SF 1001

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:17am

A bill for an act
relating to retirement; regulating volunteer firefighters' relief associations;
reorganizing the defined contribution relief association provisions; recodifying
the general volunteer firefighters' relief association law; making conforming
changes; amending Minnesota Statutes 2008, sections 69.031, subdivision 5;
69.771, subdivision 3; 69.772, subdivisions 4, 6; 69.773, subdivision 6; 356.219,
subdivision 3; 424A.001, subdivisions 1, 1a, 2, 3, 4, 5, 6, 8, 9, 10, by adding
subdivisions; 424A.01; 424A.02, subdivisions 1, 2, 3, 3a, 6, 7, 8, 9, 9a, 9b, 10,
12, 13; 424A.021; 424A.03; 424A.04; 424A.05, subdivisions 1, 2, 3, 4; 424A.06;
424A.07; 424A.08; 424A.10, subdivisions 1, 2, 3, 4, 5; 424B.10, subdivision 2,
by adding subdivisions; 424B.21; proposing coding for new law in Minnesota
Statutes, chapters 420; 424A; 424B; repealing Minnesota Statutes 2008, sections
424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, 8b, 9b; 424A.09;
424B.10, subdivision 1.

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

ARTICLE 1

REORGANIZATION AND RECODIFICATION OF

VOLUNTEER FIREFIGHTER RETIREMENT PROVISIONS

Section 1.

new text begin [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER
FIREFIGHTERS.
new text end

new text begin It is unlawful for any municipality or independent nonprofit firefighting corporation
to employ a minor to serve as a volunteer firefighter or to permit a minor to serve in any
capacity performing any firefighting duties with a volunteer fire department.
new text end

Sec. 2.

Minnesota Statutes 2008, section 424A.001, subdivision 1, is amended to read:

Subdivision 1.

Terms defined.

new text begin Unless the context clearly indicates otherwise, new text end as
used in this chapter, the terms defined in this section have the meanings given.

Sec. 3.

Minnesota Statutes 2008, section 424A.001, subdivision 1a, is amended to read:

Subd. 1a.

Ancillary benefit.

"Ancillary benefit" means a benefit new text begin payable from the
special fund of the relief association new text end other than a service pension that is permitted by law
and that is provided for in the relief association bylaws.

Sec. 4.

Minnesota Statutes 2008, section 424A.001, is amended by adding a
subdivision to read:

new text begin Subd. 1b. new text end

new text begin Defined benefit relief association. new text end

new text begin "Defined benefit relief association"
means a volunteer firefighters' relief association that provides a lump-sum service pension,
provides a monthly benefit service pension, or provides a lump-sum service pension as an
alternative to the monthly benefit service pension.
new text end

Sec. 5.

Minnesota Statutes 2008, section 424A.001, is amended by adding a
subdivision to read:

new text begin Subd. 1c. new text end

new text begin Defined contribution relief association. new text end

new text begin "Defined contribution relief
association" means a volunteer firefighters' relief association that provides a service
pension based solely on an individual account balance rather than a specified annual
lump-sum or monthly benefit service pension amount.
new text end

Sec. 6.

Minnesota Statutes 2008, section 424A.001, subdivision 2, is amended to read:

Subd. 2.

Fire department.

"Fire department" includes new text begin a new text end municipal fire department
deleted text begin and deleted text end new text begin or an new text end independent nonprofit firefighting corporation.

Sec. 7.

Minnesota Statutes 2008, section 424A.001, subdivision 3, is amended to read:

Subd. 3.

Municipality.

"Municipality" means a municipality which has
new text begin established new text end a fire department with which the relief association is directly associated, or
the municipalities which new text begin have entered into a new text end contract with the independent nonprofit
firefighting corporation of which the relief association is a subsidiary.

Sec. 8.

Minnesota Statutes 2008, section 424A.001, subdivision 4, is amended to read:

Subd. 4.

Relief association.

"Relief association" means deleted text begin (a) deleted text end new text begin (1) new text end a volunteer
firefighters' relief association or new text begin a new text end volunteer firefighters' division or account of a partially
salaried and partially volunteer firefighters' relief association new text begin that is new text end organized and
incorporated under chapter 317A and any laws of the state, new text begin is new text end governed by this chapter
and chapter 69, and new text begin is new text end directly associated with a fire department established by municipal
ordinance; or deleted text begin (b) deleted text end new text begin (2) new text end any deleted text begin separate deleted text end new text begin separately new text end incorporated volunteer firefighters' relief
association new text begin that is new text end subsidiary to and deleted text begin providing deleted text end new text begin that provides new text end service pension and retirement
benefit coverage for members of an independent nonprofit firefighting corporation new text begin that is
new text end organized under the provisions of chapter 317A, new text begin is new text end governed by this chapter, and deleted text begin operating deleted text end
new text begin operates new text end exclusively for firefighting purposes. A relief association is a governmental entity
that receives and manages public money to provide retirement benefits for individuals
providing the governmental services of firefighting and emergency first response.

Sec. 9.

Minnesota Statutes 2008, section 424A.001, subdivision 5, is amended to read:

Subd. 5.

Special fund.

"Special fund" means new text begin the new text end special fund of a volunteer
firefighters' relief association or the account for volunteer firefighters within the special
fund of a partially salaried and partially volunteer firefighters' relief association.

Sec. 10.

Minnesota Statutes 2008, section 424A.001, subdivision 6, is amended to read:

Subd. 6.

Surviving spouse.

For purposes of this chapter, and the deleted text begin governing deleted text end bylaws
deleted text begin of any deleted text end new text begin governing a new text end relief association to which this chapter applies, deleted text begin the term deleted text end "surviving
spouse" means the spouse of a deceased member who was legally married to the member
at the time of new text begin the member's new text end death.

Sec. 11.

Minnesota Statutes 2008, section 424A.001, subdivision 8, is amended to read:

Subd. 8.

Firefighting service.

"Firefighting service," if the applicable municipality
approves for a fire department that is a municipal department, or if the new text begin applicable
new text end contracting municipality or municipalities approve for a fire department that is an
independent nonprofit firefighting corporation, includes new text begin fire department new text end service rendered
by fire prevention personnel.

Sec. 12.

Minnesota Statutes 2008, section 424A.001, subdivision 9, is amended to read:

Subd. 9.

Separate from active service.

"Separate from active service" means
deleted text begin to deleted text end new text begin that a firefighter new text end permanently deleted text begin cease deleted text end new text begin ceases new text end to perform fire suppression duties with
a particular volunteer fire department, deleted text begin to deleted text end permanently deleted text begin cease deleted text end new text begin ceases new text end to perform fire
prevention duties, deleted text begin to deleted text end permanently deleted text begin cease deleted text end new text begin ceases new text end to supervise fire suppression duties, and deleted text begin to deleted text end
permanently deleted text begin cease deleted text end new text begin ceases new text end to supervise fire prevention duties.

Sec. 13.

Minnesota Statutes 2008, section 424A.001, subdivision 10, is amended to
read:

Subd. 10.

Volunteer firefighter.

"Volunteer firefighter" means a person who new text begin either new text end :

(1) was a member of the applicable fire department or the new text begin independent nonprofit
new text end firefighting corporation and a member of the relief association on July 1, 2006; or

(2) became a member of the applicable fire department or the new text begin independent nonprofit
new text end firefighting corporation and is eligible for membership in the applicable relief association
after June 30, 2006, and

(i) is engaged in providing emergency response services or delivering fire education
or prevention services as a member of a municipal fire department, a joint powers entity
fire department, or an independent nonprofit firefighting corporation;

(ii) is trained in or is qualified to provide fire suppression duties or to provide fire
prevention duties under subdivision 8; and

(iii) meets any other minimum firefighter and service standards established by the
fire department or new text begin the independent nonprofit new text end firefighting corporation or specified in the
articles of incorporation or bylaws of the relief association.

Sec. 14.

new text begin [424A.002] AUTHORIZATION OF NEW OR CONTINUING
VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin 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 end

new text begin Subd. 2. new text end

new text begin Defined benefit or defined contribution relief association. new text end

new text begin The articles
of incorporation or the bylaws of the volunteer firefighters' relief association must specify
that the relief association is either a defined benefit relief association subject to sections
69.771 to 69.774, 424A.015, and 424A.02 or is a defined contribution relief association
subject to sections 424A.015 and 424A.016.
new text end

Sec. 15.

Minnesota Statutes 2008, section 424A.01, is amended to read:

424A.01 MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF
ASSOCIATION.

Subdivision 1.

Minors.

deleted text begin It is unlawful for any deleted text end new text begin No volunteer firefighters' relief
association associated with a new text end municipality or new text begin an new text end independent nonprofit firefighting
corporation deleted text begin to employ deleted text end new text begin may include as a relief association member new text end a minor new text begin serving new text end as
a volunteer firefighter deleted text begin or to permit a minor to serve in any capacity performing any
firefighting duties with a volunteer fire department deleted text end .

Subd. 2.

Status of substitute volunteer firefighters.

No person who is serving as a
substitute volunteer firefighter deleted text begin shall be deemed deleted text end new text begin may be considered new text end to be a firefighter for
purposes of chapter 69 or this chapter deleted text begin nor shall be deleted text end new text begin and no substitute volunteer firefighter is
new text end authorized to be a member of any volunteer firefighters' relief association governed by
chapter 69 or this chapter.

Subd. 3.

Status of nonmember volunteer firefighters.

No person who is serving
as a firefighter in a fire department but who is not a member of the applicable firefighters'
relief association deleted text begin shall be deleted text end new text begin is new text end entitled to any service pension or ancillary benefits from
the relief association.

Subd. 4.

Exclusion of persons constituting an unwarranted health risk.

The
board of trustees of every relief association may exclude from membership in the relief
association all applicants who, due to some medically determinable physical or mental
impairment or condition, deleted text begin would deleted text end new text begin is determined to new text end constitute a predictable and unwarranted
risk of imposing liability for an ancillary benefit at any age earlier than the minimum
age specified for receipt of a service pension. Notwithstanding any provision of section
363A.25, it deleted text begin shall be deleted text end new text begin is new text end a good and valid defense to a complaint or action brought under
chapter 363A that the board of trustees of the relief association made a good faith
determination that the applicant suffers from an impairment or condition constituting a
predictable and unwarranted risk for the relief association if the determination was made
following consideration of: deleted text begin (a) deleted text end new text begin (1) new text end the person's medical history; and deleted text begin (b) deleted text end new text begin (2) new text end the report of
the physician completing a physical examination of the applicant deleted text begin completed deleted text end new text begin undertaken new text end at
the expense of the relief association.

Subd. 5.

Fire prevention personnel.

(a) If the fire department is a municipal
department and the applicable municipality approves, or if the fire department is an
independent nonprofit firefighting corporation and the contracting municipality or
municipalities approve, the fire department may employ or otherwise utilize the services
of persons as volunteer firefighters to perform fire prevention duties and to supervise
fire prevention activities.

(b) Personnel serving in fire prevention positions are eligible to be members of
the applicable volunteer firefighter relief association and to qualify for service pension
or other benefit coverage of the relief association on the same basis as fire department
personnel who perform fire suppression duties.

(c) Personnel serving in fire prevention positions also are eligible to receive any
other benefits under the applicable law or practice for services on the same basis as
personnel new text begin who are new text end employed to perform fire suppression duties.

Sec. 16.

new text begin [424A.015] GENERALLY APPLICABLE VOLUNTEER
FIREFIGHTERS' RELIEF ASSOCIATION PENSION PLAN REGULATION.
new text end

new text begin Subdivision 1. new text end

new text begin Separation from active service; exception. new text end

new text begin (a) No service pension
is payable to a person while the person remains an active member of the respective fire
department, and a person who is receiving a service pension is not entitled to receive any
other benefits from the special fund of the relief association.
new text end

new text begin (b) No relief association as defined in section 424A.001, subdivision 4, may pay a
service pension or disability benefit to a former member of the relief association if that
person has not separated from active service with the fire department to which the relief
association is directly associated, unless:
new text end

new text begin (1) the person is employed subsequent to retirement by the municipality or the
independent nonprofit firefighting corporation, whichever applies, to perform duties within
the municipal fire department or corporation on a full-time basis;
new text end

new text begin (2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and
new text end

new text begin (3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.
new text end

new text begin Subd. 2. new text end

new text begin No assignment or garnishment. new text end

new text begin A service pension or ancillary benefits
paid or payable from the special fund of a relief association to any person receiving or
entitled to receive a service pension or ancillary benefits is not subject to garnishment,
judgment, execution, or other legal process, except as provided in section 518.58, 518.581,
or 518A.53. No person entitled to a service pension or ancillary benefits from the special
fund of a relief association may assign any service pension or ancillary benefit payments,
and the association does not have the authority to recognize any assignment or pay over
any sum which has been assigned.
new text end

new text begin Subd. 3. new text end

new text begin Purchase of annuity contract. new text end

new text begin A relief association that provides a service
pension in a single payment, if the governing articles of incorporation or bylaws so
provide, may purchase an annuity contract on behalf of a retiring member in an amount
equal to the service pension otherwise payable at the request of the person and in place of
a direct payment to the person. The annuity contract must be purchased from an insurance
carrier licensed to do business in this state.
new text end

new text begin Subd. 4. new text end

new text begin Transfer to individual retirement account. new text end

new text begin A relief association that is a
qualified pension plan under section 401(a) of the Internal Revenue Code, as amended,
and that provides a single payment service pension, at the written request of the applicable
retiring member or, following the death of the active member, at the written request of the
deceased member's surviving spouse, may directly transfer on an institution-to-institution
basis the eligible member's lump-sum pension or the death, funeral, or survivor benefit
attributable to the member, whichever applies, to the requesting person's individual
retirement account under section 408(a) of the Internal Revenue Code, as amended.
new text end

