SF 2555

1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; various retirement plans; 
  1.3             adjusting pension coverage for certain privatized 
  1.4             public hospital employees; providing for increased 
  1.5             survivor benefits relating to certain public employees 
  1.6             murdered in the line of duty; authorizing certain 
  1.7             service credit purchases; specifying prior service 
  1.8             credit purchase payment amount determination 
  1.9             procedures increasing salaries of various judges; 
  1.10            modifying other judicial salaries; modifying the 
  1.11            judges retirement plan member and employer 
  1.12            contribution rates; authorizing the transfer of 
  1.13            certain prior retirement contributions from the 
  1.14            legislators retirement plan and from the elective 
  1.15            state officers retirement plan; creating a 
  1.16            contribution transfer account in the general fund of 
  1.17            the state; appropriating money; reformulating the 
  1.18            Columbia Heights volunteer firefighters relief 
  1.19            association plan as a defined contribution plan under 
  1.20            the general volunteer fire law; restructuring the 
  1.21            Columbia Heights volunteer firefighter relief 
  1.22            association board; modifying various higher education 
  1.23            retirement plan provisions; modifying administrative 
  1.24            expense provisions for various public pension plans; 
  1.25            expanding the teacher retirement plans part-time 
  1.26            teaching positions eligible to participate in the 
  1.27            qualified full-time service credit for part-time 
  1.28            teaching service program; making certain Minneapolis 
  1.29            fire department relief association survivor benefit 
  1.30            options retroactive; providing increased disability 
  1.31            benefit coverage for certain local government 
  1.32            correctional facility employees; increasing local 
  1.33            government correctional employee and employer 
  1.34            contribution rates; providing increased survivor 
  1.35            benefits to certain Minneapolis employee retirement 
  1.36            fund survivors; authorizing certain Hennepin county 
  1.37            regional park employees to change retirement plan 
  1.38            membership; amending Minnesota Statutes 1996, sections 
  1.39            136F.45, by adding a subdivision; 136F.48; 352.96, 
  1.40            subdivision 4; 352D.09, subdivision 7; 353.27, 
  1.41            subdivision 3; 353.33, subdivision 3a; 353D.05, 
  1.42            subdivision 3; 354.445; 354.66, subdivisions 2 and 3; 
  1.43            354A.094, subdivisions 2 and 3; 354B.23, by adding a 
  1.44            subdivision; 354C.12, by adding a subdivision; 
  1.45            383B.52; 422A.23, subdivision 2; and 490.123, 
  1.46            subdivisions 1a and 1b; Minnesota Statutes 1997 
  2.1             Supplement, sections 15A.083, subdivisions 5, 6a, and 
  2.2             7; 353.27, subdivision 2; 354B.25, subdivisions 1a and 
  2.3             5; and 354C.12, subdivision 4; Laws 1997, Second 
  2.4             Special Session chapter 3, section 16; proposing 
  2.5             coding for new law in Minnesota Statutes, chapter 356; 
  2.6             repealing Minnesota Statutes 1996, sections 11A.17, 
  2.7             subdivisions 10a and 14; and 352D.09, subdivision 8; 
  2.8             Minnesota Statutes 1997 Supplement, section 136F.45, 
  2.9             subdivision 3. 
  2.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.11                             ARTICLE 1 
  2.12               PUBLIC MEDICAL FACILITY PRIVATIZATIONS 
  2.13     Section 1.  [LUVERNE COMMUNITY HOSPITAL; PENSION COVERAGE 
  2.14  FOR TRANSFERRED EMPLOYEES.] 
  2.15     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  2.16  the Luverne Community Hospital is sold, leased, or transferred 
  2.17  to a private entity, nonprofit corporation, or public 
  2.18  corporation.  Notwithstanding Minnesota Statutes, sections 
  2.19  356.24 and 356.25, to facilitate the orderly transition of 
  2.20  employees affected by the sale, lease, or transfer, the city 
  2.21  may, at its discretion, make, from assets to be transferred to 
  2.22  the private entity, nonprofit corporation, or public 
  2.23  corporation, payments to a qualified pension plan established 
  2.24  for the transferred employees by the private entity, nonprofit 
  2.25  corporation, or public corporation, to provide benefits 
  2.26  substantially similar to those the employees would have been 
  2.27  entitled to under the provisions of the public employees 
  2.28  retirement association applicable to nonpublic safety employees 
  2.29  under Minnesota Statutes, chapter 353, as amended, in effect on 
  2.30  the date of the sale, lease, or transfer. 
  2.31     Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  2.32  ELIGIBILITY.] (a) An eligible individual is an individual who: 
  2.33     (1) is an employee of the Luverne Community Hospital 
  2.34  immediately prior to the sale, lease, or transfer of that 
  2.35  facility to a private entity, nonprofit corporation, or public 
  2.36  corporation; 
  2.37     (2) is terminated at the time of the sale, lease, or 
  2.38  transfer; and 
  2.39     (3) had less than three years of service credit in the 
  2.40  public employees retirement association plan at the date of 
  3.1   termination. 
  3.2      (b) For an eligible individual under paragraph (a), the 
  3.3   city may make a member contribution equivalent payment under 
  3.4   subdivision 3. 
  3.5      Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  3.6   member contribution equivalent payment is an amount equal to the 
  3.7   total refund provided by Minnesota Statutes, section 353.34, 
  3.8   subdivisions 1 and 2.  To be eligible for the member 
  3.9   contribution equivalent payment, the individual in subdivision 
  3.10  2, paragraph (a), must apply for a refund under Minnesota 
  3.11  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  3.12  of termination.  A member contribution equivalent amount 
  3.13  exceeding $200 must be made directly to an individual retirement 
  3.14  account under section 408(a) of the federal Internal Revenue 
  3.15  Code, as amended, or to another qualified plan.  A member 
  3.16  contribution equivalent amount of $200 or less may, at the 
  3.17  preference of the individual, be made to the individual or to an 
  3.18  individual retirement account under section 408(a) of the 
  3.19  federal Internal Revenue Code, as amended, or to another 
  3.20  qualified plan. 
  3.21     Sec. 2.  [ARNOLD MEMORIAL HOSPITAL, ADRIAN, MINNESOTA; 
  3.22  PENSION COVERAGE FOR TRANSFERRED EMPLOYEES.] 
  3.23     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  3.24  the Arnold Memorial Hospital in Adrian is sold, leased, or 
  3.25  transferred to a private entity, nonprofit corporation, or 
  3.26  public corporation.  Notwithstanding Minnesota Statutes, 
  3.27  sections 356.24 and 356.25, to facilitate the orderly transition 
  3.28  of employees affected by the sale, lease, or transfer, the city 
  3.29  may, at its discretion, make, from assets to be transferred to 
  3.30  the private entity, nonprofit corporation, or public 
  3.31  corporation, payments to a qualified pension plan established 
  3.32  for the transferred employees by the private entity, nonprofit 
  3.33  corporation, or public corporation, to provide benefits 
  3.34  substantially similar to those the employees would have been 
  3.35  entitled to under the provisions of the public employees 
  3.36  retirement association applicable to nonpublic safety employees 
  4.1   under Minnesota Statutes, chapter 353, as amended, in effect on 
  4.2   the date of the sale, lease, or transfer. 
  4.3      Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  4.4   ELIGIBILITY.] (a) An eligible individual is an individual who: 
  4.5      (1) is an employee of the Arnold Memorial Hospital in 
  4.6   Adrian immediately prior to the sale, lease, or transfer of that 
  4.7   facility to a private entity, nonprofit corporation, or public 
  4.8   corporation; 
  4.9      (2) is terminated at the time of the sale, lease, or 
  4.10  transfer; and 
  4.11     (3) had less than three years of service credit in the 
  4.12  public employees retirement association plan at the date of 
  4.13  termination. 
  4.14     (b) For an eligible individual under paragraph (a), the 
  4.15  city may make a member contribution equivalent payment under 
  4.16  subdivision 3. 
  4.17     Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  4.18  member contribution equivalent payment is an amount equal to the 
  4.19  total refund provided by Minnesota Statutes, section 353.34, 
  4.20  subdivisions 1 and 2.  To be eligible for the member 
  4.21  contribution equivalent payment, the individual in subdivision 
  4.22  2, paragraph (a), must apply for a refund under Minnesota 
  4.23  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  4.24  of termination.  A member contribution equivalent amount 
  4.25  exceeding $200 must be made directly to an individual retirement 
  4.26  account under section 408(a) of the federal Internal Revenue 
  4.27  Code, as amended, or to another qualified plan.  A member 
  4.28  contribution equivalent amount of $200 or less may, at the 
  4.29  preference of the individual, be made to the individual or to an 
  4.30  individual retirement account under section 408(a) of the 
  4.31  federal Internal Revenue Code, as amended, or to another 
  4.32  qualified plan. 
  4.33     Sec. 3.  [EFFECTIVE DATE.] 
  4.34     (a) Section 1 is effective on the day following approval by 
  4.35  the Luverne city council and compliance with Minnesota Statutes, 
  4.36  section 645.021. 
  5.1      (b) Section 2 is effective on the day following approval by 
  5.2   the Adrian city council and compliance with Minnesota Statutes, 
  5.3   section 645.021. 
  5.4                              ARTICLE 2 
  5.5            MISCELLANEOUS GENERAL EMPLOYEE PENSION CHANGES 
  5.6      Section 1.  Minnesota Statutes 1996, section 136F.45, is 
  5.7   amended by adding a subdivision to read: 
  5.8      Subd. 3a.  [SHARING OF FEES.] (a) For purposes of this 
  5.9   subdivision, a gross fee amount is defined as the fees, 
  5.10  commissions, and other charges which an annuity investment 
  5.11  provider or vendor would charge a typical consumer of those 
  5.12  services for identical or similar products.  A net fee amount is 
  5.13  an amount below the gross fee amount reflecting a negotiated 
  5.14  reduction below gross fees. 
  5.15     (b) To offset the board's necessary and reasonable expenses 
  5.16  incurred under subdivisions 1 and 2, the Minnesota state 
  5.17  colleges and universities system is authorized to negotiate with 
  5.18  an annuity investment provider or vendor to establish a net fee 
  5.19  amount. 
  5.20     (c) Under the negotiated arrangements, the Minnesota state 
  5.21  colleges and universities system is authorized to either make 
  5.22  arrangements to recapture the difference between gross and net 
  5.23  fee amounts through a rebate from the annuity investment 
  5.24  provider or vendor, or deduct those amounts prior to 
  5.25  transmitting the contributions or premiums. 
  5.26     (d) The revenues collected or retained under these 
  5.27  negotiated arrangements must be used to offset the board's 
  5.28  necessary and reasonable expenses incurred under this section.  
  5.29  Any excess above the necessary and reasonable expenses must be 
  5.30  allocated annually to the accounts of the participants. 
  5.31     Sec. 2.  Minnesota Statutes 1996, section 136F.48, is 
  5.32  amended to read: 
  5.33     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
  5.34     (a) This section applies to a person who:  
  5.35     (1) retires from the state university system, the technical 
  5.36  college system, or the community college system, or from a 
  6.1   successor system employing state university, technical college, 
  6.2   or community college faculty, with at least ten years of 
  6.3   combined service credit in a system under the jurisdiction of 
  6.4   the board of trustees of the Minnesota state colleges and 
  6.5   universities; 
  6.6      (2) was employed on a full-time basis immediately preceding 
  6.7   retirement as a state university, technical college, or 
  6.8   community college faculty member or as an unclassified 
  6.9   administrator in one of those systems; 
  6.10     (3) begins drawing an annuity from the teachers retirement 
  6.11  association or from a first class city teacher plan; and 
  6.12     (4) returns to work on not less than a one-third time basis 
  6.13  and not more than a two-thirds time basis in the system from 
  6.14  which the person retired under an agreement in which the person 
  6.15  may not earn a salary of more than $35,000 in a calendar year 
  6.16  from employment after retirement in the system from which the 
  6.17  person retired.  
