SF 2796

1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; pension plan actuarial 
  1.3             reporting; various public retirement plans; volunteer 
  1.4             firefighter relief associations; Minneapolis 
  1.5             firefighters relief association; modifying actuarial 
  1.6             cost allocation by the legislative commission on 
  1.7             pensions and retirement; changing the actuarial value 
  1.8             of assets, actuarial assumptions and funding surplus 
  1.9             recognition method; revising re-employed annuitant 
  1.10            earnings limitations; adding certain prior 
  1.11            correctional positions to correctional plan coverage; 
  1.12            clarifying various former police and fire 
  1.13            consolidation account merger provisions; authorizing 
  1.14            certain optional annuity form elections by former 
  1.15            consolidation account members; revising local 
  1.16            correctional retirement plan membership eligibility; 
  1.17            increasing local correctional retirement plan member 
  1.18            and employer contribution rates; authorizing the 
  1.19            purchase of nonprofit community-based corporation 
  1.20            teaching service; expanding investment options for 
  1.21            employer matching contribution tax sheltered 
  1.22            annuities; modifying various volunteer firefighter 
  1.23            relief association benefit and administration 
  1.24            provisions; modifying judicial pension provision; 
  1.25            modifying the marriage duration requirement for 
  1.26            certain Minneapolis firefighter relief association 
  1.27            survivor benefits; creating additional Minneapolis 
  1.28            police and firefighter relief association post 
  1.29            retirement adjustment mechanisms; resolving various 
  1.30            individual and small group pension problems; amending 
  1.31            Minnesota Statutes 1998, sections 16A.055, subdivision 
  1.32            5; 69.773, subdivision 1; 122A.46, subdivision 1, and 
  1.33            by adding a subdivision; 136F.45, subdivision 1a; 
  1.34            352.115, subdivision 10; 352.15, subdivision 1a; 
  1.35            352.91, subdivisions 3c, 3d, and by adding a 
  1.36            subdivision; 352B.01, subdivision 3, and by adding a 
  1.37            subdivision; 352D.02, subdivision 1; 352D.04, 
  1.38            subdivision 2; 352D.05, subdivision 3; 352D.06; 
  1.39            352D.09, subdivision 5a; 353.01, subdivisions 2, 6, 
  1.40            11a, 28, 32, and by adding a subdivision; 353.15, 
  1.41            subdivision 2; 353.27, subdivisions 4 and 12; 353.33, 
  1.42            subdivisions 2 and 6; 353.34, subdivision 1; 353.37, 
  1.43            by adding a subdivision; 353.64, subdivisions 2, 3, 4, 
  1.44            and by adding a subdivision; 353.656, subdivisions 1 
  1.45            and 3; 353.71, subdivision 2; 353B.11, subdivision 3; 
  1.46            354.05, subdivisions 2 and 35; 354.091; 354.092, 
  2.1             subdivision 2; 354.093; 354.094, subdivision 1; 
  2.2             354.10, subdivision 2; 354.35; 354.44, subdivision 5; 
  2.3             354.46, subdivision 2a; 354.47, subdivision 1; 354.48, 
  2.4             subdivision 6; 354.49, subdivision 1; 354.52, 
  2.5             subdivisions 3, 4, 4a, and 4b; 354.63, subdivision 2; 
  2.6             354A.31, subdivisions 3 and 3a; 354B.23, subdivision 
  2.7             5a; 354C.12, subdivision 1a; 354C.165; 356.215, 
  2.8             subdivisions 1, 2, and 4d; 356.24, by adding a 
  2.9             subdivision; 356.30, subdivision 1; 356A.01, 
  2.10            subdivision 8; 356A.02; 356A.06, subdivision 4, and by 
  2.11            adding a subdivision; 423B.01; 424A.001, subdivision 
  2.12            9; 424A.02, subdivisions 3, 7, 9, 13, and by adding a 
  2.13            subdivision; 424A.04, subdivision 1; 424A.05, 
  2.14            subdivision 3; 490.121, subdivision 4, and by adding a 
  2.15            subdivision; 490.123, subdivisions 1a and 1b; and 
  2.16            490.124, subdivision 1; Minnesota Statutes 1999 
  2.17            Supplement, sections 3.85, subdivision 12; 69.021, 
  2.18            subdivision 7; 136F.48; 352.1155, subdivisions 1 and 
  2.19            4; 353.01, subdivisions 2b and 10; 353.64, subdivision 
  2.20            1; 353E.02; 353E.03; 353F.02, subdivision 5; 354.445; 
  2.21            354.536, subdivision 1; 354A.101, subdivision 1; 
  2.22            356.215, subdivision 4g; 356.24, subdivisions 1 and 
  2.23            1b; and 423A.02, subdivisions 1b, 4 and 5; Laws 1965, 
  2.24            chapter 705, section 1, subdivision 4, as amended; 
  2.25            proposing coding for new law in Minnesota Statutes, 
  2.26            chapters 69; 352; 353; 354; 354A; 356; and 423B; 
  2.27            proposing coding for new law as Minnesota Statutes, 
  2.28            chapters 352G; and 424B; repealing Minnesota Statutes 
  2.29            1998, section 353.024; 354.52, subdivision 2; and 
  2.30            424A.02, subdivision 11; Minnesota Statutes 1999 
  2.31            Supplement, sections 356.24, subdivision 1a; and 
  2.32            356.61. 
  2.33  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.34                             ARTICLE 1
  2.35                   ACTUARIAL ASSET VALUE CHANGE, 
  2.36                   ACTUARIAL ASSUMPTION CHANGES, 
  2.37                   ACTUARIAL METHOD CHANGES, AND
  2.38            ACTUARIAL REPORTING COST ALLOCATION CHANGES
  2.39     Section 1.  Minnesota Statutes 1999 Supplement, section 
  2.40  3.85, subdivision 12, is amended to read: 
  2.41     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  2.42  commission shall assess each retirement plan specified in 
  2.43  subdivision 11, paragraph (b), its appropriate portion of the 
  2.44  compensation paid to the actuary retained by the commission for 
  2.45  the actuarial valuation calculations, quadrennial projection 
  2.46  valuations, and quadrennial experience studies.  The total 
  2.47  assessment is 100 percent of the amount of contract compensation 
  2.48  for the actuarial consulting firm retained by the commission for 
  2.49  actuarial valuation calculations, including the any public 
  2.50  employees police and fire plan consolidation accounts of the 
  2.51  public employees retirement association established before March 
  3.1   2, 1999, for which the municipality declined merger under 
  3.2   section 353.665, subdivision 1, or established after March 1, 
  3.3   1999, annual experience data collection and processing, and 
  3.4   quadrennial experience studies and quadrennial projection 
  3.5   valuations.  
  3.6      The portion of the total assessment payable by each 
  3.7   retirement system or pension plan must be determined as follows: 
  3.8      (1) Each pension plan specified in subdivision 11, 
  3.9   paragraph (b), clauses (1) to (14), must pay the following 
  3.10  indexed amount based on its total active, deferred, inactive, 
  3.11  and benefit recipient membership: 
  3.12         up to 2,000 members, inclusive         $2.55 per member 
  3.13         2,001 through 10,000 members           $1.13 per member 
  3.14         over 10,000 members                    $0.11 per member  
  3.15     The amount specified is applicable for the assessment of 
  3.16  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  3.17  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  3.18  fiscal year and subsequent fiscal year actuarial compensation 
  3.19  amounts, the amount specified must be increased at the same 
  3.20  percentage increase rate as the implicit price deflator for 
  3.21  state and local government purchases of goods and services for 
  3.22  the 12-month period ending with the first quarter of the 
  3.23  calendar year following the completion date for the actuarial 
  3.24  valuation calculations, as published by the federal Department 
  3.25  of Commerce, and rounded upward to the nearest full cent. 
  3.26     (2) The total per-member portion of the allocation must be 
  3.27  determined, and that total per-member amount must be subtracted 
  3.28  from the total amount for allocation.  Of the remainder dollar 
  3.29  amount, the following per-retirement system and per-pension plan 
  3.30  charges must be determined and the charges must be paid by the 
  3.31  system or plan: 
  3.32     (i) 37.87 percent is the total additional per-retirement 
  3.33  system charge, of which one-seventh must be paid by each 
  3.34  retirement system specified in subdivision 11, paragraph (b), 
  3.35  clauses (1), (2), (6), (7), (9), (10), and (11). 
  3.36     (ii) 62.13 percent is the total additional per-pension plan 
  4.1   charge, of which one-fourteenth must be paid by each pension 
  4.2   plan specified in subdivision 11, paragraph (b), clauses (1) to 
  4.3   (14) based on each plan's proportion, as determined by the 
  4.4   commission's retained actuary, to complete the actuarial 
  4.5   valuation calculations, annual experience data collection and 
  4.6   processing, and quadrennial experience studies for all plans.  
  4.7      (b) The assessment must be made following the completion of 
  4.8   the actuarial valuation calculations and the applicable 
  4.9   experience analysis.  The amount of the assessment is 
  4.10  appropriated from the retirement fund applicable to the 
  4.11  retirement plan.  Receipts from assessments must be deposited in 
  4.12  the state treasury and credited to the general fund.  
  4.13     Sec. 2.  Minnesota Statutes 1998, section 16A.055, 
  4.14  subdivision 5, is amended to read: 
  4.15     Subd. 5.  [RETIREMENT FUND REPORTING.] (a) The commissioner 
  4.16  may not require a public retirement fund to use financial or 
  4.17  actuarial reporting practices or procedures different from those 
  4.18  required by section 356.20 or 356.215. 
  4.19     (b) The commissioner may contract with the consulting 
  4.20  actuary retained by the legislative commission on pensions and 
  4.21  retirement for the preparation of quadrennial projection 
  4.22  valuations as required under section 356.215, subdivisions 2 and 
  4.23  2a.  The initial projection valuation under this paragraph is 
  4.24  due on May 1, 2003, and May 1 each fourth year thereafter.  The 
  4.25  commissioner of finance shall assess the various statewide and 
  4.26  major local retirement plans the cost of the quadrennial 
  4.27  projection valuation.  
  4.28     Sec. 3.  Minnesota Statutes 1998, section 356.215, 
  4.29  subdivision 1, is amended to read: 
  4.30     Subdivision 1.  [DEFINITIONS.] (a) For the purposes of 
  4.31  sections 3.85 and 356.20 to 356.23, each of the following terms 
  4.32  in the following paragraphs have the meaning given:. 
  4.33     (1) (b) "Actuarial valuation" means a set of calculations 
  4.34  prepared by the actuary retained by the legislative commission 
  4.35  on pensions and retirement if so required under section 3.85, or 
  4.36  otherwise, by an approved actuary, to determine the normal cost 
  5.1   and the accrued actuarial liabilities of a benefit plan, 
  5.2   according to the entry age actuarial cost method and based upon 
  5.3   stated assumptions including, but not limited to rates of 
  5.4   interest, mortality, salary increase, disability, withdrawal, 
  5.5   and retirement and to determine the payment necessary to 
  5.6   amortize over a stated period any unfunded accrued actuarial 
  5.7   liability disclosed as a result of the actuarial valuation of 
  5.8   the benefit plan. 
  5.9      (2) (c) "Approved actuary" means a person who is regularly 
  5.10  engaged in the business of providing actuarial services and who 
  5.11  has at least 15 years of service to major public employee 
  5.12  pension or retirement funds or who is a fellow in the society of 
  5.13  actuaries.  
  5.14     (3) (d) "Entry age actuarial cost method" means an 
  5.15  actuarial cost method under which the actuarial present value of 
  5.16  the projected benefits of each individual currently covered by 
  5.17  the benefit plan and included in the actuarial valuation is 
  5.18  allocated on a level basis over the service of the individual if 
  5.19  the benefit plan is governed by section 69.773 or over the 
  5.20  earnings of the individual if the benefit plan is governed by 
  5.21  any other law between the entry age and the assumed exit age, 
  5.22  with the portion of this actuarial present value which is 
  5.23  allocated to the valuation year to be the normal cost and the 
  5.24  portion of this actuarial present value not provided for at the 
  5.25  valuation date by the actuarial present value of future normal 
  5.26  costs to be the actuarial accrued liability, with aggregation in 
  5.27  the calculation process to be the sum of the calculated result 
  5.28  for each covered individual and with recognition given to any 
  5.29  different benefit formulas which may apply to various periods of 
  5.30  service. 
  5.31     (4) (e) "Experience study" means a report providing 
  5.32  experience data and an actuarial analysis of the adequacy of the 
  5.33  actuarial assumptions on which actuarial valuations are based. 
  5.34     (5) (f) "Current assets" means: 
  5.35     (1) for the July 1, 1999, actuarial valuation, the value of 
  5.36  all assets at cost, including realized capital gains or losses, 
  6.1   plus one-third of any unrealized capital gains or losses; 
  6.2      (2) for the July 1, 2000, actuarial valuations, the market 
  6.3   value of all assets as of June 30, 2000, reduced by: 
  6.4      (i) 60 percent of the difference between the market value 
  6.5   of all assets as of June 30, 1999, and the actuarial value of 
  6.6   assets used in the July 1, 1999, actuarial valuation, and 
  6.7      (ii) 80 percent of the difference between the actual net 
  6.8   change in the market value of assets between June 30, 1999, and 
  6.9   June 30, 2000, and the computed increase in the market value of 
  6.10  assets between June 30, 1999, and June 30, 2000, if the assets 
  6.11  had increased at the percentage preretirement interest rate 
  6.12  assumption used in the July 1, 1999, actuarial valuation; 
  6.13     (3) for the July 1, 2001, actuarial valuation, the market 
  6.14  value of all assets as of June 30, 2001, reduced by: 
  6.15     (i) 30 percent of the difference between the market value 
  6.16  of all assets as of June 30, 1999, and the actuarial value of 
  6.17  assets used in the July 1, 1999, actuarial valuation; 
  6.18     (ii) 60 percent of the difference between the actual net 
  6.19  change in the market value of assets between June 30, 1999, and 
  6.20  June 30, 2000, and the computed increase in the market value of 
  6.21  assets between June 30, 1999, and June 30, 2000, if the assets 
  6.22  had increased at the percentage preretirement interest rate 
  6.23  assumption used in the July 1, 1999, actuarial valuation; and 
  6.24     (iii) 80 percent of the difference between the actual net 
  6.25  change in the market value of assets between June 30, 2000, and 
  6.26  June 30, 2001, and the computed increase in the market value of 
  6.27  assets between June 30, 2000, and June 30, 2001, if the assets 
  6.28  had increased at the percentage preretirement interest rate 
  6.29  assumption used in the July 1, 2000, actuarial valuation; 
  6.30     (4) for the July 1, 2002, actuarial valuation, the market 
  6.31  value of all assets as of June 30, 2002, reduced by: 
  6.32     (i) ten percent of the difference between the market value 
  6.33  of all assets as of June 30, 1999, and the actuarial value of 
  6.34  assets used in the July 1, 1999, actuarial valuation; 
  6.35     (ii) 40 percent of the difference between the actual net 
  6.36  change in the market value of assets between June 30, 1999, and 
  7.1   June 30, 2000, and the computed increase in the market value of 
  7.2   assets between June 30, 1999, and June 30, 2000, if the assets 
  7.3   had increased at the percentage preretirement interest rate 
  7.4   assumption used in the July 1, 1999, actuarial valuation; 
  7.5      (iii) 60 percent of the difference between the actual net 
  7.6   change in the market value of assets between June 30, 2000, and 
  7.7   June 30, 2001, and the computed increase in the market value of 
  7.8   assets between June 30, 2000, and June 30, 2001, if the assets 
  7.9   had increased at the percentage preretirement interest rate 
  7.10  assumption used in the July 1, 2000, actuarial valuation; and 
  7.11     (iv) 80 percent of the difference between the actual net 
  7.12  change in the market value of assets between June 30, 2001, and 
  7.13  June 30, 2002, and the computed increase in the market value of 
  7.14  assets between June 30, 2001, and June 30, 2002, if the assets 
  7.15  had increased at the percentage preretirement interest rate 
  7.16  assumption used in the July 1, 2001, actuarial valuation; or 
  7.17     (5) for any actuarial valuation after July 1, 2002, the 
  7.18  market value of all assets as of the preceding June 30, reduced 
  7.19  by: 
  7.20     (i) 20 percent of the difference between the actual net 
  7.21  change in the market value of assets between the June 30 that 
  7.22  occurred three years earlier and the June 30 that occurred four 
  7.23  years earlier and the computed increase in the market value of 
  7.24  assets over that fiscal year period if the assets had increased 
  7.25  at the percentage preretirement interest rate assumption used in 
  7.26  the actuarial valuation for the July 1 that occurred four years 
  7.27  earlier; 
  7.28     (ii) 40 percent of the difference between the actual net 
  7.29  change in the market value of assets between the June 30 that 
  7.30  occurred two years earlier and the June 30 that occurred three 
  7.31  years earlier and the computed increase in the market value of 
  7.32  assets over that fiscal year period if the assets had increased 
  7.33  at the percentage preretirement interest rate assumption used in 
  7.34  the actuarial valuation for the July 1 that occurred three years 
  7.35  earlier; 
  7.36     (iii) 60 percent of the difference between the actual net 
  8.1   change in the market value of assets between the June 30 that 
  8.2   occurred one year earlier and the June 30 that occurred two 
  8.3   years earlier and the computed increase in the market value of 
  8.4   assets over that fiscal year period if the assets had increased 
  8.5   at the percentage preretirement interest rate assumption used in 
  8.6   the actuarial valuation for the July 1 that occurred two years 
  8.7   earlier; and 
  8.8      (iv) 80 percent of the difference between the actual net 
  8.9   change in the market value of assets between the immediately 
  8.10  prior June 30 and the June 30 that occurred one year earlier and 
  8.11  the computed increase in the market value of assets over that 
  8.12  fiscal year period if the assets had increased at the percentage 
  8.13  preretirement interest rate assumption used in the actuarial 
  8.14  valuation for the July 1 that occurred one year earlier. 
  8.15     (6) (g) "Unfunded actuarial accrued liability" means the 
  8.16  total current and expected future benefit obligations, reduced 
  8.17  by the sum of current assets and the present value of future 
  8.18  normal costs. 
  8.19     (7) (h) "Pension benefit obligation" means the actuarial 
  8.20  present value of credited projected benefits, determined as the 
  8.21  actuarial present value of benefits estimated to be payable in 
  8.22  the future as a result of employee service attributing an equal 
  8.23  benefit amount, including the effect of projected salary 
  8.24  increases and any step rate benefit accrual rate differences, to 
  8.25  each year of credited and expected future employee service. 
  8.26     Sec. 4.  Minnesota Statutes 1998, section 356.215, 
  8.27  subdivision 2, is amended to read: 
  8.28     Subd. 2.  [REQUIREMENTS.] (a) It is the policy of the 
  8.29  legislature that it is necessary and appropriate to determine 
  8.30  annually the financial status of tax supported retirement and 
  8.31  pension plans for public employees.  To achieve this goal,:  
  8.32     (1) the legislative commission on pensions and retirement 
  8.33  shall have prepared by the actuary retained by the commission 
  8.34  annual actuarial valuations of the retirement plans enumerated 
  8.35  in section 3.85, subdivision 11, paragraph (b), and quadrennial 
  8.36  experience studies of the retirement plans enumerated in section 
  9.1   3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7),; 
  9.2   and 
  9.3      (2) the commissioner of finance may have prepared by the 
  9.4   actuary retained by the commission, two years after each set of 
  9.5   quadrennial experience studies, quadrennial projection 
  9.6   valuations of at least one of the retirement plans enumerated in 
  9.7   section 3.85, subdivision 11, paragraph (b), for which it the 
  9.8   commissioner determines that the analysis may be beneficial.  
  9.9      (b) The governing or managing board or administrative 
  9.10  officials of each public pension and retirement fund or plan 
  9.11  enumerated in section 356.20, subdivision 2, clauses (9), (10), 
  9.12  and (12), shall have prepared by an approved actuary annual 
  9.13  actuarial valuations of their respective funds as provided in 
  9.14  this section.  This requirement also applies to any fund that is 
  9.15  the successor to any organization enumerated in section 356.20, 
  9.16  subdivision 2, or to the governing or managing board or 
  9.17  administrative officials of any newly formed retirement fund or 
  9.18  association operating under the control or supervision of any 
  9.19  public employee group, governmental unit, or institution 
  9.20  receiving a portion of its support through legislative 
  9.21  appropriations, and any local police or fire fund coming within 
  9.22  the provisions of section 356.216. 
  9.23     (b) Subd. 2a.  [PROJECTION VALUATION REQUIREMENTS.] A 
  9.24  quadrennial projection valuation required under paragraph 
  9.25  (a) subdivision 2 is intended to serve as an additional 
  9.26  analytical tool with which policy makers may assess the future 
  9.27  funding status of public plans through forecasting and testing 
  9.28  various potential outcomes over time if certain plan assumptions 
  9.29  or valuation methods were to be modified.  In consultation with 
  9.30  the executive director of the legislative commission on pensions 
  9.31  and retirement, the retirement fund directors, the state 
  9.32  economist, the state demographer, the commissioner of finance, 
  9.33  and the commissioner of employee relations, the actuary retained 
  9.34  by the legislative commission on pensions and retirement shall 
  9.35  perform the quadrennial projection valuations on behalf of the 
  9.36  commissioner of finance, testing future implications for plan 
 10.1   funding by modifying assumptions and methods currently in 
 10.2   place.  The commission-retained actuary shall provide advice to 
 10.3   the commission commissioner as to the periods over which such 
 10.4   projections should be made, the nature and scope of the 
 10.5   scenarios to be analyzed, and the measures of funding status to 
 10.6   be employed, and shall report the results of these analyses in 
 10.7   the same manner as for quadrennial experience studies. 
 10.8      Sec. 5.  Minnesota Statutes 1998, section 356.215, 
 10.9   subdivision 4d, is amended to read: 
 10.10     Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
 10.11  actuarial valuation must use the applicable following 
 10.12  preretirement interest assumption and the applicable following 
 10.13  postretirement interest assumption: 
 10.14                                     preretirement  postretirement 
 10.15                                     interest rate  interest rate 
 10.16              plan                      assumption     assumption 
 10.17       general state employees 
 10.18           retirement plan                  8.5%          5.0 6.0%
 10.19       correctional state employees 
 10.20           retirement plan                  8.5           5.0 6.0
 10.21       state patrol retirement plan         8.5           5.0 6.0
 10.22       legislators retirement plan          8.5           5.0 6.0
 10.23       elective state officers
 10.24           retirement plan                  8.5           5.0 6.0
 10.25       judges retirement plan               8.5           5.0 6.0
 10.26       general public employees 
 10.27           retirement plan                  8.5           5.0 6.0
 10.28       public employees police and fire 
 10.29           retirement plan                  8.5           5.0 6.0
 10.30       local government correctional 
 10.31           service retirement plan          8.5           5.0 6.0
 10.32       teachers retirement plan             8.5           5.0 6.0
 10.33       Minneapolis employees 
 10.34           retirement plan                  6.0           5.0 
 10.35       Duluth teachers retirement plan      8.5           8.5 
 10.36       Minneapolis teachers retirement
 10.37           plan                             8.5           8.5 
 10.38       St. Paul teachers retirement 
 10.39           plan                             8.5           7.5 
 10.40       Minneapolis police relief 
 10.41           association                      6.0           6.0 
 10.42       other local police relief 
 10.43           associations                     5.0           5.0 
 10.44       Minneapolis fire department 
 10.45           relief association               6.0           6.0 
 10.46       other local salaried firefighter 
 10.47           relief associations              5.0           5.0 
 10.48       local monthly benefit volunteer 
 10.49           firefighter relief associations  5.0           5.0 
 10.50     (b) The actuarial valuation must use the applicable 
 10.51  following single rate future salary increase assumption or the 
 10.52  applicable following graded rate future salary increase 
 10.53  assumption: 
 11.1      (1) single rate future salary increase assumption 
 11.2                                               future salary 
 11.3               plan                          increase assumption 
 11.4        legislators retirement plan                  5.0% 
 11.5        elective state officers retirement 
 11.6            plan                                     5.0 
 11.7        judges retirement plan                       5.0 
 11.8        Minneapolis employees retirement plan        4.0 
 11.9        Minneapolis police relief association        4.0 
 11.10       other local police relief associations       3.5 
 11.11       Minneapolis fire department relief 
 11.12           association                              4.0 
 11.13       other local salaried firefighter relief 
 11.14           associations                             3.5 
 11.15     (2)  modified single rate future salary increase assumption 
 11.16                                              future salary 
 11.17                 plan                       increase assumption
 11.18  Minneapolis employees retirement         prior calendar year
 11.19         plan                            increased 1.0198 percent
 11.20                                         to prior fiscal year date
 11.21                                         and 4.0 percent annually
 11.22                                         for each future year
 11.23     (3) select and ultimate future salary increase assumption 
 11.24  or graded rate future salary increase assumption 
 11.25                                               future salary 
 11.26                 plan                       increase assumption 
 11.27       general state employees             select calculation and
 11.28           retirement plan                      assumption A 
 11.29       correctional state employees 
 11.30           retirement plan                      assumption A H
 11.31       state patrol retirement plan             assumption A H 
 11.32       general public employees            select calculation and
 11.33           retirement plan                      assumption B 
 11.34       public employees police and fire 
 11.35           retirement plan                      assumption C 
 11.36       local government correctional service 
 11.37           retirement plan                      assumption C H
 11.38       teachers retirement plan                 assumption D 
 11.39       Duluth teachers retirement plan          assumption E 
 11.40       Minneapolis teachers retirement plan     assumption F 
 11.41       St. Paul teachers retirement plan        assumption G 
 11.42       
 11.43       select calculation:
 11.44       During the ten-year select period, 0.2 percent is
 11.45       multiplied by the result of 10 minus T, where T is 
 11.46       the number of completed years of service, and is added
 11.47       to the applicable future salary increase assumption.
 11.48       
 11.49       future salary increase assumption:
 11.50       
 11.51       age    A      B      C      D      E      F      G      H 
 11.52       16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 
 11.53           6.95     6.95          8.20                       7.7500
 11.54       17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 
 11.55           6.90     6.90          8.15                       7.7500
 11.56       18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 11.57           6.85     6.85          8.10                       7.7500
 11.58       19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 11.59           6.80     6.80          8.05                       7.7500
 11.60       20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 
 11.61           6.75     6.75          8.00                       7.7500
 11.62       21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 
 11.63           6.70     6.70          7.95                       7.1454
 11.64       22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 
 11.65           6.65     6.65          7.90                       7.0725
 12.1        24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 
 12.2            6.66     6.55          7.80                       7.0363
 12.3        25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 
 12.4            6.50     6.50          7.75                       7.0000
 12.5        26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 
 12.6            6.45     6.45          7.70                       7.0000
 12.7        27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 
 12.8            6.40     6.40          7.65                       7.0000
 12.9        28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 
 12.10           6.35     6.35          7.60                       7.0000
 12.11       29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 
 12.12           6.30     6.30          7.55                       7.0000
 12.13       30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 
 12.14           6.25     6.30          7.50                       7.0000
 12.15       31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 
 12.16           6.20     6.25          7.45                       7.0000
 12.17       32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 
 12.18           6.15     6.21          7.40                       7.0000
 12.19       33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 
 12.20           6.10     6.17          7.30                       7.0000
 12.21       34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 
 12.22           6.05     6.09          7.10                       7.0000
 12.23       35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 
 12.24           6.00     6.05                                     7.0000
 12.25       36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 
 12.26           6.95     6.01          6.85                       6.9019
 12.27       37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 
 12.28           5.90     5.97          6.70                       6.8074
 12.29       38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 
 12.30           5.85     5.93          6.55                       6.7125
 12.31       39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 
 12.32           5.80     5.89          6.40                       6.6054
 12.33       40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 
 12.34           5.75     5.85          6.25                       6.5000
 12.35       41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 
 12.36           5.70     5.81          6.10                       6.3540
 12.37       42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 
 12.38           5.65     5.77          5.95                       6.2087
 12.39       43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 
 12.40           5.60     5.73          5.80                       6.0622
 12.41       44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 
 12.42           5.55     5.69          5.65                       5.9048
 12.43       45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 
 12.44           5.50     5.65          5.50                       5.7500
 12.45       46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 
 12.46           5.45     5.62          5.45                       5.6940
 12.47       47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 
 12.48           5.40     5.59          5.40                       5.6375
 12.49       48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 
 12.50           5.35     5.56          5.35                       5.5822
 12.51       49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 
 12.52           5.30     5.53          5.30                       5.5404
 12.53       50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 
 12.54           5.25     5.50          5.25                       5.5000
 12.55       51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 
 12.56           5.20     5.45          5.20                       5.4384
 12.57       52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 
 12.58           5.15     5.40          5.15                       5.3776
 12.59       53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 
 12.60           5.10     5.35          5.10                       5.3167
 12.61       54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 
 12.62           5.05     5.30          5.05                       5.2826
 12.63       55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 
 12.64           5.00     5.25          5.00                       5.2500
 12.65       56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 
 12.66           5.00     5.20          5.00                       5.2500
 12.67       57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 12.68           5.00     5.15          5.00                       5.2500
 12.69       58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 12.70           5.00     5.10          5.00                       5.2500
 12.71       59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 13.1            5.00     5.05          5.00                       5.2500
 13.2        60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.3            5.00                   5.00                       5.2500
 13.4        61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.5            5.00                   5.00                       5.2500
 13.6        62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.7            5.00                   5.00                       5.2500
 13.8        63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.9            5.00                   5.00                       5.2500
 13.10       64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.11           5.00                   5.00                       5.2500
 13.12       65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.13           5.00                   5.00                       5.2500
 13.14       66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.15           5.00                   5.00                       5.2500
 13.16       67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.17           5.00                   5.00                       5.2500
 13.18       68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.19           5.00                   5.00                       5.2500
 13.20       69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.21           5.00                   5.00                       5.2500
 13.22       70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 13.23           5.00                   5.00                       5.2500
 13.24       71  5.00     5.00          5.00
 13.25     (c) The actuarial valuation must use the applicable 
 13.26  following payroll growth assumption for calculating the 
 13.27  amortization requirement for the unfunded actuarial accrued 
 13.28  liability where the amortization retirement is calculated as a 
 13.29  level percentage of an increasing payroll: 
 13.30                                                   payroll growth
 13.31                    plan                             assumption 
 13.32       general state employees retirement plan          5.00% 
 13.33       correctional state employees retirement plan     5.00 
 13.34       state patrol retirement plan                     5.00 
 13.35       legislators retirement plan                      5.00 
 13.36       elective state officers retirement plan          5.00 
 13.37       judges retirement plan                           5.00 
 13.38       general public employees retirement plan         6.00 
 13.39       public employees police and fire 
 13.40           retirement plan                              6.00 
 13.41       local government correctional service 
 13.42           retirement plan                              6.00 
 13.43       teachers retirement plan                         5.00 
 13.44       Duluth teachers retirement plan                  5.00 
 13.45       Minneapolis teachers retirement plan             5.00 
 13.46       St. Paul teachers retirement plan                5.00 
 13.47     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
 13.48  356.215, subdivision 4g, is amended to read: 
 13.49     Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 13.50  the exhibit indicating the level normal cost, the actuarial 
 13.51  valuation must contain an exhibit indicating the additional 
 13.52  annual contribution sufficient to amortize the unfunded 
 13.53  actuarial accrued liability.  For funds governed by chapters 3A, 
 13.54  352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 13.55  contribution must be calculated on a level percentage of covered 
 14.1   payroll basis by the established date for full funding in effect 
 14.2   when the valuation is prepared.  For funds governed by chapter 
 14.3   3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 14.4   sections 353.63 through 353.68, and chapters 353C, 354A, and 
 14.5   490, the level percent additional contribution must be 
 14.6   calculated assuming annual payroll growth of 6.5 percent.  For 
 14.7   funds governed by sections 352.01 through 352.86 and chapter 
 14.8   354, the level percent additional contribution must be 
 14.9   calculated assuming an annual payroll growth of five percent.  
 14.10  For the fund governed by sections 353.01 through 353.46, the 
 14.11  level percent additional contribution must be calculated 
 14.12  assuming an annual payroll growth of six percent.  For all other 
 14.13  funds, the additional annual contribution must be calculated on 
 14.14  a level annual dollar amount basis. 
 14.15     (b) For any fund other than the Minneapolis employees 
 14.16  retirement fund, after the first actuarial valuation date 
 14.17  occurring after June 1, 1989, if there has not been a change in 
 14.18  the actuarial assumptions used for calculating the actuarial 
 14.19  accrued liability of the fund, a change in the benefit plan 
 14.20  governing annuities and benefits payable from the fund, a change 
 14.21  in the actuarial cost method used in calculating the actuarial 
 14.22  accrued liability of all or a portion of the fund, or a 
 14.23  combination of the three, which change or changes by themselves 
 14.24  without inclusion of any other items of increase or decrease 
 14.25  produce a net increase in the unfunded actuarial accrued 
 14.26  liability of the fund, the established date for full funding for 
 14.27  the first actuarial valuation made after June 1, 1989, and each 
 14.28  successive actuarial valuation is the first actuarial valuation 
 14.29  date occurring after June 1, 2020.  
 14.30     (c) For any fund or plan other than the Minneapolis 
 14.31  employees retirement fund, after the first actuarial valuation 
 14.32  date occurring after June 1, 1989, if there has been a change in 
 14.33  any or all of the actuarial assumptions used for calculating the 
 14.34  actuarial accrued liability of the fund, a change in the benefit 
 14.35  plan governing annuities and benefits payable from the fund, a 
 14.36  change in the actuarial cost method used in calculating the 
 15.1   actuarial accrued liability of all or a portion of the fund, or 
 15.2   a combination of the three, and the change or changes, by 
 15.3   themselves and without inclusion of any other items of increase 
 15.4   or decrease, produce a net increase in the unfunded actuarial 
 15.5   accrued liability in the fund, the established date for full 
 15.6   funding must be determined using the following procedure:  
 15.7      (i) the unfunded actuarial accrued liability of the fund 
 15.8   must be determined in accordance with the plan provisions 
 15.9   governing annuities and retirement benefits and the actuarial 
 15.10  assumptions in effect before an applicable change; 
 15.11     (ii) the level annual dollar contribution or level 
 15.12  percentage, whichever is applicable, needed to amortize the 
 15.13  unfunded actuarial accrued liability amount determined under 
 15.14  item (i) by the established date for full funding in effect 
 15.15  before the change must be calculated using the interest 
 15.16  assumption specified in subdivision 4d in effect before the 
 15.17  change; 
 15.18     (iii) the unfunded actuarial accrued liability of the fund 
 15.19  must be determined in accordance with any new plan provisions 
 15.20  governing annuities and benefits payable from the fund and any 
 15.21  new actuarial assumptions and the remaining plan provisions 
 15.22  governing annuities and benefits payable from the fund and 
 15.23  actuarial assumptions in effect before the change; 
 15.24     (iv) the level annual dollar contribution or level 
 15.25  percentage, whichever is applicable, needed to amortize the 
 15.26  difference between the unfunded actuarial accrued liability 
 15.27  amount calculated under item (i) and the unfunded actuarial 
 15.28  accrued liability amount calculated under item (iii) over a 
 15.29  period of 30 years from the end of the plan year in which the 
 15.30  applicable change is effective must be calculated using the 
 15.31  applicable interest assumption specified in subdivision 4d in 
 15.32  effect after any applicable change; 
 15.33     (v) the level annual dollar or level percentage 
 15.34  amortization contribution under item (iv) must be added to the 
 15.35  level annual dollar amortization contribution or level 
 15.36  percentage calculated under item (ii); 
 16.1      (vi) the period in which the unfunded actuarial accrued 
 16.2   liability amount determined in item (iii) is amortized by the 
 16.3   total level annual dollar or level percentage amortization 
 16.4   contribution computed under item (v) must be calculated using 
 16.5   the interest assumption specified in subdivision 4d in effect 
 16.6   after any applicable change, rounded to the nearest integral 
 16.7   number of years, but not to exceed 30 years from the end of the 
 16.8   plan year in which the determination of the established date for 
 16.9   full funding using the procedure set forth in this clause is 
 16.10  made and not to be less than the period of years beginning in 
 16.11  the plan year in which the determination of the established date 
 16.12  for full funding using the procedure set forth in this clause is 
 16.13  made and ending by the date for full funding in effect before 
 16.14  the change; and 
 16.15     (vii) the period determined under item (vi) must be added 
 16.16  to the date as of which the actuarial valuation was prepared and 
 16.17  the date obtained is the new established date for full funding.  
 16.18     (d) For the Minneapolis employees retirement fund, the 
 16.19  established date for full funding is June 30, 2020. 
 16.20     (e) For the following retirement plans for which the annual 
 16.21  actuarial valuation indicates an excess of valuation assets over 
 16.22  the actuarial accrued liability, the valuation assets in excess 
 16.23  of the actuarial accrued liability must be recognized in the 
 16.24  following manner: 
 16.25     (1) the public employees retirement association police and 
 16.26  fire plan, the valuation assets in excess of the actuarial 
 16.27  accrued liability serve to reduce as a reduction in the current 
 16.28  contribution requirements by an amount equal to the amortization 
 16.29  of the excess expressed as a level percentage of pay over a 
 16.30  30-year period beginning anew with each annual actuarial 
 16.31  valuation of the plan; and 
 16.32     (2) the correctional employees retirement plan of the 
 16.33  Minnesota state retirement system, and the state patrol 
 16.34  retirement plan, an excess of valuation assets over actuarial 
 16.35  accrued liability must be amortized in the same manner over the 
 16.36  same period as an unfunded actuarial accrued liability but must 
 17.1   serve to reduce the required contribution instead of increasing 
 17.2   it. 
 17.3      Sec. 7.  [EFFECTIVE DATE.] 
 17.4      (a) Section 1 is effective for costs incurred on or after 
 17.5   July 1, 2000.  
 17.6      (b) Sections 2 to 6 are effective on June 30, 2000, for 
 17.7   actuarial valuations on or after that date. 
 17.8                              ARTICLE 2 
 17.9               REEMPLOYED ANNUITANT EARNINGS LIMITATION 
 17.10                             REVISIONS
 17.11     Section 1.  Minnesota Statutes 1999 Supplement, section 
 17.12  136F.48, is amended to read: 
 17.13     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
 17.14     (a) This section applies to a person who:  
 17.15     (1) retires from the Minnesota state colleges and 
 17.16  universities system with at least ten years of combined service 
 17.17  credit in a system under the jurisdiction of the board of 
 17.18  trustees of the Minnesota state colleges and universities; 
 17.19     (2) was employed on a full-time basis immediately preceding 
 17.20  retirement as a faculty member or as an unclassified 
 17.21  administrator in the Minnesota state colleges and universities 
 17.22  system; 
 17.23     (3) begins drawing a retirement benefit from the individual 
 17.24  retirement account plan or an annuity from the teachers 
 17.25  retirement association, from the general state employees 
 17.26  retirement plan or the unclassified state employees retirement 
 17.27  program of the Minnesota state retirement system, or from a 
 17.28  first class city teacher retirement plan; and 
 17.29     (4) returns to work on not less than a one-third time basis 
 17.30  and not more than a two-thirds time basis in the system from 
 17.31  which the person retired under an agreement in which the person 
 17.32  may not earn a salary of more than $35,000 in a calendar year 
 17.33  from employment after retirement in the system from which the 
 17.34  person retired.  
 17.35     (b) Initial participation, the amount of time worked, and 
 17.36  the duration of participation under this section must be 
 18.1   mutually agreed upon by the president of the institution where 
 18.2   the person returns to work and the employee.  The president may 
 18.3   require up to one-year notice of intent to participate in the 
 18.4   program as a condition of participation under this section.  The 
 18.5   president shall determine the time of year the employee shall 
 18.6   work.  The employer or the president may not require a person to 
 18.7   waive any rights under a collective bargaining agreement as a 
 18.8   condition of participation under this section.  
 18.9      (c) For a person eligible under paragraphs (a) and (b), the 
 18.10  employing board shall make the same employer contribution for 
 18.11  hospital, medical, and dental benefits as would be made if the 
 18.12  person were employed full time.  
 18.13     (d) For work under paragraph (a), a person must receive a 
 18.14  percentage of the person's salary at the time of retirement that 
 18.15  is equal to the percentage of time the person works compared to 
 18.16  full-time work.  
 18.17     (e) If a collective bargaining agreement covering a person 
 18.18  provides for an early retirement incentive that is based on age, 
 18.19  the incentive provided to the person must be based on the 
 18.20  person's age at the time employment under this section ends.  
 18.21  However, the salary used to determine the amount of the 
 18.22  incentive must be the salary that would have been paid if the 
 18.23  person had been employed full time for the year immediately 
 18.24  preceding the time employment under this section ends. 
 18.25     (f) A person who returns to work under this section is a 
 18.26  member of the appropriate bargaining unit and is covered by the 
 18.27  appropriate collective bargaining contract.  Except as provided 
 18.28  in this section, the person's coverage is subject to any part of 
 18.29  the contract limiting rights of part-time employees. 
 18.30     Sec. 2.  Minnesota Statutes 1998, section 352.115, 
 18.31  subdivision 10, is amended to read: 
 18.32     Subd. 10.  [REEMPLOYMENT OF ANNUITANT.] (a) If any retired 
 18.33  employee again becomes entitled to receive salary or wages from 
 18.34  the state, or any employer who employs state employees as that 
 18.35  term is defined in section 352.01, subdivision 2, other than 
 18.36  salary or wages received as a temporary employee of the 
 19.1   legislature during a legislative session, the annuity or 
 19.2   retirement allowance shall cease when the retired employee has 
 19.3   earned an amount equal to the annual maximum earnings allowable 
 19.4   for that age for the continued receipt of full benefit amounts 
 19.5   monthly under the federal old age, survivors, and disability 
 19.6   insurance program as set by the secretary of health and human 
 19.7   services under United States Code, title 42, section 403, in any 
 19.8   calendar year.  If the retired employee has not yet reached the 
 19.9   minimum age for the receipt of social security benefits, the 
 19.10  maximum earnings for the retired employee shall be equal to the 
 19.11  annual maximum earnings allowable for the minimum age for the 
 19.12  receipt of social security benefits.  
 19.13     (b) The balance of the annual retirement annuity after 
 19.14  cessation must be handled or disposed of as provided in section 
 19.15  356.58.  
 19.16     (c) The annuity must be resumed when state service ends, 
 19.17  or, if the retired employee is still employed at the beginning 
 19.18  of the next calendar year, at the beginning of that calendar 
 19.19  year, and payment must again end when the retired employee has 
 19.20  earned the applicable reemployment earnings maximum specified in 
 19.21  this subdivision.  No payroll deductions for the retirement fund 
 19.22  shall be made from the earnings of a reemployed retired 
 19.23  employee.  If the retired employee is granted a sick leave 
 19.24  without pay, but not otherwise, the annuity or retirement 
 19.25  allowance must be resumed during the period of sick leave.  
 19.26     (d) No payroll deductions for the retirement fund may be 
 19.27  made from the earnings of a reemployed retired employee. 
 19.28     (e) No change shall be made in the monthly amount of an 
 19.29  annuity or retirement allowance because of the reemployment of 
 19.30  an annuitant. 
 19.31     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
 19.32  352.1155, subdivision 1, is amended to read: 
 19.33     Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
 19.34  subdivision 4, the annuity reduction provisions of section 
 19.35  352.115, subdivision 10, do not apply to a person who: 
 19.36     (1) retires from the Minnesota state colleges and 
 20.1   universities system with at least ten years of combined service 
 20.2   credit in a system under the jurisdiction of the board of 
 20.3   trustees of the Minnesota state colleges and universities; 
 20.4      (2) was employed on a full-time basis immediately preceding 
 20.5   retirement as a faculty member or as an unclassified 
 20.6   administrator in that system; 
 20.7      (3) begins drawing an annuity from the general state 
 20.8   employees retirement plan of the Minnesota state retirement 
 20.9   system; and 
 20.10     (4) returns to work on not less than a one-third time basis 
 20.11  and not more than a two-thirds time basis in the system from 
 20.12  which the person retired under an agreement in which the person 
 20.13  may not earn a salary of more than $35,000 $46,000 in a calendar 
 20.14  year from employment after retirement in the system from which 
 20.15  the person retired.  
 20.16     Sec. 4.  Minnesota Statutes 1999 Supplement, section 
 20.17  352.1155, subdivision 4, is amended to read: 
 20.18     Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
 20.19  this section who earns more than $35,000 $46,000 in a calendar 
 20.20  year from reemployment in the Minnesota state colleges and 
 20.21  universities system following retirement, the annuity reduction 
 20.22  provisions of section 352.115, subdivision 10, apply only to 
 20.23  income over $35,000 $46,000. 
