3rd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; various pension plans; 1.3 providing special benefit coverage for privatized 1.4 employees of the Luverne public hospital, the Waconia 1.5 Ridgeview medical center, and the Glencoe area health 1.6 center; creating a local government correctional 1.7 service retirement plan; modifying actuarial cost 1.8 provision; providing a special property tax levy for 1.9 certain county retirement contributions; providing an 1.10 ad hoc postretirement adjustment to Eveleth police and 1.11 fire trust fund benefit recipients; establishing an 1.12 additional postretirement adjustment for the Fairmont 1.13 police relief association; extending survivor benefit 1.14 provisions to include certain Fairmont police relief 1.15 association survivors; providing a special ad hoc 1.16 postretirement adjustment to certain retired St. Cloud 1.17 police officers; merging the pre-March 1, 1999, local 1.18 police and paid fire consolidation accounts into the 1.19 public employees police and fire plan; extending the 1.20 minimum volunteer firefighter fire state aid amount to 1.21 post-1993 relief association members; modifying 1.22 governance provisions for the Minneapolis fire 1.23 department relief association and the Minneapolis 1.24 police relief association; providing a targeted early 1.25 retirement incentive program for certain employees of 1.26 the metropolitan council; permitting the purchase of 1.27 service credit by various public employees; mandating 1.28 certain school district service credit purchase 1.29 payments; making miscellaneous changes in the 1.30 legislators retirement plan, the Minnesota state 1.31 colleges and university system individual retirement 1.32 account plan, the Minnesota state retirement system, 1.33 and the teachers retirement association; including 1.34 supplemental needs trusts as recipients of optional 1.35 annuity forms; eliminating the service credit maximum 1.36 for monthly benefit volunteer fire relief 1.37 associations; mandating school district repayment of 1.38 certain omitted deduction interest charges; expanding 1.39 the membership of the state correctional employees 1.40 retirement plan to include certain Minnesota extended 1.41 treatment options program employees; downsizing the 1.42 early retirement reduction rates for various public 1.43 safety plans; grandparenting public employee police 1.44 and fire plan coverage for certain Rice county 1.45 correctional employees; requiring Rice county to repay 1.46 certain police state aid amounts; providing employer 2.1 penalties for pension plan membership certification 2.2 failures or errors; providing special retirement 2.3 coverage for certain state fire marshal employees; 2.4 authorizing the purchase of credit for certain periods 2.5 of prior military service, out-of-state public 2.6 teaching service, maternity leaves, maternity 2.7 breaks-in-employment, parochial or private school 2.8 teaching service, Peace Corps service or VISTA 2.9 service; clarifying various Minneapolis employees 2.10 retirement plan survivor benefit provisions; 2.11 increasing the number of vendors for certain 2.12 tax-sheltered annuities for educational employees; 2.13 modifying various benefit provisions for certain 2.14 Minnesota state colleges and universities employees; 2.15 reducing the membership of the legislative commission 2.16 on pensions and retirement; requiring a study; 2.17 authorizing the Minnesota state retirement system, the 2.18 public employees retirement association, and the 2.19 teachers retirement association to purchase or 2.20 construct an administrative building; authorizing the 2.21 issuance of certain revenue bonds; amending Minnesota 2.22 Statutes 1998, sections 3.85, subdivisions 3, 11, and 2.23 12; 3A.02, subdivision 1b; 43A.27, subdivision 3; 2.24 69.021, subdivisions 7 and 10; 69.031, subdivision 5; 2.25 122A.46, subdivision 2; 136F.48; 273.1385, subdivision 2.26 2; 352.03, subdivision 1; 352.90; 352.91, by adding a 2.27 subdivision; 352.92, subdivisions 1 and 2; 352.93, 2.28 subdivision 2a; 352B.08, subdivision 2a; 353.01, 2.29 subdivisions 2b, 10, and 16; 353.03, subdivision 4; 2.30 353.27, subdivisions 2 and 3; 353.64, subdivision 1; 2.31 353.65, subdivisions 2 and 3; 353.651, subdivision 4; 2.32 353A.083, by adding a subdivision; 353A.09, 2.33 subdivisions 4, 5, and by adding a subdivision; 2.34 354.05, subdivision 40; 354.06, subdivisions 1 and 7; 2.35 354.10, subdivision 4; 354.445; 354.66, subdivisions 2.36 1b, 1c, and 3; 354B.24, subdivision 3; 354B.25, 2.37 subdivisions 2, 3, and 5; 354C.11; 354C.12, 2.38 subdivision 4; 356.19, by adding subdivisions; 356.20, 2.39 subdivision 2; 356.215, subdivision 4g; 356.24, 2.40 subdivision 1; 356.30, subdivision 3; 356.302, 2.41 subdivision 7; and 356.303, subdivision 4; 356.55, 2.42 subdivisions 1 and 6; 422A.06, subdivisions 3 and 6; 2.43 422A.101, subdivision 4; 422A.18, subdivision 2; 2.44 422A.22, subdivisions 4 and 5; and 422A.23; 423A.02, 2.45 subdivisions 1b, 2, and by adding subdivisions; and 2.46 423B.07; Laws 1977, chapter 61, section 6, as amended; 2.47 proposing coding for new law in Minnesota Statutes, 2.48 chapters 352; 353; 354; 354A; 354B; 356; and 422A; 2.49 proposing coding for new law as Minnesota Statutes, 2.50 chapters 353E; and 353F; repealing Minnesota Statutes 2.51 1998, sections 353.33, subdivision 3a; 353.65, 2.52 subdivision 3a; 422A.16, subdivision 3a; and 424A.02, 2.53 subdivision 5; Laws 1998, chapter 390, article 1, 2.54 section 1. 2.55 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.56 ARTICLE 1 2.57 FUTURE PERA PENSION BENEFITS FOR 2.58 PRIVATIZED PUBLIC HOSPITAL EMPLOYEES 2.59 Section 1. [353F.01] [PURPOSE AND INTENT.] 2.60 The purpose of this chapter is to ensure, to the extent 2.61 possible, that persons employed at public medical facilities who 2.62 are privatized and consequently are excluded from retirement 3.1 coverage by the public employees retirement association will be 3.2 entitled to receive future retirement benefits under the general 3.3 employees retirement plan of the public employees retirement 3.4 association commensurate with the prior contributions made by 3.5 them or made on their behalf upon the privatization of the 3.6 medical facility. 3.7 Sec. 2. [353F.02] [DEFINITIONS.] 3.8 Subdivision 1. [GENERALLY.] As used in this chapter, 3.9 unless the context clearly indicates otherwise, each of the 3.10 terms in the following subdivisions has the meaning indicated. 3.11 Subd. 2. [ALLOWABLE SERVICE.] "Allowable service" has the 3.12 meaning provided in section 353.01, subdivision 16 of the 3.13 edition of Minnesota Statutes published in the year before the 3.14 year in which the privatization occurred. 3.15 Subd. 3. [EFFECTIVE DATE.] "Effective date" means the date 3.16 that the operation of the medical facility is assumed by another 3.17 employer or the date that the medical facility is purchased by 3.18 another employer and active membership in the public employees 3.19 retirement association consequently terminates. 3.20 Subd. 4. [MEDICAL FACILITY.] "Medical facility" means: 3.21 (1) the Glencoe area health center; 3.22 (2) the Luverne public hospital; and 3.23 (3) the Waconia-Ridgeview medical center. 3.24 Subd. 5. [TERMINATED MEDICAL FACILITY 3.25 EMPLOYEE.] "Terminated medical facility employee" means a person 3.26 who: 3.27 (1) was employed on the day before the effective date by 3.28 the medical facility; or 3.29 (2) terminated employment with the medical facility on the 3.30 day before the effective date; and 3.31 (3) was a participant in the general employees retirement 3.32 plan of the public employees retirement association at the time 3.33 of termination of employment with the medical facility. 3.34 Subd. 6. [YEARS OF ALLOWABLE SERVICE.] "Years of allowable 3.35 service" means the total number of years of allowable service 3.36 under section 353.01, subdivision 18 of the edition of Minnesota 4.1 Statutes published in the year before the year in which the 4.2 privatization occurred. 4.3 Sec. 3. [353F.03] [VESTING RULE FOR CERTAIN EMPLOYEES.] 4.4 Notwithstanding any provision of Minnesota Statutes, 4.5 chapter 353, to the contrary, a terminated medical facility 4.6 employee is eligible to receive a retirement annuity under 4.7 section 353.29 of the edition of Minnesota Statutes published in 4.8 the year before the year in which the privatization occurred, 4.9 without regard to the requirement for three years of allowable 4.10 service. 4.11 Sec. 4. [353F.04] [AUGMENTATION INTEREST RATE FOR 4.12 TERMINATED MEDICAL FACILITY EMPLOYEES.] 4.13 The deferred annuity of a terminated medical facility 4.14 employee is subject to augmentation in accordance with section 4.15 353.71, subdivision 2, of the edition of Minnesota Statutes 4.16 published in the year in which the privatization occurred, 4.17 except that the rate of interest for this purpose is 5.5 percent 4.18 compounded annually until January 1 following the year in which 4.19 such person attains age 55. From that date to the effective 4.20 date of retirement, the rate is 7.5 percent. These increased 4.21 augmentation rates are no longer applicable for any time after 4.22 the terminated medical facility employee becomes covered again 4.23 by a retirement fund enumerated in section 356.30, subdivision 4.24 3. These increased deferred annuity augmentation rates do not 4.25 apply to a terminated transferred medical facility employee who 4.26 begins receipt of a retirement annuity while employed by the 4.27 employer which assumed operations of the medical facility or 4.28 purchased the medical facility. 4.29 Sec. 5. [353F.05] [AUTHORIZATION FOR ADDITIONAL ALLOWABLE 4.30 SERVICE FOR CERTAIN EARLY RETIREMENT PURPOSES.] 4.31 For the purpose of determining eligibility for early 4.32 retirement benefits provided under section 353.30, subdivision 4.33 1a, of the edition of Minnesota Statutes published in the year 4.34 before the year in which the privatization occurred, and 4.35 notwithstanding any provision of chapter 353, to the contrary, 4.36 the years of allowable service for a terminated medical facility 5.1 employee who transfers employment on the effective date and does 5.2 not apply for a refund of contributions under section 353.34, 5.3 subdivision 1, of the edition of Minnesota Statutes published in 5.4 the year before the year in which the privatization occurred, or 5.5 any similar provision, includes service with the successor 5.6 employer to the medical facility following the effective date. 5.7 The successor employer shall provide any reports that the 5.8 executive director of the public employees retirement 5.9 association may reasonably request to permit calculation of 5.10 benefits. 5.11 To be eligible for early retirement benefits under this 5.12 section, the individual must separate from service with the 5.13 successor employer to the medical facility. The terminated 5.14 eligible individual, or an individual authorized to act on 5.15 behalf of that individual, may apply for an annuity following 5.16 application procedures under section 353.29, subdivision 4. 5.17 Sec. 6. [353F.06] [APPLICATION OF REEMPLOYED ANNUITANT 5.18 EARNINGS LIMITATIONS.] 5.19 The reemployed annuitant earnings limitations of section 5.20 353.37 apply to any service by a terminated medical facility 5.21 employee as an employee of the successor employer to the medical 5.22 facility. 5.23 Sec. 7. [353F.07] [EFFECT ON REFUND.] 5.24 Notwithstanding any provision of Minnesota Statutes, 5.25 chapter 353, to the contrary, terminated medical facility 5.26 employees may receive a refund of employee accumulated 5.27 contributions plus interest at the rate of six percent per year 5.28 compounded annually in accordance with section 353.34, 5.29 subdivision 2, of the edition of Minnesota Statutes published in 5.30 the year in which the privatization occurred, at any time after 5.31 the transfer of employment to the successor employer to the 5.32 medical facility. If a terminated medical facility employee has 5.33 received a refund from a pension plan enumerated in section 5.34 356.30, subdivision 3, the person may not repay that refund 5.35 unless the person again becomes a member of one of those 5.36 enumerated plans and complies with section 356.30, subdivision 2. 6.1 Sec. 8. [353F.08] [COUNSELING SERVICES.] 6.2 The medical facility and the executive director of the 6.3 public employees retirement association shall provide terminated 6.4 medical facility employees with counseling on their benefits 6.5 available under the general employees retirement plan of the 6.6 public employees retirement association during the 90 days 6.7 following privatization. 6.8 Sec. 9. [REPEALER.] 6.9 Laws 1998, chapter 390, article 1, section 1, is repealed. 6.10 Sec. 10. [EFFECTIVE DATE.] 6.11 Sections 1 to 9 are effective on the day following final 6.12 enactment. 6.13 ARTICLE 2 6.14 ESTABLISHMENT OF LOCAL CORRECTIONAL 6.15 EMPLOYEES RETIREMENT PLAN 6.16 Section 1. Minnesota Statutes 1998, section 3.85, 6.17 subdivision 11, is amended to read: 6.18 Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 6.19 commission shall contract with an established actuarial 6.20 consulting firm to conduct annual actuarial valuations for the 6.21 retirement plans named in paragraph (b). The contract must 6.22 include provisions for performing cost analyses of proposals for 6.23 changes in benefit and funding policies. 6.24 (b) The contract for actuarial valuation must include the 6.25 following retirement plans: 6.26 (1) the teachers retirement plan, teachers retirement 6.27 association; 6.28 (2) the general state employees retirement plan, Minnesota 6.29 state retirement system; 6.30 (3) the correctional employees retirement plan, Minnesota 6.31 state retirement system; 6.32 (4) the state patrol retirement plan, Minnesota state 6.33 retirement system; 6.34 (5) the judges retirement plan, Minnesota state retirement 6.35 system; 6.36 (6) the Minneapolis employees retirement plan, Minneapolis 7.1 employees retirement fund; 7.2 (7) the public employees retirement plan, public employees 7.3 retirement association; 7.4 (8) the public employees police and fire plan, public 7.5 employees retirement association; 7.6 (9) the Duluth teachers retirement plan, Duluth teachers 7.7 retirement fund association; 7.8 (10) the Minneapolis teachers retirement plan, Minneapolis 7.9 teachers retirement fund association; 7.10 (11) the St. Paul teachers retirement plan, St. Paul 7.11 teachers retirement fund association; 7.12 (12) the legislators retirement plan, Minnesota state 7.13 retirement system;and7.14 (13) the elective state officers retirement plan, Minnesota 7.15 state retirement system; and 7.16 (14) local government correctional service retirement plan, 7.17 public employees retirement association. 7.18 (c) The contract must specify completion of annual 7.19 actuarial valuation calculations on a fiscal year basis with 7.20 their contents as specified in section 356.215, and the 7.21 standards for actuarial work adopted by the commission. 7.22 The contract must specify completion of annual experience 7.23 data collection and processing and a quadrennial published 7.24 experience study for the plans listed in paragraph (b), clauses 7.25 (1), (2), and (7), as provided for in the standards for 7.26 actuarial work adopted by the commission. The experience data 7.27 collection, processing, and analysis must evaluate the following: 7.28 (1) individual salary progression; 7.29 (2) rate of return on investments based on current asset 7.30 value; 7.31 (3) payroll growth; 7.32 (4) mortality; 7.33 (5) retirement age; 7.34 (6) withdrawal; and 7.35 (7) disablement. 7.36 (d) The actuary retained by the commission shall annually 8.1 prepare a report to the legislature, including the commentary on 8.2 the actuarial valuation calculations for the plans named in 8.3 paragraph (b) and summarizing the results of the actuarial 8.4 valuation calculations. The commission-retained actuary shall 8.5 include with the report the actuary's recommendations concerning 8.6 the appropriateness of the support rates to achieve proper 8.7 funding of the retirement funds by the required funding dates. 8.8 The commission-retained actuary shall, as part of the 8.9 quadrennial published experience study, include recommendations 8.10 to the legislature on the appropriateness of the actuarial 8.11 valuation assumptions required for evaluation in the study. 8.12 (e) If the actuarial gain and loss analysis in the 8.13 actuarial valuation calculations indicates a persistent pattern 8.14 of sizable gains or losses, as directed by the commission, the 8.15 actuary retained by the commission shall prepare a special 8.16 experience study for a plan listed in paragraph (b), clause (3), 8.17 (4), (5), (6), (8), (9), (10), (11), (12),or(13), or (14), in 8.18 the manner provided for in the standards for actuarial work 8.19 adopted by the commission. 8.20 (f) The term of the contract between the commission and the 8.21 actuary retained by the commission is four years. The contract 8.22 is subject to competitive bidding procedures as specified by the 8.23 commission. 8.24 Sec. 2. Minnesota Statutes 1998, section 3.85, subdivision 8.25 12, is amended to read: 8.26 Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The 8.27 commission shall assess each retirement plan specified in 8.28 subdivision 11, paragraph (b), its appropriate portion of the 8.29 compensation paid to the actuary retained by the commission for 8.30 the actuarial valuation calculations, quadrennial projection 8.31 valuations, and quadrennial experience studies. The total 8.32 assessment is 100 percent of the amount of contract compensation 8.33 for the actuarial consulting firm retained by the commission for 8.34 actuarial valuation calculations, including the public employees 8.35 police and fire plan consolidation accounts of the public 8.36 employees retirement association, annual experience data 9.1 collection and processing, quadrennial projection valuations, 9.2 and quadrennial experience studies. 9.3 The portion of the total assessment payable by each 9.4 retirement system or pension plan must be determined as follows: 9.5 (1) Each pension plan specified in subdivision 11, 9.6 paragraph (b), clauses (1) to(13)(14), must pay the following 9.7 indexed amount based on its total active, deferred, inactive, 9.8 and benefit recipient membership: 9.9 up to 2,000 members, inclusive $2.55 per member 9.10 2,001 through 10,000 members $1.13 per member 9.11 over 10,000 members $0.11 per member 9.12 The amount specified is applicable for the assessment of 9.13 the July 1, 1991, to June 30, 1992, fiscal year actuarial 9.14 compensation amounts. For the July 1, 1992, to June 30, 1993, 9.15 fiscal year and subsequent fiscal year actuarial compensation 9.16 amounts, the amount specified must be increased at the same 9.17 percentage increase rate as the implicit price deflator for 9.18 state and local government purchases of goods and services for 9.19 the 12-month period ending with the first quarter of the 9.20 calendar year following the completion date for the actuarial 9.21 valuation calculations, as published by the federal Department 9.22 of Commerce, and rounded upward to the nearest full cent. 9.23 (2) The total per-member portion of the allocation must be 9.24 determined, and that total per-member amount must be subtracted 9.25 from the total amount for allocation. Of the remainder dollar 9.26 amount, the following per-retirement system and per-pension plan 9.27 charges must be determined and the charges must be paid by the 9.28 system or plan: 9.29 (i) 37.87 percent is the total additional per-retirement 9.30 system charge, of which one-seventh must be paid by each 9.31 retirement system specified in subdivision 11, paragraph (b), 9.32 clauses (1), (2), (6), (7), (9), (10), and (11). 9.33 (ii) 62.13 percent is the total additional per-pension plan 9.34 charge, of whichone-thirteenthone-fourteenth must be paid by 9.35 each pension plan specified in subdivision 11, paragraph (b), 9.36 clauses (1) to(13)(14). 10.1 (b) The assessment must be made following the completion of 10.2 the actuarial valuation calculations and the experience 10.3 analysis. The amount of the assessment is appropriated from the 10.4 retirement fund applicable to the retirement plan. Receipts 10.5 from assessments must be deposited in the state treasury and 10.6 credited to the general fund. 10.7 Sec. 3. Minnesota Statutes 1998, section 273.1385, 10.8 subdivision 2, is amended to read: 10.9 Subd. 2. [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID 10.10 REDUCTIONS.] (a) The aid amount received by any jurisdiction in 10.11 fiscal year 2000 or any year thereafter may not exceed the 10.12 amount it received in fiscal year 1999. The commissioner may, 10.13 from time to time, request the most recent fiscal year payroll 10.14 information by jurisdiction to be certified by the executive 10.15 director of the public employees retirement association. For 10.16 any jurisdiction where newly certified public employees 10.17 retirement association general plan payroll is significantly 10.18 lower than the fiscal 1997 amount, as determined by the 10.19 commissioner, the commissioner shall recalculate the aid amount 10.20 based on the most recent fiscal year payroll information, 10.21 certify the recalculated aid amount for the next distribution 10.22 year, and permanently reduce the aid amount to that jurisdiction. 10.23 (b) Aid to a jurisdiction must not be reduced under this 10.24 section due to a transfer of an employee from the general plan 10.25 of the public employees retirement association to the local 10.26 government correctional service plan administered by the public 10.27 employees retirement association. The executive director of the 10.28 public employees retirement association must provide the 10.29 commissioner of revenue with any information requested by the 10.30 commissioner to administer this paragraph. 10.31 Sec. 4. Minnesota Statutes 1998, section 353.27, 10.32 subdivision 2, is amended to read: 10.33 Subd. 2. [EMPLOYEE CONTRIBUTION.] (a)Except as provided10.34in paragraph (b),The employee contributionshall beis an 10.35 amount (1) for a "basic member" equal to 8.75 percent of total 10.36 salary; and (2) for a "coordinated member" equal to 4.75 percent 11.1 of total salary. 11.2 (b)For local government correctional service employees, as11.3defined in section 353.33, subdivision 3a, the employee11.4contribution is an amount equal to 4.96 percent of total salary.11.5(c)These contributions must be made by deduction from 11.6 salary in the manner provided in subdivision 4. Where any 11.7 portion of a member's salary is paid from other than public 11.8 funds, such member's employee contribution must be based on the 11.9 total salary received from all sources. 11.10 Sec. 5. Minnesota Statutes 1998, section 353.27, 11.11 subdivision 3, is amended to read: 11.12 Subd. 3. [EMPLOYER CONTRIBUTION.] (a)Except as provided11.13in paragraph (b),The employer contributionshall beis an 11.14 amount equal to the employee contribution under subdivision 2. 11.15 (b)On behalf of local government correctional service11.16employees, as defined in section 353.33, subdivision 3a, the11.17employer contribution is an amount equal to 5.06 percent of11.18total salary.11.19(c)This contributionshallmust be made from funds 11.20 available to the employing subdivision by the means and in the 11.21 manner provided in section 353.28. 11.22 Sec. 6. [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE 11.23 RETIREMENT PLAN.] 11.24 Subdivision 1. [PLAN ADMINISTRATION; FUND.] (a) The public 11.25 employees local government correctional service retirement plan 11.26 is established as a separate plan to be administered by the 11.27 board of trustees and the executive director of the public 11.28 employees retirement association. 11.29 (b) The board of trustees and the executive director shall 11.30 undertake their activities in a manner consistent with chapter 11.31 356A. 11.32 (c) The association shall maintain a special fund to be 11.33 known as the public employees local government correctional 11.34 service retirement fund. 11.35 Subd. 2. [REVENUE SOURCES.] Member contributions under 11.36 section 353E.03, subdivision 1, and employer contributions under 12.1 section 353E.03, subdivision 2, and other amounts authorized by 12.2 law, including any investment return on invested fund assets, 12.3 must be deposited in the fund. 12.4 Subd. 3. [INVESTMENT.] (a) The public employees local 12.5 government correctional service retirement fund participates in 12.6 the Minnesota postretirement investment fund. 12.7 (b) The amounts provided in section 353.271 must be 12.8 deposited in that fund. 12.9 (c) The balance of any assets of the fund must be deposited 12.10 in the Minnesota combined investment fund as provided in section 12.11 11A.14, if applicable, or otherwise invested under section 12.12 11A.23. 12.13 Subd. 4. [COLLECTION OF CONTRIBUTIONS.] The collection of 12.14 member and employer contributions is governed by section 353.27, 12.15 subdivisions 4, 7, 7b, 10, 11, and 12. 12.16 Subd. 5. [FUND DISBURSEMENT RESTRICTED.] (a) The public 12.17 employees local government correctional service retirement fund 12.18 and its share of participation in the Minnesota postretirement 12.19 investment fund may be disbursed only for the purposes provided 12.20 for in this chapter. 12.21 (b) The proportional share of the necessary and reasonable 12.22 administrative expenses of the association and any benefits 12.23 provided in this chapter, other than benefits payable from the 12.24 Minnesota postretirement investment fund, must be paid from the 12.25 public employees local government correctional service 12.26 retirement fund. Retirement annuities, disability benefits, 12.27 survivorship benefits, and any refunds of accumulated deductions 12.28 may be paid only from the correctional service retirement fund 12.29 after those needs have been certified by the executive director 12.30 and any applicable amounts withdrawn from the share of 12.31 participation in the Minnesota postretirement fund under section 12.32 11A.18. 12.33 (c) The amounts necessary to make the payments from the 12.34 public employees local government correctional service 12.35 retirement fund and its participation in the Minnesota 12.36 postretirement investment fund are annually appropriated from 13.1 those funds for those purposes. 13.2 Sec. 7. [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 13.3 A local government correctional service employee is a 13.4 person who: 13.5 (1) is employed in a county-administered jail or 13.6 correctional facility or in a regional correctional facility 13.7 administered by multiple counties; 13.8 (2) spends at least 95 percent of the employee's working 13.9 time in direct contact with persons confined in the jail or 13.10 facility, as certified in writing, in advance, by the employer 13.11 to the executive director of the association; and 13.12 (3) is a "public employee" as defined in section 353.01, 13.13 but is not a member of the public employees police and fire fund. 13.14 Sec. 8. [353E.03] [CORRECTIONAL SERVICE PLAN 13.15 CONTRIBUTIONS.] 13.16 Subdivision 1. [MEMBER CONTRIBUTIONS.] A local government 13.17 correctional service employee shall make an employee 13.18 contribution in an amount equal to 5.83 percent of salary. 13.19 Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer shall 13.20 contribute for a local government correctional service employee 13.21 an amount equal to 8.75 percent of salary. 13.22 Sec. 9. [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 13.23 ANNUITY.] 13.24 Subdivision 1. [ELIGIBILITY REQUIREMENTS.] After 13.25 termination of public employment, an employee covered under 13.26 section 353E.02 who has attained the age of at least 55 years 13.27 and has credit for not less than three years of coverage in the 13.28 local government correctional service plan is entitled, upon 13.29 application, to a normal retirement annuity. Instead of a 13.30 normal retirement annuity, a retiring employee may elect to 13.31 receive the optional annuity provided in section 353.30, 13.32 subdivision 3. 13.33 Subd. 2. [AVERAGE SALARY BASE.] In calculating the annuity 13.34 under subdivision 3, "average salary" means an amount equivalent 13.35 to the average of the highest salary earned as a local 13.36 government correctional employee upon which employee 14.1 contributions were paid for any five successive years of 14.2 allowable service. Average salary must be based on all 14.3 allowable service if this service is less than five years. 14.4 Subd. 3. [ANNUITY AMOUNT.] The average salary as defined 14.5 in subdivision 2, multiplied by the percent specified in section 14.6 356.19, subdivision 5a, for each year of allowable service, 14.7 determines the amount of the normal retirement annuity. If a 14.8 person has earned allowable service in the public employees 14.9 retirement association or the public employees police and fire 14.10 fund prior to participation under this chapter, the retirement 14.11 annuity representing such service must be computed in accordance 14.12 with the formula specified in sections 353.29 and 353.30 or 14.13 353.651, whichever applies. 14.14 Subd. 4. [EARLY RETIREMENT.] An employee covered under 14.15 section 353E.02 who has attained the age of at least 50 years 14.16 and has credit for not less than three years of coverage in the 14.17 local government correctional service plan is entitled, upon 14.18 application, to a reduced retirement annuity equal to the 14.19 annuity calculated under subdivision 3, reduced so that the 14.20 reduced annuity is the actuarial equivalent of the annuity that 14.21 would be payable if the employee deferred receipt of the annuity 14.22 from the day the annuity begins to accrue until age 55. 14.23 Subd. 5. [ACCRUAL AND DURATION.] The retirement annuity 14.24 under this section begins to accrue as provided in section 14.25 353.29, subdivision 7. The retirement annuity is payable for 14.26 the life of the recipient, or in accordance with the terms of 14.27 any optional annuity form selected by the retiring member. 14.28 Subd. 6. [MULTIPLE SERVICE LIMITATION.] A former employee 14.29 who has both public employees retirement plan and public 14.30 employees local government correctional retirement plan credited 14.31 service must, if qualified, receive a retirement annuity from 14.32 each retirement plan that takes into account both periods of 14.33 service and both covered salary amounts, but no period of 14.34 service may be used more than once in calculating the annuity. 14.35 Sec. 10. [353E.05] [AUGMENTATION IN CERTAIN CASES.] 14.36 Unless prior service has been transferred or unless a 15.1 combined service annuity under section 356.30 has been elected, 15.2 an employee who becomes a local government correctional employee 15.3 after being a member of the public employees retirement 15.4 association or the public employees police and fire fund is 15.5 covered under section 353.71, subdivision 2, with respect to 15.6 that prior service. An employee who becomes a member of the 15.7 public employees retirement association or the public employees 15.8 police and fire plan after being a local government correctional 15.9 employee is also covered under section 353.71, subdivision 2, 15.10 with respect to that prior service, unless calculated under 15.11 section 356.30. 15.12 Sec. 11. [353E.06] [DISABILITY BENEFITS.] 15.13 Subdivision 1. [DUTY DISABILITY QUALIFICATION 15.14 REQUIREMENTS.] A local government correctional employee who 15.15 becomes disabled and physically or mentally unfit to perform the 15.16 duties of the position as a direct result of an injury, 15.17 sickness, or other disability that is medically determinable, 15.18 that was incurred in or arose out of any act of duty, and that 15.19 renders the employee physically or mentally unable to perform 15.20 the employee's duties, is entitled to a disability benefit. The 15.21 disability benefit must be based on covered service under this 15.22 chapter only and is an amount equal to 47.5 percent of the 15.23 average salary defined in section 353E.04, subdivision 2, plus 15.24 an additional percent equal to that specified in section 356.19, 15.25 subdivision 5a, for each year of covered service under this 15.26 chapter in excess of 25 years. 15.27 Subd. 2. [NONDUTY DISABILITY QUALIFICATION 15.28 REQUIREMENTS.] A local government correctional employee who has 15.29 at least one year of covered service under this chapter and 15.30 becomes disabled and physically or mentally unfit to perform the 15.31 duties of the position because of sickness or injury that is 15.32 medically determinable and that occurs while not engaged in 15.33 covered employment, is entitled to a disability benefit based on 15.34 covered service under this chapter. The disability benefit must 15.35 be computed in the same manner as an annuity under section 15.36 353E.04, subdivision 3, and as though the employee had at least 16.1 ten years of covered correctional service. 16.2 Subd. 3. [OPTIONAL ANNUITY.] A disabled local government 16.3 correctional employee may elect the normal disability benefit or 16.4 an optional annuity as provided in section 353.30, subdivision 16.5 3. The election of an optional annuity must be made before the 16.6 commencement of payment of the disability benefit and is 16.7 effective on the date on which the disability benefit begins to 16.8 accrue as provided in section 353.33, subdivision 2. Upon 16.9 becoming effective, the optional annuity begins to accrue on the 16.10 same date as provided for the disability benefit. 16.11 Subd. 4. [DISABILITY BENEFIT APPLICATION.] A claim or 16.12 demand for a disability benefit must be initiated by written 16.13 application in the manner and form prescribed by the executive 16.14 director, filed in the office of the association, showing 16.15 compliance with the statutory conditions qualifying the 16.16 applicant for a disability benefit. A member or former member 16.17 who became disabled during a period of membership may file an 16.18 application for disability benefits within three years following 16.19 termination of local government correctional service, but not 16.20 after that time has elapsed. The disability benefit begins to 16.21 accrue the day following the commencement of disability, 90 days 16.22 preceding the filing of the application, or, if annual or sick 16.23 leave is paid for more than the 90-day period, from the date 16.24 salary ceased, whichever is latest. No payment may accrue 16.25 beyond the end of the month in which entitlement has 16.26 terminated. If the disabilitant dies before negotiating the 16.27 check for the month in which death occurs, payment must be made 16.28 to the optional annuitant or beneficiary. 16.29 Subd. 5. [DISABILITY BENEFIT TERMINATION.] The disability 16.30 benefit paid to a disabled local government correctional 16.31 employee terminates at the end of the month in which the 16.32 employee reaches age 65. If the disabled local government 16.33 correctional employee is still disabled when the employee 16.34 reaches age 65, the employee is deemed to be a retired employee 16.35 and, if the employee had elected an optional annuity under 16.36 subdivision 3, must receive an annuity in accordance with the 17.1 terms of the optional annuity previously elected. If the 17.2 employee had not elected an optional annuity under subdivision 17.3 3, the employee may elect either to receive a normal retirement 17.4 annuity computed in the manner provided in section 353E.04, 17.5 subdivision 3, or to receive an optional annuity as provided in 17.6 section 353.30, subdivision 3, based on the same length of 17.7 service as used in the calculation of the disability benefit. 17.8 Election of an optional annuity must be made within 90 days 17.9 before attaining the age of 65 years, or reaching the five-year 17.10 anniversary of the effective date of the disability benefit, 17.11 whichever is later. 17.12 Subd. 6. [RESUMPTION OF EMPLOYMENT.] If a disabled 17.13 employee resumes a gainful occupation from which earnings are 17.14 less than salary received at the date of disability or the 17.15 salary currently paid for similar positions, or should the 17.16 employee be entitled to receive workers' compensation benefits, 17.17 the disability benefit must be continued in an amount that, when 17.18 added to such earnings and workers' compensation benefits, does 17.19 not exceed the salary received at the date of disability or the 17.20 salary currently payable for the same employment position or an 17.21 employment position substantially similar to the one the person 17.22 held as of the date of the disability, whichever is greater. 17.23 Subd. 7. [COMBINED SERVICE DISABILITY BENEFIT.] If the 17.24 employee is entitled to receive a disability benefit as provided 17.25 in subdivision 1 or 2 and has credit for less covered 17.26 correctional service than the length of service upon which the 17.27 correctional disability benefit is based, and also has credit 17.28 for public employees retirement plan service, the employee is 17.29 entitled to a disability benefit or deferred retirement annuity 17.30 based on the regular plan service only for the service that, 17.31 when combined with the correctional service, exceeds the number 17.32 of years on which the correctional disability benefit is based. 17.33 The disabled employee who also has credit for regular plan 17.34 service must in all respects qualify under section 353.33 to be 17.35 entitled to receive a disability benefit based on the public 17.36 employees retirement plan service, except that the service may 18.1 be combined to satisfy length of service requirements. Any 18.2 deferred annuity to which the employee may be entitled based on 18.3 public employees retirement plan service must be augmented as 18.4 provided in section 353.71 while the employee is receiving a 18.5 disability benefit under this section. 18.6 Subd. 8. [CONTINUING BENEFIT ELIGIBILITY.] Continuing 18.7 eligibility for a disability benefit is subject to section 18.8 353.33, subdivision 6. 18.9 Sec. 12. [353E.07] [SURVIVOR BENEFITS.] 18.10 Subdivision 1. [MEMBER AT LEAST AGE 50.] If a member or 18.11 former member of the local government correctional service 18.12 retirement plan who has attained the age of at least 50 years 18.13 and has credit for not less than three years of allowable 18.14 service dies before the annuity or disability benefit has become 18.15 payable, notwithstanding any designation of beneficiary to the 18.16 contrary, the surviving spouse may elect to receive, in lieu of 18.17 a refund with interest provided in section 353.32, subdivision 18.18 1, a surviving spouse annuity equal to the 100 percent joint and 18.19 survivor annuity for which the member could have qualified had 18.20 the member terminated service on the date of death. 18.21 Subd. 2. [MEMBER NOT YET AGE 50.] If the member was under 18.22 age 50, dies, and had credit for not less than three years of 18.23 allowable service on the date of death but did not yet qualify 18.24 for retirement, the surviving spouse may elect to receive a 100 18.25 percent joint and survivor annuity based on the age of the 18.26 employee and the surviving spouse at the time of death. The 18.27 annuity is payable using the early retirement reduction under 18.28 section 353E.04, subdivision 4, to age 50 and one-half the early 18.29 retirement reduction from age 50 to the age payment begins. 