  6.18     (b) Initial participation, the amount of time worked, and 
  6.19  the duration of participation under this section must be 
  6.20  mutually agreed upon by the employer president of the 
  6.21  institution where the person returns to work and the employee.  
  6.22  The employer president may require up to one-year notice of 
  6.23  intent to participate in the program as a condition of 
  6.24  participation under this section.  The employer president shall 
  6.25  determine the time of year the employee shall work.  The 
  6.26  employer or the president may not require a person to waive any 
  6.27  rights under a collective bargaining agreement as a condition of 
  6.28  participation under this section.  
  6.29     (c) For a person eligible under paragraphs (a) and (b), the 
  6.30  employing board shall make the same employer contribution for 
  6.31  hospital, medical, and dental benefits as would be made if the 
  6.32  person were employed full time.  
  6.33     (d) For work under paragraph (a), a person must receive a 
  6.34  percentage of the person's salary at the time of retirement that 
  6.35  is equal to the percentage of time the person works compared to 
  6.36  full-time work.  
  7.1      (e) If a collective bargaining agreement covering a person 
  7.2   provides for an early retirement incentive that is based on age, 
  7.3   the incentive provided to the person must be based on the 
  7.4   person's age at the time employment under this section ends.  
  7.5   However, the salary used to determine the amount of the 
  7.6   incentive must be the salary that would have been paid if the 
  7.7   person had been employed full time for the year immediately 
  7.8   preceding the time employment under this section ends. 
  7.9      (f) A person who returns to work under this section is a 
  7.10  member of the appropriate bargaining unit and is covered by the 
  7.11  appropriate collective bargaining contract.  Except as provided 
  7.12  in this section, the person's coverage is subject to any part of 
  7.13  the contract limiting rights of part-time employees. 
  7.14     Sec. 3.  Minnesota Statutes 1996, section 352.96, 
  7.15  subdivision 4, is amended to read: 
  7.16     Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
  7.17  executive director of the system with the advice and consent of 
  7.18  the board of directors shall establish rules and procedures to 
  7.19  carry out this section including allocation of administrative 
  7.20  costs against the assets accumulated under this section.  Funds 
  7.21  to pay these costs are appropriated from the fund or account in 
  7.22  which the assets accumulated under this section are placed of 
  7.23  the plan to participants.  Fees cannot be charged on 
  7.24  contributions and investment returns attributable to 
  7.25  contributions made to the Minnesota supplemental investment 
  7.26  funds before July 1, 1992.  Annual total fees charged for plan 
  7.27  administration for the Minnesota supplemental investment funds 
  7.28  cannot exceed 40/100 of one percent of the contributions and 
  7.29  investment returns attributable to contributions made on or 
  7.30  after July 1, 1992.  The rules established by the executive 
  7.31  director must conform to federal and state tax laws, 
  7.32  regulations, and rulings, and are not subject to the 
  7.33  administrative procedure act.  Except for the marketing rules, 
  7.34  rules relating to the options provided under subdivision 2, 
  7.35  clauses (2) and (3), must be approved by the state board of 
  7.36  investment.  
  8.1      Sec. 4.  Minnesota Statutes 1996, section 352D.09, 
  8.2   subdivision 7, is amended to read: 
  8.3      Subd. 7.  Up to one-tenth of one percent of salary shall be 
  8.4   deducted from the employee contributions and up to one-tenth of 
  8.5   one percent of salary from the employer contributions authorized 
  8.6   by section 352D.04, subdivision 2, The board of directors shall 
  8.7   establish a budget and charge participants a fee to pay the 
  8.8   administrative expenses of the unclassified program.  Fees 
  8.9   cannot be charged on contributions and investment returns 
  8.10  attributable to contributions made before July 1, 1992.  Annual 
  8.11  total fees charged for plan administration cannot exceed 10/100 
  8.12  of one percent of the contributions and investment returns 
  8.13  attributable to contributions made on or after July 1, 1992. 
  8.14     Sec. 5.  Minnesota Statutes 1996, section 353D.05, 
  8.15  subdivision 3, is amended to read: 
  8.16     Subd. 3.  [ADMINISTRATIVE EXPENSES.] The executive director 
  8.17  of the association with the advice and consent of the board 
  8.18  shall annually set an amount to recover the costs of the 
  8.19  association in administering the public employees defined 
  8.20  contribution plan that are not met by the amount recovered under 
  8.21  section 11A.17. 
  8.22     Sec. 6.  Minnesota Statutes 1996, section 354.445, is 
  8.23  amended to read: 
  8.24     354.445 [NO ANNUITY REDUCTION.] 
  8.25     (a) The annuity reduction provisions of section 354.44, 
  8.26  subdivision 5, do not apply to a person who: 
  8.27     (1) retires from the state university system, technical 
  8.28  college system, or the community college system, or from a 
  8.29  successor system employing state university, technical college, 
  8.30  or community college faculty, with at least ten years of 
  8.31  combined service credit in a system under the jurisdiction of 
  8.32  the board of trustees of the Minnesota state colleges and 
  8.33  universities; 
  8.34     (2) was employed on a full-time basis immediately preceding 
  8.35  retirement as a state university, technical college, or 
  8.36  community college faculty member or as an unclassified 
  9.1   administrator in one of these systems; 
  9.2      (3) begins drawing an annuity from the teachers retirement 
  9.3   association; and 
  9.4      (4) returns to work on not less than a one-third time basis 
  9.5   and not more than a two-thirds time basis in the system from 
  9.6   which the person retired under an agreement in which the person 
  9.7   may not earn a salary of more than $35,000 in a calendar year 
  9.8   from employment after retirement in the system from which the 
  9.9   person retired. 
  9.10     (b) Initial participation, the amount of time worked, and 
  9.11  the duration of participation under this section must be 
  9.12  mutually agreed upon by the employer president of the 
  9.13  institution where the person returns to work and the employee.  
  9.14  The employer president may require up to one-year notice of 
  9.15  intent to participate in the program as a condition of 
  9.16  participation under this section.  The employer president shall 
  9.17  determine the time of year the employee shall work.  The 
  9.18  employer or the president may not require a person to waive any 
  9.19  rights under a collective bargaining agreement as a condition of 
  9.20  participation under this section.  
  9.21     (c) Notwithstanding any law to the contrary, a person 
  9.22  eligible under paragraphs (a) and (b) may not earn further 
  9.23  service credit in the teachers retirement association and is not 
  9.24  eligible to participate in the individual retirement account 
  9.25  plan or the supplemental retirement plan established in chapter 
  9.26  354B as a result of service under this section.  No employer or 
  9.27  employee contribution to any of these plans may be made on 
  9.28  behalf of such a person. 
  9.29     (d) For a person eligible under paragraphs (a) and (b) who 
  9.30  earns more than $35,000 in a calendar year from employment after 
  9.31  retirement in the system from which the person retired, the 
  9.32  annuity reduction provisions of section 354.44, subdivision 5, 
  9.33  apply only to income over $35,000. 
  9.34     (e) A person who returns to work under this section is a 
  9.35  member of the appropriate bargaining unit and is covered by the 
  9.36  appropriate collective bargaining contract.  Except as provided 
 10.1   in this section, the person's coverage is subject to any part of 
 10.2   the contract limiting rights of part-time employees. 
 10.3      Sec. 7.  Minnesota Statutes 1996, section 354B.23, is 
 10.4   amended by adding a subdivision to read: 
 10.5      Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 10.6   to the plan exceed limits imposed by federal law or regulation 
 10.7   and it is necessary to return contributions to comply with the 
 10.8   federal limits, excess contributions must be returned to the 
 10.9   employee and to the employer in the same proportions as the 
 10.10  contributions were made. 
 10.11     (b) When an employer contribution required under section 
 10.12  354B.24 due to a sabbatical leave is made after completion of 
 10.13  the leave or an employer contribution is made due to omitted 
 10.14  deductions under subdivision 5, and these employer contributions 
 10.15  cause or would cause total contributions to the plan to exceed 
 10.16  limits imposed by federal law or regulation, the employer must 
 10.17  make that portion of the contribution that would exceed the 
 10.18  federal limit during the next calendar year. 
 10.19     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 10.20  354B.25, subdivision 1a, is amended to read: 
 10.21     Subd. 1a.  [ADVISORY COMMITTEE.] (a) A committee is created 
 10.22  to advise the state board of investment and the board of 
 10.23  trustees of the Minnesota state colleges and universities 
 10.24  concerning administration of the individual retirement account 
 10.25  plan and the supplemental retirement plan established in chapter 
 10.26  354C.  The committee shall adopt recommendations by majority 
 10.27  vote of those members voting on each issue.  The exclusive 
 10.28  representatives of the state university instructional unit, the 
 10.29  community college instructional unit, and the technical college 
 10.30  instructional unit shall each appoint two members to the 
 10.31  committee.  The exclusive representatives of the general 
 10.32  professional unit, the supervisory employees unit and the state 
 10.33  university administrative unit shall each appoint one member to 
 10.34  the committee.  The chancellor of the Minnesota state colleges 
 10.35  and universities shall appoint three members, at least one of 
 10.36  whom shall be a personnel administrator.  No member of the 
 11.1   committee shall be retired.  Members serve at the pleasure of 
 11.2   the applicable appointing authority, but no member shall serve 
 11.3   for more than a total of five years.  Members shall be 
 11.4   reimbursed from the administrative expense account of the 
 11.5   individual retirement account plan for expenses as provided in 
 11.6   section 15.059, subdivision 3. 
 11.7      (b) The committee shall: 
 11.8      (1) advise the board of trustees of the Minnesota state 
 11.9   colleges and universities on the structure and operation of the 
 11.10  individual retirement account plan and the supplemental 
 11.11  retirement plan; 
 11.12     (2) along with any other consultants selected by the board, 
 11.13  advise the state board of investment on selection of financial 
 11.14  institutions and on the type of investment products to be 
 11.15  offered by these institutions for the plans; 
 11.16     (3) advise the board of trustees of the Minnesota state 
 11.17  colleges and universities on administration of the plans, 
 11.18  including selection of a third-party plan administrator, if any, 
 11.19  for the individual retirement account plan. 
 11.20     (c) The board of trustees of the Minnesota state colleges 
 11.21  and universities shall provide the advisory committee with 
 11.22  meeting space and other administrative support.  
 11.23     (d) Expenses of the advisory committee are considered 
 11.24  administrative expenses of the plans under subdivision 5 and 
 11.25  section 354C.12, subdivision 4, and must be allocated between 
 11.26  the two plans in proportion to the market value of the total 
 11.27  assets of the plans as of the most recent prior audited annual 
 11.28  financial report. 
 11.29     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 11.30  354B.25, subdivision 5, is amended to read: 
 11.31     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 11.32  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 11.33  administrative expenses of the individual retirement account 
 11.34  plan must be paid by plan participants in the following manner: 
 11.35     (1) from plan participants with amounts invested in the 
 11.36  Minnesota supplemental investment fund, the plan administrator 
 12.1   may charge an administrative expense assessment as provided in 
 12.2   section 11A.17, subdivisions 10a and 14 in an amount such that 
 12.3   annual total fees charged for plan administration cannot exceed 
 12.4   40/100 of one percent of the assets of the Minnesota 
 12.5   supplemental investment funds; and 
 12.6      (2) from plan participants with amounts through annuity 
 12.7   contracts and custodial accounts purchased under subdivision 2, 
 12.8   paragraph (a), the plan administrator may charge an 
 12.9   administrative expense assessment of a designated amount, not to 
 12.10  exceed two percent of member and employer contributions, as 
 12.11  those contributions are made. 
