1.1 	A bill for an act
1.2 	relating to retirement; various public pension plans;
1.3 	clarifying and revising various plan provisions;
1.4 	eliminating obsolete provisions; defining average
1.5 	salary; modifying the definition of allowable service
1.6 	to include time on strike; defining covered salary to
1.7 	include certain employer contributions to supplemental
1.8 	retirement plans; specifying itemized detail of plan
1.9 	administrative expenses in annual financial reporting;
1.10 	excluding police officers of the University of
1.11 	Minnesota from the public employees police and fire
1.12 	fund; clarifying collection procedures relating to
1.13 	charter schools; adding a uniform nonassignment and
1.14 	legal process exemption provision; providing for
1.15 	various member and employer contribution rate
1.16 	increases; adding employees of Bridges Medical
1.17 	Services, Hutchinson Area Health Care, and Northfield
1.18 	Hospital to privatization coverage; extending date for
1.19 	filing special law approval with the secretary of
1.20 	state for the RenVilla Nursing Home; requiring the
1.21 	privatization periodic filing of updated copies of
1.22 	articles of incorporation and bylaws; modifying a
1.23 	higher education individual retirement account plan
1.24 	investment option provision; implementing the
1.25 	recommendations of the Volunteer Firefighter Relief
1.26 	Association working group of the state auditor;
1.27 	modifying the trigger date for filing financial
1.28 	reports; revising the per firefighter financing
1.29 	requirements for monthly benefit service pensions;
1.30 	modifying the options for crediting interest on
1.31 	deferred service pensions; clarifying the deferred
1.32 	service pension options available to defined
1.33 	contribution plans; providing for the crediting of
1.34 	service during military service leaves; requiring the
1.35 	amortization of experience losses; clarifying the
1.36 	compliance requirements for the qualification for fire
1.37 	state aid; modifying a limit on mutual fund
1.38 	investments; clarifying corporate stock and exchange
1.39 	traded funds investment authority; modifying the
1.40 	municipal representation requirements on relief
1.41 	association governing boards; clarifying exemptions
1.42 	from process and taxation; providing that certain laws
1.43 	do not apply to the consolidation of specified
1.44 	volunteer firefighter relief associations; providing
1.45 	an ad hoc postretirement adjustment to Eveleth police
1.46 	and fire trust fund benefit recipients; authorizing
2.1 	the Maplewood Firefighters Relief Association to
2.2 	transfer assets to the Oakdale Firefighters Relief
2.3 	Association to cover service credits earned by certain
2.4 	individuals; appropriating money; amending Minnesota
2.5 	Statutes 2004, sections 3A.13; 69.011, subdivision 2b,
2.6 	by adding a subdivision; 69.021, subdivisions 5, 11;
2.7 	69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision
2.8 	4; 69.771; 69.772, subdivisions 3, 4; 69.773,
2.9 	subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4,
2.10 	5, 12, 13, 21, 23, by adding a subdivision; 352.021,
2.11 	subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12;
2.12 	352.041, subdivisions 1, 2, 3, 5; 352.115,
2.13 	subdivisions 2, 3; 352.15, subdivisions 1, 3, 4;
2.14 	352.22, subdivision 10; 352.87, subdivision 3; 352.91,
2.15 	by adding a subdivision; 352.93, subdivision 1;
2.16 	352B.01, subdivisions 1, 2, 3, 11; 352B.02,
2.17 	subdivision 1e; 352B.071; 352C.021, by adding a
2.18 	subdivision; 352D.01; 352D.015, subdivisions 3, 4;
2.19 	352D.03; 352D.05, subdivision 4; 352D.085, subdivision
2.20 	1; 352D.09, subdivision 5; 352D.12; 353.01,
2.21 	subdivisions 6, 10, 14, 32, 33, by adding a
2.22 	subdivision; 353.025; 353.026; 353.027; 353.028;
2.23 	353.14; 353.15, subdivisions 1, 3; 353.27,
2.24 	subdivisions 2, 3, 3a, 11, by adding a subdivision;
2.25 	353.271; 353.28, subdivisions 5, 6; 353.29,
2.26 	subdivision 3; 353.31, subdivision 1c; 353.32,
2.27 	subdivision 9; 353.33, subdivisions 3, 12; 353.64, by
2.28 	adding a subdivision; 353.65, subdivisions 2, 3;
2.29 	353.651, subdivision 3; 353.656, subdivision 1;
2.30 	353B.02, subdivision 10; 353F.02, subdivision 4;
2.31 	354.05, subdivisions 7, 35, by adding a subdivision;
2.32 	354.091; 354.094, subdivision 1; 354.10, subdivisions
2.33 	1, 3, 4; 354.33, subdivision 5; 354.39; 354.41,
2.34 	subdivision 2; 354.42, by adding a subdivision;
2.35 	354.44, subdivisions 2, 6; 354A.011, subdivisions 3a,
2.36 	24, by adding a subdivision; 354A.021, subdivision 5,
2.37 	by adding a subdivision; 354A.097, subdivision 1;
2.38 	354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions
2.39 	2, 3; 354B.25, subdivision 2; 356.20, subdivision 4;
2.40 	356.215, subdivision 8; 356.216; 356.47, subdivision
2.41 	3; 356.551; 356.611, subdivision 1; 356A.06,
2.42 	subdivision 7; 383B.46, subdivision 2; 383B.47;
2.43 	383B.48; 383B.49; 422A.01, subdivisions 6, 11, by
2.44 	adding subdivisions; 422A.06, subdivision 7; 422A.10,
2.45 	subdivisions 1, 2; 422A.15, subdivision 1; 422A.16,
2.46 	subdivision 9; 422A.22, subdivisions 1, 3, 4, 6;
2.47 	422A.231; 422A.24; 423B.01, by adding a subdivision;
2.48 	423B.05, subdivision 3; 423B.09, subdivision 1, by
2.49 	adding a subdivision; 423B.10, subdivision 1; 423B.17;
2.50 	423C.01, by adding a subdivision; 423C.05, subdivision
2.51 	2; 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04,
2.52 	subdivision 1; 424B.10, subdivision 1; 471A.10;
2.53 	490.121, subdivisions 4, 20, 21, by adding a
2.54 	subdivision; 490.126, subdivision 5; Laws 1999,
2.55 	chapter 222, article 16, section 16, as amended; Laws
2.56 	2000, chapter 461, article 4, section 4, as amended;
2.57 	Laws 2004, chapter 267, article 12, section 4;
2.58 	proposing coding for new law in Minnesota Statutes,
2.59 	chapters 356; 383B; 423C; 424A; repealing Minnesota
2.60 	Statutes 2004, sections 352.119, subdivision 1;
2.61 	352.15, subdivision 1a; 352C.031, subdivision 3;
2.62 	353.15, subdivision 2; 353.29, subdivision 2; 353.34,
2.63 	subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c;
2.64 	353.46, subdivision 4; 353.651, subdivision 2;
2.65 	353.663; 353.74; 353.75; 354.10, subdivision 2;
2.66 	354.59; 422A.22, subdivisions 2, 5; 422A.221.
2.67 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
2.68 	2005 OMNIBUS RETIREMENT BILL

3.1 	ARTICLE 1
3.2 	COVERED SALARY; AVERAGE SALARY

3.3 	Section 1. Minnesota Statutes 2004, section 352.01,
3.4 	subdivision 13, is amended to read:
3.5 		Subd. 13.Salary.  (a) Subject to the limitations of
3.6 	section 356.611,"salary" means wages, or other periodic
3.7 	compensation, paid to an employee before deductions for deferred
3.8 	compensation, supplemental retirement plans, or other voluntary
3.9 	salary reduction programs.
3.10 	(b) "Salary" does not include:
3.11 	(1) lump sum sick leave payments;
3.12 	(2) severance payments;
3.13 	(3) lump sum annual leave payments and overtime payments
3.14 	made at the time of separation from state service;
3.15 	(4) payments in lieu of any employer-paid group insurance
3.16 	coverage, including the difference between single and family
3.17 	rates that may be paid to an employee with single coverage;
3.18 	(5) payments made as an employer-paid fringe benefit;
3.19 	(6) workers' compensation payments;
3.20 	(7) employer contributions to a deferred compensation or
3.21 	tax sheltered annuity program; and
3.22 	(8) amounts contributed under a benevolent vacation and
3.23 	sick leave donation program.
3.24 	(c) Amounts provided to an employee by the employer through
3.25 	a grievance proceeding or a legal settlement are salary only if
3.26 	the settlement is reviewed by the executive director and the
3.27 	amounts are determined by the executive director to be
3.28 	consistent with paragraph (a) and prior determinations.

3.29 	Sec. 2. Minnesota Statutes 2004, section 352.01, is
3.30 	amended by adding a subdivision to read:
3.31 		Subd. 14a.Average salary. (a) "Average salary" means
3.32 	the average of the highest five successive years of salary upon
3.33 	which the employee has made contributions to the retirement fund
3.34 	by payroll deductions.  Average salary must be based upon all
3.35 	allowable service if this service is less than five years.
3.36 	(b) "Average salary" does not include the payment of
4.1 	accrued unused annual leave or overtime paid at time of final
4.2 	separation from state service if paid in a lump sum nor does it
4.3 	include the reduced salary, if any, paid during the period the
4.4 	employee is entitled to workers' compensation benefit payments
4.5 	for temporary disability.
4.6 	(c) For an employee covered by the correctional state
4.7 	employees retirement plan, "average salary" means the average of
4.8 	the monthly salary during the employee's highest five successive
4.9 	years of salary as an employee covered by the general state
4.10 	employees retirement plan, or the correctional state employees
4.11 	retirement plan, or by a combination of the two.  If the total
4.12 	of the covered service is less than five years, the
4.13 	determination of average salary must be based on all allowable
4.14 	service.

4.15 	Sec. 3. Minnesota Statutes 2004, section 352.115,
4.16 	subdivision 2, is amended to read:
4.17 		Subd. 2.average salary normal retirement annuity.  The
4.18 	retirement annuity hereunder payable at normal retirement age or
4.19 	thereafter must be computed in accordance with the applicable
4.20 	provisions of the formula stated in subdivision 3, on the basis
4.21 	of the employee's average salary for the period of allowable
4.22 	service.  This retirement annuity is known as the "normal"
4.23 	retirement annuity.
4.24 	For each year of allowable service, "average salary" of an
4.25 	employee in determining a retirement annuity means the average
4.26 	of the highest five successive years of salary upon which the
4.27 	employee has made contributions to the retirement fund by
4.28 	payroll deductions.  Average salary must be based upon all
4.29 	allowable service if this service is less than five years.
4.30 	"Average salary" does not include the payment of accrued
4.31 	unused annual leave or overtime paid at time of final separation
4.32 	from state service if paid in a lump sum nor does it include the
4.33 	reduced salary, if any, paid during the period the employee is
4.34 	entitled to workers' compensation benefit payments for temporary
4.35 	disability.

4.36 	Sec. 4. Minnesota Statutes 2004, section 352.115,
5.1 	subdivision 3, is amended to read:
5.2 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
5.3 	in conjunction with section 352.116, subdivision 1, applies to a
5.4 	person who became a covered employee or a member of a pension
5.5 	fund listed in section 356.30, subdivision 3, before July 1,
5.6 	1989, unless paragraph (b), in conjunction with section 352.116,
5.7 	subdivision 1a, produces a higher annuity amount, in which case
5.8 	paragraph (b) will apply.  The employee's average salary, as
5.9 	defined in section 352.01,subdivision 2 14a, multiplied by the
5.10 	percent specified in section 356.315, subdivision 1, per year of
5.11 	allowable service for the first ten years and the percent
5.12 	specified in section 356.315, subdivision 2, for each later year
5.13 	of allowable service and pro rata for completed months less than
5.14 	a full year shall determine the amount of the retirement annuity
5.15 	to which the employee is entitled.
5.16 	(b) This paragraph applies to a person who has become at
5.17 	least 55 years old and first became a covered employee after
5.18 	June 30, 1989, and to any other covered employee who has become
5.19 	at least 55 years old and whose annuity amount, when calculated
5.20 	under this paragraph and in conjunction with section 352.116,
5.21 	subdivision 1a, is higher than it is when calculated under
5.22 	paragraph (a), in conjunction with section 352.116, subdivision
5.23 	1.  The employee's average salary, as defined in section 352.01,
5.24 	subdivision 2 14a, multiplied by the percent specified in
5.25 	section 356.315, subdivision 2, for each year of allowable
5.26 	service and pro rata for months less than a full year shall
5.27 	determine the amount of the retirement annuity to which the
5.28 	employee is entitled.

5.29 	Sec. 5. Minnesota Statutes 2004, section 352.87,
5.30 	subdivision 3, is amended to read:
5.31 		Subd. 3.Retirement annuity formula.  A person specified
5.32 	in subdivision 1 will have is entitled to receive a retirement
5.33 	annuity applicable for allowable service credit under this
5.34 	section calculated by multiplying the employee's average salary,
5.35 	as defined in section 352.115 352.01, subdivision 2 14a, by the
5.36 	percent specified in section 356.315, subdivision 2a, for each
6.1 	year or portions of a year of allowable service credit.  No
6.2 	reduction for retirement prior to before the normal retirement
6.3 	age, as specified in section 352.01, subdivision 25, applies to
6.4 	service to which this section applies.

6.5 	Sec. 6. Minnesota Statutes 2004, section 352.93,
6.6 	subdivision 1, is amended to read:
6.7 		Subdivision 1.Basis of annuity; when to apply.  After
6.8 	separation from state service, an employee covered under section
6.9 	352.91 who has reached age 55 years and has credit for at least
6.10 	three years of covered correctional service or a combination of
6.11 	covered correctional service and regular Minnesota general
6.12 	employees state retirement System plan service is entitled upon
6.13 	application to a retirement annuity under this section,based
6.14 	only on covered correctional employees' service.  Application
6.15 	may be made no earlier than 60 days before the date the employee
6.16 	is eligible to retire by reason of both age and service
6.17 	requirements.
6.18 	In this section, "average salary" means the average of the
6.19 	monthly salary during the employee's highest five successive
6.20 	years of salary as an employee covered by the Minnesota State
6.21 	Retirement System.  Average salary must be based upon all
6.22 	allowable service if this service is less than five years.

6.23 	Sec. 7. Minnesota Statutes 2004, section 352B.01,
6.24 	subdivision 11, is amended to read:
6.25 		Subd. 11.Average monthly salary.  (a) Subject to the
6.26 	limitations of section 356.611,"average monthly salary" means
6.27 	the average of the highest monthly salaries for five years of
6.28 	service as a member upon which contributions were deducted from
6.29 	pay under section 352B.02, or upon which appropriate
6.30 	contributions or payments were made to the fund to receive
6.31 	allowable service and salary credit as specified under the
6.32 	applicable law.  Average monthly salary must be based upon all
6.33 	allowable service if this service is less than five years.
6.34 	(b) "Average monthly salary" means the salary of the member
6.35 	as defined in section 352.01, subdivision 13.  "Average monthly
6.36 	salary" does not include any lump-sum annual leave payments and
7.1 	overtime payments made at the time of separation from state
7.2 	service, any amounts of severance pay, or any reduced salary
7.3 	paid during the period the person is entitled to workers'
7.4 	compensation benefit payments for temporary disability.
7.5 	(c) A member on leave of absence receiving temporary
7.6 	workers' compensation payments and a reduced salary or no salary
7.7 	from the employer who is entitled to allowable service credit
7.8 	for the period of absence may make payment to the fund for the
7.9 	difference between salary received, if any, and the salary the
7.10 	member would normally receive if not on leave of absence during
7.11 	the period.  The member shall pay an amount equal to the member
7.12 	and employer contribution rate under section 352B.02,
7.13 	subdivisions 1b and 1c, on the differential salary amount for
7.14 	the period of the leave of absence.  The employing department,
7.15 	at its option, may pay the employer amount on behalf of the
7.16 	member.  Payment made under this subdivision must include
7.17 	interest at the rate of 8.5 percent per year, and must be
7.18 	completed within one year of the return from the leave of
7.19 	absence.

7.20 	Sec. 8. Minnesota Statutes 2004, section 352C.021, is
7.21 	amended by adding a subdivision to read:
7.22 		Subd. 1a.Average salary. "Average salary," for purposes
7.23 	of calculating the normal retirement annuity under section
7.24 	352C.031, subdivision 4, means the average of the highest five
7.25 	successive years of salary upon which contributions have been
7.26 	made under section 352C.09.

7.27 	Sec. 9. Minnesota Statutes 2004, section 353.01,
7.28 	subdivision 10, is amended to read:
7.29 		Subd. 10.Salary.  (a) Subject to the limitations of
7.30 	section 356.611,"salary" means:
7.31 	(1) the periodic compensation of a public employee, before
7.32 	deductions for deferred compensation, supplemental retirement
7.33 	plans, or other voluntary salary reduction programs, and also
7.34 	means "wages" and includes net income from fees;
7.35 	(2) for a public employee who is covered by a supplemental
7.36 	retirement plan under section 356.24, subdivision 1, clause (8),
8.1 	(9), or (10), which require all plan contributions be made by
8.2 	the employer, the contribution to the applicable supplemental
8.3 	retirement plan when the contribution is from mandatory
8.4 	withholdings from employees' wages;and
8.5 	(2) (3) for a public employee who has prior service covered
8.6 	by a local police or firefighters relief association that has
8.7 	consolidated with the Public Employees Retirement Association or
8.8 	to which section 353.665 applies and who has elected coverage
8.9 	either under the public employees police and fire fund benefit
8.10 	plan under section 353A.08 following the consolidation or under
8.11 	section 353.665, subdivision 4, the rate of salary upon which
8.12 	member contributions to the special fund of the relief
8.13 	association were made prior to the effective date of the
8.14 	consolidation as specified by law and by bylaw provisions
8.15 	governing the relief association on the date of the initiation
8.16 	of the consolidation procedure and the actual periodic
8.17 	compensation of the public employee after the effective date of
8.18 	consolidation.
8.19 	(b) Salary does not mean:
8.20 	(1) the fees paid to district court reporters, unused
8.21 	annual vacation or sick leave payments, in lump-sum or periodic
8.22 	payments, severance payments, reimbursement of expenses,
8.23 	lump-sum settlements not attached to a specific earnings period,
8.24 	or workers' compensation payments;
8.25 	(2) employer-paid amounts used by an employee toward the
8.26 	cost of insurance coverage, employer-paid fringe benefits,
8.27 	flexible spending accounts, cafeteria plans, health care expense
8.28 	accounts, day care expenses, or any payments in lieu of any
8.29 	employer-paid group insurance coverage, including the difference
8.30 	between single and family rates that may be paid to a member
8.31 	with single coverage and certain amounts determined by the
8.32 	executive director to be ineligible;
8.33 	(3) the amount equal to that which the employing
8.34 	governmental subdivision would otherwise pay toward single or
8.35 	family insurance coverage for a covered employee when, through a
8.36 	contract or agreement with some but not all employees, the
9.1 	employer:
9.2 	(i) discontinues, or for new hires does not provide,
9.3 	payment toward the cost of the employee's selected insurance
9.4 	coverages under a group plan offered by the employer;
9.5 	(ii) makes the employee solely responsible for all
9.6 	contributions toward the cost of the employee's selected
9.7 	insurance coverages under a group plan offered by the employer,
9.8 	including any amount the employer makes toward other employees'
9.9 	selected insurance coverages under a group plan offered by the
9.10 	employer; and
9.11 	(iii) provides increased salary rates for employees who do
9.12 	not have any employer-paid group insurance coverages;
9.13 	(4) except as provided in section 353.86 or 353.87,
9.14 	compensation of any kind paid to volunteer ambulance service
9.15 	personnel or volunteer firefighters, as defined in subdivision
9.16 	35 or 36; and
9.17 	(5) the amount of compensation that exceeds the limitation
9.18 	provided in section 356.611.
9.19 	(c) Amounts provided to an employee by the employer through
9.20 	a grievance proceeding or a legal settlement are salary only if
9.21 	the settlement is reviewed by the executive director and the
9.22 	amounts are determined by the executive director to be
9.23 	consistent with paragraph (a) and prior determinations.

9.24 	Sec. 10. Minnesota Statutes 2004, section 353.01, is
9.25 	amended by adding a subdivision to read:
9.26 		Subd. 17a.Average salary. (a) "Average salary," for
9.27 	purposes of calculating a retirement annuity under section
9.28 	353.29, subdivision 3, means an amount equivalent to the average
9.29 	of the highest salary of the member, police officer, or
9.30 	firefighter, whichever applies, upon which employee
9.31 	contributions were paid for any five successive years of
9.32 	allowable service, based on dates of salary periods as listed on
9.33 	salary deduction reports.  Average salary must be based upon all
9.34 	allowable service if this service is less than five years.
9.35 	(b) "Average salary" may not include any reduced salary
9.36 	paid during a period in which the employee is entitled to
10.1 	benefit payments from workers' compensation for temporary
10.2 	disability, unless the average salary is higher, including this
10.3 	period.

10.4 	Sec. 11. Minnesota Statutes 2004, section 353.29,
10.5 	subdivision 3, is amended to read:
10.6 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
10.7 	in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
10.8 	1c, applies to any member who first became a public employee or
10.9 	a member of a pension fund listed in section 356.30, subdivision
10.10 	3, before July 1, 1989, unless paragraph (b), in conjunction
10.11 	with section 353.30, subdivision 5, produces a higher annuity
10.12 	amount, in which case paragraph (b) will apply.  The average
10.13 	salary as defined in section 353.01,subdivision 2 17a,
10.14 	multiplied by the percent specified in section 356.315,
10.15 	subdivision 3, for each year of allowable service for the first
10.16 	ten years and thereafter by the percent specified in section
10.17 	356.315, subdivision 4, per year of allowable service and
10.18 	completed months less than a full year for the "basic member,"
10.19 	and the percent specified in section 356.315, subdivision 1, for
10.20 	each year of allowable service for the first ten years and
10.21 	thereafter by the percent specified in section 356.315,
10.22 	subdivision 2, per year of allowable service and completed
10.23 	months less than a full year for the "coordinated member," shall
10.24 	determine the amount of the "normal" retirement annuity.
10.25 	(b) This paragraph applies to a member who has become at
10.26 	least 55 years old and first became a public employee after June
10.27 	30, 1989, and to any other member whose annuity amount, when
10.28 	calculated under this paragraph and in conjunction with section
10.29 	353.30, subdivision 5, is higher than it is when calculated
10.30 	under paragraph (a), in conjunction with section 353.30,
10.31 	subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined
10.32 	in section 353.01,subdivision 2 17a, multiplied by the percent
10.33 	specified in section 356.315, subdivision 4, for each year of
10.34 	allowable service and completed months less than a full year for
10.35 	a basic member and the percent specified in section 356.315,
10.36 	subdivision 2, per year of allowable service and completed
11.1 	months less than a full year for a coordinated member, shall
11.2 	determine the amount of the normal retirement annuity.

11.3 	Sec. 12. Minnesota Statutes 2004, section 353.33,
11.4 	subdivision 3, is amended to read:
11.5 		Subd. 3.Computation of benefits.  This disability
11.6 	benefit is an amount equal to the normal annuity payable to a
11.7 	member who has reached normal retirement age with the same
11.8 	number of years of allowable service and the same average
11.9 	salary, as provided in section 353.01, subdivision 17a, and 
11.10 	section 353.29, subdivisions 2 and subdivision 3.
11.11 	A basic member shall receive a supplementary monthly
11.12 	benefit of $25 to age 65 or the five-year anniversary of the
11.13 	effective date of the disability benefit, whichever is later.
11.14 	If the disability benefits under this subdivision exceed
11.15 	the average salary as defined in section 353.29 353.01,
11.16 	subdivision 2 17a, the disability benefits must be reduced to an
11.17 	amount equal to said the average salary.

11.18 	Sec. 13. Minnesota Statutes 2004, section 353.651,
11.19 	subdivision 3, is amended to read:
11.20 		Subd. 3.Retirement annuity formula.  The average salary
11.21 	as defined in section 353.01,subdivision 2 17a, multiplied by
11.22 	the percent specified in section 356.315, subdivision 6, per
11.23 	year of allowable service determines the amount of the normal
11.24 	retirement annuity.  If the member has earned allowable service
11.25 	for performing services other than those of a police officer or
11.26 	firefighter, the annuity representing such that service is must
11.27 	be computed under sections 353.29 and 353.30.

11.28 	Sec. 14. Minnesota Statutes 2004, section 353.656,
11.29 	subdivision 1, is amended to read:
11.30 		Subdivision 1.In line of duty; computation of benefits.
 11.31 	A member of the police and fire plan who becomes disabled and
11.32 	physically unfit to perform duties as a police officer,
11.33 	firefighter, or paramedic as defined under section 353.64,
11.34 	subdivision 10, as a direct result of an injury, sickness, or
11.35 	other disability incurred in or arising out of any act of duty,
11.36 	which has or is expected to render the member physically or
12.1 	mentally unable to perform the duties as a police officer,
12.2 	firefighter, or paramedic as defined under section 353.64,
12.3 	subdivision 10, for a period of at least one year, shall receive
12.4 	disability benefits during the period of such disability.  The
12.5 	benefits must be in an amount equal to 60 percent of the
12.6 	"average salary" as defined in section 353.651 353.01,
12.7 	subdivision 2 17a, plus an additional percent specified in
12.8 	section 356.315, subdivision 6, of that average salary for each
12.9 	year of service in excess of 20 years.  If the disability under
12.10 	this subdivision occurs before the member has at least five
12.11 	years of allowable service credit in the police and fire plan,
12.12 	the disability benefit must be computed on the "average salary"
12.13 	from which deductions were made for contribution to the police
12.14 	and fire fund.

12.15 	Sec. 15. Minnesota Statutes 2004, section 353B.02,
12.16 	subdivision 10, is amended to read:
12.17 		Subd. 10.Salary.  (a) "Salary" under this chapter is
12.18 	subject to the limitations of section 356.611.
12.19 	(b) "Salary" for benefit computation and contribution
12.20 	purposes means the salary of a first class or first grade
12.21 	firefighter or patrol officer, whichever applies, for the former
12.22 	members of the following consolidating relief associations:
12.23 	(1) Anoka Police Relief Association;
12.24 	(2) Austin Firefighters Relief Association;
12.25 	(3) Austin Police Relief Association;
12.26 	(4) Columbia Heights Fire Department Relief Association,
12.27 	Paid Division;
12.28 	(5) Fairmont Police Benefit Association;
12.29 	(6) Faribault Fire Department Relief Association;
12.30 	(7) Mankato Fire Department Relief Association;
12.31 	(8) Minneapolis Fire Department Relief Association;
12.32 	(9) Minneapolis Police Relief Association;
12.33 	(10) Richfield Fire Department Relief Association;
12.34 	(11) Rochester Fire Department Relief Association;
12.35 	(12) Rochester Police Relief Association;
12.36 	(13) St. Cloud Fire Department Relief Association;
13.1 	(14) St. Cloud Police Relief Association;
13.2 	(15) St. Paul Fire Department Relief Association;
13.3 	(16) South St. Paul Firefighters Relief Association;
13.4 	(17) West St. Paul Firefighters Relief Association;
13.5 	(18) West St. Paul Police Relief Association; and
13.6 	(19) Winona Fire Department Relief Association.
13.7 	(b) (c) "Salary" for benefit computation purposes means the
13.8 	salary of a first grade patrol officer for the second month of
13.9 	the previous fiscal year and for contribution purposes means the
13.10 	current salary of a first grade patrol officer, for the former
13.11 	members of the following consolidating relief associations:
13.12 	(1) Bloomington Police Relief Association;
13.13 	(2) Crystal Police Relief Association;
13.14 	(3) Fridley Police Pension Association;
13.15 	(4) Richfield Police Relief Association;
13.16 	(5) St. Louis Park Police Relief Association; and
13.17 	(6) Winona Police Relief Association.
13.18 	(c) (d) "Salary" for benefit computation purposes means the
13.19 	final salary and for contribution purposes means the current
13.20 	salary for the former members of the following consolidating
13.21 	relief associations:
13.22 	(1) Albert Lea Firefighters Relief Association;
13.23 	(2) Albert Lea Police Relief Association;
13.24 	(3) Buhl Police Relief Association;
13.25 	(4) Chisholm Firefighters Relief Association;
13.26 	(5) Crookston Fire Department Relief Association;
13.27 	(6) Crookston Police Relief Association;
13.28 	(7) Faribault Police Benefit Association;
13.29 	(8) Red Wing Police Relief Association; and
13.30 	(9) Virginia Fire Department Relief Association.
13.31 	(d) (e) "Salary" for benefit computation purposes means the
13.32 	average earnings or salary for the final six months of
13.33 	employment before retirement and for contribution purposes means
13.34 	the current salary for the former members of the following
13.35 	consolidating relief associations:
13.36 	(1) Chisholm Police Relief Association;
14.1 	(2) Hibbing Firefighters Relief Association; and
14.2 	(3) Hibbing Police Relief Association.
14.3 	(e) (f) "Salary" for benefit computation purposes means the
14.4 	greater of the final salary at retirement or the highest salary
14.5 	of a patrol officer and for contribution purposes means the
14.6 	greater of the current salary or the current highest salary of a
14.7 	patrol officer for the former members of the following
14.8 	consolidating relief associations:
14.9 	(1) Brainerd Police Benefit Association; and
14.10 	(2) New Ulm Police Relief Association.
14.11 	(f) (g) "Salary" for benefit computation and contribution
14.12 	purposes means the following for the former members of the
14.13 	consolidating relief associations as indicated:
14.14 	(1) salary of a top grade patrol officer, including
14.15 	longevity pay and education incentive pay in an amount not to
14.16 	exceed $235 per month, Columbia Heights Police Relief
14.17 	Association;
14.18 	(2) maximum pay of a firefighter, including overtime
14.19 	payments for a regular workweek of a firefighter mandated by the
14.20 	federal Fair Labor Standards Act of 1938, as amended, Duluth
14.21 	Firefighters Relief Association;
14.22 	(3) salary of a first class patrol officer with 16 years of
14.23 	service, Duluth Police Pension Association;
14.24 	(4) base salary for the rank currently held, plus longevity
14.25 	pay, pay for eligibility for next higher rank and pay for first
14.26 	aid care, Mankato Police Benefit Association;
14.27 	(5) average annual salary for highest three paid years for
14.28 	benefit computation purposes and current salary for contribution
14.29 	purposes, Red Wing Fire Department Relief Association;
14.30 	(6) pay of the highest grade full-time firefighter, St.
14.31 	Louis Park Fire Department Relief Association;
14.32 	(7) maximum monthly pay of a patrol officer, St. Paul
14.33 	Police Relief Association;
14.34 	(8) prevailing base pay of rank held at retirement for
14.35 	benefit computation purposes and current salary for contribution
14.36 	purposes, South St. Paul Police Relief Association; and
15.1 	(9) prevailing pay for rank held for at least six months
15.2 	before retirement for benefit computation purposes and current
15.3 	salary for contribution purposes, Virginia Police Relief
15.4 	Association.

15.5 	Sec. 16. Minnesota Statutes 2004, section 354.05, is
15.6 	amended by adding a subdivision to read:
15.7 		Subd. 13a.Average salary. (a) "Average salary," for the
15.8 	purpose of determining the member's retirement annuity, means
15.9 	the average salary upon which contributions were made for the
15.10 	highest five successive years of formula service credit.
15.11 	(b) "Average salary" may not include any more than the
15.12 	equivalent of 60 monthly salary payments.
15.13 	(c) "Average salary" must be based upon all years of
15.14 	formula service credit if this service credit is less than five
15.15 	years.

15.16 	Sec. 17. Minnesota Statutes 2004, section 354.05,
15.17 	subdivision 35, is amended to read:
15.18 		Subd. 35.Salary.  (a) Subject to the limitations of
15.19 	section 356.611,"salary" means the periodic compensation, upon
15.20 	which member contributions are required before deductions for
15.21 	deferred compensation, supplemental retirement plans, or other
15.22 	voluntary salary reduction programs.
15.23 	(b) "Salary" does not mean:
15.24 	(1) lump sum annual leave payments;
15.25 	(2) lump sum wellness and sick leave payments;
15.26 	(3) employer-paid amounts used by an employee toward the
15.27 	cost of insurance coverage, employer-paid fringe benefits,
15.28 	flexible spending accounts, cafeteria plans, health care expense
15.29 	accounts, day care expenses, or any payments in lieu of any
15.30 	employer-paid group insurance coverage, including the difference
15.31 	between single and family rates that may be paid to a member
15.32 	with single coverage and certain amounts determined by the
15.33 	executive director to be ineligible;
15.34 	(4) any form of payment made in lieu of any other
15.35 	employer-paid fringe benefit or expense;
15.36 	(5) any form of severance payments;
16.1 	(6) workers' compensation payments;
16.2 	(7) disability insurance payments, including self-insured
16.3 	disability payments;
16.4 	(8) payments to school principals and all other
16.5 	administrators for services that are in addition to the normal
16.6 	work year contract if these additional services are performed on
16.7 	an extended duty day, Saturday, Sunday, holiday, annual leave
16.8 	day, sick leave day, or any other nonduty day;
16.9 	(9) payments under section 356.24, subdivision 1, clause
16.10 	(4); and
16.11 	(10) payments made under section 122A.40, subdivision 12,
16.12 	except for payments for sick leave that are accumulated under
16.13 	the provisions of a uniform school district policy that applies
16.14 	equally to all similarly situated persons in the district.
16.15 	(c) Amounts provided to an employee by the employer through
16.16 	a grievance proceeding or a legal settlement are salary only if
16.17 	the settlement is reviewed by the executive director and the
16.18 	amounts are determined by the executive director to be
16.19 	consistent with paragraph (a) and prior determinations.

16.20 	Sec. 18. Minnesota Statutes 2004, section 354.44,
16.21 	subdivision 6, is amended to read:
16.22 		Subd. 6.Computation of formula program retirement
16.23 	annuity.  (a) The formula retirement annuity must be computed in
16.24 	accordance with the applicable provisions of the formulas stated
16.25 	in paragraph (b) or (d) on the basis of each member's average
16.26 	salary under section 354.05, subdivision 13a,for the period of
16.27 	the member's formula service credit.
16.28 	For all years of formula service credit, "average salary,"
16.29 	for the purpose of determining the member's retirement annuity,
16.30 	means the average salary upon which contributions were made and
16.31 	upon which payments were made to increase the salary limitation
16.32 	provided in Minnesota Statutes 1971, section 354.511, for the
16.33 	highest five successive years of formula service credit
16.34 	provided, however, that such "average salary" shall not include
16.35 	any more than the equivalent of 60 monthly salary payments.
16.36 	Average salary must be based upon all years of formula service
17.1 	credit if this service credit is less than five years.
17.2 	(b) This paragraph, in conjunction with paragraph (c),
17.3 	applies to a person who first became a member of the association
17.4 	or a member of a pension fund listed in section 356.30,
17.5 	subdivision 3, before July 1, 1989, unless paragraph (d), in
17.6 	conjunction with paragraph (e), produces a higher annuity
17.7 	amount, in which case paragraph (d) applies.  The average salary
17.8 	as defined in paragraph (a) section 354.05, subdivision 13a,
17.9 	multiplied by the following percentages per year of formula
17.10 	service credit shall determine the amount of the annuity to
17.11 	which the member qualifying therefor is entitled:
17.12 	Coordinated Member   Basic Member
17.13 	Each year of service     the percent        the percent
17.14 	during first ten         specified in       specified in
17.15 	section 356.315,   section 356.315,
17.16 	subdivision 1,     subdivision 3,
17.17 	per year           per year
17.18 	Each year of service     the percent        the percent
17.19 	thereafter               specified in       specified in
17.20 	section 356.315,   section 356.315,
17.21 	subdivision 2,     subdivision 4,
17.22 	per year           per year
17.23 	(c)(i) This paragraph applies only to a person who first
17.24 	became a member of the association or a member of a pension fund
17.25 	listed in section 356.30, subdivision 3, before July 1, 1989,
17.26 	and whose annuity is higher when calculated under paragraph (b),
17.27 	in conjunction with this paragraph than when calculated under
17.28 	paragraph (d), in conjunction with paragraph (e).
17.29 	(ii) Where any member retires prior to normal retirement
17.30 	age under a formula annuity, the member shall be paid a
17.31 	retirement annuity in an amount equal to the normal annuity
17.32 	provided in paragraph (b) reduced by one-quarter of one percent
17.33 	for each month that the member is under normal retirement age at
17.34 	the time of retirement except that for any member who has 30 or
17.35 	more years of allowable service credit, the reduction shall be
17.36 	applied only for each month that the member is under age 62.
18.1 	(iii) Any member whose attained age plus credited allowable
18.2 	service totals 90 years is entitled, upon application, to a
18.3 	retirement annuity in an amount equal to the normal annuity
18.4 	provided in paragraph (b), without any reduction by reason of
18.5 	early retirement.
18.6 	(d) This paragraph applies to a member who has become at
18.7 	least 55 years old and first became a member of the association
18.8 	after June 30, 1989, and to any other member who has become at
18.9 	least 55 years old and whose annuity amount when calculated
18.10 	under this paragraph and in conjunction with paragraph (e), is
18.11 	higher than it is when calculated under paragraph (b), in
18.12 	conjunction with paragraph (c).  The average salary, as defined
18.13 	in paragraph (a) section 354.05, subdivision 13a,multiplied by
18.14 	the percent specified by section 356.315, subdivision 4, for
18.15 	each year of service for a basic member and by the percent
18.16 	specified in section 356.315, subdivision 2, for each year of
18.17 	service for a coordinated member shall determine the amount of
18.18 	the retirement annuity to which the member is entitled.
18.19 	(e) This paragraph applies to a person who has become at
18.20 	least 55 years old and first becomes a member of the association
18.21 	after June 30, 1989, and to any other member who has become at
18.22 	least 55 years old and whose annuity is higher when calculated
18.23 	under paragraph (d) in conjunction with this paragraph than when
18.24 	calculated under paragraph (b), in conjunction with paragraph
18.25 	(c).  An employee who retires under the formula annuity before
18.26 	the normal retirement age shall be paid the normal annuity
18.27 	provided in paragraph (d) reduced so that the reduced annuity is
18.28 	the actuarial equivalent of the annuity that would be payable to
18.29 	the employee if the employee deferred receipt of the annuity and
18.30 	the annuity amount were augmented at an annual rate of three
18.31 	percent compounded annually from the day the annuity begins to
18.32 	accrue until the normal retirement age.
18.33 	(f) No retirement annuity is payable to a former employee
18.34 	with a salary that exceeds 95 percent of the governor's salary
18.35 	unless and until the salary figures used in computing the
18.36 	highest five successive years average salary under paragraph (a)
19.1 	have been audited by the Teachers Retirement Association and
19.2 	determined by the executive director to comply with the
19.3 	requirements and limitations of section 354.05, subdivisions 35
19.4 	and 35a.

19.5 	Sec. 19. Minnesota Statutes 2004, section 354A.011, is
19.6 	amended by adding a subdivision to read:
19.7 		Subd. 7a.Average salary. "Average salary," for purposes
19.8 	of computing a normal coordinated program retirement annuity
19.9 	under section 354A.31, subdivision 4 or 4a, means an amount
19.10 	equal to the average salary upon which contributions were made
19.11 	for the highest five successive years of service credit but may
19.12 	not, in any event, include any more than the equivalent of 60
19.13 	monthly salary payments.  Average salary must be based upon all
19.14 	years of service credit if this service credit is less than five
19.15 	years.

19.16 	Sec. 20. Minnesota Statutes 2004, section 354A.011,
19.17 	subdivision 24, is amended to read:
19.18 		Subd. 24.Salary; covered salary.  (a) Subject to the
19.19 	limitations of section 356.611,"salary" or "covered salary"
19.20 	means the entire compensation, upon which member contributions
19.21 	are required and made, that is paid to a teacher before
19.22 	deductions for deferred compensation, supplemental retirement
19.23 	plans, or other voluntary salary reduction programs.
19.24 	(b) "Salary" does not mean:
19.25 	(1) lump sum annual leave payments;
19.26 	(2) lump sum wellness and sick leave payments;
19.27 	(3) employer-paid amounts used by an employee toward the
19.28 	cost of insurance coverage, employer-paid fringe benefits,
19.29 	flexible spending accounts, cafeteria plans, health care expense
19.30 	accounts, day care expenses, or any payments in lieu of any
19.31 	employer-paid group insurance coverage, including the difference
19.32 	between single and family rates that may be paid to a member
19.33 	with single coverage, and certain amounts determined by the
19.34 	executive secretary or director to be ineligible;
19.35 	(4) any form of payment that is made in lieu of any other
19.36 	employer-paid fringe benefit or expense;
20.1 	(5) any form of severance payments;
20.2 	(6) workers' compensation payments;
20.3 	(7) disability insurance payments, including self-insured
20.4 	disability payments;
20.5 	(8) payments to school principals and all other
20.6 	administrators for services that are in addition to the normal
20.7 	work year contract if these additional services are performed on
20.8 	an extended duty day, Saturday, Sunday, holiday, annual leave
20.9 	day, sick leave day, or any other nonduty day;
20.10 	(9) payments under section 356.24, subdivision 1, clause
20.11 	(4)(ii); and
20.12 	(10) payments made under section 122A.40, subdivision 12,
20.13 	except for payments for sick leave that are accumulated under
20.14 	the provisions of a uniform school district policy that applies
20.15 	equally to all similarly situated persons in the district.
20.16 	(c) Amounts provided to an employee by the employer through
20.17 	a grievance proceeding or a legal settlement are salary only if
20.18 	the settlement is reviewed by the executive director and the
20.19 	amounts are determined by the executive director to be
20.20 	consistent with paragraph (a) and prior determinations.