18.30 Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 18.31 to a deferred annuity or surviving spouse benefit payable under 18.32 this subdivision. 18.33 Subd. 3. [ELECTION; ACCRUAL.] A surviving spouse election 18.34 under subdivisions 1 and 2 may be made at any time after the 18.35 date of death of the local government correctional service 18.36 employee. The surviving spouse benefit begins to accrue as of 19.1 the first of the next month following the date on which the 19.2 application for the benefit was filed. 19.3 Subd. 4. [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 19.4 lieu of the 100 percent optional annuity under subdivision 1, 19.5 the surviving spouse of a deceased local government correctional 19.6 service employee may elect to receive survivor coverage in a 19.7 term certain of ten, 15, or 20 years. The monthly term certain 19.8 annuity must be actuarially equivalent to the 100 percent 19.9 optional annuity under subdivision 1 and must be based on tables 19.10 approved by the actuary retained by the legislative commission 19.11 on pensions and retirement. The optional annuity ceases upon 19.12 the expiration of the term certain period. If a survivor elects 19.13 a term certain annuity and dies before the expiration of the 19.14 specified term certain period, the commuted value of the 19.15 remaining annuity payments must be paid in a lump sum to the 19.16 survivor's estate. 19.17 Subd. 5. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 19.18 no surviving spouse eligible for benefits under subdivisions 1, 19.19 2, and 4, a dependent child as defined in section 353.01, 19.20 subdivision 15a, is eligible for a dependent child survivor 19.21 benefit. Benefits to a dependent child must be paid from the 19.22 date of the employee's death to the date the dependent child 19.23 attains age 20 if the child is under age 15 on the date of 19.24 death. If the child is 15 years or older on the date of death, 19.25 the benefit is payable for five years. The payment to a 19.26 dependent child is an amount actuarially equivalent to the value 19.27 of a 100 percent joint and survivor optional annuity using the 19.28 age of the employee and age of the dependent child at the date 19.29 of death in lieu of the age of the surviving spouse. If there 19.30 is more than one dependent child, each dependent child shall 19.31 receive a proportionate share of the actuarial value of the 19.32 employee's account, with the amount of the benefit payable to 19.33 each child to be determined based on the portion of the total 19.34 eligibility period that each child is eligible. The process for 19.35 calculating the dependent child survivor benefit must be 19.36 approved by the actuary retained by the legislative commission 20.1 on pensions and retirement. 20.2 Subd. 6. [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 20.3 equal to any excess of the accumulated contributions that were 20.4 credited to the account of the deceased employee over and above 20.5 the total of the annuities paid and payable to the surviving 20.6 spouse or dependent children must be paid to the deceased 20.7 member's last designated beneficiary or, if none, to the legal 20.8 representative of the estate of the deceased member. 20.9 Subd. 7. [ELECTION THAT SECTION DOES NOT APPLY.] A member 20.10 may specify in writing that this section does not apply and that 20.11 payment must be made only to the designated beneficiary, as 20.12 otherwise provided by this chapter. 20.13 Sec. 13. [353E.08] [SCOPE AND APPLICATION.] 20.14 The general provisions of chapter 353 apply to the local 20.15 government correctional service retirement plan except where 20.16 otherwise specifically provided in sections 353E.01 to 353E.07. 20.17 Sec. 14. Minnesota Statutes 1998, section 356.19, is 20.18 amended by adding a subdivision to read: 20.19 Subd. 5a. [LOCAL GOVERNMENT CORRECTIONAL SERVICE 20.20 PLAN.] The applicable benefit accrual rate is 1.9 percent. 20.21 Sec. 15. Minnesota Statutes 1998, section 356.20, 20.22 subdivision 2, is amended to read: 20.23 Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section 20.24 applies to the following public pension plans: 20.25 (1) State employees retirement fund. 20.26 (2) Public employees retirement fund. 20.27 (3) Teachers retirement association. 20.28 (4) State patrol retirement fund. 20.29 (5) Minneapolis teachers retirement fund association. 20.30 (6) St. Paul teachers retirement fund association. 20.31 (7) Duluth teachers retirement fund association. 20.32 (8) Minneapolis employees retirement fund. 20.33 (9) University of Minnesota faculty retirement plan. 20.34 (10) University of Minnesota faculty supplemental 20.35 retirement plan. 20.36 (11) Judges retirement fund. 21.1 (12) Any police or firefighter's relief association 21.2 enumerated in section 69.77, subdivision 1a, or 69.771, 21.3 subdivision 1. 21.4 (13) Public employees police and fire fund. 21.5 (14) Minnesota state retirement system correctional 21.6 officers retirement fund. 21.7 (15) Public employees local government correctional service 21.8 retirement plan. 21.9 Sec. 16. Minnesota Statutes 1998, section 356.30, 21.10 subdivision 3, is amended to read: 21.11 Subd. 3. [COVERED FUNDS.] This section applies to the 21.12 following retirement funds: 21.13 (1) state employees retirement fund, established pursuant 21.14 to chapter 352; 21.15 (2) correctional employees retirement program, established 21.16 pursuant to chapter 352; 21.17 (3) unclassified employees retirement plan, established 21.18 pursuant to chapter 352D; 21.19 (4) state patrol retirement fund, established pursuant to 21.20 chapter 352B; 21.21 (5) legislators retirement plan, established pursuant to 21.22 chapter 3A; 21.23 (6) elective state officers' retirement plan, established 21.24 pursuant to chapter 352C; 21.25 (7) public employees retirement association, established 21.26 pursuant to chapter 353; 21.27 (8) public employees police and fire fund, established 21.28 pursuant to chapter 353; 21.29 (9) public employees local government correctional service 21.30 retirement plan, established pursuant to chapter 353E; 21.31 (10) teachers retirement association, established pursuant 21.32 to chapter 354; 21.33(10)(11) Minneapolis employees retirement fund, 21.34 established pursuant to chapter 422A; 21.35(11)(12) Minneapolis teachers retirement fund association, 21.36 established pursuant to chapter 354A; 22.1(12)(13) St. Paul teachers retirement fund association, 22.2 established pursuant to chapter 354A; 22.3(13)(14) Duluth teachers retirement fund association, 22.4 established pursuant to chapter 354A; and 22.5(14)(15) judges' retirement fund, established by sections 22.6 490.121 to 490.132. 22.7 Sec. 17. Minnesota Statutes 1998, section 356.302, 22.8 subdivision 7, is amended to read: 22.9 Subd. 7. [COVERED RETIREMENT PLANS.] This section applies 22.10 to the following retirement plans: 22.11 (1) state employees retirement fund, established by chapter 22.12 352; 22.13 (2) unclassified employees retirement plan, established by 22.14 chapter 352D; 22.15 (3) public employees retirement association, established by 22.16 chapter 353; 22.17 (4) teachers retirement association, established by chapter 22.18 354; 22.19 (5) Duluth teachers retirement fund association, 22.20 established by chapter 354A; 22.21 (6) Minneapolis teachers retirement fund association, 22.22 established by chapter 354A; 22.23 (7) St. Paul teachers retirement fund association, 22.24 established by chapter 354A; 22.25 (8) Minneapolis employees retirement fund, established by 22.26 chapter 422A; 22.27 (9) correctional employees retirement plan, established by 22.28 chapter 352; 22.29 (10) state patrol retirement fund, established by chapter 22.30 352B; 22.31 (11) public employees police and fire fund, established by 22.32 chapter 353;and22.33 (12) public employees local government correctional service 22.34 retirement plan, established by chapter 353E; and 22.35 (13) judges' retirement fund, established by sections 22.36 490.121 to 490.132. 23.1 Sec. 18. Minnesota Statutes 1998, section 356.303, 23.2 subdivision 4, is amended to read: 23.3 Subd. 4. [COVERED RETIREMENT PLANS.] This section applies 23.4 to the following retirement plans: 23.5 (1) legislators retirement plan, established by chapter 3A; 23.6 (2) state employees retirement fund, established by chapter 23.7 352; 23.8 (3) correctional employees retirement plan, established by 23.9 chapter 352; 23.10 (4) state patrol retirement fund, established by chapter 23.11 352B; 23.12 (5) elective state officers retirement plan, established by 23.13 chapter 352C; 23.14 (6) unclassified employees retirement plan, established by 23.15 chapter 352D; 23.16 (7) public employees retirement association, established by 23.17 chapter 353; 23.18 (8) public employees police and fire fund, established by 23.19 chapter 353; 23.20 (9) public employees local government correctional service 23.21 retirement plan, established by chapter 353E; 23.22 (10) teachers retirement association, established by 23.23 chapter 354; 23.24(10)(11) Duluth teachers retirement fund association, 23.25 established by chapter 354A; 23.26(11)(12) Minneapolis teachers retirement fund association, 23.27 established by chapter 354A; 23.28(12)(13) St. Paul teachers retirement fund association, 23.29 established by chapter 354A; 23.30(13)(14) Minneapolis employees retirement fund, 23.31 established by chapter 422A; and 23.32(14)(15) judges' retirement fund, established by sections 23.33 490.121 to 490.132. 23.34 Sec. 19. [REPEALER.] 23.35 Minnesota Statutes 1998, section 353.33, subdivision 3a, is 23.36 repealed. 24.1 Sec. 20. [EFFECTIVE DATE.] 24.2 Sections 1 to 7 and 9 to 19 are effective on July 1, 1999. 24.3 Section 8 is effective on the first day of the first payroll 24.4 period beginning after June 30, 1999. 24.5 ARTICLE 3 24.6 LOCAL POLICE AND PAID FIRE RELIEF 24.7 ASSOCIATION BENEFIT MODIFICATIONS 24.8 Section 1. Laws 1977, chapter 61, section 6, as amended by 24.9 Laws 1981, chapter 68, section 39, and Laws 1998, chapter 390, 24.10 article 7, section 3, is amended to read: 24.11 Sec. 6. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; 24.12 FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 24.13(a)The city of Eveleth shall provide by annual levy amount 24.14 sufficient to pay an amount which when added to the investment 24.15 income of the trust fund is sufficient to pay the benefits 24.16 provided under the trust fund for the succeeding year as 24.17 certified by the board of trustees of the trust fund. 24.18(b) If the city of Eveleth fails to contribute the amount24.19required in paragraph (a) in a given year, no postretirement24.20adjustment granted under Laws 1995, chapter 262, article 10,24.21section 1, or Laws 1997, chapter 241, article 2, section 19 is24.22payable in the following year.24.23 Sec. 2. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 24.24 HOC POSTRETIREMENT ADJUSTMENT.] 24.25 In addition to the current pensions and other retirement 24.26 benefits payable, the pensions and retirement benefits payable 24.27 to retired police officers and firefighters and their surviving 24.28 spouses by the Eveleth police and fire trust fund are increased 24.29 by $100 a month. Increases are retroactive to January 1, 1999. 24.30 Sec. 3. [FAIRMONT POLICE RELIEF ASSOCIATION; ADDITIONAL 24.31 ANNUAL POSTRETIREMENT ADJUSTMENT.] 24.32 (a) If the requirement of paragraph (f) is met, every 24.33 recipient of a pension or benefit from the Fairmont police 24.34 relief association on June 30, annually, is entitled to receive 24.35 a postretirement adjustment as provided in this section in 24.36 addition to any pension or benefit increase by virtue of an 25.1 increase in the salary of active patrol officers in the city of 25.2 Fairmont on the following July 1. 25.3 (b) If the value of current assets of the relief 25.4 association is equal to at least 102 percent of the actuarial 25.5 accrued liability of the Fairmont police relief association as 25.6 of December 31 in the prior calendar year as calculated under 25.7 Minnesota Statutes, sections 356.215 and 356.216, one percent of 25.8 the value of current assets of the relief association is 25.9 available for the payment of the postretirement adjustment. 25.10 (c) The amount of the postretirement adjustment must be 25.11 calculated by the chief administrative officer of the relief 25.12 association. The postretirement adjustment amount is payable 25.13 monthly. The total amount of all service pensions, disability 25.14 pensions, and survivor benefits, without inclusion of any 25.15 postretirement adjustment paid previously under this section 25.16 must be calculated and the percentage amount of each recipient's 25.17 annual pension or benefit of the total amount, expressed as four 25.18 digits beyond the decimal point, must be determined. The 25.19 monthly postretirement adjustment payable to each pension or 25.20 benefit recipient is 1/12 of the dollar amount determined by 25.21 applying each recipient's determined percentage of the total 25.22 amount of pensions and benefits to the total dollar amount 25.23 available for payment as a postretirement adjustment. 25.24 (d) The postretirement adjustment amount paid in any year 25.25 under this section does not compound and must not be added to 25.26 the pension base for the calculation of a subsequent 25.27 postretirement adjustment. If a pension or benefit recipient 25.28 dies before the 12 monthly postretirement adjustments under this 25.29 section have been paid, the remaining monthly postretirement 25.30 adjustment payments cancel to the special fund of the relief 25.31 association. Nothing in this section authorizes the payment of 25.32 the postretirement adjustment to an estate or to a person who 25.33 did not qualify for a postretirement adjustment in the person's 25.34 own right. 25.35 (e) The chief administrative officer of the relief 25.36 association will report the total amount of benefits paid under 26.1 this section to the executive director of the legislative 26.2 commission on pensions and retirement, the city clerk, and the 26.3 state auditor. 26.4 (f) Payment of the postretirement adjustment amount 26.5 provided under this section may be made in a given year only if 26.6 the average time-weighted total rate of return for the total 26.7 portfolio for the most recent five-year period exceeds by at 26.8 least two percent the actual average percent increase in the 26.9 current monthly salary of a first class patrol officer in the 26.10 most recent prior five fiscal years. 26.11 Sec. 4. [FAIRMONT POLICE RELIEF ASSOCIATION; RETROACTIVITY 26.12 OF SURVIVING SPOUSE BENEFIT INCREASE.] 26.13 (a) The surviving spouse benefit amount under Laws 1963, 26.14 chapter 423, is payable to all surviving spouses receiving 26.15 benefits as of the date of the approval of this act. 26.16 (b) Any surviving spouse benefit increase under this 26.17 section is first payable on the first day of the month next 26.18 following the effective date of this section. 26.19 Sec. 5. [FAIRMONT POLICE RELIEF ASSOCIATION; BYLAWS 26.20 AMENDMENTS REQUIRED.] 26.21 Sections 3 and 4 must be implemented by the appropriate 26.22 amendments to the bylaws of the Fairmont police relief 26.23 association. 26.24 Sec. 6. [ST. CLOUD POLICE CONSOLIDATION ACCOUNT; SPECIAL 26.25 ONE-TIME POSTRETIREMENT ADJUSTMENT.] 26.26 (a) Notwithstanding any provision of general or special law 26.27 to the contrary, all service pensioners, disability pensioners, 26.28 and survivor benefit recipients of the St. Cloud police 26.29 consolidation account who had begun the receipt of pensions or 26.30 benefits before December 31, 1997, the effective date of the St. 26.31 Cloud police consolidation process under Minnesota Statutes, 26.32 chapter 353A, that began in April 1997, are entitled to receive 26.33 the pension or benefit increase granted under Laws 1997, chapter 26.34 233, article 1, section 72. 26.35 (b) The special one-time postretirement adjustment under 26.36 paragraph (a) is effective retroactive to January 1, 1998. The 27.1 first payment of pensions and benefits next following the 27.2 effective date of this section must include any back payments of 27.3 the retroactive postretirement adjustment. 27.4 (c) Nothing in this section authorizes the payment of a 27.5 special postretirement adjustment to an estate. 27.6 Sec. 7. [EFFECTIVE DATE.] 27.7 (a) Sections 1 and 2 are effective on approval by the 27.8 Eveleth city council and compliance with Minnesota Statutes, 27.9 section 645.021. 27.10 (b) Sections 3, 4, and 5 are effective on the day following 27.11 approval by the Fairmont city council and compliance with 27.12 Minnesota Statutes, section 645.021. 27.13 (c) Section 6 is effective on the day following approval by 27.14 the St. Cloud city council and compliance with Minnesota 27.15 Statutes, section 645.021. 27.16 ARTICLE 4 27.17 MERGER INTO PERA-P&F OF 27.18 LOCAL POLICE AND FIRE 27.19 CONSOLIDATION ACCOUNTS 27.20 Section 1. Minnesota Statutes 1998, section 3.85, 27.21 subdivision 12, is amended to read: 27.22 Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The 27.23 commission shall assess each retirement plan specified in 27.24 subdivision 11, paragraph (b), the compensation paid to the 27.25 actuary retained by the commission for the actuarial valuation 27.26 calculations, quadrennial projection valuations, and quadrennial 27.27 experience studies. The assessment is 100 percent of the amount 27.28 of contract compensation for the actuarial consulting firm 27.29 retained by the commission for actuarial valuation calculations, 27.30 including the public employees police and fire plan 27.31 consolidation accounts of the public employees retirement 27.32 association established before March 2, 1999, for which the 27.33 municipality declined merger under section 353.665, subdivision 27.34 1, or established after March 1, 1999, annual experience data 27.35 collection and processing, and quadrennial experience 27.36 studies and quadrennial projection valuations. 28.1 The portion of the total assessment payable by each 28.2 retirement system or pension plan must be determined as follows: 28.3 (1) Each pension plan specified in subdivision 11, 28.4 paragraph (b), clauses (1) to (13), must pay the following 28.5 indexed amount based on its total active, deferred, inactive, 28.6 and benefit recipient membership: 28.7 up to 2,000 members, inclusive $2.55 per member 28.8 2,001 through 10,000 members $1.13 per member 28.9 over 10,000 members $0.11 per member 28.10 The amount specified is applicable for the assessment of 28.11 the July 1, 1991, to June 30, 1992, fiscal year actuarial 28.12 compensation amounts. For the July 1, 1992, to June 30, 1993, 28.13 fiscal year and subsequent fiscal year actuarial compensation 28.14 amounts, the amount specified must be increased at the same 28.15 percentage increase rate as the implicit price deflator for 28.16 state and local government purchases of goods and services for 28.17 the 12-month period ending with the first quarter of the 28.18 calendar year following the completion date for the actuarial 28.19 valuation calculations, as published by the federal Department 28.20 of Commerce, and rounded upward to the nearest full cent. 28.21 (2) The total per-member portion of the allocation must be 28.22 determined, and that total per-member amount must be subtracted 28.23 from the total amount for allocation. Of the remainder dollar 28.24 amount, the following per-retirement system and per-pension plan 28.25 charges must be determined and the charges must be paid by the 28.26 system or plan: 28.27 (i) 37.87 percent is the total additional per-retirement 28.28 system charge, of which one-seventh must be paid by each 28.29 retirement system specified in subdivision 11, paragraph (b), 28.30 clauses (1), (2), (6), (7), (9), (10), and (11). 28.31 (ii) 62.13 percent is the total additional per-pension plan 28.32 charge, of which one-thirteenth must be paid by each pension 28.33 plan specified in subdivision 11, paragraph (b), clauses (1) to 28.34 (13). 28.35 (b) The assessment must be made following the completion of 28.36 the actuarial valuation calculations and the experience 29.1 analysis. The amount of the assessment is appropriated from the 29.2 retirement fund applicable to the retirement plan. Receipts 29.3 from assessments must be deposited in the state treasury and 29.4 credited to the general fund. 29.5 Sec. 2. Minnesota Statutes 1998, section 69.021, 29.6 subdivision 10, is amended to read: 29.7 Subd. 10. [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 29.8 (a) The commissioner of revenue shall reduce the apportionment 29.9 of police state aid under subdivisions 5, paragraph (b), 6, and 29.10 7a, for eligible employer units by any excess police state aid. 29.11 (b) "Excess police state aid" is: 29.12 (1) for counties and for municipalities in which police 29.13 retirement coverage is provided wholly by the public employees 29.14 police and fire fund and all police officers are members of the 29.15 plan governed by sections 353.63 to 353.657, the amount in 29.16 excess of the employer's total prior calendar year obligation as 29.17 defined in paragraph (c), as certified by the executive director 29.18 of the public employees retirement association; 29.19 (2) for municipalities in which police retirement coverage 29.20 is provided in part by the public employees police and fire fund 29.21 governed by sections 353.63 to 353.657 and in part by a local 29.22 police consolidation account governed by chapter 353A, and 29.23 established before March 2, 1999, for which the municipality 29.24 declined merger under section 353.665, subdivision 1, or 29.25 established after March 1, 1999, the amount in excess of the 29.26 employer's total prior calendar year obligation as defined in 29.27 paragraph (c), plus the amount of the employer's total prior 29.28 calendar year obligation under section 353A.09, subdivision 5, 29.29 paragraphs (a) and (b), as certified by the executive director 29.30 of the public employees retirement association; 29.31 (3) for municipalities in which police retirement coverage 29.32 is provided by the public employees police and fire plan 29.33 governed by sections 353.63 to 353.657, in which police 29.34 retirement coverage was provided by a police consolidation 29.35 account under chapter 353A before July 1, 1999, and for which 29.36 the municipality has an additional municipal contribution under 30.1 section 353.665, subdivision 8, paragraph (b), the amount in 30.2 excess of the employer's total prior calendar year obligation as 30.3 defined in paragraph (c), plus the amount of any additional 30.4 municipal contribution under section 353.665, subdivision 8, 30.5 paragraph (b), until the year 2010, as certified by the 30.6 executive director of the public employees retirement 30.7 association; 30.8 (4) for municipalities in which police retirement coverage 30.9 is provided in part by the public employees police and fire fund 30.10 governed by sections 353.63 to 353.657 and in part by a local 30.11 police relief association governed by sections 69.77 and 30.12 423A.01, the amount in excess of the employer's total prior 30.13 calendar year obligation as defined in paragraph (c), as 30.14 certified by the executive director of the public employees 30.15 retirement association, plus the amount of the financial 30.16 requirements of the relief association certified to the 30.17 applicable municipality during the prior calendar year under 30.18 section 69.77, subdivisions 2b and 2c, reduced by the amount of 30.19 member contributions deducted from the covered salary of the 30.20 relief association during the prior calendar year under section 30.21 69.77, subdivision 2a, as certified by the chief administrative 30.22 officer of the applicable municipality; 30.23(4)(5) for the metropolitan airports commission, if there 30.24 are police officers hired before July 1, 1978, with retirement 30.25 coverage by the Minneapolis employees retirement fund remaining, 30.26 the amount in excess of the commission's total prior calendar 30.27 year obligation as defined in paragraph (c), as certified by the 30.28 executive director of the public employees retirement 30.29 association, plus the amount determined by expressing the 30.30 commission's total prior calendar year contribution to the 30.31 Minneapolis employees retirement fund under section 422A.101, 30.32 subdivisions 2 and 2a, as a percentage of the commission's total 30.33 prior calendar year covered payroll for commission employees 30.34 covered by the Minneapolis employees retirement fund and 30.35 applying that percentage to the commission's total prior 30.36 calendar year covered payroll for commission police officers 31.1 covered by the Minneapolis employees retirement fund, as 31.2 certified by the chief administrative officer of the 31.3 metropolitan airports commission; and 31.4(5)(6) for the department of natural resources and for the 31.5 department of public safety, the amount in excess of the 31.6 employer's total prior calendar year obligation under section 31.7 352B.02, subdivision 1c, for plan members who are peace officers 31.8 under section 69.011, subdivision 1, clause (g), as certified by 31.9 the executive director of the Minnesota state retirement system. 31.10 (c) The employer's total prior calendar year obligation 31.11 with respect to the public employees police and fire plan is the 31.12 total prior calendar year obligation under section 353.65, 31.13 subdivision 3, for police officers as defined in section 353.64, 31.14 subdivision 2, and the actual total prior calendar year 31.15 obligation under section 353.65, subdivision 3, for 31.16 firefighters, as defined in section 353.64, subdivision 3, but 31.17 not to exceed for those firefighters the applicable following 31.18 amounts: 31.19 Municipality Maximum Amount 31.20 Albert Lea $54,157.01 31.21 Anoka 10,399.31 31.22 Apple Valley 5,442.44 31.23 Austin 49,864.73 31.24 Bemidji 27,671.38 31.25 Brooklyn Center 6,605.92 31.26 Brooklyn Park 24,002.26 31.27 Burnsville 15,956.00 31.28 Cloquet 4,260.49 31.29 Coon Rapids 39,920.00 31.30 Cottage Grove 8,588.48 31.31 Crystal 5,855.00 31.32 East Grand Forks 51,009.88 31.33 Edina 32,251.00 31.34 Elk River 5,216.55 31.35 Ely 13,584.16 31.36 Eveleth 16,288.27 32.1 Fergus Falls 6,742.00 32.2 Fridley 33,420.64 32.3 Golden Valley 11,744.61 32.4 Hastings 16,561.00 32.5 Hopkins 4,324.23 32.6 International Falls 14,400.69 32.7 Lakeville 782.35 32.8 Lino Lakes 5,324.00 32.9 Little Falls 7,889.41 32.10 Maple Grove 6,707.54 32.11 Maplewood 8,476.69 32.12 Minnetonka 10,403.00 32.13 Montevideo 1,307.66 32.14 Moorhead 68,069.26 32.15 New Hope 6,739.72 32.16 North St. Paul 4,241.14 32.17 Northfield 770.63 32.18 Owatonna 37,292.67 32.19 Plymouth 6,754.71 32.20 Red Wing 3,504.01 32.21 Richfield 53,757.96 32.22 Rosemount 1,712.55 32.23 Roseville 9,854.51 32.24 St. Anthony 33,055.00 32.25 St. Louis Park 53,643.11 32.26 Thief River Falls 28,365.04 32.27 Virginia 31,164.46 32.28 Waseca 11,135.17 32.29 West St. Paul 15,707.20 32.30 White Bear Lake 6,521.04 32.31 Woodbury 3,613.00 32.32 any other municipality 0.00 32.33 (d) The total amount of excess police state aid must be 32.34 deposited in the excess police state-aid account in the general 32.35 fund, administered and distributed as provided in subdivision 11. 32.36 Sec. 3. Minnesota Statutes 1998, section 69.031, 33.1 subdivision 5, is amended to read: 33.2 Subd. 5. [DEPOSIT OF STATE AID.] (a) The municipal 33.3 treasurer shall, within 30 days after receipt, transmit the fire 33.4 state aid to the treasurer of the duly incorporated 33.5 firefighters' relief association if there is one organized and 33.6 the association has filed a financial report with the 33.7 municipality. If the relief association has not filed a 33.8 financial report with the municipality, the municipal treasurer 33.9 shall delay transmission of the fire state aid to the relief 33.10 association until the complete financial report is filed. If 33.11 there is no relief association organized, or if the association 33.12 has dissolved, or has been removed as trustees of state aid, 33.13 then the treasurer of the municipality shall deposit the money 33.14 in the municipal treasury as provided for in section 424A.08 and 33.15 the money may be disbursed only for the purposes and in the 33.16 manner set forth in that section. 33.17 (b) The municipal treasurer, upon receipt of the police 33.18 state aid, shall disburse the police state aid in the following 33.19 manner: 33.20 (1) For a municipality in which a local police relief 33.21 association exists and all peace officers are members of the 33.22 association, the total state aid must be transmitted to the 33.23 treasurer of the relief association within 30 days of the date 33.24 of receipt, and the treasurer of the relief association shall 33.25 immediately deposit the total state aid in the special fund of 33.26 the relief association; 33.27 (2) For a municipality in which police retirement coverage 33.28 is provided by the public employees police and fire fund and all 33.29 peace officers are members of the fund, including municipalities 33.30 covered by section 353.665, the total state aid must be applied 33.31 toward the municipality's employer contribution to the public 33.32 employees police and fire fund undersectionsections 353.65, 33.33 subdivision 3, and 353.665, subdivision 8, paragraph (b), if 33.34 applicable; or 33.35 (3) For a municipality other than a city of the first class 33.36 with a population of more than 300,000 in which both a police 34.1 relief association exists and police retirement coverage is 34.2 provided in part by the public employees police and fire fund, 34.3 the municipality may elect at its option to transmit the total 34.4 state aid to the treasurer of the relief association as provided 34.5 in clause (1), to use the total state aid to apply toward the 34.6 municipality's employer contribution to the public employees 34.7 police and fire fund subject to all the provisions set forth in 34.8 clause (2), or to allot the total state aid proportionately to 34.9 be transmitted to the police relief association as provided in 34.10 this subdivision and to apply toward the municipality's employer 34.11 contribution to the public employees police and fire fund 34.12 subject to the provisions of clause (2) on the basis of the 34.13 respective number of active full-time peace officers, as defined 34.14 in section 69.011, subdivision 1, clause (g). 34.15 For a city of the first class with a population of more 34.16 than 300,000, in addition, the city may elect to allot the 34.17 appropriate portion of the total police state aid to apply 34.18 toward the employer contribution of the city to the public 34.19 employees police and fire fund based on the covered salary of 34.20 police officers covered by the fund each payroll period and to 34.21 transmit the balance to the police relief association; or 34.22 (4) For a municipality in which police retirement coverage 34.23 is provided in part by the public employees police and fire fund 34.24 and in part by a local police consolidation account governed by 34.25 chapter 353A and established before March 2, 1999, for which the 34.26 municipality declined merger under section 353.665, subdivision 34.27 1, or established after March 1, 1999, the total police state 34.28 aid must be applied towards the municipality's total employer 34.29 contribution to the public employees police and fire fund and to 34.30 the local police consolidation account under sections 353.65, 34.31 subdivision 3, and 353A.09, subdivision 5. 34.32 (c) The county treasurer, upon receipt of the police state 34.33 aid for the county, shall apply the total state aid toward the 34.34 county's employer contribution to the public employees police 34.35 and fire fund under section 353.65, subdivision 3. 34.36 (d) The designated metropolitan airports commission 35.1 official, upon receipt of the police state aid for the 35.2 metropolitan airports commission, shall apply the total police 35.3 state aid first toward the commission's employer contribution 35.4 for police officers to the Minneapolis employees retirement fund 35.5 under section 422A.101, subdivision 2a, and, if there is any 35.6 amount of police state aid remaining, shall apply that remainder 35.7 toward the commission's employer contribution for police 35.8 officers to the public employees police and fire plan under 35.9 section 353.65, subdivision 3. 35.10 (e) The police state aid apportioned to the departments of 35.11 public safety and natural resources under section 69.021, 35.12 subdivision 7a, is appropriated to the commissioner of finance 35.13 for transfer to the funds and accounts from which the salaries 35.14 of peace officers certified under section 69.011, subdivision 35.15 2a, are paid. The commissioner of revenue shall certify to the 35.16 commissioners of public safety, natural resources, and finance 35.17 the amounts to be transferred from the appropriation for police 35.18 state aid. The commissioners of public safety and natural 35.19 resources shall certify to the commissioner of finance the 35.20 amounts to be credited to each of the funds and accounts from 35.21 which the peace officers employed by their respective 35.22 departments are paid. Each commissioner must allocate the 35.23 police state aid first for employer contributions for employees 35.24 funded from the general fund and then for employer contributions 35.25 for employees funded from other funds. For peace officers whose 35.26 salaries are paid from the general fund, the amounts transferred 35.27 from the appropriation for police state aid must be canceled to 35.28 the general fund. 35.29 Sec. 4. Minnesota Statutes 1998, section 353.01, 35.30 subdivision 2b, is amended to read: 35.31 Subd. 2b. [EXCLUDED EMPLOYEES.] The following public 35.32 employees shall not participate as members of the association 35.33 with retirement coverage by the public employees retirement plan 35.34 or the public employees police and fire retirement plan: 35.35 (1) elected public officers, or persons appointed to fill a 35.36 vacancy in an elective office, who do not elect to participate 36.1 in the association by filing an application for membership; 36.2 (2) election officers; 36.3 (3) patient and inmate personnel who perform services in 36.4 charitable, penal, or correctional institutions of a 36.5 governmental subdivision; 36.6 (4) employees who are hired for a temporary position under 36.7 subdivision 12a, and employees who resign from a nontemporary 36.8 position and accept a temporary position within 30 days in the 36.9 same governmental subdivision, but not those employees who are 36.10 hired for an unlimited period but are serving a probationary 36.11 period. If the period of employment extends beyond six 36.12 consecutive months and the employee earns more than $425 from 36.13 one governmental subdivision in any one calendar month, the 36.14 department head shall report the employee for membership and 36.15 require employee deductions be made on behalf of the employee 36.16 under section 353.27, subdivision 4. 36.17 Membership eligibility of an employee who resigns or is 36.18 dismissed from a temporary position and within 30 days accepts 36.19 another temporary position in the same governmental subdivision 36.20 is determined on the total length of employment rather than on 36.21 each separate position. Membership eligibility of an employee 36.22 who holds concurrent temporary and nontemporary positions in one 36.23 governmental subdivision is determined by the length of 36.24 employment and salary of each separate position; 36.25 (5) employees whose actual salary from one governmental 36.26 subdivision does not exceed $425 per month, or whose annual 36.27 salary from one governmental subdivision does not exceed a 36.28 stipulation prepared in advance, in writing, that the salary 36.29 must not exceed $5,100 per calendar year or per school year for 36.30 school employees for employment expected to be of a full year's 36.31 duration or more than the prorated portion of $5,100 per 36.32 employment period for employment expected to be of less than a 36.33 full year's duration; 36.34 (6) employees who are employed by reason of work emergency 36.35 caused by fire, flood, storm, or similar disaster; 36.36 (7) employees who by virtue of their employment in one 37.1 governmental subdivision are required by law to be a member of 37.2 and to contribute to any of the plans or funds administered by 37.3 the Minnesota state retirement system, the teachers retirement 37.4 association, the Duluth teachers retirement fund association, 37.5 the Minneapolis teachers retirement association, the St. Paul 37.6 teachers retirement fund association, the Minneapolis employees 37.7 retirement fund, or any police or firefighters relief 37.8 association governed by section 69.77 that has not consolidated 37.9 with the public employees retirement association, or any local 37.10 police or firefightersrelief association that has consolidated37.11with the public employees retirement associationconsolidation 37.12 account butwhose memberswho have not elected the type of 37.13 benefit coverage provided by the public employees police and 37.14 fire fund under sections 353A.01 to 353A.10, or any persons 37.15 covered by section 353.665, subdivision 4, 5, or 6, who have not 37.16 elected public employees police and fire plan benefit coverage. 