 12.12     (b) Any administrative expense charge that is not actually 
 12.13  needed for the administrative expenses of the individual 
 12.14  retirement account plan must be refunded to member accounts. 
 12.15     (c) The board of trustees shall report annually, before 
 12.16  October 1, to the advisory committee created in subdivision 1a 
 12.17  on administrative expenses of the plan.  The report must include 
 12.18  a detailed accounting of charges for administrative expenses 
 12.19  collected from plan participants and expenditure of the 
 12.20  administrative expense charges.  The administrative expense 
 12.21  charges collected from plan participants must be kept in a 
 12.22  separate account from any other funds under control of the board 
 12.23  of trustees and may be used only for the necessary and 
 12.24  reasonable administrative expenses of the plan. 
 12.25     Sec. 10.  Minnesota Statutes 1996, section 354C.12, is 
 12.26  amended by adding a subdivision to read: 
 12.27     Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 12.28  to the plan exceed limits imposed by federal law or regulation 
 12.29  and it is necessary to return contributions to comply with the 
 12.30  federal limits, half of the excess contributions must be 
 12.31  returned to the employee and half to the employer. 
 12.32     (b) When an employer contribution is made due to omitted 
 12.33  deductions under subdivision 2, and these employer contributions 
 12.34  cause or would cause total contributions to the plan to exceed 
 12.35  limits imposed by federal law or regulation, the employer must 
 12.36  make that portion of the contribution that would exceed the 
 13.1   federal limit during the next calendar year. 
 13.2      Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 13.3   354C.12, subdivision 4, is amended to read: 
 13.4      Subd. 4.  [ADMINISTRATIVE EXPENSES.] The board of trustees 
 13.5   of the Minnesota state colleges and universities is authorized 
 13.6   to pay the necessary and reasonable administrative expenses of 
 13.7   the supplemental retirement plan.  The administrative fees or 
 13.8   charges must be paid by participants in the following manner: 
 13.9      (1) from participants whose contributions are invested with 
 13.10  the state board of investment, the plan administrator may 
 13.11  recover administrative expenses in the manner provided by 
 13.12  section 11A.17, subdivisions 10a and 14 authorized by the 
 13.13  Minnesota state colleges and universities in an amount such that 
 13.14  annual total fees charged for plan administration cannot exceed 
 13.15  40/100 of one percent of the assets of the Minnesota 
 13.16  supplemental investment funds; or 
 13.17     (2) from participants where contributions are invested 
 13.18  through contracts purchased from any other authorized source, 
 13.19  the plan administrator may assess an amount of up to two percent 
 13.20  of the employee and employer contributions. 
 13.21     Any recovered or assessed amounts that are not needed for 
 13.22  the necessary and reasonable administrative expenses of the plan 
 13.23  must be refunded to member accounts. 
 13.24     The board of trustees shall report annually, before October 
 13.25  1, to the advisory committee created in section 354B.25, 
 13.26  subdivision 1a, on administrative expenses of the plan.  The 
 13.27  report must include a detailed accounting of charges for 
 13.28  administrative expenses collected from plan participants and 
 13.29  expenditure of the administrative expense charges.  The 
 13.30  administrative expense charges collected from plan participants 
 13.31  must be kept in a separate account from any other funds under 
 13.32  control of the board of trustees and may be used only for the 
 13.33  necessary and reasonable administrative expenses of the plan.  
 13.34     Sec. 12.  Minnesota Statutes 1996, section 383B.52, is 
 13.35  amended to read: 
 13.36     383B.52 [ADMINISTRATION COSTS.] 
 14.1      The board of county commissioners of Hennepin county is 
 14.2   hereby authorized to appropriate money for the administration of 
 14.3   the supplementary benefit program created by sections 383B.46 to 
 14.4   383B.52.  The board of county commissioners of Hennepin county 
 14.5   may charge participants a fee to recover the administrative 
 14.6   expenses of the supplementary benefit program.  Annual total 
 14.7   fees charged to administer the supplementary benefit program may 
 14.8   not exceed 40/100 of one percent of the assets of the program. 
 14.9      Sec. 13.  Minnesota Statutes 1996, section 422A.23, 
 14.10  subdivision 2, is amended to read: 
 14.11     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] Upon the death 
 14.12  of a contributing (a) If an active member after having been in 
 14.13  the city service not less than dies prior to termination of 
 14.14  service with at least 18 months but before the effective date of 
 14.15  retirement, the board shall in lieu of the settlement 
 14.16  hereinbefore provided pay to the surviving spouse and/or 
 14.17  children of the member under the age of 18, or under the age of 
 14.18  22 if a full-time student at an accredited school, college or 
 14.19  university, and single, the following monthly benefit: 
 14.20     (a) Surviving spouse $325 per month, except for benefits 
 14.21  beginning after July 1, 1983, which shall be 30 percent of 
 14.22  member's average salary in effect over the last six months of 
 14.23  allowable service preceding the month in which the death 
 14.24  occurred. 
 14.25     (b) Each surviving child $150 per month, except for 
 14.26  benefits beginning after July 1, 1983, which shall be ten 
 14.27  percent of the member's average salary in effect over the last 
 14.28  six months of allowable service preceding the month in which the 
 14.29  death occurred but less than 20 years of service credit, the 
 14.30  surviving spouse or surviving child or children is eligible to 
 14.31  receive the survivor benefit specified in paragraph (b) or (c), 
 14.32  as applicable.  Payments for the Payment of a benefit of for 
 14.33  any surviving child under the age of 18 years shall be made to 
 14.34  the surviving parent, or if there be none, to the legal guardian 
 14.35  of such the surviving child.  The maximum monthly benefit shall 
 14.36  not exceed a total of $750. 
 15.1      (c) Effective for payments made after June 30, 1991, 
 15.2   surviving spouse and surviving child benefits under paragraphs 
 15.3   (a) and (b) beginning on or before July 1, 1983, are increased 
 15.4   to $500 per month and $225 per month, respectively.  The maximum 
 15.5   monthly payment under paragraph (b) is increased to $900.  The 
 15.6   increased cost resulting from the benefit increases in this 
 15.7   paragraph must be allocated to each employing unit listed in 
 15.8   section 422A.101, subdivisions 1a, 2, and 2a, on the basis of 
 15.9   the additional accrued liability resulting from increased 
 15.10  benefits paid to the survivors of employees from that unit. For 
 15.11  purposes of this subdivision, a surviving child is an unmarried 
 15.12  child of the deceased member under the age of 18, or under the 
 15.13  age of 22 if a full-time student at an accredited school, 
 15.14  college, or university. 
 15.15     (b) If the surviving spouse or surviving child benefit 
 15.16  commenced before July 1, 1983, the surviving spouse benefit is 
 15.17  $750 per month and the surviving child benefit is $225 per 
 15.18  month, beginning with the first monthly payment payable after 
 15.19  the effective date of this section.  The sum of surviving spouse 
 15.20  and surviving child benefits payable under this paragraph shall 
 15.21  not exceed $900 per month.  The increased cost resulting from 
 15.22  the benefit increases under this paragraph must be allocated to 
 15.23  each employing unit listed in section 422A.101, subdivisions 1a, 
 15.24  2, and 2a, on the basis of the additional accrued liability 
 15.25  resulting from increased benefits paid to the survivors of 
 15.26  employees from that unit. 
 15.27     (c) If the surviving spouse or surviving child benefit 
 15.28  commences after June 30, 1983, the surviving spouse benefit is 
 15.29  30 percent of the member's average salary in effect over the 
 15.30  last six months of allowable service preceding the month in 
 15.31  which death occurs.  The surviving child benefit is ten percent 
 15.32  of the member's average salary in effect over the last six 
 15.33  months of allowable service preceding the month in which death 
 15.34  occurs.  The sum of surviving spouse and surviving child 
 15.35  benefits payable under this paragraph shall not exceed 50 
 15.36  percent of the member's average salary in effect over the last 
 16.1   six months of allowable service. 
 16.2      (d) Any surviving child benefit or surviving spouse benefit 
 16.3   computed under paragraph (c) and in effect for the month 
 16.4   immediately prior to the effective date of this section is 
 16.5   increased by 15 percent as of the first payment on or after the 
 16.6   effective date of this section. 
 16.7      (e) Surviving child benefits under this subdivision 
 16.8   terminate when the child no longer meets the definition of 
 16.9   surviving child. 
 16.10     Sec. 14.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SPECIAL 
 16.11  SURVIVING SPOUSE BENEFIT ELIGIBILITY.] 
 16.12     (a) Notwithstanding any provision of law to the contrary, 
 16.13  the surviving spouse of a deceased qualified public employee who 
 16.14  died as a result of an alleged homicide in the line of duty 
 16.15  within one month of eligibility for normal retirement is 
 16.16  entitled to receive the second portion of a 100-percent joint 
 16.17  and survivor optional annuity under Minnesota Statutes, section 
 16.18  353.31, subdivision 1b, calculated as if the deceased qualified 
 16.19  public employee had qualified for the "rule of 90" early normal 
 16.20  retirement annuity on the date of death. 
 16.21     (b) A deceased qualified public employee is a person who: 
 16.22     (1) was born on August 18, 1941; 
 16.23     (2) became a member of the public employees retirement 
 16.24  association on July 7, 1964; 
 16.25     (3) was a member of the basic program of the public 
 16.26  employees retirement association; 
 16.27     (4) was employed as a building inspector by the city of St. 
 16.28  Paul; 
 16.29     (5) died during the course of employment duties on December 
 16.30  24, 1997; and 
 16.31     (6) would have been eligible to retire under the "rule of 
 16.32  90" early normal retirement provision on or before February 1, 
 16.33  1998. 
 16.34     (c) The benefit under paragraph (a) is payable in lieu of 
 16.35  any other survivor benefit from the public employee retirement 
 16.36  association.  The benefit under paragraph (a) accrues on January 
 17.1   1, 1998, and the initial payment of the benefit must include any 
 17.2   applicable retroactive payment amounts.  The benefit under 
 17.3   paragraph (a) must be elected by the surviving spouse on a form 
 17.4   prescribed by the executive director of the public employees 
 17.5   retirement association. 
 17.6      Sec. 15.  [REIMBURSEMENT OF ACTUARIAL COST BY CITY OF ST. 
 17.7   PAUL.] 
 17.8      On the effective date of this section, the city of St. Paul 
 17.9   shall pay to the public employees retirement association $36,698 
 17.10  and whatever portion of a remaining $36,697 is not appropriated 
 17.11  from the general fund to the public employees retirement 
 17.12  association for this purpose in order to offset the increased 
 17.13  actuarial accrued liability related to the survivor benefit 
 17.14  increase provided in section 14. 
 17.15     Sec. 16.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION COVERAGE 
 17.16  TERMINATION.] 
 17.17     Subdivision 1.  [ELIGIBILITY.] (a) An eligible member 
 17.18  specified in paragraph (b) is authorized to apply for a 
 17.19  retirement annuity, provided necessary age and service 
 17.20  requirements are met, under Minnesota Statutes, section 353.29 
 17.21  or 353.30, as applicable, as further specified under subdivision 
 17.22  2. 
