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SF 884

as introduced - 89th Legislature (2015 - 2016) Posted on 08/26/2015 02:35pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to retirement; volunteer firefighter relief associations; implementing
the recommendations of the state auditor's volunteer firefighter working group;
addressing various disbursement and accounting issues; addressing various
benefit issues; updating volunteer fire state aid references; addressing various
relief association establishment and membership issues; amending Minnesota
Statutes 2014, sections 69.051, subdivision 1a; 69.80; 424A.001, by adding
a subdivision; 424A.002, subdivision 1; 424A.016, subdivision 4; 424A.02,
subdivisions 3, 3a, 9a; 424A.05, subdivisions 2, 3; 424A.092, subdivisions 3, 6;
424A.093, subdivisions 5, 6.

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

ARTICLE 1

DISBURSEMENT AND ACCOUNTING ISSUES

Section 1.

Minnesota Statutes 2014, 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, that is not required to file a
financial report and audit under subdivision 1 must prepare 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:

(1) the sources and amounts of all money received;

(2) all disbursements, accounts payable and accounts receivable;

(3) the amount of money remaining in the treasury;

(4) total assets, including a listing of all investments;

(5) the accrued liabilities; and

(6) all other items necessary to show accurately the revenues and expenditures and
financial position of the relief association.

(b) The detailed financial statement new text beginof the special and general funds new text endrequired under
paragraph (a) must be certified by a certified public accountant or by the state auditordeleted text begin. 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
deleted text endnew text begin in accordance with agreed-upon procedures
and forms prescribed by the state auditor
new text end. The accountant must have at least five years of
public accounting, auditing, or similar experience, and must not be an active, inactive, or
retired member of the relief association or the fire department.

(c) The detailed new text beginfinancial new text endstatement required under paragraph (a) must be
countersigned by:

(1) the municipal clerk or clerk-treasurer of the municipality; or

(2) where applicable, 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 and by the secretary of the independent nonprofit firefighting corporation; or

(3) by the chief financial official of the county in which the volunteer firefighter
relief association is located or primarily located if the relief association is associated with
a fire department that is not located in or associated with an organized municipality.

(d) The volunteer firefighters' relief association board must file the detailed new text beginfinancial
new text endstatement required under paragraph (a) in the relief association office for public inspection
and present it to the governing body of the municipality within 45 days after the close of
the fiscal year, and must submit a copy of the new text begincertified new text enddetailed new text beginfinancial new text endstatement to the
state auditor within 90 days of the close of the fiscal year.

new text begin (e) A certified public accountant or auditor who performs the agreed-upon
procedures under paragraph (b) is subject to the reporting requirements of section 6.67.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies to financial
statements prepared for calendar year 2015 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2014, section 69.80, is amended to read:


69.80 AUTHORIZED ADMINISTRATIVE EXPENSES.

(a) Notwithstanding any provision of law to the contrary, the payment of the
following necessary, reasonable and direct expenses of maintaining, protecting and
administering the special fund, when provided for in the bylaws of the association and
approved by the board of trustees, constitutes authorized administrative expenses of a
volunteer firefighters' relief association organized under any law of this state or the
Bloomington Fire Department Relief Association:

(1) office expense, including, but not limited to, rent, utilities, equipment, supplies,
postage, periodical subscriptions, furniture, fixtures, and salaries of administrative
personnel;

(2) salaries of the officers of the association, or their designees, and salaries of the
members of the board of trustees of the association if the salary amounts are approved by
the governing body of the entity that is responsible for meeting any minimum obligation
under section 424A.092 or 424A.093, or Laws 2013, chapter 111, article 5, sections 31 to
42, and the itemized expenses of relief association officers and board members that are
incurred as a result of fulfilling their responsibilities as administrators of the special fund;

(3) tuition, registration fees, organizational dues, and other authorized expenses
of the officers or members of the board of trustees incurred in attending educational
conferences, seminars, or classes relating to the administration of the relief association;

(4) auditdeleted text begin,deleted text end new text beginand audit-related services, and accounting and accounting-related services,
new text endactuarial, medical, legal, and investment and performance evaluation expenses;

(5) filing and application fees payable by the relief association to federal or other
governmental entities;

(6) reimbursement to the officers and members of the board of trustees, or their
designees, for reasonable and necessary expenses actually paid and incurred in the
performance of their duties as officers or members of the board; and

(7) premiums on fiduciary liability insurance and official bonds for the officers,
members of the board of trustees, and employees of the relief association.