37.17 This clause must not be construed to prevent a person from being 37.18 a member of and contributing to the public employees retirement 37.19 association and also belonging to and contributing to another 37.20 public pension fund for other service occurring during the same 37.21 period of time. A person who meets the definition of "public 37.22 employee" in subdivision 2 by virtue of other service occurring 37.23 during the same period of time becomes a member of the 37.24 association unless contributions are made to another public 37.25 retirement fund on the salary based on the other service or to 37.26 the teachers retirement association by a teacher as defined in 37.27 section 354.05, subdivision 2; 37.28 (8) persons who are excluded from coverage under the 37.29 federal Old Age, Survivors, Disability, and Health Insurance 37.30 Program for the performance of service as specified in United 37.31 States Code, title 42, section 410(a)(8)(A), as amended through 37.32 January 1, 1987, if no irrevocable election of coverage has been 37.33 made under section 3121(r) of the Internal Revenue Code of 1954, 37.34 as amended; 37.35 (9) full-time students who are enrolled and are regularly 37.36 attending classes at an accredited school, college, or 38.1 university and who are part-time employees as defined by a 38.2 governmental subdivision; 38.3 (10) resident physicians, medical interns, and pharmacist 38.4 residents and pharmacist interns who are serving in a degree or 38.5 residency program in public hospitals; 38.6 (11) students who are serving in an internship or residency 38.7 program sponsored by an accredited educational institution; 38.8 (12) persons who hold a part-time adult supplementary 38.9 technical college license who render part-time teaching service 38.10 in a technical college; 38.11 (13) foreign citizens working for a governmental 38.12 subdivision with a work permit of less than three years, or an 38.13 H-1b visa valid for less than three years of employment. Upon 38.14 notice to the association that the work permit or visa extends 38.15 beyond the three-year period, the foreign citizens are eligible 38.16 for membership from the date of the extension; 38.17 (14) public hospital employees who elected not to 38.18 participate as members of the association before 1972 and who 38.19 did not elect to participate from July 1, 1988, to October 1, 38.20 1988; 38.21 (15) except as provided in section 353.86, volunteer 38.22 ambulance service personnel, as defined in subdivision 35, but 38.23 persons who serve as volunteer ambulance service personnel may 38.24 still qualify as public employees under subdivision 2 and may be 38.25 members of the public employees retirement association and 38.26 participants in the public employees retirement fund or the 38.27 public employees police and fire fund on the basis of 38.28 compensation received from public employment service other than 38.29 service as volunteer ambulance service personnel; 38.30 (16) except as provided in section 353.87, volunteer 38.31 firefighters, as defined in subdivision 36, engaging in 38.32 activities undertaken as part of volunteer firefighter duties; 38.33 provided that a person who is a volunteer firefighter may still 38.34 qualify as a public employee under subdivision 2 and may be a 38.35 member of the public employees retirement association and a 38.36 participant in the public employees retirement fund or the 39.1 public employees police and fire fund on the basis of 39.2 compensation received from public employment activities other 39.3 than those as a volunteer firefighter; and 39.4 (17) pipefitters and associated trades personnel employed 39.5 by independent school district No. 625, St. Paul, with coverage 39.6 by the pipefitters local 455 pension plan under a collective 39.7 bargaining agreement who were either first employed after May 1, 39.8 1997, or, if first employed before May 2, 1997, elected to be 39.9 excluded under Laws 1997, chapter 241, article 2, section 12. 39.10 Sec. 5. Minnesota Statutes 1998, section 353.01, 39.11 subdivision 10, is amended to read: 39.12 Subd. 10. [SALARY.] (a) "Salary" means: 39.13 (1) periodic compensation of a public employee, before 39.14 deductions for deferred compensation, supplemental retirement 39.15 plans, or other voluntary salary reduction programs, and also 39.16 means "wages" and includes net income from fees; and 39.17 (2) for a public employee who has prior service covered by 39.18 a local police or firefighters' relief association that has 39.19 consolidated with the public employees retirement association or 39.20 to which section 353.665 applies and who has elected 39.21 coverage either under the public employees police and fire fund 39.22 benefit plan under section 353A.08 following the 39.23 consolidation or under section 353.665, subdivision 4, "salary" 39.24 means the rate of salary upon which member contributions to the 39.25 special fund of the relief association were made prior to the 39.26 effective date of the consolidation as specified by law and by 39.27 bylaw provisions governing the relief association on the date of 39.28 the initiation of the consolidation procedure and the actual 39.29 periodic compensation of the public employee after the effective 39.30 date of consolidation. 39.31 (b) Salary does not mean: 39.32 (1) fees paid to district court reporters, unused annual or 39.33 sick leave payments, in lump-sum or periodic payments, severance 39.34 payments, reimbursement of expenses, lump-sum settlements not 39.35 attached to a specific earnings period, or workers' compensation 39.36 payments; 40.1 (2) employer-paid amounts used by an employee toward the 40.2 cost of insurance coverage, employer-paid fringe benefits, 40.3 flexible spending accounts, cafeteria plans, health care expense 40.4 accounts, day care expenses, or any payments in lieu of any 40.5 employer-paid group insurance coverage, including the difference 40.6 between single and family rates that may be paid to a member 40.7 with single coverage and certain amounts determined by the 40.8 executive director to be ineligible; 40.9 (3) the amount equal to that which the employing 40.10 governmental subdivision would otherwise pay toward single or 40.11 family insurance coverage for a covered employee when, through a 40.12 contract or agreement with some but not all employees, the 40.13 employer: 40.14 (i) discontinues, or for new hires does not provide, 40.15 payment toward the cost of the employee's selected insurance 40.16 coverages under a group plan offered by the employer; 40.17 (ii) makes the employee solely responsible for all 40.18 contributions toward the cost of the employee's selected 40.19 insurance coverages under a group plan offered by the employer, 40.20 including any amount the employer makes toward other employees' 40.21 selected insurance coverages under a group plan offered by the 40.22 employer; and 40.23 (iii) provides increased salary rates for employees who do 40.24 not have any employer-paid group insurance coverages; and 40.25 (4) except as provided in section 353.86 or 353.87, 40.26 compensation of any kind paid to volunteer ambulance service 40.27 personnel or volunteer firefighters, as defined in subdivisions 40.28 35 and 36. 40.29 Sec. 6. Minnesota Statutes 1998, section 353.01, 40.30 subdivision 16, is amended to read: 40.31 Subd. 16. [ALLOWABLE SERVICE.] (a) "Allowable service" 40.32 means service during years of actual membership in the course of 40.33 which employee contributions were made, periods covered by 40.34 payments in lieu of salary deductions under section 353.35, and 40.35 service in years during which the public employee was not a 40.36 member but for which the member later elected, while a member, 41.1 to obtain credit by making payments to the fund as permitted by 41.2 any law then in effect. 41.3 (b) "Allowable service" also means a period of authorized 41.4 leave of absence with pay from which deductions for employee 41.5 contributions are made, deposited, and credited to the fund. 41.6 (c) "Allowable service" also means a period of authorized 41.7 leave of absence without pay that does not exceed one year, and 41.8 during or for which a member obtained credit by payments to the 41.9 fund made in place of salary deductions, provided that the 41.10 payments are made in an amount or amounts based on the member's 41.11 average salary on which deductions were paid for the last six 41.12 months of public service, or for that portion of the last six 41.13 months while the member was in public service, to apply to the 41.14 period in either case immediately preceding commencement of the 41.15 leave of absence. If the employee elects to pay employee 41.16 contributions for the period of any leave of absence without 41.17 pay, or for any portion of the leave, the employee shall also, 41.18 as a condition to the exercise of the election, pay to the fund 41.19 an amount equivalent to both the required employer and 41.20 additional employer contributions for the employee. The payment 41.21 must be made within one year from the expiration of the leave of 41.22 absence or within 20 days after termination of public service 41.23 under subdivision 11a. The employer by appropriate action of 41.24 its governing body, made a part of its official records, before 41.25 the date of the first payment of the employee contribution, may 41.26 certify to the association in writing its commitment to pay the 41.27 employer and additional employer contributions from the proceeds 41.28 of a tax levy made under section 353.28. Payments under this 41.29 paragraph must include interest at an annual rate of 8.5 percent 41.30 compounded annually from the date of the termination of the 41.31 leave of absence to the date payment is made. An employee shall 41.32 return to public service and receive a minimum of three months 41.33 of allowable service to be eligible to pay employee and employer 41.34 contributions for a subsequent authorized leave of absence 41.35 without pay. 41.36 (d) "Allowable service" also means a periodic, repetitive 42.1 leave that is offered to all employees of a governmental 42.2 subdivision. The leave program may not exceed 208 hours per 42.3 annual normal work cycle as certified to the association by the 42.4 employer. A participating member obtains service credit by 42.5 making employee contributions in an amount or amounts based on 42.6 the member's average salary that would have been paid if the 42.7 leave had not been taken. The employer shall pay the employer 42.8 and additional employer contributions on behalf of the 42.9 participating member. The employee and the employer are 42.10 responsible to pay interest on their respective shares at the 42.11 rate of 8.5 percent a year, compounded annually, from the end of 42.12 the normal cycle until full payment is made. An employer shall 42.13 also make the employer and additional employer contributions, 42.14 plus 8.5 percent interest, compounded annually, on behalf of an 42.15 employee who makes employee contributions but terminates public 42.16 service. The employee contributions must be made within one 42.17 year after the end of the annual normal working cycle or within 42.18 20 days after termination of public service, whichever is 42.19 sooner. The association shall prescribe the manner and forms to 42.20 be used by a governmental subdivision in administering a 42.21 periodic, repetitive leave. 42.22 (e) "Allowable service" also means a period during which a 42.23 member is on an authorized sick leave of absence, without pay, 42.24 limited to one year. An employee who has received one year of 42.25 allowable service shall return to public service and receive a 42.26 minimum of three months of allowable service to receive 42.27 allowable service for a subsequent authorized sick leave of 42.28 absence. 42.29 (f) "Allowable service" also means an authorized temporary 42.30 layoff under subdivision 12, limited to three months allowable 42.31 service per authorized temporary layoff in one calendar year. 42.32 An employee who has received the maximum service allowed for an 42.33 authorized temporary layoff shall return to public service and 42.34 receive a minimum of three months of allowable service to 42.35 receive allowable service for a subsequent authorized temporary 42.36 layoff. 43.1 (g) Notwithstanding any law to the contrary, "allowable 43.2 service" also means a parental leave. The association shall 43.3 grant a maximum of two months service credit for a parental 43.4 leave, within six months after the birth or adoption, upon 43.5 documentation from the member's governmental subdivision or 43.6 presentation of a birth certificate or other evidence of birth 43.7 or adoption to the association. 43.8 (h) "Allowable service" also means a period during which a 43.9 member is on an authorized leave of absence to enter military 43.10 service, provided that the member returns to public service upon 43.11 discharge from military service under section 192.262 and pays 43.12 into the fund employee contributions based upon the employee's 43.13 salary at the date of return from military service. Payment 43.14 must be made within five years of the date of discharge from the 43.15 military service. The amount of these contributions must be in 43.16 accord with the contribution rates and salary limitations, if 43.17 any, in effect during the leave, plus interest at an annual rate 43.18 of 8.5 percent compounded annually from the date of return to 43.19 public service to the date payment is made. The matching 43.20 employer contribution and additional employer contribution under 43.21 section 353.27, subdivisions 3 and 3a, must be paid by the 43.22 governmental subdivision employing the member upon return to 43.23 public service if the member makes the employee contributions. 43.24 The governmental subdivision involved may appropriate money for 43.25 those payments. A member may not receive credit for a voluntary 43.26 extension of military service at the instance of the member 43.27 beyond the initial period of enlistment, induction, or call to 43.28 active duty. 43.29 (i) For calculating benefits under sections 353.30, 353.31, 43.30 353.32, and 353.33 for state officers and employees displaced by 43.31 the Community Corrections Act, chapter 401, and transferred into 43.32 county service under section 401.04, "allowable service" means 43.33 combined years of allowable service as defined in paragraphs (a) 43.34 to (i) and section 352.01, subdivision 11. 43.35 (j) For a public employee who has prior service covered by 43.36 a local police or firefighters relief association that has 44.1 consolidated with the public employees retirement association or 44.2 to which section 353.665 applies, and who has elected the type 44.3 of benefit coverage provided by the public employees police and 44.4 fire fund either under section 353A.08 following the 44.5 consolidation or under section 353.665, subdivision 4, 44.6 "applicable service" is a period of service credited by the 44.7 local police or firefighters relief association as of the 44.8 effective date of the consolidation based on law and on bylaw 44.9 provisions governing the relief association on the date of the 44.10 initiation of the consolidation procedure. 44.11 Sec. 7. Minnesota Statutes 1998, section 353.64, 44.12 subdivision 1, is amended to read: 44.13 Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 44.14 person who prior to July 1, 1961, was a member of the police and 44.15 fire fund, by virtue of being a police officer or firefighter, 44.16 shall, as long as the person remains in either position, 44.17 continue membership in the fund. 44.18 (b) A person who was employed by a governmental subdivision 44.19 as a police officer and was a member of the police and fire fund 44.20 on July 1, 1978, by virtue of being a police officer as defined 44.21 by this section on that date, and if employed by the same 44.22 governmental subdivision in a position in the same department in 44.23 which the person was employed on that date, shall continue 44.24 membership in the fund whether or not that person has the power 44.25 of arrest by warrant after that date. 44.26 (c) A person who was employed by a governmental subdivision 44.27 as a police officer or a firefighter, whichever applies, was an 44.28 active member of the local police or salaried firefighters 44.29 relief association located in that governmental subdivision by 44.30 virtue of that employment as of the effective date of the 44.31 consolidation as authorized by sections 353A.01 to 353A.10, and 44.32 has elected coverage by the public employees police and fire 44.33 fund benefit plan, shall become a member of the police and fire 44.34 fund after that date if employed by the same governmental 44.35 subdivision in a position in the same department in which the 44.36 person was employed on that date. 45.1 (d) Any other employee serving on a full-time basis as a 45.2 police officer or firefighter on or after July 1, 1961, shall 45.3 become a member of the public employees police and fire fund. 45.4 (e) An employee serving on less than a full-time basis as a 45.5 police officer shall become a member of the public employees 45.6 police and fire fund only after a resolution stating that the 45.7 employee should be covered by the police and fire fund is 45.8 adopted by the governing body of the governmental subdivision 45.9 employing the person declaring that the position which the 45.10 person holds is that of a police officer. 45.11 (f) An employee serving on less than a full-time basis as a 45.12 firefighter shall become a member of the public employees police 45.13 and fire fund only after a resolution stating that the employee 45.14 should be covered by the police and fire fund is adopted by the 45.15 governing body of the governmental subdivision employing the 45.16 person declaring that the position which the person holds is 45.17 that of a firefighter. 45.18 (g) A police officer or firefighter employed by a 45.19 governmental subdivision who by virtue of that employment is 45.20 required by law to be a member of and to contribute to any 45.21 police or firefighter relief association governed by section 45.22 69.77 which has not consolidated with the public employees 45.23 police and fire fundand, any police officer or firefighter of a 45.24 relief association that has consolidated with the association 45.25 for which the employee has not elected coverage by the public 45.26 employees police and fire fund benefit plan as provided in 45.27 sections 353A.01 to 353A.10, or any police officer or 45.28 firefighter to whom section 353.665 applies who has not elected 45.29 coverage by the public employees police and fire fund benefit 45.30 plan as provided in section 353.665, subdivision 4, shall not 45.31 become a member of the public employees police and fire fund. 45.32 Sec. 8. Minnesota Statutes 1998, section 353.65, 45.33 subdivision 2, is amended to read: 45.34 Subd. 2. [EMPLOYEE CONTRIBUTION RATE.] The employee 45.35 contribution is an amount equal to7.66.2 percent of the total 45.36 salary of the member. This contribution must be made by 46.1 deduction from salary in the manner provided in subdivision 4. 46.2 Where any portion of a member's salary is paid from other than 46.3 public funds, the member's employee contribution is based on the 46.4 total salary received from all sources. 46.5 Sec. 9. Minnesota Statutes 1998, section 353.65, 46.6 subdivision 3, is amended to read: 46.7 Subd. 3. [EMPLOYER CONTRIBUTION RATE.] The employer 46.8 contribution shall be an amount equal to11.49.3 percent of the 46.9 total salary of every member. This contribution shall be made 46.10 from funds available to the employing subdivision by the means 46.11 and in the manner provided in section 353.28. 46.12 Sec. 10. [353.665] [MERGER OF CERTAIN CONSOLIDATION 46.13 ACCOUNTS INTO PERA-P&F.] 46.14 Subdivision 1. [MERGER AUTHORIZED.] (a) Notwithstanding 46.15 any provision of law to the contrary, unless the applicable 46.16 municipality elects otherwise under paragraph (b), every local 46.17 police and fire consolidation account under chapter 353A in 46.18 existence on March 1, 1999, becomes a part of the public 46.19 employees police and fire plan and fund governed by sections 46.20 353.63 to 353.659 on July 1, 1999. 46.21 (b) If a municipality desires to retain its consolidation 46.22 account or consolidation accounts, the governing body of the 46.23 municipality must adopt a resolution to that effect and must 46.24 file a copy of the resolution with the secretary of state, the 46.25 state auditor, the legislative auditor, the finance 46.26 commissioner, the revenue commissioner, the executive director 46.27 of the public employees retirement association, and the 46.28 executive director of the legislative commission on pensions and 46.29 retirement. The retention resolution must be adopted and filed 46.30 with all recipients before June 15, 1999. 46.31 Subd. 2. [TRANSFER OF LIABILITIES.] Unless the 46.32 municipality has elected to retain the consolidation account 46.33 under subdivision 1, paragraph (b), all current and future 46.34 liabilities of a former local police or fire consolidation 46.35 account are the liabilities of the public employees police and 46.36 fire fund as of July 1, 1999, and the accrued benefits of the 47.1 members is the obligation of the public employees police and 47.2 fire fund. 47.3 Subd. 3. [TRANSFER OF ASSETS.] Unless the municipality has 47.4 elected to retain the consolidation account under subdivision 1, 47.5 paragraph (b), the assets of the former local police or fire 47.6 consolidation account must be transferred and upon transfer, the 47.7 actuarial value of the assets of a former local police or fire 47.8 consolidation account less an amount equal to the residual 47.9 assets as determined under subdivision 7, paragraph (f), are the 47.10 assets of the public employees police and fire fund as of July 47.11 1, 1999. The participation of a consolidation account in the 47.12 Minnesota postretirement investment fund becomes part of the 47.13 participation of the public employees police and fire fund in 47.14 the Minnesota postretirement investment fund. The remaining 47.15 assets, excluding the amounts for distribution under subdivision 47.16 7, paragraph (f), become an asset of the public employees police 47.17 and fire fund. The public employees police and fire fund also 47.18 must be credited as an asset with the amount of receivable 47.19 assets under subdivision 7, paragraph (e). 47.20 Subd. 4. [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 47.21 person who is a police officer or a firefighter who, as such, is 47.22 an active member of a merging local police or fire consolidation 47.23 account on June 30, 1999, and who has not previously elected 47.24 benefit coverage under the relevant provisions of the public 47.25 employees police and fire fund benefit plan under section 47.26 353A.08, subdivision 3, may elect benefit coverage under the 47.27 relevant provisions of the public employees police and fire fund 47.28 benefit plan. This election must be made in writing on a form 47.29 prescribed by the executive director before September 1, 1999, 47.30 and is irrevocable. 47.31 (b) If an eligible person makes no affirmative election of 47.32 benefit coverage before September 1, 1999, the person retains 47.33 the benefit coverage provided by the relief association benefit 47.34 plan as reflected in the applicable provisions of chapter 353B 47.35 and may elect benefit coverage under the relevant provisions of 47.36 the public employees police and fire fund benefit plan when the 48.1 person terminates active employment for purposes of receiving a 48.2 service pension, disability benefit, or within 90 days of the 48.3 date the member terminates active employment and defers receipt 48.4 of a service pension, whichever applies. 48.5 (c) Notwithstanding any provision of section 353A.083 and 48.6 any municipal action under authority of that statute to the 48.7 contrary, the provisions of the public employees police and fire 48.8 fund benefit plan applicable to active members of the merging 48.9 local police or fire consolidation accounts who elect public 48.10 employees police and fire fund benefit plan under section 48.11 353A.08, subdivision 3, or paragraph (a), are the applicable 48.12 provisions of sections 353.63 to 353.659. 48.13 Subd. 5. [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 48.14 RECIPIENTS.] (a) A person who received a service pension, a 48.15 disability pension or benefit, or a survivor benefit from a 48.16 merging local police or fire consolidation account for the month 48.17 of June 1999, and who has not previously elected participation 48.18 in the Minnesota postretirement investment fund for any future 48.19 postretirement adjustments rather than the postretirement 48.20 adjustment mechanism or mechanisms of the relief association 48.21 benefit plan under section 353A.08, subdivision 1, may elect 48.22 participation in the Minnesota postretirement investment fund 48.23 for any future postretirement adjustments or retention of the 48.24 postretirement adjustment mechanism or mechanisms of the relief 48.25 association benefit plan as reflected in the applicable 48.26 provisions of chapter 353B. This election must be in writing on 48.27 a form prescribed by the executive director and must be made 48.28 before September 1, 1999. 48.29 (b) If an eligible person is a minor, the election must be 48.30 made by the person's parent or legal guardian. If the eligible 48.31 person makes no affirmative election under this subdivision, the 48.32 person retains the postretirement adjustment mechanism or 48.33 mechanisms of the relief association benefit plan as reflected 48.34 in the applicable provisions of chapter 353B. 48.35 (c) The survivor benefit payable on behalf of any service 48.36 pension or disability benefit recipient who elects participation 49.1 in the Minnesota postretirement investment fund must be 49.2 calculated under the relief association benefit plan in effect 49.3 on the effective date of consolidation under chapter 353A as 49.4 reflected in the applicable provisions of chapter 353B. 49.5 Subd. 6. [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 49.6 who terminated before July 1, 1999, active employment as a 49.7 police officer or a firefighter that gave rise to membership in 49.8 a local relief association that consolidated with the public 49.9 employees police and fire plan under chapter 353A and is merging 49.10 under this section and had sufficient service credit to entitle 49.11 the person to an eventual service pension retains the benefit 49.12 plan as reflected in the applicable provisions of chapter 353B, 49.13 except that the deferred member may elect before September 1, 49.14 1999, to participate, upon retirement, in the Minnesota 49.15 postretirement investment fund. Any election to participate in 49.16 the Minnesota postretirement investment fund is applicable to 49.17 any survivor benefit attributable to a deferred member covered 49.18 by this subdivision. 49.19 Subd. 7. [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 49.20 June 30, 1999, the actuary retained by the legislative 49.21 commission on pensions and retirement shall determine the final 49.22 funded status of local police and fire consolidation accounts 49.23 under chapter 353A that the applicable municipality has not 49.24 elected to retain under subdivision 1, paragraph (b), as 49.25 provided in this subdivision. 49.26 (b) The final funded status calculation must be made using 49.27 the benefit plan provisions applicable to the consolidation 49.28 account and the actuarial assumptions used for the June 30, 49.29 1998, actuarial valuation of the account. 49.30 (c) The actuary must calculate the total actuarial accrued 49.31 liability of the consolidation account, which is the sum of the 49.32 actuarial accrued liability for all consolidation account 49.33 members who are not included in the participation of the account 49.34 in the Minnesota postretirement investment fund calculated using 49.35 the entry age normal actuarial cost method. If local 49.36 legislation enacted during the 1999 regular session or any 50.1 special session occurring before October 1, 1999, provides a 50.2 benefit increase for one consolidation account member or more, 50.3 whether the applicable municipality has given final approval to 50.4 the local legislation yet or not, the total actuarial accrued 50.5 liability calculation must include that benefit increase. The 50.6 actuary also must calculate any account unfunded accrued 50.7 liability or any account funding surplus. An account unfunded 50.8 accrued liability is the actuarial accrued liability reduced by 50.9 the amount of the current value of assets, if the resulting 50.10 number is positive. An account funding surplus is the actuarial 50.11 accrued liability reduced by the amount of the current value of 50.12 assets, if the resulting number is negative. 50.13 (d) The actuary also must calculate the amortizable base 50.14 for every consolidation account. The amortizable base is the 50.15 present value of future benefits for all account members who are 50.16 not included in the participation of the account in the 50.17 Minnesota postretirement investment fund reduced by the present 50.18 value of 19 percent of future covered salary and further reduced 50.19 by the current value of account assets other than its 50.20 participation in the Minnesota postretirement investment fund, 50.21 after adjustment for fiscal year 1999 net mortality gains and 50.22 losses and for the net actuarial affect of the election of 50.23 postretirement adjustment coverage under subdivision 5. 50.24 (e) If the amortizable base under paragraph (d) is a 50.25 positive number, the receivable assets are an amount equal to 50.26 the amortizable base number. 50.27 (f) If the amortizable base under paragraph (d) is a 50.28 negative number, the actuary must calculate the residual asset 50.29 amount. The residual asset amount is: 50.30 (1) one-half of the amount by which the current assets of 50.31 the account exceed 100 percent of the total actuarial accrued 50.32 liability up to that percentage of the total actuarial accrued 50.33 liability that equals the public employees police and fire fund 50.34 funded ratio on June 30, 1999; and 50.35 (2) the amount by which the current assets of the account 50.36 exceed that percentage of the total actuarial accrued liability 51.1 that equals the public employees police and fire fund funded 51.2 ratio on June 30, 1999. Following the calculation of the 51.3 residual asset amount for each applicable municipality and the 51.4 verification of the amount by the legislative auditor, the 51.5 executive director of the public employees retirement 51.6 association shall pay the applicable residual asset amount with 51.7 interest equal to the average yield on the invested treasurer's 51.8 cash fund from July 1, 1999, to the first of the month in which 51.9 the payment is issued to each qualifying municipality. The 51.10 residual asset amount must be used by the municipality to defray 51.11 fire department expenditure items if the residual asset amount 51.12 was derived from a fire consolidation account or to defray 51.13 police department expenditure items if the residual asset amount 51.14 was derived from a police consolidation account. The residual 51.15 asset amount must be deposited in a special fund or account in 51.16 the municipal treasury established for that purpose. The 51.17 special fund or account must be invested and any investment 51.18 return attributable to the residual asset amount must be 51.19 credited to that special fund or account and its disbursement 51.20 similarly restricted. The special fund or account must be 51.21 audited periodically by the state auditor. 51.22 Subd. 8. [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 51.23 Effective on the first day of the first full pay period 51.24 following June 30, 1999, the employee contribution rate for 51.25 merging former consolidation account active members is the rate 51.26 specified in section 353.65, subdivision 2, and the regular 51.27 municipal contribution rate on behalf of former consolidation 51.28 account active members is the rate specified in section 353.65, 51.29 subdivision 3. 51.30 (b) The municipality associated with a merging former local 51.31 consolidation account that had a positive value amortizable base 51.32 calculation under subdivision 7, paragraph (d), must make an 51.33 additional municipal contribution to the public employees police 51.34 and fire plan for the period from January 1, 2000, to December 51.35 31, 2009. The amount of the additional municipal contribution 51.36 is the amount calculated by the actuary retained by the 52.1 legislative commission on pensions and retirement and certified 52.2 by the executive director of the public employees retirement 52.3 association by which the amortizable base amount would be 52.4 amortized on a level dollar annual end-of-the-year contribution 52.5 basis, using an 8.5 percent interest rate assumption. The 52.6 additional municipal contribution is payable during the month of 52.7 January, is without any interest, or if made after January 31, 52.8 but before the next following December 31, is payable with 52.9 interest for the period since January 1 at a rate which is equal 52.10 to the preretirement interest rate assumption specified in 52.11 section 356.215, subdivision 4d, applicable to the fund 52.12 expressed as a monthly rate and compounded on a monthly basis or 52.13 if made after December 31 of the year in which the additional 52.14 municipal contribution is due is payable with interest at a rate 52.15 which is four percent greater than the highest interest rate 52.16 assumption specified in section 356.215, subdivision 4d, 52.17 expressed as a monthly rate and compounded monthly from January 52.18 1 of the year in which the additional municipal contribution is 52.19 due until the date on which payment is made. 52.20 Subd. 9. [BENEFIT PLAN COVERAGE.] Unless modified by an 52.21 election authorized under subdivision 4, 5, or 6, the benefit 52.22 plan election by any person or on behalf of any person under 52.23 section 353A.08 remains binding. Merging former consolidation 52.24 account members who elected the entirety of the public employees 52.25 police and fire benefit plan are entitled to an applicable 52.26 annuity or benefit under the provisions of sections 353.63 to 52.27 353.68 in effect on the day that the merging former 52.28 consolidation account member terminated active service as a 52.29 police officer or firefighter, whichever applies. 52.30 Subd. 10. [CONSOLIDATION ACCOUNT TERMINATION.] Unless the 52.31 municipality has elected to retain the consolidation account 52.32 under subdivision 1, paragraph (b), upon the payment of all 52.33 residual asset amounts under subdivision 7 and the transfer of 52.34 all liabilities and remaining assets under subdivisions 2 and 3, 52.35 the local consolidation accounts under chapter 353A in existence 52.36 on March 1, 1999, are terminated, and all benefits accrued up to 53.1 the date of termination are the obligation of the public 53.2 employees police and fire fund. 53.3 Sec. 11. Minnesota Statutes 1998, section 353A.09, 53.4 subdivision 4, is amended to read: 53.5 Subd. 4. [MEMBER CONTRIBUTIONS.] Following the effective 53.6 date of consolidation, the applicable member contribution rate 53.7 and applicable salary rate to which the member contribution rate 53.8 applies for persons who were formerly members of the relief 53.9 association shall be determined as follows: 53.10 (1) if the person has elected coverage by the public 53.11 employees police and fire fund benefit plan under section 53.12 353A.08, the applicable member contribution rate shall be that 53.13 rate specified in Minnesota Statutes 1998, section 353.65, 53.14 subdivision 2, and the applicable salary rate to which the 53.15 member contribution rate applies shall be the actual salary of 53.16 the person, as defined in section 353.01, subdivision 10; and 53.17 (2) if the person has not elected coverage by the public 53.18 employees police and fire fund benefit plan under section 53.19 353A.08, the applicable member contribution rate shall be the 53.20 rate specified in section 69.77, subdivision 2a, or the rate 53.21 specified in the applicable general law, special law, or bylaw 53.22 provision governing the relief association as of the date of the 53.23 initiation of consolidation, whichever is greater, and the 53.24 applicable salary rate to which the member contribution rate 53.25 applies shall be the salary rate specified in the applicable 53.26 general law, special law, or bylaw provision governing the 53.27 relief association as of the date of the initiation of 53.28 consolidation or the actual salary of the person, including 53.29 overtime pay and any regularly occurring special payments but 53.30 excluding lump sum annual leave payments, worker's compensation 53.31 payments, and severance payments, whichever salary rate is 53.32 greater. 53.33 The member contribution rate and applicable salary rate to 53.34 which the member contribution rate applies shall be effective as 53.35 of the first day of the first pay period occurring after the 53.36 effective date of consolidation. 54.1 The chief administrative officer of the municipal police 54.2 department or municipal fire department, whichever applies, 54.3 shall cause the member contributions required under this 54.4 subdivision to be deducted in the manner and subject to the 54.5 terms provided in section 353.27, subdivision 4. 54.6 Sec. 12. Minnesota Statutes 1998, section 353A.09, 54.7 subdivision 5, is amended to read: 54.8 Subd. 5. [REGULAR AND ADDITIONAL MUNICIPAL CONTRIBUTIONS.] 54.9 (a) Following the effective date of consolidation, the 54.10 applicable regular municipal contribution rate and applicable 54.11 salary rate to which the regular municipal contribution rate 54.12 applies on behalf of persons who were formerly members of the 54.13 relief association shall be as follows: 54.14 (1) on behalf of persons who have elected coverage by the 54.15 public employees police and fire fund benefit plan under section 54.16 353A.08, the applicable regular municipal contribution rate 54.17 shall be that specified in Minnesota Statutes 1998, section 54.18 353.65, subdivision 3, and the applicable salary rate to which 54.19 the regular municipal contribution rate applies shall be that 54.20 specified in subdivision 4, clause (1); and 54.21 (2) on behalf of persons who have not elected coverage by 54.22 the public employees police and fire fund benefit plan under 54.23 section 353A.08, the applicable regular municipal contribution 54.24 rate shall be 12 percent and the applicable salary rate to which 54.25 the regular municipal contribution rate applies shall be that 54.26 specified in subdivision 4, clause (2). 54.27 (b) Following the effective date of consolidation, the 54.28 applicable additional municipal contribution amount shall be the 54.29 sum of the following: 54.30 (1) the annual level dollar contribution as calculated by 54.31 the actuary retained by the commission as of the effective date 54.32 of consolidation which is required to amortize by December 31, 54.33 2010, that portion of the present value of future benefits 54.34 computed on the basis of the benefit plan producing the largest 54.35 present value of future benefits for each individual which 54.36 remains after subtracting the present value of future member 55.1 contributions as provided in subdivision 4, the present value of 55.2 future regular municipal contributions as provided in clause 55.3 (a), and the market value of the assets of the relief 55.4 association transferred to the fund; and 55.5 (2) the amount of the annual contribution as calculated by 55.6 the actuary retained by the commission as of the most recent 55.7 actuarial valuation date which is required to amortize on a 55.8 level annual dollar basis the amount of any net actuarial 55.9 experience loss incurred during the year which ended as of the 55.10 day immediately before the most recent actuarial valuation date 55.11 by December 31 of the year occurring 15 years later. 55.12 (c) Regular municipal contributions shall be made in the 55.13 manner provided in section 353.28. Additional municipal 55.14 contributions shall be paid during the calendar year following 55.15 the annual certification of the amount of the annual additional 55.16 municipal contribution by the executive director of the public 55.17 employees retirement association and, if made during the month 55.18 of January, shall be payable without any interest, or if made 55.19 after January 31, but before the next following December 31, 55.20 shall be payable with interest for the period since January 1 at 55.21 a rate which is equal to the preretirement interest rate 55.22 assumption specified in section 356.215, subdivision 4d, 55.23 applicable to the fund expressed as a monthly rate and 55.24 compounded on a monthly basis or if made after December 31 of 55.25 the year in which the additional municipal contribution is due 55.26 shall be payable with interest at a rate which is four percent 55.27 greater than the highest interest rate assumption specified in 55.28 section 356.215, subdivision 4d, expressed as a monthly rate and 55.29 compounded monthly from January 1 of the year in which the 55.30 additional municipal contribution is due until the date on which 55.31 payment is made. 55.32 Sec. 13. Minnesota Statutes 1998, section 353A.09, is 55.33 amended by adding a subdivision to read: 55.34 Subd. 5a. [AUTHORITY TO MODIFY CONTRIBUTION RATES.] (a) 55.35 Notwithstanding subdivisions 4 and 5, a municipality associated 55.36 with a consolidation account, with municipal governing body 56.1 approval, may implement the contribution rates specified in 56.2 section 353.65, subdivisions 2 and 3, rather than the rates 56.3 specified in subdivisions 4 and 5. 