 17.23     (b) An eligible member is an individual who: 
 17.24     (1) is an active member of the public employees retirement 
 17.25  association coordinated plan; 
 17.26     (2) contributes to that plan based on employment by the 
 17.27  suburban Hennepin county regional park district and as an 
 17.28  elected member of the Minneapolis park and recreation board; and 
 17.29     (3) was born on February 25, 1936. 
 17.30     Subd. 2.  [RETIREMENT ANNUITY.] (a) Notwithstanding 
 17.31  Minnesota Statutes, section 353.01, subdivision 2a, clause (3), 
 17.32  and continuation of elected service, an eligible individual 
 17.33  under subdivision 1, paragraph (b), is deemed to have terminated 
 17.34  membership under Minnesota Statutes, section 353.01, subdivision 
 17.35  11b, following termination of the suburban Hennepin county 
 17.36  regional park district employment and meeting applicable length 
 18.1   of separation requirements. 
 18.2      (b) If the requirements of paragraph (a) are satisfied, the 
 18.3   eligible individual may apply for a retirement annuity under 
 18.4   Minnesota Statutes, section 353.29 or 353.30, whichever 
 18.5   applies.  In computing the annuity, the public employees 
 18.6   retirement association must exclude salary due to appointed and 
 18.7   elected Minneapolis park and recreation board service. 
 18.8      Subd. 3.  [TREATMENT OF MINNEAPOLIS PARK AND RECREATION 
 18.9   BOARD CONTRIBUTION TO THE PUBLIC EMPLOYEES RETIREMENT 
 18.10  ASSOCIATION.] (a) Upon termination of the suburban Hennepin 
 18.11  county regional park district employment, all employee 
 18.12  contributions to the public employees retirement association 
 18.13  coordinated plan by an eligible individual in subdivision 1, 
 18.14  paragraph (b), due to Minneapolis park and recreation board 
 18.15  appointed and elected service, and all corresponding employer 
 18.16  contributions, terminate. 
 18.17     (b) Following termination of contributions under paragraph 
 18.18  (a), an eligible member under subdivision 1, paragraph (b), must 
 18.19  elect, within one year of termination of contributions under 
 18.20  paragraph (a) or termination of elective service, whichever is 
 18.21  earlier, a refund under Minnesota Statutes, section 353.34, 
 18.22  subdivision 2, or coverage by the public employees defined 
 18.23  contribution plan under Minnesota Statutes, chapter 353D, as 
 18.24  further specified in paragraph (c). 
 18.25     (c) If public employee defined contribution plan coverage 
 18.26  is elected under this paragraph, contributions to that plan 
 18.27  commence as of the first day of the pay period following this 
 18.28  election.  Notwithstanding Minnesota Statutes, section 353D.12, 
 18.29  accumulated employee contributions made by an eligible member as 
 18.30  specified in subdivision 1, paragraph (b), and corresponding 
 18.31  employer contributions, due to the Minneapolis park and 
 18.32  recreation board appointed and elected service, must be 
 18.33  transferred with six percent annual interest to an account for 
 18.34  an eligible member in the public employees defined contribution 
 18.35  plan. 
 18.36     (d) If no election is made by an eligible member by the 
 19.1   required date in paragraph (b), the individual is assumed to 
 19.2   have elected the refund indicated in paragraph (b). 
 19.3      (e) Upon an election under paragraph (b), or a mandatory 
 19.4   refund under paragraph (d), all rights in the public employees 
 19.5   retirement association coordinated plan due to elected and 
 19.6   appointed service are forfeited and may not be reestablished. 
 19.7      Sec. 17.  [REPEALER.] 
 19.8      (a) Minnesota Statutes 1996, sections 11A.17, subdivisions 
 19.9   10a and 14; and 352D.09, subdivision 8, are repealed. 
 19.10     (b) Minnesota Statutes 1997 Supplement, section 136F.45, 
 19.11  subdivision 3, is repealed. 
 19.12     Sec. 18.  [EFFECTIVE DATE.] 
 19.13     (a) Sections 1, 2, 6, 7, 8, 10, 16, and 17, paragraph (b), 
 19.14  are effective on the day following final enactment. 
 19.15     (b) Sections 3, 4, 5, 9, 11, 12, and 17, paragraph (a), are 
 19.16  effective July 1, 1999. 
 19.17     (c) Section 13 is effective upon approval by the 
 19.18  Minneapolis city council and compliance with Minnesota Statutes, 
 19.19  section 645.021. 
 19.20     (d) Sections 14 and 15 are effective on the day following 
 19.21  approval by the city council of the city of St. Paul and 
 19.22  compliance with Minnesota Statutes, section 645.021. 
 19.23                             ARTICLE 3 
 19.24           QUALIFIED PART-TIME TEACHER RETIREMENT PROGRAM 
 19.25                         REPORTING DEADLINE
 19.26     Section 1.  Minnesota Statutes 1996, section 354.66, 
 19.27  subdivision 2, is amended to read: 
 19.28     Subd. 2.  [QUALIFIED PART-TIME POSITIONS TEACHER PROGRAM 
 19.29  PARTICIPATION REQUIREMENTS.] A teacher in the a Minnesota public 
 19.30  elementary schools school, a Minnesota secondary schools 
 19.31  school, or technical the Minnesota state colleges or in the 
 19.32  community college system or the state university and 
 19.33  universities system of the state who has three years or more of 
 19.34  allowable service in the association or three years or more of 
 19.35  full-time teaching service in Minnesota public elementary 
 19.36  schools, Minnesota secondary schools, or technical the Minnesota 
 20.1   state colleges or in the community college system or the state 
 20.2   university and universities system, may, by agreement with the 
 20.3   board of the employing district or with the authorized 
 20.4   representative of the board, may be assigned to teaching service 
 20.5   within the district in a part-time teaching position under 
 20.6   subdivision 3.  The association must receive a copy of the 
 20.7   agreement must be executed before October 1 of the year for 
 20.8   which the teacher requests to make retirement contributions 
 20.9   under subdivision 4.  A copy of the executed agreement must be 
 20.10  filed with the executive director of the association.  If the 
 20.11  copy of the executed agreement is filed with the association 
 20.12  after October 1 of the year for which the teacher requests to 
 20.13  make retirement contributions under subdivision 4, the employing 
 20.14  unit shall pay the fine specified in section 354.52, subdivision 
 20.15  6, for each calendar day that elapsed since the October 1 due 
 20.16  date.  The association may not accept an executed agreement that 
 20.17  is received by the association more than 15 months late.  The 
 20.18  association may not waive the fine required by this section. 
 20.19     Sec. 2.  Minnesota Statutes 1996, section 354.66, 
 20.20  subdivision 3, is amended to read: 
 20.21     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 20.22  purposes of this section, the term "part-time teaching position" 
 20.23  shall mean a teaching position within the district in which the 
 20.24  teacher is employed for at least 50 full days or a fractional 
 20.25  equivalent thereof as prescribed in section 354.091, and for 
 20.26  which the teacher is compensated in an amount not exceeding 67 
 20.27  80 percent of the compensation established by the board for a 
 20.28  full-time teacher with identical education and experience with 
 20.29  the employing unit.  The compensation of a teacher in the state 
 20.30  colleges and university system may exceed the 67 80 percent 
 20.31  limit if the teacher does not teach just one of the three 
 20.32  quarters in the system's full school year, provided no 
 20.33  additional services are performed while the teacher participates 
 20.34  in the program. 
 20.35     Sec. 3.  Minnesota Statutes 1996, section 354A.094, 
 20.36  subdivision 2, is amended to read: 
 21.1      Subd. 2.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 21.2   purposes of this section, the term "part-time teaching position" 
 21.3   shall mean a teaching position within the district in which the 
 21.4   teacher is employed for at least 50 full days or a fractional 
 21.5   equivalent of 50 full days calculated using the appropriate 
 21.6   minimum number of hours which would result in a full day of 
 21.7   service credit by the appropriate association and for which the 
 21.8   teacher is compensated in an amount not to exceed 67 80 percent 
 21.9   of the compensation rate established by the board for a 
 21.10  full-time teacher with identical education and experience within 
 21.11  the district. 
 21.12     Sec. 4.  Minnesota Statutes 1996, section 354A.094, 
 21.13  subdivision 3, is amended to read: 
 21.14     Subd. 3.  [QUALIFIED PART-TIME TEACHER PROGRAM 
 21.15  PARTICIPATION REQUIREMENTS.] A teacher in the public schools of 
 21.16  a city of the first class who has three years or more allowable 
 21.17  service in the applicable retirement fund association or three 
 21.18  years or more of full-time teaching service in Minnesota public 
 21.19  elementary schools, Minnesota secondary schools, and technical 
 21.20  Minnesota state colleges and universities system may, by 
 21.21  agreement with the board of the employing district, be assigned 
 21.22  to teaching service within the district in a part-time teaching 
 21.23  position.  The agreement must be executed before October 1 of 
 21.24  the year for which the teacher requests to make retirement 
 21.25  contributions under subdivision 4.  A copy of the executed 
 21.26  agreement must be filed with the executive director of the 
 21.27  retirement fund association.  If the copy of the executed 
 21.28  agreement is filed with the association after October 1 of the 
 21.29  year for which the teacher requests to make retirement 
 21.30  contributions under subdivision 4, the employing school district 
 21.31  shall pay a fine of $5 for each calendar day that elapsed since 
 21.32  the October 1 due date.  The association may not accept an 
 21.33  executed agreement that is received by the association more than 
 21.34  15 months late.  The association may not waive the fine required 
 21.35  by this section. 
 21.36     Sec. 5.  [EFFECTIVE DATE.] 
 22.1      (a) Sections 1 and 4 are effective on the day following 
 22.2   final enactment. 
 22.3      (b) Sections 2 and 3 are effective on July 1, 1998. 
 22.4                              ARTICLE 4 
 22.5                    PRIOR SERVICE CREDIT PURCHASES 
 22.6      Section 1.  [356.55] [PRIOR SERVICE CREDIT PURCHASE PAYMENT 
 22.7   AMOUNT DETERMINATION PROCEDURE.] 
 22.8      Subdivision 1.  [APPLICATION.] Unless the prior service 
 22.9   credit purchase authorization special law or general statute 
 22.10  provision explicitly specifies a different purchase payment 
 22.11  amount determination procedure, this section governs the 
 22.12  determination of the prior service credit purchase payment 
 22.13  amount of any prior service credit purchase. 
 22.14     Subd. 2.  [DETERMINATION.] (a) Unless the prior service 
 22.15  credit purchase minimum amount determined under paragraph (d) is 
 22.16  greater, the prior service credit purchase amount is the result 
 22.17  obtained by subtracting the amount determined under paragraph 
 22.18  (c) from the amount determined under paragraph (b). 
 22.19     (b) The present value of the unreduced single life 
 22.20  retirement annuity, with the purchase of the additional service 
 22.21  credit included, must be calculated as follows: 
 22.22     (1) the age at first eligibility for an unreduced single 
 22.23  life retirement annuity, including the purchase of the 
 22.24  additional service credit, must be determined; 
 22.25     (2) the length of total service credit, including the 
 22.26  period of the purchase of the additional service credit, at the 
 22.27  age determined under clause (1) must be determined; 
 22.28     (3) the highest five successive years average salary at the 
 22.29  age determined under clause (1), assuming five percent annual 
 22.30  compounding salary increases from the most current annual salary 
 22.31  amount at the age determined under clause (1), must be 
 22.32  determined; 
 22.33     (4) using the benefit accrual rate or rates applicable to 
 22.34  the prospective purchaser of the service credit based on the 
 22.35  prospective purchaser's actual date of entry into covered 
 22.36  service, the length of service determined under clause (2), and 
 23.1   the final average salary determined under clause (3), the annual 
 23.2   unreduced single life retirement annuity amount must be 
 23.3   determined; 
 23.4      (5) the actuarial present value of the projected annual 
 23.5   unreduced single life retirement annuity amount determined under 
 23.6   clause (4) at the age determined under clause (1), using the 
 23.7   same actuarial factor that the plan would use to determine 
 23.8   actuarial equivalence for optional annuity forms and related 
 23.9   purposes, must be determined; and 
 23.10     (6) the discounted value of the amount determined under 
 23.11  clause (5) to the date of the prospective purchase, using an 
 23.12  interest rate of 8.5 percent and no mortality probability 
 23.13  decrement, must be determined. 
