endmember account new text beginthrough the date on which the
investment return is recognized by and credited to the special
fund new text end.

new text begin (c) new text endAt the time of retirement deleted text beginpursuant to deleted text end new text beginunder new text endsubdivision
1 and any applicable provision of the bylaws of the relief
association, a retiring member deleted text beginshall be deleted text end new text beginis new text endentitled to that
portion of the assets of the special fund to the credit of the
member in the individual member account which is
nonforfeitable deleted text beginpursuant to deleted text end new text beginunder new text endsubdivision 2 and any
applicable provision of the bylaws of the relief association
based on the number of years of service to the credit of the
retiring member.

Sec. 12.

Minnesota Statutes 2004, section 424A.02,
subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a
relief association deleted text beginto which this section applies deleted text endis entitled to
a deferred service pension if the member:

(1) has completed the lesser of the minimum period of
active service with the fire department specified in the bylaws
or 20 years of active service with the fire department;

(2) has completed at least five years of active membership
in the relief association; and

(3) separates from active service and membership before
reaching age 50 or the minimum age for retirement and
commencement of a service pension specified in the bylaws
governing the relief association if that age is greater than age
50.

(b) The deferred service pension deleted text beginstarts deleted text end new text beginis payable new text endwhen the
former member reaches age 50 new text begin, new text endor the minimum age specified in
the bylaws governing the relief association if that age is
greater than age 50 new text begin, new text endand when the former member makes a valid
written application.

(c) A relief association that provides a lump sum service
pension new text begingoverned by subdivision 3 new text endmay, when its governing bylaws
so provide, pay interest on the deferred lump sum service
pension during the period of deferral. If provided for in the
bylaws, interest must be paid in one of the following manners:

(1) at the investment performance rate actually earned on
that portion of the assets if the deferred benefit amount is
invested by the relief association in a separate account
established and maintained by the relief association or if the
deferred benefit amount is invested in a separate investment
vehicle held by the relief association;

(2) at deleted text beginthe deleted text end new text beginan new text endinterest rate of new text beginup to new text endfive percent,
compounded annually new text begin, as set by the board of directors and
approved as provided in subdivision 10 new text end; or

(3) at a rate equal to the actual time weighted total rate
of return investment performance of the special fund as reported
by the Office of the State Auditor under section 356.219, up to
five percent, compounded annually, and applied consistently for
all deferred service pensioners.

deleted text begin (d) deleted text endA relief association may not use the method provided
for in deleted text beginparagraph (c), deleted text endclause (3), until it has modified its
bylaws to be consistent with that clause.

new text begin (d) Interest under paragraph (c), clause (2) or (3), is
payable from the first day of the month next following the date
on which the municipality has approved the deferred service
pension interest rate established by the board of trustees or
from the first day of the month next following the date on which
the member separated from active fire department service and
relief association membership, whichever is later, to the last
day of the month immediately before the month in which the
deferred member becomes eligible to begin receipt of the service
pension and applies for the deferred service pension.
new text end

(e) new text beginA relief association that provides a defined
contribution service pension may, if its governing bylaws so
provide, credit interest or additional investment performance on
the deferred lump sum service pension during the period of
deferral. If provided for in the bylaws, the interest must be
paid in one of the manners specified in paragraph (c) or
alternatively the relief association may credit any investment
return on the assets of the special fund of the defined
contribution volunteer firefighter relief association in
proportion to the share of the assets of the special fund to the
credit of each individual deferred member account through the
date on which the investment return is recognized by and
credited to the special fund.
new text end

new text begin (f) new text endFor a deferred service pension that is transferred to a
separate account established and maintained by the relief
association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk
subsequent to transfer and in calculating the accrued liability
of the volunteer firefighters relief association that pays a
lump sum service pension, the accrued liability for deferred
service pensions is equal to the separate relief association
account balance or the fair market value of the separate
investment vehicle held by the relief association.

deleted text begin (f) deleted text end new text begin(g) new text endThe deferred service pension is governed by and
must be calculated under the general statute, special law,
relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the
member separated from active service with the fire department
and active membership in the relief association.

Sec. 13.

new text begin [424A.021] CREDIT FOR BREAK IN SERVICE TO
PROVIDE UNIFORMED SERVICE.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Subject to restrictions
stated in this section, a volunteer firefighter who is absent
from firefighting service due to service in the uniformed
services, as defined in United States Code, title 38, section
4303(13), may obtain service credit if the relief association is
a defined benefit plan or an allocation of any fire state aid,
any municipal contributions, and any investment return received
by the relief association if the relief association is a defined
contribution plan for the period of the uniformed service, not
to exceed five years, unless a longer period is required under
United States Code, title 38, section 4312.
new text end

new text begin Subd. 2. new text end

new text begin Limitations. new text end

new text begin (a) To be eligible for service
credit or an investment return allocation under this section,
the volunteer firefighter must return to firefighting service
with coverage by the same relief association or by the successor
to that relief association upon discharge from service in the
uniformed service within the time frame required in United
States Code, title 38, section 4312(e).
new text end

new text begin (b) Service credit or an investment return allocation is
not authorized if the firefighter separates from uniformed
service with a dishonorable or bad conduct discharge or under
other than honorable conditions.
new text end

new text begin (c) Service credit or an investment return allocation is
not authorized if the firefighter fails to provide notice to the
fire department that the individual is leaving to provide
service in the uniformed service, unless it is not feasible to
provide that notice due to the emergency nature of the situation.
new text end

Sec. 14.

Minnesota Statutes 2004, section 424A.04,
subdivision 1, is amended to read:

Subdivision 1.

Membership.

(a) deleted text beginEvery deleted text end new text beginA new text endrelief
association new text beginthat is new text enddirectly associated with a municipal fire
department deleted text beginshall deleted text end new text beginmust new text endbe managed by a board of trustees
consisting of nine members. Six trustees deleted text beginshall deleted text end new text beginmust new text endbe elected
from the membership of the relief association and three trustees
deleted text begin shall deleted text end new text beginmust new text endbe drawn from the officials of the municipalities
served by the fire department to which the relief association is
directly associated. The bylaws of a relief association new text beginwhich
provides a monthly benefit service pension new text endmay provide that one
of the six trustees elected from the relief
association new text beginmembership new text endmay be a retired member receiving a
monthly pension who is elected by the membership of the relief
association. The three deleted text beginex officio deleted text end new text beginmunicipal new text endtrustees deleted text beginshall be
the mayor, the clerk, clerk-treasurer or finance director, deleted text end new text beginmust
be one elected municipal official and one elected or appointed
municipal official who are designated as municipal
representatives by the municipal governing board annually new text endand
the chief of the municipal fire department.

(b) deleted text beginEvery deleted text end new text beginA new text endrelief association that is a subsidiary of an
independent nonprofit firefighting corporation deleted text beginshall deleted text end new text beginmust new text endbe
managed by a board of trustees consisting of deleted text beginten deleted text end new text beginnine new text endmembers.
Six trustees deleted text beginshall deleted text end new text beginmust new text endbe elected from the membership of the
relief association, deleted text beginthree deleted text end new text begintwo new text endtrustees deleted text beginshall deleted text end new text beginmust new text endbe drawn from
the officials of the municipalities served by the fire
department to which the relief association is directly
associated, and one trustee shall be the fire chief new text beginserving with
the independent nonprofit firefighting corporation new text end. The bylaws
of a relief association may provide that one of the six trustees
elected from the relief association new text beginmembership new text endmay be a retired
member receiving a monthly pension who is elected by the
membership of the relief association. The deleted text beginthree ex officio deleted text end new text begintwo
municipal new text endtrustees deleted text beginwho are the elected officials shall deleted text end new text beginmust
new text end be new text beginelected or appointed municipal officials, new text endselected as follows:

(1) if only one municipality contracts with the independent
nonprofit firefighting corporation, the deleted text beginex officio deleted text end new text beginmunicipal
new text end trustees deleted text beginshall deleted text end new text beginmust new text endbe deleted text beginthree elected deleted text end new text begintwo new text endofficials of the
contracting municipality who are designated new text beginannually new text endby the
governing body of the municipality;

deleted text begin (2) if two municipalities contract with the independent
nonprofit firefighting corporation, the ex officio trustees
shall be two elected officials of the largest municipality in
population and one elected official of the next largest
municipality in population who are designated by the governing
bodies of the applicable municipalities; deleted text endor

deleted text begin (3) deleted text end new text begin(2) new text endif deleted text beginthree deleted text end new text begintwo new text endor more municipalities contract with
the independent nonprofit corporation, the deleted text beginex officio deleted text end new text beginmunicipal
new text end trustees deleted text beginshall deleted text end new text beginmust new text endbe one deleted text beginelected deleted text endofficial deleted text beginof deleted text end new text beginfrom new text endeach of
the deleted text beginthree deleted text end new text begintwo new text endlargest municipalities in population who are
designated new text beginannually new text endby the governing bodies of the applicable
municipalities.

(c) new text beginThe municipal trustees for a relief association that is
directly associated with a fire department operated as or by a
joint powers entity must be designated annually by the joint
powers board. The municipal trustees for a relief association
that is directly associated with a fire department service area
township must be designated by the township board.
new text end

new text begin (d) new text endIf a relief association lacks the deleted text beginex officio deleted text end new text beginmunicipal
new text end board members provided for in paragraph (a) new text begin, (b), new text endor deleted text begin(b) deleted text end new text begin(c)
new text end because the fire department is not located in or associated with
an organized municipality, new text beginjoint powers entity, or township, new text endthe
deleted text begin ex officio deleted text end new text beginmunicipal new text endboard members must be appointed from the
fire department service area by the board of commissioners of
the applicable county.

new text begin (e) new text endThe term of these appointed deleted text beginex officio deleted text end new text beginmunicipal new text endboard
members is deleted text beginthree years deleted text end new text beginone year new text endor until the person's successor
is qualified, whichever is later.

deleted text begin (d) An ex officio deleted text end new text begin(f) A municipal new text endtrustee under paragraph
(a), (b), deleted text beginor deleted text end(c) deleted text beginshall have deleted text end new text begin, or (d) has new text endall the rights and
duties accorded to any other trustee new text begin, new text endexcept the right to be an
officer of the new text beginrelief association new text endboard of trustees.

deleted text begin (e) deleted text end new text begin(g) new text endA board deleted text beginshall deleted text end new text beginmust new text endhave at least three officers,
deleted text begin which shall be deleted text end new text beginwho are new text enda president, a secretary and a treasurer.
These officers deleted text beginshall deleted text end new text beginmust new text endbe elected from among the elected
trustees by either the full board of trustees or by the
membership, as specified in the bylaws deleted text begin, and deleted text end new text begin. new text endIn no event deleted text beginshall
deleted text end new text begin may new text endany trustee hold more than one officer position at any one
time. The terms of the elected trustees and of the officers of
the board deleted text beginshall deleted text end new text beginmust new text endbe specified in the bylaws of the relief
association, but deleted text beginshall deleted text end new text beginmay new text endnot exceed three years. If the term
of the elected trustees exceeds one year, the election of the
various trustees elected from the membership deleted text beginshall initially and
shall thereafter continue to deleted text end new text beginmust new text endbe staggered on as equal a
basis as is practicable.