56.4 (b) If the contribution rates specified in section 353.65, 56.5 subdivisions 2 and 3, are subsequently modified, the applicable 56.6 municipal governing body must approve that subsequent 56.7 modification. 56.8 (c) The municipal governing body approval must be in the 56.9 form of a municipal resolution. The municipal resolution must 56.10 specify the effective date for the contribution rate 56.11 modification. The municipal resolution must be filed with the 56.12 executive director of the public employees retirement 56.13 association, the state auditor, the secretary of state, and the 56.14 executive director of the legislative commission on pensions and 56.15 retirement. 56.16 Sec. 14. Minnesota Statutes 1998, section 356.215, 56.17 subdivision 4g, is amended to read: 56.18 Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 56.19 the exhibit indicating the level normal cost, the actuarial 56.20 valuation must contain an exhibit indicating the additional 56.21 annual contribution sufficient to amortize the unfunded 56.22 actuarial accrued liability. For funds governed by chapters 3A, 56.23 352, 352B, 352C, 353, 354, 354A, and 490, the additional 56.24 contribution must be calculated on a level percentage of covered 56.25 payroll basis by the established date for full funding in effect 56.26 when the valuation is prepared. For funds governed by chapter 56.27 3A, sections 352.90 through 352.951, chapters 352B, 352C, 56.28 sections 353.63 through 353.68, and chapters 353C, 354A, and 56.29 490, the level percent additional contribution must be 56.30 calculated assuming annual payroll growth of 6.5 percent. For 56.31 funds governed by sections 352.01 through 352.86 and chapter 56.32 354, the level percent additional contribution must be 56.33 calculated assuming an annual payroll growth of five percent. 56.34 For the fund governed by sections 353.01 through 353.46, the 56.35 level percent additional contribution must be calculated 56.36 assuming an annual payroll growth of six percent. For all other 57.1 funds, the additional annual contribution must be calculated on 57.2 a level annual dollar amount basis. 57.3 (b) For any fund other than the Minneapolis employees 57.4 retirement fund, after the first actuarial valuation date 57.5 occurring after June 1, 1989, if there has not been a change in 57.6 the actuarial assumptions used for calculating the actuarial 57.7 accrued liability of the fund, a change in the benefit plan 57.8 governing annuities and benefits payable from the fund, a change 57.9 in the actuarial cost method used in calculating the actuarial 57.10 accrued liability of all or a portion of the fund, or a 57.11 combination of the three, which change or changes by themselves 57.12 without inclusion of any other items of increase or decrease 57.13 produce a net increase in the unfunded actuarial accrued 57.14 liability of the fund, the established date for full funding for 57.15 the first actuarial valuation made after June 1, 1989, and each 57.16 successive actuarial valuation is the first actuarial valuation 57.17 date occurring after June 1, 2020. 57.18 (c) For any fund or plan other than the Minneapolis 57.19 employees retirement fund, after the first actuarial valuation 57.20 date occurring after June 1, 1989, if there has been a change in 57.21 any or all of the actuarial assumptions used for calculating the 57.22 actuarial accrued liability of the fund, a change in the benefit 57.23 plan governing annuities and benefits payable from the fund, a 57.24 change in the actuarial cost method used in calculating the 57.25 actuarial accrued liability of all or a portion of the fund, or 57.26 a combination of the three, and the change or changes, by 57.27 themselves and without inclusion of any other items of increase 57.28 or decrease, produce a net increase in the unfunded actuarial 57.29 accrued liability in the fund, the established date for full 57.30 funding must be determined using the following procedure: 57.31 (i) the unfunded actuarial accrued liability of the fund 57.32 must be determined in accordance with the plan provisions 57.33 governing annuities and retirement benefits and the actuarial 57.34 assumptions in effect before an applicable change; 57.35 (ii) the level annual dollar contribution or level 57.36 percentage, whichever is applicable, needed to amortize the 58.1 unfunded actuarial accrued liability amount determined under 58.2 item (i) by the established date for full funding in effect 58.3 before the change must be calculated using the interest 58.4 assumption specified in subdivision 4d in effect before the 58.5 change; 58.6 (iii) the unfunded actuarial accrued liability of the fund 58.7 must be determined in accordance with any new plan provisions 58.8 governing annuities and benefits payable from the fund and any 58.9 new actuarial assumptions and the remaining plan provisions 58.10 governing annuities and benefits payable from the fund and 58.11 actuarial assumptions in effect before the change; 58.12 (iv) the level annual dollar contribution or level 58.13 percentage, whichever is applicable, needed to amortize the 58.14 difference between the unfunded actuarial accrued liability 58.15 amount calculated under item (i) and the unfunded actuarial 58.16 accrued liability amount calculated under item (iii) over a 58.17 period of 30 years from the end of the plan year in which the 58.18 applicable change is effective must be calculated using the 58.19 applicable interest assumption specified in subdivision 4d in 58.20 effect after any applicable change; 58.21 (v) the level annual dollar or level percentage 58.22 amortization contribution under item (iv) must be added to the 58.23 level annual dollar amortization contribution or level 58.24 percentage calculated under item (ii); 58.25 (vi) the period in which the unfunded actuarial accrued 58.26 liability amount determined in item (iii) is amortized by the 58.27 total level annual dollar or level percentage amortization 58.28 contribution computed under item (v) must be calculated using 58.29 the interest assumption specified in subdivision 4d in effect 58.30 after any applicable change, rounded to the nearest integral 58.31 number of years, but not to exceed 30 years from the end of the 58.32 plan year in which the determination of the established date for 58.33 full funding using the procedure set forth in this clause is 58.34 made and not to be less than the period of years beginning in 58.35 the plan year in which the determination of the established date 58.36 for full funding using the procedure set forth in this clause is 59.1 made and ending by the date for full funding in effect before 59.2 the change; and 59.3 (vii) the period determined under item (vi) must be added 59.4 to the date as of which the actuarial valuation was prepared and 59.5 the date obtained is the new established date for full funding. 59.6 (d) For the Minneapolis employees retirement fund, the 59.7 established date for full funding is June 30, 2020. 59.8 (e) For the following plans for which the annual actuarial 59.9 valuation indicates an excess of valuation assets over the 59.10 actuarial accrued liability, the valuation assets in excess of 59.11 the actuarial accrued liability must be recognized in the 59.12 following manner: 59.13 (1) the public employees retirement association police and 59.14 fire plan, the valuation assets in excess of the actuarial 59.15 accrued liability serve to reduce the current contribution 59.16 requirements by an amount equal to the amortization of the 59.17 excess expressed as a level percentage of pay over a 30-year 59.18 period beginning anew with each annual actuarial valuation of 59.19 the plan; and 59.20 (2) the correctional employees retirement plan of the 59.21 Minnesota state retirement system, and the state patrol 59.22 retirement plan, an excess of valuation assets over actuarial 59.23 accrued liability must be amortized in the same manner over the 59.24 same period as an unfunded actuarial accrued liability but must 59.25 serve to reduce the required contribution instead of increasing 59.26 it. 59.27 Sec. 15. Minnesota Statutes 1998, section 423A.02, 59.28 subdivision 1b, is amended to read: 59.29 Subd. 1b. [ADDITIONAL AMORTIZATION STATE AID.] (a) 59.30 Annually, on October 1, the commissioner of revenue shall 59.31 allocate the additional amortization state aid transferred under 59.32 section 69.021, subdivision 11, to: 59.33 (1) all police or salaried firefighter relief associations 59.34 governed by and in full compliance with the requirements of 59.35 section 69.77, that had an unfunded actuarial accrued liability 59.36 in the actuarial valuation prepared under sections 356.215 and 60.1 356.216 as of the preceding December 31;and60.2 (2) all local police or salaried firefighter consolidation 60.3 accounts governed by chapter 353A that are certified by the 60.4 executive director of the public employees retirement 60.5 association as having for the current fiscal year an additional 60.6 municipal contribution amount under section 353A.09, subdivision 60.7 5, paragraph (b), and that have implemented section 353A.083, 60.8 subdivision 1, if the effective date of the consolidation 60.9 preceded May 24, 1993, and that have implemented section 60.10 353A.083, subdivision 2, if the effective date of the 60.11 consolidation preceded June 1, 1995.; and 60.12 (3) the public employees police and fire fund on behalf of 60.13 municipalities that received amortization aid in 1999 and are 60.14 required to make an additional municipal contribution under 60.15 section 353.665, subdivision 8, for the duration of the required 60.16 additional contribution. 60.17 (b) The commissioner shall allocate the state aid on the 60.18 basis of the proportional share of the relief association or 60.19 consolidation account of the total unfunded actuarial accrued 60.20 liability of all recipient relief associations and consolidation 60.21 accounts as of December 31, 1993, for relief associations, and 60.22 as of June 30, 1994, for consolidation accounts. 60.23 (c) Beginning October 1, 2000, and annually thereafter, the 60.24 commissioner shall allocate the state aid on the basis of 64.5 60.25 percent to the public employees police and fire fund or local 60.26 consolidation account, whichever applies, on behalf of 60.27 municipalities to which section 353.665, subdivision 8, 60.28 paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply 60.29 for distribution in accordance with paragraph (b) and subject to 60.30 the limitation in subdivision 4, 34.2 percent to the city of 60.31 Minneapolis to fund any unfunded actuarial accrued liability in 60.32 the actuarial valuation prepared under sections 356.215 and 60.33 356.216 as of the preceding December 31 for the Minneapolis 60.34 police relief association or the Minneapolis fire department 60.35 relief association, and 1.3 percent to the city of Virginia to 60.36 fund any unfunded actuarial accrued liability in the actuarial 61.1 valuation prepared under sections 356.215 and 356.216 as of the 61.2 preceding December 31 for the Virginia fire department relief 61.3 association. In the event that there is no unfunded actuarial 61.4 accrued liability in both the Minneapolis police relief 61.5 association and the Minneapolis fire department relief 61.6 association, the commissioner shall allocate that 34.2 percent 61.7 of the aid as follows: 49 percent to the Minneapolis teachers 61.8 retirement fund association, provided that, annually, beginning 61.9 on July 1, 2005, if a teacher's association five-year average 61.10 time-weighted rate of investment return does not equal or exceed 61.11 the performance of a composite portfolio assumed passively 61.12 managed (indexed) invested ten percent in cash equivalents, 60 61.13 percent bonds and similar debt securities, and 30 percent in 61.14 domestic stock calculated using the formula under section 61.15 11A.04, clause (11), the aid under this section ceases until the 61.16 five-year annual rate of return equals or exceeds the 61.17 performance of a composite portfolio, 21 percent to the St. Paul 61.18 teachers retirement fund association, provided that, annually, 61.19 beginning on July 1, 2005, if a teacher's association five-year 61.20 average time-weighted rate of investment return does not equal 61.21 or exceed the performance of a composite portfolio assumed 61.22 passively managed (indexed) invested ten percent in cash 61.23 equivalents, 60 percent bonds and similar debt securities, and 61.24 30 percent in domestic stock calculated using the formula under 61.25 section 11A.04, clause (11), the aid under this section ceases 61.26 until the five-year annual rate of return equals or exceeds the 61.27 performance of a composite portfolio, and 30 percent as 61.28 additional funding to support minimum fire state aid for 61.29 volunteer firefighter relief associations, with the allocation 61.30 made at the same time and under the same procedures in 61.31 subdivision 3. In the event there is no actuarial accrued 61.32 unfunded liability in the Virginia fire department relief 61.33 association, the commissioner shall allocate that 1.3 percent of 61.34 the aid as follows: 49 percent to the Minneapolis teachers 61.35 retirement fund association, provided that, annually, beginning 61.36 on July 1, 2005, if a teacher's association five-year average 62.1 time-weighted rate of investment return does not equal or exceed 62.2 the performance of a composite portfolio assumed passively 62.3 managed (indexed) invested ten percent in cash equivalents, 60 62.4 percent bonds and similar debt securities, and 30 percent in 62.5 domestic stock calculated using the formula under section 62.6 11A.04, clause (11), the aid under this section ceases until the 62.7 five-year annual rate of return equals or exceeds the 62.8 performance of a composite portfolio, 21 percent to the St. Paul 62.9 teachers retirement fund association, provided that, annually, 62.10 beginning on July 1, 2005, if a teacher's association five-year 62.11 average time-weighted rate of investment return does not equal 62.12 or exceed the performance of a composite portfolio assumed 62.13 passively managed (indexed) invested ten percent in cash 62.14 equivalents, 60 percent bonds and similar debt securities, and 62.15 30 percent in domestic stock calculated using the formula under 62.16 section 11A.04, clause (11), the aid under this section ceases 62.17 until the five-year annual rate of return equals or exceeds the 62.18 performance of a composite portfolio, and 30 percent as 62.19 additional funding to support minimum fire state aid for 62.20 volunteer firefighter relief associations, with the allocation 62.21 made at the same time and under the same procedures in 62.22 subdivision 3. 62.23 (d) Additional amortization state aid payable to the public 62.24 employees retirement association on behalf of a municipality 62.25 must be credited by the executive director of the public 62.26 employees retirement association against any additional 62.27 municipal contribution to which the applicable municipality is 62.28 obligated to make under section 353A.09, subdivision 5, or under 62.29 section 353.665, subdivision 8. 62.30 (e) The amounts required under this subdivision are 62.31 annually appropriated to the commissioner of revenue. 62.32 Sec. 16. Minnesota Statutes 1998, section 423A.02, 62.33 subdivision 2, is amended to read: 62.34 Subd. 2. [CONTINUED ELIGIBILITY.] A municipality that has 62.35 qualified for amortization state aid under subdivision 1 on 62.36 December 31, 1984, and has an additional municipal contribution 63.1 payable under section 353A.09, subdivision 5, paragraph (b), as 63.2 of the most recent December 31, continues upon application to be 63.3 entitled to receive amortization state aid under subdivision 1 63.4 and supplementary amortization state aid under subdivision 1a, 63.5 after the local police or salaried firefighters' relief 63.6 association has been consolidated into the public employees 63.7 police and fire fund. If a municipality loses entitlement for 63.8 amortization state aid and supplementary amortization state aid 63.9 in any year because of not having an additional municipal 63.10 contribution under section 353A.09, subdivision 5, paragraph 63.11 (b), the municipality is not entitled to the aid amounts in any 63.12 subsequent year.If the actuarial assumptions specified in63.13section 356.215 are changed in 1997, and the change results in a63.14municipality having an additional municipal contribution, and63.15the municipality had previously lost entitlement for63.16amortization aid and supplementary amortization due to not63.17having an additional municipal contribution, then the63.18municipality is again entitled to receive amortization aid and63.19supplementary amortization aid in the same amount as it63.20previously received.A municipality that received amortization 63.21 aid in 1999 and is required to make an additional municipal 63.22 contribution under section 353.665, subdivision 8, continues to 63.23 qualify for the amortization state aid and the supplemental 63.24 amortization aid until December 31, 2009. 63.25 Sec. 17. Minnesota Statutes 1998, section 423A.02, is 63.26 amended by adding a subdivision to read: 63.27 Subd. 4. [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 63.28 total of amortization aid, supplemental amortization aid, and 63.29 additional amortization aid under this section payable to the 63.30 executive director of the public employees retirement 63.31 association on behalf of a municipality to which section 63.32 353.665, subdivision 8, paragraph (b), applies, may not exceed 63.33 the amount of the additional municipal contribution payable by 63.34 an individual municipality under section 353.665, subdivision 8, 63.35 paragraph (b). 63.36 (b) Any aid amount in excess of the limit under this 64.1 subdivision for an individual municipality must be redistributed 64.2 to the other municipalities to which section 353.665, 64.3 subdivision 8, paragraph (b), applies. The excess aid must be 64.4 distributed in proportion to each municipality's additional 64.5 municipal contribution under section 353.665, subdivision 8, 64.6 paragraph (b). 64.7 (c) When the total aid for each municipality under this 64.8 section equals the limit under paragraph (a), any aid in excess 64.9 of the limit must be redistributed under subdivisions 1, 1a, and 64.10 1b. 64.11 Sec. 18. Minnesota Statutes 1998, section 423A.02, is 64.12 amended by adding a subdivision to read: 64.13 Subd. 5. [TERMINATION OF STATE AID PROGRAMS.] The 64.14 amortization state aid, supplemental amortization state aid, and 64.15 additional amortization state aid programs terminate when the 64.16 assets of the Minneapolis teachers retirement fund association 64.17 equal the actuarial accrued liability of that plan and when the 64.18 assets of the St. Paul teachers retirement fund association 64.19 equal the actuarial accrued liability of that plan. 64.20 Sec. 19. [1999 PERA-P&F ACTUARIAL VALUATION.] 64.21 (a) As of July 1, 1999, no actuarial valuations are 64.22 required of the local police and fire consolidation accounts 64.23 which were in existence before March 1, 1999, and have not been 64.24 retained under Minnesota Statutes, section 353.655, subdivision 64.25 1, paragraph (b). 64.26 (b) The actuary retained by the legislative commission on 64.27 pensions and retirement shall prepare all calculations required 64.28 under Minnesota Statutes, section 353.665, and shall present 64.29 them to the commission in a separate report. 64.30 (c) The calculated actuarial accrued liability of the 64.31 public employees police and fire plan for July 1, 1999, must 64.32 contain all liabilities associated with the former local police 64.33 and fire consolidation accounts affected by Minnesota Statutes, 64.34 section 353.665. 64.35 (d) The asset value of the public employees police and fire 64.36 plan for July 1, 1999, is the sum of the following: 65.1 (1) the current assets of the public employees police and 65.2 fire plan as of June 30, 1999, without reference to any local 65.3 consolidation accounts in existence on March 1, 1999; 65.4 (2) the amount of assets transferred from the Minnesota 65.5 postretirement investment fund with respect to local 65.6 consolidation accounts under Minnesota Statutes, section 65.7 353.655, subdivision 3; 65.8 (3) that portion of the market value of assets of the local 65.9 consolidation accounts affected by Minnesota Statutes, section 65.10 353.665, and not retained under Minnesota Statutes, section 65.11 353.665, subdivision 1, paragraph (b), after subtracting the 65.12 amount in clause (2) determined by multiplying the total by the 65.13 ratio that the current asset value of public employee police and 65.14 fire fund assets other than the participation in the Minnesota 65.15 postretirement investment fund as of June 30, 1999, without 65.16 reference to any local consolidation accounts in existence on 65.17 March 1, 1999, bears to the market value of the same assets; and 65.18 (4) a receivable amount equal to the present value of the 65.19 future additional municipal contributions required under 65.20 Minnesota Statutes, section 353.655, subdivision 8, paragraph 65.21 (b). 65.22 Sec. 20. [REPEALER.] 65.23 Minnesota Statutes 1998, section 353.65, subdivision 3a, is 65.24 repealed. 65.25 Sec. 21. [EFFECTIVE DATE.] 65.26 Sections 1 to 7, 10, 12, and 15 to 20 are effective on the 65.27 day following final enactment. Sections 8 and 9 are effective 65.28 on the first day of the first full pay period that begins after 65.29 June 30, 1999. Section 13 is effective on July 1, 2000. 65.30 ARTICLE 5 65.31 MINIMUM VOLUNTEER FIREFIGHTER 65.32 STATE AID AMOUNT CHANGES 65.33 Section 1. Minnesota Statutes 1998, section 69.021, 65.34 subdivision 7, is amended to read: 65.35 Subd. 7. [APPORTIONMENT OF FIRE STATE AID TO 65.36 MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 66.1 shall apportion the fire state aid relative to the premiums 66.2 reported on the Minnesota Firetown Premium Reports filed under 66.3 this chapter to each municipality and/or firefighters' relief 66.4 association. 66.5 (b) The commissioner shall calculate an initial fire state 66.6 aid allocation amount for each municipality or fire department 66.7 under paragraph (c) and a minimum fire state aid allocation 66.8 amount for each municipality or fire department under paragraph 66.9 (d). The municipality or fire department must receive the 66.10 larger fire state aid amount. 66.11 (c) The initial fire state aid allocation amount is the 66.12 amount available for apportionment as fire state aid under 66.13 subdivision 5, without inclusion of any additional funding 66.14 amount to support a minimum fire state aid amount under section 66.15 423A.02, subdivision 3, allocated one-half in proportion to the 66.16 population as shown in the last official statewide federal 66.17 census for each fire town and one-half in proportion to the 66.18 market value of each fire town, including (1) the market value 66.19 of tax exempt property and (2) the market value of natural 66.20 resources lands receiving in lieu payments under sections 66.21 477A.11 to 477A.14, but excluding the market value of minerals. 66.22 In the case of incorporated or municipal fire departments 66.23 furnishing fire protection to other cities, towns, or townships 66.24 as evidenced by valid fire service contracts filed with the 66.25 commissioner, the distribution must be adjusted proportionately 66.26 to take into consideration the crossover fire protection 66.27 service. Necessary adjustments shall be made to subsequent 66.28 apportionments. In the case of municipalities or independent 66.29 fire departments qualifying for the aid, the commissioner shall 66.30 calculate the state aid for the municipality or relief 66.31 association on the basis of the population and the market value 66.32 of the area furnished fire protection service by the fire 66.33 department as evidenced by duly executed and valid fire service 66.34 agreements filed with the commissioner. If one or more fire 66.35 departments are furnishing contracted fire service to a city, 66.36 town, or township, only the population and market value of the 67.1 area served by each fire department may be considered in 67.2 calculating the state aid and the fire departments furnishing 67.3 service shall enter into an agreement apportioning among 67.4 themselves the percent of the population and the market value of 67.5 each service area. The agreement must be in writing and must be 67.6 filed with the commissioner. 67.7 (d) The minimum fire state aid allocation amount is the 67.8 amount in addition to the initial fire state allocation amount 67.9 that is derived from any additional funding amount to support a 67.10 minimum fire state aid amount under section 423A.02, subdivision 67.11 3, and allocated to municipalities with volunteer firefighter 67.12 relief associations based on the number of active volunteer 67.13 firefighters who are members of the relief association as 67.14 reported in the annual financial reporting for the calendar year 67.15 1993 to the office of the state auditor, but not to exceed 30 67.16 active volunteer firefighters, so that all municipalities or 67.17 fire departments with volunteer firefighter relief associations 67.18 receive in total at least a minimum fire state aid amount per 67.19 1993 active volunteer firefighter to a maximum of 30 67.20 firefighters. If a relief association did not exist in calendar 67.21 year 1993, the number of active volunteer firefighters who are 67.22 members of the relief association as reported in the annual 67.23 financial reporting for calendar year 1998 to the office of the 67.24 state auditor, but not to exceed 30 active volunteer 67.25 firefighters, shall be used in this determination. 67.26 (e) The fire state aid must be paid to the treasurer of the 67.27 municipality where the fire department is located and the 67.28 treasurer of the municipality shall, within 30 days of receipt 67.29 of the fire state aid, transmit the aid to the relief 67.30 association if the relief association has filed a financial 67.31 report with the treasurer of the municipality and has met all 67.32 other statutory provisions pertaining to the aid apportionment. 67.33 (f) The commissioner may make rules to permit the 67.34 administration of the provisions of this section. Any 67.35 adjustments needed to correct prior misallocations must be made 67.36 to subsequent apportionments. 68.1 Sec. 2. [EFFECTIVE DATE.] 68.2 Section 1 is effective on the day following final enactment 68.3 and applies to the first fire state aid and minimum fire state 68.4 aid allocation occurring after that date. 68.5 ARTICLE 6 68.6 MINNEAPOLIS POLICE AND FIRE DEPARTMENT 68.7 RELIEF ASSOCIATIONS GOVERNANCE 68.8 CHANGES 68.9 Section 1. Minnesota Statutes 1998, section 423B.07, is 68.10 amended to read: 68.11 423B.07 [AUTHORIZED FUND DISBURSEMENTS.] 68.12 The police pension fund may be used only for the payment of: 68.13 (1) service, disability, or dependency pensions; 68.14 (2) notwithstanding a contrary provision of section 69.80, 68.15the salary of the secretary of the association in an amount not68.16to exceed 30 percent of the base salary of a first grade patrol68.17officer, the salary of the president of the association in an68.18amount not to exceed ten percent of the base salary of a first68.19grade patrol officer, andthe salaries of theotherelected 68.20 members of the board of trustees in an amount not to exceed 68.21 three units; 68.22 (3) expenses of officers and employees of the association 68.23 in connection with the protection of the fund; 68.24 (4) expenses of operating and maintaining the association, 68.25 including the administrative expenses related to the 68.26 administration of the insurance plan authorized in section 68.27 423B.08; and 68.28 (5) other expenses authorized by section 69.80, or other 68.29 applicable law. 68.30 Sec. 2. [CONTINUATION OF BOARD.] 68.31 Notwithstanding Minnesota Statutes, section 423A.01, 68.32 subdivision 2, or any other law to the contrary, the board of 68.33 trustees of the Minneapolis firefighters relief association 68.34 shall continue to govern the association until there are fewer 68.35 than 100 benefit recipients of the relief association pension 68.36 fund. The special fund thereafter must become a trust fund in 69.1 accordance with Minnesota Statutes, section 423A.01, subdivision 69.2 2. 69.3 Sec. 3. [EFFECTIVE DATE.] 69.4 (a) Section 1 is effective on December 31, 1999. 69.5 (b) Section 2 is effective on the day following approval by 69.6 the Minneapolis city council and compliance with Minnesota 69.7 Statutes, section 645.021, subdivision 3. 69.8 ARTICLE 7 69.9 METROPOLITAN COUNCIL TARGETED 69.10 EARLY RETIREMENT INCENTIVE 69.11 Section 1. [RETIREMENT INCENTIVE.] 69.12 The metropolitan council may offer its eligible employees, 69.13 as specified in sections 2 and 3, the retirement incentive 69.14 provided in section 4. 69.15 Sec. 2. [INCLUSION.] 69.16 If the metropolitan council chooses to offer the retirement 69.17 incentive under section 4, it must designate the positions or 69.18 group of positions within the council divisions specified in 69.19 section 3, clause (1), that will qualify for participation in 69.20 its retirement incentive program and may exclude otherwise 69.21 eligible employees. After initially designating the qualified 69.22 positions or group of positions, the council may at any time 69.23 modify its designation in order to further limit the qualified 69.24 positions or group of positions. 69.25 Sec. 3. [ELIGIBILITY.] 69.26 An employee of the metropolitan council is eligible to 69.27 participate in the retirement incentive program if the employee: 69.28 (1) was employed in the environmental services, community 69.29 development, or regional administration divisions of the council 69.30 on January 1, 1999; 69.31 (2) on or after the effective date of this article notifies 69.32 the council's regional administrator in writing of the 69.33 employee's intention to retire, the plan or plans from which the 69.34 individual will retire, and the employee's date of separation 69.35 from employment with the council; 69.36 (3) is, on the date the council receives the employee's 70.1 written notice of intention to retire, within the positions or 70.2 group of positions then currently designated by the council 70.3 under section 2; 70.4 (4) on the date of retirement has at least 25 years of 70.5 combined allowable service in any covered fund or funds listed 70.6 in Minnesota Statutes, section 356.30, subdivision 3; 70.7 (5) on the date of retirement is at least 55 years of age; 70.8 (6) upon retirement is immediately eligible for a 70.9 retirement annuity from a defined benefit plan listed in 70.10 Minnesota Statutes, section 356.30, subdivision 3; and 70.11 (7) has a retirement annuity accrual date in the applicable 70.12 plan or plans on or after July 1, 1999, and before July 1, 2000. 70.13 Sec. 4. [RETIREMENT INCENTIVE.] 70.14 Subdivision 1. [FORMULA INCREASE.] For an eligible 70.15 employee who elects to participate in the retirement incentive 70.16 program, the benefit accrual rate multiplier percentage or 70.17 percentages used to calculate the retirement annuity from each 70.18 defined benefit plan listed in Minnesota Statutes, section 70.19 356.30, subdivision 3, from which the employee is eligible to 70.20 receive a retirement annuity must be increased by .25 percentage 70.21 point for each year of allowable service, and pro rata for 70.22 completed months less than a full year, in the applicable plan 70.23 or plans. If the eligible employee has more than 30 years of 70.24 combined service in covered plans, the .25 percentage point 70.25 increase applies only to the first 30 years of allowable service 70.26 in such covered funds. 70.27 Subd. 2. [CERTIFICATION OF ELIGIBILITY.] Before applying 70.28 the formula increase in subdivision 1, the applicable retirement 70.29 plan or plans must receive a certification from the council's 70.30 regional administrator that the employee meets the eligibility 70.31 criteria in clauses (1), (2), and (3) of section 3. 70.32 Subd. 3. [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 70.33 metropolitan council chooses to offer a retirement incentive 70.34 under this section, it must make an additional employer 70.35 contribution or contributions as specified in paragraph (b) to 70.36 the applicable retirement plan or plans from which the eligible 71.1 individual retired under the incentive program. 71.2 (b) The additional employer contribution for the applicable 71.3 employee to each applicable plan is an amount equal to the 71.4 difference in the actuarial present value of the annuity payable 71.5 by the plan for the employee, with and without the retirement 71.6 incentive under subdivision 1. The actuarial present value 71.7 calculations must be made by the chief administrative officer of 71.8 the applicable retirement plan. 71.9 (c) An additional employer contribution under paragraph (b) 71.10 must be paid within 60 days from the effective date of the 71.11 applicable annuity for the eligible employee who elects to 71.12 participate in the retirement incentive. 71.13 Sec. 5. [LIMIT ON REHIRING AND FUTURE SERVICES.] 71.14 The metropolitan council may not rehire or contract for 71.15 services from a former employee who retires with an early 71.16 retirement incentive under this article. 71.17 Sec. 6. [APPLICATION OF OTHER LAWS.] 71.18 Unilateral implementation of retirement incentives under 71.19 this article by the metropolitan council is not an unfair labor 71.20 practice for purposes of Minnesota Statutes, chapter 179A. 71.21 Sec. 7. [EFFECTIVE DATE.] 71.22 Sections 1 to 6 are effective on the day following final 71.23 enactment. 71.24 ARTICLE 8 71.25 VARIOUS SMALL GROUP PENSION CHANGES 71.26 Section 1. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; 71.27 PURCHASE OF SERVICE CREDIT BY RUSH CITY SCHOOL DISTRICT 71.28 EMPLOYEE.] 71.29 (a) Notwithstanding Minnesota Statutes, section 353.01, 71.30 subdivision 16, or any other law to the contrary, an eligible 71.31 person described in paragraph (b) may purchase service credit in 71.32 the public employees retirement association for the period 71.33 described in paragraph (c). 71.34 (b) An eligible person is a person who: 71.35 (1) was born on October 28, 1948; 71.36 (2) was first employed by the Rush City school district in 72.1 September 1968; 72.2 (3) has received service credit from the public employees 72.3 retirement association for a period of leave for military 72.4 service from April 1969 through March 1970; 72.5 (4) has not received service credit from the public 72.6 employees retirement association for a period of leave for 72.7 military service from April 1970 through March 1971. 72.8 (c) The period for service credit purchase is the 72.9 uncredited portion of the period from April 1970 through March 72.10 1971. 72.11 (d) An eligible person may purchase service under this 72.12 section by making the payment determined under Minnesota 72.13 Statutes, section 356.55, for the period in paragraph (c). 72.14 (e) The person who desires to purchase service credit under 72.15 this section must apply with the executive director to make the 72.16 purchase. The application must include all necessary 72.17 documentation of the person's qualifications to make the 72.18 purchase, signed written permission to allow the executive 72.19 director to request and receive necessary verification of 72.20 applicable facts and eligibility requirements, and any other 72.21 relevant information that the executive director may require. 72.22 (f) Service credit for the purchase period must be granted 72.23 by the public employees retirement association to the purchaser 72.24 on receipt of the purchase payment amount. 72.25 Sec. 2. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 72.26 SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED 72.27 LEAVE.] 72.28 (a) An eligible teacher as defined in paragraph (b) is 72.29 entitled to purchase allowable and formula service credit from 72.30 the teachers retirement association for an uncredited leave 72.31 during the 1996-1997 school year under terms specified in 72.32 paragraph (c). 72.33 (b) An eligible teacher is a person who: 72.34 (1) was born on November 14, 1944; 72.35 (2) became a member of the teachers retirement association 72.36 on September 29, 1972; 73.1 (3) is employed by independent school district No. 786 73.2 (Bertha-Hewitt); and 73.3 (4) failed to obtain one year of service credit due to 73.4 classification of a 1996-1997 school year leave as an "other" 73.5 leave rather than an extended leave. 73.6 (c) Notwithstanding Minnesota Statutes, section 356.55, 73.7 subdivision 5, the eligible person may pay, before January 1, 73.8 2000, or the date of retirement, whichever is earlier, an amount 73.9 equal to the employee contribution rate or rates in effect 73.10 during the leave period specified in paragraph (b) applied to 73.11 the actual salary rate or rates in effect during that period, 73.12 plus any applicable employer contributions the employee agreed 73.13 to pay under an agreement with independent school district No. 73.14 786, plus annual compound interest at the rate of 8.5 percent 73.15 from June 30, 1997, to the date on which the payment is actually 73.16 made. Independent school district No. 786 (Bertha-Hewitt) must 73.17 pay the remaining balance of the prior service credit purchase 73.18 payment amount calculated under Minnesota Statutes, section 73.19 356.55, within 30 days of the payment by the eligible person. 73.20 The executive director of the teachers retirement association 73.21 must notify the superintendent of independent school district 73.22 No. 786 of its payment amount and payment due date if the 73.23 eligible person makes the required payment. 73.24 (d) If independent school district No. 786 fails to pay its 73.25 portion of the required prior service credit purchase payment 73.26 amount, the executive director may notify the commissioner of 73.27 finance of that fact and the commissioner of finance may order 73.28 that the required employer payment be deducted from the next 73.29 subsequent payment or payments of state education aid to the 73.30 school district and be transmitted to the teachers retirement 73.31 association. 73.32 (e) An eligible teacher must provide any relevant 73.33 documentation required by the executive director to determine 73.34 eligibility for the prior service credit under this section. 