20.21 	Sec. 21. Minnesota Statutes 2004, section 354A.31,
20.22 	subdivision 4, is amended to read:
20.23 		Subd. 4.Computation of the normal coordinated retirement
20.24 	annuity; minneapolis and st. paul funds.  (a) This subdivision
20.25 	applies to the coordinated programs of the Minneapolis Teachers
20.26 	Retirement Fund Association and the St. Paul Teachers Retirement
20.27 	Fund Association.
20.28 	(b) The normal coordinated retirement annuity shall be is 
20.29 	an amount equal to a retiring coordinated member's average
20.30 	salary under section 354A.011, subdivision 7a,multiplied by the
20.31 	retirement annuity formula percentage. Average salary for
20.32 	purposes of this section shall mean an amount equal to the
20.33 	average salary upon which contributions were made for the
20.34 	highest five successive years of service credit, but which shall
20.35 	not in any event include any more than the equivalent of 60
20.36 	monthly salary payments.  Average salary must be based upon all
21.1 	years of service credit if this service credit is less than five
21.2 	years.
21.3 	(c) This paragraph, in conjunction with subdivision 6,
21.4 	applies to a person who first became a member or a member in a
21.5 	pension fund listed in section 356.30, subdivision 3, before
21.6 	July 1, 1989, unless paragraph (d), in conjunction with
21.7 	subdivision 7, produces a higher annuity amount, in which case
21.8 	paragraph (d) will apply.  The retirement annuity formula
21.9 	percentage for purposes of this paragraph is the percent
21.10 	specified in section 356.315, subdivision 1, per year for each
21.11 	year of coordinated service for the first ten years and the
21.12 	percent specified in section 356.315, subdivision 2, for each
21.13 	year of coordinated service thereafter.
21.14 	(d) This paragraph applies to a person who has become at
21.15 	least 55 years old and who first becomes a member after June 30,
21.16 	1989, and to any other member who has become at least 55 years
21.17 	old and whose annuity amount, when calculated under this
21.18 	paragraph and in conjunction with subdivision 7 is higher than
21.19 	it is when calculated under paragraph (c), in conjunction with
21.20 	the provisions of subdivision 6.  The retirement annuity formula
21.21 	percentage for purposes of this paragraph is the percent
21.22 	specified in section 356.315, subdivision 2, for each year of
21.23 	coordinated service.

21.24 	Sec. 22. Minnesota Statutes 2004, section 354A.31,
21.25 	subdivision 4a, is amended to read:
21.26 		Subd. 4a.Computation of the normal coordinated
21.27 	retirement annuity; duluth fund.  (a) This subdivision applies
21.28 	to the new law coordinated program of the Duluth Teachers
21.29 	Retirement Fund Association.
21.30 	(b) The normal coordinated retirement annuity is an amount
21.31 	equal to a retiring coordinated member's average salary under
21.32 	section 354A.011, subdivision 7a,multiplied by the retirement
21.33 	annuity formula percentage. Average salary for purposes of this
21.34 	section means an amount equal to the average salary upon which
21.35 	contributions were made for the highest five successive years of
21.36 	service credit, but may not in any event include any more than
22.1 	the equivalent of 60 monthly salary payments.  Average salary
22.2 	must be based upon all years of service credit if this service
22.3 	credit is less than five years.
22.4 	(c) This paragraph, in conjunction with subdivision 6,
22.5 	applies to a person who first became a member or a member in a
22.6 	pension fund listed in section 356.30, subdivision 3, before
22.7 	July 1, 1989, unless paragraph (d), in conjunction with
22.8 	subdivision 7, produces a higher annuity amount, in which case
22.9 	paragraph (d) applies.  The retirement annuity formula
22.10 	percentage for purposes of this paragraph is the percent
22.11 	specified in section 356.315, subdivision 1, per year for each
22.12 	year of coordinated service for the first ten years and the
22.13 	percent specified in section 356.315, subdivision 2, for each
22.14 	subsequent year of coordinated service.
22.15 	(d) This paragraph applies to a person who is at least 55
22.16 	years old and who first becomes a member after June 30, 1989,
22.17 	and to any other member who is at least 55 years old and whose
22.18 	annuity amount, when calculated under this paragraph and in
22.19 	conjunction with subdivision 7, is higher than it is when
22.20 	calculated under paragraph (c) in conjunction with subdivision
22.21 	6.  The retirement annuity formula percentage for purposes of
22.22 	this paragraph is the percent specified in section 356.315,
22.23 	subdivision 2, for each year of coordinated service.

22.24 	Sec. 23. Minnesota Statutes 2004, section 356.611,
22.25 	subdivision 1, is amended to read:
22.26 		Subdivision 1.State salary limitations.  (a)
22.27 	Notwithstanding any provision of law, bylaws, articles of
22.28 	incorporation, retirement and disability allowance plan
22.29 	agreements, or retirement plan contracts to the contrary, the
22.30 	covered salary for pension purposes for a plan participant of a
22.31 	covered retirement fund enumerated in section 356.30,
22.32 	subdivision 3, may not exceed 95 110 percent of the salary
22.33 	established for the governor under section 15A.082 at the time
22.34 	the person received the salary.
22.35 	(b) This section does not apply to a salary paid:
22.36 	(1) to the governor or to a judge;
23.1 	(2) to an employee or an elected official who is not
23.2 	subject to the limit as specified under section 43A.17,
23.3 	subdivision 9;
23.4 	(3) to an employee of a political subdivision in a position
23.5 	that is excluded from the limit as specified under section
23.6 	43A.17, subdivision 9;
23.7 	(3) (4) to a state employee as defined under section
23.8 	43A.02, subdivision 21;
23.9 	(4) (5) to an employee of Gillette Hospital who is covered
23.10 	by the general state employees retirement plan of the Minnesota
23.11 	State Retirement System;
23.12 	(5) (6) to an employee of the Minnesota Crop Improvement
23.13 	Council; or 
23.14 	(6) (7) to an employee of the Minnesota Historical Society;
23.15 	(8) to an employee of the Southern Minnesota Municipal
23.16 	Power Association; or 
23.17 	(9) to the director of the Duluth Port Authority.
23.18 	(c) The limited covered salary determined under this
23.19 	section must be used in determining employee and employer
23.20 	contributions and in determining retirement annuities and other
23.21 	benefits under the respective covered retirement fund and under
23.22 	this chapter.

23.23 	Sec. 24. Minnesota Statutes 2004, section 422A.01, is
23.24 	amended by adding a subdivision to read:
23.25 		Subd. 4a.Average salary. (a) "Average salary" means the
23.26 	arithmetic average annual salary, wages, or compensation of the
23.27 	member from the city for any five calendar years out of the last
23.28 	ten calendar years of service, except as provided for in section
23.29 	422A.16, which may include the year in which the employee
23.30 	retires, as selected by the employee.
23.31 	(b) A member with more than five calendar years of service,
23.32 	but less than ten calendar years, may select any five calendar
23.33 	years of service to determine the average salary.  A member with
23.34 	less than five years of service with the city shall use all
23.35 	earnings to determine the average salary.

23.36 	Sec. 25. Minnesota Statutes 2004, section 422A.01, is
24.1 	amended by adding a subdivision to read:
24.2 		Subd. 13a.Covered salary. "Salary" is subject to the
24.3 	limitations of section 356.611.

24.4 	Sec. 26. Minnesota Statutes 2004, section 422A.15,
24.5 	subdivision 1, is amended to read:
24.6 		Subdivision 1.Formula pension and annuity.  Except as
24.7 	otherwise provided in subdivision 3, each contributing member
24.8 	who, at the time of retirement, fulfills the conditions
24.9 	necessary to enable the member to retire, shall is entitled to 
24.10 	receive what shall be known as a "formula pension and annuity"
24.11 	equal to two percent for each year of allowable service for the
24.12 	first ten years and thereafter 2.5 percent per year of allowable
24.13 	service of the arithmetic average annual salary, wages or
24.14 	compensation of the member from the city for any five calendar
24.15 	years out of the last ten calendar years of service except as
24.16 	provided for in section 422A.16, which may include the year in
24.17 	which the employee retires, as selected by the employee,
24.18 	multiplied by the years of service credited by the retirement
24.19 	fund.  The formula pension and annuity shall must be computed on
24.20 	the single life plan but subject to the option selections
24.21 	provided for in section 422A.17.
24.22 	In order to be entitled to the formula pension and annuity
24.23 	herein provided for, the retiring employee at the time of
24.24 	cessation of employment and of actual retirement shall must have
24.25 	attained the age of 60 years or have been employed by the city
24.26 	not less than 30 years, or meet the qualifications provided for
24.27 	in section 422A.16, and in addition thereto have contributed to
24.28 	the retirement fund at the percentage rate prescribed by the
24.29 	retirement law applicable when the salary, wages or compensation
24.30 	was paid on all salaries, wages, or compensation received from
24.31 	the city or from an applicable employing unit.  The years of
24.32 	service to be applied in the formula pension and annuity shall 
24.33 	must be found and determined by the retirement board, except
24.34 	that no credit shall may be allowed for any year in which a back
24.35 	charge is owing at time of retirement and the earnings from any
24.36 	year in which a back charge is owing shall may not be used in
25.1 	determining the average annual salary.

25.2 	Sec. 27. Minnesota Statutes 2004, section 422A.16,
25.3 	subdivision 9, is amended to read:
25.4 		Subd. 9.Incompetency or death of member.  Any member of
25.5 	the contributing class who becomes permanently separated from
25.6 	the service of the city under subdivision 8, may, by an
25.7 	instrument in writing, filed with the municipal employees
25.8 	retirement board within 30 days after such the separation
25.9 	becomes permanent, elect to allow the member contributions
25.10 	to such the fund to the date of separation to remain on deposit
25.11 	in such the fund, and in such the event the member shall be 
25.12 	is entitled to receive a retirement allowance at age 65,
25.13 	provided the member, or someone acting in the member's behalf if
25.14 	the member be incompetent, shall must make a written application
25.15 	for such the retirement allowance in the same manner provided
25.16 	for in section 422A.17 and in accordance with the provisions of
25.17 	section 422A.15, subdivision 1,except for determining
25.18 	average annual salary. A member with more than five calendar
25.19 	years of service but less than ten calendar years may select any
25.20 	five calendar years of service to determine the average annual
25.21 	salary.  A member with less than five years of service with the
25.22 	city shall use all earnings to determine the average annual
25.23 	salary.
25.24 	If the contributing member dies before reaching the age of
25.25 	65 years, or having attained the age of 65 years without having
25.26 	made the election provided for herein, the net accumulated
25.27 	amount of deductions from the member's salary, pay or
25.28 	compensation, plus interest, to the member's credit on date of
25.29 	death shall be paid is payable to such the person or persons as
25.30 	have been nominated by written designation filed with the
25.31 	retirement board, in such the form as that the retirement board
25.32 	shall require requires.
25.33 	If the employee fails to make a designation, or if the
25.34 	person or persons designated by such the employee predeceases
25.35 	such the employee, the net accumulated credit to such the 
25.36 	employee's account on date of death shall be paid is payable to
26.1 	such the employee's estate.
26.2 	The provisions of subdivisions 4, 5,and 6 shall also apply
26.3 	to any member qualifying for benefits under this subdivision,
26.4 	except for purposes of this subdivision the age referred to in
26.5 	subdivision 4 shall be is 65 years.

26.6 	Sec. 28. Minnesota Statutes 2004, section 423B.01, is
26.7 	amended by adding a subdivision to read:
26.8 		Subd. 22.Covered salary. "Salary" is subject to the
26.9 	limitations of section 356.611.

26.10 	Sec. 29. Minnesota Statutes 2004, section 423C.01, is
26.11 	amended by adding a subdivision to read:
26.12 		Subd. 29.Covered salary. "Salary" is subject to the
26.13 	limitations of section 356.611.

26.14 	Sec. 30. Minnesota Statutes 2004, section 490.121,
26.15 	subdivision 21, is amended to read:
26.16 		Subd. 21.Final average compensation.  "Final average
26.17 	compensation" means the total amount of salary payable to a
26.18 	judge in the highest five years out of the last ten years prior
26.19 	to before the event of maturity of benefits termination of
26.20 	judicial service, divided by five; provided, however, that if
26.21 	the number of years of service by the judge equals or exceeds
26.22 	ten.  If the number of years of service by the judge is less
26.23 	than ten, but more than five,the highest five shall years of
26.24 	salary must be counted, and .If the number of years of service
26.25 	by the judge is less than five, the aggregate salary in such for
26.26 	the period shall of service must be divided by the number of
26.27 	months in such the period and multiplied by 12.

26.28 	Sec. 31. Minnesota Statutes 2004, section 490.121, is
26.29 	amended by adding a subdivision to read:
26.30 		Subd. 21a.Covered salary limitation. "Final average
26.31 	compensation" is subject to the limitations of section 356.611.

26.32 	Sec. 32. REPEALER.
 26.33 	Minnesota Statutes 2004, sections 352C.031, subdivision 3;
26.34 	353.29, subdivision 2; and 353.651, subdivision 2, are repealed.

26.35 	Sec. 33. EFFECTIVE DATE.
 26.36 	This article is effective on the day following final
27.1 	enactment except that section 23 applies retroactively from
27.2 	April 28, 1994.

27.3 	ARTICLE 2
27.4 	ALLOWABLE SERVICE CREDIT

27.5 	Section 1. [356.195] SERVICE CREDIT PURCHASE PROCEDURES
27.6 	FOR STRIKE PERIODS.
27.7 		Subdivision 1.Covered plans. This section applies to
27.8 	all defined benefit plans specified in section 356.30,
27.9 	subdivision 3.
27.10 		Subd. 2.Purchase procedure for strike periods. (a) An
27.11 	employee covered by a plan specified in subdivision 1 may
27.12 	purchase allowable service credit in the applicable plan for any
27.13 	period of time during which the employee was on a public
27.14 	employee strike without pay, not to exceed a period of one year,
27.15 	if the employee makes a payment in lieu of salary deductions as
27.16 	specified in paragraph (b) or (c), whichever applies.  The
27.17 	employing unit, at its option, may pay the employer portion of
27.18 	the amount specified in paragraph (b) on behalf of its employees.
27.19 	(b) If payment is received by the applicable pension plan
27.20 	executive director within one year from the end of the strike,
27.21 	the payment amount is equal to the applicable employee and
27.22 	employer contribution rates specified in law for the applicable
27.23 	plan during the strike period, applied to the employee's rate of
27.24 	salary in effect at the conclusion of the strike for the period
27.25 	of the strike without pay, plus compound interest at a monthly
27.26 	rate of 0.71 percent from the last day of the strike period
27.27 	until the date payment is received.
27.28 	(c) If payment is received by the applicable pension fund
27.29 	director after one year and before five years from the end of
27.30 	the strike, the payment amount is the amount determined under
27.31 	section 356.551.
27.32 	(d) Payments may not be made more than five years after the
27.33 	end of the strike.

27.34 	Sec. 2. Minnesota Statutes 2004, section 490.121,
27.35 	subdivision 4, is amended to read:
27.36 		Subd. 4.Allowable service. (a) "Allowable service"
28.1 	means any calendar month, subject to the service credit limit in
28.2 	subdivision 22, served as a judge at any time, or served as a
28.3 	referee in probate for all referees in probate who were in
28.4 	office prior to January 1, 1974.
28.5 	(b) "Allowable service" also means a period of authorized
28.6 	leave of absence for which the judge has made a payment in lieu
28.7 	of contributions, not in an amount in excess of the service
28.8 	credit limit under subdivision 22.  To obtain the service
28.9 	credit, the judge shall pay an amount equal to the normal cost
28.10 	of the judges retirement plan on the date of return from the
28.11 	leave of absence, as determined in the most recent actuarial
28.12 	report for the plan filed with the Legislative Commission on
28.13 	Pensions and Retirement, multiplied by the judge's average
28.14 	monthly salary rate during the authorized leave of absence and
28.15 	multiplied by the number of months of the authorized leave of
28.16 	absence, plus annual compound interest at the rate of 8.5
28.17 	percent from the date of the termination of the leave to the
28.18 	date on which payment is made.  The payment must be made within
28.19 	one year of the date on which the authorized leave of absence
28.20 	terminated.  Service credit for an authorized leave of absence
28.21 	is in addition to a uniformed service leave under section
28.22 	490.1211.

28.23 	Sec. 3. Laws 1999, chapter 222, article 16, section 16, as
28.24 	amended by Laws 2002, chapter 392, article 7, section 1, and
28.25 	Laws 2003, First Special Session chapter 12, article 6, section
28.26 	2, and Laws 2004, chapter 267, article 17, section 6, is amended
28.27 	to read:
28.28 	Sec. 16REPEALER.
 28.29 	(a) Sections 2 to 6 and 8 to 13 are repealed on May 16,
28.30 	2004.
28.31 	(b) Sections 1 and 7 are repealed on May 16, 2006 2007.

28.32 	Sec. 4. Laws 2000, chapter 461, article 4, section 4, as
28.33 	amended by Laws 2003, First Special Session chapter 12, article
28.34 	6, section 3, and Laws 2004, chapter 267, article 17, section 7,
28.35 	is amended to read:
28.36 	Sec. 4EFFECTIVE DATE; SUNSET REPEALER.
 29.1 	(a) Sections 1, 2, and 3 are effective on the day following
29.2 	final enactment.
29.3 	(b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.

29.4 	Sec. 5. METRO TRANSIT STRIKE PROVISION.
 29.5 	Notwithstanding the payment deadline specified in Minnesota
29.6 	Statutes, section 356.195, subdivision 2, paragraph (b), a Metro
29.7 	Transit employee covered by the general state employees
29.8 	retirement plan of the Minnesota State Retirement System who was
29.9 	on strike on or after January 1, 2004, and before the effective
29.10 	date of this section, is authorized to make a payment under that
29.11 	paragraph on or before one year after the effective date of this
29.12 	section.

29.13 	Sec. 6. CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.
 29.14 	Notwithstanding the payment deadline specified in Minnesota
29.15 	Statutes, section 356.195, subdivision 2, paragraph (b), a
29.16 	Crosby-Ironton public school teacher covered by the Teachers
29.17 	Retirement Association who was on strike during a period that
29.18 	included April 1, 2005, and before the effective date of this
29.19 	section, is authorized to make a payment under that paragraph on
29.20 	or before one year after the effective date of this section.

29.21 	Sec. 7. UNIVERSITY OF MINNESOTA STRIKE PROVISION.
 29.22 	Notwithstanding the payment deadline specified in Minnesota
29.23 	Statutes, section 356.195, subdivision 2, paragraph (b), a
29.24 	University of Minnesota employee covered by the Minnesota State
29.25 	Retirement System who was on strike on or after October 21,
29.26 	2003, and before the effective date of this section, is
29.27 	authorized to make a payment under that paragraph on or before
29.28 	one year after the effective date of this section.

29.29 	Sec. 8. EFFECTIVE DATE.
 29.30 	(a) Sections 1 and 3 to 7 are effective the day following
29.31 	final enactment.
29.32 	(b) Section 2 is effective retroactively from January 1,
29.33 	2005, and applies to any person who was in active service as a
29.34 	judge on or after that date and applies to an authorized leave
29.35 	of absence that occurred before or after that date.  For a
29.36 	person for whom section 2 is retroactive, the equivalent
30.1 	contribution payment must be made on or before July 1, 2006.

30.2 	ARTICLE 3
30.3 	ACTUARIAL FINANCIAL REPORTING AND OTHER
30.4 	GENERALLY APPLICABLE ADMINISTRATIVE CHANGES

30.5 	Section 1. Minnesota Statutes 2004, section 352.01,
30.6 	subdivision 12, is amended to read:
30.7 		Subd. 12.Actuarial equivalent.  "Actuarial equivalent"
30.8 	means the condition of one annuity or benefit having an equal
30.9 	actuarial present value as another annuity or benefit,
30.10 	determined as of a given date at a specified age with each
30.11 	actuarial present value based on the appropriate mortality table
30.12 	adopted by the board of directors based on the experience of the
30.13 	fund as recommended by the actuary retained by the Legislative
30.14 	Commission on Pensions and Retirement under section 356.214, and
30.15 	approved under section 356.215, subdivision 18,and using the
30.16 	applicable preretirement or postretirement interest rate
30.17 	assumption specified in section 356.215, subdivision 8.

30.18 	Sec. 2. Minnesota Statutes 2004, section 353.01,
30.19 	subdivision 14, is amended to read:
30.20 		Subd. 14.Actuarial equivalent.  "Actuarial equivalent"
30.21 	means the condition of one annuity or benefit having an equal
30.22 	actuarial present value as another annuity or benefit,
30.23 	determined as of a given date with each actuarial present value
30.24 	based on the appropriate mortality table adopted by the board of
30.25 	trustees based on the experience of the fund as recommended by
30.26 	the actuary retained by the Legislative Commission on Pensions
30.27 	and Retirement under section 356.214, and approved under section
30.28 	356.215, subdivision 18,and using the applicable preretirement
30.29 	or postretirement interest rate assumption specified in section
30.30 	356.215, subdivision 8.

30.31 	Sec. 3. Minnesota Statutes 2004, section 354.05,
30.32 	subdivision 7, is amended to read:
30.33 		Subd. 7.Actuarial equivalent.  "Actuarial equivalent"
30.34 	means the condition of one annuity or benefit having an equal
30.35 	actuarial present value as another annuity or benefit,
30.36 	determined as of a given date with each actuarial present value
31.1 	based on the appropriate mortality table adopted by the board of
31.2 	trustees based on the experience of the association as
31.3 	recommended by the actuary retained by the Legislative
31.4 	Commission on Pensions and Retirement under section 356.214, and
31.5 	approved under section 356.215, subdivision 18,and using the
31.6 	applicable preretirement or postretirement interest rate
31.7 	assumption specified in section 356.215, subdivision 8.

31.8 	Sec. 4. Minnesota Statutes 2004, section 354.094,
31.9 	subdivision 1, is amended to read:
31.10 		Subdivision 1.Service credit contributions. (a) Upon
31.11 	granting any extended leave of absence under section 122A.46 or
31.12 	136F.43, the employing unit granting the leave must certify the
31.13 	leave to the association on a form specified by the executive
31.14 	director.  A member granted an extended leave of absence under
31.15 	section 122A.46 or 136F.43 may pay employee contributions and
31.16 	receive allowable service credit toward annuities and other
31.17 	benefits under this chapter, for each year of the leave,
31.18 	provided that the member and the employing board make the
31.19 	required employer contribution in any proportion they may agree
31.20 	upon, during the period of the leave.  The employer may enter
31.21 	into an agreement with the exclusive bargaining representative
31.22 	of the teachers in the district under which, for an individual
31.23 	teacher, all or a portion of the employee's contribution is paid
31.24 	by the employer.  Any such agreement must include a sunset of
31.25 	eligibility to qualify for the payment and must not be a part of
31.26 	the collective bargaining agreement.  The leave period must not
31.27 	exceed five years.  A member may not receive more than five
31.28 	years of allowable service credit under this section.  The
31.29 	employee and employer contributions must be based upon the rates
31.30 	of contribution prescribed by section 354.42 for the salary
31.31 	received during the year immediately preceding the extended
31.32 	leave.
31.33 	(b) Employee contribution payments for the years for which
31.34 	a member is receiving service credit while on extended leave
31.35 	must be made on or before the later of June 30 of each fiscal
31.36 	year for which service credit is to be received or within 30
32.1 	days after first notification of the amount due, if requested by
32.2 	the member, is given by the association. If payment is to be
32.3 	made by a transfer of pretax assets authorized under section
32.4 	356.441, payment is authorized after June 30 of the fiscal year
32.5 	providing that authorization for the asset transfer has been
32.6 	received by the applicable third party administrator by June 30,
32.7 	and the payment must include interest at a rate of .708 percent
32.8 	per month from June 30 through the end of the month in which
32.9 	payment is received.No payment is permitted after the
32.10 	following September 30. Payments received after June 30 must
32.11 	include interest at an annual rate of 8.5 percent from June 30
32.12 	through the end of the month in which payment is received.
32.13 	(c) Notwithstanding the provisions of any agreements to the
32.14 	contrary, employee and employer contributions may not be made to
32.15 	receive allowable service credit if the member does not have
32.16 	full reinstatement rights as provided in section 122A.46 or
32.17 	136F.43, both during and at the end of the extended leave.
32.18 	(d) Any school district paying the employee's retirement
32.19 	contributions under this section shall forward to the applicable
32.20 	retirement association or retirement fund a copy of the
32.21 	agreement executed by the school district and the employee.

32.22 	Sec. 5. Minnesota Statutes 2004, section 354A.011,
32.23 	subdivision 3a, is amended to read:
32.24 		Subd. 3a.Actuarial equivalent.  "Actuarial equivalent"
32.25 	means the condition of one annuity or benefit having an equal
32.26 	actuarial present value as another annuity or benefit,
32.27 	determined as of a given date with each actuarial present value
32.28 	based on the appropriate mortality table adopted by the
32.29 	appropriate board of trustees based on the experience of that
32.30 	retirement fund association as recommended by the actuary
32.31 	retained by the Legislative Commission on Pensions and
32.32 	Retirement under section 356.214, and approved under section
32.33 	356.215, subdivision 18,and using the applicable preretirement
32.34 	or postretirement interest rate assumption specified in section
32.35 	356.215, subdivision 8.

32.36 	Sec. 6. Minnesota Statutes 2004, section 356.20,
33.1 	subdivision 4, is amended to read:
33.2 		Subd. 4.Contents of financial report.  (a) The financial
33.3 	report required by this section must contain financial
33.4 	statements and disclosures that indicate the financial
33.5 	operations and position of the retirement plan and fund.  The
33.6 	report must conform with generally accepted governmental
33.7 	accounting principles, applied on a consistent basis.  The
33.8 	report must be audited.  The report must include, as part of its
33.9 	exhibits or its footnotes, an actuarial disclosure item based on
33.10 	the actuarial valuation calculations prepared by the
33.11 	commission-retained actuary retained under section 356.214or by
33.12 	the actuary retained by the retirement fund or plan, if
33.13 	applicable whichever applies, according to applicable actuarial
33.14 	requirements enumerated in section 356.215, and specified in the
33.15 	most recent standards for actuarial work adopted by the
33.16 	Legislative Commission on Pensions and Retirement.  The accrued
33.17 	assets, the accrued liabilities, including accrued reserves, and
33.18 	the unfunded actuarial accrued liability of the fund or plan
33.19 	must be disclosed.  The disclosure item must contain a
33.20 	declaration by the actuary retained by the Legislative
33.21 	Commission on Pensions and Retirement under section 356.214or
33.22 	the actuary retained by the fund or plan, whichever applies,
33.23 	specifying that the required reserves for any retirement,
33.24 	disability, or survivor benefits provided under a benefit
33.25 	formula are computed in accordance with the entry age actuarial
33.26 	cost method and in accordance with the most recent applicable
33.27 	standards for actuarial work adopted by the Legislative
33.28 	Commission on Pensions and Retirement.
33.29 	(b) Assets of the fund or plan contained in the disclosure
33.30 	item must include the following statement of the actuarial value
33.31 	of current assets as defined in section 356.215, subdivision 1:
33.32 	Value         Value
33.33 	at cost       at market
33.34 	Cash, cash equivalents, and
33.35 	short-term securities           .........     .........
33.36 	Accounts receivable               .........     .........
34.1 	Accrued investment income         .........     .........
34.2 	Fixed income investments          .........     .........
34.3 	Equity investments other
34.4 	than real estate                .........     .........
34.5 	Real estate investments           .........     .........
34.6 	Equipment                         .........     .........
34.7 	Equity Participation in the Minnesota
34.8 	postretirement investment
34.9 	fund or the retirement 
34.10 	benefit fund.........     .........
34.11 	Other                             .........     .........
34.12 	
34.13 	Total assets
34.14 	Value at cost                                 .........
34.15 	Value at market                               .........
34.16 	Actuarial value of current assets             .........
34.17 	(c) The unfunded actuarial accrued liability of the fund or
34.18 	plan contained in the disclosure item must include the following
34.19 	measures of unfunded actuarial accrued liability, using
34.20 	the actuarial value of current assets:
34.21 	(1) the unfunded actuarial accrued liability, determined by
34.22 	subtracting the current assets and the present value of future
34.23 	normal costs from the total current and expected future benefit
34.24 	obligations; and
34.25 	(2) the unfunded pension benefit obligation, determined by
34.26 	subtracting the current assets from the actuarial present value
34.27 	of credited projected benefits.
34.28 	If the current assets of the fund or plan exceed the
34.29 	actuarial accrued liabilities, the excess must be disclosed and
34.30 	indicated as a surplus.
34.31 	(d) The pension benefit obligations schedule included in
34.32 	the disclosure must contain the following information on the
34.33 	benefit obligations:
34.34 	(1) the pension benefit obligation, determined as the
34.35 	actuarial present value of credited projected benefits on
34.36 	account of service rendered to date, separately identified as
35.1 	follows:
35.2 	(i) for annuitants;
35.3 	               retirement annuities;
35.4 	               disability benefits;
35.5 	               surviving spouse and child benefits;
35.6 	         (ii)  for former members without vested rights;
35.7 	         (iii) for deferred annuitants' benefits, including
35.8 	               any augmentation;
35.9 	         (iv)  for active employees;
35.10 	               accumulated employee contributions,
35.11 	               including allocated investment income;
35.12 	               employer-financed benefits vested;
35.13 	               employer-financed benefits nonvested;
35.14 	               total pension benefit obligation; and
35.15 	(2) if there are additional benefits not appropriately
35.16 	covered by the foregoing items of benefit obligations, a
35.17 	separate identification of the obligation.
35.18 	(e) The report must contain an itemized exhibit describing
35.19 	the administrative expenses of the plan, including, but not
35.20 	limited to, the following items, classified on a consistent
35.21 	basis from year to year, and with any further meaningful detail:
35.22 	(1) personnel expenses;
35.23 	(2) communication-related expenses;
35.24 	(3) office building and maintenance expenses;
35.25 	(4) professional services fees; and 
35.26 	(5) other expenses.
35.27 	(f) The report must contain an itemized exhibit describing
35.28 	the investment expenses of the plan, including, but not limited
35.29 	to, the following items, classified on a consistent basis from
35.30 	year to year, and with any further meaningful detail:
35.31 	(1) internal investment-related expenses; and 
35.32 	(2) external investment-related expenses.
35.33 	(g) Any additional statements or exhibits or more detailed
35.34 	or subdivided itemization of a disclosure item that will enable
35.35 	the management of the fund to portray a true interpretation of
35.36 	the fund's financial condition must be included in the
36.1 	additional statements or exhibits.

36.2 	Sec. 7. Minnesota Statutes 2004, section 356.47,
36.3 	subdivision 3, is amended to read:
36.4 		Subd. 3.Payment.  (a) Upon the retired member attaining
36.5 	the age of 65 years or upon the first day of the month next
36.6 	following the month occurring one year after the termination of
36.7 	the reemployment that gave rise to the limitation, whichever is
36.8 	later, and the filing of a written application, the retired
36.9 	member is entitled to the payment, in a lump sum, of the value
36.10 	of the person's amount under subdivision 2, plus interest at the
36.11 	compound annual rate of six percent from the date that the
36.12 	amount was deducted from the retirement annuity to the date of
36.13 	payment.
36.14 	(b) The written application must be on a form prescribed by
36.15 	the chief administrative officer of the applicable retirement
36.16 	plan.
36.17 	(c) If the retired member dies before the payment provided
36.18 	for in paragraph (a) is made, the amount is payable, upon
36.19 	written application, to the deceased person's surviving spouse,
36.20 	or if none, to the deceased person's designated beneficiary, or
36.21 	if none, to the deceased person's estate.
36.22 	(d) In lieu of the direct payment of the person's amount
36.23 	under subdivision 2, on or after the payment date under
36.24 	paragraph (a), if the federal Internal Revenue Code so permits,
36.25 	the retired member may elect to have all or any portion of the
36.26 	payment amount under this section paid in the form of a direct
36.27 	rollover to an eligible retirement plan as defined in section
36.28 	402(c) of the federal Internal Revenue Code that is specified by
36.29 	the retired member.  If the retired member dies with a balance
36.30 	remaining payable under this section, the surviving spouse of
36.31 	the retired member, or if none, the deceased person's designated
36.32 	beneficiary, or if none, the administrator of the deceased
36.33 	person's estate may elect a direct rollover under this paragraph.

36.34 	Sec. 8. Minnesota Statutes 2004, section 422A.01,
36.35 	subdivision 6, is amended to read:
36.36 		Subd. 6.Present worth or present value.  "Present worth"
37.1 	or "present value" means that the present amount of money if
37.2 	increased at the applicable postretirement or preretirement
37.3 	interest rate assumption specified in section 356.215,
37.4 	subdivision 8, and based on the mortality table adopted by the
37.5 	board of trustees based on the experience of the fund as
37.6 	recommended by the actuary retained by the Legislative
37.7 	Commission on Pensions and Retirement under section 356.214, and
37.8 	approved under section 356.215, subdivision 18,will at
37.9 	retirement equal the actuarial accrued liability of the annuity
37.10 	already earned.

37.11 	Sec. 9. Minnesota Statutes 2004, section 490.121,
37.12 	subdivision 20, is amended to read:
37.13 		Subd. 20.Actuarial equivalent.  "Actuarial equivalent"
37.14 	means the condition of one annuity or benefit having an equal
37.15 	actuarial present value as another annuity or benefit,
37.16 	determined as of a given date with each actuarial present value
37.17 	based on the appropriate mortality table adopted by the board of
37.18 	trustees directors of the Minnesota State Retirement System 
37.19 	based on the experience of the fund as recommended by
37.20 	the commission-retained actuary retained under section 356.214,
37.21 	and approved under section 356.215, subdivision 18,and using
37.22 	the applicable preretirement or postretirement interest rate
37.23 	assumption specified in section 356.215, subdivision 8.

37.24 	Sec. 10. EFFECTIVE DATE.
 37.25 	(a) Sections 1 to 5, 8, and 9 are effective July 1, 2005.
37.26 	(b) Section 6 is effective the day following final
37.27 	enactment and applies to annual financial reporting occurring on
37.28 	or after June 30, 2005.
37.29 	(c) Section 4 is effective the day following final
37.30 	enactment.
37.31 	(d) Section 7 is effective July 1, 2005, and applies to
37.32 	retired members with an amount in a reemployed annuitant's
37.33 	account on or after that date.

37.34 	ARTICLE 4
37.35 	MEMBERSHIP INCLUSIONS
37.36 	AND EXCLUSIONS

38.1 	Section 1. Minnesota Statutes 2004, section 69.011, is
38.2 	amended by adding a subdivision to read:
38.3 		Subd. 2c.Ineligibility of certain police officers. A
38.4 	police officer employed by the University of Minnesota who is
38.5 	required by the Board of Regents to be a member of the
38.6 	University of Minnesota faculty retirement plan is not eligible
38.7 	to be included in any police state-aid certification under this
38.8 	section.

38.9 	Sec. 2. Minnesota Statutes 2004, section 352.01,
38.10 	subdivision 2a, is amended to read:
38.11 		Subd. 2a.Included employees.  (a) "State employee"
38.12 	includes:
38.13 	(1) employees of the Minnesota Historical Society;
38.14 	(2) employees of the State Horticultural Society;
38.15 	(3) employees of the Disabled American Veterans, Department
38.16 	of Minnesota, Veterans of Foreign Wars, Department of Minnesota,
38.17 	if employed before July 1, 1963;
38.18 	(4) employees of the Minnesota Crop Improvement
38.19 	Association;
38.20 	(5) employees of the adjutant general who are paid from
38.21 	federal funds and who are not covered by any federal civilian
38.22 	employees retirement system;
38.23 	(6) employees of the Minnesota State Colleges and
38.24 	Universities employed under the university or college activities
38.25 	program;
38.26 	(7) currently contributing employees covered by the system
38.27 	who are temporarily employed by the legislature during a
38.28 	legislative session or any currently contributing employee
38.29 	employed for any special service as defined in subdivision 2b,
38.30 	clause (8);
38.31 	(8) employees of the Armory Building Commission;
38.32 	(9) employees of the legislature appointed without a limit
38.33 	on the duration of their employment and persons employed or
38.34 	designated by the legislature or by a legislative committee or
38.35 	commission or other competent authority to conduct a special
38.36 	inquiry, investigation, examination, or installation;
39.1 	(10) trainees who are employed on a full-time established
39.2 	training program performing the duties of the classified
39.3 	position for which they will be eligible to receive immediate
39.4 	appointment at the completion of the training period;
39.5 	(11) employees of the Minnesota Safety Council;
39.6 	(12) any employees on authorized leave of absence from the
39.7 	Transit Operating Division of the former Metropolitan Transit
39.8 	Commission who are employed by the labor organization which is
39.9 	the exclusive bargaining agent representing employees of the
39.10 	Transit Operating Division;
39.11 	(13) employees of the Metropolitan Council, Metropolitan
39.12 	Parks and Open Space Commission, Metropolitan Sports Facilities
39.13 	Commission, Metropolitan Mosquito Control Commission, or
39.14 	Metropolitan Radio Board unless excluded or covered by another
39.15 	public pension fund or plan under section 473.415, subdivision
39.16 	3;
39.17 	(14) judges of the Tax Court;
39.18 	(15) personnel employed on June 30, 1992, by the University
39.19 	of Minnesota in the management, operation, or maintenance of its
39.20 	heating plant facilities, whose employment transfers to an
39.21 	employer assuming operation of the heating plant facilities, so
39.22 	long as the person is employed at the University of Minnesota
39.23 	heating plant by that employer or by its successor organization;
39.24 	and 
39.25 	(16) seasonal help in the classified service employed by
39.26 	the Department of Revenue; and 
39.27 	(17) persons employed by the Department of Commerce as a
39.28 	peace officer in the Insurance Fraud Prevention Division under
39.29 	section 45.0135 who have attained the mandatory retirement age
39.30 	specified in section 43A.34, subdivision 4.
39.31 	(b) Employees specified in paragraph (a), clause (15), are
39.32 	included employees under paragraph (a) if employer and employee
39.33 	contributions are made in a timely manner in the amounts
39.34 	required by section 352.04.  Employee contributions must be
39.35 	deducted from salary.  Employer contributions are the sole
39.36 	obligation of the employer assuming operation of the University
40.1 	of Minnesota heating plant facilities or any successor
40.2 	organizations to that employer.

40.3 	Sec. 3. Minnesota Statutes 2004, section 352.91, is
40.4 	amended by adding a subdivision to read:
40.5 		Subd. 4a.Process for evaluating and recommending
40.6 	potential employment positions for membership inclusion. (a)
40.7 	The Department of Corrections and the Department of Human
40.8 	Services must establish a procedure for evaluating periodic
40.9 	requests by department employees for qualification for
40.10 	recommendation by the commissioner for inclusion of the
40.11 	employment position in the correctional facility or human
40.12 	services facility in the correctional retirement plan and for
40.13 	periodically determining employment positions that no longer
40.14 	qualify for continued correctional retirement plan coverage.
40.15 	(b) The procedure must provide for an evaluation of the
40.16 	extent of the employee's working time spent in direct contact
40.17 	with patients or inmates, the extent of the physical hazard that
40.18 	the employee is routinely subjected to in the course of
40.19 	employment, and the extent of intervention routinely expected of
40.20 	the employee in the event of a facility incident.  The
40.21 	percentage of routine direct contact with inmates or patients
40.22 	may not be less than 75 percent.
40.23 	(c) The applicable commissioner shall notify the employee
40.24 	of the determination of the appropriateness of recommending the
40.25 	employment position for inclusion in the correctional retirement
40.26 	plan, if the evaluation procedure results in a finding that the
40.27 	employee:
40.28 	(1) routinely spends 75 percent of the employee's time in
40.29 	direct contact with inmates or patients; and 
40.30 	(2) is regularly engaged in the rehabilitation, treatment,
40.31 	custody, or supervision of inmates or patients.
40.32 	(d) After providing the affected employee an opportunity to
40.33 	dispute or clarify any evaluation determinations, if the
40.34 	commissioner determines that the employment position is
40.35 	appropriate for inclusion in the correctional retirement plan,
40.36 	the commissioner shall forward that recommendation and
41.1 	supporting documentation to the chair of the Legislative
41.2 	Commission on Pensions and Retirement, the chair of the State
41.3 	and Local Governmental Operations Committee of the senate, the
41.4 	chair of the Governmental Operations and Veterans Affairs Policy
41.5 	Committee of the house of representatives, and the executive
41.6 	director of the Legislative Commission on Pensions and
41.7 	Retirement in the form of the appropriate proposed legislation.
41.8 	The recommendation must be forwarded to the legislature before
41.9 	January 15 for the recommendation to be considered in that
41.10 	year's legislative session.