Sec. 15.

Minnesota Statutes 2004, section 424B.10,
subdivision 1, is amended to read:

Subdivision 1.

Benefits.

(a) Notwithstanding new text beginany
provision of new text endsection 424A.02, subdivision 3, to the contrary,
the service pension of the subsequent relief association as of
the effective date of consolidation is new text begineither the service
pension amount specified in clause (1) or the service pension
amounts specified in clause (2), as provided for in the
consolidated relief association's articles of incorporation or
bylaws:
new text end

new text begin (1) new text endthe highest dollar amount service pension amount of any
prior volunteer firefighters relief association in effect
immediately before the consolidation initiation if the pension
amount was implemented consistent with section 424A.02 new text begin; or
new text end

new text begin (2) for service rendered by each individual volunteer
firefighter before consolidation, the service pension amount
under the consolidating volunteer firefighters relief
association that the firefighter belonged to immediately before
the consolidation if the pension amount was implemented
consistent with section 424A.02 and for service rendered after
the effective date of the consolidation, the highest dollar
amount service pension of any of the consolidating volunteer
firefighters relief associations in effect immediately before
the consolidation if the pension amount was implemented
consistent with section 424A.02 new text end.

(b) Any increase in the service pension amount beyond the
amount implemented under paragraph (a) must conform with the
requirements and limitations of sections 69.771 to 69.775 and
424A.02.

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
new text end

new text begin (b) Section 13 is effective July 1, 2005, and applies to
breaks in service that end on or after that date.
new text end

ARTICLE 10

VARIOUS CORRECTIONS
AND CLARIFICATIONS

Section 1.

Minnesota Statutes 2004, section 3A.13, is
amended to read:

3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
DEDUCTION.

new text begin (a) new text endThe provisions of section deleted text begin352.15 shall deleted text end new text begin356.401 new text endapply to
the legislators retirement plan deleted text begin, chapter 3A deleted text end.

new text begin (b) new text endThe executive director of the Minnesota State
Retirement System must, at the request of a retired legislator
who is enrolled in a health insurance plan covering state
employees, deduct the person's health insurance premiums from
the person's annuity and transfer the amount of the premium to a
health insurance carrier covering state employees.

Sec. 2.

Minnesota Statutes 2004, section 69.011,
subdivision 2b, is amended to read:

Subd. 2b.

Departments of natural resources and public
safety.

(a) deleted text beginOn or before July 1, 1997, the commissioner of
natural resources shall certify one-half of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the Enforcement Division during calendar year 1996 and the
commissioner of public safety shall certify one-half of the
number of peace officers as defined in subdivision 1, clause
(g), employed by the Bureau of Criminal Apprehension, the
Gambling Enforcement Division, and the State Patrol Division
during calendar year 1996.
deleted text end

deleted text begin (b) On or before March 15, 1998, the commissioner of
natural resources shall certify seven-tenths of the number of
peace officers as defined in subdivision 1, clause (g), employed
by the Enforcement Division and the commissioner of public
safety shall certify seven-tenths of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the Bureau of Criminal Apprehension, the Gambling Enforcement
Division, and the State Patrol Division.
deleted text end

deleted text begin (c) deleted text endOn or before deleted text beginMarch 15, 1999, and annually on or before
deleted text end new text begin each new text endMarch 15 deleted text beginthereafter deleted text end, the commissioner of natural resources
shall certify the number of peace officers as defined in
subdivision 1, clause (g), employed by the Enforcement Division
and the commissioner of public safety shall certify the number
of peace officers as defined in subdivision 1, clause (g),
employed by the Bureau of Criminal Apprehension, the Gambling
Enforcement Division, and the State Patrol Division.

deleted text begin (d) deleted text end new text begin(b) new text endThe certification must be on a form prescribed by
the commissioner. Peace officers certified under this paragraph
must be included in the total certifications under subdivision 2.

Sec. 3.

Minnesota Statutes 2004, section 69.021,
subdivision 5, is amended to read:

Subd. 5.

Calculation of state aid.

(a) The amount of
fire state aid available for apportionment, before the addition
of the minimum fire state aid allocation amount under
subdivision 7, is equal to 107 percent of the amount of premium
taxes paid to the state upon the fire, lightning, sprinkler
leakage, and extended coverage premiums reported to the
commissioner by insurers on the Minnesota Firetown Premium
Report. This amount deleted text beginshall deleted text end new text beginmust new text endbe reduced by the amount
required to pay the state auditor's costs and expenses of the
audits or exams of the firefighters relief associations.

The total amount for apportionment in respect to fire state
aid must not be less than two percent of the premiums reported
to the commissioner by insurers on the Minnesota Firetown
Premium Report after subtracting the following amounts:

(1) the amount required to pay the state auditor's costs
and expenses of the audits or exams of the firefighters relief
associations; and

(2) one percent of the premiums reported by town and
farmers' mutual insurance companies and mutual property and
casualty companies with total assets of $5,000,000 or less.

(b) The total amount for apportionment as police state aid
is equal to 104 percent of the amount of premium taxes paid to
the state on the premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report, reduced
by the amount required to pay the costs and expenses of the
state auditor for audits or exams of police relief
associations. The total amount for apportionment in respect to
the police state aid program must not be less than two percent
of the amount of premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report after
subtracting the amount required to pay the state auditor's cost
and expenses of the audits or exams of the police relief
associations.

(c) The commissioner shall calculate the percentage of
increase or decrease reflected in the apportionment over or
under the previous year's available state aid using the same
premiums as a basis for comparison.

(d) deleted text beginThe amount for apportionment in respect to peace
officer state aid under paragraph (b) must be further reduced by
$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
and $2,404,000 in fiscal year 2001. These reductions in this
paragraph cancel to the general fund.
deleted text end

deleted text begin (e) deleted text endIn addition to the amount for apportionment of police
state aid under paragraph (b), each year $100,000 deleted text beginshall deleted text end new text beginmust new text endbe
apportioned for police state aid. An amount sufficient to pay
this increase is annually appropriated from the general fund.

Sec. 4.

Minnesota Statutes 2004, section 69.021,
subdivision 11, is amended to read:

Subd. 11.

Excess police state-aid holding account.

(a)
The excess police state-aid holding account is established in
the general fund. The excess police state-aid holding account
must be administered by the commissioner.

(b) Excess police state aid determined according to
subdivision 10, must be deposited in the excess police state-aid
holding account.

(c) From the balance in the excess police state-aid holding
account, $900,000 is appropriated to and must be transferred
annually to the ambulance service personnel longevity award and
incentive suspense account established by section 144E.42,
subdivision 2.

(d) If a police officer stress reduction program is created
by law and money is appropriated for that program, an amount
equal to that appropriation must be transferred new text beginto the
administrator of that program new text endfrom the balance in the excess
police state-aid holding account.

(e) On October 1 deleted text begin, 1997, and annually on each subsequent
October 1 deleted text end new text beginof each year new text end, one-half of the balance of the excess
police state-aid holding account remaining after the deductions
under paragraphs (c) and (d) is appropriated for additional
amortization aid under section 423A.02, subdivision 1b.

(f) Annually, the remaining balance in the excess police
state-aid holding account, after the deductions under paragraphs
(c), (d), and (e), cancels to the general fund.

Sec. 5.

Minnesota Statutes 2004, section 69.33, is amended
to read:

69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
COMPANIES.

The commissioner shall enclose in the annual statement
blank new text beginthat is new text endsent to all fire insurance companies doing
business in this state a blank form containing the names of deleted text beginall
firefighters' relief associations in deleted text endall cities of the first
class deleted text beginand the names of the cities deleted text endand require these companies,
at the time of making their annual statements to the
commissioner, to state on these blanks the amount of premiums
received by them upon properties insured within the corporate
limits of the cities named thereon during the year ending
December 31st last past. Thereafter, before July first each
year, the commissioner shall certify to the commissioner of
finance the information thus obtained, together with the amount
of the tax for the benefit of the deleted text beginrelief association deleted text end new text beginpension
plans covering firefighters in cities of the first class new text endpaid in
such year by these companies upon these insurance premiums.

Sec. 6.

Minnesota Statutes 2004, section 69.773,
subdivision 4, is amended to read:

Subd. 4.

Financial requirements of special fund.

deleted text beginPrior
to deleted text end new text beginBefore new text endAugust 1 of each year, the officers of the relief
association shall determine the financial requirements of the
special fund of the relief association in accordance with the
requirements of this subdivision. The financial requirements of
the relief association deleted text beginshall deleted text end new text beginmust new text endbe based on the most recent
actuarial valuation of the special fund prepared in accordance
with subdivision 2. If the relief association has an unfunded
actuarial accrued liability as reported in the most recent
actuarial valuation, the financial requirements deleted text beginshall deleted text end new text beginmust new text endbe
determined by adding the figures calculated deleted text beginpursuant to deleted text end new text beginunder
new text end clauses (a), (b), and (c). If the relief association does not
have an unfunded actuarial accrued liability as reported in the
most recent actuarial valuation, the financial requirements
deleted text begin shall deleted text end new text beginmust new text endbe an amount equal to the figure calculated deleted text beginpursuant
to deleted text end new text beginunder new text endclauses (a) and (b), reduced by an amount equal to
one-tenth of the amount of any assets in excess of the actuarial
accrued liability of the relief association. The determination
of whether or not the relief association has an unfunded
actuarial accrued liability deleted text beginshall deleted text end new text beginmust new text endbe based on the current
market value of assets for which a market value is readily
ascertainable and the cost or book value, whichever is
applicable, for assets for which no market value is readily
ascertainable.