73.35 (f) Service credit for the purchase period must be granted 73.36 by the teachers retirement association to the account of the 74.1 eligible teacher upon receipt of the purchase payment amount 74.2 specified in paragraph (c). 74.3 Sec. 3. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 74.4 UNREQUESTED LEAVE PERIOD BY VIRGINIA TEACHER.] 74.5 (a) A qualified teacher described in paragraph (b) is 74.6 entitled to purchase one year of allowable and formula service 74.7 credit from the teachers retirement association for a one-year 74.8 portion of the period of unrequested leave from teaching service 74.9 specified in paragraph (b), clause (5), upon the payment of the 74.10 purchase price specified in paragraph (c). 74.11 (b) A qualified teacher is a person who: 74.12 (1) was born in 1943; 74.13 (2) is a current member of the teachers retirement 74.14 association; 74.15 (3) initially was employed as a teacher in 1966 by the 74.16 Alexandria school district; 74.17 (4) was subsequently employed as an industrial arts teacher 74.18 at the Virginia high school by the Virginia school district; and 74.19 (5) was placed on unrequested leave by the Virginia school 74.20 district for the 1983-1984 and 1984-1985 school years. 74.21 (c) The purchase payment amount must be determined as 74.22 provided in Minnesota Statutes, section 356.55. 74.23 (d) Payment of the prior service credit purchase amount 74.24 must be made by January 1, 2000. 74.25 Sec. 4. [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL 74.26 BUREAU OF HEALTH EMPLOYEE.] 74.27 (a) An eligible person, as described in paragraph (b), is 74.28 entitled to purchase coordinated service credit in the public 74.29 employees retirement association general plan for the period of 74.30 employment described in paragraph (b), clause (2), by making 74.31 payment as specified in paragraph (c). 74.32 (b) An eligible person is a person who: 74.33 (1) was born on May 22, 1932; 74.34 (2) was employed by the St. Paul Bureau of Health from 74.35 March 17, 1958, to September 21, 1962, was covered by the St. 74.36 Paul bureau of health relief association as a result of that 75.1 employment, and who forfeited all service credit in that relief 75.2 association upon leaving that employment; and 75.3 (3) later became a coordinated member of the general plan 75.4 of the public employees retirement association and currently is 75.5 a coordinated member of that plan. 75.6 (c) An eligible person described in paragraph (b) may 75.7 purchase service credit from the public employees retirement 75.8 association by paying the amount specified in Minnesota 75.9 Statutes, section 356.55, prior to termination of public 75.10 employees retirement association covered employment or prior to 75.11 January 1, 2000, whichever is earlier. If the city of St. Paul 75.12 agrees to make a payment under Minnesota Statutes, section 75.13 356.55, subdivision 5, an eligible person must make the employee 75.14 payments prior to termination of public employees retirement 75.15 association covered employment or prior to January 1, 2000, 75.16 whichever is earlier. If the employee payment is made in a 75.17 timely fashion, the city payment must be remitted 60 days 75.18 thereafter. 75.19 (d) An eligible person must provide any relevant 75.20 documentation required by the executive director to determine 75.21 eligibility for the prior service credit under this section. 75.22 (e) Service credit for the purchase period must be granted 75.23 by the public employees retirement association to the account of 75.24 the eligible person upon receipt of the purchase payment amount 75.25 specified in paragraph (c). 75.26 Sec. 5. [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA, 75.27 TEACHER; PRIOR SERVICE CREDIT PURCHASE.] 75.28 (a) Notwithstanding Minnesota Statutes, section 354.095, an 75.29 eligible person described in paragraph (b) is entitled to 75.30 purchase allowable and formula service credit in the teachers 75.31 retirement association for the period described in paragraph (c) 75.32 by paying the amount specified in Minnesota Statutes, section 75.33 356.55, subdivision 2. 75.34 (b) An eligible person is a person who: 75.35 (1) was on medical leave for a period that includes the 75.36 1994-1995 and the 1995-1996 school years; 76.1 (2) was employed by independent school district No. 276, 76.2 Minnetonka, during the period that the medical leave was taken; 76.3 and 76.4 (3) due to the failure of independent school district No. 76.5 276, Minnetonka, to file certain papers with the teachers 76.6 retirement association was not able to obtain service credit for 76.7 the 1994-1995 and 1995-1996 school year portions of the medical 76.8 leave. 76.9 (c) The period for service credit purchase is the 1994-1995 76.10 and 1995-1996 school years. 76.11 (d) Notwithstanding Minnesota Statutes, section 356.55, 76.12 subdivision 5, the eligible person must pay, on or before 76.13 September 1, 1999, an amount equal to the employee, employer, 76.14 and employer additional contribution rates in effect during the 76.15 prior service period applied to the actual salary rates in 76.16 effect during the prior service period, plus annual compound 76.17 interest at the rate of 8.5 percent from the date on which the 76.18 contributions would have been made if made contemporaneous with 76.19 the service period to the date on which the payment is actually 76.20 made. Independent school district No. 276, Minnetonka, must pay 76.21 one-half of the remaining balance of the prior service credit 76.22 purchase payment amount calculated under Minnesota Statutes, 76.23 section 356.55, within 30 days of the payment by the eligible 76.24 person. Recognizing that the teachers retirement association 76.25 failed to provide adequate information on the opportunity of the 76.26 eligible person to make timely payments for the 1995-1996 school 76.27 year following receipt of the medical leave of absence forms on 76.28 August 16, 1996, the teachers retirement association is 76.29 responsible for one-half of the remaining balance of the prior 76.30 service credit purchase payment amount calculated under 76.31 Minnesota Statutes, section 356.55. The executive director of 76.32 the teachers retirement association must notify the 76.33 superintendent of independent school district No. 276, 76.34 Minnetonka, of its payment amount and payment due date if the 76.35 eligible person makes the required payment. 76.36 (e) If independent school district No. 276, Minnetonka, 77.1 fails to pay its portion of the required prior service credit 77.2 purchase payment amount, the executive director may notify the 77.3 commissioner of finance of that fact and the commissioner of 77.4 finance may order that the required school district payment be 77.5 deducted from the next subsequent payment or payments of state 77.6 education aid to the school district and be transmitted to the 77.7 teachers retirement association. 77.8 Sec. 6. [HOPKINS SCHOOL DISTRICT; REPAYMENT OF INTEREST 77.9 CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE PAYMENTS.] 77.10 (a) Independent school district No. 270, Hopkins, shall 77.11 pay the amount of $1,004.08, plus compound interest on each 77.12 amount at the annual rate of six percent from June 1, 1997, to 77.13 the date of payment, to an eligible person described in 77.14 paragraph (b) to compensate the person for a past overcharge in 77.15 a member contribution shortage payment. The shortage was caused 77.16 by the failure of the school district to make the required 77.17 member contribution deductions during the 1968-1969 school year 77.18 and the overpayment was caused by the failure of the teachers 77.19 retirement association to notify the eligible person in a timely 77.20 fashion of the shortage. 77.21 (b) An eligible person is a person who: 77.22 (1) was employed by independent school district No. 270 77.23 (Hopkins) during the 1968-1969 school year and suffered an under 77.24 deduction by the school district of $114.66; 77.25 (2) took a member contribution refund in the early 1970's 77.26 and repaid the refund in November 1974; and 77.27 (3) had an appeal denied by the teachers retirement 77.28 association board of trustees at a May 8, 1998, hearing, 77.29 reflected in a May 21, 1998, findings and final order. 77.30 (c) The payments must be made within 30 days of the 77.31 effective date. If independent school district No. 270, 77.32 Hopkins, fails to make a timely payment of its obligation, the 77.33 teachers retirement association must make the payment and may 77.34 notify the commissioner of finance of the school district's 77.35 failure to pay. In that event, the commissioner of finance may 77.36 order that the required school district payment be deducted from 78.1 the next subsequent payment of state education aid to the school 78.2 district and transmitted to the teachers retirement association. 78.3 Sec. 7. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 78.4 SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.] 78.5 (a) Notwithstanding any provision of Minnesota Statutes, 78.6 chapter 354, to the contrary, an eligible teacher as defined in 78.7 paragraph (b) is entitled to purchase allowable and formula 78.8 service credit from the teachers retirement association for the 78.9 uncredited portion of a sabbatical leave during the 1976-1977 78.10 school year under paragraph (c). 78.11 (b) An eligible teacher is a person who was born on 78.12 September 10, 1942, became a member of the teachers retirement 78.13 association on October 31, 1968, is employed by independent 78.14 school district No. 16, Spring Lake Park, and will qualify for 78.15 an early normal retirement annuity under the "rule of 90" on 78.16 September 16, 2000. 78.17 (c) Notwithstanding Minnesota Statutes, section 356.55, 78.18 subdivision 5, the eligible person may pay, before January 1, 78.19 2000, or the date of retirement, whichever is earlier, an amount 78.20 equal to the employee contribution rate or rates in effect 78.21 during the prior service period applied to the actual salary 78.22 rates in effect during the prior service period, plus annual 78.23 compound interest at the rate of 8.5 percent from the date on 78.24 which the contributions would have been made if made 78.25 contemporaneous with the service period to the date on which the 78.26 payment is actually made. Independent school district No. 16, 78.27 Spring Lake Park, must pay the balance of the prior service 78.28 credit purchase payment amount calculated under Minnesota 78.29 Statutes, section 356.55, within 30 days of the payment by the 78.30 eligible person. The executive director of the teachers 78.31 retirement association must notify the superintendent of 78.32 independent school district No. 16, Spring Lake Park, of its 78.33 payment amount and payment due date if the eligible person makes 78.34 the required payment. 78.35 (d) If independent school district No. 16, Spring Lake 78.36 Park, fails to pay its portion of the required prior service 79.1 credit purchase payment amount, the executive director may 79.2 notify the commissioner of finance of that fact and the 79.3 commissioner of finance may order that the required employer 79.4 payment be deducted from the next subsequent payment or payments 79.5 of state education aid to the school district and be transmitted 79.6 to the teachers retirement association. 79.7 (e) An eligible teacher must provide any relevant 79.8 documentation required by the executive director to determine 79.9 eligibility for the prior service credit under this section. 79.10 (f) Service credit for the purchase period must be granted 79.11 by the teachers retirement association to the account of the 79.12 eligible teacher upon receipt of the purchase payment amount 79.13 specified in paragraph (c). 79.14 Sec. 8. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE 79.15 BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.] 79.16 (a) An eligible person described in paragraph (b) is 79.17 entitled to purchase service credit from the public employees 79.18 retirement association for the period of omitted deductions 79.19 December 19, 1992, through December 27, 1994. 79.20 (b) An eligible person for purposes of paragraph (a) is a 79.21 person who: 79.22 (1) was born on August 17, 1950; 79.23 (2) was employed through Winona county until 1992; 79.24 (3) is currently employed by the state board of public 79.25 defense in the third judicial district public defender's office; 79.26 and 79.27 (4) had omitted member contributions for public employment 79.28 during the period December 19, 1992, through December 27, 1994. 79.29 (c) The prior service credit purchase payment amount is 79.30 governed by Minnesota Statutes, section 356.55. Authority to 79.31 purchase the service credit expires on July 1, 2000. 79.32 (d) Notwithstanding Minnesota Statutes, section 356.55, 79.33 subdivision 5, the eligible person must pay, on or before 79.34 September 1, 1999, an amount equal to the employee contribution 79.35 rate in effect during the prior service period applied to the 79.36 actual salary rates in effect during the prior service period, 80.1 plus annual compound interest at the rate of 8.5 percent from 80.2 the date on which the contributions would have been made if made 80.3 contemporaneous with the service period to the date on which the 80.4 payment is actually made. The state board of public defense 80.5 must pay the balance of the prior service credit purchase 80.6 payment amount calculated under Minnesota Statutes, section 80.7 356.55, within 30 days of the payment by the eligible person. 80.8 (e) A person purchasing service credit under this section 80.9 must provide sufficient documentation of eligibility to the 80.10 executive director of the public employees retirement 80.11 association. 80.12 Sec. 9. [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL PORTION 80.13 OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.] 80.14 (a) An eligible person, as described in paragraph (b), is 80.15 entitled to purchase allowable and formula service credit in the 80.16 teachers retirement association for the period specified in 80.17 paragraph (c) by making the payment specified in Minnesota 80.18 Statutes, section 356.55. 80.19 (b) An eligible person is a person who: 80.20 (1) was born February 1, 1943; 80.21 (2) was initially employed as a teacher by the Richfield 80.22 school district in 1966; 80.23 (3) is currently employed as an elementary school principal 80.24 by independent school district No. 11 (Anoka-Hennepin); and 80.25 (4) was on an extended leave of absence from June 29, 1984, 80.26 to June 28, 1989, but failed to obtain service credit for the 80.27 final two years of the leave. 80.28 (c) The prior service credit purchase period is July 1, 80.29 1987, through June 28, 1989. 80.30 Sec. 10. [EFFECTIVE DATE.] 80.31 Sections 1 to 9 are effective on the day following final 80.32 enactment. 80.33 ARTICLE 9 80.34 MISCELLANEOUS PENSION CHANGES 80.35 Section 1. Minnesota Statutes 1998, section 3A.02, 80.36 subdivision 1b, is amended to read: 81.1 Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 81.2 separation from service after the beginning of the 1981 81.3 legislative session, a former member of the legislature who has 81.4 attained the ageof at least 60 yearsset by the board of 81.5 directors of the Minnesota state retirement system and who is 81.6 otherwise qualified in accordance with subdivision 1 is entitled 81.7 upon making written application on forms supplied by the 81.8 director to a retirement allowance in an amount equal to the 81.9 retirement allowance specified in subdivision 1 reduced so that 81.10 the reduced annuity is the actuarial equivalent of the annuity 81.11 that would be payable if the former member of the legislature 81.12 deferred receipt of the annuity and the annuity amount were 81.13 augmented at an annual rate of three percent compounded annually 81.14 from the date the annuity begins to accrue until age 62. 81.15 (b) The age set by the board of directors under paragraph 81.16 (a) cannot be less than the early retirement age under section 81.17 352.116, subdivision 1a. 81.18 (c) If there is an actuarial cost to the plan of resetting 81.19 the early retirement age under paragraph (a), the retired 81.20 legislator is required to pay an additional amount to cover the 81.21 full actuarial value. The additional amount must be paid in a 81.22 lump sum within 30 days of the certification of the amount by 81.23 the executive director. 81.24 (d) The executive director of the Minnesota state 81.25 retirement system shall report to the legislative commission on 81.26 pensions and retirement on the utilization of this provision on 81.27 or before September 1, 2000. 81.28 Sec. 2. Minnesota Statutes 1998, section 122A.46, 81.29 subdivision 2, is amended to read: 81.30 Subd. 2. [LEAVE OF ABSENCE.] The board of any district may 81.31 grant an extended leave of absence without salary to any full- 81.32 or part-time elementary or secondary teacher who has been 81.33 employed by the district for at least five years and has at 81.34 least ten years of allowable service, as defined in section 81.35 354.05, subdivision 13, or the bylaws of the appropriate 81.36 retirement association or ten years of full-time teaching 82.1 service in Minnesota public elementary and secondary schools. 82.2 Themaximumduration of an extended leave of absencepursuant to82.3 under this section must be determined by mutual agreement of the 82.4 board and the teacher at the time the leave is granted and shall 82.5 be at least three but no more than five years. An extended 82.6 leave of absencepursuant tounder this section shall be taken 82.7 by mutual consent of the board and the teacher. If the school 82.8 board denies a teacher's request, it must provide reasonable 82.9 justification for the denial. 82.10 Sec. 3. Minnesota Statutes 1998, section 352.03, 82.11 subdivision 1, is amended to read: 82.12 Subdivision 1. [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 82.13 policy-making function of the system is vested in a board of 11 82.14 members, who must beknown as the board of directors. This 82.15 board shall consist of three members appointed by the governor, 82.16 one of whom must be a constitutional officer or appointed state 82.17 official and two of whom must be public members knowledgeable in 82.18 pension matters, four state employees elected by state employees 82.19 covered by the system excluding employees in categories 82.20 specifically authorized to designate or elect a member by this 82.21 subdivision, one employeeof the transit operating divisionof 82.22 the metropolitan council's transitcommissionoperations or its 82.23 successor agency designated by the executive committee of the 82.24 labor organization that is the exclusive bargaining agent 82.25 representing employees of the transit division, one member of 82.26 the state patrol retirement fund elected by members of that fund 82.27 at a time and in a manner fixed by the board, one employee 82.28 covered by the correctional employees plan elected by employees 82.29 covered by that plan, and one retired employee elected by 82.30 disabled and retired employees of all plans administered by the 82.31 system at a time and in a manner to be fixed by the board. Two 82.32 state employee members, whose terms of office begin on the first 82.33 Monday in May after their election, must be elected biennially. 82.34 Elected members and the appointed member of the metropolitan 82.35 council'soffice oftransit operations hold office for a term of 82.36 four years, except the retired member whose term is two years,83.1 and until their successors are elected or appointed, and have 83.2 qualified. An employee of the system is not eligible for 83.3 membership on the board of directors. A state employee on leave 83.4 of absence is not eligible for election or reelection to 83.5 membership on the board of directors. The term of any board 83.6 member who is on leave for more than six months automatically 83.7 ends on expiration ofthis periodthe term of office. 83.8 Sec. 4. Minnesota Statutes 1998, section 354.05, 83.9 subdivision 40, is amended to read: 83.10 Subd. 40. [TIMELY RECEIPT.] An application, payment, 83.11 return, claim, or other document that is not personally 83.12 delivered to the association on or before the applicable due 83.13 date is considered to be a timely receipt ifofficially83.14postmarkedreceived on or before the due date or if delivered or 83.15 filed under section 645.151. 83.16 Sec. 5. Minnesota Statutes 1998, section 354.06, 83.17 subdivision 1, is amended to read: 83.18 Subdivision 1. The management of the association is vested 83.19 in a board of eight trustees known as the board of trustees of 83.20 the teachers retirement association. It is composed of the 83.21 following persons: the commissioner of children, families, and 83.22 learning, the commissioner of finance, a representative of the 83.23 Minnesota school boards association, four members of the 83.24 association elected by the members of the association, and one 83.25 retiree elected by the retirees of the association. The five 83.26 elected members of the board of trustees must be chosen bytwofour years commencing on the first of 83.34 July next succeeding the election. The filing of candidacy for 83.35 a retiree election must include a petition of endorsement signed 83.36 by at least ten retirees of the association. Each election must 84.1 be completed by June first of each succeeding odd-numbered 84.2 year. In the case of elective members, any vacancy must be 84.3 filled by appointment by the remainder of the board, and the 84.4 appointee shall serve until the members or retirees of the 84.5 association at the next regular election have elected a trustee 84.6 to serve for the unexpired term caused by the vacancy. No 84.7 member or retiree may be appointed by the board, or elected by 84.8 the members of the association as a trustee, if the person is 84.9 not a member or retiree of the association in good standing at 84.10 the time of the appointment or election. 84.11 Sec. 6. Minnesota Statutes 1998, section 354.10, 84.12 subdivision 4, is amended to read: 84.13 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.] Any 84.14 beneficiary designated by a retiree or member under section 84.15 354.05, subdivision 22, may be changed or revoked by the retiree 84.16 or member on a form provided by the executive director. A 84.17 change or revocation made under this subdivision is valid only 84.18 if the properly completed form is received by the association 84.19postmarkedon or before the date of death of the retiree or the 84.20 member. If a designated beneficiary dies before the retiree or 84.21 member designating the beneficiary, and a new beneficiary is not 84.22 designated, the retiree's or member's estate is the beneficiary. 84.23 Sec. 7. Minnesota Statutes 1998, section 354C.11, is 84.24 amended to read: 84.25 354C.11 [COVERAGE.] 84.26 Subdivision 1. [AUTHORIZATION.]PersonnelIndividuals 84.27 employed by the board of trustees of the Minnesota state 84.28 colleges and universitieswho are in the unclassified service of84.29the state, and who have completed at least two years of84.30employment by the board or a predecessor board with a full-time84.31contractareparticipantsauthorized to participate in the 84.32 supplemental retirement plan, effective on the next following 84.33 July 1,if the person is employed in an eligibleafter meeting 84.34 eligibility requirements specified in subdivision 2. 84.35 Subd. 2. [ELIGIBILITY.] (a) An individual must participate 84.36 in the supplemental retirement plan if the individual is 85.1 employed by the board of trustees in the unclassified service of 85.2 the state, has completed at least two years with a full time 85.3 contract of applicable unclassified employment with the board or 85.4 an applicable predecessor board in any of the positions 85.5 specified in paragraph (b). 85.6 (b) Eligible positions or employment classifications are: 85.7 (1) an unclassified administrative position as defined in 85.8 section 354B.20, subdivision 6, or is employed in; 85.9 (2) an employment classification included in one of the 85.10 following collective bargaining units under section 179A.10, 85.11 subdivision 2: 85.12(1)(a) the state university instructional unit; 85.13(2)(b) the community college instructional unit; 85.14(3)(c) the technical college instructional unit; and 85.15(4)(d) the state university administrative unit; or 85.16 (3) an unclassified employee of the board included in the 85.17 general professional unit or supervisory employees unit under 85.18 section 179A.10, subdivision 2. 85.19 Subd. 3. [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 85.20 person qualifies for participation in the 85.21 supplemental retirement plan, all subsequent service by the 85.22 person as an unclassified employee of thestate university85.23board, the state board for community colleges, the higher85.24education board, or the technical collegesboard of trustees in 85.25 a position or employment classification listed in subdivision 2, 85.26 paragraph (b), is covered by the supplemental retirement plan. 85.27 Sec. 8. [EFFECTIVE DATE.] 85.28 Sections 1 and 3 to 7 are effective on the day following 85.29 final enactment. Section 2 is effective on July 1, 1999. 85.30 ARTICLE 10 85.31 INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS 85.32 AS OPTIONAL ANNUITY FORM RECIPIENTS 85.33 Section 1. [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 85.34 ANNUITY FORM RECIPIENT.] 85.35 Subdivision 1. [INCLUSION AS RECIPIENT.] Notwithstanding 85.36 any provision to the contrary of the laws, articles of 86.1 incorporation, or bylaws governing a covered retirement plan 86.2 specified in subdivision 3, a retiring member may designate a 86.3 qualified supplemental needs trust under subdivision 2 as the 86.4 remainder recipient on an optional retirement annuity form for a 86.5 period not to exceed the lifetime of the beneficiary of the 86.6 supplemental needs trust. 86.7 Subd. 2. [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified 86.8 supplemental needs trust is a trust that: 86.9 (1) was established on or after July 1, 1992; 86.10 (2) was established solely for the benefit of one person 86.11 who has a disability under federal Social Security 86.12 Administration supplemental security income or retirement, 86.13 survivors, and disability insurance disability determination 86.14 standards who was determined as such before the creation of the 86.15 trust; 86.16 (3) is funded, in whole or in part, by the primary 86.17 recipient of the optional annuity form and, unless the trust is 86.18 a Zebley trust, is not funded by the beneficiary, the 86.19 beneficiary's spouse, or a person who is required to pay a sum 86.20 to or for the trust beneficiary under the terms of litigation or 86.21 a litigation settlement; 86.22 (4) is established to cover reasonable living expenses and 86.23 other basic needs of the disabilitant, in whole or in part, in 86.24 instances when public assistance does not provide sufficiently 86.25 for these needs; 86.26 (5) is not permitted to make disbursement to replace or 86.27 reduce public assistance otherwise available; 86.28 (6) is irrevocable; 86.29 (7) terminates upon the death of the disabled person for 86.30 whose benefit it was established; and 86.31 (8) is determined by the executive director to be a trust 86.32 that contains excluded assets for purposes of the qualification 86.33 for public entitlement benefits under the applicable federal and 86.34 state laws and regulations. 86.35 Subd. 3. [COVERED RETIREMENT PLAN.] The provisions of this 86.36 section apply to the following retirement plans: 87.1 (1) general state employees retirement plan of the 87.2 Minnesota state retirement system, established under chapter 87.3 352; 87.4 (2) correctional employees retirement plan of the Minnesota 87.5 state retirement system, established under chapter 352; 87.6 (3) state patrol retirement plan, established under chapter 87.7 352B; 87.8 (4) legislators retirement plan, established under chapter 87.9 3A; 87.10 (5) judges retirement plan, established under chapter 490; 87.11 (6) public employees retirement plan, established under 87.12 chapter 353; 87.13 (7) public employees police and fire plan, established 87.14 under chapter 353; 87.15 (8) teachers retirement plan, established under chapter 87.16 354; 87.17 (9) Duluth teachers retirement fund association, 87.18 established under chapter 354A; 87.19 (10) St. Paul teachers retirement fund association, 87.20 established under chapter 354A; 87.21 (11) Minneapolis teachers retirement fund association, 87.22 established under chapter 354A; 87.23 (12) Minneapolis employees retirement plan, established 87.24 under chapter 422A; 87.25 (13) Minneapolis firefighters relief association, 87.26 established under chapter 69; and 87.27 (14) Minneapolis police relief association, established 87.28 under chapter 423B. 87.29 Sec. 2. [EFFECTIVE DATE.] 87.30 Section 1 is effective on the day following final enactment. 87.31 ARTICLE 11 87.32 VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 87.33 Section 1. [REPEALER.] 87.34 Minnesota Statutes 1998, section 424A.02, subdivision 5, is 87.35 repealed. 87.36 Sec. 2. [EFFECTIVE DATE.] 88.1 Section 1 is effective July 1, 1999. 88.2 ARTICLE 12 88.3 CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 88.4 Section 1. Minnesota Statutes 1998, section 352.90, is 88.5 amended to read: 88.6 352.90 [POLICY.] 88.7 It is the policy of the legislature to provide special 88.8 retirement benefits and contributions for certain correctional 88.9 employees who may be required to retire at an early age because 88.10 they lose the mental or physical capacity required to maintain 88.11 the safety, security, discipline, and custody of inmates at 88.12 state correctional facilities or of patients at the Minnesota 88.13 security hospital or at the Minnesota sexual psychopathic 88.14 personality treatment center or of patients in the Minnesota 88.15 extended treatment options on-campus program at the Cambridge 88.16 regional human services center. 88.17 Sec. 2. Minnesota Statutes 1998, section 352.91, is 88.18 amended by adding a subdivision to read: 88.19 Subd. 3e. [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 88.20 CAMBRIDGE.] "Covered correctional service" means service by a 88.21 state employee in one of the following employment positions with 88.22 the Minnesota extended treatment options on-campus program at 88.23 the Cambridge regional human services center if at least 75 88.24 percent of the employee's working time is spent in direct 88.25 contact with patients who are in the Minnesota extended 88.26 treatment options program and if service in such a position is 88.27 certified to the executive director by the commissioner of human 88.28 services, unless the person elects to retain current retirement 88.29 coverage under section 6: 88.30 (1) behavior analyst I ; 88.31 (2) human services support specialist; 88.32 (3) mental retardation residential program lead; 88.33 (4) psychologist 2; 88.34 (5) recreation program assistant; 88.35 (6) recreation therapist senior; 88.36 (7) registered nurse senior; 89.1 (8) skills development specialist; and 89.2 (9) social worker senior. 89.3 Sec. 3. Minnesota Statutes 1998, section 352.92, 89.4 subdivision 1, is amended to read: 89.5 Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] Employee 89.6 contributions of covered correctional employees must be in an 89.7 amount equal to5.505.69 percent of salary. 89.8 Sec. 4. Minnesota Statutes 1998, section 352.92, 89.9 subdivision 2, is amended to read: 89.10 Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer shall 89.11 contribute for covered correctional employees an amount equal to 89.127.707.98 percent of salary. 89.13 Sec. 5. Minnesota Statutes 1998, section 352.93, 89.14 subdivision 2a, is amended to read: 89.15 Subd. 2a. [EARLY RETIREMENT.] Any covered correctional 89.16 employee, or former employee if service ended after June 30,89.171989,who becomes at least 50 years old and who has at least 89.18 three years of allowable service is entitled upon application to 89.19 a reduced retirement annuity equal to the annuity calculated 89.20 under subdivision 2, reducedso that the reduced annuity is the89.21actuarial equivalent of the annuity that would be payable if the89.22employee deferred receipt of the annuity from the day the89.23annuity begins to accrue to age 55by two-tenths of one percent 89.24 for each month that the correctional employee is under age 55 at 89.25 the time of retirement. 89.26 Sec. 6. [TEMPORARY PROVISION; ELECTION TO RETAIN 89.27 RETIREMENT COVERAGE.] 89.28 (a) An employee in a position specified as qualifying under 89.29 section 2 may elect to retain coverage under the general 89.30 employees retirement plan of the Minnesota state retirement 89.31 system or may elect to transfer coverage and contribute to the 89.32 correctional employees retirement plan. An employee electing to 89.33 participate in the correctional employees retirement plan shall 89.34 begin making contributions to the correctional plan beginning 89.35 the first full pay period after July 1, 1999, or the first full 89.36 pay period following filing of their election to transfer 90.1 coverage to the correctional employees retirement plan, 90.2 whichever is later. The election to retain coverage or to 90.3 transfer coverage must be made in writing by the person on a 90.4 form prescribed by the executive director of the Minnesota state 90.5 retirement system and must be filed with the executive director 90.6 no later than December 31, 1999. 90.7 (b) An employee failing to make an election by December 15, 90.8 1999, must be notified by certified mail by the executive 90.9 director of the Minnesota state retirement system of the 90.10 deadline to make a choice. A person who does not submit an 90.11 election form must continue coverage in the general employees 90.12 retirement plan and forfeits all rights to transfer retirement 90.13 coverage to the correctional employees retirement plan. 90.14 (c) The election to retain coverage in the general 90.15 employees retirement plan or the election to transfer retirement 90.16 coverage to the correctional employees retirement plan is 90.17 irrevocable once it is filed with the executive director. 90.18 Sec. 7. [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 90.19 PERSONS.] 90.20 Subdivision 1. [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 90.21 (a) An employee who has future retirement coverage transferred 90.22 to the correctional employees retirement plan under section 6, 90.23 and who does not elect to retain general state employees 90.24 retirement plan coverage, is entitled to elect to obtain prior 90.25 service credit for eligible state service performed on or after 90.26 July 1, 1997, and before the first day of the first full pay 90.27 period beginning after December 31, 1999. All prior service 90.28 credit must be purchased. 90.29 (b) Eligible state service is any period of service on or 90.30 after the date which the employee started employment with the 90.31 Minnesota extended treatment options program in a position 90.32 specified in Minnesota Statutes, section 352.91, subdivision 3e, 90.33 in which at least 75 percent of the employee's working time is 90.34 determined to have been spent in direct contact with Minnesota 90.35 extended treatment options program patients or July 1, 1997, 90.36 whichever is later, and the date the employee joined the 91.1 correctional employees plan. 91.2 (c) The department of human services shall certify eligible 91.3 state service to the executive director of the Minnesota 91.4 retirement system. 91.5 Subd. 2. [PAYMENT FOR PRIOR SERVICE.] (a) An employee 91.6 electing to obtain prior service credit under subdivision 1 must 91.7 pay an additional employee contribution for that prior service. 91.8 The additional member contribution is the contribution 91.9 differential percentage applied to the actual salary paid to the 91.10 employee during the period of the prior eligible state service, 91.11 plus interest at the rate of six percent per annum, compounded 91.12 annually. The contribution differential percentage is the 91.13 difference between 5.5 percent of salary and the applicable 91.14 employee contribution rate of the general state employees 91.15 retirement plan during the prior eligible state service. 91.16 (b) The additional member contribution must be paid only in 91.17 a lump sum. Payment must accompany the election to obtain prior 91.18 service credit. No election or payment may be made by the 91.19 person or accepted by the executive director after June 30, 2001. 91.20 Subd. 3. [TRANSFER OF ASSETS.] Assets must be transferred 91.21 from the general state employees retirement plan to the 91.22 correctional employees retirement plan in an amount equal to the 91.23 present value of benefits earned under the general employees 91.24 retirement plan for each employee transferring to the 91.25 correctional employees retirement plan, as determined by the 91.26 actuary retained by the legislative commission on pensions and 91.27 retirement in accordance with Minnesota Statutes, section 91.28 356.215, multiplied by the accrued liability funding ratio of 91.29 active members as derived from the most recent actuarial 91.30 valuation prepared by the commission-retained actuary. The 91.31 transfer of assets must be made within 45 days after the 91.32 employee elects to transfer coverage to the correctional 91.33 employees retirement plan. 91.34 Subd. 4. [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 91.35 of assets in subdivision 3, service credit in the general state 91.36 employees plan of the Minnesota state retirement system is 92.1 forfeited and may not be reinstated. The service credit and 92.2 transferred assets must be credited to the correctional 92.3 employees retirement plan. 92.4 Subd. 5. [COUNSELING.] (a) The commissioners of human 92.5 services and employee relations, and the executive director of 92.6 the Minnesota state retirement system have the joint 92.7 responsibility of providing affected employees with appropriate 92.8 and timely retirement and related benefit counseling. 92.9 (b) Counseling must include the anticipated impact of the 92.10 retirement coverage change on the person's future retirement 92.11 benefit amounts, future retirement eligibility, future 92.12 applicability of mandatory retirement laws, and future 92.13 postemployment insurance coverage. 92.14 (c) The commissioner of human services must consult with 92.15 the appropriate collective bargaining agents of the affected 92.16 employees regarding the content, form, and timing of the 92.17 counseling required by this section. 92.18 Sec. 8. [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 92.19 RIGHTS.] 92.20 (a) Nothing in sections 1, 2, and 6 to 9 may be considered 92.21 to restrict the entitlement of a person under state law to repay 92.22 a previously taken refund of employee or member contributions to 92.23 a Minnesota public pension plan if all qualifying requirements 92.24 are met. 92.25 (b) The period of correctional employees retirement plan 92.26 contributions, plus interest, must be restored upon the 92.27 repayment of the appropriate refund amount if the service was 92.28 correctional employees retirement plan covered service on the 92.29 date when the service was rendered or on the date when the 92.30 refund was taken. 