(b) Any other expenses of the relief association must be paid from the general fund
of the association, if one exists. If a relief association has only one fund, that fund is the
special fund for purposes of this section. If a relief association has a special fund and
a general fund, and any expense of the relief association that is directly related to the
purposes for which both funds were established, the payment of that expense must be
apportioned between the two funds on the basis of the benefits derived by each fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2014, section 424A.05, subdivision 3, is amended to read:


Subd. 3.

Authorized disbursements from special fund.

new text begin(a) new text endDisbursements from
the special fund may not be made for any purpose other than one of the following:

(1) for the payment of service pensions to retired members of the relief association if
authorized and paid under law and the bylaws governing the relief association;

(2) for the purchase of an annuity for the applicable person under section 424A.015,
subdivision 3, for the transfer of service pension or benefit amounts to the applicable
person's individual retirement account under section 424A.015, subdivision 4, or to the
applicable person's account in the Minnesota deferred compensation plan under section
424A.015, subdivision 5;

(3) for the payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid under law and specified in amount
in the bylaws governing the relief association;

(4) for the payment of survivor benefits or for the payment of a death benefit to the
estate of the deceased active or deferred firefighter, if authorized and paid under law and
specified in amount in the bylaws governing the relief association;

(5) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the Minnesota State Fire Chiefs Association in order to
entitle relief association members to membership in and the benefits of these associations
or organizations;

(6) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
Association, or an insurance company licensed by the state of Minnesota offering casualty
insurance, in order to entitle relief association members to membership in and the benefits
of the association or organization; and

(7) for the payment of administrative expenses of the relief association as authorized
under section 69.80.

new text begin (b) Checks or authorizations for electronic fund transfers for disbursements
authorized by this section must be signed by the relief association treasurer and at least one
other elected trustee who has been designated by the board of trustees to sign the checks or
authorizations. A relief association may make disbursements authorized by this subdivision
by electronic funds transfers only if the specific method of payment and internal control
policies and procedures regarding the method are approved by the board of trustees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

ARTICLE 2

BENEFIT ISSUES

Section 1.

Minnesota Statutes 2014, section 424A.02, subdivision 3a, is amended to
read:


Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a)
If a defined benefit relief association pays a service pension greater than the maximum
service pension associated with the applicable average amount of available financing per
active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever
applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable
maximum service pension amount specified in subdivision 3, paragraph (g), whichever is
less, the state auditor shall:

(1) disqualify the municipality or the nonprofit firefighting corporation associated
with the relief association from receiving fire state aid by making the appropriate
notification to the municipality and the commissioner of revenue, with the disqualification
applicable for the next apportionment and payment of fire state aid; and

(2) order the treasurer of the applicable relief association to recover the amount of
the overpaid service pension or pensions from any retired firefighter who received an
overpayment.

(b) Fire state aid amounts from disqualified municipalities for the period of
disqualifications under paragraph (a), clause (1), must be credited to the amount of
fire insurance premium tax proceeds available for the next subsequent fire state aid
apportionment.

(c) The amount of any overpaid service pension recovered under paragraph (a),
clause (2), must be credited to the amount of fire insurance premium tax proceeds
available for the next subsequent fire state aid apportionment.

(d) The determination of the state auditor that a relief association has paid a service
pension greater than the applicable maximum must be made on the basis of the information
filed by the relief association and the municipality with the state auditor under sections
69.011, subdivision 2, and 69.051, subdivision 1 or 1a, whichever applies, and any other
relevant information that comes to the attention of the state auditor. The determination
of the state auditor is final. An aggrieved municipality, relief association, or person may
appeal the determination under section 480A.06.

new text begin (e) The state auditor may certify, upon learning that a relief association overpaid
a service pension based on an error in the maximum service pension calculation, the
municipality or nonprofit firefighting corporation associated with the relief association
for fire state aid if (1) there is evidence that the error occurred in good faith, and (2) the
relief association has initiated recovery of any overpayment amount. Notwithstanding
paragraph (c), all overpayments recovered under this paragraph must be credited to the
relief association's special fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 424A.02, subdivision 9a, is amended to read:


Subd. 9a.

Postretirement increases.