41.11 	Sec. 4. Minnesota Statutes 2004, section 352B.01,
41.12 	subdivision 2, is amended to read:
41.13 		Subd. 2.Member.  "Member" means:
41.14 	(1) a State Patrol member currently employed after June 30,
41.15 	1943, under section 299D.03 by the state, who is a peace officer
41.16 	under section 626.84, and whose salary or compensation is paid
41.17 	out of state funds;
41.18 	(2) a conservation officer employed under section 97A.201,
41.19 	currently employed by the state, whose salary or compensation is
41.20 	paid out of state funds;
41.21 	(3) a crime bureau officer who was employed by the crime
41.22 	bureau and was a member of the Highway Patrolmen's retirement
41.23 	fund on July 1, 1978, whether or not that person has the power
41.24 	of arrest by warrant after that date, or who is employed as
41.25 	police personnel, with powers of arrest by warrant under section
41.26 	299C.04, and who is currently employed by the state, and whose
41.27 	salary or compensation is paid out of state funds;
41.28 	(4) a person who is employed by the state in the Department
41.29 	of Public Safety in a data processing management position with
41.30 	salary or compensation paid from state funds, who was a crime
41.31 	bureau officer covered by the State Patrol retirement plan on
41.32 	August 15, 1987, and who was initially hired in the data
41.33 	processing management position within the department during
41.34 	September 1987, or January 1988, with membership continuing for
41.35 	the duration of the person's employment in that position,
41.36 	whether or not the person has the power of arrest by warrant
42.1 	after August 15, 1987;
42.2 	(5) a public safety employee defined as a peace officer in
42.3 	section 626.84, subdivision 1, paragraph (c), and employed with
42.4 	the Division of Alcohol and Gambling Enforcement under section
42.5 	299L.01; and 
42.6 	(6) a Fugitive Apprehension Unit officer after October 31,
42.7 	2000, employed by the Office of Special Investigations of the
42.8 	Department of Corrections who is a peace officer under section
42.9 	626.84; and 
42.10 	(7) an employee of the Department of Commerce defined as a
42.11 	peace officer in section 626.84, subdivision 1, paragraph (c),
42.12 	who is employed by the Division of Insurance Fraud Prevention
42.13 	under section 45.0135 after January 1, 2005, and who has not
42.14 	attained the mandatory retirement age specified in section
42.15 	43A.34, subdivision 4.

42.16 	Sec. 5. Minnesota Statutes 2004, section 353.01,
42.17 	subdivision 6, is amended to read:
42.18 		Subd. 6.Governmental subdivision.  (a) "Governmental
42.19 	subdivision" means a county, city, town, school district within
42.20 	this state, or a department or unit of state government, or any
42.21 	public body whose revenues are derived from taxation, fees,
42.22 	assessments or from other sources.
42.23 	(b) Governmental subdivision also means the Public
42.24 	Employees Retirement Association, the League of Minnesota
42.25 	Cities, the Association of Metropolitan Municipalities, public
42.26 	hospitals owned or operated by, or an integral part of, a
42.27 	governmental subdivision or governmental subdivisions, the
42.28 	Association of Minnesota Counties, the Metropolitan Intercounty
42.29 	Association, the Minnesota Municipal Utilities Association, the
42.30 	Metropolitan Airports Commission, the University of Minnesota
42.31 	with respect to police officers covered by the public employees
42.32 	police and fire retirement plan,the Minneapolis Employees
42.33 	Retirement Fund for employment initially commenced after June
42.34 	30, 1979, the Range Association of Municipalities and Schools,
42.35 	soil and water conservation districts, economic development
42.36 	authorities created or operating under sections 469.090 to
43.1 	469.108, the Port Authority of the city of St. Paul, the Spring
43.2 	Lake Park Fire Department, incorporated, the Lake Johanna
43.3 	Volunteer Fire Department, incorporated, the Red Wing
43.4 	Environmental Learning Center, and the Dakota County
43.5 	Agricultural Society.
43.6 	(c) Governmental subdivision does not mean any municipal
43.7 	housing and redevelopment authority organized under the
43.8 	provisions of sections 469.001 to 469.047; or any port authority
43.9 	organized under sections 469.048 to 469.089 other than the Port
43.10 	Authority of the city of St. Paul; or any hospital district
43.11 	organized or reorganized prior to July 1, 1975, under sections
43.12 	447.31 to 447.37 or the successor of the district, nor the
43.13 	Minneapolis Community Development Agency.

43.14 	Sec. 6. Minnesota Statutes 2004, section 353.64, is
43.15 	amended by adding a subdivision to read:
43.16 		Subd. 6a.University of minnesota police officers;
43.17 	inclusions and exclusions. (a) Unless paragraph (b) applies, a
43.18 	person who is employed as a peace officer by the University of
43.19 	Minnesota at any campus or facility of the university, who is
43.20 	required by the university to be and is licensed as a peace
43.21 	officer by the Minnesota Peace Officer Standards and Training
43.22 	Board under sections 626.84 to 626.863, and who has the full
43.23 	power of arrest is a member of the public employees police and
43.24 	fire retirement plan.
43.25 	(b) A police officer employed by the University of
43.26 	Minnesota who is required by the Board of Regents to contribute
43.27 	to the University of Minnesota faculty retirement plan is not
43.28 	eligible to be a member of the public employees police and fire
43.29 	retirement plan.

43.30 	Sec. 7. Minnesota Statutes 2004, section 354B.21,
43.31 	subdivision 2, is amended to read:
43.32 		Subd. 2.Coverage; election.  (a) An eligible person is
43.33 	entitled to elect coverage by the plan.  If the eligible person
43.34 	does not make a timely election of coverage by the plan, the
43.35 	person has the coverage specified in subdivision 3.
43.36 	(b) For eligible persons who were employed by the former
44.1 	state university system or the former community college system
44.2 	before May 1, 1995, the person has the retirement coverage that
44.3 	the person had for employment immediately before May 1, 1995.
44.4 	(c) (b) For all other eligible persons, the election of
44.5 	coverage must be made within 90 days of May 10, 1995, or 90 days
44.6 	of receiving notice from the employer of the options available
44.7 	under this section, whichever occurs later unless otherwise
44.8 	specified in this section, the eligible person is authorized to
44.9 	elect prospective Teachers Retirement Association plan coverage
44.10 	rather than coverage by the plan established by this chapter.
44.11 	The election of prospective Teachers Retirement Association plan
44.12 	coverage shall be made within one year of commencing eligible
44.13 	Minnesota State Colleges and Universities system employment.  If
44.14 	an election is not made within the specified election period due
44.15 	to a termination of Minnesota State Colleges and Universities
44.16 	system employment, an election may be made within 90 days of
44.17 	returning to eligible Minnesota State Colleges and Universities
44.18 	system employment.  All elections are irrevocable.  Prior to
44.19 	making an election the eligible person shall be covered by the
44.20 	plan indicated as default coverage under subdivision 3.
44.21 	(c) A purchase of service credit in the Teachers Retirement
44.22 	Association plan for any period or periods of Minnesota State
44.23 	Colleges and Universities system employment occurring prior to
44.24 	the election under paragraph (b) is prohibited.

44.25 	Sec. 8. Minnesota Statutes 2004, section 354B.21,
44.26 	subdivision 3, is amended to read:
44.27 		Subd. 3.Default coverage.  (a) Prior to making an
44.28 	election under subdivision 2, or if an eligible person fails to
44.29 	elect coverage by the plan under subdivision 2 or if the person
44.30 	fails to make a timely election, the following retirement
44.31 	coverage applies:
44.32 	(1) for employees of the board who are employed in faculty
44.33 	positions in the technical colleges, in the state universities
44.34 	or in the community colleges, the retirement coverage is by the
44.35 	plan established by this chapter;
44.36 	(2) for employees of the board who are employed in faculty
45.1 	positions in the technical colleges, the retirement coverage is
45.2 	by the plan established by this chapter unless on June 30, 1997,
45.3 	the employee was a member of the Teachers Retirement Association
45.4 	established under chapter 354 and then the retirement coverage
45.5 	is by the Teachers Retirement Association, or, unless the
45.6 	employee was a member of a first class city teacher retirement
45.7 	fund established under chapter 354A on June 30, 1995, and then
45.8 	the retirement coverage is by the Duluth Teachers Retirement
45.9 	Fund Association if the person was a member of that plan on June
45.10 	30, 1995, or the Minneapolis Teachers Retirement Fund
45.11 	Association if the person was a member of that plan on June 30,
45.12 	1995, or the St. Paul Teachers Retirement Fund Association if
45.13 	the person was a member of that plan on June 30, 1995; and
45.14 	(3) for employees of the board who are employed in eligible
45.15 	unclassified administrative positions, the retirement coverage
45.16 	is by the plan established by this chapter.
45.17 	(b) If an employee fails to correctly certify prior
45.18 	membership in the Teachers Retirement Association to the
45.19 	Minnesota State colleges and Universities system, the system
45.20 	shall not pay interest on employee contributions, employer
45.21 	contributions, and additional employer contributions to the
45.22 	Teachers Retirement Association under section 354.52,
45.23 	subdivision 4.

45.24 	Sec. 9. EFFECTIVE DATE.
 45.25 	(a) Sections 1, 3, 5, and 6 are effective July 1, 2005.
45.26 	(b) Sections 2 and 4 are effective retroactively from
45.27 	January 1, 2005.
45.28 	(c) Sections 7 and 8 are effective the day following final
45.29 	enactment.

45.30 	ARTICLE 5
45.31 	RETIREMENT CONTRIBUTIONS

45.32 	Section 1. Minnesota Statutes 2004, section 353.27,
45.33 	subdivision 2, is amended to read:
45.34 		Subd. 2.Employee contribution.  (a) The employee
45.35 	contribution is the following applicable percentage of the total
45.36 	salary amount for a "basic member" and for a "coordinated
46.1 	member":
46.2 	Basic    Coordinated
46.3 	                                   Program     Program
46.4 	Before January 1, 2002 8.75 4.75
46.5 	Effective January 1, 2002 
46.6 	Effective before January 1, 2006 9.10         5.10
46.7 	Effective January 1, 2006 9.10 5.50
46.8 	Effective January 1, 2007 9.10 5.75
46.9 	Effective January 1, 2008 9.10 6.00 plus any
46.10 	                                                 contribution
46.11 	                                                 rate adjustment
46.12 	                                                 under
46.13 	                                                 subdivision 3b 
46.14 	(b) These contributions must be made by deduction from
46.15 	salary as defined in section 353.01, subdivision 10,in the
46.16 	manner provided in subdivision 4. Where If any portion of a
46.17 	member's salary is paid from other than public funds, such the 
46.18 	member's employee contribution must be based on the total salary
46.19 	received by the member from all sources.

46.20 	Sec. 2. Minnesota Statutes 2004, section 353.27,
46.21 	subdivision 3, is amended to read:
46.22 		Subd. 3.Employer contribution.  (a) The employer
46.23 	contribution is the following applicable percentage of the total
46.24 	salary amount for "basic members" and for "coordinated members":
46.25 	Basic     Coordinated
46.26 	                                 Program      Program
46.27 	Before January 1, 2002 8.75 4.75
46.28 	Effective January 1, 2002 
46.29 	Effective before January 1, 2006 9.10          5.10
46.30 	Effective January 1, 2006 9.10 5.50
46.31 	Effective January 1, 2007 9.10 5.75
46.32 	Effective January 1, 2008 9.10 6.00 plus any
46.33 	                                                contribution
46.34 	                                                rate adjustment
46.35 	                                                under
46.36 	                                                subdivision 3b 
47.1 	(b) This contribution must be made from funds available to
47.2 	the employing subdivision by the means and in the manner
47.3 	provided in section 353.28.

47.4 	Sec. 3. Minnesota Statutes 2004, section 353.27,
47.5 	subdivision 3a, is amended to read:
47.6 		Subd. 3a.Additional employer contribution.  (a) An
47.7 	additional employer contribution must be made equal to (1) 2.68
47.8 	percent of the following applicable percentage of the total
47.9 	salary of each amount for "basic member members ";and (2)
47.10 	.43 percent of the total salary of each for "coordinated member.
47.11 	members ":
47.12 	Basic Coordinated
47.13 	                                    Program Program
47.14 	Effective before January 1, 2006 2.68 .43
47.15 	Effective January 1, 2006 2.68 .50
47.16 	Effective January 1, 2009 2.68 .75
47.17 	Effective January 1, 2010 2.68 1.00 
47.18 	These contributions must be made from funds available to
47.19 	the employing subdivision by the means and in the manner
47.20 	provided in section 353.28.
47.21 	(b) The coordinated program contribution rates set forth in
47.22 	paragraph (a) effective for January 1, 2009, or January 1, 2010,
47.23 	must not be implemented if, following receipt of the July 1,
47.24 	2008, or July 1, 2009, annual actuarial valuation reports under
47.25 	section 356.215, respectively, the actuarially required
47.26 	contributions are equal to or less than the total rates under
47.27 	this section in effect as of January 1, 2008.
47.28 	(c) This subdivision is repealed once the actuarial value
47.29 	of the assets of the plan equal or exceed the actuarial accrued
47.30 	liability of the plan as determined by the actuary retained by
47.31 	the Legislative Commission on Pensions and Retirement under
47.32 	section 356.215.  The repeal is effective on the first day of
47.33 	the first full pay period occurring after March 31 of the
47.34 	calendar year following the issuance of the actuarial valuation
47.35 	upon which the repeal is based.

47.36 	Sec. 4. Minnesota Statutes 2004, section 353.27, is
48.1 	amended by adding a subdivision to read:
48.2 		Subd. 3b.Change in employee and employer contributions
48.3 	in certain instances. (a) For purposes of this section, a
48.4 	contribution sufficiency exists if the total of the employee
48.5 	contribution under subdivision 2, the employer contribution
48.6 	under subdivision 3, the additional employer contribution under
48.7 	subdivision 3a, and any additional contribution previously
48.8 	imposed under this subdivision exceeds the total of the normal
48.9 	cost, the administrative expenses, and the amortization
48.10 	contribution of the retirement plan as reported in the most
48.11 	recent actuarial valuation of the retirement plan prepared by
48.12 	the actuary retained under section 356.214 and prepared under
48.13 	section 356.215 and the standards for actuarial work of the
48.14 	Legislative Commission on Pensions and Retirement.  For purposes
48.15 	of this section, a contribution deficiency exists if the total
48.16 	of the employee contributions under subdivision 2, the employer
48.17 	contributions under subdivision 3, the additional employer
48.18 	contribution under subdivision 3a, and any additional
48.19 	contribution previously imposed under this subdivision is less
48.20 	than the total of the normal cost, the administrative expenses,
48.21 	and the amortization contribution of the retirement plan as
48.22 	reported in the most recent actuarial valuation of the
48.23 	retirement plan prepared by the actuary retained under section
48.24 	356.214 and prepared under section 356.215 and the standards for
48.25 	actuarial work of the Legislative Commission on Pensions and
48.26 	Retirement.
48.27 	(b) Employee and employer contributions under subdivisions
48.28 	2 and 3 must be adjusted:
48.29 	(1) if, after July 1, 2010, the regular actuarial
48.30 	valuations of the general employees retirement plan of the
48.31 	Public Employees Retirement Association under section 356.215
48.32 	indicate that there is a contribution sufficiency under
48.33 	paragraph (a) equal to or greater than 0.5 percent of covered
48.34 	payroll for two consecutive years, the coordinated program
48.35 	employee and employer contribution rates must be decreased as
48.36 	determined under paragraph (c) to a level such that the
49.1 	sufficiency equals no more than 0.25 percent of covered payroll
49.2 	based on the most recent actuarial valuation; or 
49.3 	(2) if, after July 1, 2010, the regular actuarial
49.4 	valuations of the general employees retirement plan of the
49.5 	Public Employees Retirement Association under section 356.215
49.6 	indicate that there is a deficiency equal to or greater than 0.5
49.7 	percent of covered payroll for two consecutive years, the
49.8 	coordinated program employee and employer contribution rates
49.9 	must be increased as determined under paragraph (c) to a level
49.10 	such that no deficiency exists based on the most recent
49.11 	actuarial valuation.
49.12 	(c) The contribution rate increase or decrease must be
49.13 	determined by the executive director of the Public Employees
49.14 	Retirement Association, must be reported to the chair and the
49.15 	executive director of the Legislative Commission on Pensions and
49.16 	Retirement on or before the next February 1, and, if the
49.17 	Legislative Commission on Pensions and Retirement does not
49.18 	recommend against the rate change or does not recommend a
49.19 	modification in the rate change, is effective on the next July 1
49.20 	following the determination by the executive director that a
49.21 	contribution deficiency or sufficiency has existed for two
49.22 	consecutive fiscal years based on the most recent actuarial
49.23 	valuations under section 356.215.  If the actuarially required
49.24 	contribution exceeds or is less than the total support provided
49.25 	by the combined employee and employer contribution rates by more
49.26 	than 0.5 percent of covered payroll, the coordinated program
49.27 	employee and employer contribution rates must be adjusted
49.28 	incrementally over one or more years to a level such that there
49.29 	remains a contribution sufficiency of no more than 0.25 percent
49.30 	of covered payroll.
49.31 	(d) No incremental adjustment may exceed 0.25 percent for
49.32 	either the coordinated program employee and employer
49.33 	contribution rates per year in which any adjustment is
49.34 	implemented.  A contribution rate adjustment under this
49.35 	subdivision must not be made until at least two years have
49.36 	passed since fully implementing a previous adjustment under this
50.1 	subdivision.

50.2 	Sec. 5. Minnesota Statutes 2004, section 353.28,
50.3 	subdivision 5, is amended to read:
50.4 		Subd. 5.Interest charges chargeable on amounts due.  Any
50.5 	amount due under this section or section 353.27, subdivision 4,
50.6 	is payable with interest at an annual compound rate of 8.5
50.7 	percent compounded annually from the date due until the date
50.8 	payment is received by the association, with a minimum interest
50.9 	charge of $10. Interest for past due payments of excess police
50.10 	state aid under section 69.031, subdivision 5, must be charged
50.11 	at an annual rate of 8.5 percent compounded annually.

50.12 	Sec. 6. Minnesota Statutes 2004, section 353.28,
50.13 	subdivision 6, is amended to read:
50.14 		Subd. 6.failure to pay collection of unpaid amounts. (a) 
50.15 	If the a governmental subdivision which receives the direct
50.16 	proceeds of property taxation fails to pay amounts an amount due
50.17 	under chapters chapter 353, 353A, 353B, 353C, and or 353D or
50.18 	fails to make payments of excess police state aid to the public
50.19 	employees police and fire fund under section 69.031, subdivision
50.20 	5, the executive director shall certify those amounts the amount 
50.21 	to the governmental subdivision for payment.  If the
50.22 	governmental subdivision fails to remit the sum so due in a
50.23 	timely fashion, the executive director shall certify amounts the
50.24 	amount to the applicable county auditor for collection.  The
50.25 	county auditor shall collect such amounts the amount out of the
50.26 	revenue of the governmental subdivision, or shall add them the
50.27 	amount to the levy of the governmental subdivision and make
50.28 	payment directly to the association.  This tax shall must be
50.29 	levied, collected, and apportioned in the manner that other
50.30 	taxes are levied, collected, and apportioned.
50.31 	(b) If a governmental subdivision which is not funded
50.32 	directly from the proceeds of property taxation fails to pay an
50.33 	amount due under this chapter, the executive director shall
50.34 	certify the amount to the governmental subdivision for payment.
50.35 	If the governmental subdivision fails to pay the amount for a
50.36 	period of 60 days after certification, the executive director
51.1 	shall certify the amount to the commissioner of finance, who
51.2 	shall deduct the amount from any subsequent state-aid payment or
51.3 	state appropriation amount applicable to the governmental
51.4 	subdivision.

51.5 	Sec. 7. Minnesota Statutes 2004, section 353.65,
51.6 	subdivision 2, is amended to read:
51.7 		Subd. 2.Employee contribution rate. (a) The employee
51.8 	contribution is an amount equal to 6.2 the percent of the total
51.9 	salary of the member specified in paragraph (b).  This
51.10 	contribution must be made by deduction from salary in the manner
51.11 	provided in subdivision 4.  Where any portion of a member's
51.12 	salary is paid from other than public funds, the member's
51.13 	employee contribution is based on the total salary received from
51.14 	all sources.
51.15 	(b) For calendar year 2006, the employee contribution rate
51.16 	is 7.0 percent.  For calendar year 2007, the employee
51.17 	contribution rate is 7.8 percent.  For calendar year 2008, the
51.18 	employee contribution rate is 8.6 percent.  For calendar year
51.19 	2009 and thereafter, the employee contribution rate is 9.4
51.20 	percent.

51.21 	Sec. 8. Minnesota Statutes 2004, section 353.65,
51.22 	subdivision 3, is amended to read:
51.23 		Subd. 3.Employer contribution rate. (a) The employer
51.24 	contribution shall be an amount equal to 9.3 the percent of the
51.25 	total salary of every member as specified in paragraph (b).
51.26 	This contribution shall be made from funds available to the
51.27 	employing subdivision by the means and in the manner provided in
51.28 	section 353.28.
51.29 	(b) For calendar year 2006, the employer contribution rate
51.30 	is 10.5 percent.  For calendar year 2007, the employer
51.31 	contribution rate is 11.7 percent.  For calendar year 2008, the
51.32 	employer contribution rate is 12.9 percent.  For calendar year
51.33 	2009 and thereafter, the employer contribution rate is 14.1
51.34 	percent.

51.35 	Sec. 9. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST
51.36 	ON SERVICE CREDIT PURCHASE PAYMENT RETURN.
 52.1 	If a former employee of the Minneapolis Community
52.2 	Development Agency made a prior service credit purchase payment
52.3 	under Minnesota Statutes 2002, section 356.55, in an amount that
52.4 	is greater than the actually required payment amount because of
52.5 	the use of an inaccurate salary figure or other similar
52.6 	reporting or clerical error, the general employees retirement
52.7 	plan of the Public Employees Retirement Association may pay
52.8 	interest on the overage amount at an annual compound rate of six
52.9 	percent per year.

52.10 	Sec. 10. RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT
52.11 	FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.
 52.12 	(a) An eligible person, upon written application, may
52.13 	receive a return of a prior service credit purchase payment
52.14 	under Minnesota Statutes 2002, section 356.55, plus interest on
52.15 	the amount at an annual compound rate of six percent per year.
52.16 	The return amount and interest must be made in an
52.17 	institution-to-institution transfer to a federal tax qualified
52.18 	retirement plan or account and may not be paid directly to an
52.19 	individual.
52.20 	(b) An eligible person is a person who was an employee of
52.21 	the Minneapolis Community Development Agency and made a payment
52.22 	for the purchase of prior service credit under Laws 2003,
52.23 	chapter 127, article 12, section 31, subdivision 4, and
52.24 	Minnesota Statutes 2002, section 356.55, in an erroneous amount
52.25 	because of an inaccurate salary figure supplied by the employing
52.26 	agency.

52.27 	Sec. 11. EFFECTIVE DATE.
 52.28 	(a) Sections 5 and 6 are effective retroactive to July 1,
52.29 	2005.
52.30 	(b) Sections 9 and 10 are effective the day following final
52.31 	enactment.
52.32 	(c) Section 10 expires June 30, 2005.

52.33 	ARTICLE 6
52.34 	PENSION BENEFITS UPON PRIVATIZATION

52.35 	Section 1. Minnesota Statutes 2004, section 353F.02,
52.36 	subdivision 4, is amended to read:
53.1 		Subd. 4.Medical facility.  "Medical facility" means:
53.2 	(1) Bridges Medical Services;
53.3 	(2) the Fair Oaks Lodge, Wadena;
53.4 	(2) (3) the Glencoe Area Health Center;
53.5 	(3) (4) the Hutchinson Area Health Care;
53.6 	(5) the Kanabec Hospital;
53.7 	(4) (6) the Luverne Public Hospital;
53.8 	(7) the Northfield Hospital;
53.9 	(5) (8) the RenVilla Nursing Home;
53.10 	(6) (9) the Renville County Hospital in Olivia;
53.11 	(7) (10) the St. Peter Community Healthcare Center; and
53.12 	(8) (11) the Waconia-Ridgeview Medical Center.

53.13 	Sec. 2. Minnesota Statutes 2004, section 471A.10, is
53.14 	amended to read:
53.15 	471A.10 PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING
53.16 	FACILITY.
53.17 	(a) Unless expressly provided therein, and except as
53.18 	provided in this section, no state law, charter provision, or
53.19 	ordinance of a municipality relating to public employees shall
53.20 	apply to a person solely by reason of that person's employment
53.21 	by a private vendor in connection with services rendered under a
53.22 	service contract.
53.23 	(b) A private vendor purchasing or leasing existing related
53.24 	facilities from a municipality or operating or maintaining the
53.25 	facility shall recognize all exclusive bargaining
53.26 	representatives and existing labor agreements and those
53.27 	agreements shall remain in force until they expire by their
53.28 	terms.  Persons who are not who were employed by a municipality
53.29 	in a related facility at the time of and who were members of the
53.30 	Public Employees Retirement Association general plan due to that
53.31 	employment are not permitted to remain as active members of the
53.32 	plan following a lease or purchase of the facility by the a 
53.33 	private vendor are not "public employees" within the meaning of
53.34 	the Public Employees Retirement Act, chapter 353.  Persons
53.35 	employed by a municipality in a related facility at the time of
53.36 	a lease or purchase of the facility by a private vendor shall
54.1 	continue to be considered to be "public employees" within the
54.2 	meaning of the Public Employees Retirement Act, chapter 353, but
54.3 	may elect to terminate their participation in the Public
54.4 	Employees Retirement Association as provided in this section.
54.5 	Each such employee may exercise the election annually on the
54.6 	anniversary of the person's initial employment by the
54.7 	municipality.  An employee electing to terminate participation
54.8 	in the association is entitled to benefits that the employee
54.9 	would be entitled to if terminating public employment and may
54.10 	participate in a retirement program established by the private
54.11 	vendor.

54.12 	Sec. 3. Laws 2004, chapter 267, article 12, section 4, is
54.13 	amended to read:
54.14 	Sec. 4EFFECTIVE DATE.
 54.15 	(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
54.16 	effective upon the latter of:
54.17 	(1) the day after the governing body of Todd County and its
54.18 	chief clerical officer timely complete their compliance with
54.19 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
54.20 	(2) the day after the governing body of Wadena County and
54.21 	its chief clerical officer timely complete their compliance with
54.22 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
54.23 	(b) Section 1, relating to the RenVilla Nursing Home, is
54.24 	effective upon the latter of:
54.25 	(1) the day after the governing body of the city of
54.26 	Renville and its chief clerical officer timely complete their
54.27 	compliance with Minnesota Statutes, section 645.021,
54.28 	subdivisions 2 and 3, except that the certificate of approval
54.29 	must be filed before January 1, 2006; and
54.30 	(2) the first day of the month next following certification
54.31 	to the governing body of the city of Renville by the executive
54.32 	director of the Public Employees Retirement Association that the
54.33 	actuarial accrued liability of the special benefit coverage
54.34 	proposed for extension to the privatized RenVilla Nursing Home
54.35 	employees under section 1 does not exceed the actuarial gain
54.36 	otherwise to be accrued by the Public Employees Retirement
55.1 	Association, as calculated by the consulting actuary retained by
55.2 	the Legislative Commission on Pensions and Retirement, or the
55.3 	actuary retained under Minnesota Statutes, section 356.214,
55.4 	whichever is applicable.
55.5 	(c) The cost of the actuarial calculations must be borne by
55.6 	the city of Renville or the purchaser of the RenVilla Nursing
55.7 	Home.
55.8 	(d) Section 1, relating to the St. Peter Community
55.9 	Healthcare Center, is effective upon the latter of:
55.10 	(1) the day after the governing body of the city of St.
55.11 	Peter and its chief clerical officer timely complete their
55.12 	compliance with Minnesota Statutes, section 645.021,
55.13 	subdivisions 2 and 3; and
55.14 	(2) the first day of the month next following certification
55.15 	to the governing body of the city of St. Peter by the executive
55.16 	director of the Public Employees Retirement Association that the
55.17 	actuarial accrued liability of the special benefit coverage
55.18 	proposed for extension to the privatized St. Peter Community
55.19 	Healthcare Center employees under section 1 does not exceed the
55.20 	actuarial gain otherwise to be accrued by the Public Employees
55.21 	Retirement Association, as calculated by the consulting actuary
55.22 	retained by the Legislative Commission on Pensions and
55.23 	Retirement, or the actuary retained under Minnesota Statutes,
55.24 	section 356.214, whichever is applicable.
55.25 	(e) The cost of the actuarial calculations must be borne by
55.26 	the city of St. Peter or the purchaser of the St. Peter
55.27 	Community Healthcare Center.
55.28 	(f) If the required actions under paragraphs (b) and (c)
55.29 	occur, section 1 applies retroactively to the RenVilla Nursing
55.30 	Home as of the date of privatization.
55.31 	(g) If the required actions under paragraph (a) occur,
55.32 	section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
55.33 	of January 1, 2004.
55.34 	(h) Sections 2 and 3 are effective on the day following
55.35 	final enactment.

55.36 	Sec. 4. EFFECTIVE DATE.
 56.1 	(a) Section 1, relating to Bridges Medical Services, is
56.2 	effective upon the later of:
56.3 	(1) the day after the governing body of the city of Ada and
56.4 	its chief clerical officer timely complete their compliance with
56.5 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
56.6 	(2) the first day of the month next following certification
56.7 	to the governing body of the city of Ada by the executive
56.8 	director of the Public Employees Retirement Association that the
56.9 	actuarial accrued liability of the special benefit coverage
56.10 	proposed for extension to the privatized Bridges Medical
56.11 	Services employees under section 1 does not exceed the actuarial
56.12 	gain otherwise to be accrued by the Public Employees Retirement
56.13 	Association, as calculated by the consulting actuary retained
56.14 	under Minnesota Statutes, section 356.214.
56.15 	(b) Section 1, relating to the Hutchinson Area Health Care,
56.16 	is effective upon the later of:
56.17 	(1) the day after the governing body of the city of
56.18 	Hutchinson and its chief clerical officer timely complete their
56.19 	compliance with Minnesota Statutes, section 645.021,
56.20 	subdivisions 2 and 3; and 
56.21 	(2) the first day of the month next following certification
56.22 	to the governing body of the city of Hutchinson by the executive
56.23 	director of the Public Employees Retirement Association that the
56.24 	actuarial accrued liability of the special benefit coverage
56.25 	proposed for extension to the privatized Hutchinson Area Health
56.26 	Care employees under section 1 does not exceed the actuarial
56.27 	gain otherwise to be accrued by the Public Employees Retirement
56.28 	Association, as calculated by the consulting actuary retained by
56.29 	the Legislative Commission on Pensions and Retirement.
56.30 	(c) Section 1, relating to the Northfield Hospital, is
56.31 	effective upon the later of:
56.32 	(1) the day after the governing body of the city of
56.33 	Northfield and its chief clerical officer timely complete their
56.34 	compliance with Minnesota Statutes, section 645.021,
56.35 	subdivisions 2 and 3; and 
56.36 	(2) the first day of the month next following certification
57.1 	to the governing body of the city of Northfield by the executive
57.2 	director of the Public Employees Retirement Association that the
57.3 	actuarial accrued liability of the special benefit coverage
57.4 	proposed for extension to the privatized Northfield Hospital
57.5 	employees under section 1 does not exceed the actuarial gain
57.6 	otherwise to be accrued by the Public Employees Retirement
57.7 	Association, as calculated by the consulting actuary retained by
57.8 	the Legislative Commission on Pensions and Retirement.
57.9 	(d) The cost of the actuarial calculations must be borne by
57.10 	the facility, the city in which the facility is located, or the
57.11 	purchaser of the facility.
57.12 	(e) If the required actions in paragraphs (a), (b), or (c)
57.13 	and (d) occur, section 1 applies retroactively to the date of
57.14 	privatization.
57.15 	(f) Section 3 is effective the day following final
57.16 	enactment.
57.17 	(g) Section 2 is effective the day following final
57.18 	enactment and applies to privatizations occurring on or after
57.19 	the effective date.

57.20 	ARTICLE 7
57.21 	FIRST CLASS CITY TEACHER
57.22 	RETIREMENT FUND ASSOCIATIONS

57.23 	Section 1. Minnesota Statutes 2004, section 354A.021, is
57.24 	amended by adding a subdivision to read:
57.25 		Subd. 9.Updated articles of incorporation and bylaws;
57.26 	filing. (a) On or before July 1, 2006, and within six months of
57.27 	the date of the approval of any amendment to the articles of
57.28 	incorporation or bylaws, the chief administrative officer of
57.29 	each first class city teacher retirement fund association shall
57.30 	prepare and publish an updated compilation of the articles of
57.31 	incorporation and the bylaws of the association.
57.32 	(b) The chief administrative officer of the first class
57.33 	city teacher retirement fund association must certify the
57.34 	accuracy and the completeness of the compilation.
57.35 	(c) The compilation of the articles of incorporation and
57.36 	bylaws of a first class city teacher retirement fund association
58.1 	must contain an index.
58.2 	(d) The compilation must be made available to association
58.3 	members and other interested parties.  The association may
58.4 	charge a fee for a copy that reflects the price of printing or
58.5 	otherwise producing the copy.  Two copies of the compilation
58.6 	must be filed, without charge, by each retirement fund
58.7 	association with the Legislation Commission on Pensions and
58.8 	Retirement, the Legislative Reference Library, the state
58.9 	auditor, the commissioner of education, the chancellor of the
58.10 	Minnesota State Colleges and Universities system, and the
58.11 	superintendent of the applicable school district.
58.12 	(e) A first class city teacher retirement fund association
58.13 	may contract with the revisor of statutes for the preparation of
58.14 	the compilation.
58.15 	(f) If a first class city teacher retirement fund
58.16 	association makes an updated copy of its articles of
58.17 	incorporation and bylaws available on its Web site, the
58.18 	retirement fund association is not obligated to file a hard copy
58.19 	of the documents under paragraph (d) for the applicable filing
58.20 	period.

58.21 	Sec. 2. EFFECTIVE DATE.
 58.22 	Section 1 is effective July 1, 2005.

58.23 	ARTICLE 8
58.24 	MINNESOTA STATE COLLEGES AND UNIVERSITIES
58.25 	INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES

58.26 	Section 1. Minnesota Statutes 2004, section 354B.25,
58.27 	subdivision 2, is amended to read:
58.28 		Subd. 2.Investment options. (a) The plan administrator
58.29 	shall arrange for the purchase of investment products.
58.30 	(b) The investment products must be purchased with
58.31 	contributions under section 354B.23 or with money or assets
58.32 	otherwise provided by law by authority of the board.
58.33 	(c) Various investment accounts offered through the
58.34 	Minnesota supplemental investment fund established under section
58.35 	11A.17 and administered by the State Board of Investment is one
58.36 	of the may be included as investment products for the individual
59.1 	retirement account plan.  Direct access must also be provided to
59.2 	lower expense and no-load mutual funds, as those terms are
59.3 	defined by the federal Securities and Exchange Commission,
59.4 	including stock funds, bond funds, and balanced funds.  Other
59.5 	investment products or combination of investment products which
59.6 	may be included are:
59.7 	(1) savings accounts at federally insured financial
59.8 	institutions;
59.9 	(2) life insurance contracts, fixed and variable annuity
59.10 	contracts from companies that are subject to regulation by the
59.11 	commerce commissioner;
59.12 	(3) investment options from open-ended investment companies
59.13 	registered under the federal Investment Company Act of 1940,
59.14 	United States Code, title 15, sections 80a-1 to 80a-64;
59.15 	(4) investment options from a firm that is a registered
59.16 	investment advisor under the federal Investment Advisers Act of
59.17 	1940, United States Code, title 15, sections 80b-1 to 80b-21;
59.18 	and
59.19 	(5) investment options of a bank as defined in United
59.20 	States Code, title 15, section 80b-2, subsection (a), paragraph
59.21 	2, or a bank holding company as defined in the Bank Holding
59.22 	Company Act of 1956, United States Code, title 12, section 1841,
59.23 	subsection (a), paragraph (1).

59.24 	Sec. 2. EFFECTIVE DATE.
 59.25 	Section 1 is effective the day following final enactment.

59.26 	ARTICLE 9
59.27 	VOLUNTEER FIREFIGHTER RELIEF
59.28 	ASSOCIATION CHANGES

59.29 	Section 1. Minnesota Statutes 2004, section 69.051,
59.30 	subdivision 1, is amended to read:
59.31 		Subdivision 1.Financial report and audit.  The board of
59.32 	each salaried firefighters relief association, police relief
59.33 	association, and volunteer firefighters relief association as
59.34 	defined in section 424A.001, subdivision 4, with assets of at
59.35 	least $200,000 or liabilities of at least $200,000 in the prior
59.36 	year or in any previous year, according to the most recent 
60.1 	applicable actuarial valuation or financial report if no
60.2 	valuation is required, shall:
60.3 	(1) prepare a financial report covering the special and
60.4 	general funds of the relief association for the preceding fiscal
60.5 	year on a form prescribed by the state auditor.  The financial
60.6 	report shall must contain financial statements and disclosures
60.7 	which present the true financial condition of the relief
60.8 	association and the results of relief association operations in
60.9 	conformity with generally accepted accounting principles and in
60.10 	compliance with the regulatory, financing and funding provisions
60.11 	of this chapter and any other applicable laws.  The financial
60.12 	report shall must be countersigned by the municipal clerk or
60.13 	clerk-treasurer of the municipality in which the relief
60.14 	association is located if the relief association is a
60.15 	firefighters relief association which is directly associated
60.16 	with a municipal fire department or is a police relief
60.17 	association, or countersigned by the secretary of the
60.18 	independent nonprofit firefighting corporation and by the
60.19 	municipal clerk or clerk-treasurer of the largest municipality
60.20 	in population which contracts with the independent nonprofit
60.21 	firefighting corporation if the volunteer firefighter relief
60.22 	association is a subsidiary of an independent nonprofit
60.23 	firefighting corporation;
60.24 	(2) file the financial report in its office for public
60.25 	inspection and present it to the city council after the close of
60.26 	the fiscal year.  One copy of the financial report shall must be
60.27 	furnished to the state auditor after the close of the fiscal
60.28 	year; and
60.29 	(3) submit to the state auditor audited financial
60.30 	statements which have been attested to by a certified public
60.31 	accountant, public accountant, or the state auditor within 180
60.32 	days after the close of the fiscal year.  The state auditor may
60.33 	accept this report in lieu of the report required in clause (2).

60.34 	Sec. 2. Minnesota Statutes 2004, section 69.051,
60.35 	subdivision 1a, is amended to read:
60.36 		Subd. 1a.Financial statement.  (a) The board of each
61.1 	volunteer firefighters relief association, as defined in section
61.2 	424A.001, subdivision 4, with assets of less than $200,000 and
61.3 	liabilities less than $200,000, according to the most recent
61.4 	financial report, shall that is not required to file a financial
61.5 	report and audit under subdivision 1 must prepare a detailed
61.6 	statement of the financial affairs for the preceding fiscal year
61.7 	of the relief association's special and general funds in the
61.8 	style and form prescribed by the state auditor.  The detailed
61.9 	statement must show the sources and amounts of all money
61.10 	received; all disbursements, accounts payable and accounts
61.11 	receivable; the amount of money remaining in the treasury; total
61.12 	assets including a listing of all investments; the accrued
61.13 	liabilities; and all items necessary to show accurately the
61.14 	revenues and expenditures and financial position of the relief
61.15 	association.
61.16 	(b) The detailed financial statement required under
61.17 	paragraph (a) must be certified by an independent public
61.18 	accountant or auditor or by the auditor or accountant who
61.19 	regularly examines or audits the financial transactions of the
61.20 	municipality.  In addition to certifying the financial condition
61.21 	of the special and general funds of the relief association, the
61.22 	accountant or auditor conducting the examination shall give an
61.23 	opinion as to the condition of the special and general funds of
61.24 	the relief association, and shall comment upon any exceptions to
61.25 	the report.  The independent accountant or auditor shall must 
61.26 	have at least five years of public accounting, auditing, or
61.27 	similar experience, and shall must not be an active, inactive,
61.28 	or retired member of the relief association or the fire or
61.29 	police department.
61.30 	(c) The detailed statement required under paragraph (a)
61.31 	must be countersigned by the municipal clerk or clerk-treasurer
61.32 	of the municipality, or, where applicable, by the secretary of
61.33 	the independent nonprofit firefighting corporation and by the
61.34 	municipal clerk or clerk-treasurer of the largest municipality
61.35 	in population which contracts with the independent nonprofit
61.36 	firefighting corporation if the relief association is a
62.1 	subsidiary of an independent nonprofit firefighting corporation.
62.2 	(d) The volunteer firefighters' relief association board
62.3 	must file the detailed statement required under paragraph (a) in
62.4 	the relief association office for public inspection and present
62.5 	it to the city council within 45 days after the close of the
62.6 	fiscal year, and must submit a copy of the detailed statement to
62.7 	the state auditor within 90 days of the close of the fiscal year.