92.31 Sec. 9. [EARLY RETIREMENT INCENTIVE.] 92.32 This section applies to an employee who has future 92.33 retirement coverage transferred to the correctional employee 92.34 retirement plan under section 6 and who is at least 55 years old 92.35 on the effective date of section 6. That employee may 92.36 participate in a health insurance early retirement incentive 93.1 available under the terms of a collective bargaining agreement, 93.2 notwithstanding any provision of the collective bargaining 93.3 agreement that limits participation to persons who select the 93.4 option during the payroll period in which they become 55 years 93.5 old. A person selecting the health insurance early retirement 93.6 incentive under this section must retire by the later of 93.7 December 31, 2000, or within the pay period following the time 93.8 at which the person has at least three years of covered 93.9 correctional service, including any purchased service credit. 93.10 An employee meeting this criteria who wishes to extend the 93.11 person's employment must do so under Minnesota Statutes, section 93.12 43A.34, subdivision 3. 93.13 Sec. 10. [EFFECTIVE DATE.] 93.14 Sections 1, 2, and 6 to 9 are effective on the first day of 93.15 the first full pay period beginning after July 1, 1999. Section 93.16 5 is effective July 1, 1999. 93.17 ARTICLE 13 93.18 PUBLIC SAFETY EMPLOYEE PENSION 93.19 PLAN CHANGES 93.20 Section 1. Minnesota Statutes 1998, section 352B.08, 93.21 subdivision 2a, is amended to read: 93.22 Subd. 2a. [EARLY RETIREMENT.] Any member who has become at 93.23 least 50 years old and who has at least three years of allowable 93.24 service is entitled upon application to a reduced retirement 93.25 annuity equal to the annuity calculated under subdivision 2, 93.26 reduced bytwo-tenthsone-tenth of one percent for each month 93.27 that the member is under age 55 at the time of retirement. 93.28 Sec. 2. Minnesota Statutes 1998, section 353.64, 93.29 subdivision 1, is amended to read: 93.30 Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 93.31 person who prior to July 1, 1961, was a member of the police and 93.32 fire fund, by virtue of being a police officer or firefighter, 93.33 shall, as long as the person remains in either position, 93.34 continue membership in the fund. 93.35 (b) A person who was employed by a governmental subdivision 93.36 as a police officer and was a member of the police and fire fund 94.1 on July 1, 1978, by virtue of being a police officer as defined 94.2 by this section on that date, and if employed by the same 94.3 governmental subdivision in a position in the same department in 94.4 which the person was employed on that date,shall continue94.5membership incontinues to be a member of the fund, whether or 94.6 not that person has the power of arrest by warrant and is 94.7 licensed by the peace officers standards and training board 94.8 after that date. A person who was employed as a correctional 94.9 officer by Rice county before July 1, 1998, for the duration of 94.10 employment in the correctional position held on July 1, 1998, 94.11 continues to be a member of the public employees police and fire 94.12 plan, whether or not the person has the power of arrest by 94.13 warrant and is licensed by the peace officers standards and 94.14 training board after that date. 94.15 (c) A person who was employed by a governmental subdivision 94.16 as a police officer or a firefighter, whichever applies, was an 94.17 active member of the local police or salaried firefighters 94.18 relief association located in that governmental subdivision by 94.19 virtue of that employment as of the effective date of the 94.20 consolidation as authorized by sections 353A.01 to 353A.10, and 94.21 has elected coverage by the public employees police and fire 94.22 fund benefit plan, shall become a member of the police and fire 94.23 fund after that date if employed by the same governmental 94.24 subdivision in a position in the same department in which the 94.25 person was employed on that date. 94.26 (d) Any other employee serving on a full-time basis as a 94.27 police officer as defined in subdivision 2 or as a firefighter 94.28 as defined in subdivision 3 on or after July 1, 1961, shall 94.29 become a member of the public employees police and fire fund. 94.30 (e) An employee serving on less than a full-time basis as a 94.31 police officer shall become a member of the public employees 94.32 police and fire fund only after a resolution stating that the 94.33 employee should be covered by the police and fire fund is 94.34 adopted by the governing body of the governmental subdivision 94.35 employing the person declaring that the position which the 94.36 person holds is that of a police officer. 95.1 (f) An employee serving on less than a full-time basis as a 95.2 firefighter shall become a member of the public employees police 95.3 and fire fund only after a resolution stating that the employee 95.4 should be covered by the police and fire fund is adopted by the 95.5 governing body of the governmental subdivision employing the 95.6 person declaring that the position which the person holds is 95.7 that of a firefighter. 95.8 (g) A police officer or firefighter employed by a 95.9 governmental subdivision who by virtue of that employment is 95.10 required by law to be a member of and to contribute to any 95.11 police or firefighter relief association governed by section 95.12 69.77 which has not consolidated with the public employees 95.13 police and fire fund and any police officer or firefighter of a 95.14 relief association that has consolidated with the association 95.15 for which the employee has not elected coverage by the public 95.16 employees police and fire fund benefit plan as provided in 95.17 sections 353A.01 to 353A.10 shall not become a member of the 95.18 public employees police and fire fund. 95.19 Sec. 3. Minnesota Statutes 1998, section 353.651, 95.20 subdivision 4, is amended to read: 95.21 Subd. 4. [EARLY RETIREMENT.] Any police officer or 95.22 firefighter member who has become at least 50 years old and who 95.23 has at least three years of allowable service is entitled upon 95.24 application to a retirement annuity equal to the normal annuity 95.25 calculated under subdivision 3, reduced bytwo-tenthsone-tenth 95.26 of one percent for each month that the member is under age 55 at 95.27 the time of retirement. 95.28 Sec. 4. [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 95.29 CERTAIN INSTANCES.] 95.30 (a) If a public employee continues in retirement plan 95.31 coverage by the public employees police and fire retirement plan 95.32 by virtue of this article and subsequently is covered by the 95.33 federal old age, survivors, and disability insurance program for 95.34 service as a Rice county correctional officer, the retirement 95.35 annuity of the person under section 353.651 or the disability 95.36 benefit of the person under section 353.656 must be reduced 96.1 dollar for dollar for the social security benefit that the 96.2 person is entitled to receive by virtue of Rice county 96.3 correctional service rendered after the effective date of 96.4 section 1. 96.5 (b) To be effective, the retirement annuity or disability 96.6 benefit application form for a Rice county correctional employee 96.7 must include signed written permission by the person for the 96.8 public employees retirement association to obtain the necessary 96.9 information from the federal old age, survivors, and disability 96.10 insurance program to implement the offset provision in paragraph 96.11 (a). 96.12 Sec. 5. [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 96.13 AND CERTIFICATION FAILURES.] 96.14 (a) If the board of trustees of the public employees 96.15 retirement association, upon the recommendation of the executive 96.16 director, determines that a governmental subdivision has 96.17 certified a public employee for membership in the public 96.18 employees police and fire retirement plan when the public 96.19 employee was not eligible for that retirement plan coverage, the 96.20 public employee must be covered by the correct retirement plan 96.21 for subsequent service, the public employee retains the coverage 96.22 for the period of the misclassification, and the governmental 96.23 subdivision shall pay in a lump sum the difference in the 96.24 actuarial present value of the retirement annuities to which the 96.25 public employee would have been entitled if the public employee 96.26 was properly classified. The governmental subdivision payment 96.27 is payable within 30 days of the board's determination. If 96.28 unpaid, it must be collected under section 353.28. The lump sum 96.29 payment must be deposited in the public employees retirement 96.30 fund. 96.31 (b) If the executive director of the public employees 96.32 retirement association determines that a governmental 96.33 subdivision has failed to certify a person for retirement plan 96.34 membership and coverage under this chapter, in addition to the 96.35 procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 96.36 12a, or 12b, the director shall charge a fine of $25 for each 97.1 membership certification failure. 97.2 Sec. 6. Minnesota Statutes 1998, section 353A.083, is 97.3 amended by adding a subdivision to read: 97.4 Subd. 4. [PRE-1999 CONSOLIDATIONS.] For any consolidation 97.5 account in effect on July 1, 1999, the public employees police 97.6 and fire fund benefit plan applicable to consolidation account 97.7 members who have elected or will elect that benefit plan 97.8 coverage under section 353A.08 is the most recent change adopted 97.9 by the applicable municipality under subdivision 1, 2, or 3, 97.10 unless the applicable municipality approves the extension of the 97.11 post-June 30, 1999, public employees police and fire fund 97.12 benefit plan to the consolidation account. 97.13 Sec. 7. [COLLECTION OF POLICE STATE OVERPAYMENTS.] 97.14 (a) As police state aid that was received by Rice county on 97.15 account of correctional officers who were improperly included in 97.16 retirement coverage by the public employees police and fire 97.17 plan, the total of the following amounts must be deducted in 20 97.18 equal annual installments from any police state aid payable to 97.19 Rice county under Minnesota Statutes, chapter 69: 97.20 amount year 97.21 $11,543 1994 97.22 19,096 1995 97.23 39,111 1996 97.24 19,170 1997 97.25 13,764 1998. 97.26 (b) Rice county correctional officers who are members of 97.27 the public employees police and fire plan may not be included in 97.28 the police officer certification under Minnesota Statutes, 97.29 section 69.011, subdivision 2, paragraph (b), and the employer 97.30 contributions to the public employees police and fire fund on 97.31 behalf of those correctional employees may not be included in 97.32 the employer police retirement coverage prior calendar year 97.33 obligation for the determination of excess police state aid 97.34 under Minnesota Statutes, section 69.021, subdivision 10, unless 97.35 the correctional officer is a peace officer as defined in 97.36 Minnesota Statutes, section 69.011, subdivision 1, paragraph (g). 98.1 Sec. 8. [EFFECTIVE DATE.] 98.2 (a) Sections 1, 3, and 7 are effective on July 1, 1999. 98.3 Sections 2, 4, and 6 are effective on the day following final 98.4 enactment. Section 5 is effective on August 1, 2000. 98.5 (b) If all consolidation accounts in effect on March 1, 98.6 1999, are merged with the public employees police and fire fund 98.7 after July 1, 1999, section 6 is repealed as of June 30, 1999. 98.8 ARTICLE 14 98.9 SPECIAL RETIREMENT COVERAGE 98.10 FOR CERTAIN STATE FIRE 98.11 MARSHAL EMPLOYEES 98.12 Section 1. [352.87] [STATE FIRE MARSHAL DIVISION 98.13 EMPLOYEES.] 98.14 Subdivision 1. [ELIGIBILITY.] A member of the general plan 98.15 who is employed by the department of public safety, state fire 98.16 marshal division, as a deputy state fire marshal, fire/arson 98.17 investigator, who elects special benefit coverage under 98.18 subdivision 8, is entitled to retirement benefits or disability 98.19 benefits, as applicable, as stated in this section for eligible 98.20 service under this section rendered after July 1, 1999, for 98.21 which allowable service credit is received. The covered member 98.22 must be at least age 55 to qualify for the retirement annuity 98.23 specified in subdivision 3. 98.24 Subd. 2. [RETIREMENT ANNUITY ELIGIBILITY.] A person 98.25 specified in subdivision 1 who meets all eligibility 98.26 requirements specified in this chapter applicable to general 98.27 plan members is eligible for retirement benefits as specified in 98.28 subdivision 3. 98.29 Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified 98.30 in subdivision 1 will have a retirement annuity applicable for 98.31 allowable service credit under this section calculated by 98.32 multiplying the employee's average salary, as defined in section 98.33 352.115, subdivision 2, by the percent specified in section 98.34 356.19, subdivision 2a, for each year or portions of a year of 98.35 allowable service credit. No reduction for retirement prior to 98.36 normal retirement age, as specified in section 352.01, 99.1 subdivision 25, applies to service to which this section applies. 99.2 Subd. 4. [NON-JOB-RELATED DISABILITY BENEFITS.] An 99.3 eligible member described in subdivision 1, who is less than 55 99.4 years of age and who becomes disabled and physically or mentally 99.5 unfit to perform the duties of the position because of sickness 99.6 or injury while not engaged in covered employment, is entitled 99.7 to a disability benefit amount equivalent to an annuity computed 99.8 under subdivision 3 assuming the member has 15 years of service 99.9 qualifying under this section and waiving the minimum age 99.10 requirement. If the eligible member becomes disabled under this 99.11 subdivision with more than 15 years of service covered under 99.12 this section, the eligible member is entitled to a disability 99.13 benefit amount equivalent to an annuity computed under 99.14 subdivision 3 based on all years of service credited under this 99.15 section and waiving the minimum age requirement. 99.16 Subd. 5. [JOB-RELATED DISABILITY BENEFITS.] An eligible 99.17 member defined in subdivision 1, who is less than 55 years of 99.18 age and who becomes disabled and physically or mentally unfit to 99.19 perform the duties of the position because of sickness or injury 99.20 while engaged in covered employment, is entitled to a disability 99.21 benefit amount equivalent to an annuity computed under 99.22 subdivision 3 assuming the member has 20 years of service 99.23 qualifying under this section and waiving the minimum age 99.24 requirement. An eligible member who becomes disabled under this 99.25 subdivision with more than 20 years of service credited under 99.26 this section is entitled to a disability benefit amount 99.27 equivalent to an annuity computed under subdivision 3 based on 99.28 all years of service credited under this section and waiving the 99.29 age requirement. 99.30 Subd. 6. [DISABILITY BENEFIT COORDINATION.] If the 99.31 eligible employee is entitled to receive a disability benefit as 99.32 provided in subdivision 4 or 5 and has allowable service credit 99.33 under this section for less service than the length of service 99.34 upon which the disability benefit in subdivision 4 or 5 is 99.35 based, and also has allowable service in the general plan not 99.36 includable in this section, the employee is entitled to a 100.1 disability benefit or deferred retirement annuity based on the 100.2 general plan service not includable in this section only for the 100.3 service that, when combined with the service includable in this 100.4 section, exceeds the number of years on which the disability 100.5 benefit provided in subdivision 4 or 5 is based. The benefit 100.6 recipient under subdivision 4 or 5 who also has credit for 100.7 regular plan service must in all respects qualify under section 100.8 352.113 to be entitled to receive a disability benefit based on 100.9 the general plan service not includable in this section, except 100.10 that the service may be combined to satisfy length of service 100.11 requirements. Any deferred annuity to which the employee may be 100.12 entitled based on general plan service not includable in this 100.13 section must be augmented as provided in section 352.72, 100.14 subdivision 2, while the employee is receiving a disability 100.15 benefit under this section. 100.16 Subd. 7. [ADDITIONAL CONTRIBUTIONS.] The special 100.17 retirement annuity and disability coverage under this section 100.18 must be financed by an employee contribution of 2.78 percent of 100.19 covered salary and an employer contribution of 4.20 percent. 100.20 These contributions are in addition to the contributions 100.21 required by section 352.04, subdivisions 2 and 3, and must be 100.22 made in the manner provided for in section 352.04, subdivisions 100.23 4, 5, and 6. 100.24 Subd. 8. [ELECTION OF COVERAGE.] To be covered by this 100.25 section, an employee of the department of public safety 100.26 described in subdivision 1 who is employed in a position 100.27 described in that subdivision on or after July 1, 1999, must 100.28 file a notice with the executive director of the Minnesota state 100.29 retirement system on a form prescribed by the executive director 100.30 stating whether or not the employee elects to be covered by this 100.31 section. Notice must be filed by September 1, 1999, or within 100.32 90 days of employment, whichever is later. Elections are 100.33 irrevocable during any period of covered employment. A failure 100.34 to file a timely notice shall be deemed a waiver of coverage by 100.35 this section. 100.36 Sec. 2. Minnesota Statutes 1998, section 356.19, is 101.1 amended by adding a subdivision to read: 101.2 Subd. 2a. [COORDINATED MEMBERS.] The applicable benefit 101.3 accrual rate is 2.0 percent. 101.4 Sec. 3. [EFFECTIVE DATE.] 101.5 Sections 1 and 2 are effective the day following final 101.6 enactment. 101.7 ARTICLE 15 101.8 TEACHER RETIREMENT PLANS 101.9 PRIOR SERVICE CREDIT PURCHASE 101.10 AUTHORIZATION 101.11 Section 1. [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE 101.12 CREDIT PURCHASE.] 101.13 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 101.14 teacher who has at least three years of allowable service credit 101.15 with the teachers retirement association and who performed 101.16 service in the United States armed forces before becoming a 101.17 teacher as defined in section 354.05, subdivision 2, or who 101.18 failed to obtain service credit for a military leave of absence 101.19 under the provisions of section 354.53, is entitled to purchase 101.20 allowable and formula service credit for the initial period of 101.21 enlistment, induction, or call to active duty without any 101.22 voluntary extension by making payment under section 356.55 101.23 provided the teacher is not entitled to receive a current or 101.24 deferred retirement annuity from a United States armed forces 101.25 pension plan and has not purchased service credit from any other 101.26 defined benefit public employee pension plan for the same period 101.27 of service. 101.28 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 101.29 desires to purchase service credit under subdivision 1 must 101.30 apply with the executive director to make the purchase. The 101.31 application must include all necessary documentation of the 101.32 teacher's qualifications to make the purchase, signed written 101.33 permission to allow the executive director to request and 101.34 receive necessary verification of applicable facts and 101.35 eligibility requirements, and any other relevant information 101.36 that the executive director may require. 102.1 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 102.2 service credit for the purchase period must be granted by the 102.3 teachers retirement association to the purchasing teacher upon 102.4 receipt of the purchase payment amount. Payment must be made 102.5 before the teacher's effective date of retirement. 102.6 Sec. 2. [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 102.7 CREDIT PURCHASE.] 102.8 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 102.9 teacher who has at least three years of allowable service credit 102.10 with the teachers retirement association is entitled to purchase 102.11 up to ten years of allowable and formula service credit for 102.12 out-of-state teaching service by making payment under section 102.13 356.55, provided the out-of-state teaching service was performed 102.14 for an educational institution established and operated by 102.15 another state, governmental subdivision of another state, or the 102.16 federal government and the teacher is not entitled to receive a 102.17 current or deferred age and service retirement annuity or 102.18 disability benefit and has not purchased service credit from 102.19 another defined benefit public employee pension plan for that 102.20 out-of-state teaching service. 102.21 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 102.22 desires to purchase service credit under subdivision 1 must 102.23 apply with the executive director to make the purchase. The 102.24 application must include all necessary documentation of the 102.25 teacher's qualifications to make the purchase, signed written 102.26 permission to allow the executive director to request and 102.27 receive necessary verification of applicable facts and 102.28 eligibility requirements, and any other relevant information 102.29 that the executive director may require. Payment must be made 102.30 before the teacher's effective date of retirement. 102.31 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 102.32 service credit for the purchase period must be granted by the 102.33 teachers retirement association to the purchasing teacher on 102.34 receipt of the purchase payment amount. 102.35 Sec. 3. [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN 102.36 SERVICE PURCHASES.] 103.1 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 103.2 teacher who has at least three years of allowable service credit 103.3 with the teachers retirement association and who was granted a 103.4 maternity leave of absence by a school district or other 103.5 employing unit covered by the teachers retirement association 103.6 for which the teacher did not previously receive allowable and 103.7 formula service credit, or who had a maternity break in teaching 103.8 service for which the teacher did not receive or purchase 103.9 service credit from another defined benefit public employee 103.10 pension plan is entitled to purchase the actual period of the 103.11 leave or of the break in teaching service, up to five years, of 103.12 allowable and formula service credit for applicable maternity 103.13 leaves of absence or applicable maternity break in teaching 103.14 service periods by making payment under section 356.55. 103.15 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 103.16 desires to purchase service credit under subdivision 1 must 103.17 apply with the executive director to make the purchase. The 103.18 application must include all necessary documentation of the 103.19 teacher's qualifications to make the purchase, signed written 103.20 permission to allow the executive director to request and 103.21 receive necessary verification of applicable facts and 103.22 eligibility requirements, and any other relevant information 103.23 that the executive director may require. Payment must be made 103.24 before the teacher's effective date of retirement. 103.25 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 103.26 service credit for the purchase period must be granted by the 103.27 teachers retirement association to the purchasing teacher on 103.28 receipt of the purchase payment amount. 103.29 Sec. 4. [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE 103.30 CREDIT PURCHASE.] 103.31 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 103.32 teacher who has at least three years of allowable service credit 103.33 with the teachers retirement association is entitled to purchase 103.34 up to ten years of allowable and formula service credit for 103.35 private or parochial school teaching service by making payment 103.36 under section 356.55, provided that the teacher is not entitled 104.1 to receive a current or deferred age and service retirement 104.2 annuity or disability benefit from the applicable 104.3 employer-sponsored pension plan and has not purchased service 104.4 credit from the applicable defined benefit employer-sponsored 104.5 pension plan for that service. 104.6 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 104.7 desires to purchase service credit under subdivision 1 must 104.8 apply with the executive director to make the purchase. The 104.9 application must include all necessary documentation of the 104.10 teacher's qualifications to make the purchase, signed written 104.11 permission to allow the executive director to request and 104.12 receive necessary verification of applicable facts and 104.13 eligibility requirements, and any other relevant information 104.14 that the executive director may require. Payment must be made 104.15 before the teacher's effective date of retirement. 104.16 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 104.17 service credit for the purchase period must be granted by the 104.18 teachers retirement association to the purchasing teacher on 104.19 receipt of the purchase payment amount. 104.20 Sec. 5. [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT 104.21 PURCHASE.] 104.22 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 104.23 teacher who has at least three years of allowable service credit 104.24 with the teachers retirement association is entitled to purchase 104.25 up to ten years of allowable and formula service credit for 104.26 service rendered in the federal peace corps program or in the 104.27 federal volunteers in service to America program by making 104.28 payment under section 356.55, provided that the teacher has not 104.29 purchased service credit from any defined benefit pension plan 104.30 for that service. 104.31 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 104.32 desires to purchase service credit under subdivision 1 must 104.33 apply with the executive director to make the purchase. The 104.34 application must include all necessary documentation of the 104.35 teacher's qualifications to make the purchase, signed written 104.36 permission to allow the executive director to request and 105.1 receive necessary verification of applicable facts and 105.2 eligibility requirements, and any other relevant information 105.3 that the executive director may require. Payment must be made 105.4 before the teacher's effective date of retirement. 105.5 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 105.6 service credit for the purchase period must be granted by the 105.7 teachers retirement association to the purchasing teacher on 105.8 receipt of the purchase payment amount. 105.9 Sec. 6. [354.538] [CHARTER SCHOOL TEACHING SERVICE CREDIT 105.10 PURCHASE.] 105.11 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 105.12 teacher who has at least three years of allowable service credit 105.13 with the teachers retirement association is entitled to purchase 105.14 up to ten years of allowable and formula service credit for 105.15 charter school teaching service by making payment under section 105.16 356.55, provided that the teacher is not entitled to receive a 105.17 current or deferred age and service retirement annuity or 105.18 disability benefit from the applicable employer-sponsored 105.19 pension plan and has not purchased service credit from the 105.20 applicable defined benefit employer-sponsored pension plan for 105.21 that service. 105.22 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 105.23 desires to purchase service credit under subdivision 1 must 105.24 apply with the executive director to make the purchase. The 105.25 application must include all necessary documentation of the 105.26 teacher's qualifications to make the purchase, signed written 105.27 permission to allow the executive director to request and 105.28 receive necessary verification of applicable facts and 105.29 eligibility requirements, and any other relevant information 105.30 that the executive director may require. Payment must be made 105.31 before the teacher's effective date of retirement. 105.32 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 105.33 service credit for the purchase period must be granted by the 105.34 teachers retirement association to the purchasing teacher on 105.35 receipt of the purchase payment amount. 105.36 Sec. 7. [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE 106.1 CREDIT PURCHASE.] 106.2 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 106.3 teacher who has at least three years of allowable service credit 106.4 with the teachers retirement fund association and who performed 106.5 service in the United States armed forces before becoming a 106.6 teacher as defined in section 354A.011, subdivision 27, or who 106.7 failed to obtain service credit for a military leave of absence 106.8 period under section 354A.093, is entitled to purchase allowable 106.9 service credit for the initial period of enlistment, induction, 106.10 or call to active duty without any voluntary extension by making 106.11 payment under section 356.55 provided the teacher is not 106.12 entitled to receive a current or deferred retirement annuity 106.13 from a United States armed forces pension plan and has not 106.14 purchased service credit from another defined benefit public 106.15 employee pension plan for the same period of service. 106.16 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 106.17 desires to purchase service credit under subdivision 1 must 106.18 apply with the executive director or secretary of the respective 106.19 teachers retirement fund association to make the purchase. The 106.20 application must include all necessary documentation of the 106.21 teacher's qualifications to make the purchase, signed written 106.22 permission to allow the executive director or secretary to 106.23 request and receive necessary verification of applicable facts 106.24 and eligibility requirements, and any other relevant information 106.25 that the executive director or secretary may require. Payment 106.26 must be made before the teacher's effective date of retirement. 106.27 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 106.28 for the purchase period must be granted by the applicable 106.29 teachers retirement fund association to the purchasing teacher 106.30 on receipt of the purchase payment amount. 106.31 Sec. 8. [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 106.32 CREDIT PURCHASE.] 106.33 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 106.34 teacher who has at least three years of allowable service credit 106.35 with one of the retirement fund associations under this chapter 106.36 and who rendered out-of-state teaching service for an 107.1 educational institution established and operated by another 107.2 state, governmental subdivision of another state, or the federal 107.3 government, is entitled to purchase up to ten years of allowable 107.4 service credit for that out-of-state service by making payment 107.5 under section 356.55, provided the teacher is not entitled to 107.6 receive a current or deferred age and service retirement annuity 107.7 or disability benefit and has not purchased service credit from 107.8 another defined benefit public employee pension plan for that 107.9 out-of-state teaching service. Payment must be made before the 107.10 teacher's effective date of retirement. 107.11 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 107.12 desires to purchase service credit under subdivision 1 must 107.13 apply with the executive director or secretary of the respective 107.14 teachers retirement fund association to make the purchase. The 107.15 application must include all necessary documentation of the 107.16 teacher's qualifications to make the purchase, signed written 107.17 permission to allow the executive director or secretary to 107.18 request and receive necessary verification of applicable facts 107.19 and eligibility requirements, and any other relevant information 107.20 that the executive director or secretary may require. 107.21 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 107.22 for the purchase period must be granted by the applicable 107.23 teachers retirement fund association to the purchasing teacher 107.24 on receipt of the purchase payment amount. 107.25 Sec. 9. [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE 107.26 SERVICE CREDIT PURCHASE.] 107.27 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 107.28 teacher who has at least three years of allowable service credit 107.29 with the teachers retirement fund association and who was 107.30 granted a maternity leave of absence by a school district or 107.31 other employing unit covered by the teachers retirement 107.32 association for which the teacher did not previously receive 107.33 allowable service credit or who had a maternity break in 107.34 teaching service for which the teacher did not receive or 107.35 purchase service credit from another defined benefit public 107.36 employee pension plan is entitled to purchase the actual period 108.1 of the leave or of the break in teaching service, up to five 108.2 years, of allowable service credit for applicable maternity 108.3 leaves of absence or applicable maternity break in teaching 108.4 service periods by making payment under section 356.55. 108.5 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 108.6 desires to purchase service credit under subdivision 1 must 108.7 apply with the executive director or secretary of the respective 108.8 retirement fund association to make the purchase. The 108.9 application must include all necessary documentation of the 108.10 teacher's qualifications to make the purchase, signed written 108.11 permission to allow the executive director or secretary to 108.12 request and receive any necessary verification of applicable 108.13 facts and eligibility requirements, and any other relevant 108.14 information that the executive director or secretary may require. 108.15 Payment must be made before the teacher's effective date of 108.16 retirement. 108.17 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 108.18 for the purchase period must be granted by the applicable 108.19 teachers retirement fund association to the purchasing teacher 108.20 on receipt of the purchase payment amount. 108.21 Sec. 10. [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE 108.22 CREDIT PURCHASE.] 108.23 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 108.24 teacher who has at least three years of allowable service credit 108.25 with the teachers retirement fund association is entitled to 108.26 purchase up to ten years of allowable service credit for private 108.27 or parochial school teaching service by making payment under 108.28 section 356.55, provided that the teacher is not entitled to 108.29 receive a current or deferred age and service retirement annuity 108.30 or disability benefit from the applicable employer-sponsored 108.31 pension plan and has not purchased service credit from the 108.32 applicable defined benefit employer-sponsored pension plan for 108.33 that service. 108.34 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 108.35 desires to purchase service credit under subdivision 1 must 108.36 apply with the executive director to make the purchase. The 109.1 application must include all necessary documentation of the 109.2 teacher's qualifications to make the purchase, signed written 109.3 permission to allow the executive director to request and 109.4 receive necessary verification of applicable facts and 109.5 eligibility requirements, and any other relevant information 109.6 that the executive director may require. Payment must be made 109.7 before the teacher's effective date of retirement. 109.8 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 109.9 for the purchase period must be granted by the teachers 109.10 retirement fund association to the purchasing teacher on receipt 109.11 of the purchase payment amount. 109.12 Sec. 11. [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT 109.13 PURCHASE.] 109.14 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 109.15 teacher who has at least three years of allowable service credit 109.16 with the teachers retirement fund association is entitled to 109.17 purchase up to ten years of allowable service credit for service 109.18 rendered in the federal Peace Corps program or in the federal 109.19 Volunteers in Service to America program by making payment under 109.20 section 356.55, provided that the teacher has not purchased 109.21 service credit from any defined benefit pension plan for that 109.22 service. 109.23 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 109.24 desires to purchase service credit under subdivision 1 must 109.25 apply with the executive director to make the purchase. The 109.26 application must include all necessary documentation of the 109.27 teacher's qualifications to make the purchase, signed written 109.28 permission to allow the executive director to request and 109.29 receive necessary verification of applicable facts and 109.30 eligibility requirements, and any other relevant information 109.31 that the executive director may require. Payment must be made 109.32 before the teacher's effective date of retirement. 109.33 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 109.34 for the purchase period must be granted by the teachers 109.35 retirement fund association to the purchasing teacher on receipt 109.36 of the purchase payment amount. 110.1 Sec. 12. [354A.103] [CHARTER SCHOOL TEACHING SERVICE 110.2 CREDIT PURCHASE.] 110.3 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 110.4 teacher who has at least three years of allowable service credit 110.5 with the teachers retirement fund association is entitled to 110.6 purchase up to ten years of allowable service credit for charter 110.7 school teaching service by making payment under section 356.55, 110.8 provided that the teacher is not entitled to receive a current 110.9 or deferred age and service retirement annuity or disability 110.10 benefit from the applicable employer-sponsored pension plan and 110.11 has not purchased service credit from the applicable defined 110.12 benefit employer-sponsored pension plan for that service. 110.13 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 110.14 desires to purchase service credit under subdivision 1 must 110.15 apply with the executive director to make the purchase. The 110.16 application must include all necessary documentation of the 110.17 teacher's qualifications to make the purchase, signed written 110.18 permission to allow the executive director to request and 110.19 receive necessary verification of applicable facts and 110.20 eligibility requirements, and any other relevant information 110.21 that the executive director may require. Payment must be made 110.22 before the teacher's effective date of retirement. 