Notwithstanding any provision of general or
special law to the contrary, a defined benefit relief association paying a monthly service
pension may provide a postretirement increase to retired members and ancillary benefit
recipients of the relief association if (1) the relief association adopts an appropriate
bylaw amendment; and (2) the bylaw amendment is approved by the municipality
pursuant to subdivision 10 and section 424A.093, subdivision 6. The postretirement
increase is applicable only to retired members and ancillary benefit recipients receiving a
new text beginmonthly new text endservice pension or new text beginmonthly new text endancillary benefit as of the effective date of the bylaw
amendment. The authority to provide a postretirement increase to retired members and
ancillary benefit recipients of a relief association contained in this subdivision supersedes
any prior special law authorization relating to the provision of postretirement increases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 3

STATE AID REFERENCES

Section 1.

Minnesota Statutes 2014, section 424A.016, subdivision 4, is amended to
read:


Subd. 4.

Individual accounts.

(a) An individual account must be established for
each firefighter who is a member of the relief association.

(b) To each individual active member account must be credited an equal share of:

(1) any amounts of fire state aid new text beginand police and firefighter retirement supplemental
state aid
new text endreceived by the relief association;

(2) any amounts of municipal contributions to the relief association raised from
levies on real estate or from other available municipal revenue sources exclusive of fire
state aid; and

(3) any amounts equal to the share of the assets of the special fund to the credit of:

(i) any former member who terminated active service with the fire department to
which the relief association is associated before meeting the minimum service requirement
provided for in subdivision 2, paragraph (b), and has not returned to active service with
the fire department for a period no shorter than five years; or

(ii) any retired member who retired before obtaining a full nonforfeitable interest in
the amounts credited to the individual member account under subdivision 2, paragraph
(b), and any applicable provision of the bylaws of the relief association. In addition, any
investment return on the assets of the special fund must be credited in proportion to the
share of the assets of the special fund to the credit of each individual active member
account. Administrative expenses of the relief association payable from the special
fund may be deducted from individual accounts in a manner specified in the bylaws of
the relief association.

(c) If the bylaws so permit and as the bylaws define, the relief association may credit
any investment return on the assets of the special fund to the accounts of inactive members.

(d) Amounts to be credited to individual accounts must be allocated uniformly
for all years of active service and allocations must be made for all years of service,
except for caps on service credit if so provided in the bylaws of the relief association.
Amounts forfeited under paragraph (b), clause (3), before a resumption of active service
and membership under section 424A.01, subdivision 6, remain forfeited and may not be
reinstated upon the resumption of active service and membership. The allocation method
may utilize monthly proration for fractional years of service, as the bylaws or articles of
incorporation of the relief association so provide. The bylaws or articles of incorporation
may define a "month," but the definition must require a calendar month to have at least 16
days of active service. If the bylaws or articles of incorporation do not define a "month," a
"month" is a completed calendar month of active service measured from the member's
date of entry to the same date in the subsequent month.

(e) At the time of retirement under subdivision 2 and any applicable provision of the
bylaws of the relief association, a retiring member is entitled to that portion of the assets
of the special fund to the credit of the member in the individual member account which is
nonforfeitable under subdivision 3 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.

(f) Annually, the secretary of the relief association shall certify the individual
account allocations to the state auditor at the same time that the annual financial statement
or financial report and audit of the relief association, whichever applies, is due under
section 69.051.

Sec. 2.

Minnesota Statutes 2014, 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 424A.092, subdivision 4, or 424A.093, subdivision 5,
as applicable, the secretary or some other official of the relief association designated in the
bylaws of each defined benefit relief association shall calculate and certify to the governing
body of the applicable municipality the average amount of available financing per active
covered firefighter for the most recent three-year period. The amount of available financing
includes any amounts of fire state aid new text beginand police and firefighter retirement supplemental
state aid
new text endreceived 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 424A.092,
subdivision 2
; 424A.093, subdivisions 2 and 4; or 424A.094, subdivision 2, if any.