Sec. 17.

new text begin [424A.016] DEFINED CONTRIBUTION VOLUNTEER
FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.
new text end

new text begin Subdivision 1. new text end

new text begin Defined contribution relief association authorization. new text end

new text begin If the
articles of incorporation or the bylaws governing the volunteer firefighters' relief
association so provide exclusively, the relief association may pay a defined contribution
lump-sum service pension instead of a defined benefit service pension governed by section
424A.02.
new text end

new text begin Subd. 2. new text end

new text begin Defined contribution service pension eligibility. new text end

new text begin (a) A relief association,
when its articles of incorporation or bylaws so provide, may pay out of the assets of its
special fund a service pension to each of its members who:
new text end

new text begin (1) separates from active service with the fire department;
new text end

new text begin (2) reaches age 50;
new text end

new text begin (3) completes at least five years of active service as an active member of the
municipal fire department to which the relief association is associated;
new text end

new text begin (4) completes at least five years of active membership with the relief association
before separation from active service; and
new text end

new text begin (5) complies with any additional conditions as to age, service, and membership that
are prescribed by the bylaws of the relief association.
new text end

new text begin (b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the date of the payment of the service pension. During the period
of inactive membership, the member is not entitled to receive any disability benefit
coverage, is not entitled to receive additional individual account allocation of fire state
aid or municipal contribution towards a service pension, and is considered to have the
status of a person entitled to a deferred service pension.
new text end

new text begin (c) The service pension earned by a volunteer under this chapter and the articles
of incorporation and bylaws of the relief association may be paid whether or not the
municipality or nonprofit firefighting corporation to which the relief association is
associated qualifies for the receipt of fire state aid under chapter 69.
new text end

new text begin Subd. 3. new text end

new text begin Reduced vesting schedule. new text end

new text begin If the articles of incorporation or bylaws of a
defined contribution relief association so provide, a relief association may pay a reduced
service pension not to exceed the nonforfeitable percentage of the account balance to a
retiring member who has completed fewer than 20 years of service. The reduced service
pension may be paid when the retiring member meets the minimum age and service
requirements of subdivision 2. The nonforfeitable percentage of pension amounts are
as follows:
new text end

	new text begin Completed Years of Service new text end		new text begin Nonforfeitable Percentage of Pension Amount new text end
	new text begin 5 new text end		new text begin 40 percent new text end
	new text begin 6 new text end		new text begin 52 percent new text end
	new text begin 7 new text end		new text begin 64 percent new text end
	new text begin 8 new text end		new text begin 76 percent new text end
	new text begin 9 new text end		new text begin 88 percent new text end
	new text begin 10 new text end	new text begin and thereafter new text end	new text begin 100 percent new text end

new text begin Subd. 4. new text end

new text begin Individual accounts. new text end

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

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

new text begin (1) amounts of fire state aid received by the relief association;
new text end

new text begin (2) 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
new text end

new text begin (3) amounts equal to the share of the assets of the special fund to the credit of:
new text end

new text begin (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
new text end

new text begin (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.
new text end

new text begin (c) 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 as otherwise provided in this section. The allocation method may utilize monthly
proration for fractional years of service, if the bylaws or articles of incorporation of the
relief association so provide.
new text end

new text begin (d) 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.
new text end

new text begin (e) 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.
new text end

new text begin Subd. 5. new text end

new text begin Service pension installment payments. new text end

new text begin At the option of the retiring
member and in lieu of a single payment of a service pension, a defined contribution relief
association may pay the service pension in installments, if the governing bylaws so
provide. The election of installment payments is irrevocable and must be made by the
retiring member in writing and filed with the secretary of the relief association no later
than 30 days before the commencement of payment of the service pension. The amount of
the installment payments must be the fractional portion of the remaining account balance
equal to one divided by the number of remaining annual installment payments.
new text end

new text begin Subd. 6. new text end

new text begin Deferred service pensions. new text end

new text begin (a) A member of a relief association is entitled
to a deferred service pension if the member:
new text end

new text begin (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;
new text end

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

new text begin (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.
new text end

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

new text begin (c) A defined contribution relief association 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:
new text end

new text begin (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; or
new text end

new text begin (2) the 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 (d) The 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.
new text end

new text begin Subd. 7. new text end

new text begin Limitation on ancillary benefits. new text end

new text begin (a) A defined contribution relief
association may only pay an ancillary benefit which would constitute an authorized
disbursement as specified in section 424A.05. The ancillary benefit for active members
must equal the vested or nonvested amount of the individual account of the member.
new text end

new text begin (b) For deferred members, the ancillary benefit must equal the vested amount of
the individual account of the member. For the recipient of installment payments of a
service pension, the ancillary benefit must equal the remaining balance in the individual
account of the recipient.
new text end

new text begin Subd. 8. new text end

new text begin Repayment of service pension in certain instances. new text end

new text begin If a retired volunteer
firefighter does not permanently separate from active firefighting service as required
by subdivision 1 and section 424A.001, subdivision 9, by resuming active service as a
firefighter in the same volunteer fire department or as a person in charge of firefighters in
the same volunteer fire department, no additional service pension amount is payable to the
person, no additional individual account allocation may be made to the person, and the
person must repay to the relief association any previously received service pension.
new text end

new text begin Subd. 9. new text end

new text begin Filing of bylaw amendments. new text end

new text begin Each relief association to which this section
applies must file a revised copy of its governing bylaws with the state auditor upon the
adoption of any amendment to its governing bylaws by the relief association. Failure of
the relief association to file a copy of the bylaws or any bylaw amendments with the state
auditor disqualifies the municipality from the distribution of any future fire state aid until
this filing requirement has been completed.
new text end

Sec. 18.

Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A new text begin defined benefit new text end relief association, when its
articles of incorporation or bylaws so provide, may pay out of the assets of its special fund
a service pension to each of its members who: (1) separates from active service with the
fire department; (2) reaches age 50; (3) completes at least five years of active service
as an active member of the municipal fire department to which the relief association
is associated; (4) completes at least five years of active membership with the relief
association before separation from active service; and (5) complies with any additional
conditions as to age, service, and membership that are prescribed by the bylaws of the
relief association. A service pension computed under this section may be prorated
monthly for fractional years of service, if the bylaws or articles of incorporation of the
relief association so provide. The service pension new text begin earned by a volunteer firefighter under
this chapter and the articles of incorporation and bylaws of the volunteer firefighters'
relief association new text end may be paid whether or not the municipality or nonprofit firefighting
corporation to which the relief association is associated qualifies for new text begin the receipt of new text end fire
state aid under chapter 69.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the new text begin date of the new text end payment of the service pension. During the
period of inactive membership, the member is not entitled to receive disability benefit
coverage, is not entitled to receive additional service credit towards computation of a
service pension, and is considered to have the status of a person entitled to a deferred
service pension under subdivision 7.

(c) No municipality or nonprofit firefighting corporation may delegate the power to
take final action in setting a service pension or ancillary benefit amount or level to the
board of trustees of the relief association or to approve in advance a service pension or
ancillary benefit amount or level equal to the maximum amount or level that this chapter
would allow rather than a specific dollar amount or level.

(d) No relief association as defined in section 424A.001, subdivision 4, may pay a
service pension or disability benefit to a former member of the relief association if that
person has not separated from active service with the fire department to which the relief
association is directly associated, unless:

(1) the person is employed subsequent to retirement by the municipality or the
independent nonprofit firefighting corporation, whichever applies, to perform duties within
the municipal fire department or corporation on a full-time basis;

(2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.

Sec. 19.

Minnesota Statutes 2008, section 424A.02, subdivision 2, is amended to read:

Subd. 2.

Nonforfeitable portion of service pension.

(a) If the articles of
incorporation or bylaws of a new text begin defined benefit new text end relief association so provide, deleted text begin a deleted text end new text begin the new text end relief
association may pay a reduced service pension to a retiring member who has completed
fewer than 20 years of service. The reduced service pension may be paid when the retiring
member meets the minimum age and service requirements of subdivision 1.

(b) The amount of the reduced service pension may not exceed the amount calculated
by multiplying the service pension appropriate for the completed years of service as
specified in the bylaws deleted text begin times deleted text end new text begin multiplied by new text end the applicable nonforfeitable percentage of
pension.

(c) For a new text begin defined benefit new text end volunteer firefighter relief association that pays a lump-sum
service pension, a monthly benefit service pension, or a lump-sum service pension or a
monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage
of pension amounts are as follows:

	Completed Years of Service		Nonforfeitable Percentage of Pension Amount
	5		40 percent
	6		44 percent
	7		48 percent
	8		52 percent
	9		56 percent
	10		60 percent
	11		64 percent
	12		68 percent
	13		72 percent
	14		76 percent
	15		80 percent
	16		84 percent
	17		88 percent
	18		92 percent
	19		96 percent
	20	and thereafter	100 percent

deleted text begin (d) For a volunteer firefighter relief association that pays a defined contribution
service pension, the nonforfeitable percentage of pension amounts are as follows:
deleted text end

	deleted text begin Completed Years of Service deleted text end		deleted text begin Nonforfeitable Percentage of Pension Amount deleted text end
	deleted text begin 5 deleted text end		deleted text begin 40 percent deleted text end
	deleted text begin 6 deleted text end		deleted text begin 52 percent deleted text end
	deleted text begin 7 deleted text end		deleted text begin 64 percent deleted text end
	deleted text begin 8 deleted text end		deleted text begin 76 percent deleted text end
	deleted text begin 9 deleted text end		deleted text begin 88 percent deleted text end
	deleted text begin 10 deleted text end	deleted text begin and thereafter deleted text end	deleted text begin 100 percent deleted text end

Sec. 20.

Minnesota Statutes 2008, 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 new text begin defined benefit new text end 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 deleted text begin shall include deleted text end new text begin includes new text end 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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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
Effective beginning December 31, 2008
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
Effective beginning December 31, 2009
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
Effective beginning December 31, 2010
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
Effective beginning December 31, 2011
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
Effective beginning December 31, 2012
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 new text begin defined benefit new text end 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
Effective beginning December 31, 2008
4101		7600
4155		7700
4209		7800
4263		7900
4317		8000
4371		8100
4425		8200
4479		8300
Effective beginning December 31, 2009
4533		8400
4587		8500
4641		8600
4695		8700
4749		8800
4803		8900
4857		9000
4911		9100
Effective beginning December 31, 2010
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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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.

new text begin (h) The method of calculating service pensions must be applied uniformly for all
years of active service and credit must be given for all years of active service except as
otherwise provided in this section.
new text end

Sec. 21.

Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a)
If a new text begin defined benefit new text end 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) 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.

Sec. 22.

Minnesota Statutes 2008, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a new text begin defined benefit new text end relief
association is entitled to a deferred service pension if the member:

(1) has completed the lesser of new text begin either new text end 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 is payable when the former member reaches age
50, or the minimum age specified in the bylaws governing the relief association if that age
is greater than age 50, and when the former member makes a valid written application.

(c) A new text begin defined benefit new text end relief association that provides a lump-sum service pension
governed by subdivision 3 may, 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; or

(2) at an interest rate of up to five percent, compounded annually, as set by the board
of directors and approved as provided in subdivision 10.

(d) Interest under paragraph (c), clause (2), is payable following the date on which
the municipality has approved the deferred service pension interest rate established by
the board of trustees.

deleted text begin (e) A 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.
deleted text end

deleted text begin (f) deleted text end new text begin (e) new text end For 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 (g) deleted text end new text begin (f) new text end The 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. 23.

Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:

Subd. 8.

Lump-sum service pensions; installment payments.

(a) deleted text begin Any deleted text end new text begin A defined
benefit new text end relief association, if the governing bylaws so provide, may pay, at the option of
the retiring member and in lieu of a single payment of a lump-sum service pension, a
lump-sum service pension in installments.

(b) The election of installment payments deleted text begin shall be deleted text end new text begin is new text end irrevocable and deleted text begin shall deleted text end new text begin must
new text end be made by the retiring member in writing and filed with the secretary of the relief
association no later than 30 days prior to the commencement of payment of the service
pension. The amount of the installment payments deleted text begin shall deleted text end new text begin must new text end be determined so that the
present value of the aggregate installment payments computed at an interest rate of five
percent, compounded annually, is equal to the amount of the single lump-sum payment
which would have been made had the installment payments option not been elected.
The payment of each installment deleted text begin shall deleted text end new text begin must new text end include interest at the rate of five percent,
compounded annually on the reserve supporting the remaining installment payments as
of the date on which the previous installment payment was paid and computed from the
date on which the previous installment payment was paid to the date of payment for
the current installment payment.

(c) To the extent that the deleted text begin commissioner of commerce deleted text end new text begin state auditor new text end deems it to be
necessary or practical, the deleted text begin commissioner deleted text end new text begin state auditor new text end may specify and issue procedures,
forms or mathematical tables for use in performing the calculations required deleted text begin pursuant to deleted text end
new text begin under new text end this subdivision.

Sec. 24.

Minnesota Statutes 2008, section 424A.02, subdivision 9, is amended to read:

Subd. 9.