 23.14     (c) The present value of the unreduced single life 
 23.15  retirement annuity, without the purchase of the additional 
 23.16  service credit included, must be calculated as follows:  
 23.17     (1) the age at first eligibility for an unreduced single 
 23.18  life retirement annuity, not including the purchase of 
 23.19  additional service credit, must be determined; 
 23.20     (2) the length of accrued service credit, without the 
 23.21  period of the purchase of the additional service credit, at the 
 23.22  age determined under clause (1) must be determined; 
 23.23     (3) the highest five successive years average salary at the 
 23.24  age determined under clause (1), assuming five percent annual 
 23.25  compounding salary increases from the most current annual salary 
 23.26  amount to the age determined under clause (1), must be 
 23.27  determined; 
 23.28     (4) using the benefit accrual rate or rates applicable to 
 23.29  the prospective purchaser of the service credit based on the 
 23.30  prospective purchaser's actual date of entry into covered 
 23.31  service the length of service credit determined under clause 
 23.32  (2), and the final average salary determined under clause (3), 
 23.33  the annual unreduced single life retirement annuity amount must 
 23.34  be determined; 
 23.35     (5) the actuarial present value of the projected annual 
 23.36  unreduced single life retirement annuity amount determined under 
 24.1   clause (4) at the age determined under clause (1), using the 
 24.2   same actuarial factor that the plan would use to determine 
 24.3   actuarial equivalence for optional annuity forms and related 
 24.4   purposes, must be determined; 
 24.5      (6) the discounted value of the amount determined under 
 24.6   clause (5) to the date of the prospective purchase, using an 
 24.7   interest rate of 8.5 percent and no mortality probability 
 24.8   decrement, must be determined; and 
 24.9      (7) the net value of the discounted value determined under 
 24.10  clause (6) must be determined by applying a service ratio, where 
 24.11  the numerator is the total length of credited service determined 
 24.12  under paragraph (b), clause (2) reduced by the period of the 
 24.13  additional service credit proposed to be purchased, and where 
 24.14  the denominator is the total length of service credit determined 
 24.15  under clause (2). 
 24.16     (d) The minimum prior service credit purchase amount is the 
 24.17  amount determined by multiplying the most current annual salary 
 24.18  of the prospective purchaser by the combined current employee, 
 24.19  employer, and any additional employer contribution rates for the 
 24.20  applicable pension plan and by multiplying that result by the 
 24.21  number of years of service or fractions of years of service of 
 24.22  the potential service credit purchase. 
 24.23     Subd. 3.  [SOURCE OF DETERMINATION.] The prior service 
 24.24  credit purchase amounts under subdivision 2 must be calculated 
 24.25  by the chief administrative officer of the public pension plan 
 24.26  using a prior service credit purchase amount determination 
 24.27  process that has been verified for accuracy and consistency 
 24.28  under this section by the commission-retained actuary.  That 
 24.29  verification must be in writing and must occur before the first 
 24.30  prior service credit purchase for the plan under this section is 
 24.31  accepted and every five years thereafter or whenever the 
 24.32  preretirement interest rate, postretirement interest rate, 
 24.33  payroll growth, or mortality actuarial assumption for the 
 24.34  applicable pension plan is modified under section 356.215, 
 24.35  whichever occurs first. 
 24.36     Subd. 4.  [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 
 25.1   public pension plan may establish a fee to be charged to the 
 25.2   prospective purchaser for processing a prior service credit 
 25.3   purchase application and the prior service credit payment amount 
 25.4   calculation.  The fee must be established by the governing board 
 25.5   of the pension plan and must be uniform for comparable service 
 25.6   credit purchase situations or actuarial calculation requests.  
 25.7   The prior service credit purchase processing fee structure must 
 25.8   be published by the chief administrative officer of the 
 25.9   applicable retirement plan in the state register. 
 25.10     Subd. 5.  [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 
 25.11  the prior service credit purchase authorization special law or 
 25.12  general statute provision explicitly specifies otherwise, the 
 25.13  prior service credit purchase payment amount determined under 
 25.14  subdivision 2 is payable by the purchaser, but the former 
 25.15  employer of the purchaser or the current employer of the 
 25.16  purchaser may, at its discretion, pay all or a portion of the 
 25.17  purchase payment amount in excess of an amount equal to the 
 25.18  employee contribution rate or rates in effect during the prior 
 25.19  service period applied to the actual salary rates in effect 
 25.20  during the prior service period, plus annual compound interest 
 25.21  at the rate of 8.5 percent from the date on which the 
 25.22  contributions would have been made if made contemporaneous with 
 25.23  the service period to the date on which the payment is actually 
 25.24  made. 
 25.25     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
 25.26  As part of the regular data reporting to the consulting actuary 
 25.27  retained by the legislative commission on pensions and 
 25.28  retirement annually, the chief administrative officer of each 
 25.29  public pension plan that has accepted a prior service credit 
 25.30  purchase payment under this section shall report for any 
 25.31  purchase, the purchaser, the purchaser's employer, the age of 
 25.32  the purchaser, the period of the purchase, the purchaser's 
 25.33  pre-purchase accrued service credit, the purchaser's 
 25.34  post-purchase accrued service credit, the purchaser's prior 
 25.35  service credit payment, the prior service credit payment made by 
 25.36  the purchaser's employer, and the amount of the additional 
 26.1   benefit or annuity purchased. 
 26.2      (b) As part of the regular annual actuarial valuation for 
 26.3   the applicable public pension plan prepared by the consulting 
 26.4   actuary retained by the legislative commission on pensions and 
 26.5   retirement, there must be an exhibit comparing for each purchase 
 26.6   the total prior service credit payment received from all sources 
 26.7   and the increased public pension plan actuarial accrued 
 26.8   liability resulting from each purchase. 
 26.9      Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
 26.10  PROCEDURE.] (a) This section expires and is repealed on July 1, 
 26.11  2001. 
 26.12     (b) Authority for any public pension plan to accept a prior 
 26.13  service credit payment calculated in a timely fashion under this 
 26.14  section expires on October 1, 2001. 
 26.15     Sec. 2.  [356.551] [POST-JULY 1, 2001 PRIOR SERVICE CREDIT 
 26.16  PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
 26.17     (a) Unless the prior service credit purchase authorization 
 26.18  special law or general statute provision explicitly specifies a 
 26.19  different purchase payment amount determination procedure, and 
 26.20  if section 356.55 has expired, this section governs the 
 26.21  determination of the prior service credit purchase payment 
 26.22  amount of any prior service credit purchase. 
 26.23     (b) The prior service credit purchase amount is an amount 
 26.24  equal to the actuarial present value, on the date of payment, as 
 26.25  calculated by the chief administrative officer of the pension 
 26.26  plan and reviewed by the actuary retained by the legislative 
 26.27  commission on pensions and retirement, of the amount of the 
 26.28  additional retirement annuity obtained by the acquisition of the 
 26.29  additional service credit in this section.  Calculation of this 
 26.30  amount must be made using the preretirement interest rate 
 26.31  applicable to the public pension plan specified in section 
 26.32  356.215, subdivision 4d, and the mortality table adopted for the 
 26.33  public pension plan.  The calculation must assume continuous 
 26.34  future service in the public pension plan until, and retirement 
 26.35  at, the age at which the minimum requirements of the fund for 
 26.36  normal retirement or retirement with an annuity unreduced for 
 27.1   retirement at an early age, including section 356.30, are met 
 27.2   with the additional service credit purchased.  The calculation 
 27.3   must also assume a full-time equivalent salary, or actual 
 27.4   salary, whichever is greater, and a future salary history that 
 27.5   includes annual salary increases at the applicable salary 
 27.6   increase rate for the plan specified in section 356.215, 
 27.7   subdivision 4d.  Payment must be made in one lump sum within one 
 27.8   year of the prior service credit authorization.  Payment of the 
 27.9   amount calculated under this subdivision must be made by the 
 27.10  applicable eligible person.  However, the current employer or 
 27.11  the prior employer may, at its discretion, pay all or any 
 27.12  portion of the payment amount that exceeds an amount equal to 
 27.13  the employee contribution rates in effect during the period or 
 27.14  periods of prior service applied to the actual salary rates in 
 27.15  effect during the period or periods of prior service, plus 
 27.16  interest at the rate of 8.5 percent a year compounded annually 
 27.17  from the date on which the contributions would otherwise have 
 27.18  been made to the date on which the payment is made.  If the 
 27.19  employer agrees to payments under this paragraph, the purchaser 
 27.20  must make the employee payments required under this paragraph 
 27.21  within 290 days of the prior service credit authorization.  If 
 27.22  that employee payment is made, the employer payment under this 
 27.23  paragraph must be remitted to the chief administrative officer 
 27.24  of the public pension plan within 60 days of receipt by the 
 27.25  chief administrative officer of the employee payments specified 
 27.26  under this paragraph. 
 27.27     (c) The prospective purchaser must provide any relevant 
 27.28  documentation required by the chief administrative officer of 
 27.29  the public pension plan to determine eligibility for the prior 
 27.30  service credit under this section. 
 27.31     (d) Service credit for the purchase period must be granted 
 27.32  by the public pension plan to the purchaser upon receipt of the 
 27.33  purchase payment amount specified in paragraph (b). 
 27.34     Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
 27.35     Subdivision 1.  [INDEPENDENT SCHOOL DISTRICT NO. 77 
 27.36  (MANKATO) TEACHER.] (a) Notwithstanding any provision of 
 28.1   Minnesota Statutes, section 354.094, or other law to the 
 28.2   contrary, an eligible person described in paragraph (b) is 
 28.3   entitled to obtain allowable and formula service credit in the 
 28.4   teachers retirement association for the period described in 
 28.5   paragraph (c) upon the payment of the full service credit 
 28.6   purchase amount specified in Minnesota Statutes, section 356.55. 
 28.7      (b) An eligible person is a person who was: 
 28.8      (1) born on June 23, 1946; 
 28.9      (2) granted an extended leave of absence from employment 
 28.10  under the teacher mobility program by independent school 
 28.11  district No. 77 on March 3, 1986, for the period July 1, 1986, 
 28.12  to June 30, 1989; and 
 28.13     (3) granted a leave which was erroneously characterized in 
 28.14  the "other" category on the leave of absence report submitted to 
 28.15  the teachers retirement association. 
 28.16     (c) The period for service credit purchase is July 1, 1986, 
 28.17  to June 30, 1989. 