 20.24     Sec. 5.  Minnesota Statutes 1998, section 353.37, is 
 20.25  amended by adding a subdivision to read: 
 20.26     Subd. 3a.  [DISPOSITION OF SUSPENSION OR REDUCTION AMOUNT.] 
 20.27  The balance of the annual retirement annuity after suspension or 
 20.28  the amount of the retirement annuity reduction must be handled 
 20.29  or disposed of as provided in section 356.58. 
 20.30     Sec. 6.  Minnesota Statutes 1998, section 354.44, 
 20.31  subdivision 5, is amended to read: 
 20.32     Subd. 5.  [RESUMPTION OF TEACHING SERVICE AFTER 
 20.33  RETIREMENT.] (a) Any person who retired under the provisions of 
 20.34  this chapter and has thereafter resumed teaching in any employer 
 20.35  unit to which this chapter applies is eligible to continue to 
 20.36  receive payments in accordance with the annuity except that 
 21.1   annuity payments must be reduced during the calendar year 
 21.2   immediately following any calendar year in which the person's 
 21.3   income from the teaching service is in an amount greater than 
 21.4   the annual maximum earnings allowable for that age for the 
 21.5   continued receipt of full benefit amounts monthly under the 
 21.6   federal old age, survivors and disability insurance program as 
 21.7   set by the secretary of health and human services under United 
 21.8   States Code, title 42, section 403.  The amount of the reduction 
 21.9   must be one-half of the amount in excess of the applicable 
 21.10  reemployment income maximum specified in this subdivision and 
 21.11  must be deducted from the annuity payable for the calendar year 
 21.12  immediately following the calendar year in which the excess 
 21.13  amount was earned.  If the person has not yet reached the 
 21.14  minimum age for the receipt of social security benefits, the 
 21.15  maximum earnings for the person must be equal to the annual 
 21.16  maximum earnings allowable for the minimum age for the receipt 
 21.17  of social security benefits.  
 21.18     (b) If the person is retired for only a fractional part of 
 21.19  the calendar year during the initial year of retirement, the 
 21.20  maximum reemployment income specified in this subdivision must 
 21.21  be prorated for that calendar year.  
 21.22     (c) After a person has reached the age of 70, no 
 21.23  reemployment income maximum is applicable regardless of the 
 21.24  amount of income. 
 21.25     (d) The amount of the retirement annuity reduction must be 
 21.26  handled or disposed of as provided in section 356.58. 
 21.27     (e) For the purpose of this subdivision, income from 
 21.28  teaching service includes, but is not limited to:  
 21.29     (a) (1) all income for services performed as a consultant 
 21.30  or an independent contractor for an employer unit covered by the 
 21.31  provisions of this chapter; and 
 21.32     (b) (2) the greater of either the income received or an 
 21.33  amount based on the rate paid with respect to an administrative 
 21.34  position, consultant, or independent contractor in an employer 
 21.35  unit with approximately the same number of pupils and at the 
 21.36  same level as the position occupied by the person who resumes 
 22.1   teaching service.  
 22.2      Sec. 7.  Minnesota Statutes 1999 Supplement, section 
 22.3   354.445, is amended to read: 
 22.4      354.445 [NO ANNUITY REDUCTION.] 
 22.5      (a) The annuity reduction provisions of section 354.44, 
 22.6   subdivision 5, do not apply to a person who: 
 22.7      (1) retires from the Minnesota state colleges and 
 22.8   universities system with at least ten years of combined service 
 22.9   credit in a system under the jurisdiction of the board of 
 22.10  trustees of the Minnesota state colleges and universities; 
 22.11     (2) was employed on a full-time basis immediately preceding 
 22.12  retirement as a faculty member or as an unclassified 
 22.13  administrator in that system; 
 22.14     (3) begins drawing an annuity from the teachers retirement 
 22.15  association; and 
 22.16     (4) returns to work on not less than a one-third time basis 
 22.17  and not more than a two-thirds time basis in the system from 
 22.18  which the person retired under an agreement in which the person 
 22.19  may not earn a salary of more than $35,000 $46,000 in a calendar 
 22.20  year from employment after retirement in the system from which 
 22.21  the person retired. 
 22.22     (b) Initial participation, the amount of time worked, and 
 22.23  the duration of participation under this section must be 
 22.24  mutually agreed upon by the president of the institution where 
 22.25  the person returns to work and the employee.  The president may 
 22.26  require up to one-year notice of intent to participate in the 
 22.27  program as a condition of participation under this section.  The 
 22.28  president shall determine the time of year the employee shall 
 22.29  work.  The employer or the president may not require a person to 
 22.30  waive any rights under a collective bargaining agreement as a 
 22.31  condition of participation under this section.  
 22.32     (c) Notwithstanding any law to the contrary, a person 
 22.33  eligible under paragraphs (a) and (b) may not, based on 
 22.34  employment to which the waiver in this section applies, earn 
 22.35  further service credit in a Minnesota public defined benefit 
 22.36  plan and is not eligible to participate in a Minnesota public 
 23.1   defined contribution plan, other than a volunteer fire plan 
 23.2   governed by chapter 424A.  No employer or employee contribution 
 23.3   to any of these plans may be made on behalf of such a person. 
 23.4      (d) For a person eligible under paragraphs (a) and (b) who 
 23.5   earns more than $35,000 $46,000 in a calendar year from 
 23.6   employment after retirement due to employment by the Minnesota 
 23.7   state colleges and universities system, the annuity reduction 
 23.8   provisions of section 354.44, subdivision 5, apply only to 
 23.9   income over $35,000 $46,000. 
 23.10     (e) A person who returns to work under this section is a 
 23.11  member of the appropriate bargaining unit and is covered by the 
 23.12  appropriate collective bargaining contract.  Except as provided 
 23.13  in this section, the person's coverage is subject to any part of 
 23.14  the contract limiting rights of part-time employees. 
 23.15     Sec. 8.  Minnesota Statutes 1998, section 354A.31, 
 23.16  subdivision 3, is amended to read: 
 23.17     Subd. 3.  [RESUMPTION OF TEACHING AFTER COMMENCEMENT OF A 
 23.18  RETIREMENT ANNUITY.] (a) Any person who retired and is receiving 
 23.19  a coordinated program retirement annuity under the provisions of 
 23.20  sections 354A.31 to 354A.41 or any person receiving a basic 
 23.21  program retirement annuity under the governing sections in the 
 23.22  articles of incorporation or bylaws and who has resumed teaching 
 23.23  service for the school district in which the teachers retirement 
 23.24  fund association exists is entitled to continue to receive 
 23.25  retirement annuity payments, except that annuity payments must 
 23.26  be reduced during the calendar year immediately following the 
 23.27  calendar year in which the person's income from the teaching 
 23.28  service is in an amount greater than the annual maximum earnings 
 23.29  allowable for that age for the continued receipt of full benefit 
 23.30  amounts monthly under the federal old age, survivors, and 
 23.31  disability insurance program as set by the secretary of health 
 23.32  and human services under United States Code, title 42, section 
 23.33  403.  The amount of the reduction must be one-third the amount 
 23.34  in excess of the applicable reemployment income maximum 
 23.35  specified in this subdivision and must be deducted from the 
 23.36  annuity payable for the calendar year immediately following the 
 24.1   calendar year in which the excess amount was earned.  If the 
 24.2   person has not yet reached the minimum age for the receipt of 
 24.3   social security benefits, the maximum earnings for the person 
 24.4   must be equal to the annual maximum earnings allowable for the 
 24.5   minimum age for the receipt of social security benefits. 
 24.6      (b) If the person is retired for only a fractional part of 
 24.7   the calendar year during the initial year of retirement, the 
 24.8   maximum reemployment income specified in this subdivision must 
 24.9   be prorated for that calendar year. 
 24.10     (c) After a person has reached the age of 70, no 
 24.11  reemployment income maximum is applicable regardless of the 
 24.12  amount of any compensation received for teaching service for the 
 24.13  school district in which the teachers retirement fund 
 24.14  association exists.  
 24.15     (d) The amount of the retirement annuity reduction must be 
 24.16  handled or disposed of as provided in section 356.58. 
 24.17     (e) For the purpose of this subdivision, income from 
 24.18  teaching service includes:  (i) all income for services 
 24.19  performed as a consultant or independent contractor; or income 
 24.20  resulting from working with the school district in any capacity; 
 24.21  and (ii) the greater of either the income received or an amount 
 24.22  based on the rate paid with respect to an administrative 
 24.23  position, consultant, or independent contractor in the school 
 24.24  district in which the teachers retirement fund association 
 24.25  exists and at the same level as the position occupied by the 
 24.26  person who resumes teaching service. 
 24.27     Sec. 9.  Minnesota Statutes 1998, section 354A.31, 
 24.28  subdivision 3a, is amended to read: 
 24.29     Subd. 3a.  [NO ANNUITY REDUCTION.] (a) The annuity 
 24.30  reduction provisions of subdivision 3 do not apply to a person 
 24.31  who: 
 24.32     (1) retires from the technical college system with at least 
 24.33  ten years of service credit in the system from which the person 
 24.34  retires; 
 24.35     (2) was employed on a full-time basis immediately preceding 
 24.36  retirement as a technical college faculty member; 
 25.1      (3) begins drawing an annuity from a first class city 
 25.2   teachers retirement association; and 
 25.3      (4) returns to work on not less than a one-third time basis 
 25.4   and not more than a two-thirds time basis in the technical 
 25.5   college system under an agreement in which the person may not 
 25.6   earn a salary of more than $35,000 $46,000 in a calendar year 
 25.7   from the technical college system. 
 25.8      (b) Initial participation, the amount of time worked, and 
 25.9   the duration of participation under this section must be 
 25.10  mutually agreed upon by the employer and the employee.  The 
 25.11  employer may require up to a one-year notice of intent to 
 25.12  participate in the program as a condition of participation under 
 25.13  this section.  The employer shall determine the time of year the 
 25.14  employee shall work. 
 25.15     (c) Notwithstanding any law to the contrary, a person 
 25.16  eligible under paragraphs (a) and (b) may not earn further 
 25.17  service credit in a first class city teachers retirement 
 25.18  association and is not eligible to participate in the individual 
 25.19  retirement account plan or the supplemental retirement plan 
 25.20  established in chapter 354B as a result of service under this 
 25.21  section.  No employer or employee contribution to any of these 
 25.22  plans may be made on behalf of such a person. 
 25.23     Sec. 10.  [356.58] [DISPOSITION OF AMOUNT IN EXCESS OF 
 25.24  REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.] 
 25.25     Subdivision 1.  [APPLICATION.] This section applies to the 
 25.26  balance of annual retirement annuities on the amount of 
 25.27  retirement annuity reductions after reemployed annuitant 
 25.28  earnings limitations for retirement plans governed by sections 
 25.29  352.115, subdivision 10; 353.37; 354.44, subdivision 5; and 
 25.30  354A.31, subdivision 3. 
 25.31     Subd. 2.  [RECORDKEEPING; REPORTING.] The chief 
 25.32  administrative officer of each retirement plan will keep records 
 25.33  for each reemployed annuitant of the amount of the annuity 
 25.34  reduction.  This amount will be reported to each member at least 
 25.35  once each year. 
 25.36     Subd. 3.  [PAYMENT.] Upon the retired member attaining the 
 26.1   age of 65 years or one year after termination of the 
 26.2   reemployment that gave rise to the limitation, whichever is 
 26.3   later, and the filing of an application for the payment by the 
 26.4   person, or upon the death of the retired member and the filing 
 26.5   of an application for the payment by the deceased person's 
 26.6   surviving spouse, or if none by the deceased person's designated 
 26.7   beneficiary, or if none, by the deceased person's estate, the 
 26.8   chief administrative officer of the applicable retirement plan 
 26.9   shall pay in a lump sum of the value of the person's amount 
 26.10  under subdivision 2, plus six percent interest compounded 
 26.11  annually. 
 26.12     Sec. 11.  [SUNSET; REPEALER.] 
 26.13     (a) Minnesota Statutes 1998, section 354A.31, subdivision 
 26.14  3a, is repealed, effective July 1, 2003. 
 26.15     (b) Minnesota Statutes 1999 Supplement, sections 136F.48; 
 26.16  352.1155, subdivisions 1 and 4; and 354.445, are repealed, 
 26.17  effective July 1, 2003. 
 26.18     (c) Agreements for a phased retirement under Minnesota 
 26.19  Statutes, sections 136F.48; 352.1155; 354.445; and 354A.31, 
 26.20  subdivision 3a, made before the date of enactment may continue 
 26.21  for the duration of their specified effective period even if the 
 26.22  period extends beyond July 1, 2003. 
 26.23     Sec. 12.  [EFFECTIVE DATE.] 
 26.24     Sections 1 to 11 are effective on July 1, 2000. 
 26.25                             ARTICLE 3
 26.26                     ADMINISTRATIVE PROVISIONS
 26.27     Section 1.  Minnesota Statutes 1998, section 352.15, 
 26.28  subdivision 1a, is amended to read: 
 26.29     Subd. 1a.  [AUTOMATIC DEPOSITS.] The executive director may 
 26.30  pay an remit, through an automatic deposit system, annuity, 
 26.31  benefit, or refund payments only to a banking financial 
 26.32  institution, qualified under chapter 48, associated with the 
 26.33  National Automated Clearinghouse Association or a comparable 
 26.34  successor organization that is trustee for a person eligible to 
 26.35  receive the annuity, benefit, or refund.  Upon the request of a 
 26.36  retired, disabled, the retiree, disabilitant, survivor, or 
 27.1   former employee, the executive director may mail remit the 
 27.2   annuity, benefit, or refund check to a banking institution, 
 27.3   savings association, or credit union the applicable financial 
 27.4   institution for deposit to in the employee's person's account 
 27.5   or joint account.  The board of directors may prescribe the 
 27.6   conditions under which payments will be made.  
 27.7      Sec. 2.  Minnesota Statutes 1998, section 352B.01, 
 27.8   subdivision 3, is amended to read: 
 27.9      Subd. 3.  [ALLOWABLE SERVICES SERVICE.] "Allowable service" 
 27.10  means:  
 27.11     (a) for members defined in subdivision 2, clause (a), 
 27.12  monthly service is granted for any month for which payments have 
 27.13  been made to the state patrol retirement fund, and 
 27.14     (b) for members defined in subdivision 2, clauses (b) and 
 27.15  (c), service for which payments have been made to the state 
 27.16  patrol retirement fund, service for which payments were made to 
 27.17  the state police officers retirement fund after June 30, 1961, 
 27.18  and all prior service which was credited to a member for service 
 27.19  on or before June 30, 1961.  
 27.20  Allowable service also includes any period of absence from duty 
 27.21  by a member who, by reason of injury incurred in the performance 
 27.22  of duty, is temporarily disabled and for which disability the 
 27.23  state is liable under the workers' compensation law, until the 
 27.24  date authorized by the executive director for commencement of 
 27.25  payment of a disability benefit or return to employment.  
 27.26     Sec. 3.  Minnesota Statutes 1998, section 352D.02, 
 27.27  subdivision 1, is amended to read: 
 27.28     Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
 27.29  paragraph (c), clauses (2), (3), (4), and (6) to (15), if they 
 27.30  are in the unclassified service of the state or metropolitan 
 27.31  council and are eligible for coverage under the general state 
 27.32  employees retirement plan under chapter 352, are participants in 
 27.33  the unclassified program plan under this chapter unless the 
 27.34  employee gives notice to the executive director of the Minnesota 
 27.35  state retirement system within one year following the 
 27.36  commencement of employment in the unclassified service that the 
 28.1   employee desires coverage under the general state employees 
 28.2   retirement plan.  For the purposes of this chapter, an employee 
 28.3   who does not file notice with the executive director is deemed 
 28.4   to have exercised the option to participate in the unclassified 
 28.5   plan. 
 28.6      (b) Persons referenced in paragraph (c), clauses (1) and 
 28.7   (5), are participants in the unclassified program under this 
 28.8   chapter unless the person is eligible to elect different 
 28.9   coverage under section 3A.07 or 352C.011 and, after July 1, 
 28.10  1998, elects retirement coverage by the applicable alternative 
 28.11  retirement plan. 
 28.12     (c) Enumerated employees and referenced persons are: 
 28.13     (1) the governor, the lieutenant governor, the secretary of 
 28.14  state, the state auditor, the state treasurer, and the attorney 
 28.15  general; 
 28.16     (2) an employee in the office of the governor, lieutenant 
 28.17  governor, secretary of state, state auditor, state treasurer, 
 28.18  attorney general; 
 28.19     (3) an employee of the state board of investment; 
 28.20     (4) the head of a department, division, or agency created 
 28.21  by statute in the unclassified service, an acting department 
 28.22  head subsequently appointed to the position, or an employee 
 28.23  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
 28.24     (5) a member of the legislature; 
 28.25     (6) a permanent, full-time unclassified employee of the 
 28.26  legislature or a commission or agency of the legislature or a 
 28.27  temporary legislative employee having shares in the supplemental 
 28.28  retirement fund as a result of former employment covered by this 
 28.29  chapter, whether or not eligible for coverage under the 
 28.30  Minnesota state retirement system; 
 28.31     (7) a person who is employed in a position established 
 28.32  under section 43A.08, subdivision 1, clause (3), or in a 
 28.33  position authorized under a statute creating or establishing a 
 28.34  department or agency of the state, which is at the deputy or 
 28.35  assistant head of department or agency or director level; 
 28.36     (8) the regional administrator, or executive director of 
 29.1   the metropolitan council, general counsel, division directors, 
 29.2   operations managers, and other positions as designated by the 
 29.3   council, all of which may not exceed 27 positions at the council 
 29.4   and the chair, provided that upon initial designation of all 
 29.5   positions provided for in this clause, no further designations 
 29.6   or redesignations may be made without approval of the board of 
 29.7   directors of the Minnesota state retirement system; 
 29.8      (9) the executive director, associate executive director, 
 29.9   and not to exceed nine positions of the higher education 
 29.10  services office in the unclassified service, as designated by 
 29.11  the higher education services office before January 1, 1992, or 
 29.12  subsequently redesignated with the approval of the board of 
 29.13  directors of the Minnesota state retirement system, unless the 
 29.14  person has elected coverage by the individual retirement account 
 29.15  plan under chapter 354B; 
 29.16     (10) the clerk of the appellate courts appointed under 
 29.17  article VI, section 2, of the Constitution of the state of 
 29.18  Minnesota; 
 29.19     (11) the chief executive officers of correctional 
 29.20  facilities operated by the department of corrections and of 
 29.21  hospitals and nursing homes operated by the department of human 
 29.22  services; 
 29.23     (12) an employee whose principal employment is at the state 
 29.24  ceremonial house; 
 29.25     (13) an employee of the Minnesota educational computing 
 29.26  corporation; 
 29.27     (14) an employee of the world trade center board; and 
 29.28     (15) an employee of the state lottery board who is covered 
 29.29  by the managerial plan established under section 43A.18, 
 29.30  subdivision 3. 
 29.31     Sec. 4.  Minnesota Statutes 1998, section 352D.05, 
 29.32  subdivision 3, is amended to read: 
 29.33     Subd. 3.  [FULL OR PARTIAL WITHDRAWAL.] After termination 
 29.34  of covered employment or at any time thereafter, a participant 
 29.35  is entitled, upon application, to withdraw the cash value of the 
 29.36  participant's total shares or leave such shares on deposit with 
 30.1   the supplemental retirement fund.  The account is valued at the 
 30.2   end of the month in which application for withdrawal is made.  
 30.3   Shares not withdrawn remain on deposit with the supplemental 
 30.4   retirement fund until the former participant becomes at least 55 
 30.5   years old, and applies for an annuity under section 352D.06, 
 30.6   subdivision 1.  
 30.7      Sec. 5.  Minnesota Statutes 1998, section 352D.06, is 
 30.8   amended to read: 
 30.9      352D.06 [ANNUITIES.] 
 30.10     Subdivision 1.  [ANNUITY; RESERVES.] When a participant 
 30.11  attains at least age 55, is retired terminates from covered 
 30.12  service, and applies for a retirement annuity, the cash value of 
 30.13  the participant's shares shall be transferred to the Minnesota 
 30.14  postretirement investment fund and used to provide an annuity 
 30.15  for the retired employee based upon the participant's age when 
 30.16  the benefit begins to accrue according to the reserve basis used 
 30.17  by the state employees retirement fund in determining pensions 
 30.18  and reserves.  
 30.19     Subd. 2.  [PARTIAL VALUE ANNUITY.] A participant has the 
 30.20  option in an application for an annuity to apply for and receive 
 30.21  the a partial value of one-half of the total shares and 
 30.22  thereafter receive an annuity, as provided in subdivision 1, 
 30.23  based on the remaining value of one-half of the total shares.  
 30.24     Subd. 3.  [ACCRUAL DATE.] An annuity herein shall begin to 
 30.25  accrue under this section accrues the first day of the first 
 30.26  full month after an application is received or after termination 
 30.27  of state service, whichever is later.  Upon the former 
 30.28  employee's request, the annuity may begin to accrue up to six 
 30.29  months before redemption of shares, but not prior to the 
 30.30  termination date from covered service, and will be based on the 
 30.31  account value at redemption and upon the age of the former 
 30.32  employee at the date annuity accrual starts.  The account is 
 30.33  valued and redeemed the later of the end of the month of 
 30.34  termination of covered employment, or the end of the month of 
 30.35  receipt of the annuity application for the purpose of computing 
 30.36  the annuity. 
 31.1      Sec. 6.  Minnesota Statutes 1998, section 352D.09, 
 31.2   subdivision 5a, is amended to read: 
 31.3      Subd. 5a.  [SMALL BALANCE ACCOUNTS.] If a former 
 31.4   participant who contributed less than $100 $500 in employee 
 31.5   contributions cannot be contacted by the system for five or more 
 31.6   years, the value of the shares shall be appropriated to the 
 31.7   general employees retirement fund, but upon subsequent contact 
 31.8   by the former employee the account shall be reinstated to the 
 31.9   amount that would have been payable had the money been left in 
 31.10  the unclassified plan. 
 31.11     Sec. 7.  Minnesota Statutes 1998, section 353.01, 
 31.12  subdivision 2, is amended to read: 
 31.13     Subd. 2.  [PUBLIC EMPLOYEE.] "Public employee" means an 
 31.14  employee performing personal services for a governmental 
 31.15  subdivision under subdivision 6, whose salary is paid, in whole 
 31.16  or in part, from revenue derived from taxation, fees, 
 31.17  assessments, or from other sources.  The term also includes 
 31.18  special classes of persons listed in subdivision 2a, but 
 31.19  excludes special classes of persons listed in subdivision 2b for 
 31.20  purposes of membership in the association.  Public employee does 
 31.21  not include independent contractors and their employees.  A 
 31.22  reemployed annuitant under section 353.37 is not considered to 
 31.23  be a public employee for purposes of that reemployment. 
 31.24     Sec. 8.  Minnesota Statutes 1998, section 353.01, 
 31.25  subdivision 6, is amended to read: 
 31.26     Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
 31.27  subdivision" means a county, city, town, school district within 
 31.28  this state, or a department or unit of state government, or any 
 31.29  public body whose revenues are derived from taxation, fees, 
 31.30  assessments or from other sources. 
 31.31     (b) Governmental subdivision also means the public 
 31.32  employees retirement association, the league of Minnesota 
 31.33  cities, the association of metropolitan municipalities, public 
 31.34  hospitals owned or operated by, or an integral part of, a 
 31.35  governmental subdivision or governmental subdivisions, the 
 31.36  association of Minnesota counties, the metropolitan intercounty 
 32.1   association, the Minnesota municipal utilities association, the 
 32.2   metropolitan airports commission, and the Minneapolis employees 
 32.3   retirement fund for employment initially commenced after June 
 32.4   30, 1979, the range association of municipalities and schools, 
 32.5   soil and water conservation districts, and economic development 
 32.6   authorities created or operating under sections 469.090 to 
 32.7   469.108. 
 32.8      (c) Governmental subdivision does not mean any municipal 
 32.9   housing and redevelopment authority organized under the 
 32.10  provisions of sections 469.001 to 469.047; or any port authority 
 32.11  organized under sections 469.048 to 469.068 469.089; or any 
 32.12  hospital district organized or reorganized prior to July 1, 
 32.13  1975, under sections 447.31 to 447.37 or the successor of the 
 32.14  district, nor the Minneapolis community development agency.  
 32.15     Sec. 9.  Minnesota Statutes 1999 Supplement, section 
 32.16  353.01, subdivision 10, is amended to read: 
 32.17     Subd. 10.  [SALARY.] (a) "Salary" means: 
 32.18     (1) periodic compensation of a public employee, before 
 32.19  deductions for deferred compensation, supplemental retirement 
 32.20  plans, or other voluntary salary reduction programs, and also 
 32.21  means "wages" and includes net income from fees; and 
 32.22     (2) for a public employee who has prior service covered by 
 32.23  a local police or firefighters' relief association that has 
 32.24  consolidated with the public employees retirement association or 
 32.25  to which section 353.665 applies and who has elected coverage 
 32.26  either under the public employees police and fire fund benefit 
 32.27  plan under section 353A.08 following the consolidation or under 
 32.28  section 353.665, subdivision 4, "salary" means the rate of 
 32.29  salary upon which member contributions to the special fund of 
 32.30  the relief association were made prior to the effective date of 
 32.31  the consolidation as specified by law and by bylaw provisions 
 32.32  governing the relief association on the date of the initiation 
 32.33  of the consolidation procedure and the actual periodic 
 32.34  compensation of the public employee after the effective date of 
 32.35  consolidation. 
 32.36     (b) Salary does not mean: 
 33.1      (1) fees paid to district court reporters, unused 
 33.2   annual vacation or sick leave payments, in lump-sum or periodic 
 33.3   payments, severance payments, reimbursement of expenses, 
 33.4   lump-sum settlements not attached to a specific earnings period, 
 33.5   or workers' compensation payments; 
 33.6      (2) employer-paid amounts used by an employee toward the 
 33.7   cost of insurance coverage, employer-paid fringe benefits, 
 33.8   flexible spending accounts, cafeteria plans, health care expense 
 33.9   accounts, day care expenses, or any payments in lieu of any 
 33.10  employer-paid group insurance coverage, including the difference 
 33.11  between single and family rates that may be paid to a member 
 33.12  with single coverage and certain amounts determined by the 
 33.13  executive director to be ineligible; 
 33.14     (3) the amount equal to that which the employing 
 33.15  governmental subdivision would otherwise pay toward single or 
 33.16  family insurance coverage for a covered employee when, through a 
 33.17  contract or agreement with some but not all employees, the 
 33.18  employer: 
 33.19     (i) discontinues, or for new hires does not provide, 
 33.20  payment toward the cost of the employee's selected insurance 
 33.21  coverages under a group plan offered by the employer; 
 33.22     (ii) makes the employee solely responsible for all 
 33.23  contributions toward the cost of the employee's selected 
 33.24  insurance coverages under a group plan offered by the employer, 
 33.25  including any amount the employer makes toward other employees' 
 33.26  selected insurance coverages under a group plan offered by the 
 33.27  employer; and 
 33.28     (iii) provides increased salary rates for employees who do 
 33.29  not have any employer-paid group insurance coverages; and 
 33.30     (4) except as provided in section 353.86 or 353.87, 
 33.31  compensation of any kind paid to volunteer ambulance service 
 33.32  personnel or volunteer firefighters, as defined in subdivisions 
 33.33  35 and 36.  
 33.34     Sec. 10.  Minnesota Statutes 1998, section 353.01, 
 33.35  subdivision 11a, is amended to read: 
 33.36     Subd. 11a.  [TERMINATION OF PUBLIC SERVICE.] (a) 
 34.1   "Termination of public service" occurs when a member resigns or 
 34.2   is dismissed from public service by the employing governmental 
 34.3   subdivision, as evidenced by appropriate written record 
 34.4   transmitted to the association, or when a position ends and the 
 34.5   member who held the position is not considered by the 
 34.6   governmental subdivision to be on a temporary layoff, and the 
 34.7   employee does not, within 30 days of resignation or dismissal 
 34.8   the date the employment relationship ended, return to a 
 34.9   nontemporary an employment position in the same governmental 
 34.10  subdivision. 
 34.11     (b) The termination of public service shall be recorded in 
 34.12  the association records upon receipt of an appropriate notice 
 34.13  from the governmental subdivision. 
 34.14     Sec. 11.  Minnesota Statutes 1998, section 353.01, 
 34.15  subdivision 28, is amended to read: 
 34.16     Subd. 28.  [RETIREMENT.] (a) "Retirement" means the 
 34.17  commencement of payment of an annuity based on a date designated 
 34.18  by the board of trustees.  This date determines the rights under 
 34.19  this chapter which occur either before or after retirement.  A 
 34.20  right to retirement is subject to termination of public service 
 34.21  under subdivision 11a or termination of membership under 
 34.22  subdivision 11b, the earlier of which will determine the date 
 34.23  membership and coverage cease.  A right to retirement must not 
 34.24  accrue without requires a complete and continuous separation for 
 34.25  30 days from employment as a public employee under subdivision 2 
 34.26  and from provision of paid services to that employer. 
 34.27     (b) An individual who separates from employment as a public 
 34.28  employee and who, within 30 days of separation, returns to 
 34.29  provide service to a governmental subdivision as an independent 
 34.30  contractor or as an employee of an independent contractor, has 
 34.31  not satisfied separation requirements under paragraph (a). 
 34.32     (c) A former member of the basic or police and fire fund 
 34.33  who becomes a coordinated member upon returning to eligible, 
 34.34  nontemporary public service, terminates employment before 
 34.35  obtaining six months' allowable service under subdivision 16, 
 34.36  paragraph (a), in the coordinated fund, and is eligible to 
 35.1   receive an annuity the first day of the month after the most 
 35.2   recent termination date shall not accrue a right to a retirement 
 35.3   annuity under the coordinated fund.  An annuity otherwise 
 35.4   payable to the former member must be based on the laws in effect 
 35.5   on the date of termination of the most recent service under the 
 35.6   basic or police and fire fund and shall be retroactive to the 
 35.7   first day of the month following that termination date or one 
 35.8   year preceding the filing of an application for retirement 
 35.9   annuity as provided by section 353.29, subdivision 7, whichever 
 35.10  is later.  The annuity payment must be suspended or reduced 
 35.11  under the provisions of section 353.37, if earned compensation 
 35.12  for the reemployment equals or exceeds the amounts indicated 
 35.13  under that section.  The association will refund the employee 
 35.14  deductions made to the coordinated fund, with interest under 
 35.15  section 353.34, subdivision 2, return the accompanying employer 
 35.16  contributions, and remove the allowable service credits covering 
 35.17  the deductions refunded. 
 35.18     (b) (d) Notwithstanding the 30-day separation requirement 
 35.19  under paragraph (a), a member of the defined benefit plan under 
 35.20  this chapter, who also participates in the public employees 
 35.21  defined contribution plan under chapter 353D for other public 
 35.22  service, may be paid, if eligible, a retirement annuity from the 
 35.23  defined benefit plan while participating in the defined 
 35.24  contribution plan. 
 35.25     Sec. 12.  Minnesota Statutes 1998, section 353.01, 
 35.26  subdivision 32, is amended to read: 
 35.27     Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
 35.28  any public employee, including any public hospital employee, 
 35.29  covered by any agreement or modification made between the state 
 35.30  and the Secretary of Health, Education and Welfare, making the 
 35.31  provisions of the federal Old Age, Survivors and Disability 
 35.32  Insurance Act applicable to the member if membership eligibility 
 35.33  criteria are met under this chapter.  Coordinated member also 
 35.34  means a former basic member who terminates public service under 
 35.35  subdivision 11a, has a complete and continuous separation for at 
 35.36  least 30 days from employment as a public employee meeting 
 36.1   requirements specified in subdivision 28, paragraphs (a) and 
 36.2   (b), and who reenters public service in a nontemporary position, 
 36.3   as a public employee and meets the membership eligibility 
 36.4   criteria under this chapter. 
 36.5      Sec. 13.  Minnesota Statutes 1998, section 353.15, 
 36.6   subdivision 2, is amended to read: 
 36.7      Subd. 2.  [AUTOMATIC DEPOSITS.] The association may pay an 
 36.8   remit, through an automatic deposit system, annuity, benefit, or 
 36.9   refund payments only to a trust company, qualified under chapter 
 36.10  48, financial institution associated with the National Automated 
 36.11  Clearinghouse Association or a comparable successor organization 
 36.12  that is trustee for a person eligible to receive such the 
 36.13  annuity, benefit, or refund.  Upon the request of a retired, 
 36.14  disabled the retiree, disabilitant, survivor, or former member, 
 36.15  the association may mail or send by electronic transfer the 
 36.16  annuity, benefit or refund check to a banking institution, 
 36.17  savings association or credit union the applicable financial 
 36.18  institution for deposit to such in the person's account or joint 
 36.19  account with a spouse.  The association may prescribe the 
 36.20  conditions under which such payment will be made.  
 36.21     Sec. 14.  Minnesota Statutes 1998, section 353.27, 
 36.22  subdivision 4, is amended to read: 
 36.23     Subd. 4.  [EMPLOYERS REPORTING REQUIREMENTS; CONTRIBUTIONS; 
 36.24  MEMBER STATUS.] (a) A representative authorized by the head of 
 36.25  each department shall deduct employee contributions from the 
 36.26  salary of each member employee who qualifies for membership 
 36.27  under this chapter and issue or approve one warrant remit 
 36.28  payment in a manner prescribed by the executive director for the 
 36.29  aggregate amount of the employee contributions, the employer 
 36.30  contributions and the additional employer contributions to be 
 36.31  received within 20 14 calendar days in the office of the 
 36.32  association.  The head of each department or designee shall, for 
 36.33  each pay period in which employee contributions are deducted, 
 36.34  submit to the association a salary deduction report, in the form 
 36.35  format prescribed by the executive director, showing.  Data to 
 36.36  be submitted as part of salary deduction reporting may include, 
 37.1   but are not limited to:  
 37.2      (a) (1) the legal names and the association membership 
 37.3   numbers, listed in alphabetical order, social security numbers 
 37.4   of employees who are members; 
 37.5      (b) the legal names of all new public employees and the 
 37.6   effective dates of appointment; (c) (2) the amount of each 
 37.7   employee's salary deduction; (d) 
 37.8      (3) the amount of salary from which each deduction was 
 37.9   made; (e) effective dates of member terminations of public 
 37.10  service accompanied by the applicable status code as set by the 
 37.11  association for those terminations caused by death or 
 37.12  retirement; (f) effective dates of all temporary layoffs and 
 37.13  leaves of absence accompanied by the applicable status code as 
 37.14  set by the association; and (g) 
 37.15     (4) the beginning and ending dates of the payroll period 
 37.16  covered and the date of actual payment; and 
 37.17     (5) adjustments or corrections covering past pay periods.  
 37.18     Reports of contributions must be accompanied by a 
 37.19  membership enrollment form 
 37.20     (b) Employers must furnish the data required for enrollment 
 37.21  for each new employee who qualifies for membership in the form 
 37.22  format prescribed by the executive director.  The required 
 37.23  enrollment forms from data on new employees must be collected by 
 37.24  the employer and submitted to the association within 30 days 
 37.25  following the date of employment prior to or concurrent with the 
 37.26  submission of the initial employee salary deduction.  The 
 37.27  employer shall also report to the association all member 
 37.28  employment status changes, such as leaves of absence, 
 37.29  terminations, and death, and the effective dates of those 
 37.30  changes, on an ongoing basis for the payroll cycle in which they 
 37.31  occur.  The employer shall furnish such additional data, forms, 
 37.32  and reports on magnetic media on other forms as may be requested 
 37.33  required by the executive director for proper administration of 
 37.34  the retirement system.  Before implementing new or different 
 37.35  computerized reporting requirements, the executive director 
 37.36  shall give advance notice to governmental subdivisions to allow 
 38.1   time for system modifications. 
 38.2      (b) (c) Notwithstanding paragraph (a), the association may 
 38.3   provide for less frequent reporting and payments for small 
 38.4   employers. 
 38.5      Sec. 15.  Minnesota Statutes 1998, section 353.27, 
 38.6   subdivision 12, is amended to read: 
 38.7      Subd. 12.  [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] (a) In 
 38.8   the case of omission of required deductions from the salary of 
 38.9   an employee, the department head or designee shall immediately, 
 38.10  upon discovery, report the employee for membership and deduct 
 38.11  the employee deductions under subdivision 4.  Upon receipt of 
 38.12  billing from the association, in the current pay period or the 
 38.13  pay period immediately following the discovery of the omission.  
 38.14  Payment for the omitted obligations shall be made in accordance 
 38.15  with reporting procedures and methods established by the 
 38.16  executive director. 
 38.17     (b) When the entire omission period of an employee does not 
 38.18  exceed 60 days, the governmental subdivision may report and 
 38.19  submit payment of the omitted employee deductions and omitted 
 38.20  employer contributions through the reporting processes under 
 38.21  subdivision 4. 
 38.22     (c) When the omission period of an employee exceeds 60 
 38.23  days, the governmental subdivision shall furnish to the 
 38.24  association sufficient data and documentation upon which 
 38.25  obligations for omitted employee and employer contributions can 
 38.26  be calculated.  The omitted employee deductions must be deducted 
 38.27  from the employee's next subsequent salary payment or payments 
 38.28  and remitted to the association.  The employee shall pay omitted 
 38.29  employee deductions due for the 60 days prior to the end of the 
 38.30  last pay period in the omission period during which salary was 
 38.31  earned.  The employer shall pay any remaining omitted employee 
 38.32  deductions and any omitted employer contributions, plus 
 38.33  cumulative interest at an annual rate of 8.5 percent compounded 
 38.34  annually, from the date or dates each omitted employee 
 38.35  contribution was first payable.  
 38.36     (b) (d) An employer shall not hold an employee liable for 
 39.1   omitted employee deductions beyond the pay period dates under 
 39.2   paragraph (a) (c), nor attempt to recover from the employee 
 39.3   those employee deductions paid by the employer on behalf of the 
 39.4   employee.  Omitted deductions due under paragraph (a) (c) which 
 39.5   are not paid by the employee constitute a liability of the 
 39.6   employer that failed to deduct the omitted deductions from the 
 39.7   employee's salary.  The employer shall make payment with 
 39.8   interest at an annual rate of 8.5 percent compounded annually.  
 39.9   Omitted employee deductions are no longer due if an employee 
 39.10  terminates public service before making payment of omitted 
 39.11  employee deductions to the association, but the employer remains 
 39.12  liable to pay omitted employer contributions plus interest at an 
 39.13  annual rate of 8.5 percent compounded annually from the date the 
 39.14  contributions were first payable.  
 39.15     (c) (e) The association may not commence action for the 
 39.16  recovery of omitted employee deductions and employer 
 39.17  contributions after the expiration of three calendar years after 
 39.18  the calendar year in which the contributions and deductions were 
 39.19  omitted.  Except as provided under paragraph (b), no payment may 
 39.20  be made or accepted unless the association has already commenced 
 39.21  action for recovery of omitted deductions.  An action for 
 39.22  recovery commences on the date of the mailing of any written 
 39.23  correspondence from the association requesting information from 
 39.24  the governmental subdivision upon which to determine whether or 
 39.25  not omitted deductions occurred. 
 39.26     Sec. 16.  Minnesota Statutes 1998, section 353.33, 
 39.27  subdivision 2, is amended to read: 
 39.28     Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
 39.29  or demand for a total and permanent disability benefit must be 
 39.30  initiated by written application in the manner and form 
 39.31  prescribed by the executive director showing compliance with the 
 39.32  statutory conditions qualifying the applicant for a total and 
 39.33  permanent disability benefit and filed with the executive 
 39.34  director.  A member or former member who became totally and 
 39.35  permanently disabled during a period of membership shall file 
 39.36  application for total and permanent disability benefits within 
 40.1   three years next following termination of public service.  This 
 40.2   benefit begins to accrue the day following the commencement of 
 40.3   disability, 90 days preceding the filing of the application, or, 
 40.4   if annual or sick leave is paid for more than the 90-day period, 
 40.5   from the date salary ceased, whichever is later.  No member is 
 40.6   entitled to receive a disability benefit payment when there 
 40.7   remains to the member's credit unused annual leave or sick leave 
 40.8   or under any other circumstances when, during the period of 
 40.9   disability, there has been no impairment of the person's 
 40.10  salary.  Payment must not accrue beyond the end of the month in 
 40.11  which entitlement has terminated.  If the disabilitant dies 
 40.12  prior to negotiating the check for the month in which death 
 40.13  occurs, payment is made to the surviving spouse, or if none, to 
 40.14  the designated beneficiary, or if none, to the estate.  An 
 40.15  applicant for total and permanent disability benefits may file a 
 40.16  retirement annuity application under section 353.29, subdivision 
 40.17  4, simultaneously with an application for total and permanent 
 40.18  disability benefits.  The retirement annuity application is void 
 40.19  upon the determination of the entitlement for disability 
 40.20  benefits by the executive director.  If disability benefits are 
 40.21  denied, the retirement annuity application must be initiated and 
 40.22  processed. 
 40.23     Sec. 17.  Minnesota Statutes 1998, section 353.33, 
 40.24  subdivision 6, is amended to read: 
 40.25     Subd. 6.  [CONTINUING ELIGIBILITY FOR BENEFITS.] The 
 40.26  association shall determine eligibility for continuation of 
 40.27  disability benefits and require periodic examinations and 
 40.28  evaluations of disabled members as frequently as deemed 
 40.29  necessary.  The association shall require the disabled member to 
 40.30  provide and authorize release of medical evidence, including all 
 40.31  medical records and information from any source, relating to an 
 40.32  application for continuation of disability benefits.  Disability 
 40.33  benefits are contingent upon a disabled person's participation 
 40.34  in a vocational rehabilitation program if the executive director 
 40.35  determines that the disabled person may be able to return to a 
 40.36  gainful occupation.  If a member is found to be no longer 
 41.1   totally and permanently disabled and is reinstated to the 
 41.2   payroll, payments must cease the first of the month following 
 41.3   the reinstatement to the payroll expiration of 30 days after the 
 41.4   member receives a certified letter notifying the member that 
 41.5   payments will cease. 
 41.6      Sec. 18.  Minnesota Statutes 1998, section 353.34, 
 41.7   subdivision 1, is amended to read: 
 41.8      Subdivision 1.  [REFUND OR DEFERRED ANNUITY.] (a) A former 
 41.9   member is entitled to a refund of accumulated employee 
 41.10  deductions under subdivision 2, or to a deferred annuity under 
 41.11  subdivision 3.  An active member of a fund enumerated in section 
 41.12  356.30, subdivision 3, clause (7), (8), or (14), who terminates 
 41.13  public service in any of those funds and becomes a member of 
 41.14  another fund enumerated in those clauses may receive a refund of 
 41.15  employee contributions plus six percent interest compounded 
 41.16  annually from the fund in which the member terminated service.  
 41.17  Application for a refund may not be made prior to the date of 
 41.18  termination of public service or the termination of membership, 
 41.19  whichever is sooner.  Except as specified in paragraph (b), a 
 41.20  refund must be paid within 120 days following receipt of the 
 41.21  application unless the applicant has again become a public 
 41.22  employee required to be covered by the association.  
 41.23     (b) If an individual was granted an authorized temporary 
 41.24  layoff, a refund is not payable before termination of membership 
 41.25  under section 353.01, subdivision 11b, clause (3). 
 41.26     (c) An individual who terminates public service covered by 
 41.27  the public employees retirement association general plan or the 
 41.28  public employees retirement association police and fire plan, or 
 41.29  the public employees local government corrections service 
 41.30  retirement plan, and who becomes an active member covered by one 
 41.31  of the other two plans, may receive a refund of employee 
 41.32  contributions plus six percent interest compounded annually from 
 41.33  the plan in which the member terminated service. 
 41.34     Sec. 19.  Minnesota Statutes 1999 Supplement, section 
 41.35  353.64, subdivision 1, is amended to read: 
 41.36     Subdivision 1.  [POLICE AND FIRE FUND PLAN MEMBERSHIP; 
 42.1   MANDATORY.] A governmental subdivision must report a public 
 42.2   employee for membership in the police and fire plan if the 
 42.3   employee is employed full-time as specified in clause (1), (2), 
 42.4   or (3): 
 42.5      (1) a full-time police officer or a person in charge of a 
 42.6   designated police or sheriff's department, who by virtue of that 
 42.7   employment is required by the employing governmental subdivision 
 42.8   to be and is licensed by the Minnesota peace officer standards 
 42.9   and training board under sections 626.84 to 626.863, who is 
 42.10  charged with the prevention and detection of crime, who has the 
 42.11  full power of arrest, who is assigned to a designated police or 
 42.12  sheriff's department, and whose primary job is the enforcement 
 42.13  of the general criminal laws of the state; 
 42.14     (2) a full-time firefighter or a person in charge of a 
 42.15  designated fire company or companies who is engaged in the 
 42.16  hazards of fire fighting; or 
 42.17     (3) a full-time police officer or firefighter meeting all 
 42.18  requirements of clause (1) or (2), as applicable, who as part of 
 42.19  the position is periodically assigned to employment duties in 
 42.20  the same department but not within the scope of this subdivision.