Limitation on ancillary benefits.

deleted text begin Any deleted text end new text begin A defined benefit new text end relief association,
including any volunteer firefighters relief association governed by section 69.77 or any
volunteer firefighters division of a relief association governed by chapter 424, may only
pay ancillary benefits which would constitute an authorized disbursement as specified in
section 424A.05 subject to the following requirements or limitations:

(1) with respect to a new text begin defined benefit new text end relief association in which governing bylaws
provide for a lump-sum service pension to a retiring member, no ancillary benefit may
be paid to any former member or paid to any person on behalf of any former member
after the former member (i) terminates active service with the fire department and active
membership in the relief association; and (ii) commences receipt of a service pension as
authorized under this section; and

(2) with respect to any new text begin defined benefit new text end relief association, no ancillary benefit paid or
payable to any member, to any former member, or to any person on behalf of any member
or former member, may exceed in amount the total earned service pension of the member
or former member. The total earned service pension must be calculated by multiplying
the service pension amount specified in the bylaws of the relief association at the time of
death or disability, whichever applies, by the years of service credited to the member or
former member. The years of service must be determined as of (i) the date the member or
former member became entitled to the ancillary benefit; or (ii) the date the member or
former member died entitling a survivor or the estate of the member or former member to
an ancillary benefit. The ancillary benefit must be calculated without regard to whether the
member had attained the minimum amount of service and membership credit specified in
the governing bylaws. For active members, the amount of a permanent disability benefit
or a survivor benefit must be equal to the member's total earned service pension except
that the bylaws of deleted text begin any deleted text end new text begin a defined benefit new text end relief association may provide for the payment of
a survivor benefit in an amount not to exceed five times the yearly service pension amount
specified in the bylaws on behalf of any member who dies before having performed five
years of active service in the fire department with which the relief association is affiliated.

Sec. 25.

Minnesota Statutes 2008, 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 new text begin defined benefit new text end 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 69.773, subdivision 6. The postretirement increase deleted text begin shall be deleted text end
new text begin is new text end applicable only to retired members and ancillary benefit recipients receiving a service
pension or ancillary 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 deleted text begin shall supersede deleted text end new text begin supersedes new text end any prior
special law authorization relating to the provision of postretirement increases.

Sec. 26.

Minnesota Statutes 2008, section 424A.02, subdivision 9b, is amended to read:

Subd. 9b.

Repayment of service pension in certain instances.

If a retired
volunteer firefighter does not permanently separate from active firefighting service as
required by subdivision 1 and section 424A.001, subdivision 9, by resuming active service
as a firefighter in the same volunteer fire department or as a person in charge of firefighters
in the same volunteer fire department, no additional service pension amount is payable
to the person, no additional service is creditable to the person, and the person deleted text begin shall deleted text end new text begin must
new text end repay new text begin to the defined benefit relief association new text end any previously received service pension.

Sec. 27.

Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:

Subd. 10.

Local approval of bylaw amendments; filing requirements.

(a) Each
new text begin defined benefit new text end relief association to which this section applies deleted text begin shall deleted text end new text begin must new text end file a revised
copy of its governing bylaws with the state auditor upon the adoption of any amendment
to its governing bylaws by the relief association or upon the approval of any amendment
to its governing bylaws granted by the governing body of each municipality served by the
fire department to which the relief association is directly associated. Failure of the relief
association to file a copy of the bylaws or any bylaw amendments with the state auditor
deleted text begin shall disqualify deleted text end new text begin disqualifies new text end the municipality from the distribution of any future fire state
aid until this filing requirement has been completed.

(b) If the special fund of the relief association does not have a surplus over full
funding deleted text begin pursuant to deleted text end new text begin under new text end section 69.772, subdivision 3, clause (2), subclause (e), or
69.773, subdivision 4, and if the municipality is required to provide financial support to
the special fund of the relief association deleted text begin pursuant to deleted text end new text begin under new text end section 69.772 or 69.773, no
bylaw amendment which would affect the amount of, the manner of payment of, or the
conditions for qualification for service pensions or ancillary benefits or disbursements
other than administrative expenses authorized deleted text begin pursuant to deleted text end new text begin under new text end section 69.80 payable
from the special fund of the relief association deleted text begin shall be deleted text end new text begin is new text end effective until it has been ratified
by the governing body or bodies of the appropriate municipalities. If the municipality is
not required to provide financial support to the special fund deleted text begin pursuant to deleted text end new text begin under new text end this section,
the relief association may adopt or amend without municipal ratification its articles
of incorporation or bylaws which increase or otherwise affect the service pensions or
ancillary benefits payable from the special fund so long as the changes do not cause the
amount of the resulting increase in the accrued liability of the special fund to exceed 90
percent of the amount of the prior surplus over full funding and the changes do not result
in the financial requirements of the special fund exceeding the expected amount of the
deleted text begin future deleted text end new text begin subsequent calendar year's new text end fire state aid to be received by the relief association.

(c) If the relief association pays only a lump-sum pension, the financial requirements
are to be 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 the relief association pays a monthly
benefit service pension, the financial requirements are to be determined by the board of
trustees following either 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 deleted text begin pursuant to deleted text end new text begin under new text end this subdivision,
and, subsequent to the amendment or adoption, the financial requirements of the special
fund deleted text begin pursuant to deleted text end new text begin under new text end this section are such so as to require financial support from the
municipality, the provision which was implemented without municipal ratification deleted text begin shall deleted text end new text begin is
new text end no longer deleted text begin be deleted text end effective without municipal ratification, and any service pensions or ancillary
benefits payable after that date deleted text begin shall deleted text end new text begin must new text end be paid only in accordance with the articles of
incorporation or bylaws as amended or adopted with municipal ratification.

Sec. 28.

Minnesota Statutes 2008, section 424A.02, subdivision 12, is amended to read:

Subd. 12.

Transfer of service credit to new district.

Notwithstanding the
requirements of subdivision 1 or any other law, a member of a fire department which is
disbanded upon formation of a fire district to serve substantially the same geographic
area, who serves as an active firefighter with the new district fire department, and is a
member of the district firefighters' new text begin defined benefit new text end relief association deleted text begin shall be deleted text end new text begin is new text end entitled
to a nonforfeitable service pension from the new relief association upon completion of
a combined total of 20 years active service in the disbanded and the new departments.
The amount of the service pension deleted text begin shall be deleted text end new text begin is new text end based upon years of service in the new
department only deleted text begin , deleted text end and deleted text begin shall deleted text end new text begin must new text end be in an amount equal to the accrued liability for the
appropriate years of service calculated in accordance with section 69.772, subdivision 2.

Sec. 29.

Minnesota Statutes 2008, section 424A.02, subdivision 13, is amended to read:

Subd. 13.

Combined service pensions.

(a) If the articles of incorporation or bylaws
of the new text begin defined benefit relief new text end associations so provide, a volunteer firefighter with credit for
service as an active firefighter in more than one new text begin defined benefit new text end volunteer firefighters relief
association is entitled, when the applicable requirements of paragraph (b) are met and
when otherwise qualified, to a prorated service credit from each relief association.

(b) A volunteer firefighter receiving a prorated service pension under this subdivision
must have new text begin a new text end total new text begin amount of new text end service credit of ten years or more, if new text begin the bylaws of new text end every
affected relief association deleted text begin does deleted text end new text begin do new text end not deleted text begin require deleted text end new text begin specify new text end only a five-year service vesting
requirement, or five years or more, if new text begin the bylaws of new text end every affected relief association
deleted text begin requires deleted text end new text begin require new text end only a five-year service vesting requirement, as a member of two or more
relief associations otherwise qualified. The member must have one year or more of service
credit in each relief association. The prorated service pension must be based on the service
pension amount in effect for the relief association on the date on which active volunteer
firefighting services covered by that relief association terminate. To receive a service
pension under this subdivision, the firefighter must become a member of the second or
succeeding association and must give notice of membership to the prior association within
two years of the date of termination of active service with the prior association. The notice
must be attested to by the second or subsequent new text begin relief new text end association secretary.

Sec. 30.

Minnesota Statutes 2008, section 424A.021, is amended to read:

424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
SERVICE.

Subdivision 1.

Authorization.

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 deleted text begin of any fire state
aid, any municipal contributions, and any investment return received deleted text end by the relief
association new text begin as though the person was an active member new text end 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.

Subd. 2.

Limitations.

(a) To be eligible for service credit or an deleted text begin investment return deleted text end
allocation new text begin as though an active member new text end 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).

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

(c) Service credit or an deleted text begin investment return deleted text end allocation new text begin as though an active member
new text end 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.

Sec. 31.

Minnesota Statutes 2008, section 424A.03, is amended to read:

424A.03 UNIFORMITY OF VOLUNTEER FIREFIGHTER SERVICE
PENSION AND RETIREMENT BENEFITS.

Subdivision 1.

Limitation on nonuniformity of pensions.

Every partially salaried
and partially volunteer firefighters' relief association deleted text begin shall deleted text end new text begin must new text end provide service pensions
to volunteer firefighter members based on the years of service of the members not on
the compensation paid to the members for firefighting services. Each relief association
deleted text begin shall deleted text end new text begin must new text end provide service pensions to salaried members as set forth in chapter 424 and
applicable special laws.

Subd. 2.

Penalties for violations.

deleted text begin Any deleted text end new text begin A new text end municipality which has a fire department
deleted text begin to which deleted text end new text begin associated with new text end a relief association which violates the provisions of subdivision
1 is directly associated or which contracts with an independent nonprofit firefighting
corporation deleted text begin of which deleted text end new text begin associated with new text end a relief association which violates the provisions
of subdivision 1 is a subsidiary deleted text begin shall deleted text end new text begin may new text end not be included in the apportionment of fire
state aid deleted text begin by the commissioner of commerce deleted text end to the applicable county auditor deleted text begin pursuant to deleted text end
new text begin under new text end section 69.021, subdivision 6, and deleted text begin shall deleted text end new text begin may new text end not be included in the apportionment
of fire state aid by the county auditor to the various municipalities deleted text begin pursuant to deleted text end new text begin under
new text end section 69.021, subdivision 7.

Subd. 3.

Exception to application of limitation and penalty.

The limitation
provided for in subdivision 1 deleted text begin shall deleted text end new text begin does new text end not apply to any relief association which deleted text begin prior to deleted text end
new text begin before new text end January 1, 1957, had established a definite service pension formula for members
of the partially salaried and partially volunteer firefighters' relief association who are
regularly employed firefighters.

Sec. 32.

Minnesota Statutes 2008, section 424A.04, is amended to read:

424A.04 VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.

Subdivision 1.

Membership.

(a) A relief association that is directly associated with
a municipal fire department must be managed by a board of trustees consisting of nine
members. Six trustees must be elected from the membership of the relief association and
three trustees must be 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 which provides a monthly benefit service pension may provide that one of
the six trustees elected from the relief association membership may be a retired member
receiving a monthly pension who is elected by the membership of the relief association.
The three municipal trustees must be one elected municipal official and one elected or
appointed municipal official who are designated as municipal representatives by the
municipal governing board annually and the chief of the municipal fire department.

(b) A relief association that is a subsidiary of an independent nonprofit firefighting
corporation must be managed by a board of trustees consisting of nine members. Six
trustees must be elected from the membership of the relief association, two trustees must
be drawn from the officials of the municipalities served by the fire department to which
the relief association is directly associated, and one trustee deleted text begin shall deleted text end new text begin must new text end be the fire chief
serving with the independent nonprofit firefighting corporation. The bylaws of a relief
association may provide that one of the six trustees elected from the relief association
membership may be a retired member receiving a monthly pension who is elected by the
membership of the relief association. The two municipal trustees must be elected or
appointed municipal officials, selected as follows:

(1) if only one municipality contracts with the independent nonprofit firefighting
corporation, the municipal trustees must be two officials of the contracting municipality
who are designated annually by the governing body of the municipality; or

(2) if two or more municipalities contract with the independent nonprofit corporation,
the municipal trustees must be one official from each of the two largest municipalities
in population who are designated annually by the governing bodies of the applicable
municipalities.

(c) The 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.

(d) If a relief association lacks the municipal board members provided for in
paragraph (a), (b), or (c) because the fire department is not located in or associated with an
organized municipality, joint powers entity, or township, the municipal board members
must be appointed from the fire department service area by the board of commissioners
of the applicable county.

(e) The term of deleted text begin these deleted text end new text begin the new text end appointed municipal board members is one year or until the
person's successor is qualified, whichever is later.

(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights
and duties accorded to any other trustee, except the right to be an officer of the relief
association board of trustees.

(g) A board must have at least three officers, who are a president, a secretary and a
treasurer. These officers must be elected from among the elected trustees by either the full
board of trustees or by the new text begin relief association new text end membership, as specified in the bylaws. In
no event may any trustee hold more than one officer position at any one time. The terms
of the elected trustees and of the officers of the board must be specified in the bylaws of
the relief association, but may not exceed three years. If the term of the elected trustees
exceeds one year, the election of the various trustees elected from the membership must be
staggered on as equal a basis as is practicable.

Subd. 2.

Fiduciary duty.

The board of trustees new text begin of a relief association new text end shall
undertake their activities consistent with chapter 356A.

new text begin Subd. 2a. new text end

new text begin Fiduciary responsibility. new text end

new text begin In the discharge of their respective duties, the
officers and trustees shall be held to the standard of care specified in section 11A.09. In
addition, the trustees shall act in accordance with chapter 356A. Each member of the
board is a fiduciary and shall undertake all fiduciary activities in accordance with the
standard of care of section 11A.09, and in a manner consistent with chapter 356A. No
fiduciary of a relief association shall cause a relief association to engage in a transaction if
the fiduciary knows or should know that the transaction constitutes one of the following
direct or indirect transactions:
new text end

new text begin (1) sale or exchange or leasing of any real property between the relief association
and a board member;
new text end

new text begin (2) lending of money or other extension of credit between the relief association and
a board member or member of the relief association;
new text end

new text begin (3) furnishing of goods, services, or facilities between the relief association and a
board member; or
new text end

new text begin (4) transfer to a board member, or use by or for the benefit of a board member, of any
assets of the relief association. A transfer of assets does not mean the payment of relief
association benefits or administrative expenses permitted by law.
new text end

Subd. 3.