 28.18     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 28.19  subdivision 5, the eligible person must pay, on or before 
 28.20  September 1, 1998, an amount equal to the employee contribution 
 28.21  rate or rates in effect during the prior service period applied 
 28.22  to the actual salary rates in effect during the prior service 
 28.23  period, plus annual compound interest at the rate of 8.5 percent 
 28.24  from the date on which the contributions would have been made if 
 28.25  made contemporaneous with the service period to the date on 
 28.26  which the payment is actually made and independent school 
 28.27  district No. 77 (Mankato) must pay the balance of the prior 
 28.28  service credit purchase payment amount calculated under 
 28.29  Minnesota Statutes, section 356.55, within 30 days of the 
 28.30  payment by the eligible person.  The executive director of the 
 28.31  teachers retirement association must notify the superintendent 
 28.32  of independent school district No. 77 of its payment amount and 
 28.33  payment due date if the eligible person makes the required 
 28.34  payment. 
 28.35     (e) If independent school district No. 77 fails to pay its 
 28.36  portion of the required prior service credit purchase payment 
 29.1   amount, the executive director may notify the commissioner of 
 29.2   finance of that fact and the commissioner of finance may order 
 29.3   that the required school district payment be deducted from the 
 29.4   next subsequent payment or payments of state education aid to 
 29.5   the school district and be transmitted to the teachers 
 29.6   retirement association. 
 29.7      Subd. 2.  [INDEPENDENT SCHOOL DISTRICT NO. 199 (INVER GROVE 
 29.8   HEIGHTS) TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 29.9   section 354.096, an eligible person described in paragraph (b) 
 29.10  is entitled to purchase allowable service credit in the teachers 
 29.11  retirement association for the period described in paragraph (c) 
 29.12  by paying the amount specified in Minnesota Statutes, section 
 29.13  356.55, subdivision 2. 
 29.14     (b) An eligible person is a person who: 
 29.15     (1) was on medical leave for multiple sclerosis in the fall 
 29.16  of 1990; 
 29.17     (2) was employed by independent school district No. 199 
 29.18  (Inver Grove Heights), during the period that the medical leave 
 29.19  was taken; and 
 29.20     (3) was not properly notified of the deadline to purchase 
 29.21  service credit for the medical leave period. 
 29.22     (c) The period for service credit purchase is 18 days of a 
 29.23  period of medical leave during the fall of 1990. 
 29.24     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 29.25  subdivision 5, the eligible person must pay, on or before 
 29.26  September 1, 1998, an amount equal to the employee contribution 
 29.27  rate or rates in effect during the prior service period applied 
 29.28  to the actual salary rates in effect during the prior service 
 29.29  period, plus annual compound interest at the rate of 8.5 percent 
 29.30  from the date on which the contributions would have been made if 
 29.31  made contemporaneous with the service period to the date on 
 29.32  which the payment is actually made and independent school 
 29.33  district No. 199 (Inver Grove Heights) must pay the balance of 
 29.34  the prior service credit purchase payment amount calculated 
 29.35  under Minnesota Statutes, section 356.55, within 30 days of the 
 29.36  payment by the eligible person.  The executive director of the 
 30.1   teachers retirement association must notify the superintendent 
 30.2   of independent school district No. 199 of its payment amount and 
 30.3   payment due date if the eligible person makes the required 
 30.4   payment. 
 30.5      (e) If independent school district No. 199 fails to pay its 
 30.6   portion of the required prior service credit purchase payment 
 30.7   amount, the executive director may notify the commissioner of 
 30.8   finance of that fact and the commissioner of finance may order 
 30.9   that the required school district payment be deducted from the 
 30.10  next subsequent payment or payments of state education aid to 
 30.11  the school district and be transmitted to the teachers 
 30.12  retirement association. 
 30.13     Subd. 3.  [PRE-JANUARY 1, 1998 LATE REPORTED QUALIFIED 
 30.14  PART-TIME TEACHER PROGRAM AGREEMENT PERIODS.] (a) 
 30.15  Notwithstanding any provision of Minnesota Statutes, section 
 30.16  354.66, to the contrary, an eligible person described in 
 30.17  paragraph (b) is entitled to obtain allowable and formula 
 30.18  service credit in the teachers retirement association for the 
 30.19  period described in paragraph (c) upon the payment of the full 
 30.20  service credit purchase amount specified in Minnesota Statutes, 
 30.21  section 356.55. 
 30.22     (b) An eligible person is a person who rendered part-time 
 30.23  teaching service after the end of the 1993-1994 school year and 
 30.24  before the beginning of the 1998-1999 school year under an 
 30.25  agreement with a school district or other applicable employer 
 30.26  under Minnesota Statutes, section 354.66, that was executed 
 30.27  before the applicable October 1, but was not filed by the 
 30.28  employing unit with the teachers retirement association before 
 30.29  the applicable October 1 deadline. 
 30.30     (c) The period for service credit purchase is the 
 30.31  uncredited portion of a full year of service credit during the 
 30.32  1994-1995, 1995-1996, 1996-1997, and 1997-1998 school years 
 30.33  where the uncredited period of service resulted solely from a 
 30.34  failure of the employing unit to file the part-time teaching 
 30.35  participation agreement with the teachers retirement association 
 30.36  in a timely fashion. 
 31.1      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 31.2   subdivision 5, the eligible person must pay, on or before 
 31.3   November 30, 1998, an amount equal to the employee contribution 
 31.4   rate or rates in effect during the prior service period applied 
 31.5   to the actual salary rates in effect during the prior service 
 31.6   period, plus annual compound interest at the rate of 8.5 percent 
 31.7   from the date on which the contributions would have been made if 
 31.8   made contemporaneous with the service period to the date on 
 31.9   which the payment is actually made and the employing unit that 
 31.10  agreed to the part-time teaching service participation program 
 31.11  must pay the balance of the prior service credit purchase 
 31.12  payment amount calculated under Minnesota Statutes, section 
 31.13  356.55, within 30 days of the payment by the eligible person.  
 31.14  The executive director of the teachers retirement association 
 31.15  must notify the chief administrative officer of the applicable 
 31.16  employing unit of its payment amount and payment due date if the 
 31.17  eligible person makes the required payment. 
 31.18     (e) If the applicable employing unit fails to pay its 
 31.19  portion of the required prior service credit purchase payment 
 31.20  amount, the executive director may notify the commissioner of 
 31.21  finance of that fact and the commissioner of finance may order 
 31.22  that the required employer payment be deducted from the next 
 31.23  subsequent payment or payments of any state education or other 
 31.24  aid to that employing unit and be transmitted to the teachers 
 31.25  retirement association. 
 31.26     Subd. 4.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION; MIDDLE 
 31.27  MANAGEMENT ASSOCIATION EMPLOYEE.] (a) Notwithstanding Minnesota 
 31.28  Statutes, sections 352.01, subdivision 2, and 352.029, 
 31.29  subdivision 1, and Minnesota Statutes 1997 Supplement, section 
 31.30  352.01, subdivision 2a, an eligible employee described in 
 31.31  paragraph (b) is eligible for membership in the Minnesota state 
 31.32  retirement system general plan and is eligible to purchase 
 31.33  service credit in that plan as specified in paragraph (d). 
 31.34     (b) An eligible employee is a person who: 
 31.35     (1) has been employed by the middle management association 
 31.36  since February 14, 1994; and 
 32.1      (2) was born on September 13, 1958. 
 32.2      (c) An eligible employee in paragraph (b) remains eligible 
 32.3   for membership in the Minnesota state retirement system general 
 32.4   plan, under this subdivision, while the individual remains 
 32.5   employed by the middle management association or a successor 
 32.6   organization providing contribution requirements and other 
 32.7   general requirements for membership are met. 
 32.8      (d) An eligible employee under paragraph (b) is entitled to 
 32.9   purchase service credit in the Minnesota state retirement system 
 32.10  general plan for the period of service prior to the effective 
 32.11  date of this act for service with the middle management 
 32.12  association.  An eligible employee may not purchase service 
 32.13  credit for any period during which the employer has made 
 32.14  contributions on behalf of the employee to a defined 
 32.15  contribution pension plan or for any period during which the 
 32.16  employee or the employer have made contributions to a defined 
 32.17  benefit pension plan covering public, nonprofit, or private 
 32.18  sector employees, other than a volunteer firefighter relief 
 32.19  association governed by Minnesota Statutes, chapter 424A.  
 32.20  Authority to make the payment terminates on July 1, 1999, or 
 32.21  upon termination of employment with the middle management 
 32.22  association, whichever is earlier. 
 32.23     Subd. 5.  [INDEPENDENT SCHOOL DISTRICT NO. 13 (COLUMBIA 
 32.24  HEIGHTS) TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 32.25  section 354.094, an eligible person described in paragraph (b) 
 32.26  is entitled to purchase allowable and formula service credit in 
 32.27  the teachers retirement association for the period described in 
 32.28  paragraph (c) by paying the amount specified in Minnesota 
 32.29  Statutes, section 356.55, subdivision 2. 
 32.30     (b) An eligible person for purposes of paragraph (a) is a 
 32.31  person who was born on January 26, 1944, was initially hired by 
 32.32  independent school district No. 13 (Columbia Heights) on August 
 32.33  30, 1967, was granted a five year extended leave of absence by 
 32.34  independent school district No. 13 for the period July 1, 1994, 
 32.35  through June 30, 1999, and was unable to make contributions 
 32.36  under Minnesota Statutes, section 354.094, subdivision 1, 
 33.1   because of the failure of independent school district No. 13 to 
 33.2   timely forward the person's leave payment to the teachers 
 33.3   retirement association. 
 33.4      (c) The period for service credit purchase is the extended 
 33.5   leave of absence for the 1996-1997 school year. 
 33.6      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 33.7   subdivision 5, the eligible person must pay, on or before 
 33.8   September 1, 1998, an amount equal to the employee, employer, 
 33.9   and employer additional contribution rates in effect during the 
 33.10  prior service period applied to the actual salary rates in 
 33.11  effect during the prior service period, plus annual compound 
 33.12  interest at the rate of 8.5 percent from the date on which the 
 33.13  contributions would have been made if made contemporaneous with 
 33.14  the service period to the date on which the payment is actually 
 33.15  made and independent school district No. 13 (Columbia Heights) 
 33.16  must pay the balance of the prior service credit purchase 
 33.17  payment amount calculated under Minnesota Statutes, section 
 33.18  356.55, within 30 days of the payment by the eligible person.  
 33.19  The executive director of the teachers retirement association 
 33.20  must notify the superintendent of independent school district 
 33.21  No. 13 of its payment amount and payment due date if the 
 33.22  eligible person makes the required payment. 
 33.23     (e) If independent school district No. 13 (Columbia Heights)
 33.24  fails to pay its portion of the required prior service credit 
 33.25  purchase payment amount, the executive director may notify the 
 33.26  commissioner of finance of that fact and the commissioner of 
 33.27  finance may order that the required employer payment be deducted 
 33.28  from any state education or other aid payable to independent 
 33.29  school district No. 13 (Columbia Heights) and be transmitted to 
 33.30  the teachers retirement association. 
 33.31     Subd. 6.  [WINONA STATE UNIVERSITY FACULTY MEMBER.] (a) 
 33.32  Notwithstanding Minnesota Statutes, section 354.094, an eligible 
 33.33  person described in paragraph (b) is entitled to purchase 
 33.34  allowable service credit in the teachers retirement association 
 33.35  for the period described in paragraph (c) by paying the amount 
 33.36  specified in Minnesota Statutes, section 356.55, subdivision 2. 
 34.1      (b) An eligible person for purposes of paragraph (a) is a 
 34.2   person who was born on September 5, 1943, was initially hired by 
 34.3   Winona state university on September 4, 1979, was granted an 
 34.4   extended leave of absence by Winona state university on March 
 34.5   18, 1996, and was unable to make contributions under Minnesota 
 34.6   Statutes, section 354.094, subdivision 1, because of the failure 
 34.7   of Winona state university to timely submit the leave of absence 
 34.8   report to the teachers retirement association. 