 42.21     An individual to which clause (3) applies must contribute 
 42.22  as a member of the police and fire plan for both the primary and 
 42.23  secondary services that are provided to the employing 
 42.24  governmental subdivision.  
 42.25     Subd. 1a.  [POLICE AND FIRE PLAN; OTHER MEMBERS.] (a) A 
 42.26  person who prior to July 1, 1961, was a member of the police and 
 42.27  fire fund plan, by virtue of being a police officer or 
 42.28  firefighter, shall, as long as the person remains in either 
 42.29  position, continue membership in the fund plan.  
 42.30     (b) A person who was employed by a governmental subdivision 
 42.31  as a police officer and was a member of the police and fire fund 
 42.32  plan on July 1, 1978, by virtue of being a police officer as 
 42.33  defined by this section on that date, and if employed by the 
 42.34  same governmental subdivision in a position in the same 
 42.35  department in which the person was employed on that date, 
 42.36  continues to be a member of the fund plan, whether or not that 
 43.1   person has the power of arrest by warrant and is licensed by the 
 43.2   peace officers standards and training board after that date. 
 43.3      (c) A person who was employed as a correctional officer by 
 43.4   Rice county before July 1, 1998, for the duration of employment 
 43.5   in the correctional position held on July 1, 1998, continues to 
 43.6   be a member of the public employees police and fire plan, 
 43.7   whether or not the person has the power of arrest by warrant and 
 43.8   is licensed by the peace officers standards and training board 
 43.9   after that date. 
 43.10     (c) (d) A person who was employed by a governmental 
 43.11  subdivision as a police officer or a firefighter, whichever 
 43.12  applies, was an active member of the local police or salaried 
 43.13  firefighters relief association located in that governmental 
 43.14  subdivision by virtue of that employment as of the effective 
 43.15  date of the consolidation as authorized by sections 353A.01 to 
 43.16  353A.10, and has elected coverage by the public employees police 
 43.17  and fire fund benefit plan, shall become a member of the police 
 43.18  and fire fund plan after that date if employed by the same 
 43.19  governmental subdivision in a position in the same department in 
 43.20  which the person was employed on that date. 
 43.21     (d) Any other employee serving on a full-time basis as a 
 43.22  police officer as defined in subdivision 2 or as a firefighter 
 43.23  as defined in subdivision 3 on or after July 1, 1961, shall 
 43.24  become a member of the public employees police and fire fund.  
 43.25     (e) An employee serving on less than a full-time basis as a 
 43.26  police officer shall become a member of the public employees 
 43.27  police and fire fund only after a resolution stating that the 
 43.28  employee should be covered by the police and fire fund is 
 43.29  adopted by the governing body of the governmental subdivision 
 43.30  employing the person declaring that the position which the 
 43.31  person holds is that of a police officer. 
 43.32     (f) An employee serving on less than a full-time basis as a 
 43.33  firefighter shall become a member of the public employees police 
 43.34  and fire fund only after a resolution stating that the employee 
 43.35  should be covered by the police and fire fund is adopted by the 
 43.36  governing body of the governmental subdivision employing the 
 44.1   person declaring that the position which the person holds is 
 44.2   that of a firefighter. 
 44.3      (g) A police officer or firefighter employed by a 
 44.4   governmental subdivision who by virtue of that employment is 
 44.5   required by law to be a member of and to contribute to any 
 44.6   police or firefighter relief association governed by section 
 44.7   69.77 which has not consolidated with the public employees 
 44.8   police and fire fund, (e) Any police officer or firefighter of a 
 44.9   relief association that has consolidated with the association 
 44.10  for which the employee has not elected coverage by the public 
 44.11  employees police and fire fund benefit plan as provided in 
 44.12  sections 353A.01 to 353A.10, or any police officer or 
 44.13  firefighter to whom section 353.665 applies who has not elected 
 44.14  coverage by the public employees police and fire fund benefit 
 44.15  plan as provided in section 353.665, subdivision 4, shall not 
 44.16  become a member of the public employees police and fire fund 
 44.17  plan, but shall not be subject to the provisions of sections 
 44.18  353.651 to 353.659 unless an election for such coverage is made 
 44.19  under section 353.665, subdivision 4. 
 44.20     Sec. 20.  Minnesota Statutes 1998, section 353.64, 
 44.21  subdivision 2, is amended to read: 
 44.22     Subd. 2.  [POLICE AND FIRE FUND MEMBERSHIP; PART-TIME 
 44.23  EMPLOYMENT COVERAGE OPTION.] Before a (a) The governing body of 
 44.24  a governmental subdivision may adopt a resolution, subject to 
 44.25  requirements specified in paragraph (b), declaring that a public 
 44.26  employee employed in a position on a part-time basis by that 
 44.27  governmental subdivision shall be covered by the police and fire 
 44.28  plan for that employment. 
 44.29     (b) If the public employee's position is related to police 
 44.30  service, the resolution is valid if conditions specified in 
 44.31  paragraph (c) are met.  If the public employee's position is 
 44.32  related to fire service, the resolution is valid if conditions 
 44.33  specified in paragraph (d) are met.  If the public employee in 
 44.34  the applicable position is periodically assigned to employment 
 44.35  duties not within the scope of this subdivision, the resolution 
 44.36  is considered valid if the governing body of the governmental 
 45.1   subdivision declares that the public employee's position, for 
 45.2   primary services provided, satisfies all requirements of 
 45.3   subdivision 1, clause (3), other than the requirement of 
 45.4   full-time employment. 
 45.5      (c) For the governing body may of the governmental 
 45.6   subdivision to declare a position to be that of a police 
 45.7   officer, the duties and qualifications of the person so employed 
 45.8   must, as at a minimum, include employment as an officer of a 
 45.9   designated police department or sheriff's office or person in 
 45.10  charge of a designated police department or sheriff's office 
 45.11  whose primary job it is to enforce the law, who is licensed by 
 45.12  the Minnesota board of peace officer standards and training 
 45.13  under sections 626.84 to 626.863, who is engaged in the hazards 
 45.14  of protecting the safety and property of others, and who has the 
 45.15  power to arrest by warrant. 
 45.16     A police officer who is periodically assigned to employment 
 45.17  duties not within the scope of this subdivision may contribute 
 45.18  to the public employees police and fire fund for all service, if 
 45.19  a resolution declaring that the primary position held by the 
 45.20  person is that of a police officer, is adopted by the governing 
 45.21  body of the department, and is promptly submitted to the 
 45.22  executive director. satisfy all requirements of subdivision 1, 
 45.23  clause (1), other than the requirement of full-time employment. 
 45.24     (d) For the governing body of a governmental subdivision to 
 45.25  declare a position to be that of a firefighter, the duties and 
 45.26  qualifications of the person so employed must, at a minimum, 
 45.27  satisfy all requirements of subdivision 1, clause (2), other 
 45.28  than the requirement of full-time employment. 
 45.29     Sec. 21.  Minnesota Statutes 1998, section 353.64, 
 45.30  subdivision 3, is amended to read: 
 45.31     Subd. 3.  [POLICE AND FIRE FUND MEMBERSHIP; EXCLUSION.] 
 45.32  Before a governing body may declare a position to be that of a 
 45.33  firefighter, the duties of the person so employed must, as a 
 45.34  minimum, include services as an employee of a designated fire 
 45.35  company or person in charge of a designated fire company or 
 45.36  companies who is engaged in the hazards of fire fighting.  A 
 46.1   firefighter who is periodically assigned to employment duties 
 46.2   outside the scope of firefighting may contribute to the public 
 46.3   employees police and fire fund for all service, if a resolution 
 46.4   declaring that the primary position held by the person is that 
 46.5   of a firefighter, is adopted by the governing body of the 
 46.6   company or companies, and is promptly submitted to the executive 
 46.7   director. A police officer or firefighter employed by a 
 46.8   governmental subdivision who by virtue of that employment is 
 46.9   required by law to be a member of and to contribute to any 
 46.10  police or firefighter relief association governed by section 
 46.11  69.77 which has not consolidated with the public employees 
 46.12  police and fire plan shall not become a member of the public 
 46.13  employees police and fire plan. 
 46.14     Sec. 22.  Minnesota Statutes 1998, section 353.64, 
 46.15  subdivision 4, is amended to read: 
 46.16     Subd. 4.  [RESOLUTION FILING.] (a) A copy of the resolution 
 46.17  of the governing body declaring a position to be that of police 
 46.18  officer or firefighter shall be promptly filed with the board of 
 46.19  trustees and shall be irrevocable.  
 46.20     (b) Following notice from the association, if a valid 
 46.21  resolution is not filed with the public employees retirement 
 46.22  association within six months following the date of that notice, 
 46.23  any contributions or deductions made to the police and fire fund 
 46.24  for the applicable employment are deemed to be contributions or 
 46.25  deductions transmitted in error under section 353.27, 
 46.26  subdivision 7a. 
 46.27     Sec. 23.  Minnesota Statutes 1998, section 353.656, 
 46.28  subdivision 1, is amended to read: 
 46.29     Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
 46.30  A member of the police and fire fund plan who becomes disabled 
 46.31  and physically unfit to perform duties as a police officer or, 
 46.32  firefighter subsequent to June 30, 1973, or paramedic as defined 
 46.33  under section 353.64, subdivision 10, as a direct result of an 
 46.34  injury, sickness, or other disability incurred in or arising out 
 46.35  of any act of duty, which has or is expected to render the 
 46.36  member physically or mentally unable to perform the duties as a 
 47.1   police officer or, firefighter, or paramedic as defined under 
 47.2   section 353.64, subdivision 10, for a period of at least one 
 47.3   year, shall receive disability benefits during the period of 
 47.4   such disability.  The benefits must be in an amount equal to 60 
 47.5   percent of the "average salary" under as defined in section 
 47.6   353.651, subdivision 3 2, plus an additional percent specified 
 47.7   in section 356.19, subdivision 6, of said that average salary 
 47.8   for each year of service in excess of 20 years.  Should If 
 47.9   disability under this subdivision occur occurs before the member 
 47.10  has at least five years of allowable service credit in the 
 47.11  police and fire fund plan, the disability benefit must be 
 47.12  computed on the "average salary" from which deductions were made 
 47.13  for contribution to the police and fire fund. 
 47.14     Sec. 24.  Minnesota Statutes 1998, section 353.656, 
 47.15  subdivision 3, is amended to read: 
 47.16     Subd. 3.  [NONDUTY DISABILITY BENEFIT.] Any member of the 
 47.17  police and fire plan who becomes disabled after not less than 
 47.18  one year of allowable service because of sickness or injury 
 47.19  occurring while not on duty as a police officer or, firefighter, 
 47.20  or paramedic as defined under section 353.64, subdivision 10, 
 47.21  and by reason of that sickness or injury the member has been or 
 47.22  is expected to be unable to perform the duties as a police 
 47.23  officer or, firefighter, or paramedic as defined under section 
 47.24  353.64, subdivision 10, for a period of at least one year, is 
 47.25  entitled to receive a disability benefit.  The benefit must be 
 47.26  paid in the same manner as if the benefit were paid under 
 47.27  section 353.651.  If a disability under this subdivision occurs 
 47.28  after one but in less than 15 years of allowable service, the 
 47.29  disability benefit must be the same as though the member had at 
 47.30  least 15 years service.  For a member who is employed as a 
 47.31  full-time firefighter by the department of military affairs of 
 47.32  the state of Minnesota, allowable service as a full-time state 
 47.33  military affairs department firefighter credited by the 
 47.34  Minnesota state retirement system may be used in meeting the 
 47.35  minimum allowable service requirement of this subdivision. 
 47.36     Sec. 25.  Minnesota Statutes 1998, section 353.71, 
 48.1   subdivision 2, is amended to read: 
 48.2      Subd. 2.  [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) 
 48.3   The deferred annuity, if any, accruing under subdivision 1, or 
 48.4   under sections 353.34, subdivision 3, and 353.68, subdivision 4, 
 48.5   must be computed in the manner provided in said sections, on the 
 48.6   basis of allowable service prior to termination of public 
 48.7   service and augmented as provided herein in this paragraph.  The 
 48.8   required reserves applicable to a deferred annuity, or to an 
 48.9   annuity for which a former member was eligible but had not 
 48.10  applied, or to any deferred segment of an annuity shall must be 
 48.11  determined as of the date the annuity begins to accrue and shall 
 48.12  be augmented from the first day of the month following the month 
 48.13  in which the former member ceased to be a public employee, or 
 48.14  July 1, 1971, whichever is later, to the first day of the month 
 48.15  in which the annuity begins to accrue,.  These required reserves 
 48.16  must be augmented at the rate of five percent per annum annually 
 48.17  compounded annually until January 1, 1981, and at the rate of 
 48.18  three percent thereafter until January 1 of the year following 
 48.19  the year in which the former member attains age 55.  From that 
 48.20  date to the effective date of retirement, the rate is five 
 48.21  percent per annum compounded annually.  If a person has more 
 48.22  than one period of uninterrupted service, the required reserves 
 48.23  related to each period shall must be augmented by interest 
 48.24  pursuant to this subdivision as specified in this paragraph.  
 48.25  The sum of the augmented required reserves so determined shall 
 48.26  be is the present value of the annuity.  Uninterrupted service 
 48.27  for the purpose of this subdivision shall mean means periods of 
 48.28  covered employment during which the employee has not been 
 48.29  separated from public service for more than two years.  If a 
 48.30  person repays a refund, the restored service restored thereby 
 48.31  shall must be considered as continuous with the next period of 
 48.32  service for which the employee has credit with this association. 
 48.33  The formula percentages used for each period of uninterrupted 
 48.34  service shall be those as would be applicable to a new employee. 
 48.35  This section shall must not reduce the annuity otherwise payable 
 48.36  under this chapter.  This subdivision paragraph shall apply 
 49.1   applies to individuals who become deferred annuitants of record 
 49.2   on or after July 1, 1971, and to employees who thereafter become 
 49.3   deferred annuitants; it shall also apply.  For a member who 
 49.4   became a deferred annuitant before July 1, 1971, the paragraph 
 49.5   applies from July 1, 1971, to if the former members who make 
 49.6   application active member applies for an annuity after July 1, 
 49.7   1973. 
 49.8      (b) The retirement annuity or disability benefit of, or the 
 49.9   survivor benefit payable on behalf of, a former member who 
 49.10  terminated service before July 1, 1997, or the survivor benefit 
 49.11  payable on behalf of a basic or police and fire member who was 
 49.12  receiving disability benefits before July 1, 1997, which is not 
 49.13  first payable until after June 30, 1997, must be increased on an 
 49.14  actuarial equivalent basis to reflect the change in the 
 49.15  postretirement interest rate actuarial assumption under section 
 49.16  356.215, subdivision 4d, from five percent to six percent under 
 49.17  a calculation procedure and tables adopted by the board and 
 49.18  approved by the actuary retained by the legislative commission 
 49.19  on pensions and retirement. 
 49.20     Sec. 26.  Minnesota Statutes 1998, section 353B.11, 
 49.21  subdivision 3, is amended to read: 
 49.22     Subd. 3.  [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 
 49.23  surviving spouse benefit shall be 30 percent of the salary base 
 49.24  for the former members of the following consolidating relief 
 49.25  associations:  
 49.26     (1) Albert Lea firefighters relief association; 
 49.27     (2) Albert Lea police relief association; 
 49.28     (3) Anoka police relief association; 
 49.29     (4) Austin police relief association; 
 49.30     (5) Brainerd police benefit association; 
 49.31     (6) Crookston police relief association; 
 49.32     (7) Faribault fire department relief association; and 
 49.33     (8) West St. Paul firefighters relief association.  
 49.34     (b) The surviving spouse benefit shall be 25 percent of the 
 49.35  salary base for the former members of the following 
 49.36  consolidating relief associations:  
 50.1      (1) Chisholm police relief association; 
 50.2      (2) Duluth firefighters relief association; 
 50.3      (3) Duluth police pension association; 
 50.4      (4) Fairmont police benefit association; 
 50.5      (5) Red Wing fire department relief association; 
 50.6      (6) South St. Paul police relief association; and 
 50.7      (7) West St. Paul police relief association. 
 50.8      (c) The surviving spouse benefit shall be 24 percent of the 
 50.9   salary base for the former members of the following 
 50.10  consolidating relief associations: 
 50.11     (1) Fridley police pension association; 
 50.12     (2) Richfield police relief association; 
 50.13     (3) Rochester fire department relief association; 
 50.14     (4) Rochester police relief association; 
 50.15     (5) Winona fire department relief association; and 
 50.16     (6) Winona police relief association. 
 50.17     (d) The surviving spouse benefit shall be 40 percent of the 
 50.18  salary base for the former members of the following 
 50.19  consolidating relief associations: 
 50.20     (1) Columbia Heights fire department relief association, 
 50.21  paid division; and 
 50.22     (2) New Ulm police relief association.  
 50.23     (e) The surviving spouse benefit shall be $250 per month 30 
 50.24  percent of the salary base for the former members of the 
 50.25  following consolidating relief associations: 
 50.26     (1) Hibbing firefighters relief association; and 
 50.27     (2) Hibbing police relief association. 
 50.28     (f) The surviving spouse benefit shall be 23.75 percent of 
 50.29  the salary base for the former members of the following 
 50.30  consolidating relief associations: 
 50.31     (1) Crystal police relief associations; and 
 50.32     (2) Minneapolis police relief association.  
 50.33     (g) The surviving spouse benefit shall be 32 percent of the 
 50.34  salary base for the former members of the following 
 50.35  consolidating relief associations: 
 50.36     (1) St. Cloud fire department relief association; and 
 51.1      (2) St. Cloud police relief association. 
 51.2      (h) The surviving spouse benefit shall be one-half of the 
 51.3   service pension or disability benefit which the deceased member 
 51.4   was receiving as of the date of death, or of the service pension 
 51.5   which the deferred member would have been receiving if the 
 51.6   service pension had commenced as of the date of death or of the 
 51.7   service pension which the active member would have received 
 51.8   based on the greater of the allowable service credit of the 
 51.9   person as of the date of death or 20 years of allowable service 
 51.10  credit if the person would have been eligible as of the date of 
 51.11  death, for the former members of the following consolidating 
 51.12  relief associations: 
 51.13     (1) Virginia fire department relief association; and 
 51.14     (2) Virginia police relief association. 
 51.15     (i) The surviving spouse benefit shall be the following for 
 51.16  the former members of the consolidating relief associations as 
 51.17  indicated: 
 51.18     (1) 30 percent of the salary base, reduced by any amount 
 51.19  awarded or payable from the service pension or disability 
 51.20  benefit of the deceased former firefighter to a former spouse of 
 51.21  the member by virtue of the legal dissolution of the member's 
 51.22  marriage to the former spouse if the surviving spouse married 
 51.23  the member after the time of separation from active service, 
 51.24  Austin firefighters relief association; 
 51.25     (2) 27.333 percent of the salary base, or one-half of the 
 51.26  service pension payable to or accrued by the deceased former 
 51.27  member, whichever is greater, Bloomington police relief 
 51.28  association; 
 51.29     (3) 72.25 percent of the salary base, Buhl police relief 
 51.30  association; 
 51.31     (4) 50 percent of the service pension which the active 
 51.32  member would have received based on allowable service credit to 
 51.33  the date of death and prospective service from the date of death 
 51.34  until the date on which the person would have attained the 
 51.35  normal retirement age, 50 percent of the service pension which 
 51.36  the deferred member would have been receiving if the service 
 52.1   pension had commenced as of the date of death or $175 per month 
 52.2   if the deceased member was receiving a service pension or 
 52.3   disability benefit as of the date of death, Chisholm 
 52.4   firefighters relief association; 
 52.5      (5) two-thirds of the service pension or disability benefit 
 52.6   which the deceased member was receiving as of the date of death, 
 52.7   or of the service pension which the deferred member would have 
 52.8   been receiving if the service pension had commenced as of the 
 52.9   date of death or of the service pension which the active member 
 52.10  would have received based on the greater of the allowable 
 52.11  service credit of the person as of the date of death or 20 years 
 52.12  of allowable service credit if the person would have been 
 52.13  eligible as of the date of death, Columbia Heights police relief 
 52.14  association; 
 52.15     (6) the greater of $300 per month or one-half of the 
 52.16  service pension or disability benefit which the deceased member 
 52.17  was receiving as of the date of death, or of the service pension 
 52.18  which the deferred member would have been receiving if the 
 52.19  service pension had commenced as of the date of death or of the 
 52.20  service pension which the active member would have received 
 52.21  based on the allowable service credit of the person as of the 
 52.22  date of death if the person would have been eligible as of the 
 52.23  date of death, Crookston fire department relief association; 
 52.24     (7) $100 per month, Faribault police benefit association; 
 52.25     (8) 60 percent of the service pension or disability benefit 
 52.26  which the deceased member was receiving as of the date of death, 
 52.27  or of the service pension which the deferred member would have 
 52.28  been receiving if the service pension had commenced as of the 
 52.29  date of death or of the service pension which the active member 
 52.30  would have received based on the allowable service credit of the 
 52.31  person as of the date of death if the person would have been 
 52.32  eligible as of the date of death, Mankato fire department relief 
 52.33  association; 
 52.34     (9) $175 per month, Mankato police benefit association; 
 52.35     (10) 26.25 percent of the salary base, Minneapolis fire 
 52.36  department relief association; 
 53.1      (11) equal to the service pension or disability benefit 
 53.2   which the deceased member was receiving as of the date of death, 
 53.3   or of the service pension which the deferred member would have 
 53.4   been receiving if the service pension had commenced as of the 
 53.5   date of death or of the service pension which the active member 
 53.6   would have received based on the allowable service credit of the 
 53.7   person as of the date of death if the person would have been 
 53.8   eligible as of the date of death, Red Wing police relief 
 53.9   association; 
 53.10     (12) 78.545 percent of the benefit amount payable prior to 
 53.11  the death of the deceased active, disabled, deferred, or retired 
 53.12  firefighter if that firefighter's benefit was 55 percent of 
 53.13  salary or would have been 55 percent of salary if the 
 53.14  firefighter had survived to begin benefit receipt; or 80 percent 
 53.15  of the benefit amount payable prior to the death of the deceased 
 53.16  active, disabled, deferred, or retired firefighter if that 
 53.17  firefighter's benefit was 54 percent of salary or would have 
 53.18  been 54 percent of salary if the firefighter had survived to 
 53.19  begin benefit receipt, Richfield fire department relief 
 53.20  association; 
 53.21     (13) 40 percent of the salary base for a surviving spouse 
 53.22  of a deceased active member, disabled member, or retired or 
 53.23  deferred member with at least 20 years of allowable service, or 
 53.24  the prorated portion of 40 percent of the salary base that bears 
 53.25  the same relationship to 40 percent that the deceased member's 
 53.26  years of allowable service bear to 20 years of allowable service 
 53.27  for the surviving spouse of a deceased retired or deferred 
 53.28  member with at least ten but less than 20 years of allowable 
 53.29  service, St. Louis Park fire department relief association; 
 53.30     (14) 26.6667 percent of the salary base, St. Louis Park 
 53.31  police relief association; 
 53.32     (15) 27.5 percent of the salary base, St. Paul fire 
 53.33  department relief association; 
 53.34     (16) 20 27.5 percent of the salary base, St. Paul police 
 53.35  relief association; and 
 53.36     (17) 27 percent of the salary base, South St. Paul 
 54.1   firefighters relief association. 
 54.2      Sec. 27.  Minnesota Statutes 1998, section 354.05, 
 54.3   subdivision 2, is amended to read: 
 54.4      Subd. 2.  [TEACHER.] (a) "Teacher" means: 
 54.5      (1) a person who renders service as a teacher, supervisor, 
 54.6   principal, superintendent, librarian, nurse, counselor, social 
 54.7   worker, therapist, or psychologist in the public schools of the 
 54.8   state located outside of the corporate limits of the cities of 
 54.9   the first class as those cities were so classified on January 1, 
 54.10  1979, or in the Minnesota state colleges and universities 
 54.11  system, or in any charitable, penal, or correctional 
 54.12  institutions of a governmental subdivision, or who is engaged in 
 54.13  educational administration in connection with the state public 
 54.14  school system, including the Minnesota state colleges and 
 54.15  university system, but excluding the University of Minnesota, 
 54.16  whether the position be a public office or an employment, not 
 54.17  including members or officers of any general governing or 
 54.18  managing board or body; 
 54.19     (2) an employee of the teachers retirement association 
 54.20  unless the employee is covered by the Minnesota state retirement 
 54.21  system by virtue of due to prior employment by the association 
 54.22  that system; 
 54.23     (3) a person who renders teaching service on a part-time 
 54.24  basis and who also renders other services for a single employing 
 54.25  unit.  In such cases, the executive director shall determine 
 54.26  whether all or none of the combined service is covered by the 
 54.27  association, however a A person whose teaching service comprises 
 54.28  at least 50 percent of the combined employment salary is a 
 54.29  member of the association for all services with the single 
 54.30  employing unit.  If the person's teaching service comprises less 
 54.31  than 50 percent of the combined employment salary, the executive 
 54.32  director must determine whether all or none of the combined 
 54.33  service is covered by the association. 
 54.34     (b) The term Teacher does not mean: 
 54.35     (1) an employee described in section 352D.02, subdivision 
 54.36  1a, who is hired after the effective date of Laws 1986, chapter 
 55.1   458; 
 55.2      (2) a person who works for a school or institution as an 
 55.3   independent contractor as defined by the Internal Revenue 
 55.4   Service; 
 55.5      (3) (2) a person employed in subsidized on-the-job 
 55.6   training, work experience or public service employment as an 
 55.7   enrollee under the federal Comprehensive Employment and Training 
 55.8   Act from and after March 30, 1978, unless the person has, as of 
 55.9   the later of March 30, 1978, or the date of employment, 
 55.10  sufficient service credit in the retirement association to meet 
 55.11  the minimum vesting requirements for a deferred retirement 
 55.12  annuity, or the employer agrees in writing on forms prescribed 
 55.13  by the executive director to make the required employer 
 55.14  contributions, including any employer additional contributions, 
 55.15  on account of that person from revenue sources other than funds 
 55.16  provided under the federal Comprehensive Training and Employment 
 55.17  Act, or the person agrees in writing on forms prescribed by the 
 55.18  executive director to make the required employer contribution in 
 55.19  addition to the required employee contribution; 
 55.20     (4) (3) a person holding a part-time adult supplementary 
 55.21  technical college license who renders part-time teaching service 
 55.22  or a customized trainer as defined by the Minnesota state 
 55.23  colleges and universities system in a technical college if (i) 
 55.24  the service is incidental to the regular nonteaching occupation 
 55.25  of the person; and (ii) the applicable technical college 
 55.26  stipulates annually in advance that the part-time teaching 
 55.27  service or customized training service will not exceed 300 hours 
 55.28  in a fiscal year and retains the stipulation in its records; and 
 55.29  (iii) the part-time teaching service or customized training 
 55.30  service actually does not exceed 300 hours in a fiscal year; or 
 55.31     (5) (4) a person exempt from licensure pursuant to under 
 55.32  section 122A.30. 
 55.33     Sec. 28.  Minnesota Statutes 1998, section 354.05, 
 55.34  subdivision 35, is amended to read: 
 55.35     Subd. 35.  [SALARY.] (a) "Salary" means the periodic 
 55.36  compensation, upon which member contributions are required and 
 56.1   made, that is paid to a teacher before employee-paid fringe 
 56.2   benefits, tax sheltered annuities, deferred compensation, or any 
 56.3   combination of these employee-paid items are deducted before 
 56.4   deductions for deferred compensation, supplemental retirement 
 56.5   plans, or other voluntary salary reduction programs. 
 56.6      (b) "Salary" does not mean: 
 56.7      (1) lump sum annual leave payments; 
 56.8      (2) lump sum wellness and sick leave payments; 
 56.9      (3) payments in lieu of any employer-paid group insurance 
 56.10  coverage; 
 56.11     (4) payments for the difference between single and family 
 56.12  premium rates that may be paid to a member with single coverage; 
 56.13     (5) employer-paid fringe benefits including, but not 
 56.14  limited to, flexible spending accounts, cafeteria plans, health 
 56.15  care expense accounts, day care expenses, or automobile 
 56.16  allowances and expenses; employer-paid amounts used by an 
 56.17  employee toward the cost of insurance coverage, employer-paid 
 56.18  fringe benefits, flexible spending accounts, cafeteria plans, 
 56.19  health care expense accounts, day care expenses, or any payments 
 56.20  in lieu of any employer-paid group insurance coverage, including 
 56.21  the difference between single and family rates that may be paid 
 56.22  to a member with single coverage and certain amounts determined 
 56.23  by the executive director to be ineligible; 
 56.24     (6) (4) any form of payment made in lieu of any other 
 56.25  employer-paid fringe benefit or expense; 
 56.26     (7) (5) any form of severance payments; 
 56.27     (8) (6) workers' compensation payments; 
 56.28     (9) (7) disability insurance payments including 
 56.29  self-insured disability payments; 
 56.30     (10) (8) payments to school principals and all other 
 56.31  administrators for services in addition to the normal work year 
 56.32  contract if these additional services are performed on an 
 56.33  extended duty day, Saturday, Sunday, holiday, annual leave day, 
 56.34  sick leave day, or any other nonduty day; 
 56.35     (11) (9) payments under section 356.24, subdivision 1, 
 56.36  clause (4); and 
 57.1      (12) (10) payments made under section 122A.40, subdivision 
 57.2   12, except for payments for sick leave accumulated under the 
 57.3   provisions of a uniform school district policy that applies 
 57.4   equally to all similarly situated persons in the district. 
 57.5      Sec. 29.  Minnesota Statutes 1998, section 354.091, is 
 57.6   amended to read: 
 57.7      354.091 [SERVICE CREDIT.] 
 57.8      (a) In computing the time of service of a teacher, the 
 57.9   length of a legal school year in the district or institution 
 57.10  where such service was rendered must constitute a year under 
 57.11  sections 354.05 to 354.10, provided the year is not less than 
 57.12  the legal minimum school year of this state. service credit, 
 57.13  no person teacher shall receive credit for more than one year of 
 57.14  teaching service for any fiscal year.  Commencing July 1, 1961,: 
 57.15     (1) if a teacher teaches only a fractional part of a day, 
 57.16  credit must be given for a day of teaching service for each less 
 57.17  than five hours taught, and in a day, service must be given for 
 57.18  the fractional part of the day as the term of service performed 
 57.19  bears to five hours; 
 57.20     (2) if a teacher teaches five or more hours in a day, 
 57.21  service credit must be given for only one day; 
 57.22     (3) if a teacher teaches at least 170 full days in any 
 57.23  fiscal year, credit must be given for a full year of teaching 
 57.24  service,; and 
 57.25     (3) (4) if a teacher teaches for only a fractional part of 
 57.26  the year, credit must be given for such fractional part of the 
 57.27  year as the term of service rendered performed bears to 170 days.
 57.28     (b) A person who teaches in the state colleges and 
 57.29  university system teacher shall receive a full year of service 
 57.30  credit based on the number of days in the system's employer's 
 57.31  full school year if it is less than 170 days.  Teaching service 
 57.32  performed prior to before July 1, 1961, must be computed under 
 57.33  the law in effect at the time it was rendered performed. 
 57.34     (c) A teacher shall does not lose or gain retirement 
 57.35  service credit as a result of the employer converting to 
 57.36  a four-day work week flexible or alternate work schedule.  If 
 58.1   the employer does convert converts to a four-day work week 
 58.2   flexible or alternate work schedule, the forms for reporting and 
 58.3   procedures for determining service credit shall must be 
 58.4   determined by the executive director with the approval of the 
 58.5   board of trustees.  
 58.6      Sec. 30.  Minnesota Statutes 1998, section 354.092, 
 58.7   subdivision 2, is amended to read: 
 58.8      Subd. 2.  [PAY RATE; CERTIFICATION.] A sabbatical leave 
 58.9   must be compensated by a minimum of one-third of the salary the 
 58.10  member received for a comparable period during the prior fiscal 
 58.11  year.  Before the end of the fiscal year during which any 
 58.12  sabbatical leave is granted Upon granting a sabbatical leave, 
 58.13  the employing unit granting the leave must certify the leave to 
 58.14  the association on a form specified by the executive director.  
 58.15     Sec. 31.  Minnesota Statutes 1998, section 354.093, is 
 58.16  amended to read: 
 58.17     354.093 [PARENTAL OR MATERNITY LEAVE.] 
 58.18     Before the end of the fiscal year during which any parental 
 58.19  or maternity leave is granted Upon granting a parental leave for 
 58.20  the birth or adoption of a child, the employing unit granting 
 58.21  the leave must certify the leave to the association on a form 
 58.22  specified by the executive director.  A member of the 
 58.23  association granted parental or maternity leave of absence by 
 58.24  the employing unit is entitled to service credit not to exceed 
 58.25  one year for the period of leave upon payment to the association 
 58.26  by the end of the fiscal year following the fiscal year in which 
 58.27  the leave of absence terminated.  This payment must include 
 58.28  equal the total required employee, and employer contributions, 
 58.29  and amortization contributions, if any, for the period of leave 
 58.30  prescribed in section 354.42.  The payment must be based on the 
 58.31  member's average full-time monthly salary rate on the date the 
 58.32  leave of absence commenced, and must be without interest.  
 58.33  Notwithstanding the provisions of any agreements to the 
 58.34  contrary, employee and employer the contributions specified in 
 58.35  this section may not be made to receive allowable service credit 
 58.36  under this section if the member does not retain the right to 
 59.1   full reinstatement at the end of the leave. 
 59.2      Sec. 32.  Minnesota Statutes 1998, section 354.094, 
 59.3   subdivision 1, is amended to read: 
 59.4      Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] Before the 
 59.5   end of the fiscal year during which Upon granting any extended 
 59.6   leave of absence is granted pursuant to under section 122A.46 or 
 59.7   136F.43, the employing unit granting the leave must certify the 
 59.8   leave to the association on a form specified by the executive 
 59.9   director.  A member granted an extended leave of absence 
 59.10  pursuant to under section 122A.46 or 136F.43 may pay employee 
 59.11  contributions and receive allowable service credit toward 
 59.12  annuities and other benefits under this chapter, for each year 
 59.13  of the leave, provided the member and the employing board make 
 59.14  the required employer contribution in any proportion they may 
 59.15  agree upon, during the period of the leave.  which shall The 
 59.16  leave period must not exceed five years.  A member may not 
 59.17  receive more than five years of allowable service credit under 
 59.18  this section.  The employee and employer contributions must be 
 59.19  based upon the rates of contribution prescribed by section 
 59.20  354.42 for the salary received during the year immediately 
 59.21  preceding the extended leave.  Payments for the years for which 
 59.22  a member is receiving service credit while on extended leave 
 59.23  must be made on or before the later of June 30 of each fiscal 
 59.24  year for which service credit is received or within 30 days 
 59.25  after first notification of the amount due, if requested by the 
 59.26  member, is given by the association.  No payment is permitted 
 59.27  after the following September 30.  Payments received after June 
 59.28  30 must include interest at an annual rate of 8.5 percent from 
 59.29  June 30 through the end of the month in which payment is 
 59.30  received.  Notwithstanding the provisions of any agreements to 
 59.31  the contrary, employee and employer contributions may not be 
 59.32  made to receive allowable service credit if the member does not 
 59.33  have full reinstatement rights as provided in section 122A.46 or 
 59.34  136F.43, both during and at the end of the extended leave. 
 59.35     Sec. 33.  Minnesota Statutes 1998, section 354.10, 
 59.36  subdivision 2, is amended to read: 
 60.1      Subd. 2.  [AUTOMATIC DEPOSITS.] Upon receipt of the 
 60.2   properly completed forms as provided by the executive director, 
 60.3   the annuity or benefit amount may be electronically transferred 
 60.4   or the annuity or benefit check may be mailed to a banking 
 60.5   institution, savings association, or credit union any financial 
 60.6   institution associated with the National Automated Clearinghouse 
 60.7   Association or a comparable successor organization for deposit 
 60.8   to the recipient's individual account or joint account with the 
 60.9   recipient's spouse or any other person designated by the 
 60.10  recipient.  An overpayment to a joint account after the death of 
 60.11  the annuity or benefit recipient must be repaid to the fund by 
 60.12  the joint tenant if the overpayment is not repaid to the fund by 
 60.13  the banking institution, savings association, or credit 
 60.14  union financial institution associated with the National 
 60.15  Automated Clearinghouse Association or a successor.  The board 
 60.16  may prescribe the conditions which govern these procedures. 
 60.17     Sec. 34.  Minnesota Statutes 1998, section 354.35, is 
 60.18  amended to read: 
 60.19     354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 
 60.20  65 NORMAL RETIREMENT AGE.] 
 60.21     Any coordinated member who retires before normal retirement 
 60.22  age 65 may elect to receive an optional accelerated retirement 
 60.23  annuity from the association which provides for different 
 60.24  annuity amounts over different periods of retirement.  The 
 60.25  election of this optional accelerated retirement annuity is 
 60.26  exercised by making an application to the board on a form 
 60.27  provided by the executive director.  The optional accelerated 
 60.28  retirement annuity must take the form of an annuity payable for 
 60.29  the period before the member attains normal retirement age 65 in 
 60.30  a greater amount than the amount of the annuity calculated under 
 60.31  section 354.44 on the basis of the age of the member at 
 60.32  retirement, but the optional accelerated retirement annuity must 
 60.33  be the actuarial equivalent of the member's annuity computed on 
 60.34  the basis of the member's age at retirement.  The greater amount 
 60.35  must be paid until the retiree reaches normal retirement age 65 
 60.36  and at that time the payment from the association must be 
 61.1   reduced.  For each year the retiree is under normal retirement 
 61.2   age 65, up to five percent of the total life annuity required 
 61.3   reserves may be used to accelerate the optional retirement 
 61.4   annuity under this section.  At retirement, members who retire 
 61.5   before age 62 may elect to have the age specified in this 
 61.6   section be 62 instead of 65 the normal retirement age.  This 
 61.7   election is irrevocable and may be made only once on the 
 61.8   application form provided by the executive director.  The method 
 61.9   of computing the optional accelerated retirement annuity 
 61.10  provided in this section is established by the board of 
 61.11  trustees.  In establishing the method of computing the optional 
 61.12  accelerated retirement annuity, the board of trustees must 
 61.13  obtain the written approval of the commission-retained actuary.  
 61.14  The written approval must be a part of the permanent records of 
 61.15  the board of trustees.  The election of an optional accelerated 
 61.16  retirement annuity is exercised by making an application on a 
 61.17  form provided by the executive director.  
 61.18     Sec. 35.  Minnesota Statutes 1998, section 354.46, 
 61.19  subdivision 2a, is amended to read: 
 61.20     Subd. 2a.  [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 
 61.21  100 percent optional annuity under subdivision 2, or a refund 
 61.22  under section 354.47, subdivision 1, the surviving spouse of a 
 61.23  deceased member may elect to receive survivor coverage in a term 
 61.24  certain of five, ten, 15, or 20 years, but monthly payments must 
 61.25  not exceed 75 percent of the average high-five monthly salary of 
 61.26  the deceased member.  The monthly term certain annuity must be 
 61.27  actuarially equivalent to the 100 percent optional annuity under 
 61.28  subdivision 2. 
 61.29     If a surviving spouse elects a term certain payment and 
 61.30  dies before the expiration of the specified term certain period, 
 61.31  the commuted value of the remaining annuity payments must be 
 61.32  paid in a lump sum to the survivor's surviving spouse's estate. 
 61.33     Sec. 36.  Minnesota Statutes 1998, section 354.47, 
 61.34  subdivision 1, is amended to read: 
 61.35     Subdivision 1.  [DEATH BEFORE RETIREMENT.] (1) (a) If a 
 61.36  member dies before retirement and is covered under section 
 62.1   354.44, subdivision 2, and neither an optional annuity, nor a 
 62.2   reversionary annuity, nor a benefit under section 354.46, 
 62.3   subdivision 1, is payable to the survivors if the member was a 
 62.4   basic member, then the surviving spouse, or if there is no 
 62.5   surviving spouse, the designated beneficiary is entitled to an 
 62.6   amount equal to the member's accumulated deductions with 
 62.7   interest credited to the account of the member to the date of 
 62.8   death of the member.  If the designated beneficiary is a minor, 
 62.9   interest must be credited to the date the beneficiary reaches 
 62.10  legal age, or the date of receipt, whichever is earlier. 
 62.11     (2) (b) If a member dies before retirement and is covered 
 62.12  under section 354.44, subdivision 6, and neither an optional 
 62.13  annuity, nor reversionary annuity, nor the benefit described in 
 62.14  section 354.46, subdivision 1, is payable to the survivors if 
 62.15  the member was a basic member,; then the surviving spouse, or if 
 62.16  there is no surviving spouse, the designated beneficiary is 
 62.17  entitled to an amount equal to the member's accumulated 
 62.18  deductions credited to the account of the member as of June 30, 
 62.19  1957, and from July 1, 1957, to the date of death of the member, 
 62.20  the member's accumulated deductions plus six percent interest at 
 62.21  the rate of six percent per annum compounded annually. 
 62.22     (c) If the designated beneficiary under paragraph (b) is a 
 62.23  minor, any interest credited under that paragraph must be 
 62.24  credited to the date the beneficiary reaches legal age, or the 
 62.25  date of receipt, whichever is earlier. 
 62.26     Sec. 37.  Minnesota Statutes 1998, section 354.48, 
 62.27  subdivision 6, is amended to read: 
 62.28     Subd. 6.  [REGULAR PHYSICAL EXAMINATIONS.] At least once 
 62.29  each year during the first five years following the allowance of 
 62.30  a disability benefit to any member, and at least once in every 
 62.31  three-year period thereafter, the executive director shall 
 62.32  require the disability beneficiary to undergo a medical 
 62.33  examination to be made at the place of residence of such person, 
 62.34  or at any other place mutually agreed upon, by a physician or 
 62.35  physicians engaged by the executive director.  If any 
 62.36  examination indicates that the member is no longer permanently 
 63.1   and totally disabled or that the member is engaged or is able to 
 63.2   engage in a substantial gainful occupation, payments of the 
 63.3   disability benefit by the association shall be discontinued.  
 63.4   The payments shall discontinue as soon as the member is 
 63.5   reinstated to the payroll following sick leave, but payment may 
 63.6   not be made for more than 60 days after physicians engaged by 
 63.7   the executive director find that the person is no longer 
 63.8   permanently and totally disabled. 
 63.9      Sec. 38.  Minnesota Statutes 1998, section 354.49, 
 63.10  subdivision 1, is amended to read: 
 63.11     Subdivision 1.  [ENTITLEMENT, APPLICATION.] A person who 
 63.12  ceases to render teaching service in any school or institution 
 63.13  to which the provisions of this chapter apply is entitled to a 
 63.14  refund provided in subdivision 2, or a deferred retirement 
 63.15  annuity under section 354.55, subdivision 11.  An application 
 63.16  for a refund must not be made sooner than 30 days after 
 63.17  termination of teaching service if the applicant has not again 
 63.18  become a teacher.  This payment must be made within 90 45 days 
 63.19  after receipt of application for refund or upon completion of 
 63.20  processing the report made pursuant to section 354.52, 
 63.21  subdivision 2 receipt of member reporting data under section 
 63.22  354.52, subdivision 4a, and payroll cycle data under section 
 63.23  354.52, subdivision 4b, whichever is later. 
 63.24     Sec. 39.  Minnesota Statutes 1998, section 354.52, 
 63.25  subdivision 3, is amended to read: 
 63.26     Subd. 3.  [DUTY OF FINANCE OFFICIALS DEDUCTION 
 63.27  REQUIREMENTS.] It is the duty of each person, officer, school 
 63.28  board, or managing body required by law to draw the warrants or 
 63.29  orders for payment of salaries to teachers to Every pay period 
 63.30  each employer shall deduct and withhold from all the salary paid 
 63.31  each pay period to of every teacher who is a member of the fund 
 63.32  the amount which the teacher is required to pay into the fund 
 63.33  and, required under section 354.42.  At the time of each 
 63.34  deduction, to the employer shall also furnish to each teacher a 
 63.35  statement showing the amount of the deduction.  