Conditions on relief association consultants.

(a) If a volunteer firefighter
relief association deleted text begin hires deleted text end new text begin employs new text end or contracts with a consultant to provide legal or financial
advice, the new text begin secretary of the relief new text end association shall obtain and the consultant shall provide
new text begin to the secretary of the relief association new text end a copy of the consultant's certificate of insurance.

(b) A consultant is any person who is employed under contract to provide legal or
financial advice and who is or who represents to the volunteer firefighter relief association
that the person is:

(1) an actuary;

(2) a licensed public accountant or a certified public accountant;

(3) an attorney;

(4) an investment advisor or manager, or an investment counselor;

(5) an investment advisor or manager selection consultant;

(6) a pension benefit design advisor or consultant; or

(7) any other financial consultant.

Sec. 33.

Minnesota Statutes 2008, section 424A.05, subdivision 1, is amended to read:

Subdivision 1.

Establishment of special fund.

Every new text begin volunteer firefighters' new text end relief
association shall establish and maintain a special fund within the relief association.

Sec. 34.

Minnesota Statutes 2008, section 424A.05, subdivision 2, is amended to read:

Subd. 2.

Special fund assets and revenues.

The special fund deleted text begin shall deleted text end new text begin must new text end be credited
with all fire state aid moneys received deleted text begin pursuant to deleted text end new text begin under new text end sections 69.011 to 69.051,
all taxes levied by or other revenues received from the municipality deleted text begin pursuant to deleted text end new text begin under
new text end sections 69.771 to 69.776 or any applicable special law requiring municipal support for
the relief association, any moneys 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 new text begin or
investment return new text end earned upon the assets of the special fund. The treasurer of the relief
association deleted text begin shall be deleted text end new text begin is new text end the custodian of the assets of the special fund and deleted text begin shall deleted text end new text begin must new text end 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
deleted text begin shall be deleted text end new text begin are new text end public and deleted text begin shall deleted text end new text begin must new text end be open for inspection by any member of the relief
association, any officer or employee of the state or new text begin of new text end the municipality, or any member of
the public, at reasonable times and places.

Sec. 35.

Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from the special fund.

(a) Disbursements
from the special fund deleted text begin are deleted text end new text begin may new text end not deleted text begin permitted to deleted text end 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 payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid deleted text begin pursuant to deleted text end new text begin under new text end law and
specified in amount in the bylaws governing the relief association;

(3) for the payment of survivor benefits to surviving spouses and surviving children,
or if none, to designated beneficiaries, of deceased members of the relief association, and
if new text begin no new text end survivors and if no designated beneficiary, for the payment of a death benefit to the
estate of the deceased active new text begin or deferred new text end firefighter, if authorized by and paid deleted text begin pursuant to deleted text end
new text begin under new text end law and specified in amount in the bylaws governing the relief association;

(4) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association, to the Minnesota Area Relief Association Coalition, and to
the state Volunteer Firefighters Benefit Association in order to entitle relief association
members to membership in and the benefits of these associations or organizations; and

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

(b) For purposes of this chapter, a designated beneficiary must be a natural person.

Sec. 36.

Minnesota Statutes 2008, section 424A.05, subdivision 4, is amended to read:

Subd. 4.

Investments of assets of the special fund.

The assets of the special fund
deleted text begin shall deleted text end new text begin must new text end be invested only in securities authorized by section 69.775.

Sec. 37.

Minnesota Statutes 2008, section 424A.06, is amended to read:

424A.06 RELIEF ASSOCIATION GENERAL FUND.

Subdivision 1.

Establishment of general fund.

deleted text begin Any deleted text end new text begin A new text end volunteer firefighters' relief
association may establish and maintain a general fund within the relief association.

Subd. 2.

General fund assets and revenues.

To the general fund, if established,
deleted text begin shall deleted text end new text begin must new text end be credited all moneys received from dues, fines, initiation fees, entertainment
revenues and any moneys or property donated, given, granted or devised by any person,
for unspecified uses. The treasurer of the relief association deleted text begin shall be deleted text end new text begin is new text end the custodian of the
assets of the general fund and deleted text begin shall deleted text end new text begin must new text end be the recipient on behalf of the general fund of
all revenues payable to the general fund. The treasurer shall maintain adequate records
documenting any transaction involving the assets or the revenues of the general fund.
These records deleted text begin shall deleted text end new text begin must new text end be open for inspection by any member of the relief association
at reasonable times and places.

Subd. 3.

Authorized disbursements from the general fund.

Disbursements from
the general fund may be made for any purpose new text begin that is new text end authorized by either the articles of
incorporation or bylaws of the relief association.

Subd. 4.

Investment of assets of the general fund.

The assets of the general
fund may be invested in any securities new text begin that are new text end authorized by the bylaws of the relief
association and may be certified 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.

Sec. 38.

Minnesota Statutes 2008, section 424A.07, is amended to read:

424A.07 NONPROFIT FIREFIGHTING CORPORATIONS;
ESTABLISHMENT OF RELIEF ASSOCIATIONS.

deleted text begin Prior to deleted text end new text begin Before new text end paying any service pensions or retirement benefits deleted text begin pursuant to deleted text end
new text begin under new text end section 424A.02 or new text begin before new text end becoming entitled to receive any amounts of fire state
aid upon transmittal from a contracting municipality deleted text begin pursuant to deleted text end new text begin under new text end section 69.031,
subdivision 5, a nonprofit firefighting corporation shall establish a new text begin volunteer firefighters'
new text end relief association governed by this chapter.

Sec. 39.

Minnesota Statutes 2008, section 424A.08, is amended to read:

424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
AUTHORIZED DISBURSEMENTS.

Any qualified municipality which is entitled to receive fire state aid but which has
no volunteer firefighters' relief association directly associated with its fire department
shall deposit the fire state aid in a special account new text begin established for that purpose new text end in the
municipal treasury. Disbursement from the special account deleted text begin shall deleted text end new text begin may new text end not be made for
any purpose except:

(1) payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the state Volunteer Firefighters' Benefit Association in
order to entitle its firefighters to membership in and the benefits of these state associations;

(2) payment of the cost of purchasing and maintaining needed equipment for the
fire department; and

(3) payment of the cost deleted text begin for deleted text end new text begin of new text end construction, acquisition, repair deleted text begin and deleted text end new text begin or new text end maintenance of
buildings or other premises to house the new text begin equipment of the new text end fire department.

Sec. 40.

Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means an individual who receives a lump-sum distribution
of pension or retirement benefits from a new text begin volunteer new text end firefighters' relief association for service
that the individual has performed as a volunteer firefighter;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or
minor children of a deceased volunteer firefighter;

(3) "active volunteer firefighter" means a person who regularly renders fire
suppression service for a municipal fire department or an independent nonprofit firefighting
corporation, who has met the statutory and other requirements for relief association
membership, and who has been a fully qualified member of the relief association for
at least one month; and

(4) "deferred volunteer firefighter" means a former active volunteer firefighter who
terminated active firefighting service, has sufficient service credit from the applicable
relief association to be entitled to a service pension, but has not applied for or has not
received the service pension.

Sec. 41.

Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:

Subd. 2.

Payment of supplemental benefit.

(a) Upon the payment by a new text begin volunteer
new text end firefighters' relief association of a lump-sum distribution to a qualified recipient, the
association must pay a supplemental benefit to the qualified recipient. Notwithstanding
any law to the contrary, the relief association must pay the supplemental benefit out of
its special fund. deleted text begin The amount of deleted text end This benefit deleted text begin equals deleted text end new text begin is an amount equal to new text end ten percent of
the regular lump-sum distribution that is paid on the basis of the recipient's service as
a volunteer firefighter. In no case may the amount of the supplemental benefit exceed
$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a
deceased active or deferred volunteer firefighter in that capacity.

(b) Upon the payment by a relief association of a lump-sum survivor benefit or
funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased
deferred volunteer firefighter, the association may pay a supplemental survivor benefit
to the survivor of the deceased active or deferred volunteer firefighter from the special
fund of the relief association if its articles of incorporation or bylaws so provide. The
amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral
benefit, but not to exceed $2,000.

(c) An individual may receive a supplemental benefit under paragraph (a) or under
paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
firefighter benefit.

Sec. 42.

Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:

Subd. 3.

State reimbursement.

(a) Each year, to be eligible for state reimbursement
of the amount of supplemental benefits paid under subdivision 2 during the preceding
calendar year, the new text begin volunteer firefighters' new text end relief association must apply to the commissioner
of revenue by February 15. By March 15, the commissioner shall reimburse the relief
association for the amount of the supplemental benefits paid new text begin by the relief association new text end to
qualified recipients and to survivors of deceased active or deferred volunteer firefighters.

(b) The commissioner of revenue shall prescribe the form of and supporting
information that must be supplied as part of the application for state reimbursement.
The commissioner of revenue shall reimburse the relief association by paying the
reimbursement amount to the treasurer of the municipality where the association is located.
Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
to the treasurer of the association if the association has filed a financial report with the
municipality. If the relief association has not filed a financial report with the municipality,
the municipal treasurer shall delay transmission of the reimbursement payment to the
association until the complete financial report is filed. If the association has dissolved or
has been removed as a trustee of state aid, the treasurer shall deposit the money in a
special account in the municipal treasury, and the money may be disbursed only for the
purposes and in the manner provided in section 424A.08. When paid to the association,
the reimbursement payment must be deposited in the special fund of the relief association.

(c) A sum sufficient to make the payments is appropriated from the general fund
to the commissioner of revenue.

Sec. 43.

Minnesota Statutes 2008, section 424A.10, subdivision 4, is amended to read:

Subd. 4.

In lieu of income tax exclusion.

(a) The supplemental benefit provided
by this section is in lieu of the state income tax exclusion for lump-sum distributions of
retirement benefits paid to volunteer firefighters.

(b) If the law is modified to exclude or exempt volunteer firefighters' lump-sum
distributions from state income taxation, the supplemental benefits under this section
deleted text begin may deleted text end new text begin are new text end no longer deleted text begin be paid deleted text end new text begin payable, new text end beginning with the first calendar year in which the
exclusion or exemption is effective. This subdivision does not apply to exemption of all or
part of a lump-sum distribution under section 290.032 or 290.0802.

Sec. 44.

Minnesota Statutes 2008, section 424A.10, subdivision 5, is amended to read:

Subd. 5.

Retroactive reimbursement in certain instances.

A supplemental
survivor or funeral benefit may be paid by a relief association for the death of an active
volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August
1, 2005, if the relief association articles of incorporation or bylaws deleted text begin so deleted text end provide for a
supplemental survivor benefit and new text begin provide new text end for retroactivity.

Sec. 45.

Minnesota Statutes 2008, section 424B.10, is amended by adding a
subdivision to read:

new text begin Subd. 1a. new text end

new text begin Applicability. new text end

new text begin This section applies when all of the volunteer firefighters'
relief associations involved in the consolidation are defined benefit relief associations as
defined in section 424A.001, subdivision 1b.
new text end

Sec. 46.

Minnesota Statutes 2008, section 424B.10, is amended by adding a
subdivision to read:

new text begin Subd. 1b. new text end

new text begin Benefits. new text end

new text begin (a) The successor relief association following the consolidation
of two or more defined benefit relief associations must be a defined benefit relief
association.
new text end

new text begin (b) Notwithstanding any provision of section 424A.02, subdivision 3, to the contrary,
the initial service pension amount of the subsequent defined benefit relief association as
of the effective date of consolidation is either 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) the 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; 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

new text begin (c) 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 section 424A.02.
new text end

Sec. 47.

Minnesota Statutes 2008, section 424B.10, subdivision 2, is amended to read:

Subd. 2.

Funding.

(a) Unless the applicable municipalities agree in writing to
allocate the minimum municipal obligation in a different manner, the minimum municipal
obligation under section 69.772 or 69.773, whichever applies, must be allocated between
the applicable municipalities in proportion to their fire state aid.

(b) If any applicable municipality fails to meet its portion of the minimum municipal
obligation to the subsequent relief association, all other applicable municipalities are
jointly obligated to provide the required funding upon certification by the relief association
secretary. An applicable municipality that pays the minimum municipal obligation
new text begin amount new text end for another applicable municipality, the municipality may collect deleted text begin the deleted text end new text begin that new text end payment
amount, plus a 25 percent surcharge, from the responsible applicable municipality by any
available means, including new text begin a new text end deduction from any state aid or payment amount payable
to the responsible municipality upon certification of the necessary information to the
commissioner of finance.