62.8 	Sec. 3. Minnesota Statutes 2004, section 69.771, is
62.9 	amended to read:
62.10 	69.771 VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
62.11 	FINANCING GUIDELINES ACT; APPLICATION.
62.12 		Subdivision 1.Covered relief associations. The
62.13 	applicable provisions of sections 69.771 to 69.776shall apply
62.14 	to any firefighters' relief association other than a relief
62.15 	association enumerated in section 69.77, subdivision 1a, which
62.16 	is organized under any laws of this state, which is composed of
62.17 	volunteer firefighters or is composed partially of volunteer
62.18 	firefighters and partially of salaried firefighters with
62.19 	retirement coverage provided by the public employees police and
62.20 	fire fund and which, in either case,operates subject to the
62.21 	service pension minimum requirements for entitlement and
62.22 	maximums contained in section 424A.02, or subject to a special
62.23 	law modifying those requirements or maximums.
62.24 		Subd. 2.Authorized employer support for a relief
62.25 	association. Notwithstanding any law to the contrary, a
62.26 	municipality may lawfully contribute public funds, including the
62.27 	transfer of any applicable fire state aid, or may levy property
62.28 	taxes for the support of a firefighters' relief association
62.29 	specified in subdivision 1, however organized, which provides
62.30 	retirement coverage or pays a service pension to retired
62.31 	firefighter or a retirement benefit to a disabled firefighter or
62.32 	a surviving dependent of either an active or retired firefighter
62.33 	for the operation and maintenance of the relief association only
62.34 	if the municipality and the relief association both comply with
62.35 	the applicable provisions of sections 69.771 to 69.776.
62.36 		Subd. 3.Remedy for noncompliance; determination.
 63.1 	Any (a) A municipality in which there exists a firefighters'
63.2 	relief association as specified in subdivision 1 which does not
63.3 	comply with the applicable provisions of sections 69.771 to
63.4 	69.776 or the provisions of any applicable special law relating
63.5 	to the funding or financing of the association shall does not
63.6 	qualify initially to receive, or be and is not entitled
63.7 	subsequently to retain, fire state aid pursuant to under 
63.8 	sections 69.011 to 69.051 until the reason for the 
63.9 	disqualification specified by the state auditor is remedied,
63.10 	whereupon the municipality or relief association, if otherwise
63.11 	qualified, shall be is entitled to again receive fire state aid
63.12 	for the year occurring immediately subsequent to the year in
63.13 	which the disqualification is remedied.
63.14 	(b) The state auditor shall determine if a municipality to
63.15 	which a firefighters' relief association is directly associated
63.16 	or a firefighters' relief association fails to comply with the
63.17 	provisions of sections 69.771 to 69.776 or the funding or
63.18 	financing provisions of any applicable special law based upon
63.19 	the information contained in the annual financial report of the
63.20 	firefighters' relief association required pursuant to under 
63.21 	section 69.051., the actuarial valuation of the relief
63.22 	association, if applicable, the relief association officers'
63.23 	financial requirements of the relief association and minimum
63.24 	municipal obligation determination documentation under section
63.25 	69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
63.26 	69.774, subdivision 2, if requested to be filed by the state
63.27 	auditor, the applicable municipal or nonprofit firefighting
63.28 	corporation budget, if requested to be filed by the state
63.29 	auditor, and any other relevant documents or reports obtained by
63.30 	the state auditor.
63.31 	(c) The municipality or nonprofit firefighting corporation
63.32 	and the associated relief association are not eligible to
63.33 	receive or to retain fire state aid if:
63.34 	(1) the relief association fails to prepare or to file the
63.35 	financial report or financial statement under section 69.051;
63.36 	(2) the relief association treasurer is not bonded in the
64.1 	manner and in the amount required by section 69.051, subdivision
64.2 	2;
64.3 	(3) the relief association officers fail to determine or
64.4 	improperly determine the accrued liability and the annual
64.5 	accruing liability of the relief association under section
64.6 	69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
64.7 	applicable;
64.8 	(4) if applicable, the relief association officers fail to
64.9 	obtain and file a required actuarial valuation or the officers
64.10 	file an actuarial valuation that does not contain the special
64.11 	fund actuarial liability calculated under the entry age normal
64.12 	actuarial cost method, the special fund current assets, the
64.13 	special fund unfunded actuarial accrued liability, the special
64.14 	fund normal cost under the entry age normal actuarial cost
64.15 	method, the amortization requirement for the special fund
64.16 	unfunded actuarial accrued liability by the applicable target
64.17 	date, a summary of the applicable benefit plan, a summary of the
64.18 	membership of the relief association, a summary of the actuarial
64.19 	assumptions used in preparing the valuation, and a signed
64.20 	statement by the actuary attesting to its results and certifying
64.21 	to the qualifications of the actuary as an approved actuary
64.22 	under section 356.215, subdivision 1, paragraph (c);
64.23 	(5) the municipality failed to provide a municipal
64.24 	contribution, or the nonprofit firefighting corporation failed
64.25 	to provide a corporate contribution, in the amount equal to the
64.26 	minimum municipal obligation if the relief association is
64.27 	governed under section 69.772, or the amount necessary, when
64.28 	added to the fire state aid actually received in the plan year
64.29 	in question, to at least equal in total the calculated annual
64.30 	financial requirements of the special fund of the relief
64.31 	association if the relief association is governed under section
64.32 	69.773, and, if the municipal or corporate contribution is
64.33 	deficient, the municipality failed to include the minimum
64.34 	municipal obligation certified under section 69.772, subdivision
64.35 	3, or 69.773, subdivision 5, in its budget and tax levy or the
64.36 	nonprofit firefighting corporation failed to include the minimum
65.1 	corporate obligation certified under section 69.774, subdivision
65.2 	2, in the corporate budget;
65.3 	(6) the relief association did not receive municipal
65.4 	ratification for the most recent plan amendment when municipal
65.5 	ratification was required under section 69.772, subdivision 6;
65.6 	69.773, subdivision 6; or 424A.02, subdivision 10;
65.7 	(7) the relief association invested special fund assets in
65.8 	an investment security that is not authorized under section
65.9 	69.775;
65.10 	(8) the relief association had an administrative expense
65.11 	that is not authorized under section 69.80 or 424A.05,
65.12 	subdivision 3, or the municipality had an expenditure that is
65.13 	not authorized under section 424A.08;
65.14 	(9) the relief association officers fail to provide a
65.15 	complete and accurate public pension plan investment portfolio
65.16 	and performance disclosure under section 356.219;
65.17 	(10) the relief association fails to obtain the
65.18 	acknowledgment from a broker of the statement of investment
65.19 	restrictions under section 356A.06, subdivision 8b;
65.20 	(11) the relief association officers permitted to occur a
65.21 	prohibited transaction under section 356A.06, subdivision 9, or
65.22 	424A.001, subdivision 7, or failed to undertake correction of a
65.23 	prohibited transaction that did occur; or 
65.24 	(12) the relief association pays a defined benefit service
65.25 	pension in an amount that is in excess of the applicable service
65.26 	pension maximum under section 424A.02, subdivision 3.

65.27 	Sec. 4. Minnesota Statutes 2004, section 69.772,
65.28 	subdivision 3, is amended to read:
65.29 		Subd. 3.Financial requirements of relief association;
65.30 	minimum obligation of municipality. (a) During the month of
65.31 	July, the officers of the relief association shall determine the
65.32 	overall funding balance of the special fund for the current
65.33 	calendar year, the financial requirements of the special fund
65.34 	for the following calendar year and the minimum obligation of
65.35 	the municipality with respect to the special fund for the
65.36 	following calendar year in accordance with the requirements of
66.1 	this subdivision.
66.2 	(1) (b) The overall funding balance of the special fund for
66.3 	the current calendar year shall must be determined in the
66.4 	following manner:
66.5 	(a) (1) The total accrued liability of the special fund for
66.6 	all active and deferred members of the relief association as of
66.7 	December 31 of the current year shall must be calculated
66.8 	pursuant to under subdivisions 2 and 2a, if applicable.
66.9 	(b) (2) The total present assets of the special fund
66.10 	projected to December 31 of the current year, including receipts
66.11 	by and disbursements from the special fund anticipated to occur
66.12 	on or before December 31 shall , must be calculated.  To the
66.13 	extent possible, for those assets for which a market value is
66.14 	readily ascertainable, the current market value as of the date
66.15 	of the calculation for those assets shall must be utilized in
66.16 	making this calculation.  For any asset for which no market
66.17 	value is readily ascertainable, the cost value or the book
66.18 	value, whichever is applicable, shall must be utilized in making
66.19 	this calculation.
66.20 	(c) (3) The amount of the total present assets of the
66.21 	special fund calculated pursuant to under clause (b) shall (2)
66.22 	must be subtracted from the amount of the total accrued
66.23 	liability of the special fund calculated pursuant to under 
66.24 	clause (a) (1).  If the amount of total present assets exceeds
66.25 	the amount of the total accrued liability, then the special fund
66.26 	shall be is considered to have a surplus over full funding.  If
66.27 	the amount of the total present assets is less than the amount
66.28 	of the total accrued liability, then the special fund shall be 
66.29 	is considered to have a deficit from full funding.  If the
66.30 	amount of total present assets is equal to the amount of the
66.31 	total accrued liability, then the special fund shall be is 
66.32 	considered to be fully funded.
66.33 	(2) (c) The financial requirements of the special fund for
66.34 	the following calendar year shall must be determined in the
66.35 	following manner:
66.36 	(a) (1) The total accrued liability of the special fund for
67.1 	all active and deferred members of the relief association as of
67.2 	December 31 of the calendar year next following the current
67.3 	calendar year shall must be calculated pursuant to under 
67.4 	subdivisions 2 and 2a, if applicable.
67.5 	(b) (2) The increase in the total accrued liability of the
67.6 	special fund for the following calendar year over the total
67.7 	accrued liability of the special fund for the current year shall 
67.8 	must be calculated.
67.9 	(c) (3) The amount of anticipated future administrative
67.10 	expenses of the special fund shall must be calculated by
67.11 	multiplying the dollar amount of the administrative expenses of
67.12 	the special fund for the most recent prior calendar year by the
67.13 	factor of 1.035.
67.14 	(d) (4) If the special fund is fully funded, the financial
67.15 	requirement requirements of the special fund for the following
67.16 	calendar year shall be are the figure which represents the
67.17 	increase in the total accrued liability of the special fund as 
67.18 	amounts calculated pursuant to subclause (b) under clauses (2)
67.19 	and (3).
67.20 	(e) (5) If the special fund has a deficit from full
67.21 	funding, the financial requirements of the special fund for the
67.22 	following calendar year shall be are the financial requirements
67.23 	of the special fund calculated as though the special fund were
67.24 	fully funded pursuant to subclause (d) under clause (4) plus an
67.25 	amount equal to one-tenth of the original amount of the deficit
67.26 	from full funding of the special fund as determined pursuant to
67.27 	this section for the calendar year 1971 until that deficit from
67.28 	full funding is fully retired, and plus an amount equal to
67.29 	one-tenth of the increase in the deficit from full funding of
67.30 	the special fund under clause (2) resulting either from an
67.31 	increase in the amount of the service pension accruing after
67.32 	December 31, 1971 occurring in the last ten years or from a net
67.33 	annual investment loss occurring during the last ten years until
67.34 	each increase in the deficit from full funding is fully
67.35 	retired. The annual amortization contribution under this clause
67.36 	may not exceed the amount of the deficit from full funding.
68.1 	(f) (6) If the special fund has a surplus over full
68.2 	funding, the financial requirements of the special fund for the
68.3 	following calendar year shall be are the financial requirements
68.4 	of the special fund calculated as though the special fund were
68.5 	fully funded pursuant to subclause (d) under clause (4) reduced
68.6 	by an amount equal to one-tenth of the amount of the surplus
68.7 	over full funding of the special fund.
68.8 	(3) (d) The minimum obligation of the municipality with
68.9 	respect to the special fund shall be is the financial
68.10 	requirements of the special fund reduced by the amount of any
68.11 	fire state aid payable pursuant to under sections 69.011 to
68.12 	69.051 reasonably anticipated to be received by the municipality
68.13 	for transmittal to the special fund during the following
68.14 	calendar year, an amount of interest on the assets of the
68.15 	special fund projected to the beginning of the following
68.16 	calendar year calculated at the rate of five percent per annum,
68.17 	and the amount of any anticipated contributions to the special
68.18 	fund required by the relief association bylaws from the active 
68.19 	members of the relief association reasonably anticipated to be
68.20 	received during the following calendar year. A reasonable
68.21 	amount of anticipated fire state aid is an amount that does not
68.22 	exceed the fire state aid actually received in the prior year
68.23 	multiplied by the factor 1.035.

68.24 	Sec. 5. Minnesota Statutes 2004, section 69.772,
68.25 	subdivision 4, is amended to read:
68.26 		Subd. 4.Certification of financial requirements and
68.27 	minimum municipal obligation; levy. (a) The officers of the
68.28 	relief association shall certify the financial requirements of
68.29 	the special fund of the relief association and the minimum
68.30 	obligation of the municipality with respect to the special fund
68.31 	of the relief association as determined pursuant to under 
68.32 	subdivision 3 to the governing body of the municipality on or
68.33 	before August 1 of each year. The financial requirements of the
68.34 	relief association and the minimum municipal obligation must be
68.35 	included in the financial report or financial statement under
68.36 	section 69.051.
69.1 	(b) The municipality shall provide for at least the minimum
69.2 	obligation of the municipality with respect to the special fund
69.3 	of the relief association by tax levy or from any other source
69.4 	of public revenue.
69.5 	(c) The municipality may levy taxes for the payment of the
69.6 	minimum municipal obligation without any limitation as to rate
69.7 	or amount and irrespective of any limitations imposed by other
69.8 	provisions of law upon the rate or amount of taxation until the
69.9 	balance of the special fund or any fund of the relief
69.10 	association has attained a specified level.  In addition, any
69.11 	taxes levied pursuant to under this section shall must not cause
69.12 	the amount or rate of any other taxes levied in that year or to
69.13 	be levied in a subsequent year by the municipality which are
69.14 	subject to a limitation as to rate or amount to be reduced.
69.15 	(d) If the municipality does not include the full amount of
69.16 	the minimum municipal obligations in its levy for any year, the
69.17 	officers of the relief association shall certify that amount to
69.18 	the county auditor, who shall spread a levy in the amount of the
69.19 	certified minimum municipal obligation on the taxable property
69.20 	of the municipality.
69.21 	(e) If the state auditor determines that a municipal
69.22 	contribution actually made in a plan year was insufficient under
69.23 	section 69.771, subdivision 3, paragraph (c), clause (5), the
69.24 	state auditor may request a copy of the certifications under
69.25 	this subdivision from the relief association or from the city.
69.26 	The relief association or the city, whichever applies, must
69.27 	provide the certifications within 14 days of the date of the
69.28 	request from the state auditor.

69.29 	Sec. 6. Minnesota Statutes 2004, section 69.773,
69.30 	subdivision 4, is amended to read:
69.31 		Subd. 4.Financial requirements of special fund. Prior
69.32 	to (a) On or before August 1 of each year, the officers of the
69.33 	relief association shall determine the financial requirements of
69.34 	the special fund of the relief association in accordance with
69.35 	the requirements of this subdivision.
69.36 	(b) The financial requirements of the relief
70.1 	association shall must be based on the most recent actuarial
70.2 	valuation of the special fund prepared in accordance with
70.3 	subdivision 2.  If the relief association has an unfunded
70.4 	actuarial accrued liability as reported in the most recent
70.5 	actuarial valuation, the financial requirements shall must be
70.6 	determined by adding the figures calculated pursuant to under
70.7 	paragraph (d),clauses (a) (1), (b) (2), and (c) (3).  If
70.8 	the relief association does not have an unfunded actuarial
70.9 	accrued liability as reported in the most recent actuarial
70.10 	valuation, the financial requirements shall must be an amount
70.11 	equal to the figure calculated pursuant to under paragraph (d),
70.12 	clauses (a) (1) and (b) (2), reduced by an amount equal to
70.13 	one-tenth of the amount of any assets in excess of the actuarial
70.14 	accrued liability of the relief association.
70.15 	(c) The determination of whether or not the relief
70.16 	association has an unfunded actuarial accrued liability
70.17 	shall must be based on the current market value of assets for
70.18 	which a market value is readily ascertainable and the cost or
70.19 	book value, whichever is applicable, for assets for which no
70.20 	market value is readily ascertainable.
70.21 	(a) (d) The components of the financial requirements of the
70.22 	relief association are the following:
70.23 	(1) The normal level cost requirement for the following
70.24 	year, expressed as a dollar amount, shall be is the figure for
70.25 	the normal level cost of the relief association as reported in
70.26 	the actuarial valuation.
70.27 	(b) (2) The amount of anticipated future administrative
70.28 	expenses of the special fund shall must be calculated by
70.29 	multiplying the dollar amount of the administrative expenses of
70.30 	the special fund for the most recent prior calendar year by the
70.31 	factor of 1.035.
70.32 	(c) (3) The amortization contribution requirement to retire
70.33 	the current unfunded actuarial accrued liability by the
70.34 	established date for full funding shall be is the figure for the
70.35 	amortization contribution as reported in the actuarial
70.36 	valuation.  If there has not been a change in the actuarial
71.1 	assumptions used for calculating the actuarial accrued liability
71.2 	of the special fund, a change in the bylaws of the relief
71.3 	association governing the service pensions, retirement benefits,
71.4 	or both,payable from the special fund,or a change in the
71.5 	actuarial cost method used to value all or a portion of the
71.6 	special fund which change or changes, which by themselves,
71.7 	without inclusion of any other items of increase or decrease,
71.8 	produce a net increase in the unfunded actuarial accrued
71.9 	liability of the special fund since December 31, 1970, the
71.10 	established date for full funding shall be is the December 31,
71.11 	1990 occurring ten years later.  If there has been a change in
71.12 	the actuarial assumptions used for calculating the actuarial
71.13 	accrued liability of the special fund, a change in the bylaws of
71.14 	the relief association governing the service pensions,
71.15 	retirement benefits, or both payable from the special fund or a
71.16 	change in the actuarial cost method used to value all or a
71.17 	portion of the special fund and the change or changes, by
71.18 	themselves and without inclusion of any other items of increase
71.19 	or decrease, produce a net increase in the unfunded actuarial
71.20 	accrued liability of the special fund since December 31, 1970,
71.21 	but prior to January 1, 1979 within the past 20 years, the
71.22 	established date for full funding shall be December 31, 1998,
71.23 	and if there has been a change since December 31, 1978, the
71.24 	established date for full funding shall must be determined using
71.25 	the following procedure:
71.26 	(i) the unfunded actuarial accrued liability of the special
71.27 	fund attributable to experience losses that have occurred since
71.28 	the most recent prior actuarial valuation must be determined and
71.29 	the level annual dollar contribution needed to amortize the
71.30 	experience loss over a period of ten years ending on the
71.31 	December 31 occurring ten years later must be calculated;
71.32 	(ii) the unfunded actuarial accrued liability of the
71.33 	special fund shall must be determined in accordance with the
71.34 	provisions governing service pensions, retirement benefits, and
71.35 	actuarial assumptions in effect before an applicable change;
71.36 	(ii) (iii) the level annual dollar contribution needed to
72.1 	amortize this unfunded actuarial accrued liability amount by the
72.2 	date for full funding in effect prior to before the change shall 
72.3 	must be calculated using the interest assumption specified in
72.4 	section 356.215, subdivision 8, in effect before any applicable
72.5 	change;
72.6 	(iii) (iv) the unfunded actuarial accrued liability of the
72.7 	special fund shall must be determined in accordance with any new
72.8 	provisions governing service pensions, retirement benefits, and
72.9 	actuarial assumptions and the remaining provisions governing
72.10 	service pensions, retirement benefits, and actuarial assumptions
72.11 	in effect before an applicable change;
72.12 	(iv) (v) the level annual dollar contribution needed to
72.13 	amortize the difference between the unfunded actuarial accrued
72.14 	liability amount calculated pursuant to subclause (i) under item
72.15 	(ii) and the unfunded actuarial accrued liability amount
72.16 	calculated pursuant to subclause (iii) under item (iv) over a
72.17 	period of 20 years starting December 31 of the year in which the
72.18 	change is effective shall must be calculated using the interest
72.19 	assumption specified in section 356.215, subdivision 8, in
72.20 	effect after any applicable change;
72.21 	(v) (vi) the annual amortization contribution calculated
72.22 	pursuant to subclause (iv) shall under item (v) must be added to
72.23 	the annual amortization contribution calculated pursuant to
72.24 	subclause (ii) under items (i) and (iii);
72.25 	(vi) (vii) the period in which the unfunded actuarial
72.26 	accrued liability amount determined in subclause (iii) item (iv) 
72.27 	will be amortized by the total annual amortization contribution
72.28 	computed pursuant to subclause (v) shall under item (vi) must be
72.29 	calculated using the interest assumption specified in section
72.30 	356.215, subdivision 8, in effect after any applicable change,
72.31 	rounded to the nearest integral number of years, but which shall 
72.32 	must not exceed a period of 20 years from the end of the year in
72.33 	which the determination of the date for full funding using this
72.34 	procedure is made and which shall must not be less than the
72.35 	period of years beginning in the year in which the determination
72.36 	of the date for full funding using this procedure is made and
73.1 	ending by the date for full funding in effect before the change;
73.2 	(vii) (viii) the period determined pursuant to subclause
73.3 	(vi) shall under item (vii) must be added to the date as of
73.4 	which the actuarial valuation was prepared and the resulting
73.5 	date shall be is the new date for full funding.

73.6 	Sec. 7. Minnesota Statutes 2004, section 69.773,
73.7 	subdivision 5, is amended to read:
73.8 		Subd. 5.Minimum municipal obligation. (a) The officers
73.9 	of the relief association shall determine the minimum obligation
73.10 	of the municipality with respect to the special fund of the
73.11 	relief association for the following calendar year prior to on
73.12 	or before August 1 of each year in accordance with the
73.13 	requirements of this subdivision.
73.14 	(b) The minimum obligation of the municipality with respect
73.15 	to the special fund shall be is an amount equal to the financial
73.16 	requirements of the special fund of the relief association
73.17 	determined pursuant to under subdivision 4, reduced by the
73.18 	estimated amount of any fire state aid payable pursuant to under 
73.19 	sections 69.011 to 69.051reasonably anticipated to be received
73.20 	by the municipality for transmittal to the special fund of the
73.21 	relief association during the following year and the amount of
73.22 	any anticipated contributions to the special fund required by
73.23 	the relief association bylaws from the active members of the
73.24 	relief association reasonably anticipated to be received during
73.25 	the following calendar year. A reasonable amount of anticipated
73.26 	fire state aid is an amount that does not exceed the fire state
73.27 	aid actually received in the prior year multiplied by the factor
73.28 	1.035.
73.29 	(c) The officers of the relief association shall certify
73.30 	the financial requirements of the special fund of the relief
73.31 	association and the minimum obligation of the municipality with
73.32 	respect to the special fund of the relief association as
73.33 	determined pursuant to under subdivision 4 and this subdivision
73.34 	to the governing body of the municipality by August 1 of each
73.35 	year. The financial requirements of the relief association and
73.36 	the minimum municipal obligation must be included in the
74.1 	financial report or financial statement under section 69.051.
74.2 	(d) The municipality shall provide for at least the minimum
74.3 	obligation of the municipality with respect to the special fund
74.4 	of the relief association by tax levy or from any other source
74.5 	of public revenue.  The municipality may levy taxes for the
74.6 	payment of the minimum municipal obligation without any
74.7 	limitation as to rate or amount and irrespective of any
74.8 	limitations imposed by other provisions of law or charter upon
74.9 	the rate or amount of taxation until the balance of the special
74.10 	fund or any fund of the relief association has attained a
74.11 	specified level.  In addition, any taxes levied pursuant to 
74.12 	under this section shall must not cause the amount or rate of
74.13 	any other taxes levied in that year or to be levied in a
74.14 	subsequent year by the municipality which are subject to a
74.15 	limitation as to rate or amount to be reduced.
74.16 	(e) If the municipality does not include the full amount of
74.17 	the minimum municipal obligation in its levy for any year, the
74.18 	officers of the relief association shall certify that amount to
74.19 	the county auditor, who shall spread a levy in the amount of the
74.20 	minimum municipal obligation on the taxable property of the
74.21 	municipality.
74.22 	(f) If the state auditor determines that a municipal
74.23 	contribution actually made in a plan year was insufficient under
74.24 	section 69.771, subdivision 3, paragraph (c), clause (5), the
74.25 	state auditor may request from the relief association or from
74.26 	the city a copy of the certifications under this subdivision.
74.27 	The relief association or the city, whichever applies, must
74.28 	provide the certifications within 14 days of the date of the
74.29 	request from the state auditor.

74.30 	Sec. 8. Minnesota Statutes 2004, section 69.775, is
74.31 	amended to read:
74.32 	69.775 INVESTMENTS.
74.33 	(a) The special fund assets of the a relief associations 
74.34 	association governed by sections 69.771 to 69.776 must be
74.35 	invested in securities that are authorized investments under
74.36 	section 356A.06, subdivision 6 or 7.
75.1 	(b) Notwithstanding the foregoing, up to 75 percent of the
75.2 	market value of the assets of the special fund, not including
75.3 	any money market mutual funds,may be invested in open-end
75.4 	investment companies registered under the federal Investment
75.5 	Company Act of 1940, if the portfolio investments of the
75.6 	investment companies comply with the type of securities
75.7 	authorized for investment under section 356A.06, subdivision 7.
75.8 	(c) Securities held by the associations before June 2,
75.9 	1989, that do not meet the requirements of this section may be
75.10 	retained after that date if they were proper investments for the
75.11 	association on that date.
75.12 	(d) The governing board of the association may select and
75.13 	appoint investment agencies to act for and in its behalf or may
75.14 	certify special fund assets for investment by the State Board of
75.15 	Investment under section 11A.17.
75.16 	(e) The governing board of the association may certify
75.17 	general fund assets of the relief association for investment by
75.18 	the State Board of Investment in fixed income pools or in a
75.19 	separately managed account at the discretion of the State Board
75.20 	of Investment as provided in section 11A.14.
75.21 	(f) The governing board of the association may select and
75.22 	appoint a qualified private firm to measure management
75.23 	performance and return on investment, and the firm shall use the
75.24 	formula or formulas developed by the state board under section
75.25 	11A.04, clause (11).

75.26 	Sec. 9. Minnesota Statutes 2004, section 356A.06,
75.27 	subdivision 7, is amended to read:
75.28 		Subd. 7.Expanded list of authorized investment
75.29 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
75.30 	authorized by law or bylaws, a covered pension plan not
75.31 	described by subdivision 6, paragraph (a), may invest its assets
75.32 	only in accordance with this subdivision.
75.33 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
75.34 	the authority to purchase, sell, lend, or exchange the
75.35 	securities specified in paragraphs (c) to (g) (h), including
75.36 	puts and call options and future contracts traded on a contract
76.1 	market regulated by a governmental agency or by a financial
76.2 	institution regulated by a governmental agency.  These
76.3 	securities may be owned as units in commingled trusts that own
76.4 	the securities described in paragraphs (c) to (g) (h).
76.5 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
76.6 	invest funds in governmental bonds, notes, bills, mortgages, and
76.7 	other evidences of indebtedness provided the issue is backed by
76.8 	the full faith and credit of the issuer or the issue is rated
76.9 	among the top four quality rating categories by a nationally
76.10 	recognized rating agency.  The obligations in which funds may be
76.11 	invested under this paragraph include guaranteed or insured
76.12 	issues of (1) the United States, its agencies, its
76.13 	instrumentalities, or organizations created and regulated by an
76.14 	act of Congress; (2) Canada and its provinces, provided the
76.15 	principal and interest is payable in United States dollars; (3)
76.16 	the states and their municipalities, political subdivisions,
76.17 	agencies, or instrumentalities; (4) the International Bank for
76.18 	Reconstruction and Development, the Inter-American Development
76.19 	Bank, the Asian Development Bank, the African Development Bank,
76.20 	or any other United States government sponsored organization of
76.21 	which the United States is a member, provided the principal and
76.22 	interest is payable in United States dollars.
76.23 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
76.24 	invest funds in bonds, notes, debentures, transportation
76.25 	equipment obligations, or any other longer term evidences of
76.26 	indebtedness issued or guaranteed by a corporation organized
76.27 	under the laws of the United States or any state thereof, or the
76.28 	Dominion of Canada or any province thereof if they conform to
76.29 	the following provisions:
76.30 	(1) the principal and interest of obligations of
76.31 	corporations incorporated or organized under the laws of the
76.32 	Dominion of Canada or any province thereof must be payable in
76.33 	United States dollars; and
76.34 	(2) obligations must be rated among the top four quality
76.35 	categories by a nationally recognized rating agency.
76.36 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
77.1 	invest funds in bankers acceptances, certificates of deposit,
77.2 	deposit notes, commercial paper, mortgage participation
77.3 	certificates and pools, asset backed securities, repurchase
77.4 	agreements and reverse repurchase agreements, guaranteed
77.5 	investment contracts, savings accounts, and guaranty fund
77.6 	certificates, surplus notes, or debentures of domestic mutual
77.7 	insurance companies if they conform to the following provisions:
77.8 	(i) bankers acceptances and deposit notes of United States
77.9 	banks are limited to those issued by banks rated in the highest
77.10 	four quality categories by a nationally recognized rating
77.11 	agency;
77.12 	(ii) certificates of deposit are limited to those issued by
77.13 	(A) United States banks and savings institutions that are rated
77.14 	in the highest four quality categories by a nationally
77.15 	recognized rating agency or whose certificates of deposit are
77.16 	fully insured by federal agencies; or (B) credit unions in
77.17 	amounts up to the limit of insurance coverage provided by the
77.18 	National Credit Union Administration;
77.19 	(iii) commercial paper is limited to those issued by United
77.20 	States corporations or their Canadian subsidiaries and rated in
77.21 	the highest two quality categories by a nationally recognized
77.22 	rating agency;
77.23 	(iv) mortgage participation or pass through certificates
77.24 	evidencing interests in pools of first mortgages or trust deeds
77.25 	on improved real estate located in the United States where the
77.26 	loan to value ratio for each loan as calculated in accordance
77.27 	with section 61A.28, subdivision 3, does not exceed 80 percent
77.28 	for fully amortizable residential properties and in all other
77.29 	respects meets the requirements of section 61A.28, subdivision
77.30 	3;
77.31 	(v) collateral for repurchase agreements and reverse
77.32 	repurchase agreements is limited to letters of credit and
77.33 	securities authorized in this section;
77.34 	(vi) guaranteed investment contracts are limited to those
77.35 	issued by insurance companies or banks rated in the top four
77.36 	quality categories by a nationally recognized rating agency or
78.1 	to alternative guaranteed investment contracts where the
78.2 	underlying assets comply with the requirements of this
78.3 	subdivision;
78.4 	(vii) savings accounts are limited to those fully insured
78.5 	by federal agencies; and
78.6 	(viii) asset backed securities must be rated in the top
78.7 	four quality categories by a nationally recognized rating agency.
78.8 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
78.9 	not apply to certificates of deposit and collateralization
78.10 	agreements executed by the covered pension plan under clause
78.11 	(1), item (ii).
78.12 	(3) In addition to investments authorized by clause (1),
78.13 	item (iv), the covered pension plan may purchase from the
78.14 	Minnesota Housing Finance Agency all or any part of a pool of
78.15 	residential mortgages, not in default, that has previously been
78.16 	financed by the issuance of bonds or notes of the agency.  The
78.17 	covered pension plan may also enter into a commitment with the
78.18 	agency, at the time of any issue of bonds or notes, to purchase
78.19 	at a specified future date, not exceeding 12 years from the date
78.20 	of the issue, the amount of mortgage loans then outstanding and
78.21 	not in default that have been made or purchased from the
78.22 	proceeds of the bonds or notes.  The covered pension plan may
78.23 	charge reasonable fees for any such commitment and may agree to
78.24 	purchase the mortgage loans at a price sufficient to produce a
78.25 	yield to the covered pension plan comparable, in its judgment,
78.26 	to the yield available on similar mortgage loans at the date of
78.27 	the bonds or notes.  The covered pension plan may also enter
78.28 	into agreements with the agency for the investment of any
78.29 	portion of the funds of the agency.  The agreement must cover
78.30 	the period of the investment, withdrawal privileges, and any
78.31 	guaranteed rate of return.
78.32 	(f)  [CORPORATE STOCKS.] The covered pension plan may
78.33 	invest funds in stocks or convertible issues of any corporation
78.34 	organized under the laws of the United States or the states
78.35 	thereof, any corporation organized under the laws of the
78.36 	Dominion of Canada or its provinces, or any corporation listed
79.1 	on the New York Stock Exchange or the American Stock Exchange an
79.2 	exchange regulated by an agency of the United States or of the
79.3 	Canadian national government, if they conform to the following
79.4 	provisions:
79.5 	(1) the aggregate value of corporate stock investments, as
79.6 	adjusted for realized profits and losses, must not exceed 85
79.7 	percent of the market or book value, whichever is less, of a
79.8 	fund, less the aggregate value of investments according to
79.9 	subdivision 6 paragraph (h);
79.10 	(2) investments must not exceed five percent of the total
79.11 	outstanding shares of any one corporation.
79.12 	(g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may
79.13 	invest funds in exchange traded funds, subject to the maximums,
79.14 	the requirements, and the limitations set forth in paragraph
79.15 	(d), (e), (f), or (h), whichever applies.
79.16 	(h) [OTHER INVESTMENTS.] (1) In addition to the
79.17 	investments authorized in paragraphs (b) to (f) (g), and subject
79.18 	to the provisions in clause (2), the covered pension plan may
79.19 	invest funds in:
79.20 	(i) venture capital investment businesses through
79.21 	participation in limited partnerships and corporations;
79.22 	(ii) real estate ownership interests or loans secured by
79.23 	mortgages or deeds of trust through investment in limited
79.24 	partnerships, bank sponsored collective funds, trusts, and
79.25 	insurance company commingled accounts, including separate
79.26 	accounts;
79.27 	(iii) regional and mutual funds through bank sponsored
79.28 	collective funds and open-end investment companies registered
79.29 	under the Federal Investment Company Act of 1940;
79.30 	(iv) resource investments through limited partnerships,
79.31 	private placements, and corporations; and
79.32 	(v) international securities.
79.33 	(2) The investments authorized in clause (1) must conform
79.34 	to the following provisions:
79.35 	(i) the aggregate value of all investments made according
79.36 	to clause (1) may not exceed 35 percent of the market value of
80.1 	the fund for which the covered pension plan is investing;
80.2 	(ii) there must be at least four unrelated owners of the
80.3 	investment other than the state board covered pension plan for
80.4 	investments made under clause (1), item (i), (ii), (iii), or
80.5 	(iv);
80.6 	(iii) covered pension plan participation in an investment
80.7 	vehicle is limited to 20 percent thereof for investments made
80.8 	under clause (1), item (i), (ii), (iii), or (iv); and
80.9 	(iv) covered pension plan participation in a limited
80.10 	partnership does not include a general partnership interest or
80.11 	other interest involving general liability.  The covered pension
80.12 	plan may not engage in any activity as a limited partner which
80.13 	creates general liability.

80.14 	Sec. 10. Minnesota Statutes 2004, section 424A.02,
80.15 	subdivision 3, is amended to read:
80.16 		Subd. 3.Flexible service pension maximums.  (a) Annually
80.17 	on or before August 1 as part of the certification of the
80.18 	financial requirements and minimum municipal obligation
80.19 	determined under section 69.772, subdivision 4, or 69.773,
80.20 	subdivision 5, as applicable, the secretary or some other
80.21 	official of the relief association designated in the bylaws of
80.22 	each relief association shall calculate and certify to the
80.23 	governing body of the applicable qualified municipality the
80.24 	average amount of available financing per active covered
80.25 	firefighter for the most recent three-year period.  The amount
80.26 	of available financing shall include any amounts of fire state
80.27 	aid received or receivable by the relief association, any
80.28 	amounts of municipal contributions to the relief association
80.29 	raised from levies on real estate or from other available
80.30 	revenue sources exclusive of fire state aid, and one-tenth of
80.31 	the amount of assets in excess of the accrued liabilities of the
80.32 	relief association calculated under section 69.772, subdivision
80.33 	2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
80.34 	any.
80.35 	(b) The maximum service pension which the relief
80.36 	association has authority to provide for in its bylaws for
81.1 	payment to a member retiring after the calculation date when the
81.2 	minimum age and service requirements specified in subdivision 1
81.3 	are met must be determined using the table in paragraph (c) or
81.4 	(d), whichever applies.
81.5 	(c) For a relief association where the governing bylaws
81.6 	provide for a monthly service pension to a retiring member, the
81.7 	maximum monthly service pension amount per month for each year
81.8 	of service credited that may be provided for in the bylaws is
81.9 	the greater of the service pension amount provided for in the
81.10 	bylaws on the date of the calculation of the average amount of
81.11 	the available financing per active covered firefighter or the 
81.12 	maximum service pension figure corresponding to the average
81.13 	amount of available financing per active covered firefighter:
81.14 	Minimum Average Amount of      Maximum Service Pension
81.15 	  Available Financing per        Amount Payable per Month
81.16 	       Firefighter               for Each Year of Service
81.17 	$...                            $  .25
81.18 	42 41.50
81.19 	84 81 1.00
81.20 	126 122 1.50
81.21 	168 162 2.00
81.22 	209 203 2.50
81.23 	252 243 3.00
81.24 	294 284 3.50
81.25 	335 324 4.00
81.26 	378 365 4.50
81.27 	420 405 5.00
81.28 	503 486 6.00
81.29 	587 567 7.00
81.30 	672 648 8.00
81.31 	755 729 9.00
81.32 	839 810 10.00
81.33 	923 891 11.00
81.34 	1007 972 12.00
81.35 	1090 1053 13.00
81.36 	1175 1134 14.00
82.1 	1259 1215 15.00
82.2 	1342 1296 16.00
82.3 	1427 1377 17.00
82.4 	1510 1458 18.00
82.5 	1594 1539 19.00
82.6 	1677 1620 20.00
82.7 	1762 1701 21.00
82.8 	1845 1782 22.00
82.9 	1888 1823 22.50
82.10 	1929 1863 23.00
82.11 	2014 1944 24.00
82.12 	2098 2025 25.00
82.13 	2183 2106 26.00
82.14 	2267 2187 27.00
82.15 	2351 2268 28.00
82.16 	2436 2349 29.00
82.17 	2520 2430 30.00
82.18 	2604 2511 31.00
82.19 	2689 2592 32.00
82.20 	2773 2673 33.00
82.21 	2857 2754 34.00
82.22 	2942 2834 35.00
82.23 	3026 2916 36.00
82.24 	3110 2997 37.00
82.25 	3194 3078 38.00
82.26 	3278 3159 39.00
82.27 	3362 3240 40.00
82.28 	3446 3321 41.00
82.29 	3530 3402 42.00
82.30 	3614 3483 43.00
82.31 	3698 3564 44.00
82.32 	3782 3645 45.00
82.33 	3866 3726 46.00
82.34 	3950 3807 47.00
82.35 	4034 3888 48.00
82.36 	4118 3969 49.00
83.1 	4202 4050 50.00
83.2 	4286 4131 51.00
83.3 	4370 4212 52.00
83.4 	Effective beginning December 31, 2003:
83.5 	4454 4293 53.00
83.6 	4538 4374 54.00
83.7 	4622 4455 55.00
83.8 	4706 4536 56.00
83.9 	(d) For a relief association in which the governing bylaws
83.10 	provide for a lump sum service pension to a retiring member, the
83.11 	maximum lump sum service pension amount for each year of service
83.12 	credited that may be provided for in the bylaws is the greater
83.13 	of the service pension amount provided for in the bylaws on the
83.14 	date of the calculation of the average amount of the available
83.15 	financing per active covered firefighter or the maximum service
83.16 	pension figure corresponding to the average amount of available
83.17 	financing per active covered firefighter for the applicable
83.18 	specified period:
83.19 	Minimum Average Amount         Maximum Lump Sum Service
83.20 	 of Available Financing         Pension Amount Payable
83.21 	    per Firefighter             for Each Year of Service
83.22 	$..                              $10
83.23 	         11                               20
83.24 	         16                               30
83.25 	         23                               40
83.26 	         27                               50
83.27 	         32                               60
83.28 	         43                               80
83.29 	         54                              100
83.30 	         65                              120
83.31 	         77                              140
83.32 	         86                              160
83.33 	         97                              180
83.34 	        108                              200
83.35 	        131                              240
83.36 	        151                              280
84.1 	        173                              320
84.2 	        194                              360
84.3 	        216                              400
84.4 	        239                              440
84.5 	        259                              480
84.6 	        281                              520
84.7 	        302                              560
84.8 	        324                              600
84.9 	        347                              640
84.10 	        367                              680
84.11 	        389                              720
84.12 	        410                              760
84.13 	        432                              800
84.14 	        486                              900
84.15 	        540                             1000
84.16 	        594                             1100
84.17 	        648                             1200
84.18 	        702                             1300
84.19 	        756                             1400
84.20 	        810                             1500
84.21 	        864                             1600
84.22 	        918                             1700
84.23 	        972                             1800
84.24 	       1026                             1900
84.25 	       1080                             2000
84.26 	       1134                             2100
84.27 	       1188                             2200
84.28 	       1242                             2300
84.29 	       1296                             2400
84.30 	       1350                             2500
84.31 	       1404                             2600
84.32 	       1458                             2700
84.33 	       1512                             2800
84.34 	       1566                             2900
84.35 	       1620                             3000
84.36 	       1672                             3100
85.1 	       1726                             3200
85.2 	       1753                             3250
85.3 	       1780                             3300
85.4 	       1820                             3375
85.5 	1834                             3400
85.6 	       1888                             3500
85.7 	1942                             3600
85.8 	       1996                             3700
85.9 	       2023                             3750
85.10 	2050                             3800
85.11 	       2104                             3900
85.12 	       2158                             4000
85.13 	2212                             4100
85.14 	       2265                             4200
85.15 	       2319                             4300
85.16 	       2373                             4400
85.17 	       2427                             4500
85.18 	       2481                             4600
85.19 	       2535                             4700
85.20 	       2589                             4800
85.21 	       2643                             4900
85.22 	       2697                             5000
85.23 	       2751                             5100
85.24 	       2805                             5200
85.25 	       2859                             5300
85.26 	       2913                             5400
85.27 	       2967                             5500
85.28 	3021                             5600
85.29 	3075                             5700
85.30 	3129                             5800
85.31 	3183                             5900
85.32 	3237                             6000
85.33 	3291                             6100
85.34 	3345                             6200
85.35 	3399                             6300
85.36 	3453                             6400
86.1 	3507                             6500
86.2 	3561                             6600
86.3 	3615                             6700
86.4 	3669                             6800
86.5 	3723                             6900
86.6 	3777                             7000
86.7 	Effective beginning December 31, 2003:
86.8 	3831                             7100
86.9 	3885                             7200
86.10 	3939                             7300
86.11 	3993                             7400
86.12 	4047                             7500
86.13 	(e) For a relief association in which the governing bylaws
86.14 	provide for a monthly benefit service pension as an alternative
86.15 	form of service pension payment to a lump sum service pension,
86.16 	the maximum service pension amount for each pension payment type
86.17 	must be determined using the applicable table contained in this
86.18 	subdivision.
86.19 	(f) If a relief association establishes a service pension
86.20 	in compliance with the applicable maximum contained in paragraph
86.21 	(c) or (d) and the minimum average amount of available financing
86.22 	per active covered firefighter is subsequently reduced because
86.23 	of a reduction in fire state aid or because of an increase in
86.24 	the number of active firefighters, the relief association may
86.25 	continue to provide the prior service pension amount specified
86.26 	in its bylaws, but may not increase the service pension amount
86.27 	until the minimum average amount of available financing per
86.28 	firefighter under the table in paragraph (c) or (d), whichever
86.29 	applies, permits.
86.30 	(g) No relief association is authorized to provide a
86.31 	service pension in an amount greater than the largest applicable
86.32 	flexible service pension maximum amount even if the amount of
86.33 	available financing per firefighter is greater than the
86.34 	financing amount associated with the largest applicable flexible
86.35 	service pension maximum.