 63.36     Sec. 40.  Minnesota Statutes 1998, section 354.52, 
 64.1   subdivision 4, is amended to read: 
 64.2      Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
 64.3   once each month, a representative authorized by An employing 
 64.4   unit employer shall transmit remit all amounts due to the 
 64.5   association and furnish a signed statement indicating the amount 
 64.6   due and transmitted with any other information required by the 
 64.7   executive director.  Signing the statement has the force and 
 64.8   effect of an oath as to the correctness of the amount due and 
 64.9   transmitted.  If an amount due and is not transmitted 
 64.10  remitted to the association within seven calendar days of the 
 64.11  payroll warrant, the amount accrues interest at an annual rate 
 64.12  of 8.5 percent compounded annually commencing 15 days after from 
 64.13  the due date first due until the amount is transmitted and must 
 64.14  be paid by the employing unit.  These payments received by the 
 64.15  association.  All amounts due and other employing unit employer 
 64.16  obligations not remitted within 60 days of notification by the 
 64.17  association must be certified to the commissioner of finance who 
 64.18  shall deduct the amount from any state aid or appropriation 
 64.19  amount applicable to the employing unit. 
 64.20     Sec. 41.  Minnesota Statutes 1998, section 354.52, 
 64.21  subdivision 4a, is amended to read: 
 64.22     Subd. 4a.  [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 
 64.23  employing unit shall must initially provide the following member 
 64.24  data specified in paragraph (b) or any of that data not 
 64.25  previously provided to the association for payroll warrants 
 64.26  dated after June 30, 1995, in a format prescribed by the 
 64.27  executive director.  Data changes and the dates of those changes 
 64.28  under this subdivision must be reported to the association on an 
 64.29  ongoing basis for within 14 calendar days after the date of the 
 64.30  end of the payroll cycle in which they occur.  These data 
 64.31  changes should be reported with the payroll cycle data under 
 64.32  subdivision 4b. 
 64.33     (b)  Data on the member includes:  
 64.34     (1) legal name, address, date of birth, association member 
 64.35  number, employer-assigned employee number, and social security 
 64.36  number; 
 65.1      (2) association status, including, but not limited to, 
 65.2   basic, coordinated, exempt annuitant, exempt technical college 
 65.3   teacher, and exempt independent contractor or consultant; 
 65.4      (3) employment status, including, but not limited to, full 
 65.5   time, part time, intermittent, substitute, or part-time 
 65.6   mobility; 
 65.7      (4) employment position, including, but not limited to, 
 65.8   teacher, superintendent, principal, administrator, or other; 
 65.9      (5) employment activity, including, but not limited to, 
 65.10  hire, termination, resumption of employment, disability, or 
 65.11  death; 
 65.12     (6) leaves of absence; 
 65.13     (7) county district number assigned by the association for 
 65.14  the employing unit; 
 65.15     (8) data center identification number, if applicable; and 
 65.16     (9) other information as may be required by the executive 
 65.17  director. 
 65.18     Sec. 42.  Minnesota Statutes 1998, section 354.52, 
 65.19  subdivision 4b, is amended to read: 
 65.20     Subd. 4b.  [PAYROLL CYCLE REPORTING REQUIREMENTS.] An 
 65.21  employing unit shall provide the following data to the 
 65.22  association for payroll warrants dated after June 30, 1995, for 
 65.23  each on an ongoing basis within 14 calendar days after the date 
 65.24  of the payroll cycle warrant in a format prescribed by the 
 65.25  executive director:  
 65.26     (1) association member number; 
 65.27     (2) employer-assigned employee number; 
 65.28     (3) social security number; 
 65.29     (4) amount of each salary deduction; 
 65.30     (5) amount of salary as defined in section 354.05, 
 65.31  subdivision 35, from which each deduction was made; 
 65.32     (6) reason for payment; 
 65.33     (7) service credit; 
 65.34     (8) the beginning and ending dates of the payroll period 
 65.35  covered and the date of actual payment; 
 65.36     (9) fiscal year of salary earnings; 
 66.1      (10) total remittance amount including employee, employer, 
 66.2   and additional employer contributions; and 
 66.3      (11) other information as may be required by the executive 
 66.4   director. 
 66.5      Sec. 43.  Minnesota Statutes 1998, section 354.63, 
 66.6   subdivision 2, is amended to read: 
 66.7      Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
 66.8   (1) The required reserves for retirement annuities as determined 
 66.9   in accordance with under this chapter shall must be transferred 
 66.10  to the Minnesota postretirement investment fund as of no later 
 66.11  than the last business day of the month in which the retirement 
 66.12  annuity begins.  The required reserves shall be determined in 
 66.13  accordance with the appropriate annuity table of mortality 
 66.14  adopted by the board of trustees as provided in section 354.07, 
 66.15  subdivision 1, based on the experience of the fund as 
 66.16  recommended by the commission-retained actuary and using the 
 66.17  interest assumption specified in section 356.215, subdivision 4d.
 66.18     (2) Annuity payments shall be adjusted as provided in 
 66.19  accordance with the provisions of section 11A.18.  In making 
 66.20  these adjustments, members who retire effective July 1 shall be 
 66.21  considered to have retired effective the preceding June 
 66.22  30.  This section applies to persons who retired effective July 
 66.23  1, 1982, or later.  
 66.24     (3) An increase in annuity payments pursuant to under this 
 66.25  section will be made automatically unless written notice is 
 66.26  filed by the annuitant with the executive director of the 
 66.27  teachers retirement association requesting that the increase 
 66.28  shall not be made. 
 66.29     Sec. 44.  Minnesota Statutes 1998, section 356.30, 
 66.30  subdivision 1, is amended to read: 
 66.31     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] 
 66.32  (1) (a) Notwithstanding any provisions to the contrary of the 
 66.33  laws governing the funds plans enumerated in subdivision 3, a 
 66.34  person who has met the qualifications of clause (2) paragraph 
 66.35  (b) may elect to receive a retirement annuity from each fund 
 66.36  plan in which the person has at least six months one-half year 
 67.1   of allowable service, based on the allowable service in 
 67.2   each fund plan, subject to the provisions of clause 
 67.3   (3) paragraph (c).  
 67.4      (2) (b) A person may receive upon retirement a retirement 
 67.5   annuity from each fund plan in which the person has at least six 
 67.6   months one-half year of allowable service, and augmentation of a 
 67.7   deferred annuity calculated under the laws governing each public 
 67.8   pension plan or fund named in subdivision 3, from the date the 
 67.9   person terminated all public service if: 
 67.10     (a) (1) the person has allowable service totaling an amount 
 67.11  that allows the person to receive an annuity in any two or more 
 67.12  of the enumerated funds plans; and 
 67.13     (b) (2) the person has not begun to receive an annuity from 
 67.14  any enumerated fund plan or the person has made application for 
 67.15  benefits from all funds each applicable plan and the effective 
 67.16  dates of the retirement annuity with each fund plan under which 
 67.17  the person chooses to receive an annuity are within a one-year 
 67.18  period.  
 67.19     (3) (c) The retirement annuity from each fund plan must be 
 67.20  based upon the allowable service, accrual rates, and average 
 67.21  salary in each fund, except that the applicable plan as further 
 67.22  specified or modified in the following clauses:  
 67.23     (a) (1) the laws governing annuities must be the law in 
 67.24  effect on the date of termination from the last period of public 
 67.25  service under a covered fund plan with which the person earned a 
 67.26  minimum of one-half year of allowable service credit during that 
 67.27  employment.; 
 67.28     (b) (2) the "average salary" on which the annuity from each 
 67.29  covered fund plan in which the employee has credit in a formula 
 67.30  plan shall be based on the employee's highest five successive 
 67.31  years of covered salary during the entire service in 
 67.32  covered funds. plans; 
 67.33     (c) The formula percentages (3) accrual rates to be used by 
 67.34  each fund plan must be those percentages prescribed by 
 67.35  each fund's plan's formula as continued for the respective years 
 67.36  of allowable service from one fund plan to the next, recognizing 
 68.1   all previous allowable service with the other 
 68.2   covered funds. plans; 
 68.3      (d) (4) allowable service in all the funds plans must be 
 68.4   combined in determining eligibility for and the application of 
 68.5   each fund's plan's provisions in respect to actuarial reduction 
 68.6   in the annuity amount for retirement prior to normal retirement. 
 68.7   age; and 
 68.8      (e) (5) the annuity amount payable for any allowable 
 68.9   service under a nonformula plan of a covered fund must not be 
 68.10  affected but such service and covered salary must be used in the 
 68.11  above calculation.  
 68.12     (f) (d) This section shall does not apply to any person 
 68.13  whose final termination from the last public service under a 
 68.14  covered fund is prior to May 1, 1975.  
 68.15     (g) (e) For the purpose of computing annuities under this 
 68.16  section the formula percentages accrual rates used by any 
 68.17  covered fund plan, except the public employees police and 
 68.18  fire fund plan and the state patrol retirement fund plan, must 
 68.19  not exceed the percent specified in section 356.19, subdivision 
 68.20  4, per year of service for any year of service or fraction 
 68.21  thereof.  The formula percentage accrual rate used by the public 
 68.22  employees police and fire fund plan and the state patrol 
 68.23  retirement fund plan must not exceed the percent specified in 
 68.24  section 356.19, subdivision 6, per year of service for any year 
 68.25  of service or fraction thereof.  The formula percentage accrual 
 68.26  rate or rates used by the legislators retirement plan and the 
 68.27  elective state officers retirement plan must not exceed 2.5 
 68.28  percent, but this limit does not apply to the adjustment 
 68.29  provided under section 3A.02, subdivision 1, paragraph (c), or 
 68.30  352C.031, paragraph (b). 
 68.31     (h) (f) Any period of time for which a person has credit in 
 68.32  more than one of the covered funds must be used only once for 
 68.33  the purpose of determining total allowable service.  
 68.34     (i) (g) If the period of duplicated service credit is more 
 68.35  than six months one-half year, or the person has credit for more 
 68.36  than six months one-half year, with each of the funds plans, 
 69.1   each fund shall plan must apply its formula to a prorated 
 69.2   service credit for the period of duplicated service based on a 
 69.3   fraction of the salary on which deductions were paid to that 
 69.4   fund for the period divided by the total salary on which 
 69.5   deductions were paid to all funds for the period.  
 69.6      (j) (h) If the period of duplicated service credit is less 
 69.7   than six months one-half year, or when added to other service 
 69.8   credit with that fund is less than six months one-half year, the 
 69.9   service credit must be ignored and a refund of contributions 
 69.10  made to the person in accord with that fund's refund provisions. 
 69.11     Sec. 45.  [356.90] [COMBINED PAYMENT.] 
 69.12     (a) The public employees retirement association and the 
 69.13  Minnesota state retirement system are permitted to combine 
 69.14  payments to retirees and the total payment must be equal to what 
 69.15  is payable if payments are kept separate.  The retiree must 
 69.16  agree, in writing, to have the payment combined. 
 69.17     (b) Each fund will calculate benefits under the laws 
 69.18  governing the plan and the required reserves and future 
 69.19  mortality losses or gains will be paid or accrued to the fund 
 69.20  from which the service was earned.  Each fund must account for 
 69.21  their portion of the payment separately, and there may be no 
 69.22  additional liabilities realized by either fund. 
 69.23     (c) The fund making payment would be responsible for 
 69.24  issuing one payment, making address changes, tax withholding 
 69.25  changes, and other administrative functions needed to process 
 69.26  the payment. 
 69.27     Sec. 46.  [INSTRUCTION TO REVISOR.] 
 69.28     The revisor of statutes shall change the term "six months" 
 69.29  to "one-half year" wherever it appears in Minnesota Statutes, 
 69.30  sections 356.302 and 356.303. 
 69.31     Sec. 47.  [REPEALER.] 
 69.32     Minnesota Statutes 1998, sections 353.024; and 354.52, 
 69.33  subdivision 2, are repealed. 
 69.34     Sec. 48.  [EFFECTIVE DATE.] 
 69.35     (a) Sections 1 to 47 are effective on July 1, 2000. 
 69.36     (b) Section 26 is not intended to increase or decrease any 
 70.1   surviving spouse benefit compared to the surviving spouse 
 70.2   benefit payable immediately prior to July 1, 2000. 
 70.3                              ARTICLE 4
 70.4                       MILITARY SERVICE CREDIT
 70.5                        PURCHASE AUTHORIZATION
 70.6      Section 1.  [352.275] [UNCREDITED MILITARY SERVICE CREDIT 
 70.7   PURCHASE.] 
 70.8      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 70.9   state employee who has at least three years of allowable service 
 70.10  with the Minnesota state retirement system and who performed 
 70.11  service in the United States armed forces before becoming a 
 70.12  state employee, or who failed to obtain service credit for a 
 70.13  military leave of absence under section 352.27, is entitled to 
 70.14  purchase allowable service credit for the initial period of 
 70.15  enlistment, induction, or call to active duty without any 
 70.16  voluntary extension by making payment under section 356.55 
 70.17  provided the employee is not entitled to receive a current or 
 70.18  deferred retirement annuity from a United States armed forces 
 70.19  pension plan and has not purchased service credit from any other 
 70.20  defined benefit public employee pension plan for the same period 
 70.21  of service. 
 70.22     Subd. 2.  [APPLICATION AND DOCUMENTATION.] An employee who 
 70.23  desires to purchase service credit under subdivision 1 must 
 70.24  apply with the executive director to make the purchase.  The 
 70.25  application must include all necessary documentation of the 
 70.26  employee's qualifications to make the purchase, signed written 
 70.27  permission to allow the executive director to request and 
 70.28  receive necessary verification of applicable facts and 
 70.29  eligibility requirements, and any other relevant information 
 70.30  that the executive director may require. 
 70.31     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 70.32  for the purchase period must be granted by the Minnesota state 
 70.33  retirement system to the purchasing employee upon receipt of the 
 70.34  purchase payment amount.  Payment must be made before the 
 70.35  employee's effective date of retirement. 
 70.36     Sec. 2.  Minnesota Statutes 1998, section 352B.01, is 
 71.1   amended by adding a subdivision to read: 
 71.2      Subd. 3a.  [UNCREDITED MILITARY SERVICE CREDIT 
 71.3   PURCHASE] (a) A member who has at least three years of allowable 
 71.4   service with the state patrol retirement plan under subdivision 
 71.5   3 and who performed service in the United States armed forces 
 71.6   before becoming a member is entitled to purchase allowable 
 71.7   service credit for the initial period of enlistment, induction, 
 71.8   or call to active duty without any voluntary extension by making 
 71.9   payment under section 356.55 provided the employee is not 
 71.10  entitled to receive a current or deferred retirement annuity 
 71.11  from a United States armed forces pension plan and has not 
 71.12  purchased service credit from any other defined benefit public 
 71.13  employee pension plan for the same period of service. 
 71.14     (b) A member who desires to purchase service credit under 
 71.15  paragraph (a) must apply with the executive director to make the 
 71.16  purchase.  The application must include all necessary 
 71.17  documentation of the member's qualifications to make the 
 71.18  purchase, signed written permission to allow the executive 
 71.19  director to request and receive necessary verification of 
 71.20  applicable facts and eligibility requirements, and any other 
 71.21  relevant information that the executive director may require. 
 71.22     (c) Allowable service credit for the purchase period must 
 71.23  be granted by the state patrol retirement plan to the purchasing 
 71.24  employee upon receipt of the purchase payment amount.  Payment 
 71.25  must be made before the effective date of retirement of the 
 71.26  member. 
 71.27     Sec. 3.  Minnesota Statutes 1998, section 353.01, is 
 71.28  amended by adding a subdivision to read: 
 71.29     Subd. 16a.  [UNCREDITED MILITARY SERVICE CREDIT PURCHASE.] 
 71.30  (a) A public employee who has at least three years of allowable 
 71.31  service with the public employees retirement association or the 
 71.32  public employees police and fire plan and who performed service 
 71.33  in the United States armed forces before becoming a public 
 71.34  employee, or who failed to obtain service credit for a military 
 71.35  leave of absence under subdivision 16, paragraph (h), is 
 71.36  entitled to purchase allowable service credit for the initial 
 72.1   period of enlistment, induction, or call to active duty without 
 72.2   any voluntary extension by making payment under section 356.55 
 72.3   provided the public employee is not entitled to receive a 
 72.4   current or deferred retirement annuity from a United States 
 72.5   armed forces pension plan and has not purchased service credit 
 72.6   from any other defined benefit public employee pension plan for 
 72.7   the same period of service. 
 72.8      (b) A public employee who desires to purchase service 
 72.9   credit under paragraph (a) must apply with the executive 
 72.10  director to make the purchase.  The application must include all 
 72.11  necessary documentation of the public employee's qualifications 
 72.12  to make the purchase, signed written permission to allow the 
 72.13  executive director to request and receive necessary verification 
 72.14  of applicable facts and eligibility requirements, and any other 
 72.15  relevant information that the executive director may require. 
 72.16     (c) Allowable service credit for the purchase period must 
 72.17  be granted by the public employees association or the public 
 72.18  employees police and fire plan, whichever applies, to the 
 72.19  purchasing public employee upon receipt of the purchase payment 
 72.20  amount.  Payment must be made before the effective date of 
 72.21  retirement of the public employee. 
 72.22     Sec. 4.  [EFFECTIVE DATE; SUNSET REPEALER.] 
 72.23     (a) Sections 1, 2, and 3 are effective on the day following 
 72.24  final enactment. 
 72.25     (b) Sections 1, 2, and 3 are repealed on May 16, 2003. 
 72.26                             ARTICLE 5
 72.27                 RETIREMENT HEALTH CARE PROVISIONS
 72.28     Section 1.  [352G.01] [DEFINITIONS.] 
 72.29     Subdivision 1.  [TERMS.] Unless the language or context 
 72.30  clearly indicates that a different meaning is intended, the 
 72.31  terms defined in this section, for the purposes of this chapter, 
 72.32  have the meanings given them. 
 72.33     Subd. 2.  [INCLUDED PARTICIPANTS.] "Included participants" 
 72.34  means persons contributing to a retirement plan under chapter 
 72.35  3A, 352, 352B, 352D, or 490 on or after July 1, 2000. 
 72.36     Subd. 3.  [ELIGIBLE RETIRED EMPLOYEE.] "Eligible retired 
 73.1   employee" means a former employee who is drawing monthly 
 73.2   retirement benefits under chapter 3A, 352, 352B, 352D, or 490, 
 73.3   and who has at least 15 years of allowable service and was 
 73.4   eligible to draw retirement benefits at the time of separation 
 73.5   from state service. 
 73.6      Subd. 4.  [DISABLED EMPLOYEE.] "Disabled employee" means an 
 73.7   employee who has been determined disabled under chapter 3A, 352, 
 73.8   352B, 352D, or 490. 
 73.9      Subd. 5.  [INELIGIBLE TERMINATED EMPLOYEE.] "Ineligible 
 73.10  terminated employee" means a former state employee who is not 
 73.11  eligible for benefits from the health care reimbursement plan. 
 73.12     Subd. 6.  [ACCUMULATED CONTRIBUTIONS.] "Accumulated 
 73.13  contributions" means the total deductions made from the salary 
 73.14  of an employee into the health care reimbursement plan. 
 73.15     Subd. 7.  [HEALTH CARE REIMBURSEMENT FUND.] The "health 
 73.16  care reimbursement fund" includes the total accumulated 
 73.17  contributions and employer contributions made by or on behalf of 
 73.18  all included participants and any investment return attributable 
 73.19  to the contributions. 
 73.20     Subd. 8.  [ALLOWABLE SERVICE.] "Allowable service" means 
 73.21  allowable service under chapter 3A, 352, 352B, 352D, or 490 
 73.22  except any allowable service reinstated by repaying a refund on 
 73.23  or after July 1, 2000. 
 73.24     Subd. 9.  [SALARY.] "Salary" means wages, or other periodic 
 73.25  compensation paid to an employee before deductions for deferred 
 73.26  compensation, supplemental retirement plans, or other voluntary 
 73.27  salary reduction programs.  Lump sum sick leave payments, 
 73.28  severance payments, lump sum annual leave payments and overtime 
 73.29  payments made at the time of separation from state service, 
 73.30  payments in lieu of any employee-paid group insurance coverage, 
 73.31  including the difference between single and family rates that 
 73.32  may be paid to an employee with single coverage, and payments 
 73.33  made as an employer-paid fringe benefit, workers' compensation 
 73.34  payments, employer contributions to a deferred compensation or 
 73.35  tax sheltered annuity program, and amounts contributed under a 
 73.36  benevolent vacation and sick leave donation program are not 
 74.1   salary. 
 74.2      Subd. 10.  [DESIGNATED BENEFICIARY.] "Designated 
 74.3   beneficiary" means the designated beneficiary established by the 
 74.4   included participants or eligible retired employees under the 
 74.5   retirement plan under chapter 3A, 352, 352B, 352D, or 490. 
 74.6      Subd. 11.  [EXECUTIVE DIRECTOR.] "Executive director" means 
 74.7   the executive director of the Minnesota state retirement system 
 74.8   under section 352.03, subdivision 5. 
 74.9      Subd. 12.  [BOARD.] "Board" means the board of directors of 
 74.10  the Minnesota state retirement system established under section 
 74.11  352.03. 
 74.12     Subd. 13.  [EMPLOYEE.] "Employee" means a person 
 74.13  contributing to a retirement plan under chapter 3A, 352, 352B, 
 74.14  352D, or 490. 
 74.15     Sec. 2.  [352G.02] [HEALTH CARE REIMBURSEMENT PLAN.] 
 74.16     Subdivision 1.  [ESTABLISHMENT.] There is established the 
 74.17  health care reimbursement plan for state employees covered under 
 74.18  chapter 3A, 352, 352B, 352D, or 490.  This plan must meet 
 74.19  qualification requirements under the Internal Revenue Code, 
 74.20  section 401(h), to ensure that both contributions and benefit 
 74.21  payments are tax free. 
 74.22     Subd. 2.  [STATE EMPLOYEES COVERED.] Every state employee 
 74.23  contributing to a plan under chapter 3A, 352, 352B, 352D, or 490 
 74.24  on or after July 1, 2000, is covered by the health care 
 74.25  reimbursement plan.  Acceptance of state employment or 
 74.26  continuance in state service in which contributions are made 
 74.27  under chapter 3A, 352, 352B, 352D, or 490 is deemed consent to 
 74.28  have deductions made from salary for deposit to the credit of 
 74.29  the account of the state employee in the health care 
 74.30  reimbursement plan. 
 74.31     Sec. 3.  [352G.03] [COVERAGE TERMINATION.] 
 74.32     Coverage of any person under the health care reimbursement 
 74.33  plan ends when the person ceases to be a state employee or is no 
 74.34  longer covered by a pension plan under chapter 3A, 352, 352B, 
 74.35  352D, or 490. 
 74.36     Sec. 4.  [352G.04] [APPEALS PROCEDURE.] 
 75.1      If someone wishes to appeal a decision made by the 
 75.2   executive director, the appeal procedure established under 
 75.3   section 352.031 must be followed. 
 75.4      Sec. 5.  [352G.05] [STATE EMPLOYEES HEALTH CARE 
 75.5   REIMBURSEMENT FUND, CONTRIBUTIONS BY EMPLOYEE AND EMPLOYER.] 
 75.6      Subdivision 1.  [FUND CREATED.] There is created a special 
 75.7   fund to be known as the state employees health care 
 75.8   reimbursement fund.  Employee contributions, employer 
 75.9   contributions, investment returns, and any other amounts 
 75.10  authorized by law shall be deposited in this account. 
 75.11     Subd. 2.  [EMPLOYEE CONTRIBUTIONS.] The employee 
 75.12  contribution to the fund must be equal to .5 percent of salary.  
 75.13  These contributions must be made by deduction from salary as 
 75.14  provided in section 352.04, subdivision 4. 
 75.15     Subd. 3.  [EMPLOYER CONTRIBUTIONS.] The employer 
 75.16  contribution to the fund must be equal to .5 percent of salary.  
 75.17  These contributions shall be made under section 352.04, 
 75.18  subdivisions 5 and 6. 
 75.19     Subd. 4.  [OMITTED SALARY DEDUCTIONS.] If a department 
 75.20  fails to take deductions from an employee's salary as provided 
 75.21  in this section, the collection of omitted deduction must be 
 75.22  made in accordance with section 352.04, subdivision 8, 
 75.23  paragraphs (a), (b), and (c). 
 75.24     Subd. 5.  [ERRONEOUS DEDUCTIONS; CANCELED 
 75.25  WARRANTS.] Deductions taken from the salary of an employee for 
 75.26  the health care reimbursement fund in error must, upon discovery 
 75.27  and verification by the department making the deduction, be 
 75.28  refunded to the employee in accordance with section 352.04, 
 75.29  subdivision 9. 
 75.30     Subd. 6.  [FUND DISBURSEMENT RESTRICTED.] The health care 
 75.31  reimbursement fund must be disbursed only for the purposes 
 75.32  provided by law.  The expenses of the health care reimbursement 
 75.33  plan and any benefits provided by law must be paid from the 
 75.34  health care reimbursement fund.  Refunds under section 352G.10, 
 75.35  subdivisions 1 and 2, must be paid from the contributions prior 
 75.36  to being invested in the health care reimbursement fund. 
 76.1      Sec. 6.  [352G.06] [STATE TREASURER TO BE TREASURER OF THE 
 76.2   HEALTH CARE REIMBURSEMENT FUND.] 
 76.3      The state treasurer and the treasurer's successor is ex 
 76.4   officio treasurer of the health care reimbursement fund.  The 
 76.5   general bond to the state shall cover all liability for actions 
 76.6   as treasurer of these funds.  Funds of the system received by 
 76.7   the treasurer must be set aside in the state treasury and 
 76.8   credited to the health care reimbursement fund.  The treasurer 
 76.9   and the treasurer's successor shall deliver to the executive 
 76.10  director copies of all payroll abstracts of the state together 
 76.11  with the commissioner of finance's warrants covering the 
 76.12  deductions made on these payroll abstracts for the health care 
 76.13  reimbursement fund.  The executive director shall have a list 
 76.14  made of the commissioner of finance's warrants.  These warrants 
 76.15  must then be deposited with the state's treasurer or the 
 76.16  treasurer's successor to be credited to the health care 
 76.17  reimbursement fund.  The treasurer shall pay out of this fund 
 76.18  only on warrants issued by the commissioner of finance, upon 
 76.19  abstracts signed by the director, or by the finance officer 
 76.20  designated by the director during the disability or the absence 
 76.21  of the director.  Abstracts for investments may be signed by the 
 76.22  executive director of the state board of investment. 
 76.23     Sec. 7.  [352G.07] [INVESTMENT BOARD TO INVEST FUNDS.] 
 76.24     The director shall, from time to time, certify to the state 
 76.25  board of investment any portions of the health care 
 76.26  reimbursement fund that in the judgment of the director are not 
 76.27  required for immediate use.  The state board of investment shall 
 76.28  invest and reinvest sums so transferred, or certified, in 
 76.29  securities that are duly authorized legal investments under 
 76.30  section 11A.24.  Amounts invested in the health care 
 76.31  reimbursement fund must be accounted for separately from the 
 76.32  retirement funds invested by the investment board. 
 76.33     Sec. 8.  [352G.08] [HEALTH CARE REIMBURSEMENT PLAN 
 76.34  BENEFITS.] 
 76.35     Subdivision 1.  [AGE AND SERVICE REQUIREMENTS.] After 
 76.36  separation from state service, an employee who has attained the 
 77.1   age of at least 60, who has at least 15 years of allowable 
 77.2   service, and is immediately eligible for retirement or 
 77.3   disability benefits or an employee who qualifies for the rule of 
 77.4   90 regardless of age is entitled upon application to benefits 
 77.5   from the health care reimbursement plan as long as the employee 
 77.6   has not accepted a refund under section 352G.10, subdivisions 1 
 77.7   and 2, or has repaid all refunds to the health care 
 77.8   reimbursement plan under section 352G.10, subdivision 4.  
 77.9   Benefits are not payable to an eligible disabled employee who is 
 77.10  no longer collecting disability or retirement benefits. 
 77.11     Subd. 2.  [BENEFIT SCHEDULE.] Those meeting the eligibility 
 77.12  requirements in subdivision 1 will be entitled to the following 
 77.13  monthly benefits: 
 77.14                  Retirement Date           Monthly Benefits
 77.15           July 1, 2000 - June 30, 2002           $55
 77.16           July 1, 2002 - June 30, 2003           $64
 77.17           July 1, 2003 - June 30, 2004           $73
 77.18           July 1, 2004 - June 30, 2005           $82
 77.19           July 1, 2005 - June 30, 2006           $92
 77.20           July 1, 2006 - June 30, 2007           $102
 77.21           July 1, 2007 - June 30, 2008           $113
 77.22           July 1, 2008 - June 30, 2009           $123
 77.23           July 1, 2009 - June 30, 2010           $134
 77.24           July 1, 2010 - June 30, 2011           $146
 77.25           July 1, 2011 - and after               $158
 77.26     Subd. 3.  [PAYMENTS.] The first monthly payment will begin 
 77.27  on July 1, 2002, and will be based on the schedule above.  No 
 77.28  monthly payments will be made prior to July 1, 2002.  Payments 
 77.29  will be paid directly to the eligible retired employee, but only 
 77.30  upon providing documentation that the money is used to offset 
 77.31  health insurance premiums or any other health expenses to meet 
 77.32  the requirements under the Internal Revenue Code, section 401(h).
 77.33  At the discretion of the executive director, payments may be 
 77.34  added to the monthly retirement checks received by the eligible 
 77.35  retired employee. 
 77.36     Subd. 4.  [TERMINATION OF BENEFITS.] Monthly benefits will 
 78.1   terminate upon the death of the member, and will not continue to 
 78.2   a survivor or designated beneficiary. 
 78.3      Sec. 9.  [352G.09] [ANNUAL INCREASES, CALCULATION OF HEALTH 
 78.4   INSURANCE PLAN INFLATION ADJUSTMENT.] 
 78.5      (a) Annually, following June 30, the Minnesota state 
 78.6   retirement system shall use the procedures in paragraph (b) to 
 78.7   determine whether an inflation adjustment is payable and to 
 78.8   determine the amount of the adjustment. 
 78.9      (b) If the medical inflation index increases from June 30 
 78.10  of the preceding year to June 30 of the current year, the 
 78.11  Minnesota state retirement system shall certify the percentage 
 78.12  increase.  The amount certified is the lesser of the medical 
 78.13  inflation index or five percent.  The board, at its discretion, 
 78.14  can decrease the adjustment in any year in order to maintain the 
 78.15  financial integrity of the health insurance plan which includes 
 78.16  avoiding projected unfunded liability.  The board will seek 
 78.17  advice from an approved actuary in determining if the inflation 
 78.18  adjustment should be lowered. 
 78.19     (c) If an increase is payable, it will be made the 
 78.20  following January 1.  An eligible retired employee who has been 
 78.21  receiving health insurance reimbursement benefits for at least 
 78.22  12 months as of the current June 30 is eligible to receive a 
 78.23  full insurance plan inflation adjustment.  An eligible retired 
 78.24  employee who has been receiving a health insurance benefit for 
 78.25  at least one full month, but less than 12 full months as of the 
 78.26  current June 30 is eligible to receive a partial inflation 
 78.27  adjustment as follows: 
 78.28            Month Retired     Fraction of the Increase 
 78.29             July                    11/12
 78.30             August                  10/12
 78.31             September               9/12
 78.32             October                 8/12
 78.33             November                7/12
 78.34             December                6/12
 78.35             January                 5/12
 78.36             February                4/12
 79.1              March                   3/12
 79.2              April                   2/12
 79.3              May                     1/12
 79.4      Sec. 10.  [352G.10] [REFUND OF EMPLOYEE CONTRIBUTIONS.] 
 79.5      Subdivision 1.  [REFUND.] An ineligible terminated 
 79.6   employee, an eligible retired employee who has not yet begun 
 79.7   collecting benefits, or an employee who moves to a state 
 79.8   position no longer covered by chapter 3A, 352, 352B, 352D, or 
 79.9   490 may apply for a refund provided in subdivision 2.  
 79.10  Application for a refund may be made after the termination of 
 79.11  state service if the applicant has not again become a state 
 79.12  employee required to be covered by the system. 
 79.13     Subd. 2.  [AMOUNT OF REFUND.] The refund payable to a 
 79.14  person defined in subdivision 1 is an amount equal to employee 
 79.15  contributions plus interest at a rate of five percent per year 
 79.16  compounded annually.  The amount of the refund is paid from 
 79.17  contributions paid under section 352G.05 prior to the money 
 79.18  being invested in the health care reimbursement fund. 
 79.19     Subd. 3.  [TERMINATION OF RIGHTS.] When an ineligible 
 79.20  terminated employee or an eligible retired employee accepts a 
 79.21  refund as provided in subdivision 2, all existing service and 
 79.22  all rights and benefits to which the employee was entitled 
 79.23  before accepting the refund terminate.  Refunds may not be 
 79.24  repaid. 
 79.25     Subd. 4.  [REPAYMENT OF REFUND.] An included participant 
 79.26  may repay a refund paid under subdivision 2 by paying the amount 
 79.27  refunded plus 8.5 percent interest compounded annually.  All 
 79.28  refunds must be paid before termination or within one month 
 79.29  following termination of state service. 
 79.30     Sec. 11.  [352G.11] [PAYMENTS UPON THE DEATH OF AN INCLUDED 
 79.31  PARTICIPANT.] 
 79.32     Upon the death of an included participant or a person not 
 79.33  yet collecting monthly benefits under this section, the 
 79.34  designated beneficiary is entitled to a refund of contributions 
 79.35  plus five percent interest, compounded annually. 
 79.36     Sec. 12.  [352G.12] [PAYMENT UPON THE DEATH OF AN ELIGIBLE 
 80.1   RETIRED EMPLOYEE.] 
 80.2      Upon the death of an eligible retired employee who has 
 80.3   started collecting monthly benefits, the designated beneficiary 
 80.4   is entitled to a refund of the eligible retired employee's 
 80.5   contributions plus five percent interest compounded annually 
 80.6   until the date of termination of state service less the monthly 
 80.7   benefits that have been paid. 
 80.8      Sec. 13.  [CURRENT RETIREES AND DISABLED EMPLOYEES.] 
 80.9      Any current retiree or disabled employee receiving monthly 
 80.10  benefits under Minnesota Statutes, chapter 3A, 352, 352B, 352D, 
 80.11  or 490, who has 15 or more years of service and is age 60 or who 
 80.12  qualified for the rule of 90 at the time of termination of 
 80.13  public employment would be eligible to receive an additional $55 
 80.14  per month.  This additional payment will be added to the retired 
 80.15  or disabled employees monthly retirement check and will be 
 80.16  eligible for future postretirement adjustments under Minnesota 
 80.17  Statutes, section 11A.18, subdivision 9.  The present value 
 80.18  necessary to provide this benefit increase to retired and 
 80.19  disabled employees must be transferred to the postretirement 
 80.20  fund under Minnesota Statutes, section 11A.18, subdivision 6, 
 80.21  from the retirement fund the person is currently receiving the 
 80.22  benefits.  If the retired or disabled employee is receiving 
 80.23  payments from more than one retirement plan meeting 
 80.24  qualifications under this subdivision, the required reserves 
 80.25  will be transferred from the plan with the most service credit. 
 80.26     Sec. 14.  [RETIREES AND DISABLED EMPLOYEES UNDER AGE 60.] 
 80.27     A retired or disabled employee who has 15 or more years of 
 80.28  service, but has not yet reached age 60 will be entitled to an 
 80.29  additional $55 per month upon attainment of age 60.  The present 
 80.30  value necessary to provide the benefit increase to those who 
 80.31  become eligible later must be transferred to the postretirement 
 80.32  fund when they reach age 60. 
 80.33     Sec. 15. [FIRST INCREASE.] 
 80.34     An eligible or retired eligible employee would first be 
 80.35  eligible for an increase on January 1, 2003.  The required 
 80.36  reserves to support the payment must be transferred on July 1, 
 81.1   2001. 
 81.2      Sec. 16.  [UNLIMITED RIGHT TO AMEND.] 
 81.3      Notwithstanding any other provision of the health benefit 
 81.4   fund and provisions of the Internal Revenue Code, the provisions 
 81.5   governing the health care reimbursement plan may be amended at 
 81.6   any time and in any manner for any reason whatsoever.  This 
 81.7   right to amend includes, but is not limited to, the right to 
 81.8   reduce or eliminate prospectively or retroactively any or all 
 81.9   health benefits under the health care reimbursement plan for any 
 81.10  or all persons who may be members, retirees, and other 
 81.11  recipients or otherwise may be entitled to health benefits under 
 81.12  this plan.  Benefits may be reduced or eliminated for any or all 
 81.13  persons including members, retirees, and other recipients even 
 81.14  if they are then entitled to or are receiving health benefits. 
 81.15     Sec. 17.  [POSTRETIREMENT HEALTH CARE TASK FORCE.] 
 81.16     (a) The commissioner of employee relations shall convene a 
 81.17  task force on postretirement health care.  The task force shall 
 81.18  identify strategies for providing postretirement health care 
 81.19  coverage for public employees and make recommendations regarding 
 81.20  the most appropriate and efficient manner for providing 
 81.21  postretirement health care. 
 81.22     (b) The task force shall include, but not be limited to, 
 81.23  the following: 
 81.24     (1) a representative of the department of employee 
 81.25  relations; 
 81.26     (2) a representative of the Minnesota state retirement 
 81.27  system; 
 81.28     (3) a representative of the teachers retirement 
 81.29  association; 
 81.30     (4) a representative of the public employees retirement 
 81.31  association; 
 81.32     (5) a representative of the first class city teacher 
 81.33  retirement fund associations; 
 81.34     (6) a representative of the first class city police and 
 81.35  fire department relief associations; 
 81.36     (7) a representative of the Minneapolis employees 
 82.1   retirement fund; 
 82.2      (8) a representative of the legislative coordinating 
 82.3   commission subcommittee on employee relations; 
 82.4      (9) one representative each from the Minnesota school 
 82.5   boards association, the association of Minnesota counties, the 
 82.6   Minnesota association of townships, the league of Minnesota 
 82.7   cities; 
 82.8      (10) exclusive representatives of affected public 
 82.9   employees; and 
 82.10     (11) representatives of major public employers. 
 82.11     (c) The task force shall report its findings and 
 82.12  recommendations to the legislature by November 15, 2000.  The 
 82.13  report shall address: 
 82.14     (i) alternative methods of providing and paying for 
 82.15  postretirement health care; 
 82.16     (ii) the estimated cost of providing postretirement health 
 82.17  care under various alternatives; and 
 82.18     (iii) the most efficient administrative structure for 
 82.19  providing for postretirement health care. 
 82.20     Sec. 18.  [EFFECTIVE DATE.] 
 82.21     Section 17 is effective on the day following final 
 82.22  enactment. 
 82.23                             ARTICLE 6
 82.24                 MSRS-CORRECTIONAL PLAN MEMBERSHIP
 82.25                             INCLUSIONS 
 82.26     Section 1.  Minnesota Statutes 1998, section 352.91, 
 82.27  subdivision 3c, is amended to read: 
 82.28     Subd. 3c.  [NURSING PERSONNEL.] (a) "Covered correctional 
 82.29  service" means service by a state employee in one of the 
 82.30  employment positions at a correctional facility or at the 
 82.31  Minnesota security hospital specified in paragraph (b), provided 
 82.32  that at least 75 percent of the employee's working time is spent 
 82.33  in direct contact with inmates or patients and the fact of this 
 82.34  direct contact is certified to the executive director by the 
 82.35  appropriate commissioner, unless the person elects to retain the 
 82.36  current retirement coverage under Laws 1996, chapter 408, 
 83.1   article 8, section 21. 
 83.2      (b) The employment positions are as follows: 
 83.3      (1) registered nurse - senior; 
 83.4      (2) registered nurse; 
 83.5      (3) registered nurse - principal; and 
 83.6      (4) licensed practical nurse 2; and 
 83.7      (5) registered nurse practitioner. 
 83.8      Sec. 2.  Minnesota Statutes 1998, section 352.91, 
 83.9   subdivision 3d, is amended to read: 
 83.10     Subd. 3d.  [OTHER CORRECTIONAL PERSONNEL.] (a) "Covered 
 83.11  correctional service" means service by a state employee in one 
 83.12  of the employment positions at a correctional facility or at the 
 83.13  Minnesota security hospital specified in paragraph (b), provided 
 83.14  that at least 75 percent of the employee's working time is spent 
 83.15  in direct contact with inmates or patients and the fact of this 
 83.16  direct contact is certified to the executive director by the 
 83.17  appropriate commissioner, unless the person elects to retain the 
 83.18  current retirement coverage under Laws 1996, chapter 408, 
 83.19  article 8, section 21. 
 83.20     (b) The employment positions are as follows:  baker, 
 83.21  chemical dependency counselor supervisor, chief cook, cook, cook 
 83.22  coordinator, corrections behavior therapist, corrections 
 83.23  behavior therapist specialist, corrections parent education 
 83.24  coordinator, corrections security caseworker, corrections 
 83.25  security caseworker career, corrections teaching assistant, 
 83.26  dentist, electrician supervisor, general repair worker, 
 83.27  library/information research services specialist, 
 83.28  library/information research services specialist senior, plumber 
 83.29  supervisor, psychologist 3, recreation therapist, recreation 
 83.30  therapist coordinator, recreation program assistant, recreation 
 83.31  therapist senior, stores clerk senior, water treatment plant 
 83.32  operator, work therapy technician, work therapy assistant, work 
 83.33  therapy program coordinator, corrections discipline unit 
 83.34  supervisor, dental assistant registered, dental hygienist, 
 83.35  psychologist 2, and sentencing to service crew leader involved 
 83.36  with the inmate community work crew program. 
 84.1      (c) "Covered correctional service" also means service as 
 84.2   the director of the Phoenix/Pomiga treatment/behavior change 
 84.3   program of the department of corrections and the Phoenix/Pomiga 
 84.4   assistant group supervisors. 
 84.5      Sec. 3.  Minnesota Statutes 1998, section 352.91, is 
 84.6   amended by adding a subdivision to read: 
 84.7      Subd. 3f.  [ADDITIONAL CORRECTIONAL PERSONNEL.] (a) 
 84.8   "Covered correctional service" means service by a state employee 
 84.9   in one of the employment positions at the Minnesota security 
 84.10  hospital or the Minnesota sexual psychopathic personality 
 84.11  treatment center specified in paragraph (b), provided that at 
 84.12  least 75 percent of the employee's working time is spent in 
 84.13  direct contact with patients and the fact of this direct contact 
 84.14  is certified to the executive director by the commissioner of 
 84.15  human services. 
 84.16     (b) The employment positions are: 
 84.17     (1) behavior analyst 2; 
 84.18     (2) licensed practical nurse 1; 
 84.19     (3) office and administrative specialist senior; 
 84.20     (4) psychologist 2; 
 84.21     (5) social worker specialist; 
 84.22     (6) behavior analyst 3; and 
 84.23     (7) social worker senior. 
 84.24     Sec. 4.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 84.25  PERSONS.] 
 84.26     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE 
 84.27  COVERAGE.] (a) An employee who has future retirement coverage 
 84.28  transferred to the correctional employees retirement plan under 
 84.29  section 1, 2, or 3, or an employee who has retirement coverage 
 84.30  for past correctional service transferred to the correctional 
 84.31  employees retirement plan under section 2, is entitled to elect 
 84.32  to obtain prior service credit for eligible state service 
 84.33  performed after June 30, 1975, and before the first day of the 
 84.34  first full pay period beginning after June 30, 2000, with the 
 84.35  department of corrections or the department of human services at 
 84.36  the Minnesota security hospital or the Minnesota sexual 
 85.1   psychopathic personality treatment center.  All eligible prior 
 85.2   service credit must be purchased. 
 85.3      (b) For purposes of section 1; 2, paragraph (b); or 3, 
 85.4   eligible state service with the department of corrections or the 
 85.5   department of human services is any prior period of continuous 
 85.6   service after June 30, 1975, performed as an employee of the 
 85.7   department of corrections or the department of human services 
 85.8   that would have been eligible for the correctional employees 
 85.9   retirement plan coverage under section 1, 2, or 3 if that prior 
 85.10  service had been performed after the first day of the first full 
 85.11  pay period beginning after June 30, 2000, rather than before 
 85.12  that date.  Service is continuous if there has been no period of 
 85.13  discontinuation of eligible state service for a period greater 
 85.14  than 180 calendar days.  For purposes of section 2, paragraph 
 85.15  (c), eligible state service is any period of service on or after 
 85.16  the date which the employee started employment with the Phoenix 
 85.17  treatment/behavior change program in a position specified in 
 85.18  Minnesota Statutes, section 352.91, subdivision 3d, paragraph 
 85.19  (c), in which at least 75 percent of the employee's working time 
 85.20  is determined to have been spent in direct contact with program 
 85.21  participants, and the date the employee joined the correctional 
 85.22  employees plan. 