110.23 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 110.24 for the purchase period must be granted by the teachers 110.25 retirement fund association to the purchasing teacher on receipt 110.26 of the purchase payment amount. 110.27 Sec. 13. [354A.104] [PREVIOUSLY UNCREDITED PART-TIME 110.28 TEACHING SERVICE CREDIT PURCHASE.] 110.29 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 110.30 teacher who has at least three years of allowable service credit 110.31 with the teachers retirement fund association and who performed 110.32 part-time teaching service in the applicable school district and 110.33 was not eligible previously for service credit for that service 110.34 is entitled to purchase the previously uncredited service by 110.35 making payment under section 356.55. 110.36 Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who 111.1 desires to purchase service credit under subdivision 1 must 111.2 apply with the executive director to make the purchase. The 111.3 application must include all necessary documentation of the 111.4 teacher's qualifications to make the purchase, signed written 111.5 permission to allow the executive director to request and 111.6 receive necessary verification of applicable facts and 111.7 eligibility requirements, and any other relevant information 111.8 that the executive director may require. Payment must be made 111.9 before the teacher's effective date of retirement. 111.10 Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit 111.11 for the purchase period must be granted by the teachers 111.12 retirement fund association to the purchasing teacher on receipt 111.13 of the purchase payment amount. 111.14 Sec. 14. Minnesota Statutes 1998, section 356.55, 111.15 subdivision 1, is amended to read: 111.16 Subdivision 1. [APPLICATION.] Unless the prior service 111.17 credit purchase authorization special law or general statute 111.18 provision explicitly specifies a different purchase payment 111.19 amount determination procedure, this section governs the 111.20 determination of the prior service credit purchase payment 111.21 amount of any prior service credit purchase. The purchase 111.22 payment amount determination procedure must recognize any 111.23 service credit accrued to the purchaser in a pension plan listed 111.24 in section 356.30, subdivision 3. Any service credit in a 111.25 Minnesota defined benefit public employee pension plan available 111.26 to be reinstated by the purchaser through the repayment of a 111.27 refund of member or employee contributions previously received 111.28 must be repaid in full before any purchase of prior service 111.29 credit payment is made under this section. 111.30 Sec. 15. Minnesota Statutes 1998, section 356.55, 111.31 subdivision 6, is amended to read: 111.32 Subd. 6. [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 111.33 As part of the regular data reporting to the consulting actuary 111.34 retained by the legislative commission on pensions and 111.35 retirement annually, the chief administrative officer of each 111.36 public pension plan that has accepted a prior service credit 112.1 purchase payment under this section shall report for any 112.2 purchase, the purchaser, the purchaser's employer, the age of 112.3 the purchaser, the period of the purchase, the purchaser's 112.4 prepurchase accrued service credit, the purchaser's postpurchase 112.5 accrued service credit, the purchaser's prior service credit 112.6 payment, the prior service credit payment made by the 112.7 purchaser's employer, and the amount of the additional benefit 112.8 or annuity purchased. 112.9 (b) Aspart ofa supplemental report to the regular annual 112.10 actuarial valuation for the applicable public pension plan 112.11 prepared by the consulting actuary retained by the legislative 112.12 commission on pensions and retirement, there must bean exhibit112.13comparinga comparison for each purchase showing the total prior 112.14 service credit payment received from all sources and the 112.15 increased public pension plan actuarial accrued liability 112.16 resulting from each purchase. 112.17 Sec. 16. [INSTRUCTION TO REVISOR.] 112.18 The revisor of statutes shall replace the current headnote 112.19 for Minnesota Statutes, section 354.53, with the headnote 112.20 "CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE." 112.21 Sec. 17. [EFFECTIVE DATE.] 112.22 (a) This article is effective on May 16, 1999. 112.23 (b) A teacher who retires on or before May 16, 1999, is not 112.24 eligible to purchase service credit under the provisions of this 112.25 act. A teacher who desires to purchase service credit under 112.26 this article before November 1, 1999, must pay an administrative 112.27 processing fee to the applicable retirement plan or plans for 112.28 the preparation of the estimate. The amount of the 112.29 administrative processing fee for a teacher retirement plan must 112.30 be established by the board of the plan based on a reasonable 112.31 estimate of the likely cost to the plan of processing the 112.32 service credit purchase payment estimate, but not less than $50. 112.33 ARTICLE 16 112.34 MINNEAPOLIS EMPLOYEES RETIREMENT 112.35 PLAN CHANGES 112.36 Section 1. Minnesota Statutes 1998, section 422A.06, 113.1 subdivision 3, is amended to read: 113.2 Subd. 3. [DEPOSIT ACCUMULATION FUND.] The deposit 113.3 accumulation fund consists of the assets held in the fund, 113.4increased byincluding amounts contributed by or for employees, 113.5 amounts contributed by the city, amounts contributed by 113.6 municipal activities supported in whole or in part by revenues 113.7 other than taxes and amounts contributed by any public 113.8 corporation, amounts paid by the state, and by income from 113.9 investments. There must be paid from the fund the amounts 113.10 required to be transferred to the retirement benefit fund, or 113.11 the disability benefit fund, refunds of contributions,death113.12benefits payable on death before retirement that are not payable113.13from the survivors' benefit fundincluding the 113.14 death-while-active refund specified in section 422A.22, 113.15 subdivision 4, postretirement increases in retirement allowances 113.16 granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 113.17 and expenses of the administration of the retirement fund which 113.18 were not charged by the retirement board against the income of 113.19 the retirement benefit fund from investments as the cost of 113.20 handling the investments of the retirement benefit fund. 113.21 Sec. 2. Minnesota Statutes 1998, section 422A.06, 113.22 subdivision 6, is amended to read: 113.23 Subd. 6. [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 113.24 fundshall consistconsists of the amount held for survivor 113.25 benefits, increased by contributions for survivor benefits made 113.26 by and for employees, including contributions made by the 113.27 employer, by any municipal activity supported in whole or in 113.28 part by revenue other than taxes or by any public corporation. 113.29 A proportionate share of income from investmentsshallmust be 113.30 allocated to this fund.There shall be paid from such fund the113.31 Survivor benefits specified in section 422A.23except that the113.32refund of net accumulated deductions from the salary of a113.33contributing member shall upon death in service be paid from the113.34deposit accumulation fundmust be paid from this fund. 113.35 Sec. 3. Minnesota Statutes 1998, section 422A.101, 113.36 subdivision 4, is amended to read: 114.1 Subd. 4. [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 114.2 INSTANCES.] (a) If a participating employing unit, other than 114.3 the state, has a negative asset balance in the deposit 114.4 accumulation fund, the executive director shall bill the 114.5 employing unit for the amount of the deficiency. Any amount 114.6 billed must include six percent interest, compounded annually, 114.7 for any year or portion of a year from the billing date until 114.8 the date of payment. 114.9 (b) If assets in the deposit accumulation fund are 114.10 insufficient to make a transfer to the retirement benefit fund, 114.11 the city of Minneapolis shall pay the amount of that 114.12 insufficiency to the retirement benefit fund within three days 114.13 of certification of the insufficiency by the executive director 114.14 of the fund. The city of Minneapolis may bill any other 114.15 participating employing unit other than the state for its 114.16 proportion of the amount paid. Any amount billed by the city 114.17 under this paragraph must include interest as specified in 114.18 paragraph (a). 114.19 Sec. 4. Minnesota Statutes 1998, section 422A.18, 114.20 subdivision 2, is amended to read: 114.21 Subd. 2. [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 114.22 disability allowance under this section shall be the amount of 114.23 service allowance to which the employee would be entitled under 114.24 section 422A.15, notwithstanding the age requirements expressed 114.25 therein; or the lesser of the following amounts: 50 percent of 114.26 the final average compensation, or an amount equal to two 114.27 percent of final average compensation for each year of allowable 114.28 service for the first ten years, and thereafter 2.5 percent of 114.29 final average compensation per year of allowable service, 114.30 including in the latter assumed service between the date the 114.31 disability occurred and the 60th birthday of the employee. 114.32If the amount of annuity(b) Annuities payablefrom the114.33Minnesota postretirement investment fund to any class of114.34annuitants is adjusted pursuant to section 11A.18, the amount of114.35benefits payable from the disability benefit fund for that class114.36of annuitantsunder this section shallalsobe adjusted at the 115.1 same time and rate as retirement annuities in the retirement 115.2 benefit fund. 115.3 Sec. 5. Minnesota Statutes 1998, section 422A.22, 115.4 subdivision 4, is amended to read: 115.5 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 115.6 ofa contributingan active memberwhile still in the service of115.7the city, and before reaching the compulsory age of115.8retirementprior to termination of service, there shall be paid 115.9 tosuch personthe beneficiary orpersons asbeneficiaries 115.10 designated by the membershall have nominated by written115.11designationon a form specified by the executive director and 115.12 filed with the retirement board,in such form as the retirement115.13board shall require,the net accumulatedamount ofemployee 115.14 deductions from salary, pay, or compensation, including interest 115.15, to the member's credit on date ofcompounded annually to the 115.16 date of the member's death. The amount must not include any 115.17 contributions made by the employee or on the employee's behalf, 115.18 or any interest or investment earnings on those contributions, 115.19 which were allocated to the survivor benefit fund under section 115.20 422A.06, subdivision 6. 115.21 (b) If the employee fails to make a designation, or if 115.22 theperson or personsbeneficiary or beneficiaries designated by 115.23suchthe employee predeceasessuchthe employee, thenet115.24accumulated amount of deductions from salary, pay, or115.25compensation including interest, to the credit of such employee115.26on date of death shallbenefit specified in paragraph (a) must 115.27 be paid tosuchthe deceased employee's estate. 115.28 (c) A benefit payable under this subdivision is in addition 115.29 to any applicable survivor benefit under section 422A.23. 115.30 Sec. 6. Minnesota Statutes 1998, section 422A.22, 115.31 subdivision 5, is amended to read: 115.32 Subd. 5. [REPAYMENT OF REFUND.] Uponreinstatement115.33 reemployment of a former covered employeeto the service,in 115.34 employment covered by the Minneapolis employees retirement fund, 115.35 service credit forsuchpast serviceor for any part thereof115.36shallwhich was forfeited by taking a refund must begranted116.1 reinstated only upon repayment of the amount of the separation 116.2 refund, with interest, from the time ofseparationpayment of 116.3 the refund until the date repaid. 116.4 Sec. 7. Minnesota Statutes 1998, section 422A.23, is 116.5 amended to read: 116.6 422A.23 [SURVIVOR BENEFITS.] 116.7 Subdivision 1. [PAYMENT OF CITY INSTALLMENT ACCUMULATED 116.8 AMOUNT.] (a) Ifa contributingan active or deferred member dies 116.9after having been in the servicewith ten or more years of 116.10 service credit,and before actual retirement, as determined by116.11the retirement board, the present worth of the city's annual116.12installments of $60 then to the credit of the contributing116.13member, shall be paid to a beneficiary designated by such116.14contributing member in such form as the retirement board shall116.15require, who shall be the surviving spouse, or surviving child,116.16or children of such member or, if there be no surviving spouse116.17or surviving child or children, then to a person actually116.18dependent on and receiving principal support from such member,116.19or surviving mother or father, or grandchildren, or surviving116.20brother or sister, or surviving children of the deceased brother116.21or sister of such memberexcept as noted in paragraph (d), the 116.22 individual specified in paragraph (b) is eligible to receive the 116.23 benefit specified in paragraph (c). 116.24 (b) An individual eligible for the benefit specified in 116.25 paragraph (c) is a beneficiary designated by the member on a 116.26 form specified by the executive director. If thebeneficiary116.27designated by the member is not one of the class of persons116.28named in the preceding sentence, such benefit from the116.29accumulation of city deposits shall be paid in the following116.30order: (1) to the surviving spouse, the whole thereof; (2) if116.31there be no surviving spouse, to the surviving children, share116.32and share alike; (3) if there be no surviving spouse or child or116.33children, to the dependent or dependents as those terms are116.34herein defined, of the member, share and share alike; (4) if116.35there be no surviving spouse, child or children, or dependents,116.36to the surviving mother and father, share and share alike; (5)117.1if there be no surviving mother and father, to the117.2grandchildren, in equal shares; if there be no grandchildren, to117.3the surviving brothers and sisters of the member, in equal117.4shares; (6) if there be no surviving brothers and sisters, to117.5the surviving children of the deceased brothers and sisters of117.6the member, in equal shares; or (7) if there is none of the117.7foregoing persons who survives the member, the accumulation of117.8the city deposits shall be applied to the funeral expenses of117.9themember failed to designate a beneficiary, or if the 117.10 beneficiary or beneficiaries designated by the employee 117.11 predecease the employee, the benefit in paragraph (c) is payable 117.12 to the deceased employee's estate. 117.13 (c) The benefit is a lump-sum payment of the present value 117.14 of the city's or other contributing employer's annual 117.15 installments of $60 to the credit of the member. 117.16 (d) No benefit is payable under this subdivision if a 117.17 monthly survivor benefit is paid on behalf of the deceased 117.18 employee under another subdivision of this section. 117.19 Subd. 2. [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 117.20 active member dies prior to termination of service with at least 117.21 18 months but less than 20 years of service credit, the 117.22 surviving spouse or surviving child or children is eligible to 117.23 receive the survivor benefit specified in paragraph (b) or (c), 117.24 as applicable. Payment of a benefit for any surviving child 117.25 under the age of 18 years shall be made to the surviving parent, 117.26 or if there be none, to the legal guardian of the surviving 117.27 child.For purposes of this subdivision, a surviving child is117.28an unmarried child of the deceased member under the age of 18,117.29or under the age of 22 if a full-time student at an accredited117.30school, college, or university.117.31 (b) If the surviving spouse or surviving child benefit 117.32 commenced before July 1, 1983, the surviving spouse benefit is 117.33 increased from $500 per month to $750 per month and the 117.34 surviving child benefit is $225 per month, beginning with the 117.35 first monthly payment payable after May 28, 1998. The sum of 117.36 surviving spouse and surviving child benefits payable under this 118.1 paragraph shall not exceed $900 per month. The increased cost 118.2 resulting from the benefit increases under this paragraph must 118.3 be allocated to each employing unit listed in section 422A.101, 118.4 subdivisions 1a, 2, and 2a, on the basis of the additional 118.5 accrued liability resulting from increased benefits paid to the 118.6 survivors of employees from that unit. 118.7 (c) If the surviving spouse or surviving child benefit 118.8 commences after June 30, 1983, the surviving spouse benefit is 118.9 30 percent of the member's average salary in effect over the 118.10 last six months of allowable service preceding the month in 118.11 which death occurs. The surviving child benefit is ten percent 118.12 of the member's average salary in effect over the last six 118.13 months of allowable service preceding the month in which death 118.14 occurs. The sum of surviving spouse and surviving child 118.15 benefits payable under this paragraph shall not exceed 50 118.16 percent of the member's average salary in effect over the last 118.17 six months of allowable service. 118.18 (d) Any surviving child benefit or surviving spouse benefit 118.19 computed under paragraph (c) and in effect for the month 118.20 immediately prior to May 28, 1998, is increased by 15 percent as 118.21 of the first payment on or after May 28, 1998. 118.22 (e) Surviving child benefits under this subdivision 118.23 terminate when the child no longer meets the definition of 118.24 surviving child. 118.25 Subd. 5. [ADMINISTRATION.] Benefitshereinprovidedshall118.26 in this section following the death of an active employee or 118.27 deferred member, as applicable, commencewithon the first day 118.28 of the month following the month in which the active employee or 118.29 deferred member dies and shall end with the last day of the 118.30 month preceding the month in which eligibility 118.31 ceases.Eligibility for the benefits herein provided shall be118.32determined by the retirement board and its determination shall118.33be final. Each beneficiary or parent or guardian of a dependent118.34child or legal representative shall furnish suchInformationas118.35the board may deemdeemed necessary by the executive director to 118.36 determine eligibility for the benefits provided by this section,119.1andmust be submitted. Failure to furnish any required 119.2 information shall be sufficient grounds forthedenial or 119.3 discontinuance of benefits. A determination made by the 119.4 executive director may be appealed to the retirement board, 119.5 whose determination is final. If the surviving spouse of the 119.6 deceased active employee or deferred member becomes entitled to 119.7 a retirement allowance by reason of membership in this fund, the 119.8 surviving spouseshallis authorized to receive the retirement 119.9 allowance in addition totheall applicable survivingspouse's119.10benefitspouse benefits to which the surviving spouse is 119.11 entitled as specified in this section and section 422A.22, 119.12 subdivision 4, if applicable. The cost of allmonthly119.13survivor'sbenefits provided in this sectionshall beis an 119.14 obligation of the members and of the city, any of its boards, 119.15 departments, commissions or public corporations or other 119.16 applicable employing units. 119.17 Subd. 6. [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 119.18 retirement board shall create a reserve account for survivor's 119.19 benefits from which shall be paid on an actuarial basis all 119.20 survivor benefits due and payable. At the end of each fiscal 119.21 year, as part of the annual actuarial valuation of the fund 119.22 prepared by the commission-retained actuary, a determination of 119.23 the normal cost of the benefits payable from the survivor's 119.24 benefit account shall be made and the board shall reduce or 119.25 increase the employee contribution rateof one-fourth of one119.26percentif and when it is determined based on the annual 119.27 actuarial valuation that the member contribution rate is in 119.28 excess of or is less than the amount necessary to pay for 50 119.29 percent of the calculated normal cost of the survivor benefits 119.30 provided in this section. 119.31 Subd. 7. [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 119.32 COVERAGE.] (a) If thecontributingactive or deferred member 119.33 diesafter having been in the service of the city 20 or more119.34years, and before the effective date of retirement, as119.35determined by the retirement board, the board shall paywith 20 119.36 or more years of service credit, a beneficiary as defined in 120.1 paragraph (b) is eligible to receive the benefit specified in 120.2 paragraph (c). 120.3 (b) The beneficiary eligible for a benefit under paragraph 120.4 (c) is the surviving spouse of the deceased employee. If there 120.5 is no surviving spouse, the beneficiary may be a dependent 120.6 surviving child of the member or dependent parent designated by 120.7 the employee on a form prescribed by the executive director. 120.8 (c) The benefit payable to the beneficiary designated in 120.9 paragraph (b) is a monthly allowance for lifeto the designated120.10beneficiary of the employee. The monthly allowanceherein120.11provided for shall beis the actuarial equivalent of a single 120.12 life service allowance specified in section 422A.15, subdivision 120.13 1, which would have been payable to the employee on the date of 120.14 death, notwithstanding the age requirement stated in section 120.15 422A.15, subdivision 1. For purposes of this section, the 120.16 amount of any excess contributions or voluntary additions by the 120.17 member shall not be included in the calculations in determining 120.18 the monthly allowance. 120.19The survivor allowance under this subdivision shall be120.20computed and determined under a procedure specified by the120.21commission-retained actuary utilizing the appropriate mortality120.22table established by the board of trustees based on the120.23experience of the fund as recommended by the commission-retained120.24actuary and using the applicable postretirement interest rate120.25assumption specified in section 356.215, subdivision 4d.120.26 (d) For benefits payable under this subdivision following 120.27 the death of a deferred member, the benefit must be calculated 120.28 as of the date of termination from service and increased by five 120.29 percent per year until January 1, 1981, and by three percent per 120.30 year thereafter compounded annually. 120.31 Subd. 8. [SURVIVING CHILD; DEPENDENT DEFINITION.]The120.32beneficiary designated by the employee shall be the surviving120.33spouse of such employee. If there is no surviving spouse, the120.34designated beneficiary may be a dependent surviving child or120.35dependent parent of such employee as dependency is defined in120.36sections 422A.01 to 422A.25. If the beneficiary designated by121.1the employee is not of the class of persons provided for in this121.2subdivision, or if the designated beneficiary predeceases the121.3employee, a refund shall be made as provided for in section121.4422A.22, in lieu of a life income. If the employee does not121.5elect to designate a beneficiary to receive a life income as121.6herein provided, the designated beneficiary, if of the class of121.7persons set forth in this subdivision, may elect within 60 days121.8after the date of death of the employee to receive a life income121.9computed and determined as though the employee had retired on121.10the date of death under the option 2 plan of retirement, as121.11provided for in sections 422A.01 to 422A.25, and had designated121.12such person as beneficiary.For purposes of subdivision 2, a 121.13 surviving child is an unmarried child of the deceased member 121.14 under the age of 18, or under the age of 22 if a full-time 121.15 student at an accredited school, college, or university. For 121.16 purposes of subdivision 7, a dependent surviving child or 121.17 dependent parent must meet the definition of dependent, as 121.18 defined in section 422A.01, subdivision 12, at the time of the 121.19 active or deferred member's death. 121.20 Subd. 9. [LUMP-SUM DEATH BENEFIT.]If any employee who has121.21contributed to the survivor's benefit account as herein provided121.22dies before the effective date of retirement on a service or121.23disability pension and is not survived by a beneficiary eligible121.24to receive a monthly allowance as herein providedIf no monthly 121.25 survivor benefit is payable under subdivision 2 or 7, there 121.26 shall be paid from thesurvivor'ssurvivor benefit account to a 121.27 beneficiary designated by the employee on a form prescribed by 121.28 the executive director a lump-sum death benefit of $750 if death 121.29 occurs prior to the end of the employee's tenth year of 121.30 service credit or of $1500 if the employee hadprior to death121.31completedten or morecalendaryears of service credit.Upon121.32reinstatement of a former employee to the service, credit for121.33such past service or for any part thereof shall be granted only121.34upon repayment of the amount of the separation refund, with121.35interest, from the time of separationAny benefit under this 121.36 subdivision may be paid in addition to a benefit payable under 122.1 subdivision 1. 122.2 Subd. 10. [BENEFIT INCREASES.]If the amount of annuity122.3payable from the Minnesota postretirement investment fund to any122.4class of annuitants is adjusted pursuant to section 11A.18, the122.5amount of benefits payable from the survivor's benefit fund122.6pursuant to subdivisions 7 or 8 for that class of annuitants122.7shall also be adjusted at the same time and rate.Annuities 122.8 payable under this section must be adjusted at the same time and 122.9 rate as retirement annuities in the retirement benefit fund. 122.10 Subd. 11. [EFFECT OF SPOUSE REMARRIAGE.] A monthly 122.11 survivor benefitismust notsuspended,be discontinued or 122.12 terminated, or otherwise stoppeddue to a surviving spouse's 122.13 remarriage. 122.14 Subd. 12. [DETERMINATION OF ANNUITY.] The survivor 122.15 annuities payable under this section must be computed and 122.16 determined under a procedure specified by the actuary retained 122.17 by the legislative commission on pensions and retirement 122.18 utilizing the appropriate mortality table based on the 122.19 experience of the fund as recommended by that actuary and 122.20 approved by the legislative commission on pensions and 122.21 retirement and using the applicable postretirement interest rate 122.22 assumption specified in section 356.215, subdivision 4d. 122.23 Sec. 8. [422A.231] [COST ALLOCATION.] 122.24 (a) Notwithstanding any law to the contrary, all current 122.25 and future contribution requirements due to this article are 122.26 payable by the participating contributing employing units other 122.27 than the state. 122.28 (b) In each actuarial valuation of the retirement fund, the 122.29 actuary retained by the legislative commission on pensions and 122.30 retirement shall include an exhibit on the impact of the benefit 122.31 increases contained in this article on the survivor benefit 122.32 fund. The actuary shall calculate the expected change in the 122.33 present value of the future benefits payable from the survivor 122.34 benefit fund attributable to this article, using the actuarial 122.35 method and assumptions applicable to the Minneapolis employees 122.36 retirement fund, from the prior actuarial valuation and shall 123.1 compare that result with the actual change in the present value 123.2 of future benefits payable from the survivor benefit fund 123.3 attributable to this article from the prior actuarial valuation. 123.4 (c) The executive director shall assess each participating 123.5 employer, other than the state, its proportional share of the 123.6 net increase amount calculated under paragraph (b). The 123.7 assessment must be made on the first business day of the 123.8 following February, plus compound interest at an annual rate of 123.9 six percent on the amount from the actuarial valuation date to 123.10 the date of payment. 123.11 Sec. 9. [REPEALER.] 123.12 Minnesota Statutes 1998, section 422A.16, subdivision 3a, 123.13 is repealed. 123.14 Sec. 10. [EFFECTIVE DATE.] 123.15 (a) This article is effective upon approval by the 123.16 Minneapolis city council and compliance with Minnesota Statutes, 123.17 section 645.021. 123.18 (b) All sections of this article must be approved for the 123.19 approval of any section to be effective. 123.20 ARTICLE 17 123.21 EMPLOYER MATCHING CONTRIBUTION 123.22 TAX-SHELTERED ANNUITY 123.23 CHANGES 123.24 Section 1. Minnesota Statutes 1998, section 356.24, 123.25 subdivision 1, is amended to read: 123.26 Subdivision 1. [RESTRICTION; EXCEPTIONS.](a)It is 123.27 unlawful for a school district or other governmental subdivision 123.28 or state agency to levy taxes for, or contribute public funds to 123.29 a supplemental pension or deferred compensation plan that is 123.30 established, maintained, and operated in addition to a primary 123.31 pension program for the benefit of the governmental subdivision 123.32 employees other than: 123.33 (1) to a supplemental pension plan that was established, 123.34 maintained, and operated before May 6, 1971; 123.35 (2) to a plan that provides solely for group health, 123.36 hospital, disability, or death benefits; 124.1 (3) to the individual retirement account plan established 124.2 by chapter 354B; 124.3 (4) to a plan that provides solely for severance pay under 124.4 section 465.72 to a retiring or terminating employee; 124.5 (5) for employees other than personnel employed by the 124.6 state university board or the community college board and 124.7 covered by the board of trustees of the Minnesota state colleges 124.8 and universities supplemental retirement plan under chapter 124.9 354C, if provided for in a personnel policy of the public 124.10 employer or in the collective bargaining agreement between the 124.11 public employer and the exclusive representative of public 124.12 employees in an appropriate unit, in an amount matching employee 124.13 contributions on a dollar for dollar basis, but not to exceed an 124.14 employer contribution of $2,000 a year per employee; 124.15 (i) to the state of Minnesota deferred compensation plan 124.16 under section 352.96; or 124.17 (ii) in payment of the applicable portion of the premium on 124.18 a tax-sheltered annuity contract qualified under section 403(b) 124.19 of the Internal Revenue Code, if purchased from a qualified 124.20 insurance company, or to a qualified investment entity, as 124.21 defined in subdivision 1a, and, in either case, if the employing 124.22 unit has complied with any applicable pension plan provisions of 124.23 the Internal Revenue Code with respect to the tax-sheltered 124.24 annuity program during the preceding calendar year; or 124.25 (6) for personnel employed by the state university board or 124.26 the community college board and not covered by clause (5), to 124.27 the supplemental retirement plan under chapter 354C, if provided 124.28 for in a personnel policy or in the collective bargaining 124.29 agreement of the public employer with the exclusive 124.30 representative of the covered employees in an appropriate unit, 124.31 in an amount matching employee contributions on a dollar for 124.32 dollar basis, but not to exceed an employer contribution of 124.33 $2,000 a year for each employee. 124.34(b)Subd. 1a. [QUALIFIED INSURANCE COMPANY; QUALIFIED 124.35 INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 124.36 company is a company that: 125.1 (1) meets the definition in section 60A.02, subdivision 4; 125.2 (2) is licensed to engage in life insurance or annuity 125.3 business in the state; 125.4 (3) is determined by the commissioner of commerce to have a 125.5 rating within the top two rating categories by a recognized 125.6 national rating agency or organization that regularly rates 125.7 insurance companies; and 125.8 (4) is determined by the state board of investment to be 125.9 amongthe tenup to 20 applicant insurance companies with 125.10 competitive investment options and investment returnson annuity125.11products. 125.12 (b) A qualified investment entity is an open-end investment 125.13 company that: 125.14 (1) is registered under the federal Investment Company Act 125.15 of 1940; 125.16 (2) is licensed to do business in the state; 125.17 (3) is determined by the commissioner of commerce to be in 125.18 sound financial standing; and 125.19 (4) is determined by the state board of investment to be 125.20 among up to five applicant investment entities with competitive 125.21 investment options and investment returns. 125.22 (c) The state board of investment determination must be 125.23 made on or beforeJanuary 1, 1993July 1, 2000, and must be 125.24 reviewed periodically. The state board of investment may retain 125.25 actuarial services to assist it in this determination and in its 125.26 periodic review. The state board of investment may annually 125.27 establish a budget for its costs in any determination and 125.28 periodic review processes. The state board of investment may 125.29 charge a proportional share of all costs related to the periodic 125.30 review to those qualified insurance companies and qualified 125.31 investment entities currently under contract and may charge a 125.32 proportional share of all costs related to soliciting and 125.33 evaluating bids in a determination process to each company and 125.34 investment entity selected by the state board of investment. 125.35 All contracts must be approved before execution by the state 125.36 board of investment. The state board of investment shall 126.1 establish policies and procedures under section 11A.04, clause 126.2 (2), to carry out this paragraph. 126.3(c)Subd. 1b. [VENDOR RESTRICTIONS.] A personnel policy 126.4 for unrepresented employees or a collective bargaining agreement 126.5 may establish limits on the number of vendors underparagraph126.6(b), clause (5),subdivision 1 that it will utilize and 126.7 conditions under which the vendors may contact employees both 126.8 during working hours and after working hours. 126.9 Sec. 2. [COMMISSION STUDY.] 126.10 The legislative commission on pensions and retirement shall 126.11 study the issue of the appropriate means to provide partially 126.12 employer-funded tax-sheltered savings opportunities for 126.13 educational employees, including the establishment of a single 126.14 comprehensive program structure for all applicable educational 126.15 employers and the elimination of any restriction on investment 126.16 vendors in providing partially employer-funded investment 126.17 opportunities to educational employees. 126.18 Sec. 3. [EFFECTIVE DATE.] 126.19 Section 1 is effective May 15, 2000. Section 2 is 126.20 effective on the day following final enactment. 126.21 ARTICLE 18 126.22 MNSCU INDIVIDUAL RETIREMENT 126.23 ACCOUNT PLAN CHANGES 126.24 Section 1. Minnesota Statutes 1998, section 43A.27, 126.25 subdivision 3, is amended to read: 126.26 Subd. 3. [RETIRED EMPLOYEES.] (a) A person may elect to 126.27 purchase at personal expense individual and dependent hospital, 126.28 medical, and dental coverages if the person is: 126.29 (1) a retired employee of the state or an organization 126.30 listed in subdivision 2 or section 43A.24, subdivision 2, who, 126.31 at separation of service: 126.32 (i) is immediately eligible to receive a retirement benefit 126.33 under chapter 354B or an annuity under a retirement program 126.34 sponsored by the state or such organization of the stateand; 126.35 (ii) immediately meets the age and service requirements in 126.36 section 352.115, subdivision 1; and 127.1(ii)(iii) has five years of service or meets the service 127.2 requirement of the collective bargaining agreement or plan, 127.3 whichever is greater; or 127.4 (2) a retired employee of the state who is at least 50 127.5 years of age and has at least 15 years of state service. 127.6 (b) The commissioner shall offer at least one plan which is 127.7 actuarially equivalent to those made available through 127.8 collective bargaining agreements or plans establishedpursuant127.9tounder section 43A.18 to employees in positions equivalent to 127.10 that from which retired. 127.11 (c) A spouse of adeceased retired employee who received an127.12annuity under a state retirement programperson eligible under 127.13 paragraph (a) may purchase the coverage listed in this 127.14 subdivision if the spouse was a dependent under the retired 127.15 employee's coverage at the time of theemployee'sretiree's 127.16 death. 127.17 (d) Coverages must be coordinated with relevant health 127.18 insurance benefits provided through the federally sponsored 127.19 Medicare program. Until the retired employee reaches age 65, 127.20 the retired employee and dependents must be pooled in the same 127.21 group as active employees for purposes of establishing premiums 127.22 and coverage for hospital, medical, and dental insurance. 127.23 Coverage for retired employees and their dependents may not 127.24 discriminate on the basis of evidence of insurability or 127.25 preexisting conditions unless identical conditions are imposed 127.26 on active employees in the group that the employee left. 127.27 Appointing authorities shall provide notice to employees no 127.28 later than the effective date of their retirement of the right 127.29 to exercise the option provided in this subdivision. The 127.30 retired employee must notify the commissioner or designee of the 127.31 commissioner within 30 days after the effective date of the 127.32 retirement of intent to exercise this option. 127.33 Sec. 2. Minnesota Statutes 1998, section 136F.48, is 127.34 amended to read: 127.35 136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 127.36 (a) This section applies to a person who: 128.1 (1) retires from the Minnesota stateuniversitycolleges 128.2 and universities system, the technical college system, or the128.3community college system, or from a successor system employing128.4state university, technical college, or community college128.5faculty,with at least ten years of combined service credit in a 128.6 system under the jurisdiction of the board of trustees of the 128.7 Minnesota state colleges and universities; 128.8 (2) was employed on a full-time basis immediately preceding 128.9 retirement as astate university, technical college, or128.10community collegefaculty member or as an unclassified 128.11 administrator inone of those systemsthe Minnesota state 128.12 colleges and universities system; 128.13 (3) begins drawing a retirement benefit from the individual 128.14 retirement account plan or an annuity from the teachers 128.15 retirement association, the Minnesota state retirement system, 128.16 or from a first class city teacher plan; and 128.17 (4) returns to work on not less than a one-third time basis 128.18 and not more than a two-thirds time basis in the system from 128.19 which the person retired under an agreement in which the person 128.20 may not earn a salary of more than $35,000 in a calendar year 128.21 from employment after retirement in the system from which the 128.22 person retired. 