(b) The maximum service pension which the defined benefit 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 defined benefit 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 greater 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 maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter:

Minimum Average Amount of Available
Financing per Firefighter
Maximum Service Pension Amount
Payable per Month for Each
Year of Service
$ ...
$ .25
41
.50
81
1.00
122
1.50
162
2.00
203
2.50
243
3.00
284
3.50
324
4.00
365
4.50
405
5.00
486
6.00
567
7.00
648
8.00
729
9.00
810
10.00
891
11.00
972
12.00
1053
13.00
1134
14.00
1215
15.00
1296
16.00
1377
17.00
1458
18.00
1539
19.00
1620
20.00
1701
21.00
1782
22.00
1823
22.50
1863
23.00
1944
24.00
2025
25.00
2106
26.00
2187
27.00
2268
28.00
2349
29.00
2430
30.00
2511
31.00
2592
32.00
2673
33.00
2754
34.00
2834
35.00
2916
36.00
2997
37.00
3078
38.00
3159
39.00
3240
40.00
3321
41.00
3402
42.00
3483
43.00
3564
44.00
3645
45.00
3726
46.00
3807
47.00
3888
48.00
3969
49.00
4050
50.00
4131
51.00
4212
52.00
4293
53.00
4374
54.00
4455
55.00
4536
56.00
4617
57.00
4698
58.00
4779
59.00
4860
60.00
4941
61.00
5022
62.00
5103
63.00
5184
64.00
5265
65.00
5346
66.00
5427
67.00
5508
68.00
5589
69.00
5670
70.00
5751
71.00
5832
72.00
5913
73.00
5994
74.00
6075
75.00
6156
76.00
6237
77.00
6318
78.00
6399
79.00
6480
80.00
6561
81.00
6642
82.00
6723
83.00
6804
84.00
6885
85.00
6966
86.00
7047
87.00
7128
88.00
7209
89.00
7290
90.00
7371
91.00
7452
92.00
7533
93.00
7614
94.00
7695
95.00
7776
96.00
7857
97.00
7938
98.00
8019
99.00
8100
100.00
any amount in excess of
8100
100.00

(d) For a defined benefit 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 greater 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 maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter for the applicable specified period:

Minimum Average Amount of Available
Financing per Firefighter
Maximum Lump-Sum Service
Pension Amount Payable 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
3831
7100
3885
7200
3939
7300
3993
7400
4047
7500
4101
7600
4155
7700
4209
7800
4263
7900
4317
8000
4371
8100
4425
8200
4479
8300
4533
8400
4587
8500
4641
8600
4695
8700
4749
8800
4803
8900
4857
9000
4911
9100
4965
9200
5019
9300
5073
9400
5127
9500
5181
9600
5235
9700
5289
9800
5343
9900
5397
10,000
any amount in excess of
5397
10,000

(e) For a defined benefit 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 defined benefit 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 defined benefit 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.

(h) The method of calculating service pensions must be applied uniformly for all
years of active service. Credit must be given for all years of active service except for caps
on service credit if so provided in the bylaws of the relief association.

Sec. 3.

Minnesota Statutes 2014, section 424A.05, subdivision 2, is amended to read:


Subd. 2.

Special fund assets and revenues.

The special fund must be credited
with all fire state aid deleted text beginmoneysdeleted text endnew text begin and police and firefighter retirement supplemental state
aid
new text end received under sections 69.011 to 69.051new text begin and 423A.022new text end, all taxes levied by or other
revenues received from the municipality under sections 424A.091 to 424A.096 or any
applicable special law requiring municipal support for the relief association, any deleted text beginmoneysdeleted text endnew text begin
funds
new text end or property donated, given, granted or devised by any person which is specified for
use for the support of the special fund and any interest or investment return earned upon
the assets of the special fund. The treasurer of the relief association is the custodian of
the assets of the special fund and must be the recipient on behalf of the special fund of
all revenues payable to the special fund. The treasurer shall maintain adequate records
documenting any transaction involving the assets or the revenues of the special fund.
These records and the bylaws of the relief association are public and must be open for
inspection by any member of the relief association, any officer or employee of the state or
of the municipality, or any member of the public, at reasonable times and places.

Sec. 4.

Minnesota Statutes 2014, section 424A.092, subdivision 3, is amended to read:


Subd. 3.

Financial requirements of relief association; minimum obligation of
municipality.

(a) During 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.

(b) The overall funding balance of the special fund for the current calendar year must
be determined in the following manner:

(1) The 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 must be calculated under
subdivisions 2 and 2a, if applicable.

(2) The 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, must be 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 must be 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, must be utilized in making this calculation.