 85.23     (c) The commissioner of corrections or the commissioner of 
 85.24  human services shall certify eligible state service to the 
 85.25  executive director of the Minnesota state retirement system. 
 85.26     (d) A covered correctional plan employee employed on July 
 85.27  1, 2000, who has past service in a job classification covered 
 85.28  under section 1, 2, or 3 on July 1, 2000, is entitled to 
 85.29  purchase the past service if the applicable department certifies 
 85.30  that the employee met the eligibility requirements for 
 85.31  coverage.  The employee shall pay the difference between the 
 85.32  employee contributions actually paid during the period and what 
 85.33  should have been paid under the correctional employees 
 85.34  retirement plan.  Payment for past service must be completed by 
 85.35  June 30, 2002. 
 85.36     Subd. 2.  [PAYMENT FOR PAST SERVICE.] (a) An employee 
 86.1   electing to obtain prior service credit under subdivision 1 must 
 86.2   pay an additional employee contribution for that prior service.  
 86.3   The additional member contribution is the contribution 
 86.4   differential percentage applied to the actual salary paid to the 
 86.5   employee during the period of the prior eligible state service, 
 86.6   plus interest at the rate of six percent per annum, compounded 
 86.7   annually.  The contribution differential percentage is the 
 86.8   difference between 4.9 percent of salary and the applicable 
 86.9   employee contribution rate of the general state employees 
 86.10  retirement plan during the prior eligible state service. 
 86.11     (b) The additional member contribution must be paid only in 
 86.12  a lump sum.  Payment must accompany the election to obtain prior 
 86.13  service credit.  No election of payment may be made by the 
 86.14  person or accepted by the executive director after June 30, 2002.
 86.15     Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 86.16  from the general state employees retirement plan to the 
 86.17  correctional employees retirement plan, in an amount equal to 
 86.18  the present value of benefits earned under the general employees 
 86.19  retirement plan for each employee transferring to the 
 86.20  correctional employees retirement plan, as determined by the 
 86.21  actuary retained by the legislative commission on pensions and 
 86.22  retirement in accordance with Minnesota Statutes, section 
 86.23  356.215.  The transfer of assets must be made within 45 days 
 86.24  after the employee elects to transfer coverage to the 
 86.25  correctional employees retirement plan. 
 86.26     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon transfer of 
 86.27  assets in subdivision 3, service credit in the general state 
 86.28  employees plan of the Minnesota state retirement system is 
 86.29  forfeited and may not be reinstated.  The service credit and 
 86.30  transferred assets must be credited to the correctional 
 86.31  employees retirement plan. 
 86.32     Subd. 5.  [PAYMENT OF ACTUARIAL CALCULATION COSTS.] (a) The 
 86.33  expense of the legislative commission on pensions and retirement 
 86.34  attributable to the calculations of its consulting actuary under 
 86.35  subdivision 3 must be reimbursed by the department of 
 86.36  corrections and the department of human services. 
 87.1      (b) The expense reimbursement under paragraph (a) must be 
 87.2   allocated between the two departments in a manner that is 
 87.3   jointly agreeable.  If no allocation procedure is developed by 
 87.4   the commissioner of corrections and the commissioner of human 
 87.5   services, the cost must be allocated on an equally shared basis. 
 87.6      (c) Payment of the expense reimbursement to the legislative 
 87.7   commission on pensions and retirement is due 30 days after the 
 87.8   receipt of the reimbursement request from the executive director 
 87.9   of the legislative commission on pensions and retirement. 
 87.10     Sec. 5. [EFFECTIVE DATE.] 
 87.11     Sections 1 to 4 are effective July 1, 2000. 
 87.12                             ARTICLE 7
 87.13              PERA AND PERA-P&F MEMBERSHIP INCLUSIONS
 87.14     Section 1.  Minnesota Statutes 1999 Supplement, section 
 87.15  353.01, subdivision 2b, is amended to read: 
 87.16     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 87.17  employees shall not participate as members of the association 
 87.18  with retirement coverage by the public employees retirement plan 
 87.19  or the public employees police and fire retirement plan: 
 87.20     (1) elected public officers, or persons appointed to fill a 
 87.21  vacancy in an elective office, who do not elect to participate 
 87.22  in the association by filing an application for membership; 
 87.23     (2) election officers; 
 87.24     (3) patient and inmate personnel who perform services in 
 87.25  charitable, penal, or correctional institutions of a 
 87.26  governmental subdivision; 
 87.27     (4) employees who are hired for a temporary position under 
 87.28  subdivision 12a, and employees who resign from a nontemporary 
 87.29  position and accept a temporary position within 30 days in the 
 87.30  same governmental subdivision, but not those employees who are 
 87.31  hired for an unlimited period but are serving a probationary 
 87.32  period.  If the period of employment extends beyond six 
 87.33  consecutive months and the employee earns more than $425 from 
 87.34  one governmental subdivision in any one calendar month, the 
 87.35  department head shall report the employee for membership and 
 87.36  require employee deductions be made on behalf of the employee 
 88.1   under section 353.27, subdivision 4. 
 88.2      Membership eligibility of an employee who resigns or is 
 88.3   dismissed from a temporary position and within 30 days accepts 
 88.4   another temporary position in the same governmental subdivision 
 88.5   is determined on the total length of employment rather than on 
 88.6   each separate position.  Membership eligibility of an employee 
 88.7   who holds concurrent temporary and nontemporary positions in one 
 88.8   governmental subdivision is determined by the length of 
 88.9   employment and salary of each separate position; 
 88.10     (5) employees whose actual salary from one governmental 
 88.11  subdivision does not exceed $425 per month, or whose annual 
 88.12  salary from one governmental subdivision does not exceed a 
 88.13  stipulation prepared in advance, in writing, that the salary 
 88.14  must not exceed $5,100 per calendar year or per school year for 
 88.15  school employees for employment expected to be of a full year's 
 88.16  duration or more than the prorated portion of $5,100 per 
 88.17  employment period for employment expected to be of less than a 
 88.18  full year's duration; 
 88.19     (6) employees who are employed by reason of work emergency 
 88.20  caused by fire, flood, storm, or similar disaster; 
 88.21     (7) employees who by virtue of their employment in one 
 88.22  governmental subdivision are required by law to be a member of 
 88.23  and to contribute to any of the plans or funds administered by 
 88.24  the Minnesota state retirement system, the teachers retirement 
 88.25  association, the Duluth teachers retirement fund association, 
 88.26  the Minneapolis teachers retirement association, the St. Paul 
 88.27  teachers retirement fund association, the Minneapolis employees 
 88.28  retirement fund, or any police or firefighters relief 
 88.29  association governed by section 69.77 that has not consolidated 
 88.30  with the public employees retirement association, or any local 
 88.31  police or firefighters consolidation account but who have not 
 88.32  elected the type of benefit coverage provided by the public 
 88.33  employees police and fire fund under sections 353A.01 to 
 88.34  353A.10, or any persons covered by section 353.665, subdivision 
 88.35  4, 5, or 6, who have not elected public employees police and 
 88.36  fire plan benefit coverage.  This clause must not be construed 
 89.1   to prevent a person from being a member of and contributing to 
 89.2   the public employees retirement association and also belonging 
 89.3   to and contributing to another public pension fund for other 
 89.4   service occurring during the same period of time.  A person who 
 89.5   meets the definition of "public employee" in subdivision 2 by 
 89.6   virtue of other service occurring during the same period of time 
 89.7   becomes a member of the association unless contributions are 
 89.8   made to another public retirement fund on the salary based on 
 89.9   the other service or to the teachers retirement association by a 
 89.10  teacher as defined in section 354.05, subdivision 2; 
 89.11     (8) persons who are excluded from coverage under the 
 89.12  federal Old Age, Survivors, Disability, and Health Insurance 
 89.13  Program for the performance of service as specified in United 
 89.14  States Code, title 42, section 410(a)(8)(A), as amended through 
 89.15  January 1, 1987, if no irrevocable election of coverage has been 
 89.16  made under section 3121(r) of the Internal Revenue Code of 1954, 
 89.17  as amended; 
 89.18     (9) full-time students who are enrolled and are regularly 
 89.19  attending classes at an accredited school, college, or 
 89.20  university and who are part-time employees as defined by a 
 89.21  governmental subdivision; 
 89.22     (10) resident physicians, medical interns, and pharmacist 
 89.23  residents and pharmacist interns who are serving in a degree or 
 89.24  residency program in public hospitals; 
 89.25     (11) students who are serving in an internship or residency 
 89.26  program sponsored by an accredited educational institution; 
 89.27     (12) persons who hold a part-time adult supplementary 
 89.28  technical college license who render part-time teaching service 
 89.29  in a technical college; 
 89.30     (13) foreign citizens working for a governmental 
 89.31  subdivision with a work permit of less than three years, or an 
 89.32  H-1b visa valid for less than three years of employment.  Upon 
 89.33  notice to the association that the work permit or visa extends 
 89.34  beyond the three-year period, the foreign citizens are eligible 
 89.35  for membership from the date of the extension; 
 89.36     (14) public hospital employees who elected not to 
 90.1   participate as members of the association before 1972 and who 
 90.2   did not elect to participate from July 1, 1988, to October 1, 
 90.3   1988; 
 90.4      (15) except as provided in section 353.86, volunteer 
 90.5   ambulance service personnel, as defined in subdivision 35, but 
 90.6   persons who serve as volunteer ambulance service personnel may 
 90.7   still qualify as public employees under subdivision 2 and may be 
 90.8   members of the public employees retirement association and 
 90.9   participants in the public employees retirement fund or the 
 90.10  public employees police and fire fund on the basis of 
 90.11  compensation received from public employment service other than 
 90.12  service as volunteer ambulance service personnel; 
 90.13     (16) except as provided in section 353.87, volunteer 
 90.14  firefighters, as defined in subdivision 36, engaging in 
 90.15  activities undertaken as part of volunteer firefighter duties; 
 90.16  provided that a person who is a volunteer firefighter may still 
 90.17  qualify as a public employee under subdivision 2 and may be a 
 90.18  member of the public employees retirement association and a 
 90.19  participant in the public employees retirement fund or the 
 90.20  public employees police and fire fund on the basis of 
 90.21  compensation received from public employment activities other 
 90.22  than those as a volunteer firefighter; and 
 90.23     (17) pipefitters and associated trades personnel employed 
 90.24  by independent school district No. 625, St. Paul, with coverage 
 90.25  by the pipefitters local 455 pension plan under a collective 
 90.26  bargaining agreement who were either first employed after May 1, 
 90.27  1997, or, if first employed before May 2, 1997, elected to be 
 90.28  excluded under Laws 1997, chapter 241, article 2, section 12; 
 90.29  and 
 90.30     (18) electrical workers, plumbers, and associated trades 
 90.31  personnel employed by independent school district No. 625, St. 
 90.32  Paul, or the city of St. Paul, with coverage by the electrical 
 90.33  workers local 110 pension plan or the united association 
 90.34  plumbers local 34 pension plan under a collective bargaining 
 90.35  agreement who were either first employed after May 1, 2000, or, 
 90.36  if first employed before May 2, 2000, elected to be excluded 
 91.1   under section 5. 
 91.2      Sec. 2.  Minnesota Statutes 1998, section 353.64, is 
 91.3   amended by adding a subdivision to read: 
 91.4      Subd. 11.  [PENSION COVERAGE FOR CERTAIN TRIBAL POLICE 
 91.5   OFFICERS EXERCISING STATE ARREST POWERS.] (a) The governing body 
 91.6   of a tribal police department which is exercising state arrest 
 91.7   powers under section 626.90, 626.91, 626.92, or 626.93 may 
 91.8   request by resolution to the executive director that its police 
 91.9   officers be considered public employees under section 353.01, 
 91.10  subdivision 2, and become members of the public employees police 
 91.11  and fire retirement plan and that the tribal police department 
 91.12  be considered a governmental subdivision under section 353.01, 
 91.13  subdivision 6.  
 91.14     (b) The executive director of the association must approve 
 91.15  the request by a tribal police department under paragraph (a) if 
 91.16  a ruling made by the federal Internal Revenue Service provides 
 91.17  that: 
 91.18     (1) the tribal police department is an agency or 
 91.19  instrumentality of the state of Minnesota for purposes of 
 91.20  enforcing state law; and 
 91.21     (2) that contributions made by the tribal police department 
 91.22  to a retirement plan on behalf of employees of the tribal police 
 91.23  department are contributions to a governmental plan within the 
 91.24  meaning of section 414(d) of the federal Internal Revenue Code. 
 91.25     (c) Following approval of the request by the executive 
 91.26  director, the head of the police department or designee must 
 91.27  immediately report for membership in the police and fire fund a 
 91.28  person who is employed as a full-time or part-time police 
 91.29  officer in a position that meets the conditions in sections 
 91.30  353.01, subdivision 2a, and 353.64, subdivisions 1 and 2.  The 
 91.31  police department head or designee must deduct the employee 
 91.32  contributions from the salary of each eligible police officer as 
 91.33  required by section 353.65, subdivision 2, and make the employer 
 91.34  contributions required by section 353.65, subdivision 3.  The 
 91.35  head of the police department must meet the reporting 
 91.36  requirements in section 353.65, subdivision 4. 
 92.1      Sec. 3. [353.666] [PAST SERVICE CREDIT FOR CERTAIN MEMBERS 
 92.2   EXTENDED COVERAGE.] 
 92.3      (a) A member to whom public employees police and fire 
 92.4   retirement plan membership was extended under section 353.64, 
 92.5   subdivision 11, may receive retroactive service credit in the 
 92.6   public employees police and fire retirement plan for service as 
 92.7   a tribal police officer rendered before the effective date of 
 92.8   membership of the tribal police department employee in the 
 92.9   police and fire fund, provided that the employee and the police 
 92.10  department did not make contributions into a qualified 
 92.11  tax-deferred retirement plan for that employment period.  
 92.12     (b) The request for retroactive coverage must be in writing 
 92.13  and must be filed with the association within 60 days of when 
 92.14  police and fire fund membership commenced.  The prior service 
 92.15  credit purchase payment is governed by section 356.55, except 
 92.16  that the member must pay an amount equal to the employee salary 
 92.17  deductions.  The employee salary deductions for the retroactive 
 92.18  period must be based on the police and fire pension plan rates 
 92.19  in effect when the service was rendered and applied to the 
 92.20  salary amount that was earned and paid to the police officer.  
 92.21  The employer must pay the balance of the prior service credit 
 92.22  purchase payment amount. 
 92.23     Sec. 4.  Laws 1965, chapter 705, section 1, subdivision 4, 
 92.24  as amended by Laws 1995, First Special Session chapter 3, 
 92.25  article 8, section 14, and Laws 1997, chapter 241, article 2, 
 92.26  section 8, is amended to read: 
 92.27     Subd. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 625; 
 92.28  APPLICABILITY OF CERTAIN LAWS.] (a) As of July 1, 1965, the 
 92.29  organization, operation, maintenance and conduct of the affairs 
 92.30  of the converted district shall be governed by general laws 
 92.31  relating to independent districts, except as otherwise provided 
 92.32  in Extra Session Laws 1959, Chapter 71, as amended, and all 
 92.33  special laws and charter provisions relating only to the 
 92.34  converted district are repealed.  
 92.35     (b) Where an existing pension law is applicable to 
 92.36  employees of the special district, such law shall continue to be 
 93.1   applicable in the same manner and to the same extent to 
 93.2   employees of the converted district.  Notwithstanding this 
 93.3   requirement, pipefitters and associated trades personnel with 
 93.4   coverage by the pipefitters local 455 pension plan under a 
 93.5   collective bargaining agreement who either were first employed 
 93.6   after May 1, 1997, or, if first employed before May 2, 1997, 
 93.7   elected exclusion from coverage under section 12 and electrical 
 93.8   workers and associated trades personnel with coverage by the 
 93.9   electrical workers local 110 pension plan under a collective 
 93.10  bargaining agreement who either were first employed after May 1, 
 93.11  2000, or, if first employed before May 2, 2000, elected 
 93.12  exclusion from coverage under section 5, are not covered by the 
 93.13  public employees retirement association.  
 93.14     (c) General laws applicable to independent school districts 
 93.15  wholly or partly within cities of the first class shall not be 
 93.16  applicable to the converted district.  
 93.17     (d) The provision of the statutes applicable only to 
 93.18  teachers retirement fund associations in cities of the first 
 93.19  class, limiting the amount of annuity to be paid from public 
 93.20  funds, limiting the taxes to be levied to carry out the plan of 
 93.21  such associations, and limiting the amount of annuities to be 
 93.22  paid to beneficiaries shall not be applicable to such converted 
 93.23  district, but the statutes applicable to such special district 
 93.24  prior to the conversion shall continue to be applicable and the 
 93.25  pension plan in operation prior to the conversion shall continue 
 93.26  in operation until changed in accordance with law, and the 
 93.27  teacher tenure law applicable to the special district shall 
 93.28  continue to apply to the converted district in the same manner 
 93.29  and to the same extent to teachers in the converted district; 
 93.30  provided further, where existing civil service provisions of any 
 93.31  law or charter are applicable to special district employees, 
 93.32  such provision may continue to be applicable in the same manner 
 93.33  and to the same extent to employees of the converted district, 
 93.34  unless the board and city governing body each adopt a resolution 
 93.35  declaring that civil service bureau (city human resources 
 93.36  department) functions would be more efficiently and effectively 
 94.1   administered separately in each jurisdiction.  Notwithstanding 
 94.2   any contrary provision of Extra Session Laws 1959, Chapter 71, 
 94.3   as amended, if there was in the special district a teachers 
 94.4   retirement fund association operating and existing under the 
 94.5   provisions of Laws 1909, Chapter 343, and all acts amendatory 
 94.6   thereof, then such teachers retirement fund association shall 
 94.7   continue to exist and operate in the converted district under 
 94.8   and to be subject to the provisions of Laws 1909, Chapter 343, 
 94.9   and all acts amendatory thereof, to the same extent and in the 
 94.10  same manner as before the conversion, and, without limiting the 
 94.11  generality of the foregoing, such teachers retirement fund 
 94.12  association shall continue, after the conversion as before the 
 94.13  conversion, to certify to the same authorities the amount 
 94.14  necessary to raise by taxation in order to carry out its 
 94.15  retirement plan, and it shall continue, after the conversion as 
 94.16  before the conversion, to be the duty of said authorities to 
 94.17  include in the tax levy for the ensuing year a tax in addition 
 94.18  to all other taxes sufficient to produce so much of the sums so 
 94.19  certified as said authorities shall approve, and such teachers 
 94.20  retirement fund association shall not be subject after the 
 94.21  conversion to any limitation on payments to any beneficiary from 
 94.22  public funds or on taxes to be levied to carry out the plan of 
 94.23  such association to which it was not subject before the 
 94.24  conversion. 
 94.25     Sec. 5.  [PUBLIC PENSION COVERAGE EXCLUSION FOR CERTAIN 
 94.26  TRADES PERSONNEL.] 
 94.27     Subdivision 1.  [EXCLUSION ELECTION.] (a) An electrical 
 94.28  worker, plumber, or an associated trades person who is employed 
 94.29  by independent school district No. 625, St. Paul, or the city of 
 94.30  St. Paul, on the effective date of this section and who has 
 94.31  pension coverage by the electrical workers 110 pension plan or 
 94.32  the united association plumbers local 34 pension plan under a 
 94.33  collective bargaining agreement may elect to be excluded from 
 94.34  pension coverage by the public employees retirement association. 
 94.35     (b) The exclusion election under this section must be in 
 94.36  writing on a form prescribed by the executive director of the 
 95.1   public employees retirement association and filed with the 
 95.2   executive director.  The exclusion election is irrevocable.  
 95.3   Authority to make the coverage exclusion expires on January 1, 
 95.4   2001. 
 95.5      Subd. 2.  [ELIGIBILITY FOR MEMBER CONTRIBUTION REFUND.] A 
 95.6   person who has less than three years of allowable service in the 
 95.7   public employees retirement association and who elects the 
 95.8   pension coverage exclusion under subdivision 1 is entitled to 
 95.9   immediately apply for a refund under Minnesota Statutes, section 
 95.10  353.34, subdivisions 1 and 2, following the effective date of 
 95.11  the exclusion election. 
 95.12     Subd. 3.  [DEFERRED ANNUITY ELIGIBILITY.] In lieu of the 
 95.13  refund under subdivision 2, a person who elects the pension 
 95.14  coverage exclusion under subdivision 1 is entitled to a deferred 
 95.15  retirement annuity under Minnesota Statutes, sections 353.34, 
 95.16  subdivision 3, and 353.71, subdivision 2, based on any length of 
 95.17  allowable service credit under Minnesota Statutes, section 
 95.18  353.01, subdivision 16, to the credit of the person as of the 
 95.19  date of the coverage exclusion election. 
 95.20     Sec. 6.  [PERA GENERAL AND PERA P&F; PRIOR SERVICE CREDIT 
 95.21  PURCHASE.] 
 95.22     Subdivision 1.  [ELIGIBILITY.] (a) Except as restricted 
 95.23  under subdivision 4, an eligible person described in paragraph 
 95.24  (b) is entitled to purchase allowable service credit for the 
 95.25  period or periods specified in paragraph (d) in the public 
 95.26  employees retirement association general plan.  Except as 
 95.27  restricted under subdivision 4, an eligible person described in 
 95.28  paragraph (c) is entitled to purchase allowable service credit 
 95.29  for the period or periods specified in paragraph (d) in the 
 95.30  public employees retirement association police and fire plan. 
 95.31     (b) An eligible person is a person who: 
 95.32     (1) is a full-time salaried employee or permanent part-time 
 95.33  salaried employee of the Spring Lake Park Fire Department, 
 95.34  Incorporated; 
 95.35     (2) became a member of the public employees retirement 
 95.36  association general plan due to that employment on June 1, 1999; 
 96.1   and 
 96.2      (3) was employed by the Spring Lake Park Fire Department, 
 96.3   Incorporated, during all or part of the period from January 1, 
 96.4   1996, to June 1, 1999. 
 96.5      (c) An eligible person is a person who meets requirements 
 96.6   specified in paragraph (b), clauses (1) and (3), and who became 
 96.7   a member of the public employees retirement association police 
 96.8   and fire plan due to applicable employment with the Spring Lake 
 96.9   Park Fire Department, Incorporated, on June 1, 1999. 
 96.10     (d) The period or periods eligible for service credit 
 96.11  purchase in the public employees retirement association general 
 96.12  plan or public employees retirement association police and fire 
 96.13  plan, as applicable, is the period or periods from January 1, 
 96.14  1996, to June 1, 1999, during which an eligible individual 
 96.15  described in paragraph (b) or (c), as applicable, provided 
 96.16  service to the Spring Lake Park Fire Department, Incorporated, 
 96.17  which would have been eligible service for coverage by the 
 96.18  applicable public employees retirement association plan if that 
 96.19  service had been provided on or after June 1, 1999, rather than 
 96.20  before. 
 96.21     Subd. 2.  [PAYMENT REQUIREMENTS.] Minnesota Statutes, 
 96.22  section 356.55, applies to service credit purchases authorized 
 96.23  under this section. 
 96.24     Subd. 3.  [DOCUMENTATION; SERVICE CREDIT GRANT.] (a) An 
 96.25  eligible person described in subdivision 1, paragraph (b) or 
 96.26  (c), must provide any documentation related to eligibility to 
 96.27  make this service credit purchase required by the executive 
 96.28  director of the public employees retirement association. 
 96.29     (b) Allowable service credit for the purchase period or 
 96.30  periods must be granted in the applicable public employees 
 96.31  retirement association plan on behalf of the eligible person 
 96.32  upon receipt of the prior service credit purchase payment amount.
 96.33     Subd. 4.  [RESTRICTIONS.] (a) An eligible person as 
 96.34  specified in subdivision 1, paragraph (c), is not authorized to 
 96.35  purchase service credit in the public employees retirement 
 96.36  association police and fire plan under this section if the 
 97.1   eligible person, or the eligible person and the Spring Lake Park 
 97.2   Fire Department, Incorporated, made contributions on that 
 97.3   person's behalf to the social security old age insurance program 
 97.4   during all or part of the period from January 1, 1996, to June 
 97.5   1, 1999, and coverage under that program for the applicable 
 97.6   period remains in effect. 
 97.7      (b) If paragraph (a) applies to the eligible person, that 
 97.8   eligible person may purchase service credit under this section 
 97.9   in the public employees retirement association general plan. 
 97.10     (c) If contributions are made by an eligible person 
 97.11  specified in paragraph (a) or by that eligible person and the 
 97.12  Spring Lake Park Fire Department, Incorporated, or a successor 
 97.13  organization, to the social security old age insurance program 
 97.14  after June 1, 1999, due to employment for which coverage in the 
 97.15  public employees retirement association police and fire plan 
 97.16  commenced on June 1, 1999, coverage by the public employees 
 97.17  retirement association police and fire plan terminates and 
 97.18  coverage by the public employees retirement association general 
 97.19  plan commences, if the employment otherwise meets requirements 
 97.20  in law for that coverage.  If public employees retirement 
 97.21  association police and fire plan contributions have been 
 97.22  received on or after June 1, 1999, for any periods where 
 97.23  contributions were also made to the social security old age 
 97.24  insurance program as specified in this paragraph, the 
 97.25  contributions to the public employees retirement association 
 97.26  police and fire plan for the applicable period or periods on or 
 97.27  after June 1, 1999, must be treated as contributions made in 
 97.28  error under Minnesota Statutes, section 353.27, subdivision 7a. 
 97.29     Sec. 7. [EFFECTIVE DATE.] 
 97.30     (a) Sections 2 and 3 are effective on July 1, 2000. 
 97.31     (b) Section 6 is effective on the day following final 
 97.32  enactment. 
 97.33     (c) Sections 1, 4, and 5 are effective for electrical 
 97.34  workers, plumbers, and associated trades personnel employed by 
 97.35  independent school district No. 625, St. Paul, on the day 
 97.36  following approval by majority vote of the board of independent 
 98.1   school district No. 625, St. Paul, and compliance with Minnesota 
 98.2   Statutes, section 645.021. 
 98.3      (d) Sections 1, 4, and 5 are effective for electrical 
 98.4   workers, plumbers, and associated trades personnel employed by 
 98.5   the city of St. Paul on the day following approval by majority 
 98.6   vote of the St. Paul city council and compliance with Minnesota 
 98.7   Statutes, section 645.021. 
 98.8                              ARTICLE 8
 98.9                        PENSION COVERAGE UPON
 98.10                      EMPLOYMENT PRIVATIZATION
 98.11     Section 1.  Minnesota Statutes 1999 Supplement, section 
 98.12  353F.02, subdivision 5, is amended to read: 
 98.13     Subd. 5.  [OTHER PUBLIC EMPLOYING UNIT.] "Other public 
 98.14  employing unit" means: 
 98.15     (1) Metro II, a joint powers organization formed under 
 98.16  section 471.59; and 
 98.17     (2) the St. Paul civic center authority. 
 98.18     Sec. 2.  [EFFECTIVE DATE.] 
 98.19     Section 1 is effective on the first day of the month next 
 98.20  following certification by the executive director of the public 
 98.21  employees retirement association that the actuarial accrued 
 98.22  liability of the special benefit coverage proposed for extension 
 98.23  to the privatized St. Paul civic center authority employees 
 98.24  under this article does not exceed the actuarial gain otherwise 
 98.25  to be accrued by the public employees retirement association, as 
 98.26  calculated by the consulting actuary retained by the legislative 
 98.27  commission on pensions and retirement.  The cost of the 
 98.28  actuarial calculations must be borne by the St. Paul civic 
 98.29  center authority. 
 98.30                             ARTICLE 9
 98.31         FORMER LOCAL POLICE AND FIRE CONSOLIDATION ACCOUNT
 98.32                   MODIFICATIONS AND CORRECTIONS
 98.33     Section 1.  Minnesota Statutes 1999 Supplement, section 
 98.34  423A.02, subdivision 1b, is amended to read: 
 98.35     Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 98.36  Annually, on October 1, the commissioner of revenue shall 
 99.1   allocate the additional amortization state aid transferred under 
 99.2   section 69.021, subdivision 11, to: 
 99.3      (1) all police or salaried firefighter relief associations 
 99.4   governed by and in full compliance with the requirements of 
 99.5   section 69.77, that had an unfunded actuarial accrued liability 
 99.6   in the actuarial valuation prepared under sections 356.215 and 
 99.7   356.216 as of the preceding December 31; 
 99.8      (2) all local police or salaried firefighter consolidation 
 99.9   accounts governed by chapter 353A that are certified by the 
 99.10  executive director of the public employees retirement 
 99.11  association as having for the current fiscal year an additional 
 99.12  municipal contribution amount under section 353A.09, subdivision 
 99.13  5, paragraph (b), and that have implemented section 353A.083, 
 99.14  subdivision 1, if the effective date of the consolidation 
 99.15  preceded May 24, 1993, and that have implemented section 
 99.16  353A.083, subdivision 2, if the effective date of the 
 99.17  consolidation preceded June 1, 1995; and 
 99.18     (3) the public employees police and fire fund on behalf of 
 99.19  municipalities that received amortization aid in 1999 and are 
 99.20  required to make an additional municipal contribution under 
 99.21  section 353.665, subdivision 8, for the duration of the required 
 99.22  additional contribution. 
 99.23     (b) The commissioner shall allocate the state aid on the 
 99.24  basis of the proportional share of the relief association or 
 99.25  consolidation account of the total unfunded actuarial accrued 
 99.26  liability of all recipient relief associations and consolidation 
 99.27  accounts as of December 31, 1993, for relief associations, and 
 99.28  as of June 30, 1994, for consolidation accounts. 
 99.29     (c) Beginning October 1, 2000, and annually thereafter, the 
 99.30  commissioner shall allocate the state aid, including any state 
 99.31  aid in excess of the limitation in subdivision 4, on the 
 99.32  following basis of: 
 99.33     (1) 64.5 percent to the public employees police and fire 
 99.34  fund or local consolidation account, whichever applies, on 
 99.35  behalf of municipalities to which section 353.665, subdivision 
 99.36  8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), 
100.1   apply for distribution in accordance with paragraph (b) and 
100.2   subject to the limitation in subdivision 4,; 
100.3      (2) 34.2 percent to the city of Minneapolis to fund any 
100.4   unfunded actuarial accrued liability in the actuarial valuation 
100.5   prepared under sections 356.215 and 356.216 as of the preceding 
100.6   December 31 for the Minneapolis police relief association or the 
100.7   Minneapolis fire department relief association,; and 
100.8      (3) 1.3 percent to the city of Virginia to fund any 
100.9   unfunded actuarial accrued liability in the actuarial valuation 
100.10  prepared under sections 356.215 and 356.216 as of the preceding 
100.11  December 31 for the Virginia fire department relief association. 
100.12     In the event that If there is no unfunded actuarial accrued 
100.13  liability in both the Minneapolis police relief association and 
100.14  the Minneapolis fire department relief association as disclosed 
100.15  in the most recent actuarial valuations for the relief 
100.16  associations prepared under sections 356.215 and 356.216, the 
100.17  commissioner shall allocate that 34.2 percent of the aid as 
100.18  follows:  49 percent to the Minneapolis teachers retirement fund 
100.19  association, provided that, 21 percent to the St. Paul teachers 
100.20  retirement fund association, and 30 percent as additional 
100.21  funding to support minimum fire state aid for volunteer 
100.22  firefighter relief associations.  If there is no unfunded 
100.23  actuarial accrued liability in the Virginia fire department 
100.24  relief association as disclosed in the most recent actuarial 
100.25  valuation for the relief association prepared under sections 
100.26  356.215 and 356.216, the commissioner shall allocate that 1.3 
100.27  percent of the aid as follows:  49 percent to the Minneapolis 
100.28  teachers retirement fund association, 21 percent to the St. Paul 
100.29  teachers retirement fund association, and 30 percent as 
100.30  additional funding to support minimum fire state aid for 
100.31  volunteer firefighter relief associations.  The allocation must 
100.32  be made by the commissioner at the same time and under the same 
100.33  procedures as specified in subdivision 3.  With respect to the 
100.34  Minneapolis teachers retirement fund association or the St. Paul 
100.35  teachers retirement fund association, annually, beginning on 
100.36  July 1, 2005, if a the applicable teacher's association 
101.1   five-year average time-weighted rate of investment return does 
101.2   not equal or exceed the performance of a composite portfolio 
101.3   assumed passively managed (indexed) invested ten percent in cash 
101.4   equivalents, 60 percent in bonds and similar debt securities, 
101.5   and 30 percent in domestic stock calculated using the formula 
101.6   under section 11A.04, clause (11), the aid allocation to that 
101.7   retirement fund under this section ceases until the five-year 
101.8   annual rate of investment return equals or exceeds the 
101.9   performance of a that composite portfolio, 21 percent to the St. 
101.10  Paul teachers retirement fund association, provided that, 
101.11  annually, beginning on July 1, 2005, if a teacher's association 
101.12  five-year average time-weighted rate of investment return does 
101.13  not equal or exceed the performance of a composite portfolio 
101.14  assumed passively managed (indexed) invested ten percent in cash 
101.15  equivalents, 60 percent bonds and similar debt securities, and 
101.16  30 percent in domestic stock calculated using the formula under 
101.17  section 11A.04, clause (11), the aid under this section ceases 
101.18  until the five-year annual rate of return equals or exceeds the 
101.19  performance of a composite portfolio, and 30 percent as 
101.20  additional funding to support minimum fire state aid for 
101.21  volunteer firefighter relief associations, with the allocation 
101.22  made at the same time and under the same procedures in 
101.23  subdivision 3.  In the event there is no actuarial accrued 
101.24  unfunded liability in the Virginia fire department relief 
101.25  association, the commissioner shall allocate that 1.3 percent of 
101.26  the aid as follows:  49 percent to the Minneapolis teachers 
101.27  retirement fund association, provided that, annually, beginning 
101.28  on July 1, 2005, if a teacher's association five-year average 
101.29  time-weighted rate of investment return does not equal or exceed 
101.30  the performance of a composite portfolio assumed passively 
101.31  managed (indexed) invested ten percent in cash equivalents, 60 
101.32  percent bonds and similar debt securities, and 30 percent in 
101.33  domestic stock calculated using the formula under section 
101.34  11A.04, clause (11), the aid under this section ceases until the 
101.35  five-year annual rate of return equals or exceeds the 
101.36  performance of a composite portfolio, 21 percent to the St. Paul 
102.1   teachers retirement fund association, provided that, annually, 
102.2   beginning on July 1, 2005, if a teacher's association five-year 
102.3   average time-weighted rate of investment return does not equal 
102.4   or exceed the performance of a composite portfolio assumed 
102.5   passively managed (indexed) invested ten percent in cash 
102.6   equivalents, 60 percent bonds and similar debt securities, and 
102.7   30 percent in domestic stock calculated using the formula under 
102.8   section 11A.04, clause (11), the aid under this section ceases 
102.9   until the five-year annual rate of return equals or exceeds the 
102.10  performance of a composite portfolio, and 30 percent as 
102.11  additional funding to support minimum fire state aid for 
102.12  volunteer firefighter relief associations, with the allocation 
102.13  made at the same time and under the same procedures in 
102.14  subdivision 3.  
102.15     (d) Additional amortization state aid payable to the public 
102.16  employees retirement association on behalf of a municipality 
102.17  must be credited by the executive director of the public 
102.18  employees retirement association against any additional 
102.19  municipal contribution to which the applicable municipality is 
102.20  obligated to make under section 353A.09, subdivision 5, or under 
102.21  section 353.665, subdivision 8. 
102.22     (e) The amounts required under this subdivision are 
102.23  annually appropriated to the commissioner of revenue. 
102.24     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
102.25  423A.02, subdivision 4, is amended to read: 
102.26     Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
102.27  total of amortization aid, supplemental amortization aid, and 
102.28  additional amortization aid under this section payable to the 
102.29  executive director of the public employees retirement 
102.30  association on behalf of a municipality to which section 
102.31  353.665, subdivision 8, paragraph (b), applies, may not exceed 
102.32  the amount of the additional municipal contribution payable by 
102.33  an individual municipality under section 353.665, subdivision 8, 
102.34  paragraph (b). 
102.35     (b) Any aid amount in excess of the limit under this 
102.36  subdivision for an individual municipality must be redistributed 
103.1   to the other municipalities to which section 353.665, 
103.2   subdivision 8, paragraph (b), applies.  The excess aid must be 
103.3   distributed in proportion to each municipality's additional 
103.4   municipal contribution under section 353.665, subdivision 8, 
103.5   paragraph (b). 
103.6      (c) When the total aid for each municipality under this 
103.7   section equals the limit under paragraph (a), any aid in excess 
103.8   of the limit must be redistributed under subdivisions 1, 1a, and 
103.9   subdivision 1b. 
103.10     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
103.11  423A.02, subdivision 5, is amended to read: 
103.12     Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
103.13  amortization state aid, supplemental amortization state aid, and 
103.14  additional amortization state aid programs terminate as of the 
103.15  December 31, next following the date of the actuarial valuation 
103.16  when the assets of the Minneapolis teachers retirement fund 
103.17  association equal the actuarial accrued liability of that plan 
103.18  and when the assets of the St. Paul teachers retirement fund 
103.19  association equal the actuarial accrued liability of that 
103.20  plan or December 31, 2009, whichever is later. 
103.21     Sec. 4. [PUBLIC EMPLOYEES POLICE AND FIRE PLAN; ONE-TIME 
103.22  SPECIAL OPTIONAL ANNUITY ELECTION FOR CERTAIN FORMER 
103.23  CONSOLIDATION ACCOUNT RETIREES.] 
103.24     Subdivision 1.  [ELIGIBILITY.] An individual who was a 
103.25  deferred annuitant, a service pension annuitant, or who was 
103.26  receiving disability benefits from the relief association on the 
103.27  effective date of the consolidation of the applicable local 
103.28  police or paid firefighter relief association, and who chose 
103.29  annual adjustments applicable to the public employees retirement 
103.30  association police and fire plan in elections provided under 
103.31  Minnesota Statutes, section 353A.08, subdivision 1 or 2, or 
103.32  353.615, subdivisions 5 and 6, may elect an optional annuity 
103.33  form under subdivision 2 to provide additional payments to a 
103.34  surviving spouse. 
103.35     Subd. 2.  [OPTIONAL ANNUITIES.] The optional annuity form 
103.36  may be either a 15 percent or a 25 percent joint and survivor 
104.1   annuity and is without reinstatement in the event of the 
104.2   surviving spouse predeceasing the member.  The optional annuity 
104.3   forms must be actuarially equivalent to the service pension 
104.4   currently paid to the retired consolidated member without 
104.5   consideration of the value of survivor benefits payable under 
104.6   Minnesota Statutes, section 353B.11, and must be based upon the 
104.7   age of the member and the age of the spouse of the member as of 
104.8   October 1, 2000.  
104.9      Subd. 3.  [ADDITIONAL SURVIVOR BENEFIT.] An optional 
104.10  annuity under subdivision 2 is payable in addition to any 
104.11  applicable survivor benefit payable under Minnesota Statutes, 
104.12  section 353.11.  An optional annuity under subdivision 2 when 
104.13  combined with applicable survivor benefits under Minnesota 
104.14  Statutes, section 353.11, must not exceed the benefit payable to 
104.15  the deceased service or disability pensioner immediately prior 
104.16  to death.  
104.17     Subd. 4.  [ELECTION.] (a) To be valid, an optional annuity 
104.18  form under subdivision 2 must be elected in writing on a form 
104.19  prescribed by the executive director of the public employees 
104.20  retirement association and signed by the eligible service 
104.21  pensioner or disabilitant before October 1, 2000.  Once 
104.22  selected, the optional annuity is irrevocable. 
104.23     (b) The executive director of the public employees 
104.24  retirement association shall provide counseling to members 
104.25  regarding the election of an optional annuity form under this 
104.26  section, including the impact on current benefit levels payable 
104.27  if an option annuity form is elected. 
104.28     Sec. 5. [EFFECTIVE DATE.] 
104.29     Sections 1 to 4 are effective on the day following final 
104.30  enactment. 
104.31                             ARTICLE 10
104.32                 PERA LOCAL CORRECTIONAL RETIREMENT
104.33                         PLAN MODIFICATIONS
104.34     Section 1.  Minnesota Statutes 1999 Supplement, section 
104.35  353E.02, is amended to read: 
104.36     353E.02 [CORRECTIONAL SERVICE EMPLOYEES RETIREMENT PLAN 
105.1   MEMBERSHIP.] 
105.2      Subdivision 1.  [RETIREMENT COVERAGE.] Local government 
105.3   correctional service employees are members of the local 
105.4   government correctional service retirement plan established by 
105.5   this chapter. 
105.6      Subd. 2.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE EMPLOYEE.] 
105.7   (a) A local government correctional service employee, for 
105.8   purposes of subdivision 1, is a person who whom the employer 
105.9   certifies: 
105.10     (1) is employed in a county-administered jail or 
105.11  correctional facility or in a regional correctional facility 
105.12  administered by multiple counties county correctional 
105.13  institution as a correctional guard or officer, a joint 
105.14  jailer/dispatcher, or as a supervisor of correctional guards or 
105.15  officers or of joint jailers/dispatchers; 
105.16     (2) spends at least 95 percent of the employee's working 
105.17  time in direct contact with persons confined in the jail or 
105.18  facility, as certified in writing, in advance, by the employer 
105.19  to the executive director of the association is directly 
105.20  responsible for the direct security, custody, and control of the 
105.21  county correctional institution and its inmates; 
105.22     (3) is expected to respond to incidents within the county 
105.23  correctional institution as part of the person's regular 
105.24  employment duties and is trained to do so; and 
105.25     (3) (4) is a "public employee" as defined in section 
105.26  353.01, but is not a member of the public employees police and 
105.27  fire fund. 
105.28     (b) The certification required under paragraph (a) must be 
105.29  made in writing on a form prescribed by the executive director 
105.30  of the public employees retirement association. 
105.31     (c) A person who was a member of the local government 
105.32  correctional service retirement plan on the day before the 
105.33  effective date of this section remains a member of the plan 
105.34  after the effective date of this section for the duration of the 
105.35  person's employment in that county correctional institution 
105.36  position, even if the person's service in this position does not 
106.1   meet the requirements set forth in paragraph (a). 
106.2      Subd. 3.  [COUNTY CORRECTIONAL INSTITUTION.] A county 
106.3   correctional institution is: 
106.4      (1) a jail administered by a county; 
106.5      (2) a correctional facility administered by a county; or 
106.6      (3) a regional correctional facility administered by or on 
106.7   behalf of multiple counties. 
106.8      Sec. 2.  Minnesota Statutes 1999 Supplement, section 
106.9   353E.03, is amended to read: 
106.10     353E.03 [CORRECTIONAL SERVICE PLAN CONTRIBUTIONS.] 
106.11     Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
106.12  correctional service employee shall make an employee 
106.13  contribution in an amount equal to 5.83 6.01 percent of salary. 
106.14     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
106.15  contribute for a local government correctional service employee 
106.16  an amount equal to 8.75 9.02 percent of salary. 
106.17     Sec. 3.  [EFFECTIVE DATE.] 
106.18     Section 1 is effective on the day following final enactment.
106.19  Section 2 is effective on the first day of the first full pay 
106.20  period beginning after January 1, 2002. 
106.21                             ARTICLE 11
106.22                       TEACHER RETIREMENT AND
106.23                          RELATED CHANGES
106.24     Section 1.  Minnesota Statutes 1998, section 122A.46, 
106.25  subdivision 1, is amended to read: 
106.26     Subdivision 1.  [TEACHERS DEFINED.] As used in this 
106.27  section, the term "teachers" shall have the meaning given it in 
106.28  section 122A.15, subdivision 1.  The term "teachers" shall also 
106.29  include any teacher in the classifications included in the 
106.30  professional state residential instructional unit, pursuant to 
106.31  section 179A.10, subdivision 2, clause (16). 
106.32     Sec. 2.  Minnesota Statutes 1998, section 122A.46, is 
106.33  amended by adding a subdivision to read: 
106.34     Subd. 1a.  [APPOINTING AUTHORITY.] For purposes of teachers 
106.35  included in the professional state residential instructional 
106.36  unit, the term "school board" shall include the appointing 
107.1   authority as defined in section 43A.02, subdivision 5. 
107.2      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
107.3   354.536, subdivision 1, is amended to read: 
107.4      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
107.5   teacher who has at least three years of allowable service credit 
107.6   with the teachers retirement association is entitled to purchase 
107.7   up to ten years of allowable and formula service credit for 
107.8   non-profit community-based corporation, private, or parochial 
107.9   school teaching service by making payment under section 356.55, 
107.10  provided that the teacher is not entitled to receive a current 
107.11  or deferred age and service retirement annuity or disability 
107.12  benefit from the applicable employer-sponsored pension plan and 
107.13  has not purchased service credit from the applicable defined 
107.14  benefit employer-sponsored pension plan for that service. 