(a) The normal level cost requirement for the following
year, expressed as a dollar amount, deleted text beginshall be deleted text end new text beginis new text endthe figure for
the normal level cost of the relief association as reported in
the actuarial valuation.

(b) The amount of anticipated future administrative
expenses of the special fund deleted text beginshall deleted text end new text beginmust new text endbe calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent year by the factor of 1.035.

(c) The amortization contribution requirement to retire the
current unfunded actuarial accrued liability by the established
date for full funding deleted text beginshall be deleted text end new text beginis new text endthe figure for the
amortization contribution as reported in the actuarial
valuation. deleted text beginIf there has not been a change in the actuarial
assumptions used for calculating the actuarial accrued liability
of the special fund, a change in the bylaws of the relief
association governing the service pensions, retirement benefits,
or both payable from the special fund or a change in the
actuarial cost method used to value all or a portion of the
special fund which change or changes, which by themselves
without inclusion of any other items of increase or decrease,
produce a net increase in the unfunded actuarial accrued
liability of the special fund since December 31, 1970, the
established date for full funding shall be December 31, 1990.
deleted text end If there has been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the special fund,
a change in the bylaws of the relief association governing the
service pensions, retirement benefits, or both payable from the
special fund or a change in the actuarial cost method used to
value all or a portion of the special fund and the change or
changes, by themselves and without inclusion of any other items
of increase or decrease, produce a net increase in the unfunded
actuarial accrued liability of the special fund deleted text beginsince December
31, 1970, but prior to January 1, 1979, the established date for
full funding shall be December 31, 1998, and if there has been a
change since December 31, 1978 deleted text end, the established date for full
funding deleted text beginshall deleted text end new text beginmust new text endbe determined using the following procedure:

(i) the unfunded actuarial accrued liability of the special
fund deleted text beginshall deleted text end new text beginmust new text endbe determined in accordance with the provisions
governing service pensions, retirement benefits, and actuarial
assumptions in effect before an applicable change;

(ii) the level annual dollar contribution needed to
amortize this unfunded actuarial accrued liability amount by the
date for full funding in effect deleted text beginprior to deleted text end new text beginbefore new text endthe change deleted text beginshall
deleted text end new text begin must new text endbe calculated using the interest assumption specified in
section 356.215, subdivision 8, in effect before any applicable
change;

(iii) the unfunded actuarial accrued liability of the
special fund deleted text beginshall deleted text end new text beginmust new text endbe determined in accordance with any new
provisions governing service pensions, retirement benefits, and
actuarial assumptions and the remaining provisions governing
service pensions, retirement benefits, and actuarial assumptions
in effect before an applicable change;

(iv) the level annual dollar contribution needed to
amortize the difference between the unfunded actuarial accrued
liability amount calculated deleted text beginpursuant to deleted text end new text beginunder new text endsubclause (i) and
the unfunded actuarial accrued liability amount
calculated deleted text beginpursuant to deleted text end new text beginunder new text endsubclause (iii) over a period of 20
years starting December 31 of the year in which the change is
effective deleted text beginshall deleted text end new text beginmust new text endbe calculated using the interest assumption
specified in section 356.215, subdivision 8, in effect after any
applicable change;

(v) the annual amortization contribution calculated
deleted text begin pursuant to deleted text end new text beginunder new text endsubclause (iv) deleted text beginshall deleted text end new text beginmust new text endbe added to the
annual amortization contribution calculated deleted text beginpursuant to deleted text end new text beginunder
new text end subclause (ii);

(vi) the period in which the unfunded actuarial accrued
liability amount determined in subclause (iii) will be amortized
by the total annual amortization contribution computed deleted text beginpursuant
to deleted text end new text beginunder new text endsubclause (v) deleted text beginshall deleted text end new text beginmust new text endbe calculated using the
interest assumption specified in section 356.215, subdivision 8,
in effect after any applicable change, rounded to the nearest
integral number of years, but which deleted text beginshall deleted text end new text begindoes new text endnot exceed a
period of 20 years from the end of the year in which the
determination of the date for full funding using this procedure
is made and which deleted text beginshall deleted text end new text beginis new text endnot deleted text beginbe deleted text endless than the period of years
beginning in the year in which the determination of the date for
full funding using this procedure is made and ending by the date
for full funding in effect before the change;

(vii) the period determined deleted text beginpursuant to deleted text end new text beginunder new text endsubclause (vi)
deleted text begin shall deleted text end new text beginmust new text endbe added to the date as of which the actuarial
valuation was prepared and the resulting date deleted text beginshall be deleted text end new text beginis new text endthe
new date for full funding.

Sec. 7.

Minnesota Statutes 2004, section 352.01,
subdivision 4, is amended to read:

Subd. 4.

Accumulated contributions.

"Accumulated
contributions" means the total, exclusive of interest, of (1)
the sums deducted from the salary of an employee, (2) the amount
of payments, including assessments, paid by the employee in lieu
of salary deductions and all other payments made under deleted text beginLaws
1929, chapter 191, as amended, deleted text end new text beginthis chapter new text endand credited to the
employee's individual account in the retirement fund.

Sec. 8.

Minnesota Statutes 2004, section 352.01,
subdivision 5, is amended to read:

Subd. 5.

Retirement fund.

new text begin (a) "Retirement fund" means
the general state employees retirement fund created by section
352.04, subdivision 1, with respect to the general state
employees retirement plan or the correctional state employees
retirement fund created by section 352.911, subdivision 1, with
respect to the correctional state employees retirement plan.
new text end

new text begin (b) new text end deleted text begin" deleted text endThe retirement fund deleted text begin" deleted text endincludes the aggregate of
accumulated contributions of employees new text begincovered by the applicable
plan new text end, and all other funds paid into the state treasury or
received by the director under deleted text beginLaws 1929, chapter 191, as
amended deleted text end new text beginthis chapter new text end, together with all income and profits from
the money and interest on it, including contributions on the
part of the federal government, the state, and state departments.

Sec. 9.

Minnesota Statutes 2004, section 352.01,
subdivision 21, is amended to read:

Subd. 21.

Accrued annuities.

new text begin(a) new text endIn this chapter and
chapters 3A, 352B, 352C, and 490, "accrued annuity" means an
annuity that had become payable to a retired employee in the
lifetime of the employee.

new text begin (b) new text endAn annuity or benefit authorized as provided in this
chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
the first day of each calendar month for that calendar month and
deleted text begin is to deleted text end new text beginmust new text endbe paid on the first day of each calendar month
deleted text begin beginning with benefits payable on and after December 1, 1977 deleted text end.

new text begin (c) new text endNotwithstanding any provision to the contrary in this
chapter and chapters 3A, 352B, 352C, and 490, benefit payment
authorized as "payable for life" is payable for the entire month
in which death occurs, and the benefit payment for the month of
death is payable to the surviving spouse or other beneficiary
only if the annuitant dies before negotiating the new text beginbenefit new text endcheck.

Sec. 10.

Minnesota Statutes 2004, section 352.01,
subdivision 23, is amended to read:

Subd. 23.

Coverage or covered by the system.

"Coverage"
or "covered by the system" means that new text begina new text endstate deleted text beginemployees deleted text end new text beginemployee
new text end who deleted text beginserve deleted text end new text beginserves new text endthe state of Minnesota and deleted text beginmake deleted text end new text beginmakes new text endthe
required employee contributions to the retirement fund deleted text beginwill deleted text end new text beginis,
new text end by reason of these contributions deleted text beginbecome deleted text end new text begin, new text endentitled to either (1)
a retirement annuity, or (2) a disability benefit, or (3) a
refund of accumulated contributions, as provided in this chapter.

Sec. 11.

Minnesota Statutes 2004, section 352.021,
subdivision 1, is amended to read:

Subdivision 1.

Establishment.

new text begin(a) new text endThere is established
the new text begingeneral state employees retirement plan of the new text endMinnesota
State Retirement System for state employees.

new text begin (b) new text endThe deleted text beginsystem deleted text end new text begingeneral state employees retirement plan new text endis a
continuation of the State Employees Retirement Association.

new text begin (c) new text endAny person who was a member of the State Employees
Retirement Association on June 30, 1967, is covered by
the deleted text beginsystem deleted text end new text begingeneral state employees retirement plan new text endand is
entitled to all benefits provided by the deleted text beginsystem deleted text end new text beginplan new text endupon
fulfilling the age, service, contribution, and other
requirements of this chapter.

Sec. 12.

Minnesota Statutes 2004, section 352.021,
subdivision 2, is amended to read:

Subd. 2.

State employees covered.

Every person who deleted text beginis a
state employee, as defined in section 352.01, on July 1, 1967,
or deleted text endbecomes a state employee deleted text beginafter that date deleted text end new text beginas defined in
section 352.01 new text endis covered by the deleted text beginsystem deleted text end new text begingeneral state employees
retirement plan new text end. Acceptance of state employment or continuance
in state service is deemed new text beginto be new text endconsent to have deductions made
from salary for deposit to the credit of the account of the
state employee in the retirement fund.

Sec. 13.

Minnesota Statutes 2004, section 352.021,
subdivision 3, is amended to read:

Subd. 3.

Optional exemptions.

Any person who is
appointed by the governor or lieutenant governor may request
exemption from coverage new text beginby the general state employees
retirement plan new text endunder this chapter if the appointee is not deleted text beginso
deleted text end covered deleted text beginat deleted text end new text beginby the plan on new text endthe date of appointment. To qualify
for this exemption new text begin, a written new text endrequest must be made within 90
days from the date of entering upon the duties of the position
to which new text beginthe person is new text endappointed. After new text beginmaking new text endthe request, a
person requesting new text beginthe new text endexemption is not entitled to coverage new text beginby
the general state employees retirement plan new text endwhile employed in
the position that entitled that person to new text beginan new text endexemption from
coverage.

Sec. 14.

Minnesota Statutes 2004, section 352.021,
subdivision 4, is amended to read:

Subd. 4.

Reentering service after refund.