Sec. 48.

new text begin [424B.11] CONSOLIDATING DEFINED CONTRIBUTION RELIEF
ASSOCIATIONS; INDIVIDUAL ACCOUNTS; FUNDING.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin This section applies when all of the volunteer
firefighters' relief associations involved in the consolidation are defined contribution relief
associations as defined in section 424A.001, subdivision 1c.
new text end

new text begin Subd. 2. new text end

new text begin Individual accounts. new text end

new text begin The successor relief association following the
consolidation of two or more defined contribution relief associations must be a defined
contribution relief association and the successor relief association board shall establish
individual accounts for every active member, deferred member, or retired member
receiving installment payments with that status as of the consolidation date. To each
individual account the successor relief association must credit the amount to the credit
of each person by a predecessor relief association as of the date of consolidation plus a
proportional share, based on account value, of any subsequent net revenue during the
consolidation process.
new text end

new text begin Subd. 3. new text end

new text begin Funding. new text end

new text begin Unless the articles of incorporation or bylaws of the successor
relief association specify that municipal contributions are wholly voluntary or unless the
municipalities associated with the consolidating defined contribution relief associations
agree in writing to a different municipal support arrangement, each municipality must
continue to provide the same amount of municipal support to the successor relief
association as the municipality provided to the applicable predecessor relief association in
the calendar year immediately prior to the calendar year in which the consolidation occurs.
new text end

Sec. 49.

new text begin [424B.12] MIXED CONSOLIDATING RELIEF ASSOCIATIONS;
BENEFIT PLAN; FUNDING.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin This section applies where one or more of the
volunteer firefighters' relief associations involved in the consolidation are defined benefit
relief associations as defined in section 424A.001, subdivision 1b, and one or more of
the volunteer firefighters' relief associations involved in the consolidation are defined
contribution relief associations as defined in section 424A.001, subdivision 1c.
new text end

new text begin Subd. 2. new text end

new text begin Benefit plan. new text end

new text begin The articles of incorporation or bylaws of the successor
relief association must specify whether the relief association is a defined benefit relief
association or whether the relief association is a defined contribution relief association. If
the successor relief association is a defined benefit relief association, the relief association
benefits must comply with sections 424A.02 and 424B.11, subdivision 1a. If the successor
relief association is a defined contribution relief association, the relief association must
comply with sections 424A.016 and 424B.12, subdivision 2.
new text end

new text begin Subd. 3. new text end

new text begin Funding. new text end

new text begin If the successor relief association is a defined benefit relief
association, the relief association funding is governed by section 424B.11, subdivision 2.
If the successor relief association is a defined contribution relief association, the relief
association funding is governed by section 424B.12, subdivision 3.
new text end

Sec. 50. new text begin REPEALER.
new text end

new text begin Subdivision 1. new text end

new text begin Repealed for recodification. new text end

new text begin Minnesota Statutes 2008, sections
424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, and 8b; and 424B.10, subdivision
1, new text end new text begin are repealed.
new text end

new text begin Subd. 2. new text end

new text begin Repealed as obsolete. new text end

new text begin Minnesota Statutes 2008, section 424A.09, new text end new text begin is
repealed.
new text end

Sec. 51. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Except as specified in paragraphs (b) and (c), sections 1 to 21, 23 to 31, and 36
to 50 are effective July 1, 2009.
new text end

new text begin (b) The reduction in the number of deferred service pension interest options
contained in section 22 is effective January 1, 2010.
new text end

new text begin (c) Sections 32 to 35 are effective retroactively from July 1, 2008.
new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2008, section 69.771, subdivision 3, is amended to read:

Subd. 3.

Remedy for noncompliance; determination.

(a) A municipality 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 does
not qualify initially to receive, and is not entitled subsequently to retain, fire state aid
under sections 69.011 to 69.051 until the reason for the disqualification specified by the
state auditor is remedied, whereupon the municipality or relief association, if otherwise
qualified, is entitled to again receive fire state aid for the year occurring immediately
subsequent to the year in which the disqualification is remedied.

(b) The 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 under section 69.051, 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.

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

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

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

(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;

(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);

(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;

(6) the new text begin defined benefit new text end 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;

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

(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;

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

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

(11) the relief association officers permitted to occur a prohibited transaction under
section 356A.06, subdivision 9, or deleted text begin 424A.001 deleted text end new text begin 424A.04 new text end , subdivision deleted text begin 7 deleted text end new text begin 2a new text end , or failed to
undertake correction of a prohibited transaction that did occur; or

(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 begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1 is also
enacted.
new text end

Sec. 2.

Minnesota Statutes 2008, section 424B.21, is amended to read:

424B.21 ANNUITY PURCHASES UPON DISSOLUTION.

The board of trustees of a volunteer firefighters relief association that is scheduled
for dissolution may purchase annuity contracts under section deleted text begin 424A.02 deleted text end new text begin 424A.015 new text end ,
subdivision deleted text begin 8a deleted text end new text begin 3 new text end , instead of transferring special fund assets to a municipal trust fund
under section 424B.20, subdivision 4. Payment of an annuity for which a contract is
purchased may not commence before the retirement age specified in the relief association
bylaws and in compliance with section new text begin 424A.016, subdivision 2, or new text end 424A.02, subdivision
1. Legal title to the annuity contract transfers to the municipal trust fund under section
424B.20, subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1 is also
enacted.
new text end

ARTICLE 3

VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION

GENERAL CHANGES

Section 1.

Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:

Subd. 5.

Deposit of state aid.

(a) The municipal treasurer shall, within 30 days
after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
relief association if there is one organized and the association has filed a financial report
with the municipality. If the relief association has not filed a financial report with the
municipality, the municipal treasurer shall delay transmission of the fire state aid to the
relief association until the complete financial report is filed. If there is no relief association
organized, or if the association has dissolved, or has been removed as trustees of state aid,
then the treasurer of the municipality shall deposit the money in the municipal treasury
deleted text begin as provided for in section 424A.08 deleted text end and the money may be disbursed only for the purposes
and in the manner set forth in deleted text begin that deleted text end section new text begin 424A.08 or for the payment of the employer
contribution requirement with respect to firefighters covered by the public employees
police and fire retirement plan under section 353.65, subdivision 3 new text end .

(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
police state aid in the following manner:

(1) For a municipality in which a local police relief association exists and all peace
officers are members of the association, the total state aid must be transmitted to the
treasurer of the relief association within 30 days of the date of receipt, and the treasurer
of the relief association shall immediately deposit the total state aid in the special fund
of the relief association;

(2) For a municipality in which police retirement coverage is provided by the public
employees police and fire fund and all peace officers are members of the fund, including
municipalities covered by section 353.665, the total state aid must be applied toward the
municipality's employer contribution to the public employees police and fire fund under
sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or

(3) For a municipality other than a city of the first class with a population of more
than 300,000 in which both a police relief association exists and police retirement
coverage is provided in part by the public employees police and fire fund, the municipality
may elect at its option to transmit the total state aid to the treasurer of the relief association
as provided in clause (1), to use the total state aid to apply toward the municipality's
employer contribution to the public employees police and fire fund subject to all the
provisions set forth in clause (2), or to allot the total state aid proportionately to be
transmitted to the police relief association as provided in this subdivision and to apply
toward the municipality's employer contribution to the public employees police and fire
fund subject to the provisions of clause (2) on the basis of the respective number of active
full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).

For a city of the first class with a population of more than 300,000, in addition, the
city may elect to allot the appropriate portion of the total police state aid to apply toward
the employer contribution of the city to the public employees police and fire fund based
on the covered salary of police officers covered by the fund each payroll period and to
transmit the balance to the police relief association; or

(4) For a municipality in which police retirement coverage is provided in part by
the public employees police and fire fund and in part by a local police consolidation
account governed by chapter 353A and established before March 2, 1999, for which the
municipality declined merger under section 353.665, subdivision 1, or established after
March 1, 1999, the total police state aid must be applied towards the municipality's total
employer contribution to the public employees police and fire fund and to the local police
consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.

(c) The county treasurer, upon receipt of the police state aid for the county, shall
apply the total state aid toward the county's employer contribution to the public employees
police and fire fund under section 353.65, subdivision 3.

(d) The designated Metropolitan Airports Commission official, upon receipt of the
police state aid for the Metropolitan Airports Commission, shall apply the total police
state aid first toward the commission's employer contribution for police officers to the
Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
there is any amount of police state aid remaining, shall apply that remainder toward the
commission's employer contribution for police officers to the public employees police and
fire plan under section 353.65, subdivision 3.

(e) The police state aid apportioned to the Departments of Public Safety and Natural
Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
finance for transfer to the funds and accounts from which the salaries of peace officers
certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue
shall certify to the commissioners of public safety, natural resources, and finance the
amounts to be transferred from the appropriation for police state aid. The commissioners
of public safety and natural resources shall certify to the commissioner of finance the
amounts to be credited to each of the funds and accounts from which the peace officers
employed by their respective departments are paid. Each commissioner must allocate the
police state aid first for employer contributions for employees funded from the general
fund and then for employer contributions for employees funded from other funds. For
peace officers whose salaries are paid from the general fund, the amounts transferred from
the appropriation for police state aid must be canceled to the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 2.

Minnesota Statutes 2008, section 69.772, subdivision 4, is amended to read:

Subd. 4.

Certification of financial requirements and minimum municipal
obligation; levy.

(a) 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 3 to the governing body of the municipality on or before August 1 of
each year. 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. new text begin The schedule forms related to the determination of the financial requirements
must be filed with the state auditor by March 31, annually, if the relief association is
required to file a financial statement under section 69.051, subdivision 1a, or by June 30,
annually, if the relief association is required to file a financial report and audit under
section 69.051, subdivision 1.
new text end

(b) 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.

(c) 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 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.

(d) If 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 certified
minimum municipal obligation on the taxable property of the municipality.

(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 begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 3.

Minnesota Statutes 2008, section 69.772, 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 pursuant to subdivision 3,
clause (2), subclause (e), or if the municipality is required to provide financial support
to the special fund of the relief association pursuant to 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 shall not be effective until it is ratified by the governing
body of the municipality in which the relief association is located 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 pursuant to subdivision 3, clause (2), subclause
(e), and if the municipality is not required to provide financial support to the special fund
of the relief association pursuant to 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 shall be 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
deleted text begin prior deleted text end surplus over full funding new text begin reported in the prior year new text end 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 to 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 pursuant to this subdivision, and, subsequent to
the amendment or adoption, the financial requirements of the special fund of the relief
association pursuant to this section are such so as to require financial support from the
municipality, the provision which was implemented without municipal ratification shall no
longer be effective without municipal ratification and any service pensions or retirement
benefits payable after that date shall be paid only in accordance with the articles of
incorporation or bylaws as amended or adopted with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 4.

Minnesota Statutes 2008, section 69.773, 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 pursuant to subdivision 4, or if
the municipality is required to provide financial support to the special fund of the relief
association pursuant to 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 shall not
be effective until it is ratified by the governing body of the municipality in which the
relief association is located. If the special fund of the relief association has a surplus over
full funding pursuant to subdivision 4, and if the municipality is not required to provide
financial support to the special fund of the relief association pursuant to 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 shall be
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 deleted text begin prior deleted text end surplus over full funding new text begin reported in the prior
year new text end 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 to 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 pursuant to
this section are such so as to require financial support from the municipality, the provision
which was implemented without municipal ratification shall no longer be effective without
municipal ratification and any service pensions or retirement benefits payable after that
date shall be paid only in accordance with the articles of incorporation or bylaws as
amended or adopted with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 5.

Minnesota Statutes 2008, section 356.219, subdivision 3, is amended to read:

Subd. 3.

Content of reports.

(a) The report required by subdivision 1 must include
a written statement of the investment policy. Following that initial report, subsequent
reports must include investment policy changes and the effective date of each policy
change rather than a complete statement of investment policy, unless the state auditor
requests submission of a complete current statement. The report must also include the
information required by the following paragraphs, as applicable.

(b) If, after four years of reporting under this paragraph, the total portfolio time
weighted rate of return, net of all investment related costs and fees, provided by the public
pension plan differs by no more than 0.1 percent from the comparable return for the plan
calculated by the Office of the State Auditor, and if a public pension plan has a total
market value of $25,000,000 or more as of the beginning of the calendar year, and if the
public pension plan's annual audit is performed by the state auditor or by the legislative
auditor, the report required by subdivision 1 must include the market value of the total
portfolio and the market value of each asset class included in the pension fund as of the
beginning of the calendar year and as of the end of the calendar year. At the discretion of
the state auditor, the public pension plan may be required to submit the market value of the
total portfolio and the market value of each investment account, investment portfolio, or
asset class included in the pension fund for each month, and the amount and date of each
injection and withdrawal to the total portfolio and to each investment account, investment
portfolio, or asset class. If the market value of a public pension plan's fund drops below
$25,000,000 in a subsequent year, it must continue reporting under this paragraph for any
subsequent year in which the public pension plan is not fully invested as specified in
subdivision 1, paragraph (b), except that if the public pension plan's annual audit is not
performed by the state auditor or legislative auditor, paragraph (c) applies.

(c) If paragraph (b) would apply if the annual audit were provided by the state
auditor or legislative auditor, the report required by subdivision 1 must include the market
value of the total portfolio and the market value of each asset class included in the pension
fund as of the beginning of the calendar year and for each month, and the amount and date
of each injection and withdrawal to the total portfolio and to each investment account,
investment portfolio, or asset class.

(d) For public pension plans to which paragraph (b) or (c) applies, the report required
by subdivision 1 must also include a calculation of the total time-weighted rate of return
available from index-matching investments assuming the asset class performance targets
and target asset mix indicated in the written statement of investment policy. The provided
information must include a description of indices used in the analyses and an explanation
of why those indices are appropriate. This paragraph does not apply to any fully invested
plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of
Investment under this paragraph is limited to information on the Minnesota public pension
plans required to be invested by the State Board of Investment under section 11A.23.

(e) If a public pension plan has a total market value of less than $25,000,000 as of
the beginning of the calendar year and was never required to file under paragraph (b) or
(c), the report required by subdivision 1 must include the amount and date of each total
portfolio injection and withdrawal. In addition, the report must include the market value
of the total portfolio as of the beginning of the calendar year and for each quarter.