107.15     Sec. 4.  Minnesota Statutes 1999 Supplement, section 
107.16  354A.101, subdivision 1, is amended to read: 
107.17     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
107.18  teacher who has at least three years of allowable service credit 
107.19  with the teachers retirement fund association is entitled to 
107.20  purchase up to ten years of allowable service credit 
107.21  for non-profit community-based corporation, private, or 
107.22  parochial school teaching service by making payment under 
107.23  section 356.55, provided that the teacher is not entitled to 
107.24  receive a current or deferred age and service retirement annuity 
107.25  or disability benefit from the applicable employer-sponsored 
107.26  pension plan and has not purchased service credit from the 
107.27  applicable defined benefit employer-sponsored pension plan for 
107.28  that service. 
107.29     Sec. 5.  [354A.051] [MTRFA COVERAGE FOR UNION BUSINESS 
107.30  AGENTS.] 
107.31     Subdivision 1.  [AUTHORIZATION.] A member of the 
107.32  Minneapolis teachers retirement fund association on a leave of 
107.33  absence from a teaching position with special school district 
107.34  No. 1, and who is employed by an employee organization 
107.35  representing Minneapolis teachers retirement fund association 
107.36  active members, may elect under subdivision 2 to be a member of 
108.1   the coordinated program of the association for service with that 
108.2   employee organization, subject to the limitations specified in 
108.3   subdivisions 3, 4, and 5. 
108.4      Subd. 2.  [ELECTION.] Except as indicated in subdivision 3, 
108.5   a person described in subdivision 1 must be covered by the 
108.6   Minneapolis teachers retirement fund association coordinated 
108.7   program for employment with the employer organization if the 
108.8   person files a written election to be covered with the executive 
108.9   director of the teachers retirement fund association within 90 
108.10  days of first being employed by the employee organization, or 
108.11  within 90 days of the start of the first leave of absence due to 
108.12  service as an employee organization business agent, whichever is 
108.13  later. 
108.14     Subd. 3.  [WAIVER OF LEAVE COVERAGE.] Coverage under this 
108.15  section does not apply to any leave period or portion of a leave 
108.16  period for which a person has received service credit or is 
108.17  eligible to receive service credit for the leave period under 
108.18  any leave of absence provision in chapter 354A, any other 
108.19  applicable law, or bylaws or articles of incorporation of the 
108.20  association.  The person may waive eligibility to receive 
108.21  service credit under a leave of absence provision and be covered 
108.22  by this section for the applicable period by filing a waiver 
108.23  with the executive director within 90 days of the start of the 
108.24  leave. 
108.25     Subd. 4.  [COVERED SALARY LIMITATION.] The covered salary 
108.26  for an employee of the employee organization covered by the 
108.27  coordinated program of the Minneapolis teachers retirement fund 
108.28  association under this section is limited to the lesser of: 
108.29     (1) the person's actual salary from the employee 
108.30  organization as defined in section 354A.011, subdivision 24; or 
108.31     (2) 75 percent of the salary of the governor as set under 
108.32  section 15A.082. 
108.33  The limited covered salary determined under this 
108.34  paragraph must be used in determining member, employer, and 
108.35  employer additional contributions under section 354A.12, and in 
108.36  determining annuities and other benefits under sections 354A.30 
109.1   to 354A.41 and chapter 356. 
109.2      Subd. 5.  [ANNUITY RECEIPT REQUIREMENTS.] A retirement 
109.3   annuity is only payable from the coordinated program of the 
109.4   Minneapolis teachers retirement fund association to a person 
109.5   described in subdivision 1 if the person has met all applicable 
109.6   requirements, including the termination by the person from 
109.7   employment by the employee organization and by the school 
109.8   district.  The reemployed annuitant earnings limitation in 
109.9   section 354A.31, subdivision 3, applies if the person retires 
109.10  and is subsequently reemployed while an annuitant by the 
109.11  employee organization or by any other entity employing persons 
109.12  who are members of the applicable teachers retirement fund 
109.13  association by virtue of that employment. 
109.14     Subd. 6.  [CONTRIBUTION REQUIREMENTS.] The member, 
109.15  employer, and employer additional contributions required by 
109.16  section 354A.12 are the obligation of the person who elects 
109.17  coverage by the coordinated program of the Minneapolis teachers 
109.18  retirement fund association, but the employee organization may 
109.19  pay the employer and employer additional contributions.  
109.20  Contributions made by the person must be made by salary 
109.21  deduction.  Contributions made by the employee organization must 
109.22  be made as provided in section 354A.12. 
109.23     Subd. 7.  [BOARD INELIGIBILITY.] A person employed by an 
109.24  employee organization who retains active membership in the 
109.25  applicable teachers retirement fund association is not eligible 
109.26  for election to the board of trustees of the applicable teachers 
109.27  retirement fund association. 
109.28     Sec. 6.  [ELECTION OF COVERAGE BY EMPLOYEE OF EMPLOYEE 
109.29  ORGANIZATION REPRESENTING MINNEAPOLIS TEACHERS RETIREMENT FUND 
109.30  ASSOCIATION ACTIVE MEMBERS.] 
109.31     Subdivision 1.  [ELIGIBILITY ELECTION.] Notwithstanding 
109.32  election date requirements in section 5, subdivision 2, a person 
109.33  who is currently employed as a business agent by an employee 
109.34  organization representing Minneapolis teachers retirement fund 
109.35  association active members and who has been on a mobility leave 
109.36  or leaves from special school district No. 1 since March 23, 
110.1   1998, may make a written election to be covered under section 5. 
110.2   To be valid, that written election must be on a form specified 
110.3   by the executive director of the Minneapolis teachers retirement 
110.4   fund association and be filed with the executive director within 
110.5   90 days following the effective date of this section. 
110.6      Subd. 2.  [PAYMENT REQUIREMENTS.] If a valid election is 
110.7   made under subdivision 1, an eligible individual under 
110.8   subdivision 1 is required to pay, in a lump sum within 90 days 
110.9   of the effective date of this section, any additional employee, 
110.10  employer, and employer additional contributions based on the 
110.11  eligible individual's salary and employment with the employee 
110.12  organization, as required by the election, compared to amounts 
110.13  previously paid or payable.  These amounts are in addition to 
110.14  any amounts previously payable.  The additional contribution 
110.15  requirements are to be computed from March 23, 1998, to the date 
110.16  payroll deductions are first made on the high contribution 
110.17  requirements.  The lump sum payment under this subdivision must 
110.18  include 8.5 percent annual interest.  The amounts required under 
110.19  this subdivision are the obligation of the eligible individual, 
110.20  but the employee organization may pay the additional employer 
110.21  and employer additional amounts with applicable interest. 
110.22     Subd. 3.  [SALARY CREDIT GRANT.] The additional salary 
110.23  credit is to be granted to the account of the eligible 
110.24  individual upon payment of amounts required under the section. 
110.25     Sec. 7.  [EFFECTIVE DATE.] 
110.26     Sections 1 to 6 are effective on the day following final 
110.27  enactment. 
110.28                             ARTICLE 12
110.29                       MNSCU PENSION COVERAGE
110.30                        AND RELATED CHANGES
110.31     Section 1.  Minnesota Statutes 1998, section 136F.45, 
110.32  subdivision 1a, is amended to read: 
110.33     Subd. 1a.  [SUBSEQUENT VENDOR CONTRACTS.] (a) The board may 
110.34  limit the number of vendors under subdivision 1. 
110.35     (b) In addition to any other tax-sheltered annuity program 
110.36  investment options, the board may offer as an investment option 
111.1   the Minnesota supplemental investment fund administered by the 
111.2   state board of investment under section 11A.17. 
111.3      (c) For the tax-sheltered annuity program vendor contracts 
111.4   to be executed for the period beginning after July 1, 2000, the 
111.5   board shall actively solicit participation of and shall include 
111.6   as vendors lower expense and "no-load" mutual funds or 
111.7   equivalent investment products as those terms are defined by the 
111.8   federal securities and exchange commission.  To the extent 
111.9   possible, in addition to a range of insurance annuity contract 
111.10  providers and other mutual fund provider arrangements, the board 
111.11  must assure that no less than five insurance annuity providers 
111.12  and no less than one nor more than three lower expense and 
111.13  "no-load" mutual funds or equivalent investment products will be 
111.14  made available for direct-access by employee participants.  To 
111.15  the extent that offering a lower expense "no-load" product 
111.16  increases the total necessary and reasonable expenses of the 
111.17  program and if the board is unable to negotiate a rebate of fees 
111.18  from the mutual fund or equivalent investment product providers, 
111.19  the board may charge the participants utilizing the lower 
111.20  expense "no-load" mutual fund products a fee to cover those 
111.21  expenses.  The participant fee may not exceed one percent of the 
111.22  participant's annual contributions or $20 per participant per 
111.23  year, whichever is greater.  Any excess fee revenue generated 
111.24  under this subdivision must be reimbursed to participant 
111.25  accounts in the manner provided in subdivision 3a. 
111.26     Sec. 2.  [354.539] [USE OF COLLEGE SUPPLEMENTAL RETIREMENT 
111.27  FUNDS TO PURCHASE SERVICE CREDIT.] 
111.28     (a) Unless prohibited by or subject to a penalty under 
111.29  federal law, a teacher who is a participant in the college 
111.30  supplemental retirement plan established under chapter 354C may 
111.31  utilize the teacher's supplemental plan account to purchase 
111.32  service credit under sections 354.53, 354.533, 354.534, 354.535, 
111.33  354.536, 354.537, and 354.538. 
111.34     (b) At the request of a member, if determined by the 
111.35  executive director to be eligible to purchase service credit, 
111.36  the executive director shall notify the board of the Minnesota 
112.1   state colleges and universities system of the cost of the 
112.2   purchase and shall request the transfer of funds from the 
112.3   member's college supplemental retirement account to the teachers 
112.4   retirement association.  Upon receipt of the full prior service 
112.5   credit purchase payment amount, the teachers retirement 
112.6   association shall grant the requested allowable and formula 
112.7   service credit. 
112.8      Sec. 3.  [354A.106] [USE OF COLLEGE SUPPLEMENTAL RETIREMENT 
112.9   FUNDS TO PURCHASE SERVICE CREDIT.] 
112.10     (a) Unless prohibited by or subject to a penalty under 
112.11  federal law, a teacher who is a participant in the college 
112.12  supplemental retirement plan established under chapter 354C may 
112.13  utilize the teacher's supplemental plan account to purchase 
112.14  service credit under sections 354A.097, 354A.098, 354A.099, 
112.15  354A.101, 354A.102, 354A.103, and 354A.104. 
112.16     (b) At the request of a member, if determined by the 
112.17  executive director of the applicable teachers retirement fund 
112.18  association to be eligible to purchase service credit, the 
112.19  executive director shall notify the board of the Minnesota state 
112.20  colleges and universities system of the cost of the purchase and 
112.21  shall request the transfer of funds from the member's college 
112.22  supplemental retirement account to the applicable teachers 
112.23  retirement fund association.  Upon receipt of the full prior 
112.24  service credit purchase payment amount, the applicable teachers 
112.25  retirement fund association shall grant the requested allowable 
112.26  and formula service credit. 
112.27     Sec. 4.  Minnesota Statutes 1998, section 354B.23, 
112.28  subdivision 5a, is amended to read: 
112.29     Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
112.30  to the plan exceed limits imposed by federal law or 
112.31  regulation and it is necessary to return contributions to comply 
112.32  with the federal limits, the excess employee contributions must 
112.33  be returned to the employee and to the excess employer in the 
112.34  same proportions as the contributions were made contributions 
112.35  must be reallocated in accordance with section 415 of the 
112.36  Internal Revenue Code, as amended, and the applicable federal 
113.1   regulations and revenue rulings. 
113.2      (b) When an employer contribution required under section 
113.3   354B.24 due to a sabbatical leave is made after completion of 
113.4   the leave or an employer contribution is made due to omitted 
113.5   deductions under subdivision 5, and these employer contributions 
113.6   cause or would cause total contributions to the plan to exceed 
113.7   limits imposed by federal law or regulation, the employer must 
113.8   make that portion of the contribution that would exceed the 
113.9   federal limit during the next calendar year. 
113.10     Sec. 5.  Minnesota Statutes 1998, section 354C.12, 
113.11  subdivision 1a, is amended to read: 
113.12     Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
113.13  to the plan exceed limits imposed by federal law or 
113.14  regulation and it is necessary to return contributions to comply 
113.15  with the federal limits, one-half of the excess contributions 
113.16  must be returned to the excess employee contributions must be 
113.17  returned to the employee and one-half to the excess employer 
113.18  contributions must be reallocated in accordance with section 415 
113.19  of the federal Internal Revenue Code, as amended, and the 
113.20  applicable federal regulations and revenue rulings. 
113.21     (b) When an employer contribution is made due to omitted 
113.22  deductions under subdivision 2, and these employer contributions 
113.23  cause or would cause total contributions to the plan to exceed 
113.24  limits imposed by federal law or regulation, the employer must 
113.25  make that portion of the contribution that would exceed the 
113.26  federal limit during the next calendar year. 
113.27     Sec. 6.  Minnesota Statutes 1998, section 354C.165, is 
113.28  amended to read: 
113.29     354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
113.30  DISTRIBUTIONS.] 
113.31     (a) Except as provided in paragraph (c), no participant may 
113.32  obtain a loan from the plan or obtain any distribution from the 
113.33  plan at a time before the participant terminates the employment 
113.34  that gave rise to plan coverage. 
113.35     (b) No amounts to the credit of the plan are assignable 
113.36  either in law or in equity, are subject to state estate tax, or 
114.1   are subject to execution, levy, attachment, garnishment, or 
114.2   other legal process, except as provided in section 518.58, 
114.3   518.581, or 518.6111.  
114.4      (c) Unless prohibited by or subject to a penalty under 
114.5   federal law, a teacher who is a participant in the supplemental 
114.6   retirement plan may request, in writing, a transfer of all or a 
114.7   portion of the funds accumulated in the person's supplemental 
114.8   plan account to the teachers retirement association to purchase 
114.9   service credit under sections 354.53, 354.533, 354.534, 354.535, 
114.10  354.536, 354.537, and 354.538 or to the teachers retirement fund 
114.11  association to purchase service credit under sections 354A.097, 
114.12  354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.  
114.13  Upon receipt of a valid request, the board shall execute the 
114.14  transfer.  The transfer must be a fund-to-fund transfer, and in 
114.15  no event shall the participant directly receive any of the funds 
114.16  while still employed by the board.  In no event may the board 
114.17  transfer more than the participant's account balance.  The 
114.18  board, in cooperation with the teachers retirement association, 
114.19  shall develop the forms for requesting a transfer and the 
114.20  procedures for executing the requested transfers. 
114.21     Sec. 7.  Minnesota Statutes 1999 Supplement, section 
114.22  356.24, subdivision 1, is amended to read: 
114.23     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
114.24  for a school district or other governmental subdivision or state 
114.25  agency to levy taxes for, or contribute public funds to a 
114.26  supplemental pension or deferred compensation plan that is 
114.27  established, maintained, and operated in addition to a primary 
114.28  pension program for the benefit of the governmental subdivision 
114.29  employees other than: 
114.30     (1) to a supplemental pension plan that was established, 
114.31  maintained, and operated before May 6, 1971; 
114.32     (2) to a plan that provides solely for group health, 
114.33  hospital, disability, or death benefits; 
114.34     (3) to the individual retirement account plan established 
114.35  by chapter 354B; 
114.36     (4) to a plan that provides solely for severance pay under 
115.1   section 465.72 to a retiring or terminating employee; 
115.2      (5) for employees other than personnel employed by the 
115.3   state university board or the community college board and 
115.4   covered by the board of trustees of the Minnesota state colleges 
115.5   and universities supplemental retirement plan under chapter 
115.6   354C, if provided for in a personnel policy of the public 
115.7   employer or in the collective bargaining agreement between the 
115.8   public employer and the exclusive representative of public 
115.9   employees in an appropriate unit, in an amount matching employee 
115.10  contributions on a dollar for dollar basis, but not to exceed an 
115.11  employer contribution of $2,000 a year per employee; 
115.12     (i) to the state of Minnesota deferred compensation plan 
115.13  under section 352.96; or 
115.14     (ii) in payment of the applicable portion of the premium on 
115.15  a tax-sheltered annuity contract qualified under section 403(b) 
115.16  of the Internal Revenue Code, if purchased from a qualified 
115.17  insurance company, or to a qualified investment entity, as 
115.18  defined in subdivision 1a, and, in either case, if the employing 
115.19  unit has complied with any applicable pension plan provisions of 
115.20  the Internal Revenue Code with respect to the tax-sheltered 
115.21  annuity program during the preceding calendar year; or 
115.22     (6) for personnel employed by the state university board or 
115.23  the community college board and not covered by clause (5), to 
115.24  the supplemental retirement plan under chapter 354C, if provided 
115.25  for in a personnel policy or in the collective bargaining 
115.26  agreement of the public employer with the exclusive 
115.27  representative of the covered employees in an appropriate unit, 
115.28  in an amount matching employee contributions on a dollar for 
115.29  dollar basis, but not to exceed an employer contribution of 
115.30  $2,000 $2,700 a year for each employee. 
115.31     Sec. 8.  Minnesota Statutes 1998, section 356A.01, 
115.32  subdivision 8, is amended to read: 
115.33     Subd. 8.  [COVERED PENSION PLAN.] "Covered pension plan" 
115.34  means a pension plan or fund listed in section 356.20, 
115.35  subdivision 2, or section 356.30, subdivision 3, or a plan 
115.36  established under chapter 353D, 354B, 354C, or 354D. 
116.1      Sec. 9.  Minnesota Statutes 1998, section 356A.02, is 
116.2   amended to read: 
116.3      356A.02 [FIDUCIARY STATUS AND ACTIVITIES.] 
116.4      Subdivision 1.  [FIDUCIARY STATUS.] For purposes of this 
116.5   chapter, the following persons are fiduciaries: 
116.6      (1) any member of the governing board of a covered pension 
116.7   plan; 
116.8      (2) the chief administrative officer of a covered pension 
116.9   plan or of the state board of investment; 
116.10     (3) any member of the state board of investment; and 
116.11     (4) any member of the investment advisory council; and 
116.12     (5) any member of the advisory committee established under 
116.13  section 354B.25. 
116.14     Subd. 2.  [FIDUCIARY ACTIVITY.] The activities of a 
116.15  fiduciary identified in subdivision 1 that must be carried out 
116.16  in accordance with the requirements of section 356A.04 include, 
116.17  but are not limited to: 
116.18     (1) the investment and reinvestment of plan assets; 
116.19     (2) the determination of benefits; 
116.20     (3) the determination of eligibility for membership or 
116.21  benefits; 
116.22     (4) the determination of the amount or duration of 
116.23  benefits; 
116.24     (5) the determination of funding requirements or the 
116.25  amounts of contributions; 
116.26     (6) the maintenance of membership or financial records; and 
116.27     (7) the expenditure of plan assets; and 
116.28     (8) the selection of financial institutions and investment 
116.29  products. 
116.30     Sec. 10.  Minnesota Statutes 1998, section 356A.06, is 
116.31  amended by adding a subdivision to read: 
116.32     Subd. 10.  [DEFINED CONTRIBUTION PLANS; APPLICATION.] (a) 
116.33  To the extent that a plan governed by chapter 352D, 353D, 354B, 
116.34  354C, or 354D permits a participant or beneficiary to select 
116.35  among investment products for the person's account and the 
116.36  participant or beneficiary exercises that investment 
117.1   self-direction, no fiduciary is liable for any loss which may 
117.2   result from the participant's or beneficiary's exercise of that 
117.3   investment self-direction. 
117.4      (b) Subdivisions 1, 2, 6, 8, and 8a do not apply to plans 
117.5   governed by chapter 354B or 354C. 
117.6      Sec. 11.  [VENDOR CONTRACT EXTENSION OPTION.] 
117.7      Notwithstanding Minnesota Statutes, section 136F.45, 
117.8   subdivision 1a, paragraph (c), the board of trustees of the 
117.9   Minnesota state colleges and universities may, with the 
117.10  agreement of the parties involved, extend the vendor contracts 
117.11  in effect immediately before July 1, 2000, with any revisions 
117.12  that are mutually agreeable to the parties, for up to an 
117.13  additional two years duration. 
117.14     Sec. 12.  [EFFECTIVE DATE.] 
117.15     Sections 1 to 11 are effective on the day following final 
117.16  enactment. 
117.17     (b) Sections 2, 3, and 6, paragraph (c), expire on May 16, 
117.18  2002. 
117.19                             ARTICLE 13
117.20                   EMPLOYER MATCHING CONTRIBUTION
117.21                   TAX SHELTERED ANNUITY CHANGES
117.22     Section 1.  Minnesota Statutes 1999 Supplement, section 
117.23  356.24, subdivision 1, is amended to read: 
117.24     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
117.25  for a school district or other governmental subdivision or state 
117.26  agency to levy taxes for, or contribute public funds to a 
117.27  supplemental pension or deferred compensation plan that is 
117.28  established, maintained, and operated in addition to a primary 
117.29  pension program for the benefit of the governmental subdivision 
117.30  employees other than: 
117.31     (1) to a supplemental pension plan that was established, 
117.32  maintained, and operated before May 6, 1971; 
117.33     (2) to a plan that provides solely for group health, 
117.34  hospital, disability, or death benefits; 
117.35     (3) to the individual retirement account plan established 
117.36  by chapter 354B; 
118.1      (4) to a plan that provides solely for severance pay under 
118.2   section 465.72 to a retiring or terminating employee; 
118.3      (5) for employees other than personnel employed by the 
118.4   state university board or the community college board and 
118.5   covered by the board of trustees of the Minnesota state colleges 
118.6   and universities supplemental retirement plan under chapter 
118.7   354C, if provided for in a personnel policy of the public 
118.8   employer or in the collective bargaining agreement between the 
118.9   public employer and the exclusive representative of public 
118.10  employees in an appropriate unit, in an amount matching employee 
118.11  contributions on a dollar for dollar basis, but not to exceed an 
118.12  employer contribution of $2,000 a year per employee; 
118.13     (i) to the state of Minnesota deferred compensation plan 
118.14  under section 352.96; or 
118.15     (ii) in payment of the applicable portion of the premium on 
118.16  a tax-sheltered annuity contract qualified contribution made to 
118.17  any investment eligible under section 403(b) of the Internal 
118.18  Revenue Code, if purchased from a qualified insurance company, 
118.19  or to a qualified investment entity, as defined in subdivision 
118.20  1a, and, in either case, if the employing unit has complied with 
118.21  any applicable pension plan provisions of the Internal Revenue 
118.22  Code with respect to the tax-sheltered annuity program during 
118.23  the preceding calendar year; or 
118.24     (6) for personnel employed by the state university board or 
118.25  the community college board and not covered by clause (5), to 
118.26  the supplemental retirement plan under chapter 354C, if provided 
118.27  for in a personnel policy or in the collective bargaining 
118.28  agreement of the public employer with the exclusive 
118.29  representative of the covered employees in an appropriate unit, 
118.30  in an amount matching employee contributions on a dollar for 
118.31  dollar basis, but not to exceed an employer contribution of 
118.32  $2,000 a year for each employee.  
118.33     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
118.34  356.24, subdivision 1b, is amended to read: 
118.35     Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy for 
118.36  unrepresented employees or a collective bargaining agreement A 
119.1   school board may establish limits on the number of vendors under 
119.2   subdivision 1 that it will utilize and conditions under which 
119.3   the vendors may contact employees both during working hours and 
119.4   after working hours. 
119.5      Sec. 3.  Minnesota Statutes 1998, section 356.24, is 
119.6   amended by adding a subdivision to read: 
119.7      Subd. 1c.  [STATE BOARD OF INVESTMENT REVIEW.] Any 
119.8   insurance company, mutual fund company, or similar company 
119.9   providing investments eligible under section 403(b) of the 
119.10  Internal Revenue Code and eligible to receive employer 
119.11  contributions under this section may request the state board of 
119.12  investment, in conjunction with the department of commerce, to 
119.13  review the financial standing of the company, the 
119.14  competitiveness of its investment options and returns, and the 
119.15  level of all charges and fees impacting those returns.  The 
119.16  state board of investment shall establish standards, policies, 
119.17  and procedures under section 11A.04, clause (2), to implement 
119.18  this subdivision.  The state board of investment may establish a 
119.19  fee for each review.  The state board of investment must 
119.20  maintain and have available a list of all reviewed companies 
119.21  which meet the established standards. 
119.22     Sec. 4.  [REPEALER.] 
119.23     Minnesota Statutes 1999 Supplement, section 356.24, 
119.24  subdivision 1a, is repealed. 
119.25     Sec. 5.  [EFFECTIVE DATE.] 
119.26     Sections 1 to 4 are effective on the day following final 
119.27  enactment. 
119.28                             ARTICLE 14
119.29                        RETIREMENT GENERALLY
119.30     Section 1.  [REPEALER.] 
119.31     Minnesota Statutes 1999 Supplement, section 356.61, is 
119.32  repealed. 
119.33     Sec. 2.  [EFFECTIVE DATE.] 
119.34     Section 1 is effective retroactively to July 1, 1999. 
119.35                             ARTICLE 15
119.36                    VOLUNTEER FIREFIGHTER RELIEF
120.1                         ASSOCIATION CHANGES
120.2      Section 1.  Minnesota Statutes 1999 Supplement, section 
120.3   69.021, subdivision 7, is amended to read: 
120.4      Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
120.5   MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
120.6   shall apportion the fire state aid relative to the premiums 
120.7   reported on the Minnesota Firetown Premium Reports filed under 
120.8   this chapter to each municipality and/or firefighters' relief 
120.9   association.  
120.10     (b) The commissioner shall calculate an initial fire state 
120.11  aid allocation amount for each municipality or fire department 
120.12  under paragraph (c) and a minimum fire state aid allocation 
120.13  amount for each municipality or fire department under paragraph 
120.14  (d).  The municipality or fire department must receive the 
120.15  larger fire state aid amount. 
120.16     (c) The initial fire state aid allocation amount is the 
120.17  amount available for apportionment as fire state aid under 
120.18  subdivision 5, without inclusion of any additional funding 
120.19  amount to support a minimum fire state aid amount under section 
120.20  423A.02, subdivision 3, allocated one-half in proportion to the 
120.21  population as shown in the last official statewide federal 
120.22  census for each fire town and one-half in proportion to the 
120.23  market value of each fire town, including (1) the market value 
120.24  of tax exempt property and (2) the market value of natural 
120.25  resources lands receiving in lieu payments under sections 
120.26  477A.11 to 477A.14, but excluding the market value of minerals.  
120.27  In the case of incorporated or municipal fire departments 
120.28  furnishing fire protection to other cities, towns, or townships 
120.29  as evidenced by valid fire service contracts filed with the 
120.30  commissioner, the distribution must be adjusted proportionately 
120.31  to take into consideration the crossover fire protection 
120.32  service.  Necessary adjustments shall be made to subsequent 
120.33  apportionments.  In the case of municipalities or independent 
120.34  fire departments qualifying for the aid, the commissioner shall 
120.35  calculate the state aid for the municipality or relief 
120.36  association on the basis of the population and the market value 
121.1   of the area furnished fire protection service by the fire 
121.2   department as evidenced by duly executed and valid fire service 
121.3   agreements filed with the commissioner.  If one or more fire 
121.4   departments are furnishing contracted fire service to a city, 
121.5   town, or township, only the population and market value of the 
121.6   area served by each fire department may be considered in 
121.7   calculating the state aid and the fire departments furnishing 
121.8   service shall enter into an agreement apportioning among 
121.9   themselves the percent of the population and the market value of 
121.10  each service area.  The agreement must be in writing and must be 
121.11  filed with the commissioner. 
121.12     (d) The minimum fire state aid allocation amount is the 
121.13  amount in addition to the initial fire state allocation amount 
121.14  that is derived from any additional funding amount to support a 
121.15  minimum fire state aid amount under section 423A.02, subdivision 
121.16  3, and allocated to municipalities with volunteer firefighter 
121.17  relief associations based on the number of active volunteer 
121.18  firefighters who are members of the relief association as 
121.19  reported in the annual financial reporting for the calendar year 
121.20  1993 to the office of the state auditor, but not to exceed 30 
121.21  active volunteer firefighters, so that all municipalities or 
121.22  fire departments with volunteer firefighter relief associations 
121.23  receive in total at least a minimum fire state aid amount per 
121.24  1993 active volunteer firefighter to a maximum of 30 
121.25  firefighters.  If a relief association did not exist in is 
121.26  established after calendar year 1993 and before calendar year 
121.27  2000, the number of active volunteer firefighters who are 
121.28  members of the relief association as reported in the annual 
121.29  financial reporting for calendar year 1998 to the office of the 
121.30  state auditor, but not to exceed 30 active volunteer 
121.31  firefighters, shall be used in this determination.  If a relief 
121.32  association is established after calendar year 1999, the number 
121.33  of active volunteer firefighters who are members of the relief 
121.34  association as reported in the first annual financial reporting 
121.35  submitted to the office of the state auditor, but not to exceed 
121.36  20 active volunteer firefighters, must be used in this 
122.1   determination. 
122.2      (e) The fire state aid must be paid to the treasurer of the 
122.3   municipality where the fire department is located and the 
122.4   treasurer of the municipality shall, within 30 days of receipt 
122.5   of the fire state aid, transmit the aid to the relief 
122.6   association if the relief association has filed a financial 
122.7   report with the treasurer of the municipality and has met all 
122.8   other statutory provisions pertaining to the aid apportionment. 
122.9      (f) The commissioner may make rules to permit the 
122.10  administration of the provisions of this section.  
122.11     (g) Any adjustments needed to correct prior misallocations 
122.12  must be made to subsequent apportionments. 
122.13     Sec. 2.  [69.041] [SHORTFALL FROM GENERAL FUND.] 
122.14     (a) If the annual funding requirements of fire or police 
122.15  relief associations or consolidation accounts under section 
122.16  69.77, sections 69.771 to 69.775, or section 353A.09, exceed all 
122.17  applicable revenue sources of a given year, including the 
122.18  insurance premium taxes funding the applicable fire or police 
122.19  state aid as set under section 60A.15, subdivision 1, paragraph 
122.20  (e), clauses (1) to (3), the shortfall in the annual funding 
122.21  requirements must be paid from the general fund to the extent 
122.22  appropriated by the legislature. 
122.23     (b) Nothing in this section may be deemed to relieve any 
122.24  municipality from its obligation to a relief association or 
122.25  consolidation account under law. 
122.26     Sec. 3.  Minnesota Statutes 1998, section 69.773, 
122.27  subdivision 1, is amended to read: 
122.28     Subdivision 1.  [APPLICATION.] (a) This section shall apply 
122.29  applies to any firefighters' relief association specified in 
122.30  section 69.771, subdivision 1, which pays or allows for an 
122.31  option of a monthly service pension to a retiring firefighter 
122.32  when at least the minimum requirements for entitlement to a 
122.33  service pension specified in section 424A.02, any applicable 
122.34  special legislation and the articles of incorporation or bylaws 
122.35  of the relief association have been met.  Each firefighters' 
122.36  relief association to which this section applies shall determine 
123.1   the actuarial condition and funding costs of the special fund of 
123.2   the relief association in accordance with subdivisions 2 and 3, 
123.3   the financial requirements of the special fund of the relief 
123.4   association in accordance with subdivision 4 and the minimum 
123.5   obligation of the municipality with respect to the special fund 
123.6   of the relief association in accordance with subdivision 5. 
123.7      (b) If a firefighters relief association that previously 
123.8   provided a monthly benefit service pension discontinues that 
123.9   practice and either replaces the monthly benefit amount with a 
123.10  lump sum benefit amount consistent with section 424A.02, 
123.11  subdivision 3, or purchases an annuity in the same amount as the 
123.12  monthly benefit from an insurance company licensed to do 
123.13  business in this state, the actuarial condition and funding 
123.14  costs, financial, and minimum municipal obligation requirements 
123.15  of section 69.772 apply rather than this section. 
123.16     Sec. 4.  Minnesota Statutes 1998, section 356A.06, 
123.17  subdivision 4, is amended to read: 
123.18     Subd. 4.  [ECONOMIC INTEREST STATEMENT.] (a) Each member of 
123.19  the governing board of a covered pension plan and the chief 
123.20  administrative officer of the plan shall file with the plan a 
123.21  statement of economic interest.  
123.22     (b) For a covered pension plan other than a plan specified 
123.23  in paragraph (c), the statement must contain the information 
123.24  required by section 10A.09, subdivision 5, and any other 
123.25  information that the fiduciary or the governing board of the 
123.26  plan determines is necessary to disclose a reasonably 
123.27  foreseeable potential or actual conflict of interest.  
123.28     (c) For a covered pension plan governed by sections 69.771 
123.29  to 69.776 or a covered pension plan governed by section 69.77 
123.30  with assets under $8,000,000, the statement must contain the 
123.31  following: 
123.32     (1) the person's principal occupation and principal place 
123.33  of business; 
123.34     (2) whether or not the person has an ownership of or 
123.35  interest of ten percent or greater in an investment security 
123.36  brokerage business, a real estate sales business, an insurance 
124.1   agency, a bank, a savings and loan, or another financial 
124.2   institution; and 
124.3      (3) any relationship or financial arrangement that can 
124.4   reasonably be expected to give rise to a conflict of interest. 
124.5      (d) The statement must be filed annually with the chief 
124.6   administrative officer of the plan and be available for public 
124.7   inspection during regular office hours at the office of the 
124.8   pension plan.  
124.9      (e) A disclosure form meeting the requirements of the 
124.10  federal Investment Advisers Act of 1940, United States Code, 
124.11  title 15, sections 80b-1 to 80b-21 as amended, and filed with 
124.12  the state board of investment or the pension plan meets the 
124.13  requirements of this subdivision. 
124.14     (f) The chief administrative officer of each covered 
124.15  pension plan, by January 15, annually, shall transmit a copy of 
124.16  all statements of economic interest received by the plan under 
124.17  this subdivision during the preceding 12 months to the campaign 
124.18  finance and public disclosure board. 
124.19     Sec. 5.  Minnesota Statutes 1998, section 424A.001, 
124.20  subdivision 9, is amended to read: 
124.21     Subd. 9.  [SEPARATE FROM ACTIVE SERVICE.] "Separate from 
124.22  active service" means to permanently cease to perform fire 
124.23  suppression duties with a particular volunteer fire department, 
124.24  to permanently cease to perform fire prevention duties, 
124.25  to permanently cease to supervise fire suppression duties, and 
124.26  to permanently cease to supervise fire prevention duties. 
124.27     Sec. 6.  Minnesota Statutes 1998, section 424A.02, 
124.28  subdivision 3, is amended to read: 
124.29     Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) On or 
124.30  before August 1 of each year as part of the certification of the 
124.31  financial requirements and minimum municipal obligation made 
124.32  pursuant to section 69.772, subdivision 4, or 69.773, 
124.33  subdivision 5, the secretary or some other official of the 
124.34  relief association designated in the bylaws of each relief 
124.35  association shall calculate and certify to the governing body of 
124.36  the applicable qualified municipality the average amount of 
125.1   available financing per active covered firefighter for the most 
125.2   recent three-year period.  The amount of available financing 
125.3   shall include any amounts of fire state aid received or 
125.4   receivable by the relief association, any amounts of municipal 
125.5   contributions to the relief association raised from levies on 
125.6   real estate or from other available revenue sources exclusive of 
125.7   fire state aid, and one-tenth of the amount of assets in excess 
125.8   of the accrued liabilities of the relief association calculated 
125.9   pursuant to sections 69.772, subdivision 2; 69.773, subdivisions 
125.10  2 and 4; or 69.774, subdivision 2, if any.  
125.11     (b) The maximum service pension which the relief 
125.12  association has authority to provide for in its bylaws for 
125.13  payment to a member retiring after the calculation date when the 
125.14  minimum age and service requirements specified in subdivision 1 
125.15  are met must be determined using the table in paragraph (c) or 
125.16  (d), whichever applies. 
125.17     (c) For a relief association where the governing bylaws 
125.18  provide for a monthly service pension to a retiring member, the 
125.19  maximum monthly service pension amount per month for each year 
125.20  of service credited that may be provided for in the bylaws is 
125.21  the maximum service pension figure corresponding to the average 
125.22  amount of available financing per active covered firefighter: 
125.23    Minimum Average Amount of      Maximum Service Pension
125.24    Available Financing per        Amount Payable per Month
125.25         Firefighter               for Each Year of Service
125.26           $...                             $ .25
125.27             42                               .50
125.28             84                              1.00
125.29            126                              1.50
125.30            168                              2.00
125.31            209                              2.50
125.32            252                              3.00
125.33            294                              3.50
125.34            335                              4.00
125.35            378                              4.50
125.36            420                              5.00
126.1             503                              6.00
126.2             587                              7.00
126.3             672                              8.00
126.4             755                              9.00
126.5             839                             10.00
126.6             923                             11.00
126.7            1007                             12.00
126.8            1090                             13.00
126.9            1175                             14.00
126.10           1259                             15.00
126.11           1342                             16.00
126.12           1427                             17.00
126.13           1510                             18.00
126.14           1594                             19.00
126.15           1677                             20.00
126.16           1762                             21.00
126.17           1845                             22.00
126.18           1888                             22.50
126.19           1929                             23.00
126.20           2014                             24.00
126.21           2098                             25.00
126.22           2183                             26.00
126.23           2267                             27.00
126.24           2351                             28.00
126.25           2436                             29.00
126.26           2520                             30.00
126.27           2604                             31.00
126.28           2689                             32.00
126.29           2773                             33.00
126.30           2857                             34.00
126.31           2942                             35.00
126.32           3026                             36.00
126.33           3110                             37.00
126.34           3963                             38.00
126.35           4047                             39.00
126.36           4137                             40.00
127.1            any amount more than 4137        40.00
127.2      Effective beginning December 31, 2000: 
127.3            4227                             41.00
127.4            4317                             42.00
127.5            4407                             43.00
127.6            4497                             44.00
127.7      Effective beginning December 31, 2001: 
127.8            4587                             45.00
127.9            4677                             46.00
127.10           4767                             47.00
127.11           4857                             48.00
127.12     Effective beginning December 31, 2002: 
127.13           4947                             49.00
127.14           5037                             50.00
127.15           5127                             51.00
127.16           5217                             52.00
127.17     Effective beginning December 31, 2003: 
127.18           5307                             53.00
127.19           5397                             54.00
127.20           5487                             55.00
127.21           5577                             56.00
127.22     (d) For a relief association in which the governing bylaws 
127.23  provide for a lump sum service pension to a retiring member, the 
127.24  maximum lump sum service pension amount for each year of service 
127.25  credited that may be provided for in the bylaws is the maximum 
127.26  service pension figure corresponding to the average amount of 
127.27  available financing per active covered firefighter for the 
127.28  applicable specified period: 
127.29   Minimum Average Amount         Maximum Lump Sum Service
127.30   of Available Financing         Pension Amount Payable
127.31      per Firefighter             for Each Year of Service
127.32          $..                              $10
127.33           11                               20
127.34           16                               30
127.35           23                               40
127.36           27                               50
128.1            32                               60
128.2            43                               80
128.3            54                              100
128.4            65                              120
128.5            77                              140
128.6            86                              160
128.7            97                              180
128.8           108                              200
128.9           131                              240
128.10          151                              280
128.11          173                              320
128.12          194                              360
128.13          216                              400
128.14          239                              440
128.15          259                              480
128.16          281                              520
128.17          302                              560
128.18          324                              600
128.19          347                              640
128.20          367                              680
128.21          389                              720
128.22          410                              760
128.23          432                              800
128.24          486                              900
128.25          540                             1000
128.26          594                             1100
128.27          648                             1200
128.28          702                             1300
128.29          756                             1400
128.30          810                             1500
128.31          864                             1600
128.32          918                             1700
128.33          972                             1800
128.34         1026                             1900
128.35         1080                             2000
128.36         1134                             2100
129.1          1188                             2200
129.2          1242                             2300
129.3          1296                             2400
129.4          1350                             2500
129.5          1404                             2600
129.6          1458                             2700
129.7          1512                             2800
129.8          1566                             2900
129.9          1620                             3000
129.10         1672                             3100
129.11         1726                             3200
129.12         1753                             3250
129.13         1780                             3300
129.14         1820                             3375
129.15         1834                             3400
129.16         1888                             3500
129.17         1942                             3600
129.18         1996                             3700
129.19         2023                             3750
129.20         2050                             3800
129.21         2104                             3900
129.22         2158                             4000
129.23         2212                             4100
129.24         2265                             4200
129.25         2319                             4300
129.26         2373                             4400
129.27         2427                             4500
129.28         2481                             4600
129.29         2535                             4700
129.30         2589                             4800
129.31         2643                             4900
129.32         2697                             5000
129.33         2751                             5100
129.34         2805                             5200
129.35         2859                             5300
129.36         2913                             5400
130.1          2967                             5500
130.2          any amount more than 2967        5500
130.3      Effective beginning December 31, 2000: 
130.4          3021                             5600
130.5          3075                             5700
130.6          3129                             5800
130.7          3183                             5900
130.8          3237                             6000
130.9      Effective beginning December 31, 2001: 
130.10         3291                             6100
130.11         3345                             6200
130.12         3399                             6300
130.13         3453                             6400
130.14         3507                             6500
130.15     Effective beginning December 31, 2002: 
130.16         3561                             6600
130.17         3615                             6700
130.18         3669                             6800
130.19         3723                             6900
130.20         3777                             7000
130.21     Effective beginning December 31, 2003: 
130.22         3831                             7100
130.23         3885                             7200
130.24         3939                             7300
130.25         3993                             7400
130.26         4047                             7500
130.27     (e) For a relief association in which the governing bylaws 
130.28  provide for a monthly benefit service pension as an alternative 
130.29  form of service pension payment to a lump sum service pension, 
130.30  the maximum service pension amount for each pension payment type 
130.31  must be determined using the applicable table contained in this 
130.32  subdivision. 
130.33     (f) If a relief association establishes a service pension 
130.34  in compliance with the applicable maximum contained in paragraph 
130.35  (c) or (d) and the minimum average amount of available financing 
130.36  per active covered firefighter is subsequently reduced because 
131.1   of a reduction in fire state aid or because of an increase in 
131.2   the number of active firefighters, the relief association may 
131.3   continue to provide the prior service pension amount specified 
131.4   in its bylaws, but may not increase the service pension amount 
131.5   until the minimum average amount of available financing per 
131.6   firefighter under the table in paragraph (c) or (d), whichever 
131.7   applies, permits. 
131.8      (g) No relief association is authorized to provide a 
131.9   service pension in an amount greater than $40 per month per year 
131.10  of service credit or in an amount greater than $5,500 lump sum 
131.11  per year of service credit even if the minimum average amount of 
131.12  available financing per firefighter for a relief association 
131.13  providing a monthly benefit service pension is greater than 
131.14  $4,137, or, for a relief association providing a lump sum 
131.15  service pension, is greater than $2,967.  No relief association 
131.16  is authorized to provide a service pension in an amount greater 
131.17  than the largest applicable flexible service pension maximum 
131.18  amount even if the amount of available financing per firefighter 
131.19  is greater than the financing amount associated with the largest 
131.20  applicable flexible service pension maximum. 
131.21     Sec. 7.  Minnesota Statutes 1998, section 424A.02, 
131.22  subdivision 7, is amended to read: 
131.23     Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
131.24  relief association to which this section applies is entitled to 
131.25  a deferred service pension if the member: 
131.26     (1) has completed the lesser of the minimum period of 
131.27  active service with the fire department specified in the bylaws 
131.28  or 20 years of active service with the fire department; 
131.29     (2) has completed at least five years of active membership 
131.30  in the relief association; and 
131.31     (3) separates from active service and membership before 
131.32  reaching age 50 or the minimum age for retirement and 
131.33  commencement of a service pension specified in the bylaws 
131.34  governing the relief association if that age is greater than age 
131.35  50.  
131.36     (b) The deferred service pension starts when the former 
132.1   member reaches age 50 or the minimum age specified in the bylaws 
132.2   governing the relief association if that age is greater than age 
132.3   50 and when the former member makes a valid written application. 