When a former
employee who has withdrawn accumulated contributions reenters
employment in a position entitled to coverage under the
deleted text begin system deleted text end new text begingeneral state employees retirement plan new text end, the employee
deleted text begin shall deleted text end new text beginmust new text endbe covered by the deleted text beginsystem deleted text end new text beginplan new text endon the same basis as a
new employee and is not entitled to credit for any former
service. The annuity rights forfeited when taking a refund can
only be restored as provided in this chapter.

Sec. 15.

Minnesota Statutes 2004, section 352.04,
subdivision 1, is amended to read:

Subdivision 1.

Fund created.

(a) There is created a
special fund to be known as the new text begingeneral new text endstate employees
retirement fund. In that fund deleted text beginthere shall be deposited
employees deleted text end new text begin, employee new text endcontributions, deleted text beginemployers deleted text end new text beginemployer
new text end contributions, and other amounts authorized by law new text beginmust be
deposited new text end.

(b) deleted text beginEffective July 1, 1969, deleted text end new text beginThe general state employees
retirement plan of new text endthe Minnesota State Retirement System deleted text beginshall
deleted text end new text begin must new text endparticipate in the Minnesota postretirement investment fund.
deleted text begin In that fund there shall be deposited deleted text endThe amounts provided in
section 352.119 new text beginmust be deposited in the Minnesota
postretirement investment fund new text end.

Sec. 16.

Minnesota Statutes 2004, section 352.04,
subdivision 12, is amended to read:

Subd. 12.

Fund disbursement restricted.

The new text begingeneral
new text end state employees retirement fund and the participation in the
Minnesota postretirement investment fund must be disbursed only
for the purposes provided by law. The expenses of the system
and any benefits provided by law, other than benefits payable
from the Minnesota postretirement investment fund, must be paid
from the new text begingeneral new text endstate employees retirement fund. The
retirement allowances, retirement annuities, and disability
benefits, as well as refunds of any sum remaining to the credit
of a deceased retired employee or a disabled employee must be
paid only from the new text begingeneral new text endstate employees retirement fund after
the needs have been certified and the amounts withdrawn from the
participation in the Minnesota postretirement investment fund
under section 11A.18. The amounts necessary to make the
payments from the new text begingeneral new text endstate employees retirement fund and
the participation in the Minnesota postretirement investment
fund are annually appropriated from these funds for those
purposes.

Sec. 17.

Minnesota Statutes 2004, section 352.041,
subdivision 1, is amended to read:

Subdivision 1.

Allowable service credit.

deleted text beginAny deleted text end new text begin(a) An
new text end employee covered by the deleted text beginsystem deleted text end new text begingeneral state employees
retirement plan new text endwho is given a leave of absence for employment
by a political subdivision of the state deleted text beginshall deleted text end new text beginremains a member
of the plan and must new text endcontinue to pay new text beginmember contributions new text endinto
the new text begingeneral new text endstate employees retirement fund for the period of
leave.

new text begin (b) new text endUpon payment new text beginof member contributions, new text endthe employee must
be given allowable service credit as a state employee on the
records of the deleted text beginsystem deleted text end new text beginretirement plan new text endas though the employee had
received salary from the state during the leave. Payments into
the retirement fund deleted text beginshall deleted text end new text beginmust new text endbe at the rate required in
section 352.04, subdivision 2, and must be based upon the salary
received from the political subdivision deleted text beginsubject to the maximum
amount, if any deleted text end.

Sec. 18.

Minnesota Statutes 2004, section 352.041,
subdivision 2, is amended to read:

Subd. 2.

Employee contributions, procedure.

The officer
or employee new text beginwho is new text endauthorized by law to pay salaries to
employees of the political subdivision new text beginwhich is new text endemploying a
state employee deleted text beginshall have deleted text end new text beginmust deduct new text endemployee contributions
deleted text begin deducted deleted text end new text beginfor the general state employees retirement plan under
section 352.04, subdivision 2, new text endfrom the salary of each employee
who is on leave of absence from state service on each payroll
abstract and deleted text beginshall deleted text end new text beginmust new text endpay the sum to the director new text beginfollowing
the conclusion of new text endeach pay period.

Sec. 19.

Minnesota Statutes 2004, section 352.041,
subdivision 3, is amended to read:

Subd. 3.

Employer contributions, procedure.

The officer
or employee new text beginwho is new text endauthorized by law to pay salaries to
employees of the political subdivision new text beginwhich is new text endemploying a
state employee covered by the deleted text beginsystem shall deleted text end new text begingeneral state
employees retirement plan new text endalso new text beginmust new text endhave employer contributions
made to the new text begingeneral new text endstate employees retirement fund deleted text beginon deleted text end new text beginfollowing
the conclusion of new text endeach payroll abstract in the amount required
by section 352.04, subdivision 3. These contributions deleted text beginare to
deleted text end new text begin must new text endbe charged new text beginto the political subdivision new text endas an
administrative cost.

Sec. 20.

Minnesota Statutes 2004, section 352.041,
subdivision 5, is amended to read:

Subd. 5.

Employer contributions, leaves of absence; tax
levies.

new text begin(a) new text endEvery political subdivision new text beginwhich is new text endemploying a
state employee covered by the system on leave of absence from
state service for employment by a political subdivision of the
state deleted text beginshall deleted text end new text beginmust new text endpay into the new text begingeneral new text endstate employees retirement
fund the amount of the employer contribution required by law for
state employees covered by the system new text beginunder section 352.04,
subdivision 3 new text end.

new text begin (b) new text endEmploying political subdivisions deleted text begin, except deleted text end new text beginother than
new text end school districts deleted text begin, deleted text endmay levy taxes necessary for the payment of
employer contributions without limitation as to rate or amount.
The levy of the taxes does not reduce the amount of other
taxes deleted text beginto deleted text end new text beginthat may new text endbe levied by political subdivisions deleted text begin,
except deleted text end new text beginother than new text endschool districts deleted text begin, deleted text endwhich are subject to any
limitation.

Sec. 21.

Minnesota Statutes 2004, section 352.15,
subdivision 1, is amended to read:

Subdivision 1.

Exemption deleted text begin; exceptions deleted text end.

deleted text begin None of the money,
annuities, or other benefits mentioned in this chapter is
assignable either in law or in equity or subject to execution,
levy, attachment, garnishment, or other legal process, except as
provided in subdivision 1a or section 518.58, 518.581, or
518.6111. deleted text end new text begin The provisions of section 356.401 apply to the general
state employees retirement plan and to the correctional state
employees retirement plan.
new text end

Sec. 22.

Minnesota Statutes 2004, section 352.15,
subdivision 3, is amended to read:

Subd. 3.

Deducting health or dental insurance premiums.

The board may deleted text begindirect deleted text end new text beginauthorize new text end, at its discretion, the deduction
of a retiree's health or dental insurance premiums and transfer
of the amounts to a health or dental insurance carrier covering
state employees. The insurance carrier must certify that the
retired employee has signed an authorization for the deduction
and provide a computer readable roster of covered retirees and
amounts. The health or dental insurance carrier must refund
deductions withheld from a retiree's check in error directly to
the retiree. The board shall require new text beginthat new text endthe insurance carrier
deleted text begin to deleted text endreimburse the fund for the administrative expense of
withholding the premium amounts. The insurance carrier shall
assume liability for any failure of the system to properly
withhold the premium amounts.

Sec. 23.

Minnesota Statutes 2004, section 352.15,
subdivision 4, is amended to read:

Subd. 4.

Direct transfer of refunds.

new text beginA new text enddirect transfer
of deleted text beginaccount deleted text endrefunds new text beginunder this chapter new text endmay be made to new text beginan
new text end individual retirement savings deleted text beginaccounts deleted text end new text beginaccount new text endor new text begina new text endqualified
retirement deleted text beginplans deleted text end new text beginplan of the person new text endupon new text beginthe receipt of an
new text end application for transfer by a former employee, on forms
acceptable to the executive director.

Sec. 24.

Minnesota Statutes 2004, section 352.22,
subdivision 10, is amended to read:

Subd. 10.

Other refunds.

Former employees covered by the
system are entitled to apply for refunds if they are or become
members of the State Patrol retirement fund, the state Teachers
Retirement Association, or employees of the University of
Minnesota excluded from coverage under the system by action of
the Board of Regents; deleted text beginor labor service employees, excluded from
coverage under section 352.01, subdivision 2b, clause (25); deleted text endor
employees of the adjutant general who under federal law
effectually elect membership in a federal retirement system; or
officers or employees of the senate or house of representatives,
excluded from coverage under section 352.01, subdivision 2b,
clause deleted text begin(8) deleted text end new text begin(7) new text end. The refunds must include accumulated
contributions plus interest as provided in subdivision 2. These
employees may apply new text beginfor a refund once new text end30 days or more new text beginhave
elapsed new text endafter their coverage ceases, even if they continue in
state service but in positions not covered by this chapter.

Sec. 25.

Minnesota Statutes 2004, section 352B.01,
subdivision 1, is amended to read:

Subdivision 1.

Scope.

In this chapter, new text begineach of new text endthe terms
defined in this section deleted text beginhave deleted text end new text beginhas new text endthe deleted text beginmeanings deleted text end new text beginmeaning new text endgiven
deleted text begin them deleted text end new text beginto it new text end.

Sec. 26.

Minnesota Statutes 2004, section 352B.01,
subdivision 2, is amended to read:

Subd. 2.

Member.

"Member" means:

(1) a State Patrol member currently employed deleted text beginafter June 30,
1943, deleted text endunder section 299D.03 by the state, who is a peace officer
under section 626.84, and whose salary or compensation is paid
out of state funds;

(2) a conservation officer employed under section 97A.201,
currently employed by the state, whose salary or compensation is
paid out of state funds;

(3) a crime bureau officer who was employed by the crime
bureau and was a member of the Highway Patrolmen's retirement
fund on July 1, 1978, whether or not that person has the power
of arrest by warrant after that date, or who is employed as
police personnel, with powers of arrest by warrant under section
299C.04, and who is currently employed by the state, and whose
salary or compensation is paid out of state funds;

(4) a person who is employed by the state in the Department
of Public Safety in a data processing management position with
salary or compensation paid from state funds, who was a crime
bureau officer covered by the State Patrol retirement plan on
August 15, 1987, and who was initially hired in the data
processing management position within the department during
September 1987, or January 1988, with membership continuing for
the duration of the person's employment in that position,
whether or not the person has the power of arrest by warrant
after August 15, 1987;

(5) a public safety employee deleted text begindefined as deleted text end new text beginwho is new text enda peace
officer deleted text beginin deleted text end new text beginunder new text endsection 626.84, subdivision 1, paragraph (c),
and new text beginwho is new text endemployed deleted text beginwith deleted text end new text beginby new text endthe Division of Alcohol and Gambling
Enforcement under section 299L.01; and

(6) a Fugitive Apprehension Unit officer after October 31,
2000, new text beginwho is new text endemployed by the Office of Special Investigations of
the Department of Corrections new text beginand new text endwho is a peace officer under
section 626.84.