(f) Any public pension plan reporting under paragraph (b) or (c) must include
computed time-weighted rates of return with the report, in addition to all other required
information, as applicable. The chief administrative officer of the public pension plan
submitting the returns must certify, on a form prescribed by the state auditor, that the
returns have been computed by the pension plan's investment performance consultant or
custodial bank. The chief administrative officer of the public pension plan submitting the
returns also must certify that the returns are net of all costs and fees, including investment
management fees, and that the procedures used to compute the returns are consistent
with Bank Administration Institute studies of investment performance measurement
and presentation standards set by the deleted text begin Certified Financial Analyst deleted text end new text begin CFA new text end Institute. If the
certifications required under this paragraph are not provided, the reporting requirements of
paragraph (c) apply.

(g) For public pension plans reporting under paragraph (e), the public pension plan
must retain supporting information specifying the date and amount of each injection and
withdrawal to each investment account and investment portfolio. The public pension plan
must also retain the market value of each investment account and investment portfolio at
the beginning of the calendar year and for each quarter. Information that is required to be
collected and retained for any given year or years under this paragraph must be submitted
to the Office of the State Auditor if the Office of the State Auditor requests in writing that
the information be submitted by a public pension plan or plans, or be submitted by the
State Board of Investment for any plan or plans for which the State Board of Investment is
the investment authority under this section. If the state auditor requests information under
this subdivision, and the public plan fails to comply, the pension plan is subject to penalties
under subdivision 5, unless penalties are waived by the state auditor under that subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 6.

Minnesota Statutes 2008, section 424A.01, subdivision 1, is amended to read:

Subdivision 1.

Minors.

new text begin (a) new text end It is unlawful for any municipality or independent
nonprofit firefighting corporation to employ a minor as a volunteer firefighter or to permit
a minor to serve in any capacity performing any firefighting duties with a deleted text begin volunteer deleted text end fire
department new text begin , except for members of a youth, civic, or educational organization or program
who participate with uninterrupted adult supervision, as allowed by federal law and by
section 181A.04. Such organizations or programs include, but are not limited to, Boy
Scout Explorer programs or firefighting degree programs new text end .

new text begin (b) No volunteer firefighters' relief association associated with a municipality or an
independent nonprofit firefighting corporation may include as a relief association member
a minor serving as a volunteer firefighter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 7.

Minnesota Statutes 2008, section 424A.01, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Return to active firefighting after break in service. new text end

new text begin (a) If a former active
firefighter who has separated from active service for at least 60 days resumes performing
active firefighting with the fire department associated with the relief association, if the
bylaws of the relief association so permit, the person may again become an active member
of the relief association.
new text end

new text begin (b) A firefighter who returns to active relief association membership under paragraph
(a) may qualify for the receipt of a service pension from the relief association for the
resumption service period if the firefighter meets a minimum period of resumption service
specified in the relief association bylaws.
new text end

new text begin (c) A firefighter who returns to active lump-sum relief association membership and
who qualifies for a service pension under paragraph (b) must have, upon a subsequent
cessation of duties, any service pension for the resumption service period calculated as
a separate benefit. If a lump-sum service pension had been paid to the firefighter upon
the firefighter's previous cessation of duties, a second lump-sum service pension for the
resumption service period must be calculated to apply the service pension amount in effect
on the date of the firefighter's termination of the resumption service for all years of the
resumption service. No firefighter can be paid twice for the same period of service. If
a lump-sum service pension had not been paid to the firefighter upon the firefighter's
previous cessation of duties and the firefighter meets the minimum service requirement of
section 424A.02, subdivision 2, a service pension shall be calculated to apply the service
pension amount in effect on the date of the firefighter's termination of the resumption
service for all years of service credit.
new text end

new text begin (d) A firefighter who had not been paid a lump-sum service pension returns to active
relief association membership under paragraph (a), who does not qualify for a service
pension under paragraph (b), but who does meet the minimum service requirement of
section 424A.02, subdivision 2, based on the firefighter's previous years of active service,
must have, upon a subsequent cessation of duties, a service pension calculated for the
previous years of service based on the service pension amount in effect on the date of the
firefighter's termination of the resumption service, or, if the bylaws so provide, based on the
service pension amount in effect on the date of the firefighter's previous cessation of duties.
new text end

new text begin (e) If a firefighter receiving a monthly benefit service pension returns to active
monthly benefit relief association membership under paragraph (a), any monthly benefit
service pension payable to the firefighter is suspended as of the first day of the month next
following the date on which the firefighter returns to active membership. If the firefighter
was receiving a monthly benefit service pension, and qualifies for a service pension under
paragraph (b), the firefighter is entitled to an additional monthly benefit service pension
upon a subsequent cessation of duties calculated based on the resumption service credit
and the service pension accrual amount in effect on the date of the termination of the
resumption service. The suspended initial service pension resumes as of the first of
the month next following the termination of the resumption service. If the firefighter
was not receiving a monthly benefit service pension and meets the minimum service
requirement of section 424A.02, subdivision 2, a service pension must be calculated to
apply the service pension amount in effect on the date of the firefighter's termination of the
resumption service for all years of service credit.
new text end

new text begin (f) A firefighter who was not receiving a monthly benefit service pension returns
to active relief association membership under paragraph (a), who does not qualify for a
service pension under paragraph (b), but who does meet the minimum service requirement
of section 424A.02, subdivision 2, based on the firefighter's previous years of active
service, must have, upon a subsequent cessation of duties, a service pension calculated for
the previous years of service based on the service pension amount in effect on the date
of the firefighter's termination of the resumption service, or, if the bylaws so provide,
based on the service pension amount in effect on the date of the firefighter's previous
cessation of duties.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 8.

Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A relief association, when its articles of
incorporation or bylaws so provide, may pay out of the assets of its special fund a
service pension to each of its members who: (1) separates from active service with the
fire department; (2) reaches age 50; (3) completes at least five years of active service
as an active member of the municipal fire department to which the relief association
is associated; (4) completes at least five years of active membership with the relief
association before separation from active service; and (5) complies with any additional
conditions as to age, service, and membership that are prescribed by the bylaws of the
relief association. A service pension computed under this section may be prorated
monthly for fractional years of service, deleted text begin if deleted text end new text begin as new text end the bylaws or articles of incorporation of
the relief association so provide. new text begin 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. new text end The service pension may be paid whether or
not the municipality or nonprofit firefighting corporation to which the relief association
is associated qualifies for fire state aid under chapter 69.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the payment of the service pension. During the period of inactive
membership, the member is not entitled to receive disability benefit coverage, is not
entitled to receive additional service credit towards computation of a service pension, and
is considered to have the status of a person entitled to a deferred service pension under
subdivision 7.

(c) No municipality or nonprofit firefighting corporation may delegate the power to
take final action in setting a service pension or ancillary benefit amount or level to the
board of trustees of the relief association or to approve in advance a service pension or
ancillary benefit amount or level equal to the maximum amount or level that this chapter
would allow rather than a specific dollar amount or level.

(d) No relief association as defined in section 424A.001, subdivision 4, may pay a
service pension or disability benefit to a former member of the relief association if that
person has not separated from active service with the fire department to which the relief
association is directly associated, unless:

(1) the person is employed subsequent to retirement by the municipality or the
independent nonprofit firefighting corporation, whichever applies, to perform duties within
the municipal fire department or corporation on a full-time basis;

(2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 9.

Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a)
If a 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) new text begin order the treasurer of the applicable relief association to new text end 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 EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 10.

Minnesota Statutes 2008, section 424A.02, subdivision 6, is amended to read:

Subd. 6.

Payment of service pensions; nonassignability.

The method of
calculating service pensions shall be applied uniformly for all years of active service deleted text begin and deleted text end new text begin . new text end
Credit shall be given for all years of active service, except deleted text begin as otherwise provided in this
section deleted text end new text begin for caps on service credit if so provided in the bylaws of the relief association new text end . No
service pension shall be paid to any person while the person remains an active member
of the respective fire department, and no person who is receiving a service pension shall
be entitled to receive any other benefits from the special fund of the relief association.
No service pension or ancillary benefits paid or payable from the special fund of a relief
association to any person receiving or entitled to receive a service pension or ancillary
benefits shall be subject to garnishment, judgment, execution, or other legal process,
except as provided in section 518.58, 518.581, or 518A.53. No person entitled to a service
pension or ancillary benefits from the special fund of a relief association may assign any
service pension or ancillary benefit payments, nor shall the association have the authority
to recognize any assignment or pay over any sum which has been assigned.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 11.

Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:

Subd. 8.

Lump-sum service pensions; installment payments.

(a) Any relief
association, if the governing bylaws so provide, may pay, at the option of the deleted text begin retiring
member deleted text end new text begin intended recipient new text end and in lieu of a single payment of a lump-sum service pension new text begin
or survivor benefit new text end , a lump-sum service pension new text begin or survivor benefit new text end in installments.

(b) The election of installment payments deleted text begin shall be deleted text end new text begin is new text end irrevocable and deleted text begin shall deleted text end new text begin must new text end be
made by the deleted text begin retiring member deleted text end new text begin intended recipient new text end in writing and filed with the secretary of
the relief association no later than 30 days deleted text begin prior to deleted text end new text begin before new text end the commencement of payment
of the service pension new text begin or survivor benefit new text end . The amount of the installment payments deleted text begin shall deleted text end
new text begin must new text end be determined deleted text begin so that the present value of the aggregate installment payments
computed at an interest rate of five percent, compounded annually, is equal to the amount
of the single lump-sum payment which would have been made had the installment
payments option not been elected. The payment of each installment shall include interest
at the rate of five percent, compounded annually on the reserve supporting the remaining
installment payments as of the date on which the previous installment payment was paid
and computed from the date on which the previous installment payment was paid to the
date of payment for the current installment payment deleted text end new text begin in any reasonable manner provided
for in the governing bylaws, but the total amount of installment payments may not exceed
the single payment service pension amount plus interest at an annual rate of five percent
on the amount of delayed payments for the period during which payment was delayed new text end .

deleted text begin (c) To the extent that the commissioner of commerce deems it to be necessary or
practical, the commissioner may specify and issue procedures, forms or mathematical
tables for use in performing the calculations required pursuant to this subdivision.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 12.

Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:

Subd. 10.

Local approval of bylaw amendments; filing requirements.

(a) Each
relief association to which this section applies shall file a revised copy of its governing
bylaws with the state auditor upon the adoption of any amendment to its governing bylaws
by the relief association or upon the approval of any amendment to its governing bylaws
granted by the governing body of each municipality served by the fire department to
which the relief association is directly associated. Failure of the relief association to file a
copy of the bylaws or any bylaw amendments with the state auditor shall disqualify the
municipality from the distribution of any future fire state aid until this filing requirement
has been completed.

(b) If the special fund of the relief association does not have a surplus over full
funding pursuant to section 69.772, subdivision 3, clause (2), subclause (e), or 69.773,
subdivision 4, and if the municipality is required to provide financial support to the special
fund of the relief association pursuant to section 69.772 or 69.773, no bylaw amendment
which would affect the amount of, the manner of payment of, or the conditions for
qualification for service pensions or ancillary benefits or disbursements other than
administrative expenses authorized pursuant to section 69.80 payable from the special
fund of the relief association shall be effective until it has been ratified by the governing
body or bodies of the appropriate municipalities. If the municipality is not required to
provide financial support to the special fund pursuant to this section, the relief association
may adopt or amend without municipal ratification its articles of incorporation or bylaws
which increase or otherwise affect the service pensions or ancillary benefits payable from
the special fund so long as the changes do not cause the amount of the resulting increase in
the accrued liability of the special fund to exceed 90 percent of the amount of the deleted text begin prior deleted text end
surplus over full funding new text begin reported in the prior year new text end and the changes do not result in the
financial requirements of the special fund exceeding the expected amount of the future fire
state aid to be received by the relief association.

(c) If the relief association pays only a lump-sum pension, the financial requirements
are to be 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 the relief association pays a monthly
benefit service pension, the financial requirements are to be determined by the board of
trustees following either 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
pursuant to this section are such so as to require financial support from the municipality,
the provision which was implemented without municipal ratification shall no longer be
effective without municipal ratification, and any service pensions or ancillary benefits
payable after that date shall be paid only in accordance with the articles of incorporation
or bylaws as amended or adopted with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 13.

Minnesota Statutes 2008, section 424A.04, subdivision 1, is amended to read:

Subdivision 1.

Membership.

(a) A relief association that is directly associated with
a municipal fire department must be managed by a board of trustees consisting of nine
members. Six trustees must be elected from the membership of the relief association and
three trustees must be 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 which provides a monthly benefit service pension may provide that one of
the six trustees elected from the relief association membership may be a retired member
receiving a monthly pension who is elected by the membership of the relief association.
The three municipal trustees must be one elected municipal official and one elected or
appointed municipal official who are designated as municipal representatives by the
municipal governing board annually and the chief of the municipal fire department.

(b) A relief association that is a subsidiary of an independent nonprofit firefighting
corporation must be managed by a board of trustees consisting of nine members. Six
trustees must be elected from the membership of the relief association, two trustees must
be drawn from the officials of the municipalities served by the fire department to which
the relief association is directly associated, and one trustee deleted text begin shall deleted text end new text begin must new text end be the fire chief
serving with the independent nonprofit firefighting corporation. The bylaws of a relief
association may provide that one of the six trustees elected from the relief association
membership may be a retired member receiving a monthly pension who is elected by the
membership of the relief association. The two municipal trustees must be elected or
appointed municipal officials, selected as follows:

(1) if only one municipality contracts with the independent nonprofit firefighting
corporation, the municipal trustees must be two officials of the contracting municipality
who are designated annually by the governing body of the municipality; or

(2) if two or more municipalities contract with the independent nonprofit corporation,
the municipal trustees must be one official from each of the two largest municipalities
in population who are designated annually by the governing bodies of the applicable
municipalities.