86.36 	Sec. 11. Minnesota Statutes 2004, section 424A.02,
87.1 	subdivision 4, is amended to read:
87.2 		Subd. 4.Defined contribution lump sum service
87.3 	pensions. (a) If the bylaws governing the relief association so
87.4 	provide exclusively, the relief association may pay a defined
87.5 	contribution lump sum service pension in lieu of any defined
87.6 	benefit service pension governed by subdivision 2.
87.7 	(b) An individual account for each firefighter who is a
87.8 	member of the relief association shall must be established.  To
87.9 	each individual active member account shall must be credited a
87.10 	right to an equal share of: (a) (1) any amounts of fire state
87.11 	aid received by the relief association; (b) (2) any amounts of
87.12 	municipal contributions to the relief association raised from
87.13 	levies on real estate or from other available revenue sources
87.14 	exclusive of fire state aid; and (c) (3) any amounts equal to
87.15 	the share of the assets of the special fund to the credit
87.16 	of: (1) (i) any former member who terminated active service
87.17 	with the fire department to which the relief association is
87.18 	associated prior to before meeting the minimum service
87.19 	requirement provided for in subdivision 1 and has not returned
87.20 	to active service with the fire department for a period no
87.21 	shorter than five years; or (2) (ii) any retired member who
87.22 	retired prior to before obtaining a full nonforfeitable interest
87.23 	in the amounts credited to the individual member
87.24 	account pursuant to under subdivision 2 and any applicable
87.25 	provision of the bylaws of the relief association.  In addition,
87.26 	any interest or investment income earned return on the assets of
87.27 	the special fund shall must be credited in proportion to the
87.28 	share of the assets of the special fund to the credit of each
87.29 	individual active member account through the date on which the
87.30 	investment return is recognized by and credited to the special
87.31 	fund.
87.32 	(c) At the time of retirement pursuant to under subdivision
87.33 	1 and any applicable provision of the bylaws of the relief
87.34 	association, a retiring member shall be is entitled to that
87.35 	portion of the assets of the special fund to the credit of the
87.36 	member in the individual member account which is
88.1 	nonforfeitable pursuant to under subdivision 2 and any
88.2 	applicable provision of the bylaws of the relief association
88.3 	based on the number of years of service to the credit of the
88.4 	retiring member.

88.5 	Sec. 12. Minnesota Statutes 2004, section 424A.02,
88.6 	subdivision 7, is amended to read:
88.7 		Subd. 7.Deferred service pensions.  (a) A member of a
88.8 	relief association to which this section applies is entitled to
88.9 	a deferred service pension if the member:
88.10 	(1) has completed the lesser of the minimum period of
88.11 	active service with the fire department specified in the bylaws
88.12 	or 20 years of active service with the fire department;
88.13 	(2) has completed at least five years of active membership
88.14 	in the relief association; and
88.15 	(3) separates from active service and membership before
88.16 	reaching age 50 or the minimum age for retirement and
88.17 	commencement of a service pension specified in the bylaws
88.18 	governing the relief association if that age is greater than age
88.19 	50.
88.20 	(b) The deferred service pension starts is payable when the
88.21 	former member reaches age 50,or the minimum age specified in
88.22 	the bylaws governing the relief association if that age is
88.23 	greater than age 50,and when the former member makes a valid
88.24 	written application.
88.25 	(c) A relief association that provides a lump sum service
88.26 	pension governed by subdivision 3 may, when its governing bylaws
88.27 	so provide, pay interest on the deferred lump sum service
88.28 	pension during the period of deferral.  If provided for in the
88.29 	bylaws, interest must be paid in one of the following manners:
88.30 	(1) at the investment performance rate actually earned on
88.31 	that portion of the assets if the deferred benefit amount is
88.32 	invested by the relief association in a separate account
88.33 	established and maintained by the relief association or if the
88.34 	deferred benefit amount is invested in a separate investment
88.35 	vehicle held by the relief association;
88.36 	(2) at the an interest rate of up to five percent,
89.1 	compounded annually, as set by the board of directors and
89.2 	approved as provided in subdivision 10; or
89.3 	(3) at a rate equal to the actual time weighted total rate
89.4 	of return investment performance of the special fund as reported
89.5 	by the Office of the State Auditor under section 356.219, up to
89.6 	five percent, compounded annually, and applied consistently for
89.7 	all deferred service pensioners.
89.8 	(d) A relief association may not use the method provided
89.9 	for in paragraph (c),clause (3), until it has modified its
89.10 	bylaws to be consistent with that clause.
89.11 	(d) Interest under paragraph (c), clause (2) or (3), is
89.12 	payable from the first day of the month next following the date
89.13 	on which the municipality has approved the deferred service
89.14 	pension interest rate established by the board of trustees or
89.15 	from the first day of the month next following the date on which
89.16 	the member separated from active fire department service and
89.17 	relief association membership, whichever is later, to the last
89.18 	day of the month immediately before the month in which the
89.19 	deferred member becomes eligible to begin receipt of the service
89.20 	pension and applies for the deferred service pension.
89.21 	(e) A relief association that provides a defined
89.22 	contribution service pension may, if its governing bylaws so
89.23 	provide, credit interest or additional investment performance on
89.24 	the deferred lump sum service pension during the period of
89.25 	deferral.  If provided for in the bylaws, the interest must be
89.26 	paid in one of the manners specified in paragraph (c) or
89.27 	alternatively the relief association may credit any investment
89.28 	return on the assets of the special fund of the defined
89.29 	contribution volunteer firefighter relief association in
89.30 	proportion to the share of the assets of the special fund to the
89.31 	credit of each individual deferred member account through the
89.32 	date on which the investment return is recognized by and
89.33 	credited to the special fund.
89.34 	(f) For a deferred service pension that is transferred to a
89.35 	separate account established and maintained by the relief
89.36 	association or separate investment vehicle held by the relief
90.1 	association, the deferred member bears the full investment risk
90.2 	subsequent to transfer and in calculating the accrued liability
90.3 	of the volunteer firefighters relief association that pays a
90.4 	lump sum service pension, the accrued liability for deferred
90.5 	service pensions is equal to the separate relief association
90.6 	account balance or the fair market value of the separate
90.7 	investment vehicle held by the relief association.
90.8 	(f) (g) The deferred service pension is governed by and
90.9 	must be calculated under the general statute, special law,
90.10 	relief association articles of incorporation, and relief
90.11 	association bylaw provisions applicable on the date on which the
90.12 	member separated from active service with the fire department
90.13 	and active membership in the relief association.

90.14 	Sec. 13. [424A.021] CREDIT FOR BREAK IN SERVICE TO
90.15 	PROVIDE UNIFORMED SERVICE.
90.16 		Subdivision 1.Authorization. Subject to restrictions
90.17 	stated in this section, a volunteer firefighter who is absent
90.18 	from firefighting service due to service in the uniformed
90.19 	services, as defined in United States Code, title 38, section
90.20 	4303(13), may obtain service credit if the relief association is
90.21 	a defined benefit plan or an allocation of any fire state aid,
90.22 	any municipal contributions, and any investment return received
90.23 	by the relief association if the relief association is a defined
90.24 	contribution plan for the period of the uniformed service, not
90.25 	to exceed five years, unless a longer period is required under
90.26 	United States Code, title 38, section 4312.
90.27 		Subd. 2.Limitations. (a) To be eligible for service
90.28 	credit or an investment return allocation under this section,
90.29 	the volunteer firefighter must return to firefighting service
90.30 	with coverage by the same relief association or by the successor
90.31 	to that relief association upon discharge from service in the
90.32 	uniformed service within the time frame required in United
90.33 	States Code, title 38, section 4312(e).
90.34 	(b) Service credit or an investment return allocation is
90.35 	not authorized if the firefighter separates from uniformed
90.36 	service with a dishonorable or bad conduct discharge or under
91.1 	other than honorable conditions.
91.2 	(c) Service credit or an investment return allocation is
91.3 	not authorized if the firefighter fails to provide notice to the
91.4 	fire department that the individual is leaving to provide
91.5 	service in the uniformed service, unless it is not feasible to
91.6 	provide that notice due to the emergency nature of the situation.

91.7 	Sec. 14. Minnesota Statutes 2004, section 424A.04,
91.8 	subdivision 1, is amended to read:
91.9 		Subdivision 1.Membership.  (a) Every A relief
91.10 	association that is directly associated with a municipal fire
91.11 	department shall must be managed by a board of trustees
91.12 	consisting of nine members.  Six trustees shall must be elected
91.13 	from the membership of the relief association and three trustees
91.14 	shall must be drawn from the officials of the municipalities
91.15 	served by the fire department to which the relief association is
91.16 	directly associated.  The bylaws of a relief association which
91.17 	provides a monthly benefit service pension may provide that one
91.18 	of the six trustees elected from the relief
91.19 	association membership may be a retired member receiving a
91.20 	monthly pension who is elected by the membership of the relief
91.21 	association.  The three ex officio municipal trustees shall be
91.22 	the mayor, the clerk, clerk-treasurer or finance director,must
91.23 	be one elected municipal official and one elected or appointed
91.24 	municipal official who are designated as municipal
91.25 	representatives by the municipal governing board annually and
91.26 	the chief of the municipal fire department.
91.27 	(b) Every A relief association that is a subsidiary of an
91.28 	independent nonprofit firefighting corporation shall must be
91.29 	managed by a board of trustees consisting of ten nine members.
91.30 	Six trustees shall must be elected from the membership of the
91.31 	relief association, three two trustees shall must be drawn from
91.32 	the officials of the municipalities served by the fire
91.33 	department to which the relief association is directly
91.34 	associated, and one trustee shall be the fire chief serving with
91.35 	the independent nonprofit firefighting corporation.  The bylaws
91.36 	of a relief association may provide that one of the six trustees
92.1 	elected from the relief association membership may be a retired
92.2 	member receiving a monthly pension who is elected by the
92.3 	membership of the relief association.  The three ex officio two
92.4 	municipal trustees who are the elected officials shall must 
92.5 	be elected or appointed municipal officials,selected as follows:
92.6 	(1) if only one municipality contracts with the independent
92.7 	nonprofit firefighting corporation, the ex officio municipal 
92.8 	trustees shall must be three elected two officials of the
92.9 	contracting municipality who are designated annually by the
92.10 	governing body of the municipality;
92.11 	(2) if two municipalities contract with the independent
92.12 	nonprofit firefighting corporation, the ex officio trustees
92.13 	shall be two elected officials of the largest municipality in
92.14 	population and one elected official of the next largest
92.15 	municipality in population who are designated by the governing
92.16 	bodies of the applicable municipalities;or
92.17 	(3) (2) if three two or more municipalities contract with
92.18 	the independent nonprofit corporation, the ex officio municipal 
92.19 	trustees shall must be one elected official of from each of
92.20 	the three two largest municipalities in population who are
92.21 	designated annually by the governing bodies of the applicable
92.22 	municipalities.
92.23 	(c) The municipal trustees for a relief association that is
92.24 	directly associated with a fire department operated as or by a
92.25 	joint powers entity must be designated annually by the joint
92.26 	powers board.  The municipal trustees for a relief association
92.27 	that is directly associated with a fire department service area
92.28 	township must be designated by the township board.
92.29 	(d) If a relief association lacks the ex officio municipal 
92.30 	board members provided for in paragraph (a), (b),or (b) (c) 
92.31 	because the fire department is not located in or associated with
92.32 	an organized municipality, joint powers entity, or township,the
92.33 	ex officio municipal board members must be appointed from the
92.34 	fire department service area by the board of commissioners of
92.35 	the applicable county.
92.36 	(e) The term of these appointed ex officio municipal board
93.1 	members is three years one year or until the person's successor
93.2 	is qualified, whichever is later.
93.3 	(d) An ex officio (f) A municipal trustee under paragraph
93.4 	(a), (b), or (c) shall have , or (d) has all the rights and
93.5 	duties accorded to any other trustee,except the right to be an
93.6 	officer of the relief association board of trustees.
93.7 	(e) (g) A board shall must have at least three officers,
93.8 	which shall be who are a president, a secretary and a treasurer.
93.9 	These officers shall must be elected from among the elected
93.10 	trustees by either the full board of trustees or by the
93.11 	membership, as specified in the bylaws, and .In no event shall 
93.12 	may any trustee hold more than one officer position at any one
93.13 	time.  The terms of the elected trustees and of the officers of
93.14 	the board shall must be specified in the bylaws of the relief
93.15 	association, but shall may not exceed three years.  If the term
93.16 	of the elected trustees exceeds one year, the election of the
93.17 	various trustees elected from the membership shall initially and
93.18 	shall thereafter continue to must be staggered on as equal a
93.19 	basis as is practicable.

93.20 	Sec. 15. Minnesota Statutes 2004, section 424B.10,
93.21 	subdivision 1, is amended to read:
93.22 		Subdivision 1.Benefits.  (a) Notwithstanding any
93.23 	provision of section 424A.02, subdivision 3, to the contrary,
93.24 	the service pension of the subsequent relief association as of
93.25 	the effective date of consolidation is either the service
93.26 	pension amount specified in clause (1) or the service pension
93.27 	amounts specified in clause (2), as provided for in the
93.28 	consolidated relief association's articles of incorporation or
93.29 	bylaws:
93.30 	(1) the highest dollar amount service pension amount of any
93.31 	prior volunteer firefighters relief association in effect
93.32 	immediately before the consolidation initiation if the pension
93.33 	amount was implemented consistent with section 424A.02; or 
93.34 	(2) for service rendered by each individual volunteer
93.35 	firefighter before consolidation, the service pension amount
93.36 	under the consolidating volunteer firefighters relief
94.1 	association that the firefighter belonged to immediately before
94.2 	the consolidation if the pension amount was implemented
94.3 	consistent with section 424A.02 and for service rendered after
94.4 	the effective date of the consolidation, the highest dollar
94.5 	amount service pension of any of the consolidating volunteer
94.6 	firefighters relief associations in effect immediately before
94.7 	the consolidation if the pension amount was implemented
94.8 	consistent with section 424A.02.
94.9 	(b) Any increase in the service pension amount beyond the
94.10 	amount implemented under paragraph (a) must conform with the
94.11 	requirements and limitations of sections 69.771 to 69.775 and
94.12 	424A.02.

94.13 	Sec. 16. EFFECTIVE DATE.
 94.14 	(a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
94.15 	(b) Section 13 is effective July 1, 2005, and applies to
94.16 	breaks in service that end on or after that date.

94.17 	ARTICLE 10
94.18 	VARIOUS CORRECTIONS
94.19 	AND CLARIFICATIONS

94.20 	Section 1. Minnesota Statutes 2004, section 3A.13, is
94.21 	amended to read:
94.22 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
94.23 	DEDUCTION.
94.24 	(a) The provisions of section 352.15 shall 356.401 apply to
94.25 	the legislators retirement plan, chapter 3A.
94.26 	(b) The executive director of the Minnesota State
94.27 	Retirement System must, at the request of a retired legislator
94.28 	who is enrolled in a health insurance plan covering state
94.29 	employees, deduct the person's health insurance premiums from
94.30 	the person's annuity and transfer the amount of the premium to a
94.31 	health insurance carrier covering state employees.

94.32 	Sec. 2. Minnesota Statutes 2004, section 69.011,
94.33 	subdivision 2b, is amended to read:
94.34 		Subd. 2b.Departments of natural resources and public
94.35 	safety.  (a) On or before July 1, 1997, the commissioner of
94.36 	natural resources shall certify one-half of the number of peace
95.1 	officers as defined in subdivision 1, clause (g), employed by
95.2 	the Enforcement Division during calendar year 1996 and the
95.3 	commissioner of public safety shall certify one-half of the
95.4 	number of peace officers as defined in subdivision 1, clause
95.5 	(g), employed by the Bureau of Criminal Apprehension, the
95.6 	Gambling Enforcement Division, and the State Patrol Division
95.7 	during calendar year 1996.
95.8 	(b) On or before March 15, 1998, the commissioner of
95.9 	natural resources shall certify seven-tenths of the number of
95.10 	peace officers as defined in subdivision 1, clause (g), employed
95.11 	by the Enforcement Division and the commissioner of public
95.12 	safety shall certify seven-tenths of the number of peace
95.13 	officers as defined in subdivision 1, clause (g), employed by
95.14 	the Bureau of Criminal Apprehension, the Gambling Enforcement
95.15 	Division, and the State Patrol Division.
95.16 	(c) On or before March 15, 1999, and annually on or before 
95.17 	each March 15 thereafter, the commissioner of natural resources
95.18 	shall certify the number of peace officers as defined in
95.19 	subdivision 1, clause (g), employed by the Enforcement Division
95.20 	and the commissioner of public safety shall certify the number
95.21 	of peace officers as defined in subdivision 1, clause (g),
95.22 	employed by the Bureau of Criminal Apprehension, the Gambling
95.23 	Enforcement Division, and the State Patrol Division.
95.24 	(d) (b) The certification must be on a form prescribed by
95.25 	the commissioner.  Peace officers certified under this paragraph
95.26 	must be included in the total certifications under subdivision 2.

95.27 	Sec. 3. Minnesota Statutes 2004, section 69.021,
95.28 	subdivision 5, is amended to read:
95.29 		Subd. 5.Calculation of state aid.  (a) The amount of
95.30 	fire state aid available for apportionment, before the addition
95.31 	of the minimum fire state aid allocation amount under
95.32 	subdivision 7, is equal to 107 percent of the amount of premium
95.33 	taxes paid to the state upon the fire, lightning, sprinkler
95.34 	leakage, and extended coverage premiums reported to the
95.35 	commissioner by insurers on the Minnesota Firetown Premium
95.36 	Report.  This amount shall must be reduced by the amount
96.1 	required to pay the state auditor's costs and expenses of the
96.2 	audits or exams of the firefighters relief associations.
96.3 	The total amount for apportionment in respect to fire state
96.4 	aid must not be less than two percent of the premiums reported
96.5 	to the commissioner by insurers on the Minnesota Firetown
96.6 	Premium Report after subtracting the following amounts:
96.7 	(1) the amount required to pay the state auditor's costs
96.8 	and expenses of the audits or exams of the firefighters relief
96.9 	associations; and
96.10 	(2) one percent of the premiums reported by town and
96.11 	farmers' mutual insurance companies and mutual property and
96.12 	casualty companies with total assets of $5,000,000 or less.
96.13 	(b) The total amount for apportionment as police state aid
96.14 	is equal to 104 percent of the amount of premium taxes paid to
96.15 	the state on the premiums reported to the commissioner by
96.16 	insurers on the Minnesota Aid to Police Premium Report, reduced
96.17 	by the amount required to pay the costs and expenses of the
96.18 	state auditor for audits or exams of police relief
96.19 	associations.  The total amount for apportionment in respect to
96.20 	the police state aid program must not be less than two percent
96.21 	of the amount of premiums reported to the commissioner by
96.22 	insurers on the Minnesota Aid to Police Premium Report after
96.23 	subtracting the amount required to pay the state auditor's cost
96.24 	and expenses of the audits or exams of the police relief
96.25 	associations.
96.26 	(c) The commissioner shall calculate the percentage of
96.27 	increase or decrease reflected in the apportionment over or
96.28 	under the previous year's available state aid using the same
96.29 	premiums as a basis for comparison.
96.30 	(d) The amount for apportionment in respect to peace
96.31 	officer state aid under paragraph (b) must be further reduced by
96.32 	$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
96.33 	and $2,404,000 in fiscal year 2001.  These reductions in this
96.34 	paragraph cancel to the general fund.
96.35 	(e) In addition to the amount for apportionment of police
96.36 	state aid under paragraph (b), each year $100,000 shall must be
97.1 	apportioned for police state aid.  An amount sufficient to pay
97.2 	this increase is annually appropriated from the general fund.

97.3 	Sec. 4. Minnesota Statutes 2004, section 69.021,
97.4 	subdivision 11, is amended to read:
97.5 		Subd. 11.Excess police state-aid holding account.  (a)
97.6 	The excess police state-aid holding account is established in
97.7 	the general fund.  The excess police state-aid holding account
97.8 	must be administered by the commissioner.
97.9 	(b) Excess police state aid determined according to
97.10 	subdivision 10, must be deposited in the excess police state-aid
97.11 	holding account.
97.12 	(c) From the balance in the excess police state-aid holding
97.13 	account, $900,000 is appropriated to and must be transferred
97.14 	annually to the ambulance service personnel longevity award and
97.15 	incentive suspense account established by section 144E.42,
97.16 	subdivision 2.
97.17 	(d) If a police officer stress reduction program is created
97.18 	by law and money is appropriated for that program, an amount
97.19 	equal to that appropriation must be transferred to the
97.20 	administrator of that program from the balance in the excess
97.21 	police state-aid holding account.
97.22 	(e) On October 1, 1997, and annually on each subsequent
97.23 	October 1 of each year, one-half of the balance of the excess
97.24 	police state-aid holding account remaining after the deductions
97.25 	under paragraphs (c) and (d) is appropriated for additional
97.26 	amortization aid under section 423A.02, subdivision 1b.
97.27 	(f) Annually, the remaining balance in the excess police
97.28 	state-aid holding account, after the deductions under paragraphs
97.29 	(c), (d), and (e), cancels to the general fund.

97.30 	Sec. 5. Minnesota Statutes 2004, section 69.33, is amended
97.31 	to read:
97.32 	69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
97.33 	COMPANIES.
97.34 	The commissioner shall enclose in the annual statement
97.35 	blank that is sent to all fire insurance companies doing
97.36 	business in this state a blank form containing the names of all
98.1 	firefighters' relief associations in all cities of the first
98.2 	class and the names of the cities and require these companies,
98.3 	at the time of making their annual statements to the
98.4 	commissioner, to state on these blanks the amount of premiums
98.5 	received by them upon properties insured within the corporate
98.6 	limits of the cities named thereon during the year ending
98.7 	December 31st last past.  Thereafter, before July first each
98.8 	year, the commissioner shall certify to the commissioner of
98.9 	finance the information thus obtained, together with the amount
98.10 	of the tax for the benefit of the relief association pension
98.11 	plans covering firefighters in cities of the first class paid in
98.12 	such year by these companies upon these insurance premiums.

98.13 	Sec. 6. Minnesota Statutes 2004, section 69.773,
98.14 	subdivision 4, is amended to read:
98.15 		Subd. 4.Financial requirements of special fund. Prior
98.16 	to Before August 1 of each year, the officers of the relief
98.17 	association shall determine the financial requirements of the
98.18 	special fund of the relief association in accordance with the
98.19 	requirements of this subdivision.  The financial requirements of
98.20 	the relief association shall must be based on the most recent
98.21 	actuarial valuation of the special fund prepared in accordance
98.22 	with subdivision 2.  If the relief association has an unfunded
98.23 	actuarial accrued liability as reported in the most recent
98.24 	actuarial valuation, the financial requirements shall must be
98.25 	determined by adding the figures calculated pursuant to under 
98.26 	clauses (a), (b), and (c).  If the relief association does not
98.27 	have an unfunded actuarial accrued liability as reported in the
98.28 	most recent actuarial valuation, the financial requirements
98.29 	shall must be an amount equal to the figure calculated pursuant
98.30 	to under clauses (a) and (b), reduced by an amount equal to
98.31 	one-tenth of the amount of any assets in excess of the actuarial
98.32 	accrued liability of the relief association.  The determination
98.33 	of whether or not the relief association has an unfunded
98.34 	actuarial accrued liability shall must be based on the current
98.35 	market value of assets for which a market value is readily
98.36 	ascertainable and the cost or book value, whichever is
99.1 	applicable, for assets for which no market value is readily
99.2 	ascertainable.
99.3 	(a) The normal level cost requirement for the following
99.4 	year, expressed as a dollar amount, shall be is the figure for
99.5 	the normal level cost of the relief association as reported in
99.6 	the actuarial valuation.
99.7 	(b) The amount of anticipated future administrative
99.8 	expenses of the special fund shall must be calculated by
99.9 	multiplying the dollar amount of the administrative expenses of
99.10 	the special fund for the most recent year by the factor of 1.035.
99.11 	(c) The amortization contribution requirement to retire the
99.12 	current unfunded actuarial accrued liability by the established
99.13 	date for full funding shall be is the figure for the
99.14 	amortization contribution as reported in the actuarial
99.15 	valuation. If there has not been a change in the actuarial
99.16 	assumptions used for calculating the actuarial accrued liability
99.17 	of the special fund, a change in the bylaws of the relief
99.18 	association governing the service pensions, retirement benefits,
99.19 	or both payable from the special fund or a change in the
99.20 	actuarial cost method used to value all or a portion of the
99.21 	special fund which change or changes, which by themselves
99.22 	without inclusion of any other items of increase or decrease,
99.23 	produce a net increase in the unfunded actuarial accrued
99.24 	liability of the special fund since December 31, 1970, the
99.25 	established date for full funding shall be December 31, 1990.
99.26 	If there has been a change in the actuarial assumptions used for
99.27 	calculating the actuarial accrued liability of the special fund,
99.28 	a change in the bylaws of the relief association governing the
99.29 	service pensions, retirement benefits, or both payable from the
99.30 	special fund or a change in the actuarial cost method used to
99.31 	value all or a portion of the special fund and the change or
99.32 	changes, by themselves and without inclusion of any other items
99.33 	of increase or decrease, produce a net increase in the unfunded
99.34 	actuarial accrued liability of the special fund since December
99.35 	31, 1970, but prior to January 1, 1979, the established date for
99.36 	full funding shall be December 31, 1998, and if there has been a
100.1 	change since December 31, 1978, the established date for full
100.2 	funding shall must be determined using the following procedure:
100.3 	(i) the unfunded actuarial accrued liability of the special
100.4 	fund shall must be determined in accordance with the provisions
100.5 	governing service pensions, retirement benefits, and actuarial
100.6 	assumptions in effect before an applicable change;
100.7 	(ii) the level annual dollar contribution needed to
100.8 	amortize this unfunded actuarial accrued liability amount by the
100.9 	date for full funding in effect prior to before the change shall 
100.10 	must be calculated using the interest assumption specified in
100.11 	section 356.215, subdivision 8, in effect before any applicable
100.12 	change;
100.13 	(iii) the unfunded actuarial accrued liability of the
100.14 	special fund shall must be determined in accordance with any new
100.15 	provisions governing service pensions, retirement benefits, and
100.16 	actuarial assumptions and the remaining provisions governing
100.17 	service pensions, retirement benefits, and actuarial assumptions
100.18 	in effect before an applicable change;
100.19 	(iv) the level annual dollar contribution needed to
100.20 	amortize the difference between the unfunded actuarial accrued
100.21 	liability amount calculated pursuant to under subclause (i) and
100.22 	the unfunded actuarial accrued liability amount
100.23 	calculated pursuant to under subclause (iii) over a period of 20
100.24 	years starting December 31 of the year in which the change is
100.25 	effective shall must be calculated using the interest assumption
100.26 	specified in section 356.215, subdivision 8, in effect after any
100.27 	applicable change;
100.28 	(v) the annual amortization contribution calculated
100.29 	pursuant to under subclause (iv) shall must be added to the
100.30 	annual amortization contribution calculated pursuant to under 
100.31 	subclause (ii);
100.32 	(vi) the period in which the unfunded actuarial accrued
100.33 	liability amount determined in subclause (iii) will be amortized
100.34 	by the total annual amortization contribution computed pursuant
100.35 	to under subclause (v) shall must be calculated using the
100.36 	interest assumption specified in section 356.215, subdivision 8,
101.1 	in effect after any applicable change, rounded to the nearest
101.2 	integral number of years, but which shall does not exceed a
101.3 	period of 20 years from the end of the year in which the
101.4 	determination of the date for full funding using this procedure
101.5 	is made and which shall is not be less than the period of years
101.6 	beginning in the year in which the determination of the date for
101.7 	full funding using this procedure is made and ending by the date
101.8 	for full funding in effect before the change;
101.9 	(vii) the period determined pursuant to under subclause (vi)
101.10 	shall must be added to the date as of which the actuarial
101.11 	valuation was prepared and the resulting date shall be is the
101.12 	new date for full funding.

101.13 	Sec. 7. Minnesota Statutes 2004, section 352.01,
101.14 	subdivision 4, is amended to read:
101.15 		Subd. 4.Accumulated contributions.  "Accumulated
101.16 	contributions" means the total, exclusive of interest, of (1)
101.17 	the sums deducted from the salary of an employee, (2) the amount
101.18 	of payments, including assessments, paid by the employee in lieu
101.19 	of salary deductions and all other payments made under Laws
101.20 	1929, chapter 191, as amended,this chapter and credited to the
101.21 	employee's individual account in the retirement fund.

101.22 	Sec. 8. Minnesota Statutes 2004, section 352.01,
101.23 	subdivision 5, is amended to read:
101.24 		Subd. 5.Retirement fund. (a) "Retirement fund" means
101.25 	the general state employees retirement fund created by section
101.26 	352.04, subdivision 1, with respect to the general state
101.27 	employees retirement plan or the correctional state employees
101.28 	retirement fund created by section 352.911, subdivision 1, with
101.29 	respect to the correctional state employees retirement plan.
101.30 	(b) " The retirement fund " includes the aggregate of
101.31 	accumulated contributions of employees covered by the applicable
101.32 	plan, and all other funds paid into the state treasury or
101.33 	received by the director under Laws 1929, chapter 191, as
101.34 	amended this chapter, together with all income and profits from
101.35 	the money and interest on it, including contributions on the
101.36 	part of the federal government, the state, and state departments.

102.1 	Sec. 9. Minnesota Statutes 2004, section 352.01,
102.2 	subdivision 21, is amended to read:
102.3 		Subd. 21.Accrued annuities. (a) In this chapter and
102.4 	chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an
102.5 	annuity that had become payable to a retired employee in the
102.6 	lifetime of the employee.
102.7 	(b) An annuity or benefit authorized as provided in this
102.8 	chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
102.9 	the first day of each calendar month for that calendar month and
102.10 	is to must be paid on the first day of each calendar month
102.11 	beginning with benefits payable on and after December 1, 1977.
102.12 	(c) Notwithstanding any provision to the contrary in this
102.13 	chapter and chapters 3A, 352B, 352C, and 490, benefit payment
102.14 	authorized as "payable for life" is payable for the entire month
102.15 	in which death occurs, and the benefit payment for the month of
102.16 	death is payable to the surviving spouse or other beneficiary
102.17 	only if the annuitant dies before negotiating the benefit check.

102.18 	Sec. 10. Minnesota Statutes 2004, section 352.01,
102.19 	subdivision 23, is amended to read:
102.20 		Subd. 23.Coverage or covered by the system.  "Coverage"
102.21 	or "covered by the system" means that a state employees employee 
102.22 	who serve serves the state of Minnesota and make makes the
102.23 	required employee contributions to the retirement fund will is,
102.24 	by reason of these contributions become ,entitled to either (1)
102.25 	a retirement annuity, or (2) a disability benefit, or (3) a
102.26 	refund of accumulated contributions, as provided in this chapter.

102.27 	Sec. 11. Minnesota Statutes 2004, section 352.021,
102.28 	subdivision 1, is amended to read:
102.29 		Subdivision 1.Establishment. (a) There is established
102.30 	the general state employees retirement plan of the Minnesota
102.31 	State Retirement System for state employees.
102.32 	(b) The system general state employees retirement plan is a
102.33 	continuation of the State Employees Retirement Association.
102.34 	(c) Any person who was a member of the State Employees
102.35 	Retirement Association on June 30, 1967, is covered by
102.36 	the system general state employees retirement plan and is
103.1 	entitled to all benefits provided by the system plan upon
103.2 	fulfilling the age, service, contribution, and other
103.3 	requirements of this chapter.

103.4 	Sec. 12. Minnesota Statutes 2004, section 352.021,
103.5 	subdivision 2, is amended to read:
103.6 		Subd. 2.State employees covered.  Every person who is a
103.7 	state employee, as defined in section 352.01, on July 1, 1967,
103.8 	or becomes a state employee after that date as defined in
103.9 	section 352.01is covered by the system general state employees
103.10 	retirement plan.  Acceptance of state employment or continuance
103.11 	in state service is deemed to be consent to have deductions made
103.12 	from salary for deposit to the credit of the account of the
103.13 	state employee in the retirement fund.

103.14 	Sec. 13. Minnesota Statutes 2004, section 352.021,
103.15 	subdivision 3, is amended to read:
103.16 		Subd. 3.Optional exemptions.  Any person who is
103.17 	appointed by the governor or lieutenant governor may request
103.18 	exemption from coverage by the general state employees
103.19 	retirement plan under this chapter if the appointee is not so 
103.20 	covered at by the plan on the date of appointment.  To qualify
103.21 	for this exemption, a written request must be made within 90
103.22 	days from the date of entering upon the duties of the position
103.23 	to which the person is appointed.  After making the request, a
103.24 	person requesting the exemption is not entitled to coverage by
103.25 	the general state employees retirement plan while employed in
103.26 	the position that entitled that person to an exemption from
103.27 	coverage.

103.28 	Sec. 14. Minnesota Statutes 2004, section 352.021,
103.29 	subdivision 4, is amended to read:
103.30 		Subd. 4.Reentering service after refund.  When a former
103.31 	employee who has withdrawn accumulated contributions reenters
103.32 	employment in a position entitled to coverage under the
103.33 	system general state employees retirement plan, the employee
103.34 	shall must be covered by the system plan on the same basis as a
103.35 	new employee and is not entitled to credit for any former
103.36 	service.  The annuity rights forfeited when taking a refund can
104.1 	only be restored as provided in this chapter.

104.2 	Sec. 15. Minnesota Statutes 2004, section 352.04,
104.3 	subdivision 1, is amended to read:
104.4 		Subdivision 1.Fund created.  (a) There is created a
104.5 	special fund to be known as the general state employees
104.6 	retirement fund.  In that fund there shall be deposited
104.7 	employees , employee contributions, employers employer 
104.8 	contributions, and other amounts authorized by law must be
104.9 	deposited.
104.10 	(b) Effective July 1, 1969,The general state employees
104.11 	retirement plan of the Minnesota State Retirement System shall 
104.12 	must participate in the Minnesota postretirement investment fund.
104.13 	In that fund there shall be deposited The amounts provided in
104.14 	section 352.119must be deposited in the Minnesota
104.15 	postretirement investment fund.

104.16 	Sec. 16. Minnesota Statutes 2004, section 352.04,
104.17 	subdivision 12, is amended to read:
104.18 		Subd. 12.Fund disbursement restricted.  The general 
104.19 	state employees retirement fund and the participation in the
104.20 	Minnesota postretirement investment fund must be disbursed only
104.21 	for the purposes provided by law.  The expenses of the system
104.22 	and any benefits provided by law, other than benefits payable
104.23 	from the Minnesota postretirement investment fund, must be paid
104.24 	from the general state employees retirement fund.  The
104.25 	retirement allowances, retirement annuities, and disability
104.26 	benefits, as well as refunds of any sum remaining to the credit
104.27 	of a deceased retired employee or a disabled employee must be
104.28 	paid only from the general state employees retirement fund after
104.29 	the needs have been certified and the amounts withdrawn from the
104.30 	participation in the Minnesota postretirement investment fund
104.31 	under section 11A.18.  The amounts necessary to make the
104.32 	payments from the general state employees retirement fund and
104.33 	the participation in the Minnesota postretirement investment
104.34 	fund are annually appropriated from these funds for those
104.35 	purposes.

104.36 	Sec. 17. Minnesota Statutes 2004, section 352.041,
105.1 	subdivision 1, is amended to read:
105.2 		Subdivision 1.Allowable service credit. Any (a) An 
105.3 	employee covered by the system general state employees
105.4 	retirement plan who is given a leave of absence for employment
105.5 	by a political subdivision of the state shall remains a member
105.6 	of the plan and must continue to pay member contributions into
105.7 	the general state employees retirement fund for the period of
105.8 	leave.
105.9 	(b) Upon payment of member contributions,the employee must
105.10 	be given allowable service credit as a state employee on the
105.11 	records of the system retirement plan as though the employee had
105.12 	received salary from the state during the leave.  Payments into
105.13 	the retirement fund shall must be at the rate required in
105.14 	section 352.04, subdivision 2, and must be based upon the salary
105.15 	received from the political subdivision subject to the maximum
105.16 	amount, if any.

105.17 	Sec. 18. Minnesota Statutes 2004, section 352.041,
105.18 	subdivision 2, is amended to read:
105.19 		Subd. 2.Employee contributions, procedure.  The officer
105.20 	or employee who is authorized by law to pay salaries to
105.21 	employees of the political subdivision which is employing a
105.22 	state employee shall have must deduct employee contributions
105.23 	deducted for the general state employees retirement plan under
105.24 	section 352.04, subdivision 2,from the salary of each employee
105.25 	who is on leave of absence from state service on each payroll
105.26 	abstract and shall must pay the sum to the director following
105.27 	the conclusion of each pay period.

105.28 	Sec. 19. Minnesota Statutes 2004, section 352.041,
105.29 	subdivision 3, is amended to read:
105.30 		Subd. 3.Employer contributions, procedure.  The officer
105.31 	or employee who is authorized by law to pay salaries to
105.32 	employees of the political subdivision which is employing a
105.33 	state employee covered by the system shall general state
105.34 	employees retirement plan also must have employer contributions
105.35 	made to the general state employees retirement fund on following
105.36 	the conclusion of each payroll abstract in the amount required
106.1 	by section 352.04, subdivision 3.  These contributions are to 
106.2 	must be charged to the political subdivision as an
106.3 	administrative cost.

106.4 	Sec. 20. Minnesota Statutes 2004, section 352.041,
106.5 	subdivision 5, is amended to read:
106.6 		Subd. 5.Employer contributions, leaves of absence; tax
106.7 	levies. (a) Every political subdivision which is employing a
106.8 	state employee covered by the system on leave of absence from
106.9 	state service for employment by a political subdivision of the
106.10 	state shall must pay into the general state employees retirement
106.11 	fund the amount of the employer contribution required by law for
106.12 	state employees covered by the system under section 352.04,
106.13 	subdivision 3.
106.14 	(b) Employing political subdivisions, except other than 
106.15 	school districts,may levy taxes necessary for the payment of
106.16 	employer contributions without limitation as to rate or amount.
106.17 	The levy of the taxes does not reduce the amount of other
106.18 	taxes to that may be levied by political subdivisions,
106.19 	except other than school districts,which are subject to any
106.20 	limitation.

106.21 	Sec. 21. Minnesota Statutes 2004, section 352.15,
106.22 	subdivision 1, is amended to read:
106.23 		Subdivision 1.Exemption; exceptions. None of the money,
106.24 	annuities, or other benefits mentioned in this chapter is
106.25 	assignable either in law or in equity or subject to execution,
106.26 	levy, attachment, garnishment, or other legal process, except as
106.27 	provided in subdivision 1a or section 518.58, 518.581, or
106.28 	518.6111.The provisions of section 356.401 apply to the general
106.29 	state employees retirement plan and to the correctional state
106.30 	employees retirement plan.

106.31 	Sec. 22. Minnesota Statutes 2004, section 352.15,
106.32 	subdivision 3, is amended to read:
106.33 		Subd. 3.Deducting health or dental insurance premiums.
 106.34 	The board may direct authorize, at its discretion, the deduction
106.35 	of a retiree's health or dental insurance premiums and transfer
106.36 	of the amounts to a health or dental insurance carrier covering
107.1 	state employees.  The insurance carrier must certify that the
107.2 	retired employee has signed an authorization for the deduction
107.3 	and provide a computer readable roster of covered retirees and
107.4 	amounts.  The health or dental insurance carrier must refund
107.5 	deductions withheld from a retiree's check in error directly to
107.6 	the retiree.  The board shall require that the insurance carrier
107.7 	to reimburse the fund for the administrative expense of
107.8 	withholding the premium amounts.  The insurance carrier shall
107.9 	assume liability for any failure of the system to properly
107.10 	withhold the premium amounts.

107.11 	Sec. 23. Minnesota Statutes 2004, section 352.15,
107.12 	subdivision 4, is amended to read:
107.13 		Subd. 4.Direct transfer of refunds. A direct transfer
107.14 	of account refunds under this chapter may be made to an 
107.15 	individual retirement savings accounts account or a qualified
107.16 	retirement plans plan of the person upon the receipt of an 
107.17 	application for transfer by a former employee, on forms
107.18 	acceptable to the executive director.