Sec. 27.

Minnesota Statutes 2004, section 352B.01,
subdivision 3, is amended to read:

Subd. 3.

Allowable service.

(a) "Allowable service"
means:

(1) for members defined in subdivision 2, clause deleted text begin(a) deleted text end new text begin(1) new text end,
deleted text begin monthly deleted text endservice deleted text beginis granted for deleted text end new text beginin new text endany month for which payments
have been made to the State Patrol retirement fund, and

(2) for members defined in subdivision 2, clauses deleted text begin(b) deleted text end new text begin(2)
new text end and deleted text begin(c) deleted text end new text begin(3) new text end, service for which payments have been made to the
State Patrol retirement fund, service for which payments were
made to the State Police officers retirement fund after June 30,
1961, and all prior service which was credited to a member for
service on or before June 30, 1961.

(b) Allowable service also includes any period of absence
from duty by a member who, by reason of injury incurred in the
performance of duty, is temporarily disabled and for which
disability the state is liable under the workers' compensation
law, until the date authorized by the executive director for
commencement of payment of a disability benefit or return to
employment.

(c) MS 2002 (Expired)

new text begin (d) Allowable service means service in a month during which
a member is paid a salary from which a member contribution is
deducted, deposited, and credited in the State Patrol retirement
plan.
new text end

Sec. 28.

Minnesota Statutes 2004, section 352B.02,
subdivision 1e, is amended to read:

Subd. 1e.

Audit; actuarial valuation.

The legislative
auditor shall audit the fund. Any actuarial valuation of the
fund required under section 356.215 must be prepared by the
actuary retained under section 356.214. Any approved actuary
retained by the executive director under section 352.03,
subdivision 6, may perform actuarial valuations and experience
studies to supplement those performed by the deleted text begincommission-retained
deleted text end actuary new text beginretained under section 356.214 new text end. Any supplemental
actuarial valuation or experience studies deleted text beginshall deleted text end new text beginmust new text endbe filed
with the executive director of the Legislative Commission on
Pensions and Retirement.

Sec. 29.

Minnesota Statutes 2004, section 352B.071, is
amended to read:

352B.071 EXEMPTION FROM PROCESS.

deleted text begin None of the money, annuities, or other benefits provided
for in this chapter is assignable either in law or in equity or
be subject to execution, levy, attachment, garnishment, or other
legal process, except as provided in section 518.58, 518.581, or
518.6111. deleted text end new text begin The provisions of section 356.401 apply to the State
Patrol retirement plan.
new text end

Sec. 30.

Minnesota Statutes 2004, section 352D.01, is
amended to read:

352D.01 ESTABLISHMENT.

There is hereby established within the Minnesota State
Retirement System a retirement program for certain public
employees to be known as the Minnesota unclassified employees
retirement program deleted text begin, which shall be deleted text end new text begin. The program must be
new text end administered by the Minnesota State Retirement System.

Sec. 31.

Minnesota Statutes 2004, section 352D.015,
subdivision 3, is amended to read:

Subd. 3.

Supplemental new text begininvestment new text endfund.

"Supplemental
new text begin investment new text endfund" means the fund established and governed by
section 11A.17.

Sec. 32.

Minnesota Statutes 2004, section 352D.015,
subdivision 4, is amended to read:

Subd. 4.

General fund.

"General fund" means the new text begingeneral
new text end state employees retirement fund except the moneys for the
unclassified program.

Sec. 33.

Minnesota Statutes 2004, section 352D.03, is
amended to read:

352D.03 TRANSFER OF ASSETS.

Unless an eligible employee enumerated in section 352D.02,
subdivision 1 deleted text beginor 1a deleted text end, has elected coverage under the individual
retirement account plan under chapter 354B, a sum of money
representing the assets credited to each employee exercising the
option contained in section 352D.02, plus an equal employer
contribution together with interest for the employment period at
the deleted text beginactuarially assumed rates deleted text end new text beginapplicable preretirement interest
actuarial assumption rate new text endduring this period, compounded
annually, deleted text beginshall deleted text end new text beginmust new text endbe used for the purchase of shares on
behalf of each employee in the accounts of the supplemental
retirement fund established by section 11A.17. deleted text beginAny employer's
contribution to amortize the deficit in the state employee's
retirement fund shall not, however, be used for the purchase of
shares.
deleted text end

Sec. 34.

Minnesota Statutes 2004, section 352D.05,
subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

new text begin(a) new text endA participant in the
unclassified program may repay regular refunds taken deleted text beginpursuant to
deleted text end new text begin under new text endsection 352.22, as provided in section 352.23.

new text begin (b) new text endA participant in the unclassified program or an
employee covered by the general plan who has withdrawn the value
of the total shares may repay the refund taken and thereupon
restore the service credit, rights and benefits forfeited by
paying into the fund the amount refunded plus interest at an
annual rate of 8.5 percent compounded annually from the date
that the refund was taken until the date that the refund is
repaid. If the participant had withdrawn only the employee
shares as permitted under prior laws, repayment deleted text beginshall deleted text end new text beginmust new text endbe
pro rata. deleted text beginPayment shall
deleted text end

new text begin (c) Except as provided in section 356.441, the repayment of
a refund under this section must new text endbe made in a lump sum.

Sec. 35.

Minnesota Statutes 2004, section 352D.085,
subdivision 1, is amended to read:

Subdivision 1.

Combined service.

new text beginExcept as provided in
section 356.30, 356.302, or 356.303, new text endservice under the
unclassified program for which the employee has been credited
with employee shares may be used for the limited purpose of
qualifying for benefits under sections 352.115, 352.72,
subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60 deleted text begin;
provided such deleted text end new text begin. The new text endservice new text beginalso new text endmay not be used to qualify for
a disability benefit under section 352.113 or 354.48 if a
participant was under the unclassified program at the time of
the disability deleted text begin, and provided further that deleted text end new text begin. Also, new text endthe years of
service and salary paid while the participant was in the
unclassified program deleted text beginshall deleted text end new text beginmay new text endnot be used in determining the
amount of benefits.

Sec. 36.

Minnesota Statutes 2004, section 352D.09,
subdivision 5, is amended to read:

Subd. 5.

Unclaimed benefits.

If the beneficiary,
surviving spouse or estate has not made application for benefits
within ten years after the date of new text beginthe new text enddeath of a participant new text begin,
new text end the value of the shares deleted text beginshall be deleted text end new text beginis new text endappropriated to the deleted text beginregular
deleted text end new text begin general state employees retirement new text endfund and new text beginthe new text endprovisions of
section 352.12, subdivision 12 deleted text beginshall deleted text end new text begin, new text endgovern. If a former
participant fails to make a claim for benefits within five years
after new text beginthe new text endtermination of covered service or by age 70, whichever
is later, the value of the shares deleted text beginshall be deleted text end new text beginis new text endappropriated to
the general new text beginstate new text endemployees retirement fund and the provisions
of section 352.22, subdivision 8, deleted text beginshall deleted text endapply.

Sec. 37.

Minnesota Statutes 2004, section 352D.12, is
amended to read:

352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.

(a) An employee who is a participant in the unclassified
program and who has prior service credit in a covered plan under
deleted text begin chapters 3A, deleted text end new text beginchapter new text end352, deleted text begin352C, deleted text end353, 354, 354A, deleted text beginand deleted text end new text beginor new text end422A
may, within the time limits specified in this section, elect to
transfer to the unclassified program prior service contributions
to one or more of those plans. deleted text beginParticipants with six or more
years of prior service credit in a plan governed by chapter 3A
or 352C on July 1, 1998, may not transfer prior service
contributions. Participants with less than six years of prior
service credit in a plan governed by chapter 3A or 352C on July
1, 1998, must be contributing to the unclassified plan on or
after January 5, 1999, in order to transfer prior contributions.
deleted text end

(b) For participants with prior service credit in a plan
governed by chapter 352, 353, 354, 354A, or 422A, "prior service
contributions" means the accumulated employee and equal employer
contributions with interest at an annual rate of 8.5 percent
compounded annually, based on fiscal year balances. deleted text beginFor
participants with less than six years of service credit as of
July 1, 1998, and with prior service credit in a plan governed
by chapter 3A or 352C, "prior service contributions" means an
amount equal to twice the amount of the accumulated member
contributions plus annual compound interest at the rate of 8.5
percent, computed on fiscal year balances.
deleted text end

(c) If a participant has taken a refund from a retirement
plan listed in this section, the participant may repay the
refund to that plan, notwithstanding any restrictions on
repayment to that plan, plus 8.5 percent interest compounded
annually and have the accumulated employee and equal employer
contributions transferred to the unclassified program with
interest at an annual rate of 8.5 percent compounded annually
based on fiscal year balances. If a person repays a refund and
subsequently elects to have the money transferred to the
unclassified program, the repayment amount, including interest,
is added to the fiscal year balance in the year which the
repayment was made.

(d) A participant electing to transfer prior service
contributions credited to a retirement plan governed by chapter
352, 353, 354, 354A, or 422A as provided under this section must
complete deleted text beginthe deleted text end new text begina written new text endapplication for the transfer and repay
any refund within one year of the commencement of the employee's
participation in the unclassified program. deleted text beginA participant
electing to transfer prior service contributions credited to a
retirement plan governed by chapter 3A or 352C as provided under
this section must complete the application for the transfer and
repay any refund between January 5, 1999, and June 1, 1999, if
the employee commenced participation in the unclassified program
before January 5, 1999, or within one year of the commencement
of the employee's participation in the unclassified program if
the employee commenced participation in the unclassified program
after January 4, 1999.
deleted text end

Sec. 38.