(3) The amount of the total present assets of the special fund calculated under clause
(2) must be subtracted from the amount of the total accrued liability of the special fund
calculated under clause (1). If the amount of total present assets exceeds the amount of
the total accrued liability, then the special fund is considered 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 is considered 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 is considered to be fully funded.

(c) The financial requirements of the special fund for the following calendar year
must be determined in the following manner:

(1) The 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 must be calculated under subdivisions 2 and 2a, if applicable.

(2) The 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 must
be calculated.

(3) The amount of anticipated future administrative expenses of the special fund
must be calculated by multiplying the dollar amount of the administrative expenses of the
special fund for the most recent prior calendar year by the factor of 1.035.

(4) If the special fund is fully funded, the financial requirements of the special fund for
the following calendar year are the total of the amounts calculated under clauses (2) and (3).

(5) If the special fund has a deficit from full funding, the financial requirements of
the special fund for the following calendar year are the financial requirements of the
special fund calculated as though the special fund were fully funded under clause (4) plus
an amount equal to one-tenth of the original amount of the deficit from full funding of the
special fund as determined under clause (2) resulting either from an increase in the amount
of the service pension occurring in the last ten years or from a net annual investment loss
occurring during the last ten years until each increase in the deficit from full funding is
fully retired. The annual amortization contribution under this clause may not exceed the
amount of the deficit from full funding.

(6) If the special fund has a surplus over full funding, the financial requirements of
the special fund for the following calendar year are the financial requirements of the special
fund calculated as though the special fund were fully funded under clause (4) reduced by an
amount equal to one-tenth of the amount of the surplus over full funding of the special fund.

(d) The minimum obligation of the municipality with respect to the special fund is
the financial requirements of the special fund reduced by the amount of any fire state aid
new text beginand police and firefighter retirement supplemental state aid new text endpayable under sections 69.011
to 69.051 new text beginand 423A.022 new text endreasonably anticipated 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 contributions to
the special fund required by the relief association bylaws from the active members of the
relief association reasonably anticipated to be received during the following calendar year.
A 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.

Sec. 5.

Minnesota Statutes 2014, section 424A.092, subdivision 6, is amended to read:


Subd. 6.

Municipal ratification for plan amendments.

If the special fund of the
relief association does not have a surplus over full funding under subdivision 3, paragraph
(c), clause (5), and if the municipality is required to provide financial support to the special
fund of the relief association under this section, the adoption of or any amendment to the
articles of incorporation or bylaws of a relief association which increases or otherwise
affects the retirement coverage provided by or the service pensions or retirement benefits
payable from the special fund of any relief association to which this section applies is not
effective until it is ratified by the governing body of the municipality served by the fire
department to which the relief association is directly associated or by the independent
nonprofit firefighting corporation, as applicable, and the officers of a relief association
shall not seek municipal ratification prior to preparing and certifying an estimate of
the expected increase in the accrued liability and annual accruing liability of the relief
association attributable to the amendment. If the special fund of the relief association
has a surplus over full funding under subdivision 3, paragraph (c), clause (5), and if the
municipality is not required to provide financial support to the special fund of the relief
association under this section, the relief association may adopt or amend its articles of
incorporation or bylaws which increase or otherwise affect the retirement coverage
provided by or the service pensions or retirement benefits payable from the special fund
of the relief association which are effective without municipal ratification so long as this
does not cause the amount of the resulting increase in the accrued liability of the special
fund of the relief association to exceed 90 percent of the amount of the surplus over full
funding reported in the prior year and this does not result in the financial requirements
of the special fund of the relief association exceeding the expected amount of the future
fire state aid new text beginand police and firefighter retirement supplemental state aid new text endto be received
by the relief association as determined by the board of trustees following the preparation
of an estimate of the expected increase in the accrued liability and annual accruing
liability of the relief association attributable to the change. If a relief association adopts or
amends its articles of incorporation or bylaws without municipal ratification under this
subdivision, and, subsequent to the amendment or adoption, the financial requirements
of the special fund of the relief association under this section are such so as to require
financial support from the municipality, the provision which was implemented without
municipal ratification is no longer effective without municipal ratification and any service
pensions or retirement benefits payable after that date may be paid only in accordance with
the articles of incorporation or bylaws as amended or adopted with municipal ratification.

Sec. 6.

Minnesota Statutes 2014, section 424A.093, subdivision 5, is amended to read:


Subd. 5.