107.19 	Sec. 24. Minnesota Statutes 2004, section 352.22,
107.20 	subdivision 10, is amended to read:
107.21 		Subd. 10.Other refunds.  Former employees covered by the
107.22 	system are entitled to apply for refunds if they are or become
107.23 	members of the State Patrol retirement fund, the state Teachers
107.24 	Retirement Association, or employees of the University of
107.25 	Minnesota excluded from coverage under the system by action of
107.26 	the Board of Regents; or labor service employees, excluded from
107.27 	coverage under section 352.01, subdivision 2b, clause (25);or
107.28 	employees of the adjutant general who under federal law
107.29 	effectually elect membership in a federal retirement system; or
107.30 	officers or employees of the senate or house of representatives,
107.31 	excluded from coverage under section 352.01, subdivision 2b,
107.32 	clause (8) (7).  The refunds must include accumulated
107.33 	contributions plus interest as provided in subdivision 2.  These
107.34 	employees may apply for a refund once 30 days or more have
107.35 	elapsed after their coverage ceases, even if they continue in
107.36 	state service but in positions not covered by this chapter.

108.1 	Sec. 25. Minnesota Statutes 2004, section 352B.01,
108.2 	subdivision 1, is amended to read:
108.3 		Subdivision 1.Scope.  In this chapter, each of the terms
108.4 	defined in this section have has the meanings meaning given
108.5 	them to it.

108.6 	Sec. 26. Minnesota Statutes 2004, section 352B.01,
108.7 	subdivision 2, is amended to read:
108.8 		Subd. 2.Member.  "Member" means:
108.9 	(1) a State Patrol member currently employed after June 30,
108.10 	1943,under section 299D.03 by the state, who is a peace officer
108.11 	under section 626.84, and whose salary or compensation is paid
108.12 	out of state funds;
108.13 	(2) a conservation officer employed under section 97A.201,
108.14 	currently employed by the state, whose salary or compensation is
108.15 	paid out of state funds;
108.16 	(3) a crime bureau officer who was employed by the crime
108.17 	bureau and was a member of the Highway Patrolmen's retirement
108.18 	fund on July 1, 1978, whether or not that person has the power
108.19 	of arrest by warrant after that date, or who is employed as
108.20 	police personnel, with powers of arrest by warrant under section
108.21 	299C.04, and who is currently employed by the state, and whose
108.22 	salary or compensation is paid out of state funds;
108.23 	(4) a person who is employed by the state in the Department
108.24 	of Public Safety in a data processing management position with
108.25 	salary or compensation paid from state funds, who was a crime
108.26 	bureau officer covered by the State Patrol retirement plan on
108.27 	August 15, 1987, and who was initially hired in the data
108.28 	processing management position within the department during
108.29 	September 1987, or January 1988, with membership continuing for
108.30 	the duration of the person's employment in that position,
108.31 	whether or not the person has the power of arrest by warrant
108.32 	after August 15, 1987;
108.33 	(5) a public safety employee defined as who is a peace
108.34 	officer in under section 626.84, subdivision 1, paragraph (c),
108.35 	and who is employed with by the Division of Alcohol and Gambling
108.36 	Enforcement under section 299L.01; and
109.1 	(6) a Fugitive Apprehension Unit officer after October 31,
109.2 	2000, who is employed by the Office of Special Investigations of
109.3 	the Department of Corrections and who is a peace officer under
109.4 	section 626.84.

109.5 	Sec. 27. Minnesota Statutes 2004, section 352B.01,
109.6 	subdivision 3, is amended to read:
109.7 		Subd. 3.Allowable service.  (a) "Allowable service"
109.8 	means:
109.9 	(1) for members defined in subdivision 2, clause (a) (1),
109.10 	monthly service is granted for in any month for which payments
109.11 	have been made to the State Patrol retirement fund, and
109.12 	(2) for members defined in subdivision 2, clauses (b) (2) 
109.13 	and (c) (3), service for which payments have been made to the
109.14 	State Patrol retirement fund, service for which payments were
109.15 	made to the State Police officers retirement fund after June 30,
109.16 	1961, and all prior service which was credited to a member for
109.17 	service on or before June 30, 1961.
109.18 	(b) Allowable service also includes any period of absence
109.19 	from duty by a member who, by reason of injury incurred in the
109.20 	performance of duty, is temporarily disabled and for which
109.21 	disability the state is liable under the workers' compensation
109.22 	law, until the date authorized by the executive director for
109.23 	commencement of payment of a disability benefit or return to
109.24 	employment.
109.25 	(c) MS 2002 (Expired)
109.26 	(d) Allowable service means service in a month during which
109.27 	a member is paid a salary from which a member contribution is
109.28 	deducted, deposited, and credited in the State Patrol retirement
109.29 	plan.

109.30 	Sec. 28. Minnesota Statutes 2004, section 352B.02,
109.31 	subdivision 1e, is amended to read:
109.32 		Subd. 1e.Audit; actuarial valuation.  The legislative
109.33 	auditor shall audit the fund.  Any actuarial valuation of the
109.34 	fund required under section 356.215 must be prepared by the
109.35 	actuary retained under section 356.214.  Any approved actuary
109.36 	retained by the executive director under section 352.03,
110.1 	subdivision 6, may perform actuarial valuations and experience
110.2 	studies to supplement those performed by the commission-retained 
110.3 	actuary retained under section 356.214.  Any supplemental
110.4 	actuarial valuation or experience studies shall must be filed
110.5 	with the executive director of the Legislative Commission on
110.6 	Pensions and Retirement.

110.7 	Sec. 29. Minnesota Statutes 2004, section 352B.071, is
110.8 	amended to read:
110.9 	352B.071 EXEMPTION FROM PROCESS.
110.10 	None of the money, annuities, or other benefits provided
110.11 	for in this chapter is assignable either in law or in equity or
110.12 	be subject to execution, levy, attachment, garnishment, or other
110.13 	legal process, except as provided in section 518.58, 518.581, or
110.14 	518.6111.The provisions of section 356.401 apply to the State
110.15 	Patrol retirement plan.

110.16 	Sec. 30. Minnesota Statutes 2004, section 352D.01, is
110.17 	amended to read:
110.18 	352D.01 ESTABLISHMENT.
110.19 	There is hereby established within the Minnesota State
110.20 	Retirement System a retirement program for certain public
110.21 	employees to be known as the Minnesota unclassified employees
110.22 	retirement program, which shall be .  The program must be 
110.23 	administered by the Minnesota State Retirement System.

110.24 	Sec. 31. Minnesota Statutes 2004, section 352D.015,
110.25 	subdivision 3, is amended to read:
110.26 		Subd. 3.Supplemental investment fund.  "Supplemental
110.27 	investment fund" means the fund established and governed by
110.28 	section 11A.17.

110.29 	Sec. 32. Minnesota Statutes 2004, section 352D.015,
110.30 	subdivision 4, is amended to read:
110.31 		Subd. 4.General fund.  "General fund" means the general 
110.32 	state employees retirement fund except the moneys for the
110.33 	unclassified program.

110.34 	Sec. 33. Minnesota Statutes 2004, section 352D.03, is
110.35 	amended to read:
110.36 	352D.03 TRANSFER OF ASSETS.
111.1 	Unless an eligible employee enumerated in section 352D.02,
111.2 	subdivision 1 or 1a, has elected coverage under the individual
111.3 	retirement account plan under chapter 354B, a sum of money
111.4 	representing the assets credited to each employee exercising the
111.5 	option contained in section 352D.02, plus an equal employer
111.6 	contribution together with interest for the employment period at
111.7 	the actuarially assumed rates applicable preretirement interest
111.8 	actuarial assumption rate during this period, compounded
111.9 	annually, shall must be used for the purchase of shares on
111.10 	behalf of each employee in the accounts of the supplemental
111.11 	retirement fund established by section 11A.17. Any employer's
111.12 	contribution to amortize the deficit in the state employee's
111.13 	retirement fund shall not, however, be used for the purchase of
111.14 	shares.

111.15 	Sec. 34. Minnesota Statutes 2004, section 352D.05,
111.16 	subdivision 4, is amended to read:
111.17 		Subd. 4.Repayment of refund. (a) A participant in the
111.18 	unclassified program may repay regular refunds taken pursuant to 
111.19 	under section 352.22, as provided in section 352.23.
111.20 	(b) A participant in the unclassified program or an
111.21 	employee covered by the general plan who has withdrawn the value
111.22 	of the total shares may repay the refund taken and thereupon
111.23 	restore the service credit, rights and benefits forfeited by
111.24 	paying into the fund the amount refunded plus interest at an
111.25 	annual rate of 8.5 percent compounded annually from the date
111.26 	that the refund was taken until the date that the refund is
111.27 	repaid.  If the participant had withdrawn only the employee
111.28 	shares as permitted under prior laws, repayment shall must be
111.29 	pro rata. Payment shall 
111.30 	(c) Except as provided in section 356.441, the repayment of
111.31 	a refund under this section must be made in a lump sum.

111.32 	Sec. 35. Minnesota Statutes 2004, section 352D.085,
111.33 	subdivision 1, is amended to read:
111.34 		Subdivision 1.Combined service. Except as provided in
111.35 	section 356.30, 356.302, or 356.303,service under the
111.36 	unclassified program for which the employee has been credited
112.1 	with employee shares may be used for the limited purpose of
112.2 	qualifying for benefits under sections 352.115, 352.72,
112.3 	subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;
112.4 	provided such .  The service also may not be used to qualify for
112.5 	a disability benefit under section 352.113 or 354.48 if a
112.6 	participant was under the unclassified program at the time of
112.7 	the disability, and provided further that .  Also,the years of
112.8 	service and salary paid while the participant was in the
112.9 	unclassified program shall may not be used in determining the
112.10 	amount of benefits.

112.11 	Sec. 36. Minnesota Statutes 2004, section 352D.09,
112.12 	subdivision 5, is amended to read:
112.13 		Subd. 5.Unclaimed benefits.  If the beneficiary,
112.14 	surviving spouse or estate has not made application for benefits
112.15 	within ten years after the date of the death of a participant,
112.16 	the value of the shares shall be is appropriated to the regular 
112.17 	general state employees retirement fund and the provisions of
112.18 	section 352.12, subdivision 12shall ,govern.  If a former
112.19 	participant fails to make a claim for benefits within five years
112.20 	after the termination of covered service or by age 70, whichever
112.21 	is later, the value of the shares shall be is appropriated to
112.22 	the general state employees retirement fund and the provisions
112.23 	of section 352.22, subdivision 8, shall apply.

112.24 	Sec. 37. Minnesota Statutes 2004, section 352D.12, is
112.25 	amended to read:
112.26 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
112.27 	(a) An employee who is a participant in the unclassified
112.28 	program and who has prior service credit in a covered plan under
112.29 	chapters 3A,chapter 352, 352C,353, 354, 354A, and or 422A
112.30 	may, within the time limits specified in this section, elect to
112.31 	transfer to the unclassified program prior service contributions
112.32 	to one or more of those plans. Participants with six or more
112.33 	years of prior service credit in a plan governed by chapter 3A
112.34 	or 352C on July 1, 1998, may not transfer prior service
112.35 	contributions.  Participants with less than six years of prior
112.36 	service credit in a plan governed by chapter 3A or 352C on July
113.1 	1, 1998, must be contributing to the unclassified plan on or
113.2 	after January 5, 1999, in order to transfer prior contributions.
113.3 	(b) For participants with prior service credit in a plan
113.4 	governed by chapter 352, 353, 354, 354A, or 422A, "prior service
113.5 	contributions" means the accumulated employee and equal employer
113.6 	contributions with interest at an annual rate of 8.5 percent
113.7 	compounded annually, based on fiscal year balances. For
113.8 	participants with less than six years of service credit as of
113.9 	July 1, 1998, and with prior service credit in a plan governed
113.10 	by chapter 3A or 352C, "prior service contributions" means an
113.11 	amount equal to twice the amount of the accumulated member
113.12 	contributions plus annual compound interest at the rate of 8.5
113.13 	percent, computed on fiscal year balances.
113.14 	(c) If a participant has taken a refund from a retirement
113.15 	plan listed in this section, the participant may repay the
113.16 	refund to that plan, notwithstanding any restrictions on
113.17 	repayment to that plan, plus 8.5 percent interest compounded
113.18 	annually and have the accumulated employee and equal employer
113.19 	contributions transferred to the unclassified program with
113.20 	interest at an annual rate of 8.5 percent compounded annually
113.21 	based on fiscal year balances.  If a person repays a refund and
113.22 	subsequently elects to have the money transferred to the
113.23 	unclassified program, the repayment amount, including interest,
113.24 	is added to the fiscal year balance in the year which the
113.25 	repayment was made.
113.26 	(d) A participant electing to transfer prior service
113.27 	contributions credited to a retirement plan governed by chapter
113.28 	352, 353, 354, 354A, or 422A as provided under this section must
113.29 	complete the a written application for the transfer and repay
113.30 	any refund within one year of the commencement of the employee's
113.31 	participation in the unclassified program. A participant
113.32 	electing to transfer prior service contributions credited to a
113.33 	retirement plan governed by chapter 3A or 352C as provided under
113.34 	this section must complete the application for the transfer and
113.35 	repay any refund between January 5, 1999, and June 1, 1999, if
113.36 	the employee commenced participation in the unclassified program
114.1 	before January 5, 1999, or within one year of the commencement
114.2 	of the employee's participation in the unclassified program if
114.3 	the employee commenced participation in the unclassified program
114.4 	after January 4, 1999.

114.5 	Sec. 38. Minnesota Statutes 2004, section 353.01,
114.6 	subdivision 32, is amended to read:
114.7 		Subd. 32.Coordinated member.  "Coordinated member" means
114.8 	any a public employee, including any a public hospital employee,
114.9 	who is covered by any an agreement or modification made between
114.10 	the state and the Secretary of Health, Education and Welfare 
114.11 	Human Services, making the provisions of the federal Old Age,
114.12 	Survivors and Disability Insurance Act applicable to the member
114.13 	if the membership eligibility criteria are met under this
114.14 	chapter.  A coordinated member also is a former basic member who
114.15 	has a complete and continuous separation for at least 30 days
114.16 	from employment as a public employee meeting the requirements
114.17 	specified in subdivision 28, paragraphs (a) and (b), and who
114.18 	reenters public service as a public employee and meets the
114.19 	membership eligibility criteria under this chapter.

114.20 	Sec. 39. Minnesota Statutes 2004, section 353.01,
114.21 	subdivision 33, is amended to read:
114.22 		Subd. 33.Basic member.  "Basic member" means any a 
114.23 	public employee, including any a public hospital employee, who
114.24 	is not covered by any agreement or modification made between the
114.25 	state and the Secretary of Health, Education and Welfare Human
114.26 	Services.

114.27 	Sec. 40. Minnesota Statutes 2004, section 353.025, is
114.28 	amended to read:
114.29 	353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.
114.30 	From and after January 1, 1982,Employees of the Range
114.31 	Association of Municipalities and Schools hereinafter referred
114.32 	to as the association, shall become are coordinated members of
114.33 	the general employees retirement plan of the Public Employees
114.34 	Retirement Association unless specifically exempt under section
114.35 	353.01, subdivision 2b, and .The Range Association shall be
114.36 	deemed to be of Municipalities and Schools is a governmental
115.1 	subdivision for the purposes of this chapter.

115.2 	Sec. 41. Minnesota Statutes 2004, section 353.026, is
115.3 	amended to read:
115.4 	353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
115.5 	EMPLOYEES.
115.6 	Any person who was employed by the city of Minneapolis,
115.7 	Special School District No. 1, or public corporation as defined
115.8 	in section 422A.01, subdivision 9, on or after July 1, 1978,and
115.9 	prior to before July 1, 1979, and who was excluded from
115.10 	retirement coverage by the coordinated program of the
115.11 	Minneapolis municipal employees retirement fund pursuant to 
115.12 	under section 422A.09, subdivision 3, shall be is entitled to
115.13 	retirement coverage by the general employees retirement plan of
115.14 	the Public Employees Retirement Association unless specifically
115.15 	excluded pursuant to under section 353.01, subdivision 2b, from
115.16 	and after May 19, 1981.

115.17 	Sec. 42. Minnesota Statutes 2004, section 353.027, is
115.18 	amended to read:
115.19 	353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
115.20 	EMPLOYEES.
115.21 	Any person employed on January 1, 1975, by a municipal
115.22 	court established pursuant to under Minnesota Statutes 1957,
115.23 	section 488.03,and located in the cities of New Brighton,
115.24 	Roseville, Maplewood, North Saint Paul, White Bear Lake,or St.
115.25 	Paul shall be is eligible for membership in the general
115.26 	employees retirement plan of the Public Employees Retirement
115.27 	Association and shall retain retains any rights or benefits the
115.28 	person had attained as a member of the general employees
115.29 	retirement plan of the association on January 1, 1975, so long
115.30 	as the person remains an employee of the municipal court of
115.31 	Ramsey County.

115.32 	Sec. 43. Minnesota Statutes 2004, section 353.028, is
115.33 	amended to read:
115.34 	353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.
115.35 		Subdivision 1.Definitions. (a) For purposes of this
115.36 	section, each of the terms in this subdivision has the meaning
116.1 	indicated.
116.2 	(b) "City manager" means (1) a person who is duly appointed
116.3 	to and is holding the position of city manager in a Plan B
116.4 	statutory city or in a home rule city operating under the
116.5 	"council-manager" form of government, or (2) a person who is 
116.6 	appointed to and is holding the position of chief administrative
116.7 	officer of a home rule charter city or a statutory city pursuant
116.8 	to under a charter provision, ordinance, or resolution
116.9 	establishing such a position and prescribing its duties and
116.10 	responsibilities.
116.11 	(c) "Governing body" means the city council of the city
116.12 	employing the city manager.
116.13 	(d) "Election" means the election described in subdivision
116.14 	2.
116.15 		Subd. 2.Election. (a) A city manager may elect to be
116.16 	excluded from membership in the general employees retirement
116.17 	plan of the Public Employees Retirement Association.  The
116.18 	election of exclusion must be made within six months following
116.19 	the commencement of employment, must be made in writing on a
116.20 	form prescribed by the executive director, and must be approved
116.21 	by a resolution of adopted by the governing body of the city.
116.22 	The election of exclusion is not effective until it is filed
116.23 	with the executive director.  Membership of a city manager in
116.24 	the association general employees retirement plan ceases on the
116.25 	date the written election is received by the executive director
116.26 	or upon a later date specified.  Employee and employer
116.27 	contributions made on behalf of a person exercising the option
116.28 	to be excluded from membership under this section must be
116.29 	refunded in accordance with section 353.27, subdivision 7.
116.30 	(b) A city manager who has elected exclusion under this
116.31 	subdivision may elect to revoke that action by filing a written
116.32 	notice with the executive director.  The notice must be on a
116.33 	form prescribed by the executive director and must be approved
116.34 	by a resolution of the governing body of the city.  Membership
116.35 	of the city manager in the association resumes prospectively
116.36 	from the date of the first day of the pay period for which
117.1 	contributions were deducted or, if pay period coverage dates are
117.2 	not provided, the date on which the notice of revocation or
117.3 	contributions are received in the office of the association,
117.4 	provided that the notice of revocation is received by the
117.5 	association within 60 days of the receipt of contributions.
117.6 	(c) An election under paragraph (b) is irrevocable.  Any
117.7 	election under paragraph (a) or (b) must include a statement
117.8 	that the individual will not seek authorization to purchase
117.9 	service credit for any period of excluded service.
117.10 		Subd. 3.Deferred compensation; city contribution. If an
117.11 	election of exclusion is made, and if the city manager and the
117.12 	governing body of the city additionally agree in writing that
117.13 	the additional compensation is to be deferred and shall is to be
117.14 	contributed on behalf of the city manager to a deferred
117.15 	compensation program which meets the requirements of section 457
117.16 	of the Internal Revenue Code of 1954 1986, as amended through
117.17 	December 31, 1980, the governing body may compensate the city
117.18 	manager, in addition to the salary allowed under any limitation
117.19 	imposed on salaries by law or charter, in an amount equal to the
117.20 	employer contribution which would be required by section 353.27,
117.21 	subdivision 3, if the city manager were a member of the
117.22 	association general employees retirement plan.
117.23 		Subd. 4.Refunds; deferred annuity. A city manager who
117.24 	makes an election to be excluded from membership is entitled to
117.25 	a refund of accumulated deductions or, if otherwise qualified, a
117.26 	deferred annuity in the manner provided by under section 353.34,
117.27 	at the option of the manager.
117.28 		Subd. 5.Election; other employment. If a city manager
117.29 	who has made an election to be excluded subsequently accepts
117.30 	employment in another governmental subdivision or subsequently 
117.31 	accepts employment other than as a city manager in the same
117.32 	city, the election shall be deemed to have been is rescinded on
117.33 	the effective date of employment.

117.34 	Sec. 44. Minnesota Statutes 2004, section 353.14, is
117.35 	amended to read:
117.36 	353.14 BENEFITS FROM OTHER FUNDS.
118.1 	No annuity or benefit provided by this chapter shall may be
118.2 	affected, diminished, or impaired by any pension, benefit, or
118.3 	annuity which any member or survivor is entitled to receive from
118.4 	a tax supported public retirement plan or system authorized by
118.5 	any other law, for based on service that is different service
118.6 	than the service for which the member or survivor is entitled to
118.7 	receive benefit or annuity from a retirement plan administered
118.8 	by the Public Employees Retirement Association.

118.9 	Sec. 45. Minnesota Statutes 2004, section 353.15,
118.10 	subdivision 1, is amended to read:
118.11 		Subdivision 1.Exemption; exceptions. No money, annuity,
118.12 	or benefit provided for in this chapter is assignable or subject
118.13 	to execution, levy, attachment, garnishment, or legal process,
118.14 	except as provided in subdivision 2 or section 518.58, 518.581,
118.15 	or 518.6111.The provisions of section 356.401 apply to the
118.16 	general employees retirement plan, to the public employees
118.17 	police and fire retirement plan, and to the local government
118.18 	correctional service retirement plan.

118.19 	Sec. 46. Minnesota Statutes 2004, section 353.15,
118.20 	subdivision 3, is amended to read:
118.21 		Subd. 3.Payment to public bodies.  If,in the judgment
118.22 	of the executive director,conditions so warrant, payment of an
118.23 	annuity, a retirement benefit, or a refund may be made to a
118.24 	public body in behalf of an annuitant, disabilitant, or survivor
118.25 	upon such terms as the executive director may prescribe.

118.26 	Sec. 47. Minnesota Statutes 2004, section 353.27,
118.27 	subdivision 11, is amended to read:
118.28 		Subd. 11.Employers; required to furnish requested
118.29 	information. (a) All governmental subdivisions shall furnish
118.30 	promptly such other information relative to the employment
118.31 	status of all employees or former employees, including,but not
118.32 	limited to,payroll abstracts pertaining to all past and present
118.33 	employees, as may be requested by the association or its 
118.34 	executive director, including schedules of salaries applicable
118.35 	to various categories of employment.
118.36 	(b) In the event payroll abstract records have been lost or
119.1 	destroyed, for whatever reason or in whatever manner, so that
119.2 	such schedules of salaries cannot be furnished therefrom, the
119.3 	employing governmental subdivision, in lieu thereof, shall
119.4 	furnish to the association an estimate of the earnings of any
119.5 	employee or former employee for any period as may be requested
119.6 	by the association or its executive director. Should If the
119.7 	association receive such schedules is provided a schedule of
119.8 	estimated earnings, the executive director is hereby authorized
119.9 	to use the same as a basis for making whatever computations
119.10 	might be necessary for determining obligations of the employee
119.11 	and employer to the retirement fund.  If estimates are not
119.12 	furnished by the employer pursuant to at the request of the
119.13 	association or its executive director, the association executive
119.14 	director may estimate the obligations of the employee and
119.15 	employer to the retirement fund based upon such those records as 
119.16 	that are in its possession. Where payroll abstracts have been
119.17 	lost or destroyed, the governmental agency need not furnish any
119.18 	information pertaining to employment prior to July 1, 1963.  The
119.19 	association shall make no estimate of any obligation of any
119.20 	employee, former employee, or employer covering employment prior
119.21 	to July 1, 1963.

119.22 	Sec. 48. Minnesota Statutes 2004, section 353.271, is
119.23 	amended to read:
119.24 	353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
119.25 	INVESTMENT FUND.
119.26 		Subdivision 1.Authorization. The general employees
119.27 	retirement plan of the Public Employees Retirement Association,
119.28 	including the public employees police and fire fund but
119.29 	excluding the various local relief association consolidation
119.30 	accounts, is retirement plan, and the local government
119.31 	correctional service retirement plan are authorized to
119.32 	participate in the Minnesota postretirement investment fund.
119.33 	There shall be is one general participation in the Minnesota
119.34 	postretirement investment fund for all purposes by each plan of 
119.35 	the Public Employees Retirement fund and one general
119.36 	participation in the Minnesota postretirement investment fund
120.1 	for all purposes by the public employees police and fire
120.2 	fund Association.
120.3 		Subd. 2.Valuation of assets; adjustment of benefits.
 120.4 	(1) (a) The required reserves for retirement annuities payable
120.5 	as provided in this chapter other than those payable from the
120.6 	various local relief association consolidation accounts, as
120.7 	determined in accordance with the appropriate mortality table
120.8 	adopted by the board of trustees based on the experience of the
120.9 	fund as recommended by the actuary retained by the Legislative
120.10 	Commission on Pensions and Retirement under section 356.214, and
120.11 	approved under section 356.215, subdivision 18, and using the
120.12 	postretirement interest assumption specified in section 356.215,
120.13 	subdivision 8, shall must be transferred to the Minnesota
120.14 	postretirement investment fund as of the last business day of
120.15 	the month in which the retirement annuity begins.
120.16 	(2) (b) Annuity payments other than those payable from the
120.17 	various local relief association consolidation accounts
120.18 	shall must be adjusted in accordance with the provisions of
120.19 	section 11A.18.
120.20 	(3) (c) Increases in payments pursuant to under this
120.21 	section or from the various local relief association
120.22 	consolidation accounts, if applicable, will must be made
120.23 	automatically unless the intended recipient files written notice
120.24 	with the executive director of the Public Employees Retirement
120.25 	Association requesting that the increase shall not be made.

120.26 	Sec. 49. Minnesota Statutes 2004, section 353.31,
120.27 	subdivision 1c, is amended to read:
120.28 		Subd. 1c.Coordinated members.  Except for benefits
120.29 	provided under section 353.32, subdivisions 1 and 1a,no
120.30 	survivor benefits are payable to the surviving spouse or
120.31 	dependent children of a deceased coordinated member.

120.32 	Sec. 50. Minnesota Statutes 2004, section 353.32,
120.33 	subdivision 9, is amended to read:
120.34 		Subd. 9.Payment to a minor.  If a member or former
120.35 	member dies having named as beneficiary a person who is a minor
120.36 	at the time of the application for refund, the board may make
121.1 	the payment (a) (1) directly to the minor, (b) (2) to any 
121.2 	a person who has legally qualified and is acting as guardian of
121.3 	the minor's person or property in any jurisdiction, or (c) (3) 
121.4 	to either parent of the minor or to any an adult person with
121.5 	whom the minor may at the time be living, provided only that .
121.6 	The parent or other person to whom any amount is to be
121.7 	paid shall have advised must advise the board in writing that
121.8 	the amount will be held or used in trust for the benefit of such
121.9 	minor.  Any annuity or disability benefit payable at the time of
121.10 	death of an annuitant or recipient of a disability benefit,
121.11 	which is payable to a beneficiary who is a minor, may be paid in
121.12 	the same manner. Such The payment shall be is a bar to recovery
121.13 	by any other person or persons.

121.14 	Sec. 51. Minnesota Statutes 2004, section 353.33,
121.15 	subdivision 12, is amended to read:
121.16 		Subd. 12.Basic disability survivor benefits.  If a basic
121.17 	member who is receiving a disability benefit under subdivision 3:
121.18 	(a) (1) dies before attaining age 65 or within five years
121.19 	of the effective date of the disability, whichever is later, the
121.20 	surviving spouse shall is entitled to receive a survivor benefit
121.21 	under section 353.31, unless the surviving spouse elected to
121.22 	receive a refund under section 353.32, subdivision 1.;
121.23 	(b) (2) is living at age 65 or five years after the
121.24 	effective date of the disability, whichever is later, the basic
121.25 	member may continue to receive a normal disability benefit, or
121.26 	elect a joint and survivor optional annuity under section
121.27 	353.31, subdivision 1b.  The election of the joint and survivor
121.28 	optional annuity must occur within 90 days of attaining age 65
121.29 	or of reaching the five-year anniversary of the effective date
121.30 	of the disability benefit, whichever is later.  The optional
121.31 	annuity takes effect on the first day of the month following the
121.32 	month in which the person attains age 65 or reaches the
121.33 	five-year anniversary of the effective date of the disability
121.34 	benefit, whichever is later.; or 
121.35 	(c) (3) if there is a dependent child or children under
121.36 	paragraph (a) or (b) clause (1) or (2), the association shall
122.1 	grant dependent child is entitled to a dependent child benefit
122.2 	under section 353.31, subdivision 1b, paragraph (b).

122.3 	Sec. 52. Minnesota Statutes 2004, section 354.091, is
122.4 	amended to read:
122.5 	354.091 SERVICE CREDIT.
122.6 	(a) In computing service credit, no teacher shall may 
122.7 	receive credit for more than one year of teaching service for
122.8 	any fiscal year. Commencing July 1, 1961 Additionally, in
122.9 	crediting allowable service:
122.10 	(1) if a teacher teaches less than five hours in a day,
122.11 	service credit must be given for the fractional part of the day
122.12 	as the term of service performed bears to five hours;
122.13 	(2) if a teacher teaches five or more hours in a day,
122.14 	service credit must be given for only one day;
122.15 	(3) if a teacher teaches at least 170 full days in any
122.16 	fiscal year, service credit must be given for a full year of
122.17 	teaching service; and
122.18 	(4) if a teacher teaches for only a fractional part of the
122.19 	year, service credit must be given for such fractional part of
122.20 	the year in the same relationship as the period of service
122.21 	performed bears to 170 days.
122.22 	(b) A teacher shall must receive a full year of service
122.23 	credit based on the number of days in the employer's full school
122.24 	year if it that school year is less than 170 days.  Teaching
122.25 	service performed before July 1, 1961, must be computed under
122.26 	the law in effect at the time it was performed.
122.27 	(c) A teacher must not lose or gain retirement service
122.28 	credit as a result of the employer converting to a flexible or
122.29 	alternate work schedule.  If the employer converts to a flexible
122.30 	or alternate work schedule, the forms for reporting teaching
122.31 	service and the procedures for determining service credit must
122.32 	be determined by the executive director with the approval of the
122.33 	board of trustees.
122.34 	(d) For all services rendered on or after July 1, 2003,
122.35 	service credit for all members employed by the Minnesota State
122.36 	Colleges and Universities system must be determined:
123.1 	(1) for full-time employees, by the definition of full-time
123.2 	employment contained in the collective bargaining agreement for
123.3 	those units listed in section 179A.10, subdivision 2, or
123.4 	contained in the applicable personnel or salary plan for those
123.5 	positions designated in section 179A.10, subdivision 1;
123.6 	(2) for part-time employees, by the appropriate proration
123.7 	of full-time equivalency based on the provisions contained in
123.8 	the collective bargaining agreement for those units listed in
123.9 	section 179A.10, subdivision 2, or contained in the applicable
123.10 	personnel or salary plan for those positions designated in
123.11 	section 179A.10, subdivision 1, and the applicable procedures of
123.12 	the Minnesota State Colleges and Universities system; and
123.13 	(3) in no case may a member receive more than one year of
123.14 	service credit for any fiscal year.

123.15 	Sec. 53. Minnesota Statutes 2004, section 354.10,
123.16 	subdivision 1, is amended to read:
123.17 		Subdivision 1.Exemption; exceptions. (a) The provisions
123.18 	of section 356.401 apply to the teachers retirement plan.
123.19 	(b) The right of a teacher to take advantage of the
123.20 	benefits provided by this chapter, is a personal right only and
123.21 	is not assignable.  All money to the credit of a teacher's
123.22 	account in the fund or any money payable to the teacher from the
123.23 	fund belongs to the state of Minnesota until actually paid to
123.24 	the teacher or a beneficiary under this chapter.
123.25 	(c) The association may acknowledge a properly completed
123.26 	power of attorney form. An assignment or attempted assignment
123.27 	of a teacher's interest in the fund, or of the beneficiary's
123.28 	interest in the fund, by a teacher or a beneficiary is void and
123.29 	exempt from garnishment or levy under attachment or execution,
123.30 	except as provided in subdivision 2 or 3, or section 518.58,
123.31 	518.581, or 518.6111.

123.32 	Sec. 54. Minnesota Statutes 2004, section 354.10,
123.33 	subdivision 3, is amended to read:
123.34 		Subd. 3.Payment to public bodies.  If,in the judgment
123.35 	of the executive director,conditions so warrant, payment of an
123.36 	annuity, a retirement benefit, or a refund may be made to a
124.1 	public body in behalf of an annuitant, disabilitant, or survivor
124.2 	upon such terms as the executive director may prescribe.

124.3 	Sec. 55. Minnesota Statutes 2004, section 354.10,
124.4 	subdivision 4, is amended to read:
124.5 		Subd. 4.Changes in designated beneficiaries. Any (a) A 
124.6 	beneficiary designated by a retiree or member under section
124.7 	354.05, subdivision 22, may be changed or revoked by the retiree
124.8 	or member on a form provided by the executive director.
124.9 	(b) A change or revocation made under this subdivision is
124.10 	valid only if the properly completed form is received by the
124.11 	association on or before the date of death of the retiree or the
124.12 	member.
124.13 	(c) If a designated beneficiary dies before the retiree or
124.14 	member designating the beneficiary,and a new beneficiary is not
124.15 	designated, the retiree's or member's estate is the beneficiary.

124.16 	Sec. 56. Minnesota Statutes 2004, section 354.33,
124.17 	subdivision 5, is amended to read:
124.18 		Subd. 5.Retirees not eligible for federal benefits.
 124.19 	Notwithstanding the provisions of section 354.55, subdivision 3,
124.20 	when any person retires after July 1, 1973,who (a) (1) has ten
124.21 	or more years of allowable service, and (b) (2) does not have
124.22 	any retroactive Social Security coverage by reason of the
124.23 	person's position in the retirement system, and (c) (3) does not
124.24 	qualify for federal old age and survivor primary benefits at the
124.25 	time of retirement, the annuity shall must be computed under
124.26 	section 354.44, subdivision 2,of the law in effect on June 30,
124.27 	1969, except that accumulations after June 30, 1957, shall must 
124.28 	be calculated using the same mortality table and interest
124.29 	assumption as are used to transfer the required reserves to the
124.30 	Minnesota postretirement investment fund.

124.31 	Sec. 57. Minnesota Statutes 2004, section 354.39, is
124.32 	amended to read:
124.33 	354.39 EFFECTIVE DATE; APPLICATION.
124.34 	After July 1, 1971, any A member of the Teachers Retirement
124.35 	Association who is employed in a new state university and or any 
124.36 	other new institutions institution of higher learning not
125.1 	included in any agreement or modification made between the state
125.2 	and the federal Secretary of Health, Education and Welfare Human
125.3 	Services, making the provisions of the federal Old Age and ,
125.4 	Survivors and Disability Insurance Act applicable to such
125.5 	members, shall must be covered under the provisions of this
125.6 	chapter applicable to coordinated members.

125.7 	Sec. 58. Minnesota Statutes 2004, section 354.41,
125.8 	subdivision 2, is amended to read:
125.9 		Subd. 2.Teachers.  Every teacher after June 30, 1957,in
125.10 	the service or entering the service of the state or one of its
125.11 	governmental subdivision subdivisions as a teacher, except
125.12 	persons specially specifically excluded, shall must become a
125.13 	member of the association by the acceptance of such employment.

125.14 	Sec. 59. Minnesota Statutes 2004, section 354.42, is
125.15 	amended by adding a subdivision to read:
125.16 		Subd. 1a.Teachers retirement fund. (a) Within the
125.17 	Teachers Retirement Association and the state treasury is
125.18 	created a special retirement fund, which must include all the
125.19 	assets of the Teachers Retirement Association and all revenue of
125.20 	the association.  The fund is the continuation of the fund
125.21 	established under Laws 1931, chapter 406, section 2,
125.22 	notwithstanding the repeal of Minnesota Statutes 1973, section
125.23 	354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
125.24 	(b) The teachers retirement fund must be credited with all
125.25 	employee and employer contributions, all investment revenue and
125.26 	gains, and all other income authorized by law.
125.27 	(c) From the teachers retirement fund is appropriated the
125.28 	payments of annuities and benefits authorized by this chapter,
125.29 	the transfers to the Minnesota postretirement investment fund,
125.30 	and the reasonable and necessary expenses of administering the
125.31 	fund and the association.

125.32 	Sec. 60. Minnesota Statutes 2004, section 354.44,
125.33 	subdivision 2, is amended to read:
125.34 		Subd. 2.Computation of money purchase annuity. (a) The
125.35 	amount of retirement annuity is an amount equal to double the
125.36 	annuity which could be purchased by the member's accumulated
126.1 	deductions plus interest thereon.  The annuity shall must be
126.2 	determined by the member's age, sex, double the amount of
126.3 	accumulated deductions, double the amount of interest earned on
126.4 	the accumulated deductions, and the appropriate mortality tables
126.5 	and interest rates.  To determine the amount of the annuity for
126.6 	a basic member, the accumulated deductions prior to before July
126.7 	1, 1957, and the accumulated deductions subsequent to after July
126.8 	1, 1957, shall must be considered separately.
126.9 	(1) (b) For service rendered prior to before July 1, 1957,
126.10 	the accumulated deductions for any a member shall must be
126.11 	carried forward at a fixed amount which is shown credited to the
126.12 	member's account as of that date.  That fixed amount shall must 
126.13 	also include any payments in lieu of salary deductions which are
126.14 	to be made in the future and are were actually so made pursuant
126.15 	to under an agreement executed between the member and the board
126.16 	as authorized by section 354.50 or any other authorized payments
126.17 	made by the member to the fund.  The annuity granted with
126.18 	respect to the period shall must be determined as follows:
126.19 	(a) (1) the fixed amount of the accumulated deductions for
126.20 	the period including the interest credited on the amount as
126.21 	earned up to July 1, 1957.; and 
126.22 	(b) (2) annuity purchase rates based on the applicable
126.23 	mortality table established by the board and the interest rate
126.24 	assumption in effect prior to before July 1, 1957, in the case
126.25 	of basic members and an annuity purchase rate based on an
126.26 	appropriate annuity table of mortality established by the board
126.27 	as provided in section 354.07, subdivision 1, and using the
126.28 	applicable postretirement interest rate assumption specified in
126.29 	section 356.215, subdivision 8, in the case of coordinated
126.30 	members.
126.31 	(2) (c) For service rendered subsequent to after July 1,
126.32 	1957, the accumulated deductions for any a member shall must 
126.33 	consist of the amounts actually credited to the member's account
126.34 	by reason of salary deductions.  The annuity granted with
126.35 	respect to the period shall must be determined by the following:
126.36 	(a) (1) accumulated deductions for the period;
127.1 	(b) (2) interest credited on these accumulated deductions
127.2 	from July 1, 1957, to the date of retirement;
127.3 	(c) (3) interest credited on accumulated deductions
127.4 	including prior credited interest provided in paragraph (1) (b) 
127.5 	from July 1, 1957, to the date of retirement;
127.6 	(d) (4) after the amount available for an annuity granted
127.7 	with respect to the person is determined in accordance with the
127.8 	provisions of this subdivision, an additional amount equal to 20
127.9 	percent of the sum of clause (2)(a) (1) plus interest credited
127.10 	to members a member's account from July 1, 1957, to date of
127.11 	retirement is to be added.  This added amount is not to be
127.12 	doubled as provided for other amounts determined in this
127.13 	subdivision; and 
127.14 	(e) (5) the annuity purchase rate based on an appropriate
127.15 	annuity table of mortality established by the board as provided
127.16 	in section 354.07, subdivision 1, and using the applicable
127.17 	postretirement interest rate assumption specified in section
127.18 	356.215, subdivision 8.

127.19 	Sec. 61. Minnesota Statutes 2004, section 354A.021,
127.20 	subdivision 5, is amended to read:
127.21 		Subd. 5.Tax sheltered annuity program and fund. Any A 
127.22 	teachers retirement fund association may establish a tax
127.23 	sheltered annuity program and fund meeting the requirements of
127.24 	section 403(b) of the Internal Revenue Code of 1986, as amended
127.25 	through December 31, 1992, which shall must include all assets
127.26 	which were acquired for the specific purpose of being credited
127.27 	to the program and fund and to which shall must be credited all
127.28 	employee contributions,and employer contributions,if
127.29 	negotiated under a collective bargaining agreement, designated
127.30 	for this purpose and all interest income attributable to the
127.31 	assets of the program and fund.

127.32 	Sec. 62. Minnesota Statutes 2004, section 354A.097,
127.33 	subdivision 1, is amended to read:
127.34 		Subdivision 1.Service credit purchase authorized.  A
127.35 	teacher who has at least three years of allowable service credit
127.36 	with the teachers retirement fund association and who performed
128.1 	service in the United States armed forces before becoming a
128.2 	teacher as defined in section 354A.011, subdivision 27, or who
128.3 	failed to obtain service credit for a military leave of absence
128.4 	period under section 354A.093, is entitled to purchase allowable
128.5 	service credit for the initial period of enlistment, induction,
128.6 	or call to active duty without any voluntary extension by making
128.7 	payment under section 356.55 provided 356.551 if the teacher has
128.8 	not purchased service credit from another Minnesota defined
128.9 	benefit public employee pension plan for the same period of
128.10 	service.