Minnesota Statutes 2004, section 353.01,
subdivision 32, is amended to read:

Subd. 32.

Coordinated member.

"Coordinated member" means
deleted text begin any deleted text end new text begina new text endpublic employee, including deleted text beginany deleted text end new text begina new text endpublic hospital employee,
new text begin who is new text endcovered by deleted text beginany deleted text end new text beginan new text endagreement or modification made between
the state and the Secretary of Health deleted text begin, Education deleted text endand deleted text beginWelfare
deleted text end new text begin Human Services new text end, making the provisions of the federal Old Age,
Survivors and Disability Insurance Act applicable to the member
if new text beginthe new text endmembership eligibility criteria are met under this
chapter. A coordinated member also is a former basic member who
has a complete and continuous separation for at least 30 days
from employment as a public employee meeting the requirements
specified in subdivision 28, paragraphs (a) and (b), and who
reenters public service as a public employee and meets the
membership eligibility criteria under this chapter.

Sec. 39.

Minnesota Statutes 2004, section 353.01,
subdivision 33, is amended to read:

Subd. 33.

Basic member.

"Basic member" means deleted text beginany deleted text end new text begina
new text end public employee, including deleted text beginany deleted text end new text begina new text endpublic hospital employee, new text beginwho
is new text endnot covered by any agreement or modification made between the
state and the Secretary of Health deleted text begin, Education deleted text endand deleted text beginWelfare deleted text end new text beginHuman
Services new text end.

Sec. 40.

Minnesota Statutes 2004, section 353.025, is
amended to read:

353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.

deleted text begin From and after January 1, 1982, deleted text endEmployees of the Range
Association of Municipalities and Schools deleted text beginhereinafter referred
to as the association, shall become deleted text end new text beginare new text endcoordinated members of
the new text begingeneral employees retirement plan of the new text endPublic Employees
Retirement Association unless specifically exempt under section
353.01, subdivision 2b deleted text begin, and deleted text end new text begin. new text endThe new text beginRange new text endAssociation deleted text beginshall be
deemed to be deleted text end new text beginof Municipalities and Schools is new text enda governmental
subdivision for the purposes of this chapter.

Sec. 41.

Minnesota Statutes 2004, section 353.026, is
amended to read:

353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
EMPLOYEES.

Any person who was employed by the city of Minneapolis,
Special School District No. 1, or public corporation as defined
in section 422A.01, subdivision 9, on or after July 1, 1978 new text begin, new text endand
deleted text begin prior to deleted text end new text beginbefore new text endJuly 1, 1979, and who was excluded from
retirement coverage by the coordinated program of the
Minneapolis municipal employees retirement fund deleted text beginpursuant to
deleted text end new text begin under new text endsection 422A.09, subdivision 3, deleted text beginshall be deleted text end new text beginis new text endentitled to
retirement coverage by the new text begingeneral employees retirement plan of
the new text endPublic Employees Retirement Association unless specifically
excluded deleted text beginpursuant to deleted text end new text beginunder new text endsection 353.01, subdivision 2b, from
and after May 19, 1981.

Sec. 42.

Minnesota Statutes 2004, section 353.027, is
amended to read:

353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
EMPLOYEES.

Any person employed on January 1, 1975, by a municipal
court established deleted text beginpursuant to deleted text end new text beginunder new text endMinnesota Statutes 1957,
section 488.03 new text begin, new text endand located in the cities of New Brighton,
Roseville, Maplewood, North Saint Paul, White Bear Lake new text begin, new text endor St.
Paul deleted text beginshall be deleted text end new text beginis new text endeligible for membership in the new text begingeneral
employees retirement plan of the new text endPublic Employees Retirement
Association and deleted text beginshall retain deleted text end new text beginretains new text endany rights or benefits the
person had attained as a member of the new text begingeneral employees
retirement plan of the new text endassociation on January 1, 1975, so long
as the person remains an employee of the municipal court of
Ramsey County.

Sec. 43.

Minnesota Statutes 2004, section 353.028, is
amended to read:

353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.

Subdivision 1.

Definitions.

new text begin(a) new text endFor purposes of this
section new text begin, each of the terms in this subdivision has the meaning
indicated.
new text end

new text begin (b) new text end"City manager" means (1) a person new text beginwho is new text endduly appointed
to and new text beginis new text endholding the position of city manager in a Plan B
statutory city or in a home rule city operating under the
"council-manager" form of government, or (2) a person new text beginwho is
new text end appointed to and new text beginis new text endholding the position of chief administrative
officer of a home rule charter city or a statutory city deleted text beginpursuant
to deleted text end new text beginunder new text enda charter provision, ordinance, or resolution
establishing such a position and prescribing its duties and
responsibilities.

new text begin (c) new text end"Governing body" means the city council of the city
employing the city manager.

new text begin (d) new text end"Election" means the election described in subdivision
2.

Subd. 2.

Election.

(a) A city manager may elect to be
excluded from membership in the new text begingeneral employees retirement
plan of the Public Employees Retirement new text endAssociation. The
election of exclusion must be made within six months following
the commencement of employment, new text beginmust be made new text endin writing on a
form prescribed by the executive director, and must be approved
by a resolution deleted text beginof deleted text end new text beginadopted by new text endthe governing body of the city.
The election of exclusion is not effective until it is filed
with the executive director. Membership of a city manager in
the deleted text beginassociation deleted text end new text begingeneral employees retirement plan new text endceases on the
date the written election is received by the executive director
or upon a later date specified. Employee and employer
contributions made on behalf of a person exercising the option
to be excluded from membership under this section must be
refunded in accordance with section 353.27, subdivision 7.

(b) A city manager who has elected exclusion under this
subdivision may elect to revoke that action by filing a written
notice with the executive director. The notice must be on a
form prescribed by the executive director and must be approved
by a resolution of the governing body of the city. Membership
of the city manager in the association resumes prospectively
from the date of the first day of the pay period for which
contributions were deducted or, if pay period coverage dates are
not provided, the date on which the notice of revocation or
contributions are received in the office of the association,
provided that the notice of revocation is received by the
association within 60 days of the receipt of contributions.

(c) An election under paragraph (b) is irrevocable. Any
election under paragraph (a) or (b) must include a statement
that the individual will not seek authorization to purchase
service credit for any period of excluded service.

Subd. 3.

Deferred compensation; city contribution.

If an
election of exclusion is made, and if the city manager and the
governing body of the city new text beginadditionally new text endagree in writing that
the additional compensation is to be deferred and deleted text beginshall deleted text end new text beginis to new text endbe
contributed on behalf of the city manager to a deferred
compensation program which meets the requirements of section 457
of the Internal Revenue Code of deleted text begin1954 deleted text end new text begin1986 new text end, as amended deleted text beginthrough
December 31, 1980 deleted text end, the governing body may compensate the city
manager, in addition to the salary allowed under any limitation
imposed on salaries by law or charter, in an amount equal to the
employer contribution which would be required by section 353.27,
subdivision 3, if the city manager were a member of the
deleted text begin association deleted text end new text begingeneral employees retirement plan new text end.

Subd. 4.

Refunds; deferred annuity.

A city manager who
makes an election to be excluded from membership is entitled to
a refund of accumulated deductions or, if otherwise qualified, a
deferred annuity deleted text beginin the manner provided by deleted text end new text beginunder new text endsection 353.34,
at the option of the manager.

Subd. 5.

Election; other employment.

If a city manager
who has made an election to be excluded new text beginsubsequently new text endaccepts
employment in another governmental subdivision or new text beginsubsequently
new text end accepts employment other than as a city manager in the same
city, the election deleted text beginshall be deemed to have been deleted text end new text beginis new text endrescinded on
the effective date of employment.

Sec. 44.

Minnesota Statutes 2004, section 353.14, is
amended to read:

353.14 BENEFITS FROM OTHER FUNDS.

No annuity or benefit provided by this chapter deleted text beginshall deleted text end new text beginmay new text endbe
affected, diminished, or impaired by any pension, benefit, or
annuity which any member or survivor is entitled to receive from
a tax supported public retirement new text beginplan or new text endsystem authorized by
any other law deleted text begin, for deleted text end new text beginbased on service that is new text enddifferent service
new text begin than the service new text endfor which the member or survivor is entitled to
receive benefit or annuity from new text begina retirement plan administered
by new text endthe Public Employees Retirement Association.

Sec. 45.

Minnesota Statutes 2004, section 353.15,
subdivision 1, is amended to read:

Subdivision 1.

Exemption deleted text begin; exceptions deleted text end.

deleted text begin No money, annuity,
or benefit provided for in this chapter is assignable or subject
to execution, levy, attachment, garnishment, or legal process,
except as provided in subdivision 2 or section 518.58, 518.581,
or 518.6111. deleted text end new text begin The provisions of section 356.401 apply to the
general employees retirement plan, to the public employees
police and fire retirement plan, and to the local government
correctional service retirement plan.
new text end

Sec. 46.

Minnesota Statutes 2004, section 353.15,
subdivision 3, is amended to read:

Subd. 3.

Payment to public bodies.

If new text begin, new text endin the judgment
of the executive director new text begin, new text endconditions so warrant, payment new text beginof an
annuity, a retirement benefit, or a refund new text endmay be made to a
public body in behalf of an annuitant, disabilitant, or survivor
upon such terms as the executive director may prescribe.

Sec. 47.

Minnesota Statutes 2004, section 353.27,
subdivision 11, is amended to read:

Subd. 11.