 34.9      (c) The period for service credit purchase is the first 
 34.10  year of a three year extended leave of absence that began with 
 34.11  the 1996-1997 school year. 
 34.12     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 34.13  subdivision 5, the eligible person must pay, on or before 
 34.14  September 1, 1998, an amount equal to the employee, employer, 
 34.15  and employer additional contribution rates in effect during the 
 34.16  prior service period applied to the actual salary rates in 
 34.17  effect during the prior service period, plus annual compound 
 34.18  interest at the rate of 8.5 percent from the date on which the 
 34.19  contributions would have been made if made contemporaneous with 
 34.20  the service period to the date on which the payment is actually 
 34.21  made and Winona state university must pay the balance of the 
 34.22  prior service credit purchase payment amount calculated under 
 34.23  Minnesota Statutes, section 356.55, within 30 days of the 
 34.24  payment by the eligible person.  The executive director of the 
 34.25  teachers retirement association must notify the president of 
 34.26  Winona state university of its payment amount and payment due 
 34.27  date if the eligible person makes the required payment. 
 34.28     (e) If Winona state university fails to pay its portion of 
 34.29  the required prior service credit purchase payment amount, the 
 34.30  executive director may notify the commissioner of finance of 
 34.31  that fact and the commissioner of finance may order that the 
 34.32  required employer payment be deducted from any appropriation to 
 34.33  the Minnesota state colleges and universities system and be 
 34.34  transmitted to the teachers retirement association. 
 34.35     Subd. 7.  [INDEPENDENT SCHOOL DISTRICT NO. 621 (MOUNDS VIEW)
 34.36  TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
 35.1   354.092, an eligible person described in paragraph (b) is 
 35.2   entitled to purchase allowable service credit in the teachers 
 35.3   retirement association for the period described in paragraph (c) 
 35.4   by paying the amount specified in Minnesota Statutes, section 
 35.5   356.55, subdivision 2. 
 35.6      (b) An eligible person for purposes of paragraph (a) is a 
 35.7   person who was born on December 19, 1940, was initially employed 
 35.8   as a teacher on August 27, 1968, and is employed by independent 
 35.9   school district No. 621 (Mounds View). 
 35.10     (c) The period for service credit purchase is the 
 35.11  uncredited portion of a sabbatical leave during the 1984-1985 
 35.12  school year. 
 35.13     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 35.14  subdivision 5, the eligible person must pay, on or before 
 35.15  September 1, 1998, an amount equal to the employee contribution 
 35.16  rate or rates in effect during the prior service period applied 
 35.17  to the actual salary rates in effect during the prior service 
 35.18  period, plus annual compound interest at the rate of 8.5 percent 
 35.19  from the date on which the contributions would have been made if 
 35.20  made contemporaneous with the service period to the date on 
 35.21  which the payment is actually made and independent school 
 35.22  district No. 621 (Mounds View) must pay the balance of the prior 
 35.23  service credit purchase payment amount calculated under 
 35.24  Minnesota Statutes, section 356.55, within 30 days of the 
 35.25  payment by the eligible person.  The executive director of the 
 35.26  teachers retirement association must notify the superintendent 
 35.27  of independent school district No. 621 of its payment amount and 
 35.28  payment due date if the eligible person makes the required 
 35.29  payment. 
 35.30     (e) If independent school district No. 621 fails to pay its 
 35.31  portion of the required prior service credit purchase payment 
 35.32  amount, the executive director may notify the commissioner of 
 35.33  finance of that fact and the commissioner of finance may order 
 35.34  that the required employer payment be deducted from the next 
 35.35  subsequent payment or payments of state education aid to the 
 35.36  school district be transmitted to the teachers retirement 
 36.1   association. 
 36.2      Subd. 8.  [INDEPENDENT SCHOOL DISTRICT NO. 709 (DULUTH) 
 36.3   TEACHER.] (a) Notwithstanding any provision of Minnesota 
 36.4   Statutes, chapter 354A, the articles of incorporation of the 
 36.5   Duluth teachers retirement fund association, or the Duluth 
 36.6   teachers retirement fund association bylaws to the contrary, an 
 36.7   eligible person described in paragraph (b) is entitled to 
 36.8   purchase allowable service credit in the Duluth teachers 
 36.9   retirement fund association for the periods described in 
 36.10  paragraph (c) by paying the amount specified in Minnesota 
 36.11  Statutes, section 356.55, subdivision 2. 
 36.12     (b) An eligible person for purposes of paragraph (a) is a 
 36.13  person who was born on October 29, 1942, was first employed by 
 36.14  independent school district No. 709 on September 7, 1966, was 
 36.15  granted a maternity leave that began on February 26, 1968, was 
 36.16  employed by independent school district No. 709 on a 
 36.17  less-than-full-time basis during the 1970-1971 and 1971-1972 
 36.18  school years, and was employed on a full-time contract basis 
 36.19  from September 4, 1972, through the 1997-1998 school year. 
 36.20     (c) The period for service credit purchase is any portion 
 36.21  of the period February 26, 1968, to September 4, 1972, that was 
 36.22  not previously credited as allowable service by the Duluth 
 36.23  teachers retirement fund association, but not to exceed one year 
 36.24  of service credit for any school year. 
 36.25     Sec. 4.  [EFFECTIVE DATE.] 
 36.26     Sections 1, 2, and 3 are effective on the day following 
 36.27  final enactment. 
 36.28                             ARTICLE 5 
 36.29         JUDGES RETIREMENT PLAN CONTRIBUTION MODIFICATIONS
 36.30     Section 1.  Minnesota Statutes 1997 Supplement, section 
 36.31  15A.083, subdivision 5, is amended to read: 
 36.32     Subd. 5.  [TAX COURT.] The salary of a judge of the tax 
 36.33  court is the same as 98.52 percent of the salary for a district 
 36.34  court judge.  The salary of the chief tax court judge is the 
 36.35  same as 98.52 percent of the salary for a chief district court 
 36.36  judge. 
 37.1      Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 37.2   15A.083, subdivision 6a, is amended to read: 
 37.3      Subd. 6a.  [ADMINISTRATIVE LAW JUDGE; SALARIES.] The salary 
 37.4   of the chief administrative law judge is the same as 98.52 
 37.5   percent of the salary of a district court judge.  The salaries 
 37.6   of the assistant chief administrative law judge and 
 37.7   administrative law judge supervisors are 95 93.60 percent of the 
 37.8   salary of a district court judge.  The salary of an 
 37.9   administrative law judge employed by the office of 
 37.10  administrative hearings is 90 88.67 percent of the salary of a 
 37.11  district court judge as set under section 15A.082, subdivision 3.
 37.12     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 37.13  15A.083, subdivision 7, is amended to read: 
 37.14     Subd. 7.  [WORKERS' COMPENSATION COURT OF APPEALS AND 
 37.15  COMPENSATION JUDGES.] Salaries of judges of the workers' 
 37.16  compensation court of appeals are the same as 98.52 percent of 
 37.17  the salary for district court judges.  The salary of the chief 
 37.18  judge of the workers' compensation court of appeals is the same 
 37.19  as 98.52 percent of the salary for a chief district court 
 37.20  judge.  Salaries of compensation judges are 90 88.67 percent of 
 37.21  the salary of district court judges.  The chief workers' 
 37.22  compensation settlement judge at the department of labor and 
 37.23  industry may be paid an annual salary that is up to five percent 
 37.24  greater than the salary of workers' compensation settlement 
 37.25  judges at the department of labor and industry. 
 37.26     Sec. 4.  Minnesota Statutes 1996, section 490.123, 
 37.27  subdivision 1a, is amended to read: 
 37.28     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 37.29  covered by the federal old age, survivors, disability, and 
 37.30  health insurance program shall contribute to the fund from each 
 37.31  salary payment a sum equal to 6.27 8.00 percent of salary.  
 37.32     (b) A judge not so covered shall contribute to the fund 
 37.33  from each salary payment a sum equal to 8.15 percent of salary. 
 37.34     (c) The contribution under this subdivision is payable by 
 37.35  salary deduction. 
 37.36     Sec. 5.  Minnesota Statutes 1996, section 490.123, 
 38.1   subdivision 1b, is amended to read: 
 38.2      Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 38.3   contribution rate on behalf of a judge is 22 20.5 percent of 
 38.4   salary. 
 38.5      The employer contribution must be paid by the state court 
 38.6   administrator and is payable at the same time as member 
 38.7   contributions under subdivision 1a are remitted. 
 38.8      Sec. 6.  Laws 1997, Second Special Session chapter 3, 
 38.9   section 16, is amended to read: 
 38.10     Sec. 16.  [SALARIES OF CONSTITUTIONAL OFFICERS, 
 38.11  LEGISLATORS, AND JUDGES.] 
 38.12     (a) The salaries of constitutional officers are increased 
 38.13  by 2.5 percent effective July 1, 1997, and by 2.5 percent 
 38.14  effective January 1, 1998. 
 38.15     (b) The salaries of legislators are increased by 5.0 
 38.16  percent effective January 4, 1999. 
 38.17     (c) The salaries of the judges of the supreme court, court 
 38.18  of appeals, and district court are increased by 4.0 percent 
 38.19  effective July 1, 1997, and by 5.0 percent effective January 1, 
 38.20  1998, and by 1.5 percent effective July 1, 1998. 
 38.21     (d) Effective July 1, 1999, the salaries of judges of the 
 38.22  supreme court, court of appeals, and district court are 
 38.23  increased by the average of the general salary adjustments for 
 38.24  state employees in fiscal year 1998 provided by negotiated 
 38.25  collective bargaining agreements or arbitration awards ratified 
 38.26  by the legislature in the 1998 legislative session. 
 38.27     (e) Effective January 1, 2000, the salaries of judges of 
 38.28  the supreme court, court of appeals, and district court are 
 38.29  increased by the average of the general salary adjustments for 
 38.30  state employees in fiscal year 1999 provided by negotiated 
 38.31  collective bargaining agreements or arbitration awards ratified 
 38.32  by the legislature in the 1998 legislative session. 
 38.33     (f) The commissioner of employee relations shall calculate 
 38.34  the average of the general salary adjustments provided by 
 38.35  negotiated collective bargaining agreements or arbitration 
 38.36  awards ratified by the legislature in the 1998 legislative 
 39.1   session.  Negotiated collective bargaining agreements or 
 39.2   arbitration awards that do not include general salary 
 39.3   adjustments may not be included in these calculations.  The 
 39.4   commissioner shall weigh the general salary adjustments by the 
 39.5   number of full-time equivalent employees covered by each 
 39.6   agreement or arbitration award.  The commissioner shall 
 39.7   calculate the average general salary adjustment for each fiscal 
 39.8   year covered by the agreements or arbitration awards.  The 
 39.9   results of these calculations must be expressed as percentages, 
 39.10  rounded to the nearest one-tenth of one percent.  The 
 39.11  commissioner shall calculate the new salaries for the positions 
 39.12  listed in paragraphs (d) and (e) using the applicable 
 39.13  percentages from the calculations in this paragraph and report 
 39.14  them to the speaker of the house, the president of the senate, 
 39.15  the chief justice of the supreme court, and the governor. 
 39.16     Sec. 7.  [SALARY INCREASE CONDITIONED ON MEMBER 
 39.17  CONTRIBUTION INCREASE.] 
 39.18     The increase in judicial salaries under section 6 is not 
 39.19  applicable to a judge if the member contribution rate increase 
 39.20  under section 4, paragraph (a), is not also deducted from the 
 39.21  salary of the judge. 