(c) The municipal trustees for a relief association that is directly associated with a
fire department operated as or by a joint powers entity must be new text begin the fire chief of the fire
department and two trustees new text end 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 new text begin the fire chief of the fire department and two trustees new text end designated by
the township board.

(d) If a relief association lacks the municipal board members provided for in
paragraph (a), (b), or (c) because the fire department is not located in or associated with an
organized municipality, joint powers entity, or township, the municipal board members
must be new text begin the fire chief of the fire department and two board members new text end appointed from the
fire department service area by the board of commissioners of the applicable county.

(e) The term of deleted text begin these deleted text end new text begin the new text end appointed municipal board members is one year or until the
person's successor is qualified, whichever is later.

(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights
and duties accorded to any other trustee, except the right to be an officer of the relief
association board of trustees.

(g) A board must have at least three officers, who are a president, a secretary and a
treasurer. These officers must be elected from among the elected trustees by either the full
board of trustees or by the new text begin relief association new text end membership, as specified in the bylaws. In
no event may any trustee hold more than one officer position at any one time. The terms
of the elected trustees and of the officers of the board must be specified in the bylaws of
the relief association, but may not exceed three years. If the term of the elected trustees
exceeds one year, the election of the various trustees elected from the membership must be
staggered on as equal a basis as is practicable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 14.

Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from the special fund.

(a) Disbursements
from the special fund are not permitted to 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 payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid pursuant to law and specified in
amount in the bylaws governing the relief association;

(3) for the payment of survivor benefits to surviving spouses and surviving children,
or if none, to designated beneficiaries, of deceased members of the relief association,
and if survivors and if no designated beneficiary, for the payment of a death benefit to
the estate of the deceased active firefighter, if authorized by and paid pursuant to law and
specified in amount in the bylaws governing the relief association;

(4) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association deleted text begin , deleted text end new text begin and new text end to the Minnesota Area Relief Association Coalition deleted text begin , and to
the state Volunteer Firefighters Benefit Association deleted text end in order to entitle relief association
members to membership in and the benefits of these associations or organizations; deleted text begin and
deleted text end

new text begin (5) 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
new text end

deleted text begin (5) deleted text end new text begin (6) new text end for the payment of administrative expenses of the relief association as
authorized under section 69.80.

(b) For purposes of this chapter, new text begin for a monthly benefit volunteer fire relief association
or for a combination lump-sum and monthly benefit volunteer fire relief association where
a monthly benefit service pension has been elected by or a monthly benefit is payable with
respect to a firefighter, new text end a designated beneficiary must be a natural person. new text begin For purposes of
this chapter, for a defined contribution volunteer fire relief association, for a lump-sum
volunteer fire relief association, or for a combination lump-sum and monthly benefit
volunteer fire relief association where a lump-sum service pension has been elected by
or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary
may be a trust created under chapter 501B.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 15.

Minnesota Statutes 2008, section 424A.08, is amended to read:

424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
AUTHORIZED DISBURSEMENTS.

new text begin (a) new text end Any qualified municipality which is entitled to receive fire state aid but which has
no volunteer firefighters' relief association directly associated with its fire department new text begin and
which has no full-time firefighters with retirement coverage by the public employees police
and fire retirement plan new text end shall deposit the fire state aid in a special account in the municipal
treasury. Disbursement from the special account shall not be made for any purpose except:

(1) payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the state Volunteer Firefighters' Benefit Association in
order to entitle its firefighters to membership in and the benefits of these state associations;

(2) payment of the cost of purchasing and maintaining needed equipment for the
fire department; and

(3) payment of the cost for construction, acquisition, repair and maintenance of
buildings or other premises to house the fire department.

new text begin (b) A qualified municipality which is entitled to receive fire state aid, which has no
volunteer firefighters' relief association directly associated with its fire department and
which has full-time firefighters with retirement coverage by the public employees police
and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the
payment of the employer contribution requirement with respect to firefighters covered by
the public employees police and fire retirement plan under section 353.65, subdivision 3,
or for a combination of the two types of disbursements.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 16.

Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means an individual who receives a lump-sum distribution
of pension or retirement benefits from a firefighters' relief association for service that the
individual has performed as a volunteer firefighter;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the deleted text begin legally
married deleted text end new text begin surviving new text end spouse of a deceased new text begin active or deferred new text end volunteer firefighter new text begin under
section 424A.001, subdivision 6 new text end , or, if none, the surviving deleted text begin minor deleted text end child or deleted text begin minor deleted text end children
of a deceased new text begin active or deferred new text end volunteer firefighter;

(3) "active volunteer firefighter" means a person who regularly renders fire
suppression service for a municipal fire department or an independent nonprofit firefighting
corporation, who has met the statutory and other requirements for relief association
membership, and who deleted text begin has been deleted text end new text begin is deemed by the relief association under law and its
bylaws to be new text end a fully qualified member of the relief association for at least one month; and

(4) "deferred volunteer firefighter" means a former active volunteer firefighter who
terminated active firefighting service, has sufficient service credit from the applicable relief
association to be entitled to a service pension new text begin under the bylaws of the relief association new text end ,
but has not applied for or has not received the service pension.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 17. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 424A.02, subdivision 9b, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

ARTICLE 4

ACCOMMODATING CHANGES

Section 1.

new text begin [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER
FIREFIGHTERS.
new text end

new text begin It is unlawful for any municipality or independent nonprofit firefighting corporation
to employ a minor to serve as a firefighter or to permit a minor to serve in any capacity
performing any firefighting duties with a fire department, except for members of a youth,
civic, or educational organization or program who participate with uninterrupted adult
supervision, as allowed by federal law and by section 181A.04. Such organizations or
programs include, but are not limited to, Boy Scout Explorer programs or firefighting
degree programs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section 1,
and article 3, section 6, are enacted.
new text end

Sec. 2.

Minnesota Statutes 2008, section 424A.01, subdivision 1, is amended to read:

Subdivision 1.

Minors.

deleted text begin It is unlawful for any deleted text end new text begin (a) No volunteer firefighters' relief
association associated with a new text end municipality or new text begin an new text end independent nonprofit firefighting
corporation deleted text begin to employ deleted text end new text begin may include as a relief association member new text end a minor new text begin serving new text end as
a deleted text begin volunteer deleted text end firefighter deleted text begin or to permit a minor to serve in any capacity performing any
firefighting duties with a volunteer fire department deleted text end new text begin , except for members of a youth,
civic, or educational organization or program who participate with uninterrupted adult
supervision, as allowed by federal law and by section 181A.04. Such organizations or
programs include, but are not limited to, Boy Scout Explorer programs or firefighting
degree programs new text end .

new text begin (b) No volunteer firefighters' relief association associated with a municipality or an
independent nonprofit firefighting corporation may include as a relief association member
a minor serving as a volunteer firefighter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
15, and article 3, section 6, are enacted.
new text end

Sec. 3.

new text begin [424A.016] DEFINED CONTRIBUTION VOLUNTEER
FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.
new text end

new text begin Subdivision 1. new text end

new text begin Defined contribution relief association authorization. new text end

new text begin If the
articles of incorporation or the bylaws governing the volunteer firefighters' relief
association so provide exclusively, the relief association may pay a defined contribution
lump-sum service pension instead of a defined benefit service pension governed by section
424A.02.
new text end

new text begin Subd. 2. new text end

new text begin Defined contribution service pension eligibility. new text end

new text begin (a) A relief association,
when its articles of incorporation or bylaws so provide, may pay out of the assets of its
special fund a service pension to each of its members who:
new text end

new text begin (1) separates from active service with the fire department;
new text end

new text begin (2) reaches age 50;
new text end

new text begin (3) completes at least five years of active service as an active member of the
municipal fire department to which the relief association is associated;
new text end

new text begin (4) completes at least five years of active membership with the relief association
before separation from active service; and
new text end

new text begin (5) complies with any additional conditions as to age, service, and membership that
are prescribed by the bylaws of the relief association.
new text end

new text begin (b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the date of the payment of the service pension. During the period
of inactive membership, the member is not entitled to receive any disability benefit
coverage, is not entitled to receive additional individual account allocation of fire state
aid or municipal contribution towards a service pension, and is considered to have the
status of a person entitled to a deferred service pension.
new text end

new text begin (c) The service pension earned by a volunteer under this chapter and the articles
of incorporation and bylaws of the relief association may be paid whether or not the
municipality or nonprofit firefighting corporation to which the relief association is
associated qualifies for the receipt of fire state aid under chapter 69.
new text end

new text begin Subd. 3. new text end

new text begin Reduced vesting schedule. new text end

new text begin If the articles of incorporation or bylaws of a
defined contribution relief association so provide, a relief association may pay a reduced
service pension not to exceed the nonforfeitable percentage of the account balance to a
retiring member who has completed fewer than 20 years of service. The reduced service
pension may be paid when the retiring member meets the minimum age and service
requirements of subdivision 2. The nonforfeitable percentage of pension amounts are
as follows:
new text end

	new text begin Completed Years of Service new text end		new text begin Nonforfeitable Percentage of Pension Amount new text end
	new text begin 5 new text end		new text begin 40 percent new text end
	new text begin 6 new text end		new text begin 52 percent new text end
	new text begin 7 new text end		new text begin 64 percent new text end
	new text begin 8 new text end		new text begin 76 percent new text end
	new text begin 9 new text end		new text begin 88 percent new text end
	new text begin 10 new text end	new text begin and thereafter new text end	new text begin 100 percent new text end

new text begin Subd. 4. new text end

new text begin Individual accounts. new text end

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

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

new text begin (1) any amounts of fire state aid received by the relief association;
new text end

new text begin (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
new text end

new text begin (3) any amounts equal to the share of the assets of the special fund to the credit of:
new text end

new text begin (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
new text end

new text begin (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.
new text end

new text begin (c) 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. 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.
new text end

new text begin (d) 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.
new text end

new text begin (e) 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.
new text end

new text begin Subd. 5. new text end

new text begin Service pension installment payments. new text end

new text begin A defined contribution relief
association, if the governing bylaws so provide, may pay, at the option of the retiring
member and in lieu of a single payment of a service pension, the service pension in
installments. The election of installment payments is irrevocable and must be made by the
retiring member in writing and filed with the secretary of the relief association no later
than 30 days before the commencement of payment of the service pension. The amount of
the installment payments must be the fractional portion of the remaining account balance
equal to one divided by the number of remaining annual installment payments.
new text end

new text begin Subd. 6. new text end

new text begin Deferred service pensions. new text end

new text begin (a) A member of a relief association is entitled
to a deferred service pension if the member:
new text end

new text begin (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;
new text end

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

new text begin (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.
new text end

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

new text begin (c) A defined contribution relief association 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:
new text end

new text begin (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; or
new text end

new text begin (2) the 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 (d) The 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.
new text end

new text begin Subd. 7. new text end

new text begin Limitation on ancillary benefits. new text end

new text begin (a) A defined contribution relief
association may only pay an ancillary benefit which would constitute an authorized
disbursement as specified in section 424A.05. The ancillary benefit for active members
must equal the vested or nonvested amount of the individual account of the member.
new text end

new text begin (b) For deferred members, the ancillary benefit must equal the vested amount of
the individual account of the member. For the recipient of installment payments of a
service pension, the ancillary benefit must equal the remaining balance in the individual
account of the recipient.
new text end

new text begin Subd. 8. new text end

new text begin Filing of bylaw amendments. new text end

new text begin Each relief association to which this section
applies must file a revised copy of its governing bylaws with the state auditor upon the
adoption of any amendment to its governing bylaws by the relief association. Failure of
the relief association to file a copy of the bylaws or any bylaw amendments with the state
auditor disqualifies the municipality from the distribution of any future fire state aid until
this filing requirement has been completed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section 17,
and article 3, sections 8 and 10, are enacted.
new text end

Sec. 4.

Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A new text begin defined benefit new text end relief association, when its
articles of incorporation or bylaws so provide, may pay out of the assets of its special fund
a service pension to each of its members who: (1) separates from active service with the
fire department; (2) reaches age 50; (3) completes at least five years of active service
as an active member of the municipal fire department to which the relief association
is associated; (4) completes at least five years of active membership with the relief
association before separation from active service; and (5) complies with any additional
conditions as to age, service, and membership that are prescribed by the bylaws of the
relief association. A service pension computed under this section may be prorated monthly
for fractional years of service, deleted text begin if deleted text end new text begin as new text end the bylaws or articles of incorporation of the relief
association so provide. new text begin 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. new text end The service pension new text begin earned by a volunteer firefighter under
this chapter and the articles of incorporation and bylaws of the volunteer firefighters'
relief association new text end may be paid whether or not the municipality or nonprofit firefighting
corporation to which the relief association is associated qualifies for new text begin the receipt of new text end fire
state aid under chapter 69.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the new text begin date of the new text end payment of the service pension. During the
period of inactive membership, the member is not entitled to receive disability benefit
coverage, is not entitled to receive additional service credit towards computation of a
service pension, and is considered to have the status of a person entitled to a deferred
service pension under subdivision 7.

(c) No municipality or nonprofit firefighting corporation may delegate the power to
take final action in setting a service pension or ancillary benefit amount or level to the
board of trustees of the relief association or to approve in advance a service pension or
ancillary benefit amount or level equal to the maximum amount or level that this chapter
would allow rather than a specific dollar amount or level.