132.4      (c) A relief association that provides a lump sum service 
132.5   pension may, when its governing bylaws so provide, pay interest 
132.6   on the deferred lump sum service pension during the period of 
132.7   deferral.  If provided for in the bylaws, interest must be paid 
132.8   at the rate actually earned on that portion of the assets if the 
132.9   deferred benefit amount is invested by the relief association, 
132.10  but not to exceed the interest rate specified in section 
132.11  356.215, subdivision 4d, and must be in a separate account 
132.12  established and maintained by the relief association or in a 
132.13  separate investment vehicle held by the relief association or, 
132.14  if not, at the interest rate of five percent, compounded 
132.15  annually based on calendar year balances.  
132.16     (d) For a deferred service pension that is transferred to a 
132.17  separate account established and maintained by the relief 
132.18  association or separate investment vehicle held by the relief 
132.19  association, the deferred member bears the full investment risk 
132.20  subsequent to transfer and in calculating the accrued liability 
132.21  of the volunteer firefighter relief association that pays a lump 
132.22  sum service pension, the accrued liability for deferred service 
132.23  pensions is equal to the separate relief association account 
132.24  balance or the fair market value of the separate investment 
132.25  vehicle held by the relief association. 
132.26     (e) The deferred service pension is governed by and must be 
132.27  calculated under the general statute, special law, relief 
132.28  association articles of incorporation, or and relief association 
132.29  bylaw provisions applicable on the date on which the member 
132.30  separated from active service with the fire department and 
132.31  active membership in the relief association. 
132.32     Sec. 8.  Minnesota Statutes 1998, section 424A.02, 
132.33  subdivision 9, is amended to read: 
132.34     Subd. 9.  [LIMITATION ON ANCILLARY BENEFITS.] Any relief 
132.35  association, including any volunteer firefighters relief 
132.36  association governed by section 69.77 or any volunteer 
133.1   firefighters division of a relief association governed by 
133.2   chapter 424, may only pay ancillary benefits which would 
133.3   constitute an authorized disbursement as specified in section 
133.4   424A.05 subject to the following requirements or limitations: 
133.5      (a) (1) With respect to a relief association in which 
133.6   governing bylaws provide for a lump sum service pension to a 
133.7   retiring member, no ancillary benefit may be paid to any former 
133.8   member or paid to any person on behalf of any former member 
133.9   after the former member (1) (i) terminates active service with 
133.10  the fire department and active membership in the relief 
133.11  association; and (2) (ii) commences receipt of a service pension 
133.12  as authorized pursuant to under this section; and 
133.13     (b)(2) With respect to any relief association, no ancillary 
133.14  benefit paid or payable to any member, to any former member, or 
133.15  to any person on behalf of any member or former member, may 
133.16  exceed in amount the total earned service pension of the member 
133.17  or former member.  The total earned service pension shall must 
133.18  be calculated using the service pension amount specified in the 
133.19  bylaws of the relief association and the years of service 
133.20  credited to the member or former member.  The years of service 
133.21  shall must be determined as of (1) (i) the date the member or 
133.22  former member became entitled to the ancillary benefit; 
133.23  or (2) (ii) the date the member or former member died entitling 
133.24  a survivor or the estate of the member or former member to an 
133.25  ancillary benefit.  The ancillary benefit shall must be 
133.26  calculated (1) (i) without regard to whether the member or 
133.27  former member had attained the minimum amount of service and 
133.28  membership credit specified in the governing bylaws; 
133.29  and (2) (ii) without regard to the percentage amounts specified 
133.30  in subdivision 2; except that the bylaws of any relief 
133.31  association may provide for the payment of a survivor benefit in 
133.32  an amount not to exceed five times the yearly service pension 
133.33  amount specified in the bylaws on behalf of any member who dies 
133.34  before having performed five years of active service in the fire 
133.35  department with which the relief association is affiliated. 
133.36     Sec. 9.  Minnesota Statutes 1998, section 424A.02, is 
134.1   amended by adding a subdivision to read: 
134.2      Subd. 9b.  [REPAYMENT OF SERVICE PENSION IN CERTAIN 
134.3   INSTANCES.] If a retired volunteer firefighter does not 
134.4   permanently separate from active firefighting service as 
134.5   required by section 424A.001, subdivision 9, and subdivision 1, 
134.6   by resuming active service as a firefighter in the same 
134.7   volunteer fire department or as a person in charge of 
134.8   firefighters in the same volunteer fire department, no 
134.9   additional service pension amount is payable to the person, no 
134.10  additional service is creditable to the person, and the person 
134.11  shall repay any previously received service pension. 
134.12     Sec. 10.  Minnesota Statutes 1998, section 424A.02, 
134.13  subdivision 13, is amended to read: 
134.14     Subd. 13.  [COMBINED SERVICE PENSIONS.] (a) If the articles 
134.15  of incorporation or bylaws of the associations so provide, a 
134.16  volunteer firefighter with credit for service as an active 
134.17  firefighter in more than one volunteer firefighters relief 
134.18  association is entitled, when the applicable requirements of 
134.19  paragraph (b) are met and when otherwise qualified, to a 
134.20  prorated service credit from each relief association. 
134.21     (b) A volunteer firefighter receiving a prorated service 
134.22  pension under this subdivision must have total service credit of 
134.23  ten years or more, if every affected relief association does not 
134.24  require only a five-year service vesting requirement, or five 
134.25  years or more, if every affected relief association requires 
134.26  only a five-year service vesting requirement, as a member of two 
134.27  or more relief associations is entitled, when otherwise 
134.28  qualified, to a prorated service pension from each association 
134.29  in which.  The member has must have one year or more of service 
134.30  credit in each relief association.  The prorated service pension 
134.31  must be based on the service pension amount in effect for the 
134.32  relief association on the date on which active volunteer 
134.33  firefighting services covered by that relief association 
134.34  terminate.  To receive a service pension under this subdivision, 
134.35  the firefighter must become a member of the second or succeeding 
134.36  association and must give notice of membership to the prior 
135.1   association within two years of the date of termination of 
135.2   active service with the prior association.  The notice must be 
135.3   attested to by the second or subsequent association secretary. 
135.4      Sec. 11.  Minnesota Statutes 1998, section 424A.04, 
135.5   subdivision 1, is amended to read: 
135.6      Subdivision 1.  [MEMBERSHIP.] (a) Every relief association 
135.7   directly associated with a municipal fire department shall be 
135.8   managed by a board of trustees consisting of nine members.  Six 
135.9   trustees shall be elected from the membership of the relief 
135.10  association and three trustees shall be drawn from the officials 
135.11  of the municipalities served by the fire department to which the 
135.12  relief association is directly associated.  The bylaws of a 
135.13  relief association may provide that one of the six trustees 
135.14  elected from the relief association may be a retired member 
135.15  receiving a monthly pension who is elected by the membership of 
135.16  the relief association.  The three ex officio trustees shall be 
135.17  the mayor, the clerk, clerk-treasurer or finance director, and 
135.18  the chief of the municipal fire department.  
135.19     (b) Every relief association that is a subsidiary of an 
135.20  independent nonprofit firefighting corporation shall be managed 
135.21  by a board of trustees consisting of ten members.  Six trustees 
135.22  shall be elected from the membership of the relief association, 
135.23  three trustees shall be drawn from the officials of the 
135.24  municipalities served by the fire department to which the relief 
135.25  association is directly associated, and one trustee shall be the 
135.26  fire chief.  The bylaws of a relief association may provide that 
135.27  one of the six trustees elected from the relief association may 
135.28  be a retired member receiving a monthly pension who is elected 
135.29  by the membership of the relief association.  The three ex 
135.30  officio trustees who are the elected officials shall be selected 
135.31  as follows:  
135.32     (1) if only one municipality contracts with the independent 
135.33  nonprofit firefighting corporation, the ex officio trustees 
135.34  shall be three elected officials of the contracting municipality 
135.35  who are designated by the governing body of the municipality; 
135.36     (2) if two municipalities contract with the independent 
136.1   nonprofit firefighting corporation, the ex officio trustees 
136.2   shall be two elected officials of the largest municipality in 
136.3   population and one elected official of the next largest 
136.4   municipality in population who are designated by the governing 
136.5   bodies of the applicable municipalities; or 
136.6      (3) if three or more municipalities contract with the 
136.7   independent nonprofit corporation, the ex officio trustees shall 
136.8   be one elected official of each of the three largest 
136.9   municipalities in population who are designated by the governing 
136.10  bodies of the applicable municipalities. 
136.11     (c) If a relief association lacks the ex-officio board 
136.12  members provided for in paragraph (a) or (b) because the fire 
136.13  department is not located in or associated with an organized 
136.14  municipality, the ex-officio board members must be appointed 
136.15  from the fire department service area by the board of 
136.16  commissioners of the applicable county.  The term of these 
136.17  appointed ex-officio board members is three years or until the 
136.18  person's successor is qualified, whichever is later. 
136.19     (d) An ex officio trustee under paragraph (a), (b), or (c) 
136.20  shall have all the rights and duties accorded to any other 
136.21  trustee except the right to be an officer of the board of 
136.22  trustees.  
136.23     (e) A board shall have at least three officers, which shall 
136.24  be a president, a secretary and a treasurer.  These officers 
136.25  shall be elected from among the elected trustees by either the 
136.26  full board of trustees or by the membership, as specified in the 
136.27  bylaws, and in no event shall any trustee hold more than one 
136.28  officer position at any one time.  The terms of the elected 
136.29  trustees and of the officers of the board shall be specified in 
136.30  the bylaws of the relief association, but shall not exceed three 
136.31  years.  If the term of the elected trustees exceeds one year, 
136.32  the election of the various trustees elected from the membership 
136.33  shall initially and shall thereafter continue to be staggered on 
136.34  as equal a basis as is practicable. 
136.35     Sec. 12.  Minnesota Statutes 1998, section 424A.05, 
136.36  subdivision 3, is amended to read: 
137.1      Subd. 3.  [AUTHORIZED DISBURSEMENTS FROM THE SPECIAL 
137.2   FUND.] (a) Disbursements from the special fund shall are not 
137.3   permitted to be made for any purpose other than one of the 
137.4   following: 
137.5      (1) For the payment of service pensions to retired members 
137.6   of the relief association if authorized and paid pursuant to law 
137.7   and the bylaws governing the relief association; 
137.8      (2) For the payment of temporary or permanent disability 
137.9   benefits to disabled members of the relief association if 
137.10  authorized and paid pursuant to law and specified in amount in 
137.11  the bylaws governing the relief association; 
137.12     (3) For the payment of survivor benefits to surviving 
137.13  spouses and surviving children, or if none, to designated 
137.14  beneficiaries, of deceased members of the relief association if 
137.15  authorized by and paid pursuant to law and specified in amount 
137.16  in the bylaws governing the relief association; 
137.17     (4) For the payment of any funeral benefits to the 
137.18  surviving spouse, or if no surviving spouse, the estate, of the 
137.19  deceased member of the relief association if authorized by law 
137.20  and specified in amount in the bylaws governing the relief 
137.21  association; 
137.22     (5) For the payment of the fees, dues and assessments to 
137.23  the Minnesota state fire department association and, to the 
137.24  Minnesota area relief association coalition, and to the state 
137.25  volunteer firefighters' benefit association in order to entitle 
137.26  relief association members to membership in and the benefits of 
137.27  these state associations or organizations; and 
137.28     (6) For the payment of administrative expenses of the 
137.29  relief association as authorized pursuant to section 69.80. 
137.30     (b) For purposes of this chapter, a designated beneficiary 
137.31  must be a natural person. 
137.32     Sec. 13.  [VOLUNTEER FIREFIGHTERS LUMP SUM SERVICE 
137.33  BENEFITS.] 
137.34     Subdivision 1.  [APPLICATION.] This section applies to a 
137.35  surviving spouse of a person who: 
137.36     (1) was born on August 18, 1941; 
138.1      (2) was employed as a building inspector by the city of St. 
138.2   Paul; 
138.3      (3) died during the course of his employment duties as a 
138.4   building inspector on December 24, 1997; 
138.5      (4) began service as a volunteer firefighter for the 
138.6   Woodbury fire department in 1980 and continued that service up 
138.7   to the time of his death; and 
138.8      (5) would have been eligible to retire as a volunteer 
138.9   firefighter and receive a lump sum service pension calculated at 
138.10  the rate of $4,000 for each year of service on January 1, 1998. 
138.11     Subd. 2.  [ELIGIBILITY FOR BENEFIT.] Notwithstanding any 
138.12  law to the contrary, the eligible person described in 
138.13  subdivision 1 is entitled to receive a survivor benefit from the 
138.14  Woodbury fire department relief association benefit plan 
138.15  calculated at the rate that would have been in effect had the 
138.16  person described in subdivision 1 lived until January 1, 1998. 
138.17     Subd. 3.  [RESTRICTIONS.] This section does not authorize 
138.18  payment of more than a single survivor benefit to the eligible 
138.19  individual specified in subdivision 1.  If a survivor benefit 
138.20  has been paid to the eligible individual by the Woodbury fire 
138.21  department relief association, this section authorizes payment 
138.22  to the eligible individual of the difference between the amount 
138.23  previously paid and the amount payable under the Woodbury fire 
138.24  department relief association benefit plan in effect on January 
138.25  1, 1998, assuming the volunteer firefighter survived and 
138.26  provided service to that date. 
138.27     Sec. 14.  [EFFECTIVE DATE.] 
138.28     (a) Sections 1 to 6 and 8 to 12 are effective on the day 
138.29  following final enactment. 
138.30     (b) Section 7 is effective on the day following final 
138.31  enactment and, with the appropriate bylaw amendment and 
138.32  municipal approval, applies to deferred service pensions where 
138.33  deferral began before the effective date of the municipal 
138.34  approval.  
138.35     (c) For a deferred service pension under section 7 that is 
138.36  invested in a separate account or separate investment vehicle, 
139.1   interest is payable up to the date of the transfer consistent 
139.2   with the law and bylaw provisions in effect when the firefighter 
139.3   terminated active firefighting service and actual investment 
139.4   performance thereafter. 
139.5      (d) Section 13 is effective on the day after the date on 
139.6   which the Woodbury city council and the chief clerical officer 
139.7   of the city of Woodbury complete, in a timely manner, their 
139.8   compliance with Minnesota Statutes, section 645.021, 
139.9   subdivisions 2 and 3. 
139.10                             ARTICLE 16
139.11                  DISSOLUTIONS AND CONSOLIDATIONS 
139.12            OF VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS
139.13     Section 1.  [424B.01] [DEFINITIONS.] 
139.14     Subdivision 1.  [GENERALLY.] Unless the context of the 
139.15  provision indicates that a different meaning is intended, each 
139.16  of the terms in the following subdivision has the meaning 
139.17  indicated. 
139.18     Subd. 2.  [APPLICABLE MUNICIPALITY.] "Applicable 
139.19  municipality" means the municipality or municipalities in which 
139.20  a consolidating relief association is located and to which a 
139.21  consolidating relief association is associated by virtue of the 
139.22  presence of at least one municipal official on the relief 
139.23  association board of trustees under section 424A.04. 
139.24     Subd. 3.  [CONSOLIDATING RELIEF 
139.25  ASSOCIATION.] "Consolidating relief association" means a 
139.26  volunteer firefighter relief association organized under chapter 
139.27  317A and governed by chapter 424A that has initiated or has 
139.28  completed the process of consolidating with one or more other 
139.29  relief associations under this chapter. 
139.30     Subd. 4.  [PRIOR RELIEF ASSOCIATIONS.] "Prior relief 
139.31  associations" means the two or more volunteer firefighter relief 
139.32  associations that have initiated the consolidation process under 
139.33  this chapter by action of the board of trustees of the relief 
139.34  association. 
139.35     Subd. 5.  [RELIEF ASSOCIATION MEMBERSHIP.] "Relief 
139.36  association membership" means all active members of the 
140.1   volunteer firefighter relief association, all deferred retirees 
140.2   and other vested inactive members of the volunteer firefighter 
140.3   relief association, and any persons regularly receiving a 
140.4   service pension or other retirement benefit from the volunteer 
140.5   firefighters relief association. 
140.6      Subd. 6.  [SUBSEQUENT RELIEF ASSOCIATION.] "Subsequent 
140.7   relief association" means the volunteer firefighters relief 
140.8   association that is designated to be the successor relief 
140.9   association in the consolidation initiative resolutions of the 
140.10  board of trustees of the prior relief associations or the 
140.11  volunteer firefighters relief association organized under 
140.12  chapters 317A and 424A for the purpose of operating as the 
140.13  successor relief association after consolidation under this 
140.14  chapter. 
140.15     Sec. 2.  [424B.02] [CONSOLIDATION AUTHORIZED.] 
140.16     Subdivision 1.  [INITIATION.] (a) With the approval of the 
140.17  governing body of each applicable municipality, two or more 
140.18  relief associations associated with fire departments serving 
140.19  contiguous fire districts may initiate the consolidation of the 
140.20  relief associations into a subsequent relief association. 
140.21     (b) Initiation of a consolidation action must occur through 
140.22  the proposal of a consolidation resolution to the board of 
140.23  trustees of each volunteer firefighter relief association 
140.24  notification of the relief association membership of the 
140.25  potential consolidation and after conducting a public meeting on 
140.26  the consolidation question. 
140.27     Subd. 2.  [INITIATIVE PROCESSING; FILING.] (a) After a 
140.28  consolidation initiative resolution has been filed with the 
140.29  relief association board of trustees by one or more members of 
140.30  the board, the relief association secretary shall provide 
140.31  written notification of the initiative to the relief association 
140.32  membership.  After notification of the relief association 
140.33  membership, the board of trustees must hold a public hearing on 
140.34  the initiative.  After the hearing, the board of trustees shall 
140.35  act on the consolidation resolution. 
140.36     (b) If the consolidation resolution is adopted by majority 
141.1   vote of the board of trustees, the secretary shall file a copy 
141.2   of the resolution with the other relief association or 
141.3   associations also considering consolidation. 
141.4      (c) If two or more volunteer firefighter relief 
141.5   associations adopt a consolidation resolution, those relief 
141.6   associations are consolidated effective the next following 
141.7   January 1. 
141.8      (d) Within 30 days of the adoption of the consolidation 
141.9   resolution by all prior relief associations, the secretaries of 
141.10  the applicable prior relief associations shall jointly notify in 
141.11  writing the state auditor, the commissioner of revenue, and the 
141.12  secretary of state of the consolidation. 
141.13     Sec. 3.  [424B.03] [SUBSEQUENT RELIEF ASSOCIATION.] 
141.14     Subdivision 1.  [NEW RELIEF ASSOCIATION.] If the subsequent 
141.15  relief association is a new volunteer firefighter relief 
141.16  association, the consolidated volunteer firefighters relief 
141.17  association must be incorporated under chapter 317A.  The 
141.18  incorporators of the consolidated relief association must 
141.19  include at least one board member of each of the former 
141.20  volunteer firefighters relief associations. 
141.21     Subd. 2.  [SUCCESSOR RELIEF ASSOCIATION.] If the subsequent 
141.22  relief association is one of the prior relief associations, the 
141.23  articles of incorporation and bylaws must be appropriately 
141.24  revised, effective on the consolidation effective date, and a 
141.25  revised board of trustees must be elected before the 
141.26  consolidation effective date. 
141.27     Sec. 4.  [424B.04] [GOVERNANCE OF CONSOLIDATED VOLUNTEER 
141.28  FIREFIGHTERS RELIEF ASSOCIATION.] 
141.29     Subdivision 1.  [BOARD OF TRUSTEES.] The consolidated 
141.30  volunteer firefighters relief association is governed by a board 
141.31  of trustees as provided in section 424A.04, subdivision 1. 
141.32     Subd. 2.  [COMPOSITION OF BOARD.] The board must have three 
141.33  officers, including a president, a secretary, and a treasurer.  
141.34  The membership of the consolidated volunteer firefighters relief 
141.35  association must elect the three officers from the board 
141.36  members.  A board of trustees member may not hold more than one 
142.1   officer position at the same time. 
142.2      Subd. 3.  [BOARD ADMINISTRATION.] The board of trustees 
142.3   must administer the affairs of the relief association consistent 
142.4   with this chapter and the applicable provisions of chapters 69, 
142.5   356A, and 424A. 
142.6      Sec. 5.  [424B.05] [SPECIAL AND GENERAL FUNDS.] 
142.7      The consolidated volunteer firefighters relief association 
142.8   must establish and maintain a special fund and a general fund.  
142.9   The special fund must be established and maintained as provided 
142.10  in section 424A.05.  The general fund must be established and 
142.11  maintained as provided in section 424A.06. 
142.12     Sec. 6.  [424B.06] [TRANSFERS.] 
142.13     Subdivision 1.  [GENERALLY.] On the effective date of 
142.14  consolidation, the records, assets, and liabilities of the prior 
142.15  volunteer firefighter relief associations are transferred to the 
142.16  consolidated volunteer firefighters relief association.  On the 
142.17  effective date of consolidation, the prior volunteer 
142.18  firefighters relief associations cease to exist as legal 
142.19  entities, except for the purposes of winding up association 
142.20  affairs as provided by this chapter. 
142.21     Subd. 2.  [TRANSFER OF ADMINISTRATION.] On the effective 
142.22  date of consolidation, the administration of the prior relief 
142.23  associations is transferred to the board of trustees of the 
142.24  subsequent volunteer firefighters relief association. 
142.25     Subd. 3.  [TRANSFER OF RECORDS.] On the effective date of 
142.26  consolidation, the secretary and the treasurer of the prior 
142.27  volunteer firefighters relief associations shall transfer all 
142.28  records and documents relating to the prior relief associations 
142.29  to the secretary and treasurer of the subsequent volunteer 
142.30  firefighters relief association. 
142.31     Subd. 4.  [TRANSFER OF SPECIAL FUND ASSETS AND 
142.32  LIABILITIES.] (a) On the effective date of consolidation, the 
142.33  secretary and the treasurer of a prior volunteer firefighters 
142.34  relief association shall transfer the assets of the special fund 
142.35  of the applicable relief association to the special fund of the 
142.36  subsequent relief association.  Unless the appropriate secretary 
143.1   and treasurer decide otherwise, the assets may be transferred as 
143.2   investment securities rather than cash.  The transfer must 
143.3   include any accounts receivable.  The appropriate secretary must 
143.4   settle any accounts payable from the special fund of the relief 
143.5   association before the effective date of consolidation. 
143.6      (b) Upon the transfer of the assets of the special fund of 
143.7   a prior relief association, the pension liabilities of that 
143.8   special fund become the obligation of the special fund of the 
143.9   subsequent volunteer firefighters relief association. 
143.10     (c) Upon the transfer of the prior relief association 
143.11  special fund assets, the board of trustees of the subsequent 
143.12  volunteer firefighters relief association has legal title to and 
143.13  management responsibility for the transferred assets as trustees 
143.14  for persons having a beneficial interest in those assets arising 
143.15  out of the benefit coverage provided by the prior relief 
143.16  association. 
143.17     (d) The subsequent volunteer firefighters relief 
143.18  association is the successor in interest in all claims for and 
143.19  against the special funds of the prior volunteer firefighters 
143.20  relief associations or the applicable municipalities with 
143.21  respect to the special funds of the prior relief associations.  
143.22  The status of successor in interest does not apply to any claim 
143.23  against a prior relief association, the municipality in which 
143.24  that relief association is located, or any person connected with 
143.25  the prior relief association or the municipality, based on any 
143.26  act or acts that were not done in good faith and that 
143.27  constituted a breach of fiduciary responsibility under common 
143.28  law or chapter 356A. 
143.29     Sec. 7.  [424B.07] [DISSOLUTION OF PRIOR GENERAL FUND 
143.30  BALANCES.] 
143.31     Before the effective date of consolidation, the secretaries 
143.32  of the volunteer firefighters relief associations shall settle 
143.33  any accounts payable from the respective general fund or any 
143.34  other relief association fund in addition to the relief 
143.35  association special fund.  Investments held by a fund of the 
143.36  prior relief associations in addition to the special fund must 
144.1   be liquidated before the effective date of consolidation as the 
144.2   bylaws of the relief association provide.  Before the effective 
144.3   date of consolidation, the respective relief associations must 
144.4   pay all applicable general fund expenses from their respective 
144.5   general funds.  Any balance remaining in the general fund or in 
144.6   a fund other than the relief association special fund as of the 
144.7   effective date of consolidation must be paid to the new general 
144.8   fund of the subsequent volunteer firefighter relief association. 
144.9      Sec. 8.  [424B.08] [TERMINATION OF PRIOR RELIEF 
144.10  ASSOCIATIONS.] 
144.11     Following the transfer of administration, records, special 
144.12  fund assets, and special fund liabilities from the prior relief 
144.13  associations to the subsequent volunteer firefighters relief 
144.14  association, the prior volunteer firefighter relief associations 
144.15  cease to exist as legal entities for any purpose.  The 
144.16  subsequent relief association secretary shall notify the 
144.17  following governmental officials of the termination of the 
144.18  respective volunteer firefighter relief associations and of the 
144.19  establishment of the subsequent volunteer firefighters relief 
144.20  association: 
144.21     (1) Minnesota secretary of state; 
144.22     (2) Minnesota state auditor; 
144.23     (3) Minnesota commissioner of revenue; and 
144.24     (4) commissioner of the federal Internal Revenue Service. 
144.25     Sec. 9.  [424B.09] [ADMINISTRATIVE EXPENSES.] 
144.26     The payment of authorized administrative expenses of the 
144.27  subsequent volunteer firefighters relief association must be 
144.28  from the special fund of the subsequent volunteer firefighters 
144.29  relief association in accordance with section 69.80, and as 
144.30  provided for in the bylaws of the subsequent volunteer 
144.31  firefighters relief association and approved by the board of 
144.32  trustees of the subsequent volunteer firefighters relief 
144.33  association.  The payment of any other expenses of the 
144.34  subsequent volunteer firefighters relief association must be 
144.35  from the general fund of the subsequent volunteer firefighters 
144.36  relief association in accordance with section 69.80, and as 
145.1   provided for in the bylaws of the subsequent volunteer 
145.2   firefighters relief association and approved by the board of 
145.3   trustees of the subsequent volunteer firefighters relief 
145.4   association. 
145.5      Sec. 10.  [424B.10] [BENEFITS; FUNDING.] 
145.6      Subdivision 1.  [BENEFITS.] (a) Notwithstanding section 
145.7   424A.02, subdivision 3, to the contrary, the service pension of 
145.8   the subsequent relief association as of the effective date of 
145.9   consolidation is the highest dollar amount service pension 
145.10  amount of any prior volunteer firefighters relief association in 
145.11  effect immediately before the consolidation initiation if the 
145.12  pension amount was implemented consistent with section 424A.02. 
145.13     (b) Any increase in the service pension amount beyond the 
145.14  amount implemented under paragraph (a) must conform with the 
145.15  requirements and limitations of sections 69.771 to 69.775 and 
145.16  424A.02. 
145.17     Subd. 2.  [FUNDING.] (a) Unless the applicable 
145.18  municipalities agree in writing to allocate the minimum 
145.19  municipal obligation in a different manner, the minimum 
145.20  municipal obligation under section 69.772 or 69.773, whichever 
145.21  applies, must be allocated between the applicable municipalities 
145.22  in proportion to their fire state aid. 
145.23     (b) If any applicable municipality fails to meet its 
145.24  portion of the minimum municipal obligation to the subsequent 
145.25  relief association, all other applicable municipalities are 
145.26  jointly obligated to provide the required funding upon 
145.27  certification by the relief association secretary.  An 
145.28  applicable municipality that pays the minimum municipal 
145.29  obligation for another applicable municipality, the municipality 
145.30  may collect the payment amount, plus a 25 percent surcharge, 
145.31  from the responsible applicable municipality by any available 
145.32  means, including deduction from any state aid or payment amount 
145.33  payable to the responsible municipality upon certification of 
145.34  the necessary information to the commissioner of finance. 
145.35     Sec. 11.  [424B.20] [DISSOLUTION WITHOUT CONSOLIDATION.] 
145.36     Subdivision 1.  [APPLICABLE DISSOLUTIONS.] This section 
146.1   applies if the fire department associated with a volunteer 
146.2   firefighter relief association is dissolved or eliminated by 
146.3   action of the governing body of the municipality in which fire 
146.4   department was located or by the independent nonprofit 
146.5   firefighting corporation, whichever applies, and no 
146.6   consolidation with another volunteer firefighter relief 
146.7   association under sections 424B.01 to 424B.10 is sought, or if a 
146.8   volunteer firefighter relief association is dissolved or 
146.9   eliminated with municipal approval, but the fire department 
146.10  associated with the volunteer firefighter relief association is 
146.11  not dissolved or eliminated, and no consolidation with another 
146.12  volunteer firefighter relief association under sections 424B.01 
146.13  to 424B.10 is applicable. 
146.14     Subd. 2.  [PROCEDURES.] As part of the dissolution process, 
146.15  all legal obligations of the relief association other than 
146.16  service pensions and benefits must be settled under subdivision 
146.17  3, a benefit trust must be established under subdivision 4, and 
146.18  the affairs of the relief association must be concluded under 
146.19  subdivision 5. 
146.20     Subd. 3.  [SETTLEMENT OF NONBENEFIT LEGAL OBLIGATIONS.] (a) 
146.21  Prior to the effective date of the dissolution of the volunteer 
146.22  firefighter relief association established by the relief 
146.23  association board of trustees, the board shall determine the 
146.24  following: 
146.25     (1) the fair market value of the assets of the special 
146.26  fund; 
146.27     (2) the total amount of the accounts payable and other 
146.28  legal obligations of the special fund, excluding the accrued 
146.29  liability of the special fund for service pensions and other 
146.30  benefits; and 
146.31     (3) the accrued liability of the special fund for service 
146.32  pensions and other benefits payable or accrued under the 
146.33  applicable bylaws of the relief association and chapter 424A. 
146.34     (b) On or before the effective date of the dissolution of 
146.35  the volunteer firefighter relief association, the board shall 
146.36  liquidate sufficient special fund assets to pay the legal 
147.1   obligations of the special fund and must settle those legal 
147.2   obligations. 
147.3      (c) On or before the effective date of the dissolution of 
147.4   the volunteer firefighter relief association, the board shall 
147.5   settle the legal obligations of the general fund of the relief 
147.6   association. 
147.7      Subd. 4.  [BENEFIT TRUST FUND ESTABLISHMENT.] (a) After the 
147.8   settlement of nonbenefit legal obligations of the special fund 
147.9   of the volunteer firefighter relief association under 
147.10  subdivision 3, the board of the relief association shall 
147.11  transfer the remaining assets of the special fund, as securities 
147.12  or in cash, as applicable, to the chief financial official of 
147.13  the municipality in which the associated fire department was 
147.14  located if the fire department was a municipal fire department 
147.15  or to the chief financial official of the municipality with the 
147.16  largest population served by the fire department if the fire 
147.17  department was an independent nonprofit firefighting 
147.18  corporation.  The board shall also compile a schedule of the 
147.19  relief association members to whom a service pension is or will 
147.20  be owed, any beneficiary to whom a benefit is owed, the amount 
147.21  of the service pension or benefit payable based on the 
147.22  applicable bylaws and state law and the service rendered to the 
147.23  date of the dissolution, and the date on which the pension or 
147.24  benefit would first be payable under the bylaws of the relief 
147.25  association and state law. 
147.26     (b) The municipality in which is located a volunteer 
147.27  firefighter relief association that is dissolving under this 
147.28  section shall establish a separate account in the municipal 
147.29  treasury which must function as a trust fund for members of the 
147.30  volunteer firefighter relief association and their beneficiaries 
147.31  to whom the volunteer firefighter relief association owes a 
147.32  service pension or other benefit under the bylaws of the relief 
147.33  association and state law.  Upon proper application, on or after 
147.34  the initial date on which the service pension or benefit is 
147.35  payable, the municipal treasurer shall pay the pension or 
147.36  benefit due, based on the schedule prepared under paragraph (a) 
148.1   and the other records of the dissolved relief association.  The 
148.2   trust fund under this section must be invested and managed 
148.3   consistent with section 69.775 and chapter 356A.  Upon payment 
148.4   of the last service pension or benefit due and owing, any 
148.5   remaining assets in the trust fund cancel to the general fund of 
148.6   the municipality.  If the special fund of the volunteer 
148.7   firefighter relief association had an unfunded actuarial accrued 
148.8   liability upon dissolution, the municipality is liable for that 
148.9   unfunded actuarial accrued liability. 
148.10     Subd. 5.  [RELIEF ASSOCIATION AFFAIRS WIND-UP.] Upon 
148.11  dissolution, the board of trustees of the volunteer firefighter 
148.12  relief association shall transfer the records of the relief 
148.13  association to the chief administrative officer of the 
148.14  applicable municipality.  The board shall also notify the 
148.15  commissioner of revenue, the state auditor, and the secretary of 
148.16  state of the dissolution within 30 days of the effective date of 
148.17  the dissolution. 
148.18     Sec. 12.  [424B.21] [ANNUITY PURCHASES UPON DISSOLUTION.] 
148.19     The board of trustees of a volunteer firefighter relief 
148.20  association that is scheduled for dissolution may purchase 
148.21  annuity contracts under section 424A.02, subdivision 8a, instead 
148.22  of transferring special fund assets to a municipal trust fund 
148.23  under section 424B.20, subdivision 4.  Payment of an annuity for 
148.24  which a contract is purchased may not commence before the 
148.25  retirement age specified in the relief association bylaws and in 
148.26  compliance with section 424A.02, subdivision 1.  Legal title to 
148.27  the annuity contract transfers to the municipal trust fund under 
148.28  section 424B.20, subdivision 4. 
148.29     Sec. 13.  [REPEALER.] 
148.30     Minnesota Statutes 1998, section 424A.02, subdivision 11, 
148.31  is repealed. 
148.32     Sec. 14.  [EFFECTIVE DATE.] 
148.33     Sections 1 to 13 are effective on July 1, 2000. 
148.34                             ARTICLE 17
148.35                MINNEAPOLIS POLICE AND FIREFIGHTERS
148.36                     RELIEF ASSOCIATION CHANGES
149.1      
149.2      Section 1.  Minnesota Statutes 1998, section 423B.01, is 
149.3   amended to read: 
149.4      423B.01 [MINNEAPOLIS POLICE RELIEF ASSOCIATION; 
149.5   DEFINITIONS.] 
149.6      Subdivision 1.  [TERMS.] For purposes of sections 423B.01 
149.7   to 423B.18, unless the context clearly indicates otherwise, each 
149.8   of the terms defined in this section has the indicated meaning. 
149.9      Subd. 2.  [ACTIVE MEMBER.] "Active member" means a person 
149.10  who was hired and duly appointed by the city of Minneapolis 
149.11  before May 1, 1959, as a police stenographer, police clerk, 
149.12  police telephone operator, police radio operator, or police 
149.13  mechanic or before June 15, 1980, as a police officer, police 
149.14  matron, or assistant police matron, who is regularly entered on 
149.15  the payroll of the police department, and who serves on active 
149.16  duty. 
149.17     Subd. 3.  [ACTIVE MEMBER PERCENTAGE.] The "active member 
149.18  percentage" is the total number of units accrued by active 
149.19  members of the association divided by the sum of the total 
149.20  number of units to which eligible members are entitled and 
149.21  active members of the association have accrued. 
149.22     Subd. 4.  [AGE.] "Age" means a person's age at the person's 
149.23  latest birthday. 
149.24     Subd. 4 5.  [ANNUAL POSTRETIREMENT PAYMENT.] "Annual 
149.25  postretirement payment" means the payment of a lump sum 
149.26  postretirement benefit under section 423B.15 to an eligible 
149.27  member on June 1 following the determination date in any year. 
149.28     Subd. 5 6.  [ASSOCIATION.] "Association" means the 
149.29  Minneapolis police relief association. 
149.30     Subd. 7.  [CITY.] "City" means the city of Minneapolis. 
149.31     Subd. 8.  [DETERMINATION DATE.] "Determination date" means 
149.32  December 31 of each year. 
149.33     Subd. 6 9.  [DISABILITY.] "Disability" means a physical or 
149.34  mental incapacity of an active member to perform the duties of 
149.35  the person's position in the service of the police department. 
149.36     Subd. 7 10.  [DISCHARGE.] "Discharge" means a complete 
150.1   separation from service in the police department. 
150.2      Subd. 8 11.  [ELIGIBLE MEMBER.] "Eligible member" means a 
150.3   person, including a service pensioner, a disability pensioner, a 
150.4   survivor, or dependent of a deceased active member, service 
150.5   pensioner, or disability pensioner, who received a pension or 
150.6   benefit from the relief association during the 12 months before 
150.7   the determination date. 
150.8      Subd. 9 12.  [EXCESS INVESTMENT INCOME.] "Excess investment 
150.9   income" means the amount, if any, by which the average time 
150.10  weighted total rate of return earned by the fund in the most 
150.11  recent prior five fiscal years has exceeded the actual average 
150.12  percentage increase in the current monthly salary of a first 
150.13  grade patrol officer in the most recent prior five fiscal years 
150.14  plus two percent, and must be expressed as a dollar amount.  The 
150.15  amount may not exceed one percent of the total assets of the 
150.16  fund, except when the actuarial value of assets of the fund 
150.17  according to the most recent annual actuarial valuation prepared 
150.18  in accordance with sections 356.215 and 356.216 is greater than 
150.19  102 percent of its actuarial accrued liabilities, in which case 
150.20  the amount must not exceed 1-1/2 percent of the total assets of 
150.21  the fund, and does not exist unless the yearly average 
150.22  percentage increase of the time weighted total rate of return of 
150.23  the fund for the previous five years exceeds by two percent the 
150.24  yearly average percentage increase in monthly salary of a first 
150.25  grade patrol officer during the previous five calendar years. 
150.26     Subd. 10 13.  [FUND.] "Fund" means the special fund of the 
150.27  relief association. 
150.28     Subd. 14.  [NET EXCESS ASSET AMOUNT PAYMENT.] "Net excess 
150.29  asset amount payment" means the payment of an additional 
150.30  postretirement payment under section 2 to an eligible member on 
150.31  June 1 following the determination date in the given year. 
150.32     Subd. 15.  [NET TOTAL EXCESS ASSET AMOUNT.] "Net total 
150.33  excess asset amount" is the total excess asset amount stated in 
150.34  dollars and multiplied by the quantity one minus the active 
150.35  member percentage. 
150.36     Subd. 11 16.  [RETIRED MEMBER.] "Retired member" means a 
151.1   former active member who has terminated active service in the 
151.2   police department and who is entitled to receive a pension or 
151.3   benefit under sections 423B.01 to 423B.18, as amended, or any 
151.4   predecessor law. 
151.5      Subd. 12 17.  [SURVIVING SPOUSE MEMBER.] "Surviving spouse 
151.6   member" means the person who was the legally married spouse of 
151.7   the member, who was residing with the decedent, and who was 
151.8   married while or before the time the decedent was an active 
151.9   member and was on the payroll of the police department, and who, 
151.10  in case the deceased member was a pensioner or deferred 
151.11  pensioner, was legally married to the member at least one year 
151.12  before the decedent's termination of active service with the 
151.13  police department.  The term does not include the surviving 
151.14  spouse who has deserted a member or who has not been dependent 
151.15  upon the member for support, nor does it include the surviving 
151.16  common law spouse of a member. 
151.17     Subd. 13 18.  [TIME WEIGHTED TOTAL RATE OF RETURN.] "Time 
151.18  weighted total rate of return" means the percentage amount 
151.19  determined by using the formula or formulas established by the 
151.20  state board of investment under section 11A.04, clause (11), and 
151.21  in effect on January 1, 1987. 
151.22     Subd. 19.  [TOTAL EXCESS ASSET AMOUNT.] (a) "Total excess 
151.23  asset amount" means the difference, if positive, expressed in 
151.24  dollars, between the fund's market value of assets after any 
151.25  deductions required by section 423B.15, subdivision 2, and 110 
151.26  percent of the actuarial accrued liabilities based on the 
151.27  actuarial valuation indicated in paragraph (b). 
151.28     (b) The total excess asset amount in paragraph (a) exists 
151.29  if the actuarial liability funding ratio, according to the most 
151.30  recent annual actuarial valuation for the fund prepared in 
151.31  accordance with sections 69.77, 356.215, and 356.216, with 
151.32  adjustments required by section 423B.15, subdivision 2, equals 
151.33  or exceeds 110 percent. 
151.34     Subd. 14 20.  [UNIT.] "Unit" means one-eightieth of the 
151.35  current monthly salary of a first grade patrol officer. 
151.36     Subd. 15 21.  [ACTUARIAL EQUIVALENT.] "Actuarial 
152.1   equivalent" or "actuarially equivalent" means the condition of 
152.2   one annuity or benefit having an equal actuarial present value 
152.3   as another annuity or benefit, determined as of a given date at 
152.4   a specified age with each actuarial present value based on the 
152.5   appropriate mortality table adopted by the board of directors 
152.6   based on the experience of the fund and approved by the actuary 
152.7   retained by the legislative commission on pensions and 
152.8   retirement and using the applicable preretirement or 
152.9   postretirement interest rate assumptions specified in section 
152.10  356.216. 
152.11     Sec. 2.  [423B.151] [EXCESS ASSET AMOUNT PAYMENT.] 
152.12     Subdivision 1.  [DETERMINATION OF NET TOTAL EXCESS AMOUNT.] 
152.13  The board of the association shall determine by May 1 of each 
152.14  year whether the fund has a total excess asset amount for that 
152.15  year.  If a total excess asset amount exists for the given year, 
152.16  the net total excess asset amount shall be determined.  The 
152.17  total excess asset amount and net total excess asset amount 
152.18  shall be reported to the chief administrative officer of the 
152.19  association, the mayor and governing body of the city, the state 
152.20  auditor, the commissioner of finance, and the executive director 
152.21  of the legislative commission on pensions and retirement.  The 
152.22  portion of the net excess asset amount which is distributed 
152.23  under this section must not be considered as income to or assets 
152.24  of the fund for actuarial valuations of the fund for that year 
152.25  under sections 69.77, 356.215, 356.216, and this act, except to 
152.26  offset the amount distributed. 
152.27     Subd. 2.  [TOTAL AVAILABLE FOR PAYMENT.] Twenty percent of 
152.28  the net total excess asset amount determined under subdivision 1 
152.29  is available for excess asset amount payments under subdivision 
152.30  3. 
152.31     Subd. 3.  [NET EXCESS ASSET AMOUNT PAYMENTS.] Except as 
152.32  limited under subdivision 4, the net excess asset amount payment 
152.33  to an eligible member is equal to the amount determined under 
152.34  subdivision 2 multiplied by the units applicable to the eligible 
152.35  member and divided by the total units of all eligible members. 
152.36     Subd. 4.  [ENTITLEMENT; PRIORITY.] A person who is an 
153.1   eligible member for the entire 12 months before the 
153.2   determination date is eligible for a full excess asset amount 
153.3   payment under subdivision 2.  A person who is an eligible member 
153.4   for less than 12 months before the determination date is 
153.5   eligible for a prorated excess asset amount payment.  If an 
153.6   eligible member dies after the determination date and before the 
153.7   excess asset amount payment commences, the association must pay 
153.8   the eligible member's excess asset amount payment to the 
153.9   eligible member's surviving spouse, if no surviving spouse, to 
153.10  the member's estate. 
153.11     Subd. 5.  [PAYMENT METHOD.] The excess asset amount 
153.12  payments determined under this section commence on June 1 
153.13  following the determination date.  These amounts may be paid as 
153.14  a lump sum, disbursed to the eligible members in 12 equal 
153.15  monthly installments, or any other manner which the board shall 
153.16  determine. 
153.17     Subd. 6.  [NO GUARANTEE OF ANNUAL RESIDUAL INVESTMENT 
153.18  PAYMENT.] No provision of this act may be interpreted or relied 
153.19  upon by any member of the association to guarantee or entitle a 
153.20  member to a net excess asset amount payment relating to any year 
153.21  in which there is no net total excess asset amount. 
153.22     Sec. 3.  [423B.19] [CITY OF MINNEAPOLIS; NORMAL COST 
153.23  CONTRIBUTION ADJUSTMENT.] 
153.24     Notwithstanding section 69.77, 356.215, 356.216, or any 
153.25  other law to the contrary, the required city contributions 
153.26  toward the association's normal cost, as determined by the 
153.27  actuary, are reduced below that otherwise payable by the full 
153.28  amount of active member contributions required by law to be 
153.29  directed to the association's health insurance escrow account 
153.30  rather than to the special fund. 
153.31     Sec. 4.  [423B.20] [SUSPENSION OF NORMAL COST 
153.32  CONTRIBUTIONS.] 
153.33     Notwithstanding the provisions of section 69.77 or any 
153.34  other law to the contrary, if a total excess asset amount 
153.35  exists, as defined in section 423B.01, subdivision 19, the city 
153.36  is not required to make a contribution to the fund for the 
154.1   normal cost of active members. 