 39.22     Sec. 8.  [EFFECTIVE DATE.] 
 39.23     Sections 1 through 7 are effective on July 1, 1998. 
 39.24                             ARTICLE 6 
 39.25              LOCAL POLICE AND FIRE RELIEF ASSOCIATION  
 39.26                          PENSION CHANGES 
 39.27     Section 1.  [COLUMBIA HEIGHTS VOLUNTEER FIRE DEPARTMENT 
 39.28  RELIEF ASSOCIATION; INCORPORATION AND PLAN RESTRUCTURING.] 
 39.29     Subdivision 1.  [ORGANIZATION AND PLAN RESTRUCTURING.] 
 39.30  Notwithstanding the provisions of Laws 1977, chapter 374, 
 39.31  sections 38 to 60, as amended, the entity currently known as the 
 39.32  "Columbia Heights fire department relief association, volunteer 
 39.33  division" shall become incorporated under Minnesota Statutes, 
 39.34  chapter 317A, and be known as the "Columbia Heights volunteer 
 39.35  fire department relief association."  The new entity will be 
 39.36  governed by Minnesota Statutes, chapters 69, 317A, 356, 356A, 
 40.1   and 424A, and any other laws applicable to volunteer fire 
 40.2   department relief associations.  The Columbia Heights volunteer 
 40.3   fire department relief association may adopt the existing bylaws 
 40.4   of the "Columbia Heights fire department relief association, 
 40.5   volunteer division"; provided, however, that the bylaws must 
 40.6   provide that future benefits payable to any member of the 
 40.7   association are defined contribution lump sum service pensions 
 40.8   under Minnesota Statutes, section 424A.02, subdivision 4.  
 40.9      Subd. 2.  [BOARD RESTRUCTURING.] The board must be 
 40.10  reconstituted in conformance with Minnesota Statutes, section 
 40.11  424A.04, within 90 days after the effective date of this section.
 40.12     Sec. 2.  [MINNEAPOLIS FIRE; OPTIONAL ANNUITY EXTENSION TO 
 40.13  CERTAIN SURVIVORS.] 
 40.14     (a) Notwithstanding Laws 1997, chapter 233, article 4, 
 40.15  section 18, the surviving spouse of any service pensioner or 
 40.16  disability benefit recipient of the Minneapolis fire department 
 40.17  relief association who died between July 1, 1997, and October 1, 
 40.18  1997, is entitled to a surviving spouse benefit equal to the 100 
 40.19  percent joint and survivor annuity amount which the decedent 
 40.20  would have been eligible to select if the decedent had been 
 40.21  entitled and able to select an optional annuity form on the date 
 40.22  of death. 
 40.23     (b) The benefit under paragraph (a) is in lieu of any other 
 40.24  survivor benefit payable from the Minneapolis fire department 
 40.25  relief association. 
 40.26     (c) The benefit under this section accrues as of October 1, 
 40.27  1997, and is payable on the first day of the month next 
 40.28  following the effective date of this section.  The initial 
 40.29  benefit payment must include the increase amounts retroactive to 
 40.30  October 1, 1997. 
 40.31     Sec. 3.  [EFFECTIVE DATE.] 
 40.32     (a) Section 1 is effective the day after approval by the 
 40.33  Columbia Heights city council and compliance with Minnesota 
 40.34  Statutes, section 645.021. 
 40.35     (b) Section 2 is effective upon approval by the city 
 40.36  council of the city of Minneapolis and compliance with Minnesota 
 41.1   Statutes, section 645.021, subdivision 3. 
 41.2                              ARTICLE 7 
 41.3            PERA CORRECTIONAL EMPLOYEE DISABILITY COVERAGE 
 41.4      Section 1.  Minnesota Statutes 1997 Supplement, section 
 41.5   353.27, subdivision 2, is amended to read: 
 41.6      Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) Except as provided 
 41.7   in paragraph (b), the employee contribution shall be an 
 41.8   amount (a) (1) for a "basic member" equal to 8.75 percent of 
 41.9   total salary; and (b) (2) for a "coordinated member" equal to 
 41.10  4.75 percent of total salary. 
 41.11     (b) For local government correctional service employees, as 
 41.12  defined in section 353.33, subdivision 3a, the employee 
 41.13  contribution is an amount equal to 4.96 percent of total salary. 
 41.14     (c) These contributions must be made by deduction from 
 41.15  salary in the manner provided in subdivision 4.  Where any 
 41.16  portion of a member's salary is paid from other than public 
 41.17  funds, such member's employee contribution must be based on the 
 41.18  total salary received from all sources. 
 41.19     Sec. 2.  Minnesota Statutes 1996, section 353.27, 
 41.20  subdivision 3, is amended to read: 
 41.21     Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) Except as provided 
 41.22  in paragraph (b), the employer contribution shall be an amount 
 41.23  equal to the employee contribution under subdivision 2. 
 41.24     (b) On behalf of local government correctional service 
 41.25  employees, as defined in section 353.33, subdivision 3a, the 
 41.26  employer contribution is an amount equal to 5.06 percent of 
 41.27  total salary. 
 41.28     (c) This contribution shall be made from funds available to 
 41.29  the employing subdivision by the means and in the manner 
 41.30  provided in section 353.28. 
 41.31     Sec. 3.  Minnesota Statutes 1996, section 353.33, 
 41.32  subdivision 3a, is amended to read: 
 41.33     Subd. 3a.  [CORRECTIONAL EMPLOYEE DISABILITY BENEFIT 
 41.34  COVERAGE.] (a) For purposes of the disability benefit coverage 
 41.35  provided under this subdivision, a local government correctional 
 41.36  service employee is a person who: 
 42.1      (1) is an "essential employee" as defined in section 
 42.2   179A.03, subdivision 7; 
 42.3      (2) is employed in a county-administered jail or 
 42.4   correctional facility or in a regional correctional facility 
 42.5   administered by multiple counties; 
 42.6      (3) spends at least 75 percent of the employee's working 
 42.7   time in direct contact with persons confined in the jail or 
 42.8   facility, as certified by the employer to the executive director 
 42.9   of the association before August 1, 1998, or within 30 days of 
 42.10  employment in the qualifying county employment position, 
 42.11  whichever is later; and 
 42.12     (4) is a "public employee" as defined in section 353.01, 
 42.13  and is not a member of the public employees retirement 
 42.14  association police and fire fund. 
 42.15     (b) A local government correctional employee who becomes 
 42.16  disabled and physically or mentally unfit to perform the duties 
 42.17  of the position as a direct result of an injury, sickness, or 
 42.18  other disability incurred in or arising out of any act of duty 
 42.19  that renders the employee physically or mentally unable to 
 42.20  perform the employee's correctional facility duties, is entitled 
 42.21  to a disability benefit based on covered service under this 
 42.22  chapter only in an amount equal to 45 percent of the average 
 42.23  salary defined in section 353.29, subdivision 2, plus an 
 42.24  additional 1.8 percent for each year of service as a 
 42.25  correctional service employee after July 1, 1998, in excess of 
 42.26  25 years. 
 42.27     (c) A local government correctional employee who has at 
 42.28  least one year of covered correctional service under this 
 42.29  subdivision and becomes disabled and physically or mentally 
 42.30  unfit to perform the duties of the position because of sickness 
 42.31  or injury occurring while not engaged in covered employment, is 
 42.32  entitled to a disability benefit under this paragraph based on 
 42.33  covered correctional service.  The disability benefit is an 
 42.34  amount equal to 1.8 percent of average salary as defined in 
 42.35  section 353.29, subdivision 2, for each year of covered 
 42.36  correctional service under this subdivision.  If a disability 
 43.1   under this paragraph occurs after one year of covered 
 43.2   correctional service but before ten years of covered service 
 43.3   have been rendered, the disability benefit must be computed as 
 43.4   though the member had ten years of covered service. 
 43.5      (d) If the eligible employee is entitled to receive a 
 43.6   disability benefit as provided in paragraph (b) or (c) and has 
 43.7   credit for less covered correctional service than the length of 
 43.8   service upon which the correctional disability benefit is based, 
 43.9   and also has credit for regular plan service, the employee is 
 43.10  entitled to a disability benefit or deferred retirement annuity 
 43.11  based on the regular plan service only for the service that, 
 43.12  when combined with the correctional service, exceeds the number 
 43.13  of years on which the correctional disability benefit is based.  
 43.14  The disabled employee who also has credit for regular plan 
 43.15  service must in all respects qualify under section 353.33 to be 
 43.16  entitled to receive a disability benefit based on the regular 
 43.17  plan service, except that the service may be combined to satisfy 
 43.18  length of service requirements.  Any deferred annuity to which 
 43.19  the employee may be entitled based on regular plan service must 
 43.20  be augmented as provided in section 353.71 while the employee is 
 43.21  receiving a disability benefit under this subdivision. 
 43.22     Subd. 3b.  [OPTIONAL ANNUITY ELECTION.] A disabled member 
 43.23  may elect to receive the normal disability benefit or an 
 43.24  optional annuity under section 353.30, subdivision 3.  The 
 43.25  election of an optional annuity must be made prior to the 
 43.26  commencement of payment of the disability benefit.  The optional 
 43.27  annuity must begin to accrue on the same date as provided for 
 43.28  the disability benefit.  
 43.29     (1) If a person who is not the spouse of a member is named 
 43.30  as beneficiary of the joint and survivor optional annuity, the 
 43.31  person is eligible to receive the annuity only if the spouse, on 
 43.32  the disability application form prescribed by the executive 
 43.33  director, permanently waives the surviving spouse benefits under 
 43.34  sections 353.31, subdivision 1, and 353.32, subdivision 1a.  If 
 43.35  the spouse of the member refuses to permanently waive the 
 43.36  surviving spouse coverage, the selection of a person other than 
 44.1   the spouse of the member as a joint annuitant is invalid. 
 44.2      (2) If the spouse of the member permanently waives survivor 
 44.3   coverage, the dependent children, if any, continue to be 
 44.4   eligible for survivor benefits under section 353.31, subdivision 
 44.5   1, including the minimum benefit in section 353.31, subdivision 
 44.6   1a.  The designated optional annuity beneficiary may draw the 
 44.7   monthly benefit; however, the amount payable to the dependent 
 44.8   child or children and joint annuitant must not exceed the 70 
 44.9   percent maximum family benefit under section 353.31, subdivision 
 44.10  1a.  If the maximum is exceeded, the benefit of the joint 
 44.11  annuitant must be reduced to the amount necessary so that the 
 44.12  total family benefit does not exceed the 70 percent maximum 
 44.13  family benefit amount. 
 44.14     (3) If the spouse is named as the beneficiary of the joint 
 44.15  and survivor optional annuity, the spouse may draw the monthly 
 44.16  benefits; however, the amount payable to the dependent child or 
 44.17  children and the joint annuitant must not exceed the 70 percent 
 44.18  maximum family benefit under section 353.31, subdivision 1a.  If 
 44.19  the maximum is exceeded, each dependent child will receive ten 
 44.20  percent of the member's specified average monthly salary, and 
 44.21  the benefit to the joint annuitant must be reduced to the amount 
 44.22  necessary so that the total family benefit does not exceed the 
 44.23  70 percent maximum family benefit amount.  The joint and 
 44.24  survivor optional annuity must be restored to the surviving 
 44.25  spouse, plus applicable postretirement adjustments under section 
 44.26  356.41, as the dependent child or children become no longer 
 44.27  dependent under section 353.01, subdivision 15. 
 44.28     Sec. 4.  [EFFECTIVE DATE.] 
 44.29     Sections 1, 2, and 3 are effective on July 1, 1998.