128.11 	Sec. 63. Minnesota Statutes 2004, section 354A.31,
128.12 	subdivision 5, is amended to read:
128.13 		Subd. 5.Unreduced normal retirement annuity.  Upon
128.14 	retirement at normal retirement age with at least three years of
128.15 	service credit, a coordinated member shall be is entitled to a
128.16 	normal retirement annuity calculated pursuant to under 
128.17 	subdivision 4 or 4a, whichever applies.

128.18 	Sec. 64. [356.401] EXEMPTION FROM PROCESS.
128.19 		Subdivision 1.Exemption; exceptions. None of the money,
128.20 	annuities, or other benefits provided for in the governing law
128.21 	of a covered retirement plan is assignable either in law or in
128.22 	equity or subject to state estate tax, or to execution, levy,
128.23 	attachment, garnishment, or other legal process, except as
128.24 	provided in subdivision 2 or section 518.58, 518.581, or
128.25 	518.6111.
128.26 		Subd. 2.Automatic deposits. (a) The chief
128.27 	administrative officer of a covered retirement plan may remit,
128.28 	through an automatic deposit system, annuity, benefit, or refund
128.29 	payments only to a financial institution associated with the
128.30 	National Automated Clearinghouse Association or a comparable
128.31 	successor organization that is trustee for a person who is
128.32 	eligible to receive the annuity, benefit, or refund.
128.33 	(b) Upon the request of a retiree, disabilitant, survivor,
128.34 	or former member, the chief administrative officer of a covered
128.35 	retirement plan may remit the annuity, benefit, or refund check
128.36 	to the applicable financial institution for deposit in the
129.1 	person's individual account or the person's joint account.  An
129.2 	overpayment to a joint account after the death of the annuitant
129.3 	or benefit recipient must be repaid to the fund of the
129.4 	applicable covered retirement plan by the joint tenant if the
129.5 	overpayment is not repaid to that fund by the financial
129.6 	institution associated with the National Automated Clearinghouse
129.7 	Association or its successor.  The governing board of the
129.8 	covered retirement plan may prescribe the conditions under which
129.9 	these payments may be made.
129.10 		Subd. 3.Covered retirement plans. The provisions of
129.11 	this section apply to the following retirement plans:
129.12 	(1) the legislators retirement plan, established by chapter
129.13 	3A;
129.14 	(2) the general state employees retirement plan of the
129.15 	Minnesota State Retirement System, established by chapter 352;
129.16 	(3) the correctional state employees retirement plan of the
129.17 	Minnesota State Retirement System, established by chapter 352;
129.18 	(4) the State Patrol retirement plan, established by
129.19 	chapter 352B;
129.20 	(5) the elective state officers retirement plan,
129.21 	established by chapter 352C;
129.22 	(6) the unclassified state employees retirement program,
129.23 	established by chapter 352D;
129.24 	(7) the general employees retirement plan of the Public
129.25 	Employees Retirement Association, established by chapter 353;
129.26 	(8) the public employees police and fire plan of the Public
129.27 	Employees Retirement Association, established by chapter 353;
129.28 	(9) the public employees defined contribution plan,
129.29 	established by chapter 353D;
129.30 	(10) the local government correctional service retirement
129.31 	plan of the Public Employees Retirement Association, established
129.32 	by chapter 353E;
129.33 	(11) the Teachers Retirement Association, established by
129.34 	chapter 354;
129.35 	(12) the Duluth Teachers Retirement Fund Association,
129.36 	established by chapter 354A;
130.1 	(13) the Minneapolis Teachers Retirement Fund Association,
130.2 	established by chapter 354A;
130.3 	(14) the St. Paul Teachers Retirement Fund Association,
130.4 	established by chapter 354A;
130.5 	(15) the individual retirement account plan, established by
130.6 	chapter 354B;
130.7 	(16) the higher education supplemental retirement plan,
130.8 	established by chapter 354C;
130.9 	(17) the Minneapolis employees retirement fund, established
130.10 	by chapter 422A;
130.11 	(18) the Minneapolis Police Relief Association, established
130.12 	by chapter 423B;
130.13 	(19) the Minneapolis Firefighters Relief Association,
130.14 	established by chapter 423C; and 
130.15 	(20) the judges retirement fund, established by sections
130.16 	490.121 to 490.132.

130.17 	Sec. 65. Minnesota Statutes 2004, section 356.551, is
130.18 	amended to read:
130.19 	356.551 POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT
130.20 	PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.
130.21 		Subdivision 1.Application. (a) Unless the prior service
130.22 	credit purchase authorization special law or general statute
130.23 	provision explicitly specifies a different purchase payment
130.24 	amount determination procedure, and if section 356.55 has
130.25 	expired,this section governs the determination of the prior
130.26 	service credit purchase payment amount of any prior service
130.27 	credit purchase.
130.28 	(b) The purchase payment amount determination procedure
130.29 	must recognize any service credit accrued to the purchaser in a
130.30 	pension plan enumerated in section 356.30, subdivision 3.
130.31 	(c) Any service credit in a Minnesota defined benefit
130.32 	public employee pension plan available to be reinstated by the
130.33 	purchaser through the repayment of a refund of member or
130.34 	employee contributions previously received must be repaid in
130.35 	full before any purchase of prior service credit payment is made
130.36 	under this section.
131.1 		Subd. 2.Determination. (a) Unless the minimum purchase
131.2 	amount set forth in paragraph (c) applies,the prior service
131.3 	credit purchase amount is an amount equal to the actuarial
131.4 	present value, on the date of payment, as calculated by the
131.5 	chief administrative officer of the pension plan and reviewed by
131.6 	the actuary retained by the Legislative Commission on Pensions
131.7 	and Retirement under section 356.214, of the amount of the
131.8 	additional retirement annuity obtained by the acquisition of the
131.9 	additional service credit in this section.
131.10 	(b) Calculation of this amount must be made using the
131.11 	preretirement interest rate applicable to the public pension
131.12 	plan specified in section 356.215, subdivision 4d 8, and the
131.13 	mortality table adopted for the public pension plan.  The
131.14 	calculation must assume continuous future service in the public
131.15 	pension plan until, and retirement at, the age at which the
131.16 	minimum requirements of the fund for normal retirement or
131.17 	retirement with an annuity unreduced for retirement at an early
131.18 	age, including section 356.30, are met with the additional
131.19 	service credit purchased.  The calculation must also assume a
131.20 	full-time equivalent salary, or actual salary, whichever is
131.21 	greater, and a future salary history that includes annual salary
131.22 	increases at the applicable salary increase rate for the plan
131.23 	specified in section 356.215, subdivision 4d.
131.24 	(c) The prior service credit purchase amount may not be
131.25 	less than the amount determined by applying the current employee
131.26 	or member contribution rate, the employer contribution rate, and
131.27 	the additional employer contribution rate, if any, to the
131.28 	person's current annual salary and multiplying that result by
131.29 	the number of whole and fraction years of service to be
131.30 	purchased.
131.31 	(d) Payment must be made in one lump sum within one year of
131.32 	the prior service credit authorization.  Payment of the amount
131.33 	calculated under this section must be made by the applicable
131.34 	eligible person.
131.35 	(e) However, the current employer or the prior employer
131.36 	may, at its discretion, pay all or any portion of the payment
132.1 	amount that exceeds an amount equal to the employee contribution
132.2 	rates in effect during the period or periods of prior service
132.3 	applied to the actual salary rates in effect during the period
132.4 	or periods of prior service, plus interest at the rate of 8.5
132.5 	percent a year compounded annually from the date on which the
132.6 	contributions would otherwise have been made to the date on
132.7 	which the payment is made.  If the employer agrees to payments
132.8 	under this subdivision, the purchaser must make the employee
132.9 	payments required under this subdivision within 290 90 days of
132.10 	the prior service credit authorization.  If that employee
132.11 	payment is made, the employer payment under this subdivision
132.12 	must be remitted to the chief administrative officer of the
132.13 	public pension plan within 60 days of receipt by the chief
132.14 	administrative officer of the employee payments specified under
132.15 	this subdivision.
132.16 		Subd. 3.Documentation. The prospective prior service
132.17 	credit purchaser must provide any relevant documentation
132.18 	required by the chief administrative officer of the applicable 
132.19 	public pension plan to determine eligibility for the prior
132.20 	service credit under this section.
132.21 		Subd. 4.Payment precondition for credit grant. Service
132.22 	credit for the purchase period must be granted by the public
132.23 	pension plan to the purchaser upon receipt of the full purchase
132.24 	payment amount specified in subdivision 2.

132.25 	Sec. 66. Minnesota Statutes 2004, section 356A.06,
132.26 	subdivision 7, is amended to read:
132.27 		Subd. 7.Expanded list of authorized investment
132.28 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
132.29 	authorized by law or bylaws, a covered pension plan not
132.30 	described by subdivision 6, paragraph (a), may invest its assets
132.31 	only in accordance with this subdivision.
132.32 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
132.33 	the authority to purchase, sell, lend, or exchange the
132.34 	securities specified in paragraphs (c) to (g), including puts
132.35 	and call options and future contracts traded on a contract
132.36 	market regulated by a governmental agency or by a financial
133.1 	institution regulated by a governmental agency.  These
133.2 	securities may be owned as units in commingled trusts that own
133.3 	the securities described in paragraphs (c) to (g).
133.4 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
133.5 	invest funds in governmental bonds, notes, bills, mortgages, and
133.6 	other evidences of indebtedness provided the issue is backed by
133.7 	the full faith and credit of the issuer or the issue is rated
133.8 	among the top four quality rating categories by a nationally
133.9 	recognized rating agency.  The obligations in which funds may be
133.10 	invested under this paragraph include guaranteed or insured
133.11 	issues of (1) the United States, its agencies, its
133.12 	instrumentalities, or organizations created and regulated by an
133.13 	act of Congress; (2) Canada and its provinces, provided the
133.14 	principal and interest is payable in United States dollars; (3)
133.15 	the states and their municipalities, political subdivisions,
133.16 	agencies, or instrumentalities; (4) the International Bank for
133.17 	Reconstruction and Development, the Inter-American Development
133.18 	Bank, the Asian Development Bank, the African Development Bank,
133.19 	or any other United States government sponsored organization of
133.20 	which the United States is a member, provided the principal and
133.21 	interest is payable in United States dollars.
133.22 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
133.23 	invest funds in bonds, notes, debentures, transportation
133.24 	equipment obligations, or any other longer term evidences of
133.25 	indebtedness issued or guaranteed by a corporation organized
133.26 	under the laws of the United States or any state thereof, or the
133.27 	Dominion of Canada or any province thereof if they conform to
133.28 	the following provisions:
133.29 	(1) the principal and interest of obligations of
133.30 	corporations incorporated or organized under the laws of the
133.31 	Dominion of Canada or any province thereof must be payable in
133.32 	United States dollars; and
133.33 	(2) obligations must be rated among the top four quality
133.34 	categories by a nationally recognized rating agency.
133.35 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
133.36 	invest funds in bankers acceptances, certificates of deposit,
134.1 	deposit notes, commercial paper, mortgage participation
134.2 	certificates and pools, asset backed securities, repurchase
134.3 	agreements and reverse repurchase agreements, guaranteed
134.4 	investment contracts, savings accounts, and guaranty fund
134.5 	certificates, surplus notes, or debentures of domestic mutual
134.6 	insurance companies if they conform to the following provisions:
134.7 	(i) bankers acceptances and deposit notes of United States
134.8 	banks are limited to those issued by banks rated in the highest
134.9 	four quality categories by a nationally recognized rating
134.10 	agency;
134.11 	(ii) certificates of deposit are limited to those issued by
134.12 	(A) United States banks and savings institutions that are rated
134.13 	in the highest four quality categories by a nationally
134.14 	recognized rating agency or whose certificates of deposit are
134.15 	fully insured by federal agencies; or (B) credit unions in
134.16 	amounts up to the limit of insurance coverage provided by the
134.17 	National Credit Union Administration;
134.18 	(iii) commercial paper is limited to those issued by United
134.19 	States corporations or their Canadian subsidiaries and rated in
134.20 	the highest two quality categories by a nationally recognized
134.21 	rating agency;
134.22 	(iv) mortgage participation or pass through certificates
134.23 	evidencing interests in pools of first mortgages or trust deeds
134.24 	on improved real estate located in the United States where the
134.25 	loan to value ratio for each loan as calculated in accordance
134.26 	with section 61A.28, subdivision 3, does not exceed 80 percent
134.27 	for fully amortizable residential properties and in all other
134.28 	respects meets the requirements of section 61A.28, subdivision
134.29 	3;
134.30 	(v) collateral for repurchase agreements and reverse
134.31 	repurchase agreements is limited to letters of credit and
134.32 	securities authorized in this section;
134.33 	(vi) guaranteed investment contracts are limited to those
134.34 	issued by insurance companies or banks rated in the top four
134.35 	quality categories by a nationally recognized rating agency or
134.36 	to alternative guaranteed investment contracts where the
135.1 	underlying assets comply with the requirements of this
135.2 	subdivision;
135.3 	(vii) savings accounts are limited to those fully insured
135.4 	by federal agencies; and
135.5 	(viii) asset backed securities must be rated in the top
135.6 	four quality categories by a nationally recognized rating agency.
135.7 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
135.8 	not apply to certificates of deposit and collateralization
135.9 	agreements executed by the covered pension plan under clause
135.10 	(1), item (ii).
135.11 	(3) In addition to investments authorized by clause (1),
135.12 	item (iv), the covered pension plan may purchase from the
135.13 	Minnesota Housing Finance Agency all or any part of a pool of
135.14 	residential mortgages, not in default, that has previously been
135.15 	financed by the issuance of bonds or notes of the agency.  The
135.16 	covered pension plan may also enter into a commitment with the
135.17 	agency, at the time of any issue of bonds or notes, to purchase
135.18 	at a specified future date, not exceeding 12 years from the date
135.19 	of the issue, the amount of mortgage loans then outstanding and
135.20 	not in default that have been made or purchased from the
135.21 	proceeds of the bonds or notes.  The covered pension plan may
135.22 	charge reasonable fees for any such commitment and may agree to
135.23 	purchase the mortgage loans at a price sufficient to produce a
135.24 	yield to the covered pension plan comparable, in its judgment,
135.25 	to the yield available on similar mortgage loans at the date of
135.26 	the bonds or notes.  The covered pension plan may also enter
135.27 	into agreements with the agency for the investment of any
135.28 	portion of the funds of the agency.  The agreement must cover
135.29 	the period of the investment, withdrawal privileges, and any
135.30 	guaranteed rate of return.
135.31 	(f)  [CORPORATE STOCKS.] The covered pension plan may
135.32 	invest funds in stocks or convertible issues of any corporation
135.33 	organized under the laws of the United States or the states
135.34 	thereof, the Dominion of Canada or its provinces, or any
135.35 	corporation listed on the New York Stock Exchange or the
135.36 	American Stock Exchange, if they conform to the following
136.1 	provisions:
136.2 	(1) the aggregate value of corporate stock investments, as
136.3 	adjusted for realized profits and losses, must not exceed 85
136.4 	percent of the market or book value, whichever is less, of a
136.5 	fund, less the aggregate value of investments according to
136.6 	subdivision 6 paragraph (g);
136.7 	(2) investments must not exceed five percent of the total
136.8 	outstanding shares of any one corporation.
136.9 	(g)  [OTHER INVESTMENTS.] (1) In addition to the
136.10 	investments authorized in paragraphs (b) to (f), and subject to
136.11 	the provisions in clause (2), the covered pension plan may
136.12 	invest funds in:
136.13 	(i) venture capital investment businesses through
136.14 	participation in limited partnerships and corporations;
136.15 	(ii) real estate ownership interests or loans secured by
136.16 	mortgages or deeds of trust through investment in limited
136.17 	partnerships, bank sponsored collective funds, trusts, and
136.18 	insurance company commingled accounts, including separate
136.19 	accounts;
136.20 	(iii) regional and mutual funds through bank sponsored
136.21 	collective funds and open-end investment companies registered
136.22 	under the Federal Investment Company Act of 1940;
136.23 	(iv) resource investments through limited partnerships,
136.24 	private placements, and corporations; and
136.25 	(v) international securities.
136.26 	(2) The investments authorized in clause (1) must conform
136.27 	to the following provisions:
136.28 	(i) the aggregate value of all investments made according
136.29 	to clause (1) may not exceed 35 percent of the market value of
136.30 	the fund for which the covered pension plan is investing;
136.31 	(ii) there must be at least four unrelated owners of the
136.32 	investment other than the state board covered pension plan for
136.33 	investments made under clause (1), item (i), (ii), (iii), or
136.34 	(iv);
136.35 	(iii) covered pension plan participation in an investment
136.36 	vehicle is limited to 20 percent thereof for investments made
137.1 	under clause (1), item (i), (ii), (iii), or (iv); and
137.2 	(iv) covered pension plan participation in a limited
137.3 	partnership does not include a general partnership interest or
137.4 	other interest involving general liability.  The covered pension
137.5 	plan may not engage in any activity as a limited partner which
137.6 	creates general liability.

137.7 	Sec. 67. Minnesota Statutes 2004, section 422A.01,
137.8 	subdivision 11, is amended to read:
137.9 		Subd. 11.Employee.  "Employee" means any a person who is 
137.10 	not exempted from the contributing class pursuant to under 
137.11 	section 422A.09, subdivision 3, who is was employed before July
137.12 	1, 1979,by and paid, in whole or in part, by the city or any of
137.13 	its boards, departments, or commissions, operated as a
137.14 	department of city government or independently if financed in
137.15 	whole or in part by city funds, including any a person who was 
137.16 	employed by a public corporation as herein defined, and
137.17 	including any a person who was employed before July 1, 1979,by
137.18 	Special School District No. 1, and who is not a member of any
137.19 	other retirement system, and also including any a person who is 
137.20 	was employed before July 1, 1973,by the county of Hennepin, who
137.21 	was entitled by law to elect and has elected to retain
137.22 	membership in the municipal Minneapolis Employees Retirement
137.23 	Fund and who makes any required member contributions to the fund
137.24 	and who remains so employed.

137.25 	Sec. 68. Minnesota Statutes 2004, section 422A.06,
137.26 	subdivision 7, is amended to read:
137.27 		Subd. 7.Disability benefit fund.  (a) The required
137.28 	reserves for disability allowances which become effective after
137.29 	December 31, 1973, shall be transferred from the deposit
137.30 	accumulation fund to the A disability benefit fund is
137.31 	established, containing the required reserves for disability
137.32 	allowances under this chapter.  A proportionate share of income
137.33 	from investments shall must be allocated to this fund.
137.34 	There shall must be paid from this fund the disability
137.35 	allowances which become effective after December 31, 1973 
137.36 	payable under this chapter.
138.1 	(b) In the event of the termination of any disability
138.2 	allowance for any reason other than the death of the recipient,
138.3 	the balance of the required reserves for the disability
138.4 	allowance as of the date of the termination shall must be
138.5 	transferred from the disability benefit fund to the deposit
138.6 	accumulation fund.
138.7 	(c) At the end of each fiscal year, as part of the annual
138.8 	actuarial valuation, a determination shall must be made of the
138.9 	required reserves for all disability allowances being paid from
138.10 	the disability benefit fund.  Any excess of assets over
138.11 	actuarial required reserves in the disability benefit fund shall 
138.12 	must be transferred to the deposit accumulation fund.  Any
138.13 	excess of actuarial reserves over assets in the disability
138.14 	benefit fund shall must be funded by a transfer of the
138.15 	appropriate amount of assets from the deposit accumulation fund.

138.16 	Sec. 69. Minnesota Statutes 2004, section 422A.10,
138.17 	subdivision 1, is amended to read:
138.18 		Subdivision 1.member contribution rate ; deductions. (a) 
138.19 	There shall must be deducted and withheld from the basic salary,
138.20 	pay or compensation of each employee in the contributing class,
138.21 	prior to January 1, 1980 an amount equal to 7-1/4 percent, after
138.22 	December 31, 1979 but prior to January 1, 1981 an amount equal
138.23 	to 8-1/4 percent and after December 31, 1980 an amount equal to
138.24 	9-1/4 percent of such salary, pay or compensation, except as
138.25 	hereinafter provided.
138.26 	(b) The retirement board may increase the percentage rate
138.27 	of contribution to the retirement fund of any employee or
138.28 	employees for the purpose of establishing and maintaining on an
138.29 	actuarial basis a plan of insurance, survivors' benefits, or
138.30 	other type of benefit or benefits, the cost of which shall must 
138.31 	be paid out of such extra percentage so authorized and deducted
138.32 	from the employee's compensation, except as hereinafter
138.33 	provided.  Any plan or plans so established and placed in
138.34 	operation may be amended from time to time, or may be abandoned,
138.35 	but if abandoned, any surplus remaining from the operation of a
138.36 	plan shall must be the property of the fund, and shall must be
139.1 	credited to the reserve for loss in investment account.

139.2 	Sec. 70. Minnesota Statutes 2004, section 422A.10,
139.3 	subdivision 2, is amended to read:
139.4 		Subd. 2.consent to deductions mandatory member
139.5 	contributions.  Every employee to whom sections 422A.01 to
139.6 	422A.25 this chapter applies who shall continue in the service
139.7 	after the passage of Laws 1919, chapter 522, as well as every
139.8 	person to whom sections 422A.01 to 422A.25 applies who may
139.9 	hereafter be appointed to a position or place, shall be is 
139.10 	deemed to consent and agree to the deductions made and provided
139.11 	for herein, and payment with such reductions, for service, shall
139.12 	be are a full and complete discharge and acquittance of all
139.13 	claims and demands for all services rendered by such person
139.14 	during the period covered by such payment; except the person's
139.15 	claim to the benefits to which the person may be entitled under
139.16 	the provisions of sections 422A.01 to 422A.25this chapter.

139.17 	Sec. 71. Minnesota Statutes 2004, section 422A.22,
139.18 	subdivision 1, is amended to read:
139.19 		Subdivision 1.Retention; transfer. (a) If an employee
139.20 	to whom sections 422A.01 to 422A.25this chapter applies becomes
139.21 	absolutely separated from the active service prior to before 
139.22 	attaining the minimum retirement age established in section
139.23 	422A.13, the employee is entitled to a refund of the net
139.24 	accumulated amount of deduction from salary, pay, or
139.25 	compensation, made for the purpose of accumulating a fund from
139.26 	which to pay retirement allowances, shall be returned to such
139.27 	employee,with interest at the annual compound rate of six
139.28 	percent.
139.29 	(b) Any contributing employee who separates from a
139.30 	department, board or commission of the city whose employees are
139.31 	covered by a fund organized under sections 422A.01 to 422A.25
139.32 	this chapter, and becomes an employee of a department or board
139.33 	of the same city, whose employees are covered by a retirement
139.34 	fund or relief association by whatever name known, organized
139.35 	under any other law and supported in whole or in part by taxes
139.36 	on the same city, shall have has the option of:
140.1 	(1) retaining their membership in the fund organized under
140.2 	sections 422A.01 to 422A.25this chapter, regardless of the
140.3 	provisions of any law, rule, bylaw or other action requiring
140.4 	membership in any other retirement fund or relief association
140.5 	however organized.; or 
140.6 	(2) transferring to the fund or association covering the
140.7 	employees of the department or board to which they are
140.8 	transferring, providing they are eligible for membership therein.
140.9 	(c) Any contributing employee who elects to transfer to
140.10 	another fund or association as herein provided in paragraph (b),
140.11 	clause (2), shall must make such election within one year from
140.12 	the date of separation from the city service covered by this
140.13 	fund.  If the contributing employee elects to transfer to
140.14 	another fund as herein provided, the employee is entitled to a
140.15 	refund of the net accumulated contributions made by such
140.16 	employee to the fund organized under sections 422A.01 to
140.17 	422A.25, shall be returned to the employee this chapter with
140.18 	interest at the annual compound rate of six percent.

140.19 	Sec. 72. Minnesota Statutes 2004, section 422A.22,
140.20 	subdivision 3, is amended to read:
140.21 		Subd. 3.Limitation on eligibility.  No employee of the
140.22 	city shall be is eligible to be a member of,or receive benefits
140.23 	from,more than one retirement plan or fund of the city for the
140.24 	same period of service.

140.25 	Sec. 73. Minnesota Statutes 2004, section 422A.22,
140.26 	subdivision 4, is amended to read:
140.27 		Subd. 4.Death-while-active refund.  (a) Upon the death
140.28 	of an active member prior to before the employee's termination
140.29 	of active service, there shall be paid to the beneficiary or
140.30 	beneficiaries designated by the member on a form specified by
140.31 	the executive director and filed with the retirement board,are
140.32 	entitled to receive the net accumulated employee deductions from
140.33 	salary, pay, or compensation, including interest under
140.34 	subdivision 1, paragraph (a),compounded annually to the date of
140.35 	the member's death.  The amount must not include any
140.36 	contributions made by the employee or on the employee's behalf,
141.1 	or any interest or investment earnings on those contributions,
141.2 	which were allocated to the survivor benefit fund under section
141.3 	422A.06, subdivision 6.
141.4 	(b) If the employee fails to make a designation, or if the
141.5 	beneficiary or beneficiaries designated by the employee
141.6 	predeceases the employee, the benefit specified in paragraph (a)
141.7 	must be paid to the deceased employee's estate is entitled to
141.8 	the benefit specified in paragraph (a).
141.9 	(c) A benefit payable under this subdivision is in addition
141.10 	to any applicable survivor benefit under section 422A.23.

141.11 	Sec. 74. Minnesota Statutes 2004, section 422A.22,
141.12 	subdivision 6, is amended to read:
141.13 		Subd. 6.Refund; municipal employees retirement fund.
 141.14 	Any A person who has received a refund from the municipal 
141.15 	Minneapolis Employees Retirement Fund, and who is a member of a
141.16 	public retirement system included in section 422A.16,
141.17 	subdivision 8, may repay such refund with interest at a compound
141.18 	annual rate of 8.5 percent to the municipal Minneapolis 
141.19 	Employees Retirement Fund.  If a refund is repaid to the fund
141.20 	and if more than one refund has been received from the fund, all
141.21 	refunds must be repaid.  Repayment shall must be made as
141.22 	provided in sections 422A.01 to 422A.25this chapter.

141.23 	Sec. 75. Minnesota Statutes 2004, section 422A.231, is
141.24 	amended to read:
141.25 	422A.231 COST ALLOCATION.
141.26 	(a) Notwithstanding any law to the contrary, all current
141.27 	and future contribution requirements due to this article are
141.28 	payable by the participating contributing employing units other
141.29 	than the state of Minnesota.
141.30 	(b) In each actuarial valuation of the retirement fund, the
141.31 	actuary retained by the Legislative Commission on Pensions and
141.32 	Retirement under section 356.214shall include an exhibit on the
141.33 	impact of the benefit increases contained in this article on the
141.34 	survivor benefit fund.  The actuary shall calculate the expected
141.35 	change in the present value of the future benefits payable from
141.36 	the survivor benefit fund attributable to this article, using
142.1 	the actuarial method and assumptions applicable to the
142.2 	Minneapolis Employees Retirement Fund, from the prior actuarial
142.3 	valuation and shall compare that result with the actual change
142.4 	in the present value of future benefits payable from the
142.5 	survivor benefit fund attributable to this article from the
142.6 	prior actuarial valuation.
142.7 	(c) The executive director shall assess each participating
142.8 	employer, other than the state of Minnesota, its proportional
142.9 	share of the net increase amount calculated under paragraph
142.10 	(b).  The assessment must be made on the first business day of
142.11 	the following February, plus compound interest at an annual rate
142.12 	of six percent on the amount from the actuarial valuation date
142.13 	to the date of payment.

142.14 	Sec. 76. Minnesota Statutes 2004, section 422A.24, is
142.15 	amended to read:
142.16 	422A.24 ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.
142.17 	No money payable pursuant to this chapter shall be
142.18 	assignable either in law or equity or be subject to execution,
142.19 	levy, attachment, garnishment, or other legal process, except as
142.20 	provided in section 518.58, 518.581, or 518.6111, nor shall any
142.21 	of the proceeds of payments due pursuant to this chapter be
142.22 	subject to the inheritance tax provisions of this state upon
142.23 	transfer to a surviving spouse or minor or dependent child of
142.24 	the decedent or a trust for their benefit.The provisions of
142.25 	section 356.401 apply to the Minneapolis employees retirement
142.26 	plan.

142.27 	Sec. 77. Minnesota Statutes 2004, section 423B.17, is
142.28 	amended to read:
142.29 	423B.17 PAYMENTS EXEMPT FROM PROCESS.
142.30 	A payment made by the association under a provision of
142.31 	sections 423B.01 to 423B.18, as amended, is exempt from legal
142.32 	process except as provided in section 518.58, 518.581, or
142.33 	518.6111.  No person entitled to a payment may assign the same.
142.34 	The association may not recognize an assignment or pay a sum on
142.35 	account of an assignment.The provisions of section 356.401
142.36 	apply to the Minneapolis Police Relief Association.

143.1 	Sec. 78. Minnesota Statutes 2004, section 423C.09, is
143.2 	amended to read:
143.3 	423C.09 PAYMENTS EXEMPT FROM PROCESS.
143.4 	All payments made, or to be made, by the association under
143.5 	this chapter shall be totally exempt from garnishment,
143.6 	execution, or other legal process, except as provided in section
143.7 	518.58, 518.581, or 518.6111.  No person entitled to a payment
143.8 	shall have the right to assign the name, nor shall the
143.9 	association have authority to recognize any assignment or to pay
143.10 	any sum on account thereof.  Any attempt to transfer any right
143.11 	or claim, or any part thereof, shall be void.The provisions of
143.12 	section 356.401 apply to the Minneapolis Firefighters Relief
143.13 	Association.

143.14 	Sec. 79. Minnesota Statutes 2004, section 490.126,
143.15 	subdivision 5, is amended to read:
143.16 		Subd. 5.Exemption from process; no assignment. None of
143.17 	the money, annuities, or other benefits provided in this chapter
143.18 	is assignable either in law or equity or is subject to
143.19 	execution, levy, attachment, garnishment, or other legal
143.20 	process, except as provided in section 518.58, 518.581, or
143.21 	518.6111.The provisions of section 356.401 apply to the judges
143.22 	retirement plan.

143.23 	Sec. 80. REVISOR'S INSTRUCTION.
 143.24 	In the next edition and subsequent editions of Minnesota
143.25 	Statutes, the revisor of statutes shall replace the reference to
143.26 	"sections 422A.01 to 422A.25" with the reference to "this
143.27 	chapter" wherever the reference appears in Minnesota Statutes,
143.28 	chapter 422A.

143.29 	Sec. 81. REPEALER.
 143.30 	(a) Minnesota Statutes 2004, section 352.119, subdivision
143.31 	1, is repealed.
143.32 	(b) Minnesota Statutes 2004, sections 353.34, subdivision
143.33 	3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
143.34 	4; 353.663; 353.74; and 353.75, are repealed.
143.35 	(c) Minnesota Statutes 2004, section 354.59, is repealed.
143.36 	(d) Minnesota Statutes 2004, sections 422A.22, subdivisions
144.1 	2 and 5; and 422A.221, are repealed.
144.2 	(e) Minnesota Statutes 2004, sections 352.15, subdivision
144.3 	1a; 353.15, subdivision 2; and 354.10, subdivision 2, are
144.4 	repealed.

144.5 	Sec. 82. EFFECTIVE DATE.
 144.6 	(a) Sections 1 to 73 and 75 to 81 are effective July 1,
144.7 	2005.
144.8 	(b) Section 74 is effective January 1, 2006.
144.9 	(c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78,
144.10 	79, and 81, paragraph (e), do not apply to any cause of action
144.11 	that is proceeding on the date of enactment or to any cause of
144.12 	action for which the applicable statute of limitations has not
144.13 	expired as of the date of enactment.

144.14 	ARTICLE 11
144.15 	LOCAL RETIREMENT PLANS

144.16 	Section 1. Minnesota Statutes 2004, section 69.77,
144.17 	subdivision 4, is amended to read:
144.18 		Subd. 4.Relief association financial requirements;
144.19 	minimum municipal obligation.  (a) The officers of the relief
144.20 	association shall determine the financial requirements of the
144.21 	relief association and minimum obligation of the municipality
144.22 	for the following calendar year in accordance with the
144.23 	requirements of this subdivision.  The financial requirements of
144.24 	the relief association and the minimum obligation of the
144.25 	municipality must be determined on or before the submission date
144.26 	established by the municipality under subdivision 5.
144.27 	(b) The financial requirements of the relief association
144.28 	for the following calendar year must be based on the most recent
144.29 	actuarial valuation or survey of the special fund of the
144.30 	association if more than one fund is maintained by the
144.31 	association, or of the association, if only one fund is
144.32 	maintained, prepared in accordance with sections 356.215,
144.33 	subdivisions 4 to 15, and 356.216, as required under subdivision
144.34 	10.  If an actuarial estimate is prepared by the actuary of the
144.35 	relief association as part of obtaining a modification of the
144.36 	benefit plan of the relief association and the modification is
145.1 	implemented, the actuarial estimate must be used in calculating
145.2 	the subsequent financial requirements of the relief association.
145.3 	(c) If the relief association has an unfunded actuarial
145.4 	accrued liability as reported in the most recent actuarial
145.5 	valuation or survey, the total of the amounts calculated under
145.6 	clauses (1), (2), and (3), constitute the financial requirements
145.7 	of the relief association for the following year.  If the relief
145.8 	association does not have an unfunded actuarial accrued
145.9 	liability as reported in the most recent actuarial valuation or
145.10 	survey, the amount calculated under clauses (1) and (2)
145.11 	constitute the financial requirements of the relief association
145.12 	for the following year.  The financial requirement elements are:
145.13 	(1) the normal level cost requirement for the following
145.14 	year, expressed as a dollar amount, which must be determined by
145.15 	applying the normal level cost of the relief association as
145.16 	reported in the actuarial valuation or survey and expressed as a
145.17 	percentage of covered payroll to the estimated covered payroll
145.18 	of the active membership of the relief association, including
145.19 	any projected change in the active membership, for the following
145.20 	year;
145.21 	(2) for the Bloomington Fire Department Relief Association,
145.22 	the Fairmont Police Relief Association, and the Virginia Fire
145.23 	Department Relief Association, to the dollar amount of normal
145.24 	cost determined under clause (1) must be added an amount equal
145.25 	to the dollar amount of the administrative expenses of the
145.26 	special fund of the association if more than one fund is
145.27 	maintained by the association, or of the association if only one
145.28 	fund is maintained, for the most recent year, multiplied by the
145.29 	factor of 1.035.  The administrative expenses are those
145.30 	authorized under section 69.80.  No amount of administrative
145.31 	expenses under this clause are to be included in the financial
145.32 	requirements of the Minneapolis Firefighters Relief Association
145.33 	or the Minneapolis Police Relief Association; and
145.34 	(3) to the dollar amount of normal cost and expenses
145.35 	determined under clauses (1) and (2) must be added an amount
145.36 	equal to the level annual dollar amount which is sufficient to
146.1 	amortize the unfunded actuarial accrued liability by December
146.2 	31, 2010, the Fairmont Police Relief Association, the
146.3 	Minneapolis Firefighters Relief Association, and the Virginia
146.4 	Fire Department Relief Association, by the date determined under
146.5 	section 356.216, paragraph (a), clause (2), for the Bloomington
146.6 	Fire Department Relief Association, and by December 31, 2020,
146.7 	for the Minneapolis Police Relief Association,as determined
146.8 	from the actuarial valuation or survey of the fund, using an
146.9 	interest assumption set at the applicable rate specified in
146.10 	section 356.215, subdivision 8.  The amortization date specified
146.11 	in this clause applies to all local police or salaried
146.12 	firefighters' relief associations and that date supersedes any
146.13 	amortization date specified in any applicable special law.
146.14 	(d) The minimum obligation of the municipality is an amount
146.15 	equal to the financial requirements of the relief association
146.16 	reduced by the estimated amount of member contributions from
146.17 	covered salary anticipated for the following calendar year and
146.18 	the estimated amounts anticipated for the following calendar
146.19 	year from the applicable state aid program established under
146.20 	sections 69.011 to 69.051 receivable by the relief association
146.21 	after any allocation made under section 69.031, subdivision 5,
146.22 	paragraph (b), clause (2), or 423A.01, subdivision 2, clause
146.23 	(6), from the local police and salaried firefighters' relief
146.24 	association amortization aid program established under section
146.25 	423A.02, subdivision 1, from the supplementary amortization
146.26 	state-aid program established under section 423A.02, subdivision
146.27 	1a, and from the additional amortization state aid under section
146.28 	423A.02, subdivision 1b.