Minimum municipal obligation.

(a) The 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 on or before August 1 of each
year in accordance with the requirements of this subdivision.

(b) The minimum obligation of the municipality with respect to the special fund is
an amount equal to the financial requirements of the special fund of the relief association
determined under subdivision 4, reduced by the estimated amount of any fire state
aid new text beginand police and firefighter retirement supplemental state aid new text endpayable under sections
69.011 to 69.051 new text beginand 423A.022 new text endreasonably anticipated 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 required by the
relief association bylaws from the active members of the relief association reasonably
anticipated to be received during the following calendar year. A 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.

(c) The 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 under subdivision 4 and
this subdivision by August 1 of each year. The certification must be made to the entity that
is responsible for satisfying the minimum obligation with respect to the special fund of the
relief association. If the responsible entity is a joint powers entity, the certification must be
made in the manner specified in the joint powers agreement, or if the joint powers agreement
is silent on this point, the certification must be made to the chair of the joint powers board.

(d) The 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.

(e) The 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 under this section must not 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.

(f) If 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 on the taxable property of the municipality.

(g) If the state auditor determines that a municipal contribution actually made in a
plan year was insufficient under section 424A.091, 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.

Sec. 7.

Minnesota Statutes 2014, section 424A.093, subdivision 6, is amended to read:


Subd. 6.

Municipal ratification for plan amendments.

If the special fund of the
relief association does not have a surplus over full funding under subdivision 4, and
if the municipality is required to provide financial support to the special fund of the
relief association under this section, the adoption of or any amendment to the articles of
incorporation or bylaws of a relief association which increases or otherwise affects the
retirement coverage provided by or the service pensions or retirement benefits payable from
the special fund of any relief association to which this section applies is not effective until it
is ratified by the governing body of the municipality served by the fire department to which
the relief association is directly associated or by the independent nonprofit firefighting
corporation, as applicable. If the special fund of the relief association has a surplus
over full funding under subdivision 4, and if the municipality is not required to provide
financial support to the special fund of the relief association under this section, the relief
association may adopt or amend its articles of incorporation or bylaws which increase or
otherwise affect the retirement coverage provided by or the service pensions or retirement
benefits payable from the special fund of the relief association which are effective without
municipal ratification so long as this does not cause the amount of the resulting increase in
the accrued liability of the special fund of the relief association to exceed 90 percent of
the amount of the surplus over full funding reported in the prior year and this does not
result in the financial requirements of the special fund of the relief association exceeding
the expected amount of the future fire state aid new text beginand police and firefighter retirement
supplemental state aid
new text endto be received by the relief association as determined by the
board of trustees following the preparation of an updated actuarial valuation including
the proposed change or an estimate of the expected actuarial impact of the proposed
change prepared by the actuary of the relief association. If a relief association adopts or
amends its articles of incorporation or bylaws without municipal ratification pursuant to
this subdivision, and, subsequent to the amendment or adoption, the financial requirements
of the special fund of the relief association under this section are such so as to require
financial support from the municipality, the provision which was implemented without
municipal ratification is no longer effective without municipal ratification and any service
pensions or retirement benefits payable after that date may be paid only in accordance with
the articles of incorporation or bylaws as amended or adopted with municipal ratification.

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

new text begin Sections 1 to 7 are effective the day following final enactment.
new text end

ARTICLE 4

RELIEF ASSOCIATION ESTABLISHMENT AND MEMBERSHIP ISSUES

Section 1.

Minnesota Statutes 2014, section 424A.001, is amended by adding a
subdivision to read:


new text begin Subd. 12. new text end

new text begin Membership start date. new text end

new text begin Membership in a volunteer firefighters relief
association begins upon the date of hire by a municipality, a joint powers board, or an
independent nonprofit firefighting corporation with which the relief association is directly
associated, unless otherwise specified in the relief association bylaws.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016.
new text end

Sec. 2.

Minnesota Statutes 2014, section 424A.002, subdivision 1, is amended to read:


Subdivision 1.

Authorization.

A municipal fire department or an independent
nonprofit firefighting corporation, with approval by the applicable municipality or
municipalities, may establish a new volunteer firefighters relief association or may retain
an existing volunteer firefighters relief association.new text begin A municipal fire department or an
independent nonprofit firefighting corporation may be associated with only one volunteer
firefighters relief association at one time.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end