154.2      Sec. 5.  [423B.21] [CHANGE IN AMORTIZATION PERIOD.] 
154.3      Subdivision 1.  [AMORTIZATION TREATMENT.] Notwithstanding 
154.4   section 69.77, subdivision 2b; 356.215; 356.216; or any other 
154.5   law to the contrary, if the actuarial report for the association 
154.6   indicates an unfunded actuarial accrued liability after the fund 
154.7   has first achieved 100 percent funding, the unfunded obligation 
154.8   is to be amortized on a level dollar basis by December 31 of the 
154.9   year occurring 15 years later.  If subsequent actuarial 
154.10  valuations determine a net actuarial experience loss incurred 
154.11  during the year which ended as of the day before the most recent 
154.12  actuarial valuation date, any unfunded liability due to that 
154.13  loss is to be amortized on a level dollar basis by December 31 
154.14  of the year occurring 15 years later. 
154.15     Subd. 2.  [LIMITATION.] Notwithstanding subdivision 1, the 
154.16  amortization period may not exceed the average life expectancy 
154.17  of the remaining members. 
154.18     Sec. 6.  [MINNEAPOLIS FIRE RELIEF ASSOCIATION; SURVIVOR 
154.19  BENEFIT PAYMENT.] 
154.20     Subdivision 1.  [SURVIVING SPOUSE BENEFIT ELIGIBILITY.] (a) 
154.21  Notwithstanding Laws 1997, chapter 233, article 4, section 12, 
154.22  or other law to the contrary, an eligible individual specified 
154.23  in paragraph (b) is authorized to receive the benefit specified 
154.24  in subdivision 2. 
154.25     (b) An eligible individual is an individual born on May 27, 
154.26  1927, who married a Minneapolis fire relief association retiree 
154.27  on January 16, 1993, and who is a surviving spouse due to the 
154.28  death of that retired firefighter on October 2, 1997. 
154.29     Subd. 2.  [BENEFIT.] (a) An eligible individual under 
154.30  subdivision 1, paragraph (b), is entitled to a surviving spouse 
154.31  benefit computed under Laws 1997, chapter 233, article 4, 
154.32  section 12, clause (f). 
154.33     (b) Benefits payable as a result of the benefit authorized 
154.34  in paragraph (a) commence on the first of the month following 
154.35  the effective date of this section. 
154.36     Sec. 7.  [DEFINITIONS.] 
155.1      Subdivision 1.  [DEFINITIONS.] Unless the context clearly 
155.2   indicates otherwise, the following terms have the meaning given 
155.3   in this section. 
155.4      Subd. 2.  [ACTIVE MEMBER PERCENTAGE.] The "active member 
155.5   percentage" is the total number of units accrued by active 
155.6   members of the association divided by the sum of the total 
155.7   number of units to which eligible members are entitled and 
155.8   active members of the association have accrued. 
155.9      Subd. 3.  [ASSOCIATION.] "Association" means the 
155.10  Minneapolis firefighter's relief association. 
155.11     Subd. 4.  [CITY.] "City" means the city of Minneapolis. 
155.12     Subd. 5.  [ELIGIBLE MEMBER.] An "eligible member" is a 
155.13  person who receives a service, survivor, or disability pension 
155.14  payable from the special fund of the association. 
155.15     Subd. 6.  [FUND.] "Fund" means the association's special 
155.16  423B.01 fund. 
155.17     Subd. 7.  [NET EXCESS ASSET AMOUNT PAYMENT.] "Net excess 
155.18  asset amount payment" means the payment of an additional post 
155.19  retirement payment under section 3 to an eligible member on June 
155.20  1, following the determination date in the given year. 
155.21     Subd. 8.  [NET TOTAL EXCESS ASSET AMOUNT.] "Net total 
155.22  excess asset amount" is the total excess asset amount stated in 
155.23  dollars and multiplied by the quantity one minus the active 
155.24  member percentage. 
155.25     Subd. 9.  [TOTAL EXCESS ASSET AMOUNT.] (a) "Total excess 
155.26  asset amount" means the difference if positive, expressed in 
155.27  dollars, between the fund's market value of assets after any 
155.28  deductions required by Laws 1989, chapter 319, article 19, 
155.29  section 7, subdivision 3, as amended, and 110 percent of the 
155.30  actuarial accrued liabilities based on the actuarial valuation 
155.31  indicated in paragraph (b). 
155.32     (b) The total excess asset amount in paragraph (a) exists 
155.33  if the actuarial liability funding ratio, according to the most 
155.34  recent annual actuarial valuation for the fund prepared in 
155.35  accordance with Minnesota Statutes, sections 69.77, 356.215, and 
155.36  356.216, with adjustments required by Laws 1989, chapter 319, 
156.1   article 19, section 7, subdivision 3, as amended, equals or 
156.2   exceeds 110 percent. 
156.3      Sec. 8.  [DETERMINATION OF NET TOTAL EXCESS ASSET AMOUNT.] 
156.4      The board of the association shall determine by May 1 of 
156.5   each year whether the fund has a total excess asset amount for 
156.6   that year.  If a total excess asset amount exists for the given 
156.7   year, the net total excess asset amount shall be determined.  
156.8   The total excess asset amount and net total excess asset amount 
156.9   shall be reported to the chief administrative officer of the 
156.10  association, to the mayor and governing body of the city, the 
156.11  state auditor, the commissioner of finance, and the executive 
156.12  director of the legislative commission on pensions and 
156.13  retirement.  The portion of the net excess asset amount which is 
156.14  distributed under section 9 must not be considered as income to 
156.15  or assets of the fund for actuarial valuations of the fund for 
156.16  that year under Minnesota Statutes, sections 69.77, 356.215, and 
156.17  356.216, and this act, except to offset the amount distributed.  
156.18     Sec. 9.  [AMOUNT OF NET EXCESS ASSET AMOUNT PAYMENT.] 
156.19     Subdivision 1.  [TOTAL AVAILABLE FOR PAYMENT.] Twenty 
156.20  percent of the net total excess asset amount determined under 
156.21  section 8 is available for net excess asset amount payments 
156.22  under subdivision 2. 
156.23     Subd. 2.  [NET EXCESS ASSET AMOUNT PAYMENTS.] Except as 
156.24  limited under subdivision 3, the net excess asset amount payment 
156.25  to an eligible member is equal to the amount determined under 
156.26  subdivision 1 multiplied by the units applicable to the eligible 
156.27  member and divided by the total units of all eligible members. 
156.28     Subd. 3.  [ENTITLEMENT; PRIORITY.] A person who is an 
156.29  eligible member for the entire 12 months before the 
156.30  determination date is eligible for a full net excess asset 
156.31  amount payment under subdivision 2.  A person who is an eligible 
156.32  member for less than 12 months before the determination date is 
156.33  eligible for a prorated net excess asset amount payment.  If an 
156.34  eligible member dies after the determination date and before the 
156.35  excess asset amount payment commences, the association must pay 
156.36  that eligible member's net excess asset amount payment to the 
157.1   eligible member's estate. 
157.2      Subd. 4.  [PAYMENT METHOD.] The net excess asset amount 
157.3   payments determined under subdivisions 2 and 3 commence on June 
157.4   1 following the determination date.  These amounts may be paid 
157.5   as a lump sum, disbursed to the eligible members in 12 equal 
157.6   monthly installments, or any other manner which the board shall 
157.7   determine. 
157.8      Sec. 10.  [CITY NORMAL COST CONTRIBUTION ADJUSTMENT.] 
157.9      Notwithstanding Minnesota Statutes, sections 69.77, 
157.10  356.215, 356.216, or other law to the contrary, the required 
157.11  city contributions toward the association's normal cost, as 
157.12  determined by the actuary, are reduced below that otherwise 
157.13  payable by the full amount of active member contributions 
157.14  required by law to be directed to the association's health 
157.15  insurance escrow account rather than to the special fund. 
157.16     Sec. 11.  [SUSPENSION OF NORMAL COST CONTRIBUTIONS.] 
157.17     Notwithstanding the provisions of Minnesota Statutes, 
157.18  section 69.77, or any other law to the contrary, if a total 
157.19  excess asset amount exists, as defined in section 7, subdivision 
157.20  9, the city is not required to make a contribution to the fund 
157.21  for the normal cost of active members. 
157.22     Sec. 12.  [NO GUARANTEE OF ANNUAL RESIDUAL INVESTMENT 
157.23  PAYMENT.] 
157.24     No provision of this act may be interpreted or relied upon 
157.25  by any member of the association to guarantee or entitle a 
157.26  member to a net excess asset amount payment relating to any year 
157.27  in which there is no net total excess asset amount. 
157.28     Sec. 13.  [CHANGE IN AMORTIZATION PERIOD.] 
157.29     Subdivision 1.  [AMORTIZATION TREATMENT.] Notwithstanding 
157.30  Minnesota Statutes, section 69.77, subdivision 2b; 356.215; 
157.31  356.216; or any other law to the contrary, if the actuarial 
157.32  report for the Minneapolis firefighters relief association 
157.33  indicates an unfunded actuarial accrued liability, the unfunded 
157.34  obligation is to be amortized on a level dollar basis by 
157.35  December 31 of the year occurring 15 years later.  If subsequent 
157.36  actuarial valuations determine a net actuarial experience loss 
158.1   incurred during the year which ended as of the day before the 
158.2   most recent actuarial valuation date, any unfunded liability due 
158.3   to that loss is to be amortized on a level dollar basis by 
158.4   December 31 of the year occurring 15 years later. 
158.5      Subd. 2.  [LIMITATION.] Notwithstanding subdivision 1, the 
158.6   amortization period may not exceed the average life expectancy 
158.7   of the remaining members. 
158.8      Sec. 14.  [EFFECTIVE DATE.] 
158.9      (a) Sections 1 to 5 are effective on the day after the date 
158.10  on which the Minneapolis city council and the chief clerical 
158.11  officer of the city of Minneapolis complete, in a timely manner, 
158.12  their compliance with Minnesota Statutes, section 645.021, 
158.13  subdivisions 2 and 3. 
158.14     (b) Section 6 is effective on the day after the date on 
158.15  which the Minneapolis city council and the chief clerical 
158.16  officer of the city of Minneapolis compete, in a timely manner, 
158.17  their compliance with Minnesota Statutes, section 645.021, 
158.18  subdivisions 2 and 3.  Section 5, if approved, applies 
158.19  retroactively to contributions beginning after July 1, 1990. 
158.20     (c) Sections 7 to 13 are effective on the day after the 
158.21  date on which the Minneapolis city council and the chief 
158.22  clerical officer of the city of Minneapolis compete, in a timely 
158.23  manner, their compliance with Minnesota Statutes, section 
158.24  645.021, subdivisions 2 and 3.  Section 5, if approved, applies 
158.25  retroactively to contributions beginning after July 1, 1990. 
158.26                             ARTICLE 18
158.27                       JUDGES RETIREMENT PLAN
158.28                           MODIFICATIONS
158.29     Section 1.  Minnesota Statutes 1998, section 352D.02, 
158.30  subdivision 1, is amended to read: 
158.31     Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
158.32  paragraph (c), clauses (2), (3), (4), and (6) to (15), if they 
158.33  are in the unclassified service of the state or metropolitan 
158.34  council and are eligible for coverage under the general state 
158.35  employees retirement plan under chapter 352, are participants in 
158.36  the unclassified program under this chapter unless the employee 
159.1   gives notice to the executive director of the Minnesota state 
159.2   retirement system within one year following the commencement of 
159.3   employment in the unclassified service that the employee desires 
159.4   coverage under the general state employees retirement plan.  For 
159.5   the purposes of this chapter, an employee who does not file 
159.6   notice with the executive director is deemed to have exercised 
159.7   the option to participate in the unclassified plan. 
159.8      (b) Persons referenced in paragraph (c), clauses (1) and 
159.9   (5), are participants in the unclassified program under this 
159.10  chapter unless the person is eligible to elect different 
159.11  coverage under section 3A.07 or 352C.011 and, after July 1, 
159.12  1998, elects retirement coverage by the applicable alternative 
159.13  retirement plan.  Persons referenced in paragraph (c), clause 
159.14  (16), are participants in the unclassified program under this 
159.15  chapter for judicial employment in excess of the service credit 
159.16  limit in section 490.121, subdivision 22. 
159.17     (c) Enumerated employees and referenced persons are: 
159.18     (1) the governor, the lieutenant governor, the secretary of 
159.19  state, the state auditor, the state treasurer, and the attorney 
159.20  general; 
159.21     (2) an employee in the office of the governor, lieutenant 
159.22  governor, secretary of state, state auditor, state treasurer, 
159.23  attorney general; 
159.24     (3) an employee of the state board of investment; 
159.25     (4) the head of a department, division, or agency created 
159.26  by statute in the unclassified service, an acting department 
159.27  head subsequently appointed to the position, or an employee 
159.28  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
159.29     (5) a member of the legislature; 
159.30     (6) a permanent, full-time unclassified employee of the 
159.31  legislature or a commission or agency of the legislature or a 
159.32  temporary legislative employee having shares in the supplemental 
159.33  retirement fund as a result of former employment covered by this 
159.34  chapter, whether or not eligible for coverage under the 
159.35  Minnesota state retirement system; 
159.36     (7) a person who is employed in a position established 
160.1   under section 43A.08, subdivision 1, clause (3), or in a 
160.2   position authorized under a statute creating or establishing a 
160.3   department or agency of the state, which is at the deputy or 
160.4   assistant head of department or agency or director level; 
160.5      (8) the regional administrator, or executive director of 
160.6   the metropolitan council, general counsel, division directors, 
160.7   operations managers, and other positions as designated by the 
160.8   council, all of which may not exceed 27 positions at the council 
160.9   and the chair, provided that upon initial designation of all 
160.10  positions provided for in this clause, no further designations 
160.11  or redesignations may be made without approval of the board of 
160.12  directors of the Minnesota state retirement system; 
160.13     (9) the executive director, associate executive director, 
160.14  and not to exceed nine positions of the higher education 
160.15  services office in the unclassified service, as designated by 
160.16  the higher education services office before January 1, 1992, or 
160.17  subsequently redesignated with the approval of the board of 
160.18  directors of the Minnesota state retirement system, unless the 
160.19  person has elected coverage by the individual retirement account 
160.20  plan under chapter 354B; 
160.21     (10) the clerk of the appellate courts appointed under 
160.22  article VI, section 2, of the Constitution of the state of 
160.23  Minnesota; 
160.24     (11) the chief executive officers of correctional 
160.25  facilities operated by the department of corrections and of 
160.26  hospitals and nursing homes operated by the department of human 
160.27  services; 
160.28     (12) an employee whose principal employment is at the state 
160.29  ceremonial house; 
160.30     (13) an employee of the Minnesota educational computing 
160.31  corporation; 
160.32     (14) an employee of the world trade center board; and 
160.33     (15) an employee of the state lottery board who is covered 
160.34  by the managerial plan established under section 43A.18, 
160.35  subdivision 3; and 
160.36     (16) a judge who has exceeded the service credit limit in 
161.1   section 490.121, subdivision 22. 
161.2      Sec. 2.  Minnesota Statutes 1998, section 352D.04, 
161.3   subdivision 2, is amended to read: 
161.4      Subd. 2.  [CONTRIBUTION RATES.] (a) The money used to 
161.5   purchase shares under this section is the employee and employer 
161.6   contributions provided in this subdivision. 
161.7      (b) The employee contribution is an amount equal to the 
161.8   employee contribution specified in section 352.04, subdivision 2.
161.9      (c) The employer contribution is an amount equal to six 
161.10  percent of salary.  
161.11     (d) These contributions must be made in the manner provided 
161.12  in section 352.04, subdivisions 4, 5, and 6.  
161.13     (e) For members of the legislature, the contributions under 
161.14  this subdivision also must be made on per diem payments received 
161.15  during a regular or special legislative session, but may not be 
161.16  made on per diem payments received outside of a regular or 
161.17  special legislative session, on the additional compensation 
161.18  attributable to a leadership position under section 3.099, 
161.19  subdivision 3, living expense payments under section 3.101, or 
161.20  special session living expense payments under section 3.103. 
161.21     (f) For a judge who is a member of the unclassified plan 
161.22  under section 352D.02, subdivision 1, paragraph (c), clause 
161.23  (16), the employee contribution rate is eight percent of salary, 
161.24  and there is no employer contribution. 
161.25     Sec. 3.  Minnesota Statutes 1998, section 356.30, 
161.26  subdivision 1, is amended to read: 
161.27     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
161.28  Notwithstanding any provisions to the contrary of the laws 
161.29  governing the funds enumerated in subdivision 3, a person who 
161.30  has met the qualifications of clause (2) may elect to receive a 
161.31  retirement annuity from each fund in which the person has at 
161.32  least six months allowable service, based on the allowable 
161.33  service in each fund, subject to the provisions of clause (3).  
161.34     (2) A person may receive upon retirement a retirement 
161.35  annuity from each fund in which the person has at least six 
161.36  months allowable service, and augmentation of a deferred annuity 
162.1   calculated under the laws governing each public pension plan or 
162.2   fund named in subdivision 3, from the date the person terminated 
162.3   all public service if: 
162.4      (a) the person has allowable service totaling an amount 
162.5   that allows the person to receive an annuity in any two or more 
162.6   of the enumerated funds; and 
162.7      (b) the person has not begun to receive an annuity from any 
162.8   enumerated fund or the person has made application for benefits 
162.9   from all funds and the effective dates of the retirement annuity 
162.10  with each fund under which the person chooses to receive an 
162.11  annuity are within a one-year period.  
162.12     (3) The retirement annuity from each fund must be based 
162.13  upon the allowable service in each fund, except that:  
162.14     (a) The laws governing annuities must be the law in effect 
162.15  on the date of termination from the last period of public 
162.16  service under a covered fund with which the person earned a 
162.17  minimum of one-half year of allowable service credit during that 
162.18  employment.  
162.19     (b) The "average salary" on which the annuity from each 
162.20  covered fund in which the employee has credit in a formula plan 
162.21  shall be based on the employee's highest five successive years 
162.22  of covered salary during the entire service in covered funds.  
162.23     (c) The formula percentages to be used by each fund must be 
162.24  those percentages prescribed by each fund's formula as continued 
162.25  for the respective years of allowable service from one fund to 
162.26  the next, recognizing all previous allowable service with the 
162.27  other covered funds.  
162.28     (d) Allowable service in all the funds must be combined in 
162.29  determining eligibility for and the application of each fund's 
162.30  provisions in respect to actuarial reduction in the annuity 
162.31  amount for retirement prior to normal retirement.  
162.32     (e) The annuity amount payable for any allowable service 
162.33  under a nonformula plan of a covered fund must not be affected 
162.34  but such service and covered salary must be used in the above 
162.35  calculation.  
162.36     (f) This section shall not apply to any person whose final 
163.1   termination from the last public service under a covered fund is 
163.2   prior to May 1, 1975.  
163.3      (g) For the purpose of computing annuities under this 
163.4   section the formula percentages used by any covered fund, except 
163.5   the public employees police and fire fund, the judges' 
163.6   retirement fund, and the state patrol retirement fund, must not 
163.7   exceed the percent specified in section 356.19, subdivision 4, 
163.8   per year of service for any year of service or fraction 
163.9   thereof.  The formula percentage used by the public employees 
163.10  police and fire fund and the state patrol retirement fund must 
163.11  not exceed the percent specified in section 356.19, subdivision 
163.12  6, per year of service for any year of service or fraction 
163.13  thereof.  The formula percentage used by the judges' retirement 
163.14  fund must not exceed the percent specified in section 356.19, 
163.15  subdivision 8, per year of service for any year of service or 
163.16  fraction thereof.  The formula percentage used by the 
163.17  legislators retirement plan and the elective state officers 
163.18  retirement must not exceed 2.5 percent, but this limit does not 
163.19  apply to the adjustment provided under section 3A.02, 
163.20  subdivision 1, paragraph (c), or 352C.031, paragraph (b). 
163.21     (h) Any period of time for which a person has credit in 
163.22  more than one of the covered funds must be used only once for 
163.23  the purpose of determining total allowable service.  
163.24     (i) If the period of duplicated service credit is more than 
163.25  six months, or the person has credit for more than six months 
163.26  with each of the funds, each fund shall apply its formula to a 
163.27  prorated service credit for the period of duplicated service 
163.28  based on a fraction of the salary on which deductions were paid 
163.29  to that fund for the period divided by the total salary on which 
163.30  deductions were paid to all funds for the period.  
163.31     (j) If the period of duplicated service credit is less than 
163.32  six months, or when added to other service credit with that fund 
163.33  is less than six months, the service credit must be ignored and 
163.34  a refund of contributions made to the person in accord with that 
163.35  fund's refund provisions.  
163.36     Sec. 4.  Minnesota Statutes 1998, section 490.121, 
164.1   subdivision 4, is amended to read: 
164.2      Subd. 4.  [ALLOWABLE SERVICE.] "Allowable service" means a 
164.3   whole year, or any fraction thereof, subject to the service 
164.4   credit limit in subdivision 22, served as a judge at any time, 
164.5   or served as a referee in probate for all referees in probate 
164.6   who were in office prior to January 1, 1974. 
164.7      Sec. 5.  Minnesota Statutes 1998, section 490.121, is 
164.8   amended by adding a subdivision to read: 
164.9      Subd. 22.  [SERVICE CREDIT LIMIT.] "Service credit limit" 
164.10  means the greater of:  (1) 24 years of allowable service under 
164.11  chapter 490; or (2) for judges with allowable service rendered 
164.12  prior to July 1, 1980, the number of years of allowable service 
164.13  under chapter 490, which, when multiplied by the percentage 
164.14  listed in section 356.19, subdivision 7 or 8, whichever is 
164.15  applicable to each year of service, equals 76.8. 
164.16     Sec. 6.  Minnesota Statutes 1998, section 490.123, 
164.17  subdivision 1a, is amended to read: 
164.18     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
164.19  covered by the federal old age, survivors, disability, and 
164.20  health insurance program whose service does not exceed the 
164.21  service credit limit in section 490.121, subdivision 22, shall 
164.22  contribute to the fund from each salary payment a sum equal to 
164.23  8.00 percent of salary.  
164.24     (b) A judge not so covered whose service does not exceed 
164.25  the service credit limit in section 490.121, subdivision 22, 
164.26  shall contribute to the fund from each salary payment a sum 
164.27  equal to 8.15 percent of salary. 
164.28     (c) The contribution under this subdivision is payable by 
164.29  salary deduction. 
164.30     Sec. 7.  Minnesota Statutes 1998, section 490.123, 
164.31  subdivision 1b, is amended to read: 
164.32     Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
164.33  contribution rate to the fund on behalf of a judge is 20.5 
164.34  percent of salary and continues after a judge exceeds the 
164.35  service credit limit in section 490.121, subdivision 22. 
164.36     The employer contribution must be paid by the state court 
165.1   administrator and is payable at the same time as member 
165.2   contributions under subdivision 1a or employee contributions to 
165.3   the unclassified plan in chapter 352D for judges whose service 
165.4   exceeds the limit in section 490.121, subdivision 22, are 
165.5   remitted. 
165.6      Sec. 8.  Minnesota Statutes 1998, section 490.124, 
165.7   subdivision 1, is amended to read: 
165.8      Subdivision 1.  [BASIC RETIREMENT ANNUITY.] Except as 
165.9   qualified hereinafter from and after mandatory retirement date, 
165.10  normal retirement date, early retirement date, or one year from 
165.11  the disability retirement date, as the case may be, a retirement 
165.12  annuity shall be payable to a retiring judge from the judges' 
165.13  retirement fund in an amount equal to:  (1) the percent 
165.14  specified in section 356.19, subdivision 7, multiplied by the 
165.15  judge's final average compensation multiplied by the number of 
165.16  years and fractions of years of allowable service rendered prior 
165.17  to July 1, 1980; plus (2) the percent specified in section 
165.18  356.19, subdivision 8, multiplied by the judge's final average 
165.19  compensation multiplied by the number of years and fractions of 
165.20  years of allowable service rendered after June 30, 1980; 
165.21  provided that the annuity must not exceed 70 percent of the 
165.22  judge's annual salary for the 12 months immediately preceding 
165.23  retirement.  Service that exceeds the service credit limit in 
165.24  section 490.121, subdivision 22, must be excluded in calculating 
165.25  the retirement annuity, but compensation earned during this 
165.26  service must be used in determining a judge's final average 
165.27  compensation and calculating the retirement annuity.  
165.28     Sec. 9.  [PRIOR SERVICE.] 
165.29     This section applies to a person who is a judge on July 1, 
165.30  2000, and whose service under Minnesota Statutes, chapter 490, 
165.31  on that date exceeds the service credit limit in Minnesota 
165.32  Statutes, section 490.121, subdivision 22.  A judge to whom this 
165.33  section applies may elect to have money transferred from the 
165.34  judges' plan to the judge's account in the unclassified 
165.35  employees plan in Minnesota Statutes, chapter 352D.  The amount 
165.36  to be transferred is eight percent of the salary the judge 
166.1   earned after reaching the service credit limit defined in 
166.2   Minnesota Statutes, section 490.121, subdivision 22.  A judge 
166.3   electing this transfer forfeits all service credit under 
166.4   Minnesota Statutes, chapter 490, that exceeds the limit in 
166.5   Minnesota Statutes, section 490.121, subdivision 22.  An 
166.6   election under this section must be made before retirement as a 
166.7   judge, and within 120 days of the effective date of this 
166.8   section.  The election must be made on a form and in a manner 
166.9   specified by the executive director of the Minnesota state 
166.10  retirement system. 
166.11     Sec. 10.  [EFFECTIVE DATE.] 
166.12     Sections 1 to 9 are effective on July 1, 2000. 
166.13                             ARTICLE 19
166.14                 VARIOUS INDIVIDUAL AND SMALL GROUP  
166.15                         PENSION PROVISIONS
166.16     Section 1.  [MSRS-GENERAL; LATE DISABILITY BENEFIT 
166.17  APPLICATION AUTHORIZED.] 
166.18     (a) Notwithstanding any provision of Minnesota Statutes, 
166.19  section 352.113, subdivision 4, to the contrary, a person 
166.20  described in paragraph (b) is authorized to apply for a 
166.21  disability benefit from the general state employees retirement 
166.22  plan of the Minnesota state retirement system under Minnesota 
166.23  Statutes, section 352.113. 
166.24     (b) An eligible person is a person who: 
166.25     (1) was born on October 3, 1952; 
166.26     (2) was employed by the department of economic security 
166.27  from August 1978 to December 1994; 
166.28     (3) is disabled within the meaning of Minnesota Statutes, 
166.29  section 352.01, subdivision 17; 
166.30     (4) began receiving social security disability insurance 
166.31  benefits in January 1995; and 
166.32     (5) began part-time employment and continues in that 
166.33  employment by the Minnesota state council on disability in 
166.34  January 1998. 
166.35     (c) The eligible person under paragraph (b) must provide, 
166.36  in conjunction with the disability application, any relevant 
167.1   evidence that the executive director of the Minnesota state 
167.2   retirement system requires about the existence of a total and 
167.3   permanent disability as defined in Minnesota Statutes, section 
167.4   352.01, subdivision 17, and about the date on which the 
167.5   disability occurred and its relationship to the termination of 
167.6   active service in December 1994. 
167.7      (d) If the eligible person files a disability benefit 
167.8   application and if the eligible person provides sufficient 
167.9   evidence of disability and the occurrence of the disability 
167.10  under paragraph (c), the disability benefit becomes payable for 
167.11  the first month next following the application and applicable 
167.12  evidence.  The disability benefit must be calculated under the 
167.13  laws in effect at the time that the eligible person terminated 
167.14  active service in December 1994.  The disability benefit must 
167.15  include any applicable deferred annuities augmentation under 
167.16  Minnesota Statutes, section 352.72, subdivision 2. 
167.17     (e) Nothing in this section may be deemed to exempt the 
167.18  eligible person from the partial reemployment of a disibilitant 
167.19  provision, Minnesota Statutes, section 352.113, subdivision 7. 
167.20     Sec. 2.  [LEGISLATIVE EMPLOYEE CONTRIBUTION TRANSFER.] 
167.21     (a) Any employee of the senate, the house of 
167.22  representatives, or of a joint legislative agency or commission 
167.23  who transferred from the department of revenue or the department 
167.24  of finance prior to the effective date of this section who was 
167.25  covered by the general state employees retirement plan of the 
167.26  Minnesota state retirement system during the period of 
167.27  employment with the department of revenue or the department of 
167.28  finance and who upon transfer participates in the unclassified 
167.29  plan is entitled to have the person's employee and applicable 
167.30  employer contributions for the period of employment with the 
167.31  department of revenue transferred to the supplemental investment 
167.32  fund in accordance with Minnesota Statutes, section 352D.02, 
167.33  subdivision 4, and section 352D.03. 
167.34     (b) If any employee described in paragraph (a) had general 
167.35  state employees retirement plan contributions transferred before 
167.36  the effective date of this section and the transferred amount 
168.1   was less than the amount would be under paragraph (a) if the 
168.2   transfer was made subsequent to the effective date of this 
168.3   section, the difference must be transferred as provided in 
168.4   paragraph (a). 
168.5      (c) This transfer authority expires on July 1, 2002. 
168.6      Sec. 3.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SERVICE 
168.7   CREDIT PURCHASE FOR UNCREDITED HENNEPIN COUNTY EMPLOYMENT.] 
168.8      (a) An eligible person described in paragraph (b) is 
168.9   entitled to obtain one year of allowable service credit from the 
168.10  general employees retirement plan of the public employees 
168.11  retirement association. 
168.12     (b) An eligible person is a person who: 
168.13     (1) was born April 12, 1936; 
168.14     (2) retired from the teachers retirement association on 
168.15  July 1, 1997; 
168.16     (3) is currently a recipient of a retirement annuity from 
168.17  the teachers retirement association and a retirement annuity 
168.18  from the general state employees retirement plan of the 
168.19  Minnesota state retirement system; and 
168.20     (4) was employed during the period September 1966 through 
168.21  September 1967 by Hennepin county as a parole officer, when 
168.22  member contributions for retirement coverage were deducted, but 
168.23  for which no allowable service credit in the general employees 
168.24  retirement plan of the public employees retirement association 
168.25  was recorded. 
168.26     (c) Notwithstanding any provision of Minnesota Statutes, 
168.27  sections 353.29, subdivision 7, and 356.30, to the contrary, an 
168.28  eligible person may file an application for a retirement annuity 
168.29  from the general employee retirement plan of the public 
168.30  employees retirement association retroactive to July 1, 1997, 
168.31  with benefits paid retroactive to that date, and may have the 
168.32  annuity calculated as a combined service annuity. 
168.33     (d) The allowable service credit must be granted by the 
168.34  public employees retirement association upon the filing of a 
168.35  valid retirement application by the eligible person. 
168.36     (e) Within 30 days of the receipt of that application by 
169.1   the public employees retirement association and notification by 
169.2   the public employees retirement association to the county 
169.3   administrator, Hennepin county may pay one-half of the prior 
169.4   service credit purchase payment amount calculated under 
169.5   Minnesota Statutes, section 356.55.  If Hennepin county does not 
169.6   pay the required amount in a timely fashion, the executive 
169.7   director of the public employees retirement association shall 
169.8   notify the commissioner of finance of that fact and the 
169.9   commissioner shall deduct from any state aid or state 
169.10  appropriation payable to Hennepin county that amount, plus 
169.11  interest on that amount of 1.5 percent per month for each month 
169.12  or portion of a month from the filing of the retirement 
169.13  application under paragraph (d) to the date of deduction. 
169.14     (f) An amount equal to one-half of the prior service credit 
169.15  purchase payment amount calculated under Minnesota Statutes, 
169.16  section 356.55, must be charged against the public employees 
169.17  retirement association as an administrative expense. 
169.18     (g) This allowable service credit provision expires on 
169.19  January 1, 2001. 
169.20     Sec. 4.  [PAYMENT OF OMITTED SALARY DEDUCTIONS.] 
169.21     Subdivision 1.  [APPLICATION.] A person who was born on 
169.22  October 23, 1943, was employed by Dakota county as a part-time 
169.23  maintenance employee on October 16, 1985, and first had public 
169.24  employees retirement association member contributions deducted 
169.25  as of September 15, 1986, is entitled to purchase eight months 
169.26  of service credit from the public employees retirement 
169.27  association. 
169.28     Subd. 2.  [PAYMENT.] The purchase payment amount for the 
169.29  service credit purchase authorized in subdivision 1 is governed 
169.30  by Minnesota Statutes, section 356.55.  Notwithstanding any 
169.31  provision of Minnesota Statutes, section 356.55, subdivision 5, 
169.32  to the contrary, the eligible person must pay, on or before June 
169.33  1, 2001, an amount equal to the employee contribution rate 
169.34  applied to the person's actual salary rate in effect between 
169.35  January 17, 1986, and September 15, 1986, plus annual compound 
169.36  interest at the rate of 8.5 percent from the date that the 
170.1   employer contributions should have been paid and the date of 
170.2   actual payment.  Dakota county shall pay the balance of the 
170.3   required purchase payment amount within 30 days of the payment 
170.4   by the eligible person.  If Dakota county fails to pay its 
170.5   required amount, the executive director of the public employees 
170.6   retirement association may notify the commissioner of finance of 
170.7   that fact and the commissioner of finance may order that the 
170.8   required amount be deducted from any subsequent state payment to 
170.9   Dakota county and transmitted to the public employees retirement 
170.10  association. 
170.11     Subd. 3.  [APPLICATION; DOCUMENTATION.] A person described 
170.12  in subdivision 1 must apply with the executive director of the 
170.13  public employees retirement association to make the purchase.  
170.14  The application must be in writing and must include all 
170.15  necessary documentation of the applicability of this section and 
170.16  any other relevant information that the executive director may 
170.17  require. 
170.18     Subd. 4.  [LIMITATION.] Authority under this section 
170.19  expires on July 1, 2001. 
170.20     Sec. 5.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; REDUCED 
170.21  SERVICE CREDIT REQUIREMENT FOR DISABILITY BENEFIT APPLICATION.] 
170.22     (a) An eligible person described in paragraph (b) is 
170.23  entitled to apply for a disability benefit from the general 
170.24  employee retirement plan of the public employees retirement 
170.25  association with 14 months of service credit subsequent to the 
170.26  person's last termination of membership, notwithstanding any 
170.27  provision to the contrary of Minnesota Statutes, section 353.33, 
170.28  subdivision 1.  
170.29     (b) An eligible person is a person who: 
170.30     (1) was born on May 30, 1945; 
170.31     (2) began public employment with Todd county in November 
170.32  1978; 
170.33     (3) first terminated public employment in August 1982; 
170.34     (4) resumed public employment with Morrison county in 
170.35  October 1987; 
170.36     (5) subsequently terminated public employment with Meeker 
171.1   county in November 1997; 
171.2      (6) resumed public employment with Todd county in August 
171.3   1998; and 
171.4      (7) subsequently terminated public employment October 8, 
171.5   1999. 
171.6      Sec. 6.  [TEACHERS RETIREMENT ASSOCIATION; REFUND OF 
171.7   CERTAIN INTEREST CHARGES.] 
171.8      (a) Upon filing a written demand for the interest refund, a 
171.9   person described in paragraph (b) is entitled to receive a 
171.10  refund of interest specified in paragraph (c) for the period 
171.11  during which the teachers retirement association was negligent 
171.12  in providing accurate information to the eligible person or was 
171.13  negligent in making timely reports to other Minnesota public 
171.14  pension plans in which the eligible person has service credit. 
171.15     (b) An eligible person is a person who: 
171.16     (1) retired from the teachers retirement association 
171.17  effective September 1, 1999; 
171.18     (2) repaid a previously taken refund to the teachers 
171.19  retirement association on August 23, 1999, restoring 10.979 
171.20  years of allowable service credit; 
171.21     (3) began the retirement application and refund repayment 
171.22  process in February 1999, and was first able to file retirement 
171.23  forms with the teachers retirement association office on August 
171.24  27, 1999; and 
171.25     (4) was charged interest on the repayment of refund for the 
171.26  period during which the teachers retirement association failed 
171.27  to provide requested information and failed to contact the 
171.28  public employees retirement association and the St. Paul 
171.29  teachers retirement fund association. 
171.30     (c) The refund interest rate is 0.708 percent per month, 
171.31  compounded monthly, on the refund repayment amount that would 
171.32  have been payable on April 15, 1999, applied to the period April 
171.33  15, 1999, to August 23, 1999, and 8.5 percent per year, 
171.34  compounded annually, on that initially determined amount from 
171.35  August 23, 1999, until the interest repayment is made. 
171.36     (d) The interest refund is payable on the first day of the 
172.1   month next following the date on which the eligible person files 
172.2   the written demand under paragraph (a). 
172.3      Sec. 7.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
172.4   PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
172.5      (a) Notwithstanding any provision of law to the contrary, a 
172.6   person described in paragraph (b) is authorized to purchase 
172.7   allowable service credit from the basic program of the 
172.8   Minneapolis teachers retirement fund association for the period 
172.9   described in paragraph (c) by making the payment specified in 
172.10  paragraph (d). 
172.11     (b) An eligible person for purposes of paragraph (a) is a 
172.12  person who: 
172.13     (1) was born on October 1, 1942; 
172.14     (2) is currently employed by special school district No. 1 
172.15  (Minneapolis) and is currently a member of the Minneapolis 
172.16  teachers retirement fund association; 
172.17     (3) was initially hired by special school district No. 1 
172.18  (Minneapolis) on November 13, 1967, and taught at Sanford Junior 
172.19  High School until June 1968; 
172.20     (4) was reemployed by special school district No. 1 
172.21  (Minneapolis) as an adult basic education English and social 
172.22  studies teacher on May 25, 1970, and continued to teach in that 
172.23  program until December 17, 1984; and 
172.24     (5) as a result of binding arbitration of an employment 
172.25  dispute, was employed by special school district No. 1 
172.26  (Minneapolis) as an English teacher at Franklin Junior High 
172.27  School on December 17, 1984. 
172.28     (c) The service credit purchase period is any period 
172.29  between May 25, 1970, to December 17, 1984, that has not 
172.30  previously been credited by the Minneapolis teachers retirement 
172.31  fund association. 
172.32     (d) To purchase the allowable service credit, the eligible 
172.33  person must pay to the Minneapolis teachers retirement fund 
172.34  association the prior service credit purchase payment calculated 
172.35  under Minnesota Statutes, section 356.55.  
172.36     (e) The eligible person must provide all relevant 
173.1   documentation of the applicability of the requirements set forth 
173.2   in paragraph (b) and any other applicable information that the 
173.3   executive director of the Minneapolis teachers retirement fund 
173.4   association may request.  
173.5      (f) This prior service credit purchase authority expires on 
173.6   July 1, 2001, or on the date of the eligible person's 
173.7   termination of active service with special school district No. 1 
173.8   (Minneapolis), whichever is earlier. 
173.9      Sec. 8.  [MTRFA; PRIOR SERVICE CREDIT PURCHASE FOR 
173.10  INDEPENDENT CONTRACT UNCREDITED TEACHING SERVICE PERIOD.] 
173.11     (a) An eligible person described in paragraph (b) is 
173.12  authorized to purchase allowable service credit from the 
173.13  Minneapolis teachers retirement fund association for the period 
173.14  of teaching employment specified in paragraph (c) by making the 
173.15  payment required under Minnesota Statutes, section 356.55, by 
173.16  the last date authorized for receiving payment under that 
173.17  section, or the eligible person's effective date of retirement, 
173.18  whichever is earlier. 
173.19     (b) An eligible person is a person who: 
173.20     (1) was born on May 22, 1939; 
173.21     (2) was employed by special school district No. 1 
173.22  (Minneapolis) and covered as an active member by the Minneapolis 
173.23  teachers retirement fund association from July 27, 1962, to June 
173.24  11, 1967; 
173.25     (3) was retained by special school district No. 1 
173.26  (Minneapolis) at an hourly wage rate as a teacher in the adult 
173.27  basic education program from April 23, 1980, to September 28, 
173.28  1992. 
173.29     (c) The period for allowable service credit purchase is 
173.30  from April 23, 1980, to September 28, 1992.  
173.31     (d) An eligible person under paragraph (b) must provide any 
173.32  relevant documentation related to eligibility to make this 
173.33  service credit purchase which is required by the executive 
173.34  director of the Minneapolis teachers retirement fund association.
173.35     (e) Allowable service credit for the purchase periods must 
173.36  be granted by the Minneapolis teachers retirement fund 
174.1   association to the account of the eligible person upon receipt 
174.2   of the prior service credit purchase payment amount. 
174.3      (f) A service credit purchase is not authorized for any 
174.4   portion of the April 23, 1980, to September 28, 1992, period for 
174.5   which the eligible individual signed an independent contract 
174.6   which waives pension coverage by the Minneapolis teachers 
174.7   retirement fund association for the period covered by the 
174.8   contract, or for any period for which administrators for special 
174.9   school district No. 1 or the Minneapolis teachers retirement 
174.10  fund association determine that the individual was serving as an 
174.11  independent contractor. 
174.12     Sec. 9.  [MERF; PRIOR SERVICE CREDIT PURCHASE FOR TEMPORARY 
174.13  EMPLOYMENT PERIOD.] 
174.14     (a) An eligible person described in paragraph (b) is 
174.15  entitled to purchase allowable service credit from the 
174.16  Minneapolis employees retirement fund for the period of 
174.17  temporary employment specified in paragraph (c) by making the 
174.18  payment required under Minnesota Statutes, section 356.55. 
174.19     (b) An eligible person is a person who: 
174.20     (1) was born on August 15, 1951; 
174.21     (2) was hired by the city of Minneapolis as a maintenance 
174.22  worker/truck driver on June 1, 1976, and was covered by the 
174.23  Minneapolis employees retirement fund for that employment; 
174.24     (3) is currently employed by the city of Minneapolis and 
174.25  covered by the Minneapolis employees retirement association. 
174.26     (c) The period for allowable service credit purchase is a 
174.27  period during 1975 during which the eligible person was employed 
174.28  by the city of Minneapolis as a temporary employee. 
174.29     (d) An eligible person must provide any relevant 
174.30  documentation related to eligibility to make this service credit 
174.31  purchase required by the executive director of the Minneapolis 
174.32  employees retirement fund. 
174.33     (e) Allowable service credit for the purchase periods must 
174.34  be granted by the Minneapolis employees retirement fund to the 
174.35  account of the eligible person upon receipt of the prior service 
174.36  credit purchase payment amount.  To receive the service credit, 
175.1   the service credit purchase must be received by the Minneapolis 
175.2   employees retirement fund by October 1, 2001, or prior to 
175.3   retirement, whichever is earlier. 
175.4      Sec. 10.  [MERF; PRIOR SERVICE CREDIT PURCHASE FOR 
175.5   TEMPORARY EMPLOYMENT PERIOD.] 
175.6      (a) An eligible person described in paragraph (b) is 
175.7   entitled to purchase allowable service credit from the 
175.8   Minneapolis employees retirement fund for the period or periods 
175.9   of temporary employment specified in paragraph (c) by making the 
175.10  payment required under Minnesota Statutes, section 356.55. 
175.11     (b) An eligible person is a person who: 
175.12     (1) was born on December 17, 1953; 
175.13     (2) was hired by the city of Minneapolis as a full-time 
175.14  maintenance worker on February 2, 1974, and was covered by the 
175.15  Minneapolis employees retirement fund for that employment; and 
175.16     (3) is currently employed by the city of Minneapolis, 
175.17  covered by the Minneapolis employees retirement association. 
175.18     (c) The periods for allowable service credit purchase are 
175.19  periods during 1974 and 1975 during which the eligible person 
175.20  was employed by the city of Minneapolis as a temporary employee. 
175.21     (d) An eligible person must provide any relevant 
175.22  documentation related to eligibility to make this service credit 
175.23  purchase required by the executive director of the Minneapolis 
175.24  employees retirement fund. 
175.25     (e) Allowable service credit for the purchase periods must 
175.26  be granted by the Minneapolis employees retirement fund to the 
175.27  account of the eligible person upon receipt of the prior service 
175.28  credit purchase payment amount.  To receive the service credit, 
175.29  the service credit purchase must be received by the Minneapolis 
175.30  employees retirement fund by October 1, 2001, or prior to 
175.31  retirement, whichever is earlier. 
175.32     Sec. 11.  [EFFECTIVE DATE.] 
175.33     (a) Sections 1, 2, and 4 to 10 are effective on the day 
175.34  following final enactment. 
175.35     (b) Section 3 is effective on the day after the date on 
175.36  which the Dakota county board of commissioners and the chief 
176.1   clerical officer of Dakota county complete, in a timely manner, 
176.2   their compliance with Minnesota Statutes, section 645.021, 
176.3   subdivisions 2 and 3. 
176.4      (c) Section 1 expires, if not utilized, on December 31, 
176.5   2000.