146.29 	Sec. 2. Minnesota Statutes 2004, section 356.215,
146.30 	subdivision 8, is amended to read:
146.31 		Subd. 8.Interest and salary assumptions.  (a) The
146.32 	actuarial valuation must use the applicable following
146.33 	preretirement interest assumption and the applicable following
146.34 	postretirement interest assumption:
146.35 	preretirement  postretirement
146.36 	                                   interest rate  interest rate
146.37 	            plan                      assumption     assumption
147.1 	     general state employees
147.2 	         retirement plan                  8.5%          6.0%
147.3 	     correctional state employees
147.4 	         retirement plan                  8.5           6.0
147.5 	     State Patrol retirement plan         8.5           6.0
147.6 	     legislators retirement plan          8.5           6.0
147.7 	     elective state officers
147.8 	         retirement plan                  8.5           6.0
147.9 	     judges retirement plan               8.5           6.0
147.10 	     general public employees
147.11 	         retirement plan                  8.5           6.0
147.12 	     public employees police and fire
147.13 	         retirement plan                  8.5           6.0
147.14 	     local government correctional
147.15 	         service retirement plan          8.5           6.0
147.16 	     teachers retirement plan             8.5           6.0
147.17 	     Minneapolis employees
147.18 	         retirement plan                  6.0           5.0
147.19 	     Duluth teachers retirement plan      8.5           8.5
147.20 	     Minneapolis teachers retirement
147.21 	         plan                             8.5           8.5
147.22 	     St. Paul teachers retirement
147.23 	         plan                             8.5           8.5
147.24 	     Minneapolis Police Relief
147.25 	         Association                      6.0           6.0
147.26 	     Fairmont Police Relief
147.27 	         Association                      5.0           5.0
147.28 	     Minneapolis Fire Department
147.29 	         Relief Association               6.0           6.0
147.30 	     Virginia Fire Department
147.31 	         Relief Association               5.0           5.0
147.32 	Bloomington Fire Department
147.33 	         Relief Association 6.0 6.0 
147.34 	     local monthly benefit volunteer
147.35 	         firefighters relief associations 5.0           5.0
147.36 	(b) The actuarial valuation must use the applicable
147.37 	following single rate future salary increase assumption, the
147.38 	applicable following modified single rate future salary increase
147.39 	assumption, or the applicable following graded rate future
147.40 	salary increase assumption:
147.41 	(1) single rate future salary increase assumption
147.42 	future salary
147.43 	            plan                          increase assumption
147.44 	     legislators retirement plan                  5.0%
147.45 	     elective state officers retirement
147.46 	         plan                                     5.0
147.47 	     judges retirement plan                       5.0
147.48 	     Minneapolis Police Relief Association        4.0
147.49 	     Fairmont Police Relief
147.50 	         Association                              3.5
147.51 	     Minneapolis Fire Department Relief
147.52 	         Association                              4.0
147.53 	     Virginia Fire Department
147.54 	         Relief Association                       3.5
147.55 	Bloomington Fire Department Relief 
147.56 	Association 4.0 
147.57 	(2) modified single rate future salary increase assumption
147.58 	future salary
147.59 	               plan                       increase assumption
147.60 	         Minneapolis employees        the prior calendar year
148.1 	           retirement plan            amount increased first by
148.2 	1.0198 percent to prior
148.3 	                                      fiscal year date and
148.4 	                                      then increased by 4.0
148.5 	                                      percent annually for
148.6 	                                      each future year
148.7 	(3) select and ultimate future salary increase assumption
148.8 	or graded rate future salary increase assumption
148.9 	future salary
148.10 	               plan                       increase assumption
148.11 	     general state employees             select calculation and
148.12 	         retirement plan                      assumption A
148.13 	     correctional state employees
148.14 	         retirement plan                      assumption H
148.15 	     State Patrol retirement plan             assumption H
148.16 	     general public employees            select calculation and
148.17 	         retirement plan                      assumption B
148.18 	     public employees police and fire
148.19 	         fund retirement plan                 assumption C
148.20 	     local government correctional service
148.21 	         retirement plan                      assumption H
148.22 	     teachers retirement plan                 assumption D
148.23 	     Duluth teachers retirement plan          assumption E
148.24 	     Minneapolis teachers retirement plan     assumption F
148.25 	     St. Paul teachers retirement plan        assumption G
148.26 	
148.27 	     The select calculation is:
148.28 	     during the ten-year select period, a designated percent
148.29 	     is multiplied by the result of ten minus T, where T is
148.30 	     the number of completed years of service, and is added
148.31 	     to the applicable future salary increase assumption.  The
148.32 	     designated percent is 0.2 percent for the correctional state
148.33 	     employees retirement plan, the State Patrol retirement
148.34 	     plan, the public employees police and fire plan, and the
148.35 	     local government correctional service plan; 0.3 percent
148.36 	     for the general state employees retirement plan, the
148.37 	     general public employees retirement plan, the teachers
148.38 	     retirement plan, the Duluth Teachers Retirement Fund
148.39 	     Association, and the St. Paul Teachers Retirement Fund
148.40 	     Association; and 0.4 percent for the Minneapolis Teachers
148.41 	     Retirement Fund Association.
148.42 	
148.43 	          The ultimate future salary increase assumption is:
148.44 	
148.45 	     age  A     B      C     D     E     F     G      H
148.46 	     16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
148.47 	     17  6.906.9011.508.158.006.506.90  7.7500
148.48 	     18  6.856.8511.508.108.006.506.90  7.7500
148.49 	     19  6.806.8011.508.058.006.506.90  7.7500
148.50 	     20  6.756.4011.506.006.906.506.90  7.7500
148.51 	     21  6.756.4011.506.006.906.506.90  7.1454
148.52 	     22  6.756.4011.006.006.906.506.90  7.0725
148.53 	     23  6.756.4010.506.006.856.506.85  7.0544
148.54 	     24  6.756.4010.006.006.806.506.80  7.0363
148.55 	     25  6.756.409.506.006.756.506.75  7.0000
148.56 	     26  6.756.369.206.006.706.506.70  7.0000
148.57 	     27  6.756.328.906.006.656.506.65  7.0000
148.58 	     28  6.756.288.606.006.606.506.60  7.0000
148.59 	     29  6.756.248.306.006.556.506.55  7.0000
148.60 	     30  6.756.208.006.006.506.506.50  7.0000
148.61 	     31  6.756.167.806.006.456.506.45  7.0000
148.62 	     32  6.756.127.606.006.406.506.40  7.0000
148.63 	     33  6.756.087.406.006.356.506.35  7.0000
148.64 	     34  6.756.047.206.006.306.506.30  7.0000
148.65 	     35  6.756.007.006.006.256.506.25  7.0000
148.66 	     36  6.755.966.806.006.206.506.20  6.9019
148.67 	     37  6.755.926.606.006.156.506.15  6.8074
148.68 	     38  6.755.886.405.906.106.506.10  6.7125
149.1 	     39  6.755.846.205.806.056.506.05  6.6054
149.2 	     40  6.755.806.005.706.006.506.00  6.5000
149.3 	     41  6.755.765.905.605.906.505.95  6.3540
149.4 	     42  6.755.725.805.505.806.505.90  6.2087
149.5 	     43  6.655.685.705.405.706.505.85  6.0622
149.6 	     44  6.555.645.605.305.606.505.80  5.9048
149.7 	     45  6.455.605.505.205.506.505.75  5.7500
149.8 	     46  6.355.565.455.105.406.405.70  5.6940
149.9 	     47  6.255.525.405.005.306.305.65  5.6375
149.10 	     48  6.155.485.355.005.206.205.60  5.5822
149.11 	     49  6.055.445.305.005.106.105.55  5.5404
149.12 	     50  5.955.405.255.005.006.005.50  5.5000
149.13 	     51  5.855.365.255.005.005.905.45  5.4384
149.14 	     52  5.755.325.255.005.005.805.40  5.3776
149.15 	     53  5.655.285.255.005.005.705.35  5.3167
149.16 	     54  5.555.245.255.005.005.605.30  5.2826
149.17 	     55  5.455.205.255.005.005.505.25  5.2500
149.18 	     56  5.355.165.255.005.005.405.20  5.2500
149.19 	     57  5.255.125.255.005.005.305.15  5.2500
149.20 	     58  5.255.085.255.105.005.205.10  5.2500
149.21 	     59  5.255.045.255.205.005.105.05  5.2500
149.22 	     60  5.255.005.255.305.005.005.00  5.2500
149.23 	     61  5.255.005.255.405.005.005.00  5.2500
149.24 	     62  5.255.005.255.505.005.005.00  5.2500
149.25 	     63  5.255.005.255.605.005.005.00  5.2500
149.26 	     64  5.255.005.255.705.005.005.00  5.2500
149.27 	     65  5.255.005.255.705.005.005.00  5.2500
149.28 	     66  5.255.005.255.705.005.005.00  5.2500
149.29 	     67  5.255.005.255.705.005.005.00  5.2500
149.30 	     68  5.255.005.255.705.005.005.00  5.2500
149.31 	     69  5.255.005.255.705.005.005.00  5.2500
149.32 	     70  5.255.005.255.705.005.005.00  5.2500
149.33 	     71  5.255.00         5.70
149.34 	(c) The actuarial valuation must use the applicable
149.35 	following payroll growth assumption for calculating the
149.36 	amortization requirement for the unfunded actuarial accrued
149.37 	liability where the amortization retirement is calculated as a
149.38 	level percentage of an increasing payroll:
149.39 	payroll growth
149.40 	                  plan                             assumption
149.41 	     general state employees retirement plan          5.00%
149.42 	     correctional state employees retirement plan     5.00
149.43 	     State Patrol retirement plan                     5.00
149.44 	     legislators retirement plan                      5.00
149.45 	     elective state officers retirement plan          5.00
149.46 	     judges retirement plan                           5.00
149.47 	     general public employees retirement plan         6.00
149.48 	     public employees police and fire
149.49 	         retirement plan                              6.00
149.50 	     local government correctional service
149.51 	         retirement plan                              6.00
149.52 	     teachers retirement plan                         5.00
149.53 	     Duluth teachers retirement plan                  5.00
149.54 	     Minneapolis teachers retirement plan             5.00
149.55 	     St. Paul teachers retirement plan                5.00

149.56 	Sec. 3. Minnesota Statutes 2004, section 356.216, is
149.57 	amended to read:
149.58 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
149.59 	AND FIRE FUNDS.
149.60 	(a) The provisions of section 356.215 that govern the
150.1 	contents of actuarial valuations must apply to any local police
150.2 	or fire pension fund or relief association required to make an
150.3 	actuarial report under this section, except as follows:
150.4 	(1) in calculating normal cost and other requirements, if
150.5 	required to be expressed as a level percentage of covered
150.6 	payroll, the salaries used in computing covered payroll must be
150.7 	the maximum rate of salary on which retirement and survivorship
150.8 	credits and amounts of benefits are determined and from which
150.9 	any member contributions are calculated and deducted;
150.10 	(2) in lieu of the amortization date specified in section
150.11 	356.215, subdivision 11, the appropriate amortization target
150.12 	date specified in section 69.77, subdivision 4, or 69.773,
150.13 	subdivision 4, clause (c), must be used in calculating any
150.14 	required amortization contribution, except that if the actuarial
150.15 	report for the Bloomington Fire Department Relief Association
150.16 	indicates an unfunded actuarial accrued liability, the unfunded
150.17 	obligation is to be amortized on a level dollar basis by
150.18 	December 31 of the year occurring 20 years later, and if
150.19 	subsequent actuarial valuations for the Bloomington Fire
150.20 	Department Relief Association determine a net actuarial
150.21 	experience loss incurred during the year which ended as of the
150.22 	day before the most recent actuarial valuation date, any
150.23 	unfunded liability due to that loss is to be amortized on a
150.24 	level dollar basis by December 31 of the year occurring 20 years
150.25 	later and except that the amortization date for the Minneapolis
150.26 	Police Relief Association is December 31, 2020;
150.27 	(3) in addition to the tabulation of active members and
150.28 	annuitants provided for in section 356.215, subdivision 13, the
150.29 	member contributions for active members for the calendar year
150.30 	and the prospective annual retirement annuities under the
150.31 	benefit plan for active members must be reported;
150.32 	(4) actuarial valuations required under section 69.773,
150.33 	subdivision 2, must be made at least every four years and
150.34 	actuarial valuations required under section 69.77 shall be made
150.35 	annually;
150.36 	(5) the actuarial balance sheet showing accrued assets
151.1 	valued at market value if the actuarial valuation is required to
151.2 	be prepared at least every four years or valued as current
151.3 	assets under section 356.215, subdivision 1, clause (6), or
151.4 	paragraph (b), whichever applies, if the actuarial valuation is
151.5 	required to be prepared annually, actuarial accrued liabilities,
151.6 	and the unfunded actuarial accrued liability must include the
151.7 	following required reserves:
151.8 	(i) For active members
151.9 	      1.  Retirement benefits
151.10 	      2.  Disability benefits
151.11 	      3.  Refund liability due to death or withdrawal
151.12 	      4.  Survivors' benefits
151.13 	         (ii) For deferred annuitants' benefits
151.14 	         (iii) For former members without vested rights
151.15 	         (iv) For annuitants
151.16 	      1.  Retirement annuities
151.17 	      2.  Disability annuities
151.18 	      3.  Surviving spouses' annuities
151.19 	      4.  Surviving children's annuities
151.20 	In addition to those required reserves, separate items must
151.21 	be shown for additional benefits, if any, which may not be
151.22 	appropriately included in the reserves listed above; and
151.23 	(6) actuarial valuations are due by the first day of the
151.24 	seventh month after the end of the fiscal year which the
151.25 	actuarial valuation covers.
151.26 	(b) For the Minneapolis Firefighters Relief Association or
151.27 	the Minneapolis Police Relief Association, the following
151.28 	provisions additionally apply:
151.29 	(1) in calculating the actuarial balance sheet, unfunded
151.30 	actuarial accrued liability, and amortization contribution of
151.31 	the relief association, "current assets" means the value of all
151.32 	assets at cost, including realized capital gains and losses,
151.33 	plus or minus, whichever applies, the average value of total
151.34 	unrealized capital gains or losses for the most recent
151.35 	three-year period ending with the end of the plan year
151.36 	immediately preceding the actuarial valuation report
152.1 	transmission date; and
152.2 	(2) in calculating the applicable portions of the actuarial
152.3 	valuation, an annual preretirement interest assumption of six
152.4 	percent, an annual postretirement interest assumption of six
152.5 	percent, and an annual salary increase assumption of four
152.6 	percent must be used.

152.7 	Sec. 4. Minnesota Statutes 2004, section 383B.46,
152.8 	subdivision 2, is amended to read:
152.9 		Subd. 2.Establishment of account; contributions.  The
152.10 	county of Hennepin shall deduct from the salary of every person
152.11 	who is eligible for coverage and who elected to retain or obtain
152.12 	coverage by the Hennepin County supplemental retirement program
152.13 	a sum equal to one percent of the total salary of the person.
152.14 	Any classified or unclassified employee who is employed in
152.15 	subsidized on-the-job training, work experience or public
152.16 	service employment as an enrollee under the federal
152.17 	Comprehensive Employment and Training Act shall not be included
152.18 	in the supplemental retirement account from and after March 30,
152.19 	1978 unless the employee has as of the later of March 30, 1978
152.20 	or the date of employment sufficient service credit in the
152.21 	public employees retirement fund or the Minneapolis municipal
152.22 	employees retirement fund, whichever is applicable, to meet the
152.23 	minimum vesting requirements for a deferred retirement annuity,
152.24 	or the county agrees in writing to make the required employer
152.25 	contributions on account of the individual from revenue sources
152.26 	other than funds provided under the federal Comprehensive
152.27 	Employment and Training Act, or the employee agrees in writing
152.28 	to make the required employer contribution in addition to the
152.29 	employee contribution.  The deduction shall be made in the same
152.30 	manner as other retirement deductions are made from the salary
152.31 	of the person.  An amount equal to the amounts deducted during
152.32 	each payroll period shall be contributed by the county of
152.33 	Hennepin.  The total amount deducted and contributed shall be
152.34 	deposited to the credit of the supplemental retirement account
152.35 	in the treasury of the county of Hennepin a separate account
152.36 	administered by the Minnesota State Retirement System on behalf
153.1 	of Hennepin County.  The Hennepin County supplemental retirement
153.2 	account is hereby established as an account separate and
153.3 	distinct from other funds, accounts, or assets of the county of
153.4 	Hennepin.

153.5 	Sec. 5. Minnesota Statutes 2004, section 383B.47, is
153.6 	amended to read:
153.7 	383B.47 PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT
153.8 	FUND.
153.9 	With the moneys deposited to the credit of the supplemental
153.10 	retirement account in the treasury of the county of Hennepin,
153.11 	the county of Hennepin , the Minnesota State Retirement System 
153.12 	shall purchase shares on behalf of Hennepin County in the
153.13 	accounts of the Minnesota supplemental investment fund as
153.14 	provided in section 383B.48.

153.15 	Sec. 6. Minnesota Statutes 2004, section 383B.48, is
153.16 	amended to read:
153.17 	383B.48 BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.
153.18 	At the time a person becomes eligible for coverage and
153.19 	elects to obtain coverage by the Hennepin County supplemental
153.20 	retirement program and before November 1 of each subsequent
153.21 	year,A participant in the Hennepin County supplemental
153.22 	retirement program shall indicate in writing on a form provided
153.23 	by the county of Hennepin the account of the Minnesota
153.24 	supplemental investment fund in which the participant wishes
153.25 	salary deductions and county matching contributions attributable
153.26 	to salary deductions to be invested for the subsequent 12-month
153.27 	period such time as allowed by the Minnesota State Retirement
153.28 	System. For that 12-month period,The county of Hennepin 
153.29 	Minnesota State Retirement System shall purchase with the salary
153.30 	deductions and county matching funds attributable to the salary
153.31 	deductions shares in the appropriate account of the Minnesota
153.32 	supplemental investment fund in accordance with the indicated
153.33 	preferences of the participant.  However, the county of Hennepin
153.34 	has the authority to determine which accounts of the Minnesota
153.35 	supplemental investment fund will be available for participant
153.36 	investment.  The shares purchased must stand in the name of the
154.1 	county of Hennepin.  A record must be kept by the county of
154.2 	Hennepin Minnesota State Retirement System indicating the number
154.3 	of shares in each account of the Minnesota supplemental
154.4 	investment fund purchased with the salary deductions and county
154.5 	matching funds attributable to the salary deductions of each
154.6 	participant.  The record must be known as the "participant's
154.7 	share account record."  The participant's share account record
154.8 	must show, in addition to the number of shares in the account,
154.9 	any cash balance of salary deductions or county matching funds
154.10 	attributable to those deductions which stand uninvested in
154.11 	shares.  At the option of the county of Hennepin, and subject to
154.12 	any terms and conditions established and communicated in writing
154.13 	by the county to a participant, the participant may designate no
154.14 	more often than once each calendar quarter month that prior
154.15 	salary deductions and county matching contributions attributable
154.16 	to the salary deductions, together with any interest earned, be
154.17 	reinvested in another account of the Minnesota supplemental
154.18 	investment fund made available by the county of Hennepin.

154.19 	Sec. 7. Minnesota Statutes 2004, section 383B.49, is
154.20 	amended to read:
154.21 	383B.49 SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF
154.22 	SHARES.
154.23 	When requested to do so, in writing, on forms provided by
154.24 	the county Minnesota State Retirement System, by a participant,
154.25 	surviving spouse, a guardian of a surviving child or a personal
154.26 	representative, whichever is applicable, the county of Hennepin 
154.27 	Minnesota State Retirement System shall on behalf of Hennepin
154.28 	County redeem shares in the accounts of the Minnesota
154.29 	supplemental investment fund standing in a participant's share
154.30 	account record under the following circumstances and in
154.31 	accordance with the laws and regulations governing the Minnesota
154.32 	supplemental investment fund:
154.33 	(1) A participant who is no longer employed by the county
154.34 	of Hennepin is entitled to receive the cash realized on the
154.35 	redemption of the shares to the credit of the participant's
154.36 	share account record of the person.  The participant may request
155.1 	the redemption of all or a portion of the shares in the
155.2 	participant's share account record of the person, but may not
155.3 	request more than one redemption in any one calendar year.  If
155.4 	only a portion of the shares in the participant's share account
155.5 	record is requested to be redeemed the person may request to
155.6 	redeem not less than 20 percent of the shares in any one
155.7 	calendar year and the redemption must be completed in no more
155.8 	than five years. The person may select annual redemption in a
155.9 	single lump sum or in monthly payments.An election is
155.10 	irrevocable except that a participant may request an amendment
155.11 	of the election to redeem all of the person's remaining shares.
155.12 	All requests under this paragraph are subject to application to
155.13 	and approval of the Hennepin County administrator, in the sole
155.14 	discretion of the administrator Minnesota State Retirement
155.15 	System upon verification by Hennepin County through the county
155.16 	administrator of the recipient's eligibility to redeem funds.
155.17 	(2) In the event of the death of a participant leaving a
155.18 	surviving spouse, the surviving spouse is entitled to receive
155.19 	the cash realized on the redemption of all or a portion of the
155.20 	shares in the participant's share account record of the deceased
155.21 	spouse, but in no event may the spouse request more than one
155.22 	redemption in each calendar year.  If only a portion of the
155.23 	shares in the participant's share account record is requested to
155.24 	be redeemed, the surviving spouse may request the redemption of
155.25 	not less than 20 percent of the shares in any one calendar year.
155.26 	The surviving spouse may elect annual redemption in a single
155.27 	lump sum payment or in monthly payments.Redemption must be
155.28 	completed in no more than five years.  An election is
155.29 	irrevocable except that the surviving spouse may request an
155.30 	amendment of the election to redeem all of the participant's
155.31 	remaining shares.  All requests under this paragraph are subject
155.32 	to application to and approval of the Hennepin County
155.33 	administrator, in the sole discretion of the
155.34 	administrator Minnesota State Retirement System upon
155.35 	verification by Hennepin County through the county administrator
155.36 	of the recipient's eligibility to redeem funds.  Upon the death
156.1 	of the surviving spouse, any shares remaining in the
156.2 	participant's share account record must be redeemed on behalf of
156.3 	Hennepin County by the county of Hennepin Minnesota State
156.4 	Retirement System and the cash realized from the redemption
156.5 	distributed to the estate of the surviving spouse.
156.6 	(3) In the event of the death of a participant leaving no
156.7 	surviving spouse, but leaving a minor surviving child or minor
156.8 	surviving children, the guardianship estate of the minor child
156.9 	is, or the guardianship estates of the minor children are,
156.10 	entitled to receive the cash realized on the redemption of all
156.11 	shares to the credit of the participant's share account record
156.12 	of the deceased participant.  In the event of minor surviving
156.13 	children, the cash realized must be paid in equal shares to the
156.14 	guardianship estates of the minor surviving children.
156.15 	(4) In the event of the death of a participant leaving no
156.16 	surviving spouse and no minor surviving children, the estate of
156.17 	the deceased participant is entitled to receive the cash
156.18 	realized on the redemption of all shares to the credit of the
156.19 	participant's share account record of the deceased participant.

156.20 	Sec. 8. [383B.491] MINNESOTA STATE RETIREMENT SYSTEM
156.21 	BILLING AUTHORITY.
156.22 	The Minnesota State Retirement System executive director is
156.23 	authorized to enter into an interagency agreement with Hennepin
156.24 	County under which the Minnesota State Retirement System would
156.25 	directly bill the county for the cost of the Minnesota State
156.26 	Retirement System's administration of the Hennepin County
156.27 	Supplemental Retirement Plan.

156.28 	Sec. 9. Minnesota Statutes 2004, section 423B.05,
156.29 	subdivision 3, is amended to read:
156.30 		Subd. 3.Continuation of board.  Notwithstanding the
156.31 	provisions of section 423A.01, subdivision 2, or any other law,
156.32 	the board of trustees and its successors established under
156.33 	subdivision 1 shall continue to govern the association until
156.34 	there are no more than 100 225 members of the police pension
156.35 	fund.  The fund thereafter must become a trust fund in
156.36 	accordance with section 423A.01, subdivision 2.

157.1 	Sec. 10. Minnesota Statutes 2004, section 423B.09,
157.2 	subdivision 1, is amended to read:
157.3 		Subdivision 1.Minneapolis police; persons entitled to
157.4 	receive pensions.  The association shall grant pensions payable
157.5 	from the police pension fund in monthly installments to persons
157.6 	entitled to pensions in the manner and for the following
157.7 	purposes.
157.8 	(a) When the actuarial value of assets of the fund
157.9 	according to the most recent annual actuarial valuation
157.10 	performed in accordance with sections 356.215 and 356.216 is
157.11 	less than 90 percent of the actuarial accrued liabilities,An
157.12 	active member or a deferred pensioner who has performed duty as
157.13 	a member of the police department of the city for five years or
157.14 	more, upon written application after retiring from duty and
157.15 	reaching at least age 50, is entitled to be paid monthly for
157.16 	life a service pension equal to eight units.  For full years of
157.17 	service beyond five years, the service pension increases by 1.6
157.18 	units for each full year, to a maximum of 40 units.  When the
157.19 	actuarial value of assets of the fund according to the most
157.20 	recent annual actuarial valuation prepared in accordance with
157.21 	sections 356.215 and 356.216 is greater than 90 percent of
157.22 	actuarial accrued liabilities,.Active members, deferred
157.23 	members, and service pensioners are entitled to a service
157.24 	pension according to the following schedule:
157.25 	5 years           8.0 units
157.26 	               6 years           9.6 units
157.27 	               7 years          11.2 units
157.28 	               8 years          12.8 units
157.29 	               9 years          14.4 units
157.30 	              10 years          16.0 units
157.31 	              11 years          17.6 units
157.32 	              12 years          19.2 units
157.33 	              13 years          20.8 units
157.34 	              14 years          22.4 units
157.35 	              15 years          24.0 units
157.36 	              16 years          25.6 units
158.1 	              17 years          27.2 units
158.2 	              18 years          28.8 units
158.3 	              19 years          30.4 units
158.4 	A B 
158.5 	              20 years 34.0 34.5 units 35.0 units 
158.6 	              21 years 35.6 36.1 units 36.6 units 
158.7 	              22 years 37.2 37.7 units 38.2 units 
158.8 	              23 years 38.8 39.3 units 39.8 units 
158.9 	              24 years 40.4 40.9 units 41.4 units 
158.10 	              25 years 42.0 42.5 units 43.0 units 
158.11 	Column A is applicable until December 31, 2005, and applies
158.12 	retroactively to January 1, 2005, for a service pensioner who
158.13 	retired before January 1, 2005.  Column B applies on and after
158.14 	January 1, 2006.
158.15 	Fractional years of service may not be used in computing
158.16 	pensions.
158.17 	(b) An active member who after five years' service but less
158.18 	than 20 years' service with the police department of the city,
158.19 	becomes superannuated so as to be permanently unable to perform
158.20 	the person's assigned duties, is entitled to be paid monthly for
158.21 	life a superannuation pension equal to four units for five years
158.22 	of service and an additional two units for each full year of
158.23 	service over five years and less than 20 years.
158.24 	(c) An active member who is not eligible for a service
158.25 	pension and who, while a member of the police department of the
158.26 	city, becomes diseased or sustains an injury while in the
158.27 	service that permanently unfits the member for the performance
158.28 	of police duties is entitled to be paid monthly for life a
158.29 	pension equal to 34 units while so disabled.

158.30 	Sec. 11. Minnesota Statutes 2004, section 423B.09, is
158.31 	amended by adding a subdivision to read:
158.32 		Subd. 7.Additional unit. The additional half units
158.33 	provided to members by subdivision 1 must also be provided under
158.34 	the same terms and at the same time as applicable under
158.35 	subdivision 1 to members who selected a joint annuity option
158.36 	under subdivision 6 and must be in an amount that is actuarially
159.1 	equivalent to the service pension and the automatic survivor
159.2 	coverage for that additional unit.

159.3 	Sec. 12. Minnesota Statutes 2004, section 423B.10,
159.4 	subdivision 1, is amended to read:
159.5 		Subdivision 1.Entitlement; benefit amount.  (a) The
159.6 	surviving spouse of a deceased service pensioner, disability
159.7 	pensioner, deferred pensioner, superannuation pensioner, or
159.8 	active member, who was the legally married spouse of the
159.9 	decedent, residing with the decedent, and who was married while
159.10 	or before the time the decedent was on the payroll of the police
159.11 	department, and who, if the deceased member was a service or
159.12 	deferred pensioner, was legally married to the member for a
159.13 	period of at least one year before retirement from the police
159.14 	department, is entitled to a surviving spouse benefit.  The
159.15 	surviving spouse benefit is equal to 22 22.5 units per month
159.16 	until December 31, 2005, and 23 units per month beginning on
159.17 	January 1, 2006,if the person is the surviving spouse of a
159.18 	deceased active member or disabilitant.  The surviving spouse
159.19 	benefit is equal to six units per month, plus an additional one
159.20 	unit for each year of service to the credit of the decedent in
159.21 	excess of five years, to a maximum of 22 22.5 units per month
159.22 	until December 31, 2005, and 23 units per month beginning on
159.23 	January 1, 2006, if the person is the surviving spouse of a
159.24 	deceased service pensioner, deferred pensioner, or
159.25 	superannuation pensioner.  The surviving spouse benefit is
159.26 	payable for the life of the surviving spouse.
159.27 	(b) A surviving child of a deceased service pensioner,
159.28 	disability pensioner, deferred pensioner, superannuation
159.29 	pensioner, or active member, who was living while the decedent
159.30 	was an active member of the police department or was born within
159.31 	nine months after the decedent terminated active service in the
159.32 	police department, is entitled to a surviving child benefit.
159.33 	The surviving child benefit is equal to eight units per month if
159.34 	the person is the surviving child of a deceased active member or
159.35 	disabilitant.  The surviving child benefit is equal to two units
159.36 	per month, plus an additional four-tenths of one unit per month
160.1 	for each year of service to the credit of the decedent in excess
160.2 	of five years, to a maximum of eight units, if the person is the
160.3 	surviving child of a deceased service pensioner, deferred
160.4 	pensioner, or superannuation pensioner.  The surviving child
160.5 	benefit is payable until the person attains age 18, or, if in
160.6 	full-time attendance during the normal school year, in a school
160.7 	approved by the board of directors, until the person receives a
160.8 	bachelor's degree or attains the age of 22 years, whichever
160.9 	occurs first.  In the event of the death of both parents leaving
160.10 	a surviving child or children entitled to a surviving child
160.11 	benefit as determined in this paragraph, the surviving child is,
160.12 	or the surviving children are, entitled to a surviving child
160.13 	benefit in such sums as determined by the board of directors to
160.14 	be necessary for the care and education of such surviving child
160.15 	or children, but not to exceed the family maximum benefit per
160.16 	month, to the children of any one family.
160.17 	(c) The surviving spouse and surviving child benefits are
160.18 	subject to a family maximum benefit.  The family maximum benefit
160.19 	is 41 units per month.
160.20 	(d) A surviving spouse who is otherwise not qualified may
160.21 	receive a benefit if the surviving spouse was married to the
160.22 	decedent for a period of five years and was residing with the
160.23 	decedent at the time of death.  The surviving spouse benefit is
160.24 	the same as that provided in paragraph (a), except that if the
160.25 	surviving spouse is younger than the decedent, the surviving
160.26 	spouse benefit must be actuarially equivalent to a surviving
160.27 	spouse benefit that would have been paid to the member's spouse
160.28 	had the member been married to a person of the same age or a
160.29 	greater age than the member's age before retirement.
160.30 	(e) For any surviving spouse who began receiving survivor
160.31 	benefits before January 1, 2005, the half-unit increase under
160.32 	paragraph (a) is effective retroactive to January 1, 2005.

160.33 	Sec. 13. Minnesota Statutes 2004, section 423C.05,
160.34 	subdivision 2, is amended to read:
160.35 		Subd. 2.Service pension.  (a) An active A member who has
160.36 	performed duty for the fire department for five years or more,
161.1 	upon written application after retiring from duty and reaching
161.2 	at least age 50, is entitled to be paid monthly for life a
161.3 	service pension under paragraph (b).
161.4 	(b) Based on the percentage that the actuarial value of
161.5 	assets of the special fund equal to the actuarial accrued
161.6 	liabilities of the special fund according to the most recent
161.7 	annual actuarial valuation of the relief association prepared in
161.8 	accordance with sections 356.215 and 356.216,The amount of the
161.9 	service pension is as follows:
161.10 	Length of Service Service Service 
161.11 	allowable pension pension pension 
161.12 	service payable if payable payable if 
161.13 	credit under 90 if greater greater
161.14 	             percent than 89.99than 92.49
161.15 	                            percent and percent
161.16 	                            less than Number of 
161.17 	92.5 percent units 
161.18 	5 years-8.0 units 8.0 units
161.19 	 6 years-9.6 units 9.6 units
161.20 	 7 years-11.2 units 11.2 units
161.21 	 8 years-12.8 units 12.8 units
161.22 	 9 years-14.4 units 14.4 units
161.23 	10 years 16.0 units 16.0 units 16.0 units
161.24 	11 years 17.6 units 17.6 units 17.6 units
161.25 	12 years 19.2 units 19.2 units 19.2 units
161.26 	13 years 20.8 units 20.8 units 20.8 units
161.27 	14 years 22.4 units 22.4 units 22.4 units
161.28 	15 years 24.0 units 24.0 units 24.0 units
161.29 	16 years 25.6 units 25.6 units 25.6 units
161.30 	17 years 27.2 units 27.2 units 27.2 units
161.31 	18 years 28.8 units 28.8 units 28.8 units
161.32 	19 years 30.4 units 30.4 units 30.4 units
161.33 	20 years 33.0 units 33.5 units 34.0 units
161.34 	21 years 34.6 units 35.1 units 35.6 units
161.35 	22 years 36.2 units 37.7 units 37.2 units
161.36 	23 years 37.8 units 38.3 units 38.8 units
162.1 	24 years 39.4 units 39.9 units 40.4 units
162.2 	25 years
162.3 	 or more 41.0 units 41.5 units 42.0 units
162.4 	(c) A member entitled to a benefit under this subdivision
162.5 	may elect to have it paid as an optional retirement annuity
162.6 	pursuant to the conditions set forth in subdivision 8.  A member
162.7 	receiving a benefit pursuant to subdivision 5 or 6 shall not
162.8 	simultaneously be entitled to a benefit under this subdivision.

162.9 	Sec. 14. [423C.16] RECOMPUTATION OF DISABLED BENEFIT
162.10 	PROHIBITED.
162.11 	Notwithstanding section 423A.11, the Board of Trustees of
162.12 	the Minneapolis Firefighters Relief Association shall not
162.13 	recompute the disability benefit of a member who became
162.14 	permanently disabled as the result of a service-related disease
162.15 	or injury.  Any prior recomputation of a disabled member's
162.16 	service-related disability pension shall be revoked upon the
162.17 	member's request and upon the member's signed and sworn
162.18 	agreement to waive any right to a recomputation of the benefit
162.19 	in the future.  Non-service-related disability pension benefits
162.20 	that were recomputed at full 25-year service pensions shall
162.21 	remain in effect.

162.22 	Sec. 15. NO REDUCTION OF BENEFITS.
 162.23 	When a pension benefit is properly paid in accordance with
162.24 	the laws governing the Minneapolis Police Relief Association or
162.25 	the Minneapolis Firefighters Relief Association, whichever
162.26 	apply, to any member, the dollar amount of the pension a member
162.27 	received may not be reduced if the city of Minneapolis and the
162.28 	collective bargaining agent representing active police officers
162.29 	or firefighters enter into or are required to abide by an
162.30 	agreement that would otherwise require the association to reduce
162.31 	the dollar amount of a pension that had properly been paid to
162.32 	any member.

162.33 	Sec. 16. AURORA, BIWABIK CITY, HOYT LAKES, AND PALO
162.34 	VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.
 162.35 	(a) This section applies to consolidation of any
162.36 	combination of two or more of the following volunteer
163.1 	firefighter relief associations:  Aurora, Biwabik City, Hoyt
163.2 	Lakes, and Palo.
163.3 	(b) Notwithstanding Minnesota Statutes, section 424B.10,
163.4 	subdivision 1, paragraph (a), the service pension to be paid by
163.5 	the relief association existing after the consolidation is as
163.6 	follows:
163.7 	(1) for the service rendered by each individual volunteer
163.8 	firefighter before the effective date of the consolidation, the
163.9 	service pension amount is the amount payable to that volunteer
163.10 	firefighter under the articles of incorporation or bylaws of the
163.11 	consolidating volunteer firefighters relief association that the
163.12 	firefighter was a member of immediately before the
163.13 	consolidation;
163.14 	(2) for the service rendered after the effective date of
163.15 	the consolidation, the service pension amount is the highest
163.16 	dollar amount service pension of any of the consolidating
163.17 	volunteer firefighters relief associations under the articles of
163.18 	incorporation or bylaws in effect immediately before the
163.19 	consolidation; and 
163.20 	(3) after consolidation, increases in the amounts
163.21 	established in clauses (1) and (2) may be implemented if
163.22 	consistent with applicable requirements of Minnesota Statutes,
163.23 	chapters 69 and 424A.

163.24 	Sec. 17. EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD
163.25 	HOC POSTRETIREMENT ADJUSTMENT.
 163.26 	(a) In addition to the current pensions and other
163.27 	retirement benefits payable, the pensions and retirement
163.28 	benefits payable to retired police officers and firefighters and
163.29 	their surviving spouses by the Eveleth police and fire trust
163.30 	fund are increased by $100 per month.  Increases are retroactive
163.31 	from January 1, 2005.
163.32 	(b) Following the January 1, 2005, effective date of the
163.33 	benefit increase provided under paragraph (a), every two years
163.34 	thereafter, to be effective no earlier than the applicable
163.35 	January 1, the city council of the city of Eveleth is authorized
163.36 	to provide permanent, uniform benefit increases, not less than
164.1 	$10 per month nor to exceed $100 per month, to any remaining
164.2 	retirees and survivors receiving benefits from the Eveleth
164.3 	police and fire trust fund.  Any given benefit improvement under
164.4 	this paragraph is not effective unless the city council passes a
164.5 	resolution approving the increase.
164.6 	(c) Within 30 days following the approval of a resolution
164.7 	under paragraph (b), the chief administrative officer of the
164.8 	city of Eveleth shall file a copy of the resolution with the
164.9 	executive director of the Legislative Commission on Pensions and
164.10 	Retirement, with the chair of the house Governmental Operations
164.11 	and Veterans Affairs Committee, and with the chair of the senate
164.12 	State and Local Government Operations Committee.  Along with a
164.13 	copy of the resolution, the city's chief administrative officer
164.14 	must send a statement indicating the age of each benefit
164.15 	recipient and the retirement benefit or survivor benefit being
164.16 	received before and after the benefit increase.

164.17 	Sec. 18. MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER
164.18 	RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.
 164.19 	Notwithstanding any limitations in Minnesota Statutes,
164.20 	section 424A.02, subdivision 13, or any other provision of law
164.21 	to the contrary, if an agreement between the affected relief
164.22 	associations and cities is reached as provided in this section,
164.23 	the Maplewood Firefighters Relief Association may transfer
164.24 	assets from its special fund to the Oakdale Fire Department
164.25 	Relief Association representing the value of the accumulated
164.26 	service credit for the current members of the Oakdale Fire
164.27 	Department Relief Association who are currently eligible to
164.28 	receive a combined service pension for firefighter service in
164.29 	both associations.  The transfer of the assets from the
164.30 	Maplewood Firefighters Relief Association to the Oakdale Fire
164.31 	Department Relief Association must be in an amount representing
164.32 	the cumulative value of the service credit earned by the members
164.33 	of the Oakdale Fire Department Relief Association who are
164.34 	currently eligible to receive a combined service pension for
164.35 	firefighting service in both associations for the service credit
164.36 	that they accrued while working for the Maplewood Fire
165.1 	Department.  The amount of the assets, liabilities, and service
165.2 	credit to be transferred must be specified in a joint agreement
165.3 	negotiated by the secretaries of the two relief associations and
165.4 	ratified by the boards of trustees of both relief associations
165.5 	and of the cities of Maplewood and Oakdale.  The agreement must
165.6 	specify by name or other appropriate means the firefighters
165.7 	affected by the liability, asset, and service credit transfer.
165.8 	The ratification must be expressed in the form of resolutions
165.9 	adopted by each entity.  The agreements must specify the amount
165.10 	of assets to be transferred, the amount of liabilities to be
165.11 	transferred, and the amount of service credit each of the
165.12 	applicable individuals will receive in the Oakdale Fire
165.13 	Department Relief Association.  Upon the ratification of the
165.14 	agreement by both relief associations and both cities, the
165.15 	assets, liabilities, and service credit of the applicable
165.16 	individuals must be transferred to the Oakdale Fire Department
165.17 	Relief Association, and the Maplewood Firefighters Relief
165.18 	Association is relieved of any obligation to the individuals.  A
165.19 	certified copy of the ratified agreement must be filed with the
165.20 	state auditor and with the secretary of state.

165.21 	Sec. 19. EFFECTIVE DATE; LOCAL APPROVAL.
 165.22 	(a) Sections 2 and 3 with respect to the Bloomington Fire
165.23 	Department Relief Association are effective the day after the
165.24 	date on which the city council of the city of Bloomington and
165.25 	its chief clerical officer timely complete their compliance with
165.26 	Minnesota Statutes, section 645.021, subdivisions 2 and 4.
165.27 	(b) Sections 1, 3, with respect to the Minneapolis Police
165.28 	Relief Association, 9, 10, 11, 12, 13, and 15 are not severable
165.29 	and are effective the day after the date of the approval by the
165.30 	city council of the city of Minneapolis and the timely
165.31 	completion by the chief clerical officer of the city of
165.32 	Minneapolis of compliance with Minnesota Statutes, section
165.33 	645.021, subdivisions 2 and 3.
165.34 	(c) Sections 4, 5, 6, 7, and 8 are effective the day after
165.35 	the board of Hennepin County and its chief clerical officer
165.36 	complete in a timely manner their compliance with Minnesota
166.1 	Statutes, section 645.021, subdivisions 2 and 3.
166.2 	(d) Sections 14 and 15 are effective the day after the
166.3 	governing body of the city of Minneapolis and its chief clerical
166.4 	officer timely complete their compliance with Minnesota
166.5 	Statutes, section 645.021, subdivisions 2 and 3.
166.6 	(e) Section 17 is effective the day after the date on which
166.7 	the city council of the city of Eveleth and its chief clerical
166.8 	officer timely complete their compliance with Minnesota
166.9 	Statutes, section 645.021, subdivisions 2 and 3.
166.10 	(f) Section 16 is effective with respect to a volunteer
166.11 	firefighters relief association listed in column A the day after
166.12 	the governing body of the municipality listed in column B and
166.13 	its chief clerical officer timely complete compliance with
166.14 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
166.15 	A B
166.16 	              Aurora city of Aurora
166.17 	              Biwabik city of Biwabik
166.18 	              Hoyt Lakes city of Hoyt Lakes
166.19 	              Palo town of White 
166.20 	(g) Section 18 is effective the day after the governing
166.21 	body of the city of Maplewood, the governing body of the city of
166.22 	Oakdale, the Maplewood chief clerical officer, and the Oakdale
166.23 	chief clerical officer complete their compliance with Minnesota
166.24 	Statutes, section 645.021, subdivisions 2 and 3.

166.25 	ARTICLE 12
166.26 	ONE PERSON AND SMALL GROUP
166.27 	RETIREMENT CHANGES

166.28 	Section 1. PURCHASE OF PRIOR SERVICE CREDIT.
 166.29 	(a) An eligible person described in paragraph (b) is
166.30 	entitled to purchase up to one year of allowable service credit
166.31 	from the Teachers Retirement Association for the 2003-2004
166.32 	school year.  The service credit purchase under this section
166.33 	must be made in accordance with Minnesota Statutes, section
166.34 	356.551, except as otherwise stated in this section.
166.35 	(b) An eligible person is a person who:
166.36 	(1) is currently a member of the Teachers Retirement
167.1 	Association;
167.2 	(2) was born on April 2, 1949;
167.3 	(3) has been employed by Independent School District No.
167.4 	11, Anoka-Hennepin, since the 1971-1972 school year;
167.5 	(4) applied for and was granted an extended leave of
167.6 	absence from Independent School District No. 11, Anoka-Hennepin,
167.7 	for the 2002-2003, 2003-2004, and 2004-2005 school years under
167.8 	Minnesota Statutes, section 122A.46;
167.9 	(5) was unable to make timely payment for the 2003-2004
167.10 	school year under Minnesota Statutes, section 354.094, because
167.11 	of a problem in transferring funds from the individual's
167.12 	tax-sheltered annuity account; and 
167.13 	(6) was not permitted by the Teachers Retirement
167.14 	Association to make payment after June 30, 2004, with interest.
167.15 	(c) Notwithstanding Minnesota Statutes, section 356.551,
167.16 	payment must be made by September 1, 2005, or prior to
167.17 	termination of service, whichever is earlier, and the employee
167.18 	payment amount is an amount equal to the employee contribution
167.19 	rate in effect during the 2003-2004 school year applied to the
167.20 	eligible individual's salary in the year prior to the leave,
167.21 	plus .708 percent monthly interest from June 30, 2004, until the
167.22 	end of the month in which payment is made.  If the full payment
167.23 	required under this paragraph is made, then notwithstanding
167.24 	Minnesota Statutes, section 354.094, the individual is
167.25 	authorized under Minnesota Statutes, section 354.094, to make
167.26 	the required contribution for the 2004-2005 school year, and any
167.27 	subsequent years of the leave.  Notwithstanding payment
167.28 	deadlines in Minnesota Statutes, section 354.094, the employee
167.29 	contribution for the 2004-2005 school year must be made on or
167.30 	before September 30, 2005, with .708 percent monthly interest
167.31 	from June 30, 2005, until paid.
167.32 	(d) If payment is received under paragraph (c), the
167.33 	executive director of the Teachers Retirement Association shall
167.34 	bill Independent School District No. 11, Anoka-Hennepin, for the
167.35 	employer contribution that would have been made on behalf of the
167.36 	eligible person for the 2003-2004 fiscal year under Minnesota
168.1 	Statutes, section 354.094.  The remainder of the full actuarial
168.2 	value payment under Minnesota Statutes, section 356.551, is
168.3 	waived.  If the school district fails to make payment under this
168.4 	paragraph within 30 days of notification of the amount due, the
168.5 	executive director shall notify the commissioner of the
168.6 	Department of Finance of that fact and the employer payment
168.7 	amount shall be deducted from any subsequent state aid to the
168.8 	school district.

168.9 	Sec. 2. EFFECTIVE DATE.
 168.10 	Section 1 is effective the day following final enactment.