(d) No relief association as defined in section 424A.001, subdivision 4, may pay a
service pension or disability benefit to a former member of the relief association if that
person has not separated from active service with the fire department to which the relief
association is directly associated, unless:

(1) the person is employed subsequent to retirement by the municipality or the
independent nonprofit firefighting corporation, whichever applies, to perform duties within
the municipal fire department or corporation on a full-time basis;

(2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
18, and article 3, section 8, are enacted.
new text end

Sec. 5.

Minnesota Statutes 2008, 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 new text begin defined benefit new text end 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 deleted text begin shall include deleted text end new text begin includes new text end 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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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
Effective beginning December 31, 2008
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
Effective beginning December 31, 2009
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
Effective beginning December 31, 2010
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
Effective beginning December 31, 2011
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
Effective beginning December 31, 2012
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 new text begin defined benefit new text end 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
Effective beginning December 31, 2008
4101		7600
4155		7700
4209		7800
4263		7900
4317		8000
4371		8100
4425		8200
4479		8300
Effective beginning December 31, 2009
4533		8400
4587		8500
4641		8600
4695		8700
4749		8800
4803		8900
4857		9000
4911		9100
Effective beginning December 31, 2010
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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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 new text begin defined benefit new text end 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.

new text begin (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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
20, and article 3, section 10, are enacted.
new text end

Sec. 6.

Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a)
If a new text begin defined benefit new text end 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) new text begin order the treasurer of the applicable relief association to new text end 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 EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
21, and article 3, section 9, are enacted.
new text end

Sec. 7.

Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:

Subd. 8.

Lump-sum service pensions; installment payments.

(a) deleted text begin Any deleted text end new text begin A defined
benefit new text end relief association, if the governing bylaws so provide, may pay, at the option of the
deleted text begin retiring member deleted text end new text begin intended recipient new text end and in lieu of a single payment of a lump-sum service
pension new text begin or survivor benefit new text end , a lump-sum service pension new text begin or survivor benefit new text end in installments.

(b) The election of installment payments deleted text begin shall be deleted text end new text begin is new text end irrevocable and deleted text begin shall deleted text end new text begin must new text end be
made by the deleted text begin retiring member deleted text end new text begin intended recipient new text end in writing and filed with the secretary of
the relief association no later than 30 days deleted text begin prior to deleted text end new text begin before new text end the commencement of payment
of the service pension new text begin or survivor benefit new text end . The amount of the installment payments deleted text begin shall deleted text end
new text begin must new text end be determined deleted text begin so that the present value of the aggregate installment payments
computed at an interest rate of five percent, compounded annually, is equal to the amount
of the single lump-sum payment which would have been made had the installment
payments option not been elected. The payment of each installment shall include interest
at the rate of five percent, compounded annually on the reserve supporting the remaining
installment payments as of the date on which the previous installment payment was paid
and computed from the date on which the previous installment payment was paid to the
date of payment for the current installment payment deleted text end new text begin in any reasonable manner provided
for in the governing bylaws, but the total amount of installment payments may not exceed
the single payment service pension amount plus interest at an annual rate of five percent
on the amount of delayed payments for the period during which payment was delayed new text end .

deleted text begin (c) To the extent that the commissioner of commerce deems it to be necessary or
practical, the commissioner may specify and issue procedures, forms or mathematical
tables for use in performing the calculations required pursuant to this subdivision.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
23, and article 3, section 11, are enacted.
new text end

Sec. 8.

Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:

Subd. 10.

Local approval of bylaw amendments; filing requirements.

(a) Each
new text begin defined benefit new text end relief association to which this section applies deleted text begin shall deleted text end new text begin must new text end file a revised
copy of its governing bylaws with the state auditor upon the adoption of any amendment
to its governing bylaws by the relief association or upon the approval of any amendment
to its governing bylaws granted by the governing body of each municipality served by the
fire department to which the relief association is directly associated. Failure of the relief
association to file a copy of the bylaws or any bylaw amendments with the state auditor
deleted text begin shall disqualify deleted text end new text begin disqualifies new text end the municipality from the distribution of any future fire state
aid until this filing requirement has been completed.

(b) If the special fund of the relief association does not have a surplus over full
funding deleted text begin pursuant to deleted text end new text begin under new text end section 69.772, subdivision 3, clause (2), subclause (e), or
69.773, subdivision 4, and if the municipality is required to provide financial support to
the special fund of the relief association deleted text begin pursuant to deleted text end new text begin under new text end section 69.772 or 69.773, no
bylaw amendment which would affect the amount of, the manner of payment of, or the
conditions for qualification for service pensions or ancillary benefits or disbursements
other than administrative expenses authorized deleted text begin pursuant to deleted text end new text begin under new text end section 69.80 payable
from the special fund of the relief association deleted text begin shall be deleted text end new text begin is new text end effective until it has been ratified
by the governing body or bodies of the appropriate municipalities. If the municipality is
not required to provide financial support to the special fund deleted text begin pursuant to deleted text end new text begin under new text end this section,
the relief association may adopt or amend without municipal ratification its articles
of incorporation or bylaws which increase or otherwise affect the service pensions or
ancillary benefits payable from the special fund so long as the changes do not cause the
amount of the resulting increase in the accrued liability of the special fund to exceed 90
percent of the amount of the deleted text begin prior deleted text end surplus over full funding new text begin reported in the prior year new text end and
the changes do not result in the financial requirements of the special fund exceeding the
expected amount of the deleted text begin future deleted text end new text begin subsequent calendar year's new text end fire state aid to be received
by the relief association.

(c) If the relief association pays only a lump-sum pension, the financial requirements
are to be 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 the relief association pays a monthly
benefit service pension, the financial requirements are to be determined by the board of
trustees following either 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 deleted text begin pursuant to deleted text end new text begin under new text end this subdivision,
and, subsequent to the amendment or adoption, the financial requirements of the special
fund deleted text begin pursuant to deleted text end new text begin under new text end this section are such so as to require financial support from the
municipality, the provision which was implemented without municipal ratification deleted text begin shall deleted text end new text begin is
new text end no longer deleted text begin be deleted text end effective without municipal ratification, and any service pensions or ancillary
benefits payable after that date deleted text begin shall deleted text end new text begin must new text end be paid only in accordance with the articles of
incorporation or bylaws as amended or adopted with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
27, and article 3, section 12, are enacted.
new text end

Sec. 9.

Minnesota Statutes 2008, section 424A.04, subdivision 1, is amended to read:

Subdivision 1.

Membership.

(a) A relief association that is directly associated with
a municipal fire department must be managed by a board of trustees consisting of nine
members. Six trustees must be elected from the membership of the relief association and
three trustees must be 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 which provides a monthly benefit service pension may provide that one of
the six trustees elected from the relief association membership may be a retired member
receiving a monthly pension who is elected by the membership of the relief association.
The three municipal trustees must be one elected municipal official and one elected or
appointed municipal official who are designated as municipal representatives by the
municipal governing board annually and the chief of the municipal fire department.

(b) A relief association that is a subsidiary of an independent nonprofit firefighting
corporation must be managed by a board of trustees consisting of nine members. Six
trustees must be elected from the membership of the relief association, two trustees must
be drawn from the officials of the municipalities served by the fire department to which
the relief association is directly associated, and one trustee deleted text begin shall deleted text end new text begin must new text end be the fire chief
serving with the independent nonprofit firefighting corporation. The bylaws of a relief
association may provide that one of the six trustees elected from the relief association
membership may be a retired member receiving a monthly pension who is elected by the
membership of the relief association. The two municipal trustees must be elected or
appointed municipal officials, selected as follows:

(1) if only one municipality contracts with the independent nonprofit firefighting
corporation, the municipal trustees must be two officials of the contracting municipality
who are designated annually by the governing body of the municipality; or

(2) if two or more municipalities contract with the independent nonprofit corporation,
the municipal trustees must be one official from each of the two largest municipalities
in population who are designated annually by the governing bodies of the applicable
municipalities.

(c) The municipal trustees for a relief association that is directly associated with a
fire department operated as or by a joint powers entity must be new text begin the fire chief of the fire
department and two trustees new text end 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 new text begin the fire chief of the fire department and two trustees new text end designated by
the township board.

(d) If a relief association lacks the municipal board members provided for in
paragraph (a), (b), or (c) because the fire department is not located in or associated with an
organized municipality, joint powers entity, or township, the municipal board members
must be new text begin the fire chief of the fire department and two board members new text end appointed from the
fire department service area by the board of commissioners of the applicable county.

(e) The term of deleted text begin these deleted text end new text begin the new text end appointed municipal board members is one year or until the
person's successor is qualified, whichever is later.

(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights
and duties accorded to any other trustee, except the right to be an officer of the relief
association board of trustees.

(g) A board must have at least three officers, who are a president, a secretary and a
treasurer. These officers must be elected from among the elected trustees by either the full
board of trustees or by the new text begin relief association new text end membership, as specified in the bylaws. In
no event may any trustee hold more than one officer position at any one time. The terms
of the elected trustees and of the officers of the board must be specified in the bylaws of
the relief association, but may not exceed three years. If the term of the elected trustees
exceeds one year, the election of the various trustees elected from the membership must be
staggered on as equal a basis as is practicable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
32, and article 3, section 13, are enacted.
new text end

Sec. 10.

Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from the special fund.

(a) Disbursements
from the special fund deleted text begin are deleted text end new text begin may new text end not deleted text begin permitted to deleted text end 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 payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid deleted text begin pursuant to deleted text end new text begin under new text end law and
specified in amount in the bylaws governing the relief association;

(3) for the payment of survivor benefits to surviving spouses and surviving children,
or if none, to designated beneficiaries, of deceased members of the relief association, and
if new text begin no new text end survivors and if no designated beneficiary, for the payment of a death benefit to the
estate of the deceased active new text begin or deferred new text end firefighter, if authorized by and paid deleted text begin pursuant to deleted text end
new text begin under new text end law and specified in amount in the bylaws governing the relief association;

(4) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association deleted text begin , deleted text end new text begin and new text end to the Minnesota Area Relief Association Coalition deleted text begin , and to
the state Volunteer Firefighters Benefit Association deleted text end in order to entitle relief association
members to membership in and the benefits of these associations or organizations; deleted text begin and
deleted text end

new text begin (5) 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
new text end

deleted text begin (5) deleted text end new text begin (6) new text end for the payment of administrative expenses of the relief association as
authorized under section 69.80.

(b) For purposes of this chapter, new text begin for a monthly benefit volunteer fire relief association
or for a combination lump-sum and monthly benefit volunteer fire relief association where
a monthly benefit service pension has been elected by or a monthly benefit is payable with
respect to a firefighter, new text end a designated beneficiary must be a natural person. new text begin For purposes of
this chapter, for a defined contribution volunteer fire relief association, for a lump-sum
volunteer fire relief association, or for a combination lump-sum and monthly benefit
volunteer fire relief association where a lump-sum service pension has been elected by
or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary
may be a trust created under chapter 501B.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
32, and article 3, section 13, are enacted.
new text end

Sec. 11.

Minnesota Statutes 2008, section 424A.08, is amended to read:

424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
AUTHORIZED DISBURSEMENTS.

new text begin (a) new text end Any qualified municipality which is entitled to receive fire state aid but which
has no volunteer firefighters' relief association directly associated with its fire department
new text begin and which has no full-time firefighters with retirement coverage by the public employees
police and fire retirement plan new text end shall deposit the fire state aid in a special account
new text begin established for that purpose new text end in the municipal treasury. Disbursement from the special
account deleted text begin shall deleted text end new text begin may new text end not be made for any purpose except:

(1) payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the state Volunteer Firefighters' Benefit Association in
order to entitle its firefighters to membership in and the benefits of these state associations;

(2) payment of the cost of purchasing and maintaining needed equipment for the
fire department; and

(3) payment of the cost deleted text begin for deleted text end new text begin of new text end construction, acquisition, repair deleted text begin and deleted text end new text begin , or new text end maintenance
of buildings or other premises to house the new text begin equipment of the new text end fire department.

new text begin (b) A qualified municipality which is entitled to receive fire state aid, which has no
volunteer firefighters' relief association directly associated with its fire department and
which has full-time firefighters with retirement coverage by the public employees police
and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the
payment of the employer contribution requirement with respect to firefighters covered by
the public employees police and fire retirement plan under section 353.65, subdivision 3,
or for a combination of the two types of disbursements.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
39, and article 3, section 15, are enacted.
new text end

Sec. 12.

Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means an individual who receives a lump-sum distribution
of pension or retirement benefits from a new text begin volunteer new text end firefighters' relief association for service
that the individual has performed as a volunteer firefighter;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the deleted text begin legally
married deleted text end new text begin surviving new text end spouse of a deceased new text begin active or deferred new text end volunteer firefighter new text begin under
section 424A.001, subdivision 6 new text end , or, if none, the surviving deleted text begin minor deleted text end child or deleted text begin minor deleted text end children
of a deceased new text begin active or deferred new text end volunteer firefighter;

(3) "active volunteer firefighter" means a person who regularly renders fire
suppression service for a municipal fire department or an independent nonprofit firefighting
corporation, who has met the statutory and other requirements for relief association
membership, and who deleted text begin has been deleted text end new text begin is deemed by the relief association under law and its
bylaws to be new text end a fully qualified member of the relief association for at least one month; and

(4) "deferred volunteer firefighter" means a former active volunteer firefighter who
terminated active firefighting service, has sufficient service credit from the applicable relief
association to be entitled to a service pension new text begin under the bylaws of the relief association new text end ,
but has not applied for or has not received the service pension.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
40, and article 3, section 16, are enacted.
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 424A.02, subdivision 9b, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, if article 1, section
26, is enacted.
new text end