Employers; required to furnish requested
information.

new text begin(a) new text endAll governmental subdivisions shall furnish
promptly such other information relative to the employment
status of all employees or former employees, including new text begin, new text endbut not
limited to new text begin, new text endpayroll abstracts pertaining to all past and present
employees, as may be requested by the deleted text beginassociation or its
deleted text end executive director, including schedules of salaries applicable
to various categories of employment.

new text begin (b) new text endIn the event payroll abstract records have been lost or
destroyed, for whatever reason or in whatever manner, so that
such schedules of salaries cannot be furnished therefrom, the
employing governmental subdivision, in lieu thereof, shall
furnish to the association an estimate of the earnings of any
employee or former employee for any period as may be requested
by the deleted text beginassociation or its deleted text endexecutive director. deleted text beginShould deleted text end new text beginIf new text endthe
association deleted text beginreceive such schedules deleted text end new text beginis provided a schedule new text endof
estimated earnings, the executive director is deleted text beginhereby deleted text endauthorized
to use the same as a basis for making whatever computations
might be necessary for determining obligations of the employee
and employer to the retirement fund. If estimates are not
furnished by the employer deleted text beginpursuant to deleted text end new text beginat new text endthe request of the
deleted text begin association or its deleted text endexecutive director, the deleted text beginassociation deleted text end new text beginexecutive
director new text endmay estimate the obligations of the employee and
employer to the retirement fund based upon deleted text beginsuch deleted text end new text beginthose new text endrecords deleted text beginas
deleted text end new text begin that new text endare in its possession. deleted text beginWhere payroll abstracts have been
lost or destroyed, the governmental agency need not furnish any
information pertaining to employment prior to July 1, 1963. The
association shall make no estimate of any obligation of any
employee, former employee, or employer covering employment prior
to July 1, 1963.
deleted text end

Sec. 48.

Minnesota Statutes 2004, section 353.271, is
amended to read:

353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
INVESTMENT FUND.

Subdivision 1.

Authorization.

The new text begingeneral employees
retirement plan of the new text endPublic Employees Retirement Association,
deleted text begin including deleted text endthe public employees police and fire deleted text beginfund but
excluding the various local relief association consolidation
accounts, is deleted text end new text beginretirement plan, and the local government
correctional service retirement plan are new text endauthorized to
participate in the Minnesota postretirement investment fund.
There deleted text beginshall be deleted text end new text beginis new text endone general participation in the Minnesota
postretirement investment fund for deleted text beginall purposes by deleted text end new text begineach plan of
new text end the Public Employees Retirement deleted text beginfund and one general
participation in the Minnesota postretirement investment fund
for all purposes by the public employees police and fire
fund deleted text end new text beginAssociation new text end.

Subd. 2.

Valuation of assets; adjustment of benefits.

deleted text begin (1) deleted text end new text begin(a) new text endThe required reserves for retirement annuities payable
as provided in this chapter other than those payable from the
various local relief association consolidation accounts, as
determined in accordance with the appropriate mortality table
adopted by the board of trustees based on the experience of the
fund as recommended by the actuary retained deleted text beginby the Legislative
Commission on Pensions and Retirement deleted text end new text beginunder section 356.214, and
approved under section 356.215, subdivision 18 new text end, and using the
postretirement interest assumption specified in section 356.215,
subdivision 8, deleted text beginshall deleted text end new text beginmust new text endbe transferred to the Minnesota
postretirement investment fund as of the last business day of
the month in which the retirement annuity begins.

deleted text begin (2) deleted text end new text begin(b) new text endAnnuity payments deleted text beginother than those payable from the
various local relief association consolidation accounts
shall deleted text end new text beginmust new text endbe adjusted in accordance with the provisions of
section 11A.18.

deleted text begin (3) deleted text end new text begin(c) new text endIncreases in payments deleted text beginpursuant to deleted text end new text beginunder new text endthis
section deleted text beginor from the various local relief association
consolidation accounts, if applicable, will deleted text end new text beginmust new text endbe made
automatically unless the intended recipient files written notice
with the executive director of the Public Employees Retirement
Association requesting that the increase deleted text beginshall deleted text endnot be made.

Sec. 49.

Minnesota Statutes 2004, section 353.31,
subdivision 1c, is amended to read:

Subd. 1c.

Coordinated members.

Except for benefits
provided under section 353.32, deleted text beginsubdivisions 1 and 1a, deleted text endno
survivor benefits are payable to the surviving spouse or
dependent children of a deceased coordinated member.

Sec. 50.

Minnesota Statutes 2004, section 353.32,
subdivision 9, is amended to read:

Subd. 9.

Payment to a minor.

If a member or former
member dies having named as beneficiary a person who is a minor
at the time of the application for refund, the board may make
new text begin the new text endpayment deleted text begin(a) deleted text end new text begin(1) new text enddirectly to the minor, deleted text begin(b) deleted text end new text begin(2) new text endto deleted text beginany
deleted text end new text begin a new text endperson who has legally qualified and is acting as guardian of
the minor's person or property in any jurisdiction, or deleted text begin(c) deleted text end new text begin(3)
new text end to either parent of the minor or to deleted text beginany deleted text end new text beginan new text endadult person with
whom the minor may at the time be living deleted text begin, provided only that deleted text end new text begin.
new text end The parent or other person to whom any amount is to be
paid deleted text beginshall have advised deleted text end new text beginmust advise new text endthe board in writing that
the amount will be held or used in trust for the benefit of such
minor. Any annuity or disability benefit payable at the time of
death of an annuitant or recipient of a disability benefit,
which is payable to a beneficiary who is a minor, may be paid in
the same manner. deleted text beginSuch deleted text end new text beginThe new text endpayment deleted text beginshall be deleted text end new text beginis new text enda bar to recovery
by any other person or persons.

Sec. 51.

Minnesota Statutes 2004, section 353.33,
subdivision 12, is amended to read:

Subd. 12.

Basic disability survivor benefits.

If a basic
member who is receiving a disability benefit under subdivision 3:

deleted text begin (a) deleted text end new text begin(1) new text enddies before attaining age 65 or within five years
of the effective date of the disability, whichever is later, the
surviving spouse deleted text beginshall deleted text end new text beginis entitled to new text endreceive a survivor benefit
under section 353.31, unless the surviving spouse elected to
receive a refund under section 353.32, subdivision 1 deleted text begin. deleted text end new text begin;
new text end

deleted text begin (b) deleted text end new text begin(2) new text endis living at age 65 or five years after the
effective date of the disability, whichever is later, the basic
member may continue to receive a normal disability benefit, or
elect a joint and survivor optional annuity under section
353.31, subdivision 1b. The election of the joint and survivor
optional annuity must occur within 90 days of new text beginattaining new text endage 65
or new text beginof reaching new text endthe five-year anniversary of the effective date
of the disability benefit, whichever is later. The optional
annuity takes effect on the first new text beginday new text endof the month following the
month in which the person attains age 65 or reaches the
five-year anniversary of the effective date of the disability
benefit, whichever is later deleted text begin. deleted text end new text begin; or
new text end

deleted text begin (c) deleted text end new text begin(3) new text endif there is a dependent child or children under
deleted text begin paragraph (a) or (b) deleted text end new text beginclause (1) or (2) new text end, the deleted text beginassociation shall
grant deleted text end new text begindependent child is entitled to new text enda dependent child benefit
under section 353.31, subdivision 1b, paragraph (b).

Sec. 52.

Minnesota Statutes 2004, section 354.091, is
amended to read:

354.091 SERVICE CREDIT.

(a) In computing service credit, no teacher deleted text beginshall deleted text end new text beginmay
new text end receive credit for more than one year of teaching service for
any fiscal year. deleted text beginCommencing July 1, 1961 deleted text end new text beginAdditionally, in
crediting allowable service new text end:

(1) if a teacher teaches less than five hours in a day,
service credit must be given for the fractional part of the day
as the term of service performed bears to five hours;

(2) if a teacher teaches five or more hours in a day,
service credit must be given for only one day;

(3) if a teacher teaches at least 170 full days in any
fiscal year, service credit must be given for a full year of
teaching service; and

(4) if a teacher teaches for only a fractional part of the
year, service credit must be given for such fractional part of
the year new text beginin the same relationship new text endas the period of service
performed bears to 170 days.

(b) A teacher deleted text beginshall deleted text end new text beginmust new text endreceive a full year of service
credit based on the number of days in the employer's full school
year if deleted text beginit deleted text end new text beginthat school year new text endis less than 170 days. Teaching
service performed before July 1, 1961, must be computed under
the law in effect at the time it was performed.

(c) A teacher must not lose or gain retirement service
credit as a result of the employer converting to a flexible or
alternate work schedule. If the employer converts to a flexible
or alternate work schedule, the forms for reporting new text beginteaching
service new text endand the procedures for determining service credit must
be determined by the executive director with the approval of the
board of trustees.

(d) For all services rendered on or after July 1, 2003,
service credit for all members employed by the Minnesota State
Colleges and Universities system must be determined:

(1) for full-time employees, by the definition of full-time
employment contained in the collective bargaining agreement for
those units listed in section 179A.10, subdivision 2, or
contained in the applicable personnel or salary plan for those
positions designated in section 179A.10, subdivision 1;

(2) for part-time employees, by the appropriate proration
of full-time equivalency based on the provisions contained in
the collective bargaining agreement for those units listed in
section 179A.10, subdivision 2, or contained in the applicable
personnel or salary plan for those positions designated in
section 179A.10, subdivision 1, and the applicable procedures of
the Minnesota State Colleges and Universities system; and

(3) in no case may a member receive more than one year of
service credit for any fiscal year.

Sec. 53.

Minnesota Statutes 2004, section 354.10,
subdivision 1, is amended to read:

Subdivision 1.

Exemption; exceptions.

new text begin (a) The provisions
of section 356.401 apply to the teachers retirement plan.
new text end

new text begin (b) new text endThe right of a teacher to take advantage of the
benefits provided by this chapter, is a personal right only and
is not assignable. All money to the credit of a teacher's
account in the fund or any money payable to the teacher from the
fund belongs to the state of Minnesota until actually paid to
the teacher or a beneficiary under this chapter.

new text begin (c) new text endThe association may acknowledge a properly completed
power of attorney form. deleted text beginAn assignment or attempted assignment
of a teacher's interest in the fund, or of the beneficiary's
interest in the fund, by a teacher or a beneficiary is void and
exempt from garnishment or levy under attachment or execution,
except as provided in subdivision 2 or 3, or section 518.58,
518.581, or 518.6111.
deleted text end

Sec. 54.

Minnesota Statutes 2004, section 354.10,
subdivision 3, is amended to read:

Subd. 3.

Payment to public bodies.

If new text begin, new text endin the judgment
of the executive director new text begin, new text endconditions so warrant, payment new text beginof an
annuity, a retirement benefit, or a refund new text endmay be made to a
public body in behalf of an annuitant, disabilitant, or survivor
upon such terms as the executive director may prescribe.