128.23 (b) Initial participation, the amount of time worked, and 128.24 the duration of participation under this section must be 128.25 mutually agreed upon by the president of the institution where 128.26 the person returns to work and the employee. The president may 128.27 require up to one-year notice of intent to participate in the 128.28 program as a condition of participation under this section. The 128.29 president shall determine the time of year the employee shall 128.30 work. The employer or the president may not require a person to 128.31 waive any rights under a collective bargaining agreement as a 128.32 condition of participation under this section. 128.33 (c) For a person eligible under paragraphs (a) and (b), the 128.34 employing board shall make the same employer contribution for 128.35 hospital, medical, and dental benefits as would be made if the 128.36 person were employed full time. 129.1 (d) For work under paragraph (a), a person must receive a 129.2 percentage of the person's salary at the time of retirement that 129.3 is equal to the percentage of time the person works compared to 129.4 full-time work. 129.5 (e) If a collective bargaining agreement covering a person 129.6 provides for an early retirement incentive that is based on age, 129.7 the incentive provided to the person must be based on the 129.8 person's age at the time employment under this section ends. 129.9 However, the salary used to determine the amount of the 129.10 incentive must be the salary that would have been paid if the 129.11 person had been employed full time for the year immediately 129.12 preceding the time employment under this section ends. 129.13 (f) A person who returns to work under this section is a 129.14 member of the appropriate bargaining unit and is covered by the 129.15 appropriate collective bargaining contract. Except as provided 129.16 in this section, the person's coverage is subject to any part of 129.17 the contract limiting rights of part-time employees. 129.18 Sec. 3. [352.1155] [NO ANNUITY REDUCTION.] 129.19 Subdivision 1. [ELIGIBILITY.] Except as indicated in 129.20 subdivision 4, the annuity reduction provisions of section 129.21 352.115, subdivision 10, do not apply to a person who: 129.22 (1) retires from the Minnesota state colleges and 129.23 universities system with at least ten years of combined service 129.24 credit in a system under the jurisdiction of the board of 129.25 trustees of the Minnesota state colleges and universities; 129.26 (2) was employed on a full-time basis immediately preceding 129.27 retirement as a faculty member or as an unclassified 129.28 administrator in that system; 129.29 (3) begins drawing an annuity from the general employees 129.30 retirement plan of the Minnesota state retirement system; and 129.31 (4) returns to work on not less than a one-third time basis 129.32 and not more than a two-thirds time basis in the system from 129.33 which the person retired under an agreement in which the person 129.34 may not earn a salary of more than $35,000 in a calendar year 129.35 from employment after retirement in the system from which the 129.36 person retired. 130.1 Subd. 2. [APPROVAL REQUIREMENTS.] Initial participation, 130.2 the amount of time worked, and the duration of participation 130.3 under this section must be mutually agreed upon by the president 130.4 of the institution where the person returns to work and the 130.5 employee. The president may require up to one-year notice of 130.6 intent to participate in the program as a condition of 130.7 participation under this section. The president shall determine 130.8 the time of year the employee shall work. The employer or the 130.9 president may not require a person to waive any rights under a 130.10 collective bargaining agreement as a condition of participation 130.11 under this section. 130.12 Subd. 3. [SERVICE CREDIT PROHIBITION.] Notwithstanding any 130.13 law to the contrary, a person eligible under this section may 130.14 not, based on employment to which the waiver in this section 130.15 applies, earn further service credit in a Minnesota public 130.16 defined benefit plan and is not eligible to participate in a 130.17 Minnesota public defined contribution plan, other than a 130.18 volunteer fire plan governed by chapter 424A. No employer or 130.19 employee contribution to any of these plans may be made on 130.20 behalf of such a person. 130.21 Subd. 4. [EXEMPTION LIMIT.] For a person eligible under 130.22 this section who earns more than $35,000 in a calendar year from 130.23 reemployment in the Minnesota state colleges and universities 130.24 system following retirement, the annuity reduction provisions of 130.25 section 352.115, subdivision 10, apply only to income over 130.26 $35,000. 130.27 Subd. 5. [CONTINUING RIGHTS.] A person who returns to work 130.28 under this section is a member of the appropriate bargaining 130.29 unit and is covered by the appropriate collective bargaining 130.30 contract. Except as provided in this section, the person's 130.31 coverage is subject to any part of the contract limiting rights 130.32 of part-time employees. 130.33 Sec. 4. Minnesota Statutes 1998, section 354.445, is 130.34 amended to read: 130.35 354.445 [NO ANNUITY REDUCTION.] 130.36 (a) The annuity reduction provisions of section 354.44, 131.1 subdivision 5, do not apply to a person who: 131.2 (1) retires from the Minnesota stateuniversitycolleges 131.3 and universities system, technical college system, or the131.4community college system, or from a successor system employing131.5state university, technical college, or community college131.6faculty,with at least ten years of combined service credit in a 131.7 system under the jurisdiction of the board of trustees of the 131.8 Minnesota state colleges and universities; 131.9 (2) was employed on a full-time basis immediately preceding 131.10 retirement as astate university, technical college, or131.11community collegefaculty member or as an unclassified 131.12 administrator inone of these systemsthat system; 131.13 (3) begins drawing an annuity from the teachers retirement 131.14 association; and 131.15 (4) returns to work on not less than a one-third time basis 131.16 and not more than a two-thirds time basis in the system from 131.17 which the person retired under an agreement in which the person 131.18 may not earn a salary of more than $35,000 in a calendar year 131.19 from employment after retirement in the system from which the 131.20 person retired. 131.21 (b) Initial participation, the amount of time worked, and 131.22 the duration of participation under this section must be 131.23 mutually agreed upon by the president of the institution where 131.24 the person returns to work and the employee. The president may 131.25 require up to one-year notice of intent to participate in the 131.26 program as a condition of participation under this section. The 131.27 president shall determine the time of year the employee shall 131.28 work. The employer or the president may not require a person to 131.29 waive any rights under a collective bargaining agreement as a 131.30 condition of participation under this section. 131.31 (c) Notwithstanding any law to the contrary, a person 131.32 eligible under paragraphs (a) and (b) may not, based on 131.33 employment to which the waiver in this section applies, earn 131.34 further service credit inthe teachers retirement association131.35and is not eligible to participate in the individual retirement131.36account plan or the supplemental retirement plan established in132.1chapter 354B as a result of service under this sectiona 132.2 Minnesota public defined benefit plan and is not eligible to 132.3 participate in a Minnesota public defined contribution plan, 132.4 other than a volunteer fire plan governed by chapter 424A. No 132.5 employer or employee contribution to any of these plans may be 132.6 made on behalf of such a person. 132.7 (d) For a person eligible under paragraphs (a) and (b) who 132.8 earns more than $35,000 in a calendar year from employment after 132.9 retirementin the system from which the person retireddue to 132.10 employment by the Minnesota state colleges and universities 132.11 system, the annuity reduction provisions of section 354.44, 132.12 subdivision 5, apply only to income over $35,000. 132.13 (e) A person who returns to work under this section is a 132.14 member of the appropriate bargaining unit and is covered by the 132.15 appropriate collective bargaining contract. Except as provided 132.16 in this section, the person's coverage is subject to any part of 132.17 the contract limiting rights of part-time employees. 132.18 Sec. 5. Minnesota Statutes 1998, section 354.66, 132.19 subdivision 1b, is amended to read: 132.20 Subd. 1b. [DISTRICT, DEFINED.] For purposes of this 132.21 section, the term "district" means a school district, the132.22communityor the Minnesota state collegesystemandthe state132.23 university system. 132.24 Sec. 6. Minnesota Statutes 1998, section 354.66, 132.25 subdivision 1c, is amended to read: 132.26 Subd. 1c. [PARTICIPATION.] (a) Except as indicated in 132.27 paragraph (b), participation in the part-time mobility program 132.28 must be based on a full fiscal year and the employment pattern 132.29 of the teacher during the most recent fiscal year. 132.30 (b) For a teacher in the Minnesota state colleges and 132.31 universities system who teaches only during the first semester 132.32 in an academic year and retires immediately after the first 132.33 semester, participation in the part-time mobility program must 132.34 be based on one-half of a full fiscal year and the employment 132.35 pattern of the teacher during the most recent one-half of the 132.36 most recent fiscal year. 133.1 Sec. 7. Minnesota Statutes 1998, section 354.66, 133.2 subdivision 3, is amended to read: 133.3 Subd. 3. [PART-TIME TEACHING POSITION, DEFINED.] (a) For 133.4 purposes of this section, the term "part-time teaching position" 133.5shall meanmeans a teaching position within the district in 133.6 which the teacher is employed for at least 50 full days or a 133.7 fractional equivalent thereof as prescribed in section 354.091, 133.8 and for which the teacher is compensated in an amount not 133.9 exceeding 80 percent of the compensation established by the 133.10 board for a full-time teacher with identical education and 133.11 experience with the employing unit. 133.12 (b)The compensation of a teacher in the state colleges and133.13universities system may exceed the 80 percent limit if the133.14teacher does not teach just one of the three quarters in the133.15system's full school year, provided no additional services are133.16performed while the teacher participates in the program.For a 133.17 teacher to which subdivision 1c, paragraph (b), applies, the 133.18 term "part-time teaching position" means a teaching position 133.19 within the district in which the teacher is employed for at 133.20 least 25 full days or a fractional equivalent thereof as 133.21 prescribed in section 354.091, and for which the teacher is 133.22 compensated in an amount not exceeding 40 percent of the 133.23 compensation established by the board for a full-time teacher, 133.24 with identical education and experience with the employing unit. 133.25 Sec. 8. Minnesota Statutes 1998, section 354B.24, 133.26 subdivision 3, is amended to read: 133.27 Subd. 3. [OPTIONALADDITIONAL CONTRIBUTIONS.] (a) In 133.28 addition to contributions required by subdivision 2, a plan 133.29 participant on an approved sabbatical leavemayshall makean133.30optional additionala member contribution. The optional133.31additional member may not exceedbased on theapplicablemember 133.32 contribution rate specified in section 354B.23, subdivision 1, 133.33 applied to the difference between the amount of salary actually 133.34 received during the sabbatical leave and theamount offull-time 133.35 salaryactually received for a comparable period of an identical133.36length tothe member would have received if not on sabbatical 134.1 leavethat occurred during the fiscal year immediately preceding134.2the sabbatical leave. 134.3 (b) Anyoptionaladditional member contribution must be 134.4 madebefore the last day of the fiscal year next following the134.5fiscal year in which the sabbatical leave terminates. The134.6optional additional member contribution may not include interest134.7 through payroll deduction as though the member were employed 134.8 full-time. 134.9 (c) When anoptionaladditional member contribution is 134.10 made, the employing unit must make the employer contribution at 134.11 the rateset forthspecified in section 354B.23, subdivision 3, 134.12 on the salary that was the basis for theoptionaladditional 134.13 member contribution under paragraph (a). 134.14 (d) An employer contribution required under this section 134.15 must be made no later than 60 days after the date on which the 134.16 optional additional member contribution was made. 134.17 Sec. 9. Minnesota Statutes 1998, section 354B.25, 134.18 subdivision 2, is amended to read: 134.19 Subd. 2. [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS134.20 INVESTMENT OPTIONS.](a)The plan administrator shall arrange 134.21 for the purchase offixed annuity contracts, variable annuity134.22contracts, a combination of fixed and variable annuity134.23contracts, or custodial accounts from financial institutions134.24which have been selected by the state board of investment under134.25subdivision 3, as the investment vehicle for the retirement134.26coverage of plan participants and to provide retirement benefits134.27to plan participants. Custodial accounts from financial134.28institutions shall include open-end investment companies134.29registered under the federal Investment Company Act of 1940, as134.30amendedinvestment products. 134.31(b)Theannuity contracts or accountsinvestment products 134.32 must be purchased with contributions under section 354B.23 or 134.33 with money or assets otherwise provided by law by authority of 134.34 the boardand deemed acceptable by the applicable financial134.35institution. 134.36(c) In addition to contracts and accounts from financial135.1institutions,The Minnesota supplemental investment fund 135.2 established under section 11A.17 and administered by the state 135.3 board of investment is one of the investmentoptionsproducts 135.4 for the individual retirement account plan. Direct access must 135.5 also be provided to lower expense and no load mutual funds, as 135.6 those terms are defined by the federal securities and exchange 135.7 commission, including stock funds, bond funds, and balanced 135.8 funds. Other investment products or combination of investment 135.9 products which may be included are: 135.10 (1) savings accounts at federally insured financial 135.11 institutions; 135.12 (2) life insurance contracts, fixed and variable annuity 135.13 contracts from companies that are subject to regulation by the 135.14 commerce commissioner; 135.15 (3) investment options from open ended investment companies 135.16 registered under the federal Investment Company Act of 1940, 135.17 United States Code, title 15, sections 80a-1 to 80a-64; 135.18 (4) investment options from a firm that is a registered 135.19 investment advisor under the Investment Advisors Act of 1940, 135.20 United States Code, title 15, sections 80b-1 to 80b-21; 135.21 (5) investment options of a bank as defined in United 135.22 States Code, title 15, section 80b-2, subsection (a), paragraph 135.23 2, or a bank holding company as defined in the Bank Holding 135.24 Company Act of 1956, United States Code, title 12, section 1841, 135.25 subsection (a), paragraph (1). 135.26 Sec. 10. Minnesota Statutes 1998, section 354B.25, 135.27 subdivision 3, is amended to read: 135.28 Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 135.29 Thefinancial institutionsinvestment options providedforunder 135.30 subdivision 2 must be selected by the state board of 135.31 investment.Financial institutions include open-end investment135.32companies registered under the federal Investment Company Act of135.331940, as amended.135.34(b) The state board of investment may select up to five135.35financial institutions to provide annuity contracts, custodial135.36accounts, or a combination, as investment options for the136.1individual retirement account plan in addition to the Minnesota136.2supplemental investment fund.In making its selection, at a 136.3 minimum, the state board of investment shall considerat least136.4 the following: 136.5 (1) the experience and ability of the financial institution 136.6 to provideretirement and deathbenefits and products that are 136.7 suited to meet the needs of plan participants; 136.8 (2) the relationship of thoseretirement and deathbenefits 136.9 and products provided by the financial institution to their 136.10 cost;and136.11 (3) the financial strength and stability of the financial 136.12 institution; and 136.13 (4) the fees and expenses associated with the investment 136.14 products in comparison to other products of similar risk and 136.15 rates of return. 136.16(c)(b) After selecting a financial institution, the state 136.17 board of investment must periodically review each financial 136.18 institutionselected under paragraph (b)and the offered 136.19 products. The periodic review must occur at least every three 136.20 years. In making its review, the state board of investment may 136.21 retain appropriate consulting services to assist it in its 136.22 periodic review, establish a budget for the cost of the periodic 136.23 review process, and charge a proportional share of these costs 136.24 to the reviewed financial institution. 136.25(d)(c) Contracts with financial institutions under this 136.26 section must be executed by the board and must be approved by 136.27 the state board of investment before execution. 136.28(e)(d) The state board of investment shall also establish 136.29 policies and procedures under section 11A.04, clause (2), to 136.30 carry out the provisions of this subdivision. 136.31 Sec. 11. Minnesota Statutes 1998, section 354B.25, 136.32 subdivision 5, is amended to read: 136.33 Subd. 5. [INDIVIDUAL RETIREMENT ACCOUNT PLAN 136.34 ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 136.35 administrative expenses of the individual retirement account 136.36 planmustmay bepaid bycharged to plan participants by the 137.1 plan sponsor in thefollowing manner:137.2(1) from plan participants with amounts invested in the137.3Minnesota supplemental investment fund, the plan administrator137.4may charge an administrative expense assessment in an amount137.5such that annual total fees charged for plan administration137.6cannot exceed 40/100 of one percent of the assets of the137.7Minnesota supplemental investment funds; and137.8(2) from plan participants with amounts through annuity137.9contracts and custodial accounts purchased under subdivision 2,137.10paragraph (a), the plan administrator may charge an137.11administrative expense assessment of a designated amount, not to137.12exceed two percent of member and employer contributions, as137.13those contributions are madeform of an annual fee, an asset 137.14 based fee, a percentage of the contributions to the plan, or a 137.15 combination thereof. 137.16 (b) Any administrative expense charge that is not actually 137.17 needed for the administrative expenses of the individual 137.18 retirement account plan must be refunded to member accounts. 137.19 (c) The board of trustees shall report annually, before 137.20 October 1, to the advisory committee created in subdivision 1a 137.21 on administrative expenses of the plan. The report must include 137.22 a detailed accounting of charges for administrative expenses 137.23 collected from plan participants and expenditure of the 137.24 administrative expense charges. The administrative expense 137.25 charges collected from plan participants must be kept in a 137.26 separate account from any other funds under control of the board 137.27 of trustees and may be used only for the necessary and 137.28 reasonable administrative expenses of the plan. 137.29 Sec. 12. [354B.31] [IRAP PART-TIME TEACHER MOBILITY 137.30 PROGRAM.] 137.31 Subdivision 1. [PARTICIPATION REQUIREMENTS.] A faculty 137.32 member who has three years or more of service in the Minnesota 137.33 state colleges and universities system, by agreement with the 137.34 board or with the authorized representative of the board, may be 137.35 assigned to teaching service in a part-time teaching position 137.36 under subdivision 2. 138.1 Subd. 2. [PART-TIME TEACHING POSITION; DEFINED.] For 138.2 purposes of this section, "part-time teaching position" means a 138.3 teaching position within the Minnesota state colleges and 138.4 universities system in which the teacher is employed for at 138.5 least 50 full days or a fractional equivalent as prescribed in 138.6 section 354.091, and for which the faculty member is compensated 138.7 in an amount not exceeding 80 percent of the compensation 138.8 established by the board for a full-time faculty member with 138.9 identical education and experience with the employing unit. 138.10 Subd. 3. [RETIREMENT CONTRIBUTIONS.] A faculty member 138.11 assigned to a part-time position under this section shall 138.12 continue to make employee contributions to the individual 138.13 retirement account plan during the period of part-time 138.14 employment on the same basis and in the same amounts as would 138.15 have been paid if the person had been employed on a full-time 138.16 basis provided that, prior to June 30 each year the member and 138.17 the board make that portion of the required employer 138.18 contribution to the plan, in any proportion which they may agree 138.19 upon, that is based on the difference between the amount of 138.20 compensation that would have been paid if the person had been 138.21 employed on a full-time basis and the amount of compensation 138.22 actually received by the person for the services rendered in the 138.23 part-time assignment. The employing unit shall make that 138.24 portion of the required employer contributions to the plan on 138.25 behalf of the person that is based on the amount of compensation 138.26 actually received by the person for the services rendered in the 138.27 part-time assignment. The employee and employer contributions 138.28 shall be based upon the rates of contribution prescribed by 138.29 section 354B.23. Employee contributions for part-time teaching 138.30 service pursuant to this section shall not continue for more 138.31 than ten years. 138.32 Subd. 4. [OTHER MEMBERSHIP PRECLUDED.] A faculty member 138.33 entitled to make employee contributions for part-time teaching 138.34 service pursuant to this section shall not be entitled during 138.35 the same period of time to be a member of, accrue allowable 138.36 service credit in or make employee contributions to any other 139.1 Minnesota public employee pension plan, except a volunteer 139.2 firefighters relief association governed by sections 69.771 to 139.3 69.776. 139.4 Subd. 5. [INSURANCE.] If the board enters into an 139.5 agreement authorized by this section, the board shall continue 139.6 any insurance programs furnished or authorized a full-time 139.7 teacher on an identical basis and with identical sharing of 139.8 costs for a part-time teacher pursuant to this section. 139.9 However, the requirements of this subdivision may be modified by 139.10 a collective bargaining agreement between a board and an 139.11 exclusive representative pursuant to chapter 179A. Teachers as 139.12 defined in section 136F.43 employed on a less than 75 percent 139.13 time basis pursuant to this section are eligible for state paid 139.14 insurance benefits as if the teachers were employed full-time. 139.15 Subd. 6. [ELIGIBILITY FOR CREDIT.] Only teachers who are 139.16 public employees as defined in section 179A.03, subdivision 14, 139.17 during the school year preceding the period of part-time 139.18 employment pursuant to this section qualify for employee 139.19 contributions to the retirement plan for part-time teaching 139.20 service under subdivision 4. Notwithstanding section 179A.03, 139.21 subdivision 14, clauses (e) and (f), teachers who are employed 139.22 on a part-time basis for purposes of this section and who would 139.23 therefore be disqualified from the bargaining unit by one or 139.24 both of those provisions, continue to be in the bargaining unit 139.25 during the period of part-time employment under this section for 139.26 purposes of compensation, fringe benefits, and the grievance 139.27 procedure. 139.28 Subd. 7. [BOARD POWER NOT RESTRICTED.] This section does 139.29 not limit the authority of the board to assign a teacher to a 139.30 part-time teaching position which does not qualify for full 139.31 accrual of service credit from and employee contributions to the 139.32 retirement fund under this section. 139.33 Subd. 8. [SUBSTITUTE TEACHING.] Subdivision 4 does not 139.34 prohibit a teacher who qualifies for full accrual of service 139.35 credit from and employee contributions to the retirement fund 139.36 pursuant to this section in any year from being employed as a 140.1 substitute teacher by any school district during that year. 140.2 Notwithstanding sections 354.091 and 354.42, a teacher may not 140.3 qualify for full accrual of service credit from and employee 140.4 contributions to the retirement fund for other teaching service 140.5 rendered for any part of any year for which the teacher 140.6 qualifies for employee contributions to the retirement plan 140.7 pursuant to this section. 140.8 Sec. 13. Minnesota Statutes 1998, section 354C.12, 140.9 subdivision 4, is amended to read: 140.10 Subd. 4. [ADMINISTRATIVE EXPENSES.] (a) The board of 140.11 trustees of the Minnesota state colleges and universities is 140.12 authorized to pay the necessary and reasonable administrative 140.13 expenses of the supplemental retirement plan and may bill 140.14 participants to recover these expenses. The administrative fees 140.15 or chargesmustmay bepaid bycharged to participantsin the140.16following manner:as an annual fee, an asset based fee, a 140.17 percentage of contributions to the plan, or a contribution 140.18 thereof. 140.19(1) from participants whose contributions are invested with140.20the state board of investment, the plan administrator may140.21recover administrative expenses in the manner authorized by the140.22Minnesota state colleges and universities in an amount such that140.23annual total fees charged for plan administration cannot exceed140.2440/100 of one percent of the assets of the Minnesota140.25supplemental investment funds; or140.26(2) from participants where contributions are invested140.27through contracts purchased from any other authorized source,140.28the plan administrator may assess an amount of up to two percent140.29of the employee and employer contributions.140.30 (b) Any recovered or assessed amounts that are not needed 140.31 for the necessary and reasonable administrative expenses of the 140.32 plan must be refunded to member accounts. 140.33 (c) The board of trustees shall report annually, before 140.34 October 1, to the advisory committee created in section 354B.25, 140.35 subdivision 1a, on administrative expenses of the plan. The 140.36 report must include a detailed accounting of charges for 141.1 administrative expenses collected from plan participants and 141.2 expenditure of the administrative expense charges. The 141.3 administrative expense charges collected from plan participants 141.4 must be kept in a separate account from any other funds under 141.5 control of the board of trustees and may be used only for the 141.6 necessary and reasonable administrative expenses of the plan. 141.7 Sec. 14. [EFFECTIVE DATE.] 141.8 Sections 1 to 13 are effective on July 1, 1999. 141.9 ARTICLE 19 141.10 OTHER CHANGES 141.11 Section 1. Minnesota Statutes 1998, section 3.85, 141.12 subdivision 3, is amended to read: 141.13 Subd. 3. [MEMBERSHIP.] The commission consists ofsixfive 141.14 members of the senate appointed by the subcommittee on 141.15 committees of the committee on rules and administration andsix141.16 five members of the house of representatives appointed by the 141.17 speaker. Members shall be appointed at the commencement of each 141.18 regular session of the legislature for a two-year term beginning 141.19 January 16 of the first year of the regular session. Vacancies 141.20 that occur while the legislature is in session shall be filled 141.21 like regular appointments. If the legislature is not in 141.22 session, senate vacancies shall be filled by the last 141.23 subcommittee on committees of the senate committee on rules and 141.24 administration or other appointing authority designated by the 141.25 senate rules, and house vacancies shall be filled by the last 141.26 speaker of the house, or if the speaker is not available, by the 141.27 last chair of the house rules committee. 141.28 Sec. 2. [STUDY.] 141.29 The legislative commission on pensions and retirement shall 141.30 study the feasibility and cost-effectiveness of converting 141.31 public employee retirement plans to defined-contribution plans, 141.32 projecting the cost and benefit implications to 2020, and shall 141.33 report to the legislature by February 15, 2000. 141.34 Sec. 3. [EFFECTIVE DATE.] 141.35 Sections 1 and 2 are effective on the day following final 141.36 enactment. 142.1 ARTICLE 20 142.2 PUBLIC PENSION FACILITIES 142.3 Section 1. Minnesota Statutes 1998, section 353.03, 142.4 subdivision 4, is amended to read: 142.5 Subd. 4. [OFFICES.] The commissioner of 142.6 administrationshallmay make provision for suitable office 142.7 space in the state capitol or other state office buildings, or 142.8 at such other location in St. Paul as is determined by the 142.9 commissioner for the use of the board of trustees and its 142.10 executive director. The commissioner shall give the board at 142.11 least four months notice for any proposed removal from their 142.12 present location. Any and all rental charges shall be paid by 142.13 the trustees from the public employees retirement fund. 142.14 Sec. 2. Minnesota Statutes 1998, section 354.06, 142.15 subdivision 7, is amended to read: 142.16 Subd. 7. [OFFICES.] A suitable officeshallmay be 142.17 provided by the state through the proper officer for the use of 142.18 the board and its executive director. 142.19 Sec. 3. [356.89] [PUBLIC PENSION FACILITIES.] 142.20 Subdivision 1. [BUILDING; RELATED FACILITIES.] The board 142.21 of directors of the Minnesota state retirement system, the board 142.22 of trustees of the public employees retirement association, and 142.23 the board of trustees of the teachers retirement association are 142.24 authorized to expend or otherwise pledge pension funds or the 142.25 proceeds of revenue bonds as provided in subdivision 3 for the 142.26 common ownership, operation, and improvement of a building and 142.27 related facilities for the administration of their public 142.28 pension systems. This authority includes the authority to 142.29 purchase or lease land and facilities and the authority to 142.30 design, construct, furnish, improve, and equip a building and 142.31 related parking facilities to accommodate employees and 142.32 visitors. The boards' planning, selection, design, and building 142.33 of facilities are not subject to the capital improvements 142.34 provisions of section 16B.33. The competitive acquisition 142.35 process set forth in chapter 16C does not apply provided the 142.36 process set forth in subdivision 2 is followed. Notwithstanding 143.1 that no appropriation is made, the requirements of sections 143.2 16B.30 to 16B.32 and 16B.335 apply to this project. 143.3 Subd. 2. [CONTRACTING PROCEDURES.] (a) The boards may 143.4 enter into a contract for facilities with a contractor to 143.5 furnish the architectural, engineering, and related services as 143.6 well as the labor, materials, supplies, equipment, and related 143.7 construction services on the basis of a request for 143.8 qualifications and competitive responses received through a 143.9 request for proposals process which must include the items 143.10 listed in paragraphs (b) to (i). 143.11 (b) Prior to issuing a request for qualifications and a 143.12 request for proposals, the boards, with the assistance of the 143.13 department of administration, shall prepare performance criteria 143.14 and specifications which shall include: 143.15 (1) a general floor plan or layout indicating the general 143.16 dimensions of the public building and space requirements; 143.17 (2) design criteria for the exterior and site area; 143.18 (3) performance specifications for all building systems and 143.19 components to assure quality and cost efficiencies; 143.20 (4) conceptual floor plans for systems space; 143.21 (5) preferred types of interior finishes, styles of 143.22 windows, lighting and outlets, doors and features such as 143.23 built-in counters and telephone wiring; 143.24 (6) mechanical and electrical requirements; 143.25 (7) special interior features required; and 143.26 (8) completion schedule. 143.27 (c) The boards shall first solicit statements of 143.28 qualifications from eligible contractors and select more than 143.29 one qualified contractor based upon experience, technical 143.30 competence, past performance, capability to perform, and other 143.31 appropriate facts. Contractors selected under this process 143.32 shall be, employ, or have as a partner, member, coventurer, or 143.33 subcontractor, persons licensed and registered under chapter 326 143.34 to provide the services required to design and complete the 143.35 project. The boards do not have to select any of the 143.36 respondents if none reasonably fulfill the criteria set forth 144.1 within. 144.2 (d) The contractors selected shall be asked to respond to a 144.3 request for proposals. Responses must include site plans, 144.4 design concept, elevation, statement of material to be used, 144.5 floor layouts, a detailed development budget, and a total cost 144.6 to complete the project. The proposal must indicate that the 144.7 contractor obtained at least two proposals from subcontractors 144.8 for each item of work and must set forth how the subcontractors 144.9 were selected. The boards shall evaluate the proposals based 144.10 upon design, cost, quality, aesthetics, and the best overall 144.11 value to the state pension funds. The board need not select any 144.12 of the proposals submitted and reserves the right to reject any 144.13 and all proposals, and may terminate the process or revise the 144.14 request for proposals and solicit new proposals if the boards 144.15 determine that the best interests of the pension funds would be 144.16 better served by doing so. Proposals submitted shall constitute 144.17 nonpublic data until the contract is awarded. 144.18 (e) The contractor selected must comply with sections 144.19 574.26 to 574.261. Prior to the execution of a final contract, 144.20 the contractor selected shall certify a firm construction price 144.21 and completion date. 144.22 (f) The boards may consider building sites in the city of 144.23 St. Paul and surrounding suburbs. 144.24 (g) Any land, building, or facility leased, constructed, or 144.25 acquired and any leasehold interest acquired under this section 144.26 shall be held in common ownership in the name of the three 144.27 retirement systems as tenants in common. Each retirement system 144.28 fund shall consider its interest as a fixed asset of its pension 144.29 fund in accordance with governmental accounting standards. 144.30 (h) The boards may lease to another governmental 144.31 subdivision any portion of the funds' building and lands which 144.32 is not required for their direct use upon such terms and 144.33 conditions as they deem to be in the best interest of the 144.34 pension funds. Any income accruing from such rentals shall be 144.35 separately accounted for and utilized to offset ongoing 144.36 administrative expenses and any excess shall be carried forward 145.1 for future administrative expenses. The boards are also 145.2 authorized to enter into lease agreements for the establishment 145.3 of satellite offices should the boards find such offices to be 145.4 necessary in order to assure their members reasonable access to 145.5 their services. The boards also have the authority to request 145.6 the commissioner of administration to lease any portion of their 145.7 building not required for their direct use pursuant to the 145.8 commissioner's authorities under section 16B.24. 145.9 (i) The boards shall formulate and adopt a written working 145.10 agreement which shall set forth the nature of each retirement 145.11 system's ownership interest, the duties and obligations of each 145.12 system towards the construction, operation, and maintenance 145.13 costs of their facilities, and the identification of one 145.14 retirement fund to serve as manager for operating and 145.15 maintenance purposes. The boards may contract with independent 145.16 third parties for maintenance-related activities, services, and 145.17 supplies, and may utilize the services of the department of 145.18 administration where economically feasible to do so. In the 145.19 event the boards cannot agree or resolve a dispute which relates 145.20 to operations or maintenance of the facilities, they may request 145.21 the commissioner of administration to appoint a representative 145.22 from the department's real estate management division to serve 145.23 as arbitrator of the dispute with authority to issue a written 145.24 resolution of the dispute. 145.25 Subd. 3. [REVENUE BONDS AUTHORIZED.] The boards, or any of 145.26 them, may issue revenue bonds in the principal amount necessary, 145.27 in the opinion of the boards, to achieve the purposes described 145.28 in subdivisions 1 and 2; to pay issuance costs and interest 145.29 costs; and to establish necessary reserves to secure the bonds. 145.30 The boards may issue bonds for the purpose of refunding bonds 145.31 issued under this subdivision. 145.32 Subd. 4. [PROCEDURE.] The bonds authorized in subdivision 145.33 3 must be sold, issued, and secured in the manner provided in 145.34 chapter 475 for bonds payable solely from revenues, and the 145.35 boards have the same powers and duties as a municipality and its 145.36 governing body in issuing bonds under that chapter. The bonds 146.1 may be sold at any price and at public or private sale as 146.2 determined by the boards. The bonds may be sold in one or more 146.3 series. Different series may be backed by different revenue 146.4 sources. No election is required. 146.5 Subd. 5. [NONLIABILITY OF STATE.] The state of Minnesota 146.6 is not liable on bonds of the boards and the bonds are not a 146.7 general or moral obligation of the state. 146.8 Subd. 6. [NONLIABILITY OF INDIVIDUALS.] Neither the 146.9 members of the boards nor any person executing the bonds on 146.10 behalf of the boards shall be personally liable on the bonds or 146.11 subject to any personal liability or accountability by reason of 146.12 executing them. 146.13 Sec. 4. [EFFECTIVE DATE.] 146.14 Sections 1 to 3 are effective on the day following final 146.15 enactment.