Sec. 55.

Minnesota Statutes 2004, section 354.10,
subdivision 4, is amended to read:

Subd. 4.

Changes in designated beneficiaries.

deleted text beginAny deleted text end new text begin(a) A
new text end beneficiary designated by a retiree or member under section
354.05, subdivision 22, may be changed or revoked by the retiree
or member on a form provided by the executive director.

new text begin (b) new text endA change or revocation made under this subdivision is
valid only if the properly completed form is received by the
association on or before the date of death of the retiree or the
member.

new text begin (c) new text endIf a designated beneficiary dies before the retiree or
member designating the beneficiary deleted text begin, deleted text endand a new beneficiary is not
designated, the retiree's or member's estate is the beneficiary.

Sec. 56.

Minnesota Statutes 2004, section 354.33,
subdivision 5, is amended to read:

Subd. 5.

Retirees not eligible for federal benefits.

Notwithstanding the provisions of section 354.55, subdivision 3,
when any person retires after July 1, 1973 new text begin, new text endwho deleted text begin(a) deleted text end new text begin(1) new text endhas ten
or more years of allowable service, and deleted text begin(b) deleted text end new text begin(2) new text enddoes not have
any retroactive Social Security coverage by reason of the
person's position in the retirement system, and deleted text begin(c) deleted text end new text begin(3) new text enddoes not
qualify for new text beginfederal new text endold age and survivor primary benefits at the
time of retirement, the annuity deleted text beginshall deleted text end new text beginmust new text endbe computed under
section 354.44, subdivision 2 new text begin, new text endof the law in effect on June 30,
1969, except that accumulations after June 30, 1957, deleted text beginshall deleted text end new text beginmust
new text end be calculated using the same mortality table and interest
assumption new text beginas are new text endused to transfer the required reserves to the
Minnesota postretirement investment fund.

Sec. 57.

Minnesota Statutes 2004, section 354.39, is
amended to read:

354.39 EFFECTIVE DATE; APPLICATION.

deleted text begin After July 1, 1971, any deleted text end new text beginA new text endmember of the Teachers Retirement
Association new text beginwho is new text endemployed in a new state university deleted text beginand deleted text end new text beginor any
new text end other new deleted text begininstitutions deleted text end new text begininstitution new text endof higher learning not
included in any agreement or modification made between the state
and the new text beginfederal new text endSecretary of Health deleted text begin, Education deleted text endand deleted text beginWelfare deleted text end new text beginHuman
Services new text end, making the provisions of the federal Old Age deleted text beginand deleted text end new text begin,
new text end Survivors new text beginand Disability new text endInsurance Act applicable to such
members, deleted text beginshall deleted text end new text beginmust new text endbe covered under the provisions of this
chapter applicable to coordinated members.

Sec. 58.

Minnesota Statutes 2004, section 354.41,
subdivision 2, is amended to read:

Subd. 2.

Teachers.

Every teacher deleted text beginafter June 30, 1957, deleted text endin
deleted text begin the service or entering deleted text endthe service of the state or new text beginone of new text endits
governmental deleted text beginsubdivision deleted text end new text beginsubdivisions new text endas a teacher, except
persons deleted text beginspecially deleted text end new text beginspecifically new text endexcluded, deleted text beginshall deleted text end new text beginmust new text endbecome a
member of the association by the acceptance of such employment.

Sec. 59.

Minnesota Statutes 2004, section 354.42, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Teachers retirement fund. new text end

new text begin (a) Within the
Teachers Retirement Association and the state treasury is
created a special retirement fund, which must include all the
assets of the Teachers Retirement Association and all revenue of
the association. The fund is the continuation of the fund
established under Laws 1931, chapter 406, section 2,
notwithstanding the repeal of Minnesota Statutes 1973, section
354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
new text end

new text begin (b) The teachers retirement fund must be credited with all
employee and employer contributions, all investment revenue and
gains, and all other income authorized by law.
new text end

new text begin (c) From the teachers retirement fund is appropriated the
payments of annuities and benefits authorized by this chapter,
the transfers to the Minnesota postretirement investment fund,
and the reasonable and necessary expenses of administering the
fund and the association.
new text end

Sec. 60.

Minnesota Statutes 2004, section 354.44,
subdivision 2, is amended to read:

Subd. 2.

Computation of money purchase annuity.

new text begin(a) new text endThe
amount of retirement annuity is an amount equal to double the
annuity which could be purchased by the member's accumulated
deductions plus interest thereon. The annuity deleted text beginshall deleted text end new text beginmust new text endbe
determined by the member's age, sex, double the amount of
accumulated deductions, double the new text beginamount of new text endinterest earned on
the accumulated deductions, and the appropriate mortality tables
and interest rates. To determine the amount of the annuity for
a basic member, the accumulated deductions deleted text beginprior to deleted text end new text beginbefore new text endJuly
1, 1957, and the accumulated deductions deleted text beginsubsequent to deleted text end new text beginafter new text endJuly
1, 1957, deleted text beginshall deleted text end new text beginmust new text endbe considered separately.

deleted text begin (1) deleted text end new text begin(b) new text endFor service rendered deleted text beginprior to deleted text end new text beginbefore new text endJuly 1, 1957,
the accumulated deductions for deleted text beginany deleted text end new text begina new text endmember deleted text beginshall deleted text end new text beginmust new text endbe
carried forward at a fixed amount which is shown credited to the
member's account as of that date. That fixed amount deleted text beginshall deleted text end new text beginmust
new text end also include any payments in lieu of salary deductions which deleted text beginare
to be made in the future and are deleted text end new text beginwere new text endactually so made deleted text beginpursuant
to deleted text end new text beginunder new text endan agreement executed between the member and the board
as authorized by section 354.50 or any other authorized payments
made by the member to the fund. The annuity granted with
respect to the period deleted text beginshall deleted text end new text beginmust new text endbe determined as follows:

deleted text begin (a) deleted text end new text begin(1) new text endthe fixed amount of the accumulated deductions for
the period including the interest credited on the amount as
earned up to July 1, 1957 deleted text begin. deleted text end new text begin; and
new text end

deleted text begin (b) deleted text end new text begin(2) new text endannuity purchase rates based on the applicable
mortality table established by the board and the interest rate
assumption in effect deleted text beginprior to deleted text end new text beginbefore new text endJuly 1, 1957, in the case
of basic members and an annuity purchase rate based on an
appropriate annuity table of mortality established by the board
as provided in section 354.07, subdivision 1, and using the
applicable postretirement interest rate assumption specified in
section 356.215, subdivision 8, in the case of coordinated
members.

deleted text begin (2) deleted text end new text begin(c) new text endFor service rendered deleted text beginsubsequent to deleted text end new text beginafter new text endJuly 1,
1957, the accumulated deductions for deleted text beginany deleted text end new text begina new text endmember deleted text beginshall deleted text end new text beginmust
new text end consist of the amounts actually credited to the member's account
by reason of salary deductions. The annuity granted with
respect to the period deleted text beginshall deleted text end new text beginmust new text endbe determined by the following:

deleted text begin (a) deleted text end new text begin(1) new text endaccumulated deductions for the period;

deleted text begin (b) deleted text end new text begin(2) new text endinterest credited on these accumulated deductions
from July 1, 1957, to the date of retirement;

deleted text begin (c) deleted text end new text begin(3) new text endinterest credited on accumulated deductions
including prior credited interest provided in paragraph deleted text begin(1) deleted text end new text begin(b)
new text end from July 1, 1957, to the date of retirement;

deleted text begin (d) deleted text end new text begin(4) new text endafter the amount available for an annuity granted
with respect to the person is determined in accordance with the
provisions of this subdivision, an additional amount equal to 20
percent of the sum of clause deleted text begin(2)(a) deleted text end new text begin(1) new text endplus interest credited
to deleted text beginmembers deleted text end new text begina member's new text endaccount from July 1, 1957, to date of
retirement is to be added. This added amount is not to be
doubled as provided for other amounts determined in this
subdivision; new text beginand
new text end

deleted text begin (e) deleted text end new text begin(5) the new text endannuity purchase rate based on an appropriate
annuity table of mortality established by the board as provided
in section 354.07, subdivision 1, and using the applicable
postretirement interest rate assumption specified in section
356.215, subdivision 8.

Sec. 61.

Minnesota Statutes 2004, section 354A.021,
subdivision 5, is amended to read:

Subd. 5.

Tax sheltered annuity program and fund.

deleted text beginAny deleted text end new text beginA
new text end teachers retirement fund association may establish a tax
sheltered annuity program and fund meeting the requirements of
section 403(b) of the Internal Revenue Code of 1986, as amended
deleted text begin through December 31, 1992 deleted text end, which deleted text beginshall deleted text end new text beginmust new text endinclude all assets
which were acquired for the specific purpose of being credited
to the program and fund and to which deleted text beginshall deleted text end new text beginmust new text endbe credited all
employee contributions deleted text begin, deleted text endand employer contributions new text begin, new text endif
negotiated under a collective bargaining agreement, designated
for this purpose and all interest income attributable to the
assets of the program and fund.

Sec. 62.

Minnesota Statutes 2004, section 354A.097,
subdivision 1, is amended to read:

Subdivision 1.

Service credit purchase authorized.

A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354A.011, subdivision 27, or who
failed to obtain service credit for a military leave of absence
period under section 354A.093, is entitled to purchase allowable
service credit for the initial period of enlistment, induction,
or call to active duty without any voluntary extension by making
payment under section deleted text begin356.55 provided deleted text end new text begin356.551 if new text endthe teacher has
not purchased service credit from another Minnesota defined
benefit public employee pension plan for the same period of
service.

Sec. 63.

Minnesota Statutes 2004, section 354A.31,
subdivision 5, is amended to read:

Subd. 5.

Unreduced normal retirement annuity.

Upon
retirement at normal retirement age with at least three years of
service credit, a coordinated member deleted text beginshall be deleted text end new text beginis new text endentitled to a
normal retirement annuity calculated deleted text beginpursuant to deleted text end new text beginunder
new text end subdivision 4 new text beginor 4a, whichever applies new text end.

Sec. 64.

new text begin [356.401] EXEMPTION FROM PROCESS.
new text end

new text begin