Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1992 

                        CHAPTER 598-H.F.No. 2025 
           An act relating to retirement; various retirement 
          plans; increasing the interest rate on the repayment 
          of refunds and similar transactions; authorizing 
          purchases of prior service credit; increasing the 
          employer contribution rate for certain first class 
          city teacher retirement fund association coordinated 
          programs; making various changes in administrative 
          provisions of laws governing the first class city 
          teachers retirement fund associations; providing 
          authority for the Minneapolis teachers retirement fund 
          association to amend its articles of incorporation to 
          modify disability benefits for basic program members; 
          amending Minnesota Statutes 1990, sections 3A.03, 
          subdivision 2; 352.01, subdivision 11; 352.04, 
          subdivision 8; 352.23; 352.27; 352.271; 352B.11, 
          subdivision 4; 352C.051, subdivision 3; 352C.09, 
          subdivision 2; 352D.05, subdivision 4; 352D.11, 
          subdivision 2; 352D.12; 353.28, subdivision 5; 353.35; 
          353.36, subdivision 2; 353A.07, subdivision 3, as 
          amended; 354.41, subdivision 9; 354.50, subdivision 2; 
          354.51, subdivisions 4 and 5; 354.52, subdivision 4; 
          354.53, subdivision 1; 354A.011, subdivisions 4, 8, 
          11, 12, 13, 15, 21, 24, and 27; 354A.021, subdivision 
          6; 354A.05; 354A.08; 354A.096; 354A.12, subdivision 2; 
          354A.31, subdivision 3; 354A.36, subdivision 3; 
          354A.38, subdivision 3; and 490.124, subdivision 12; 
          Minnesota Statutes 1991 Supplement, sections 353.01, 
          subdivision 16; 353.27, subdivisions 12, 12a, and 12b; 
          354.094, subdivision 1; and 354A.011, subdivision 26; 
          repealing Minnesota Statutes 1990, sections 354A.011, 
          subdivision 2; and 354A.40, subdivisions 2 and 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                    MINNESOTA STATE RETIREMENT SYSTEM
    Section 1.  Minnesota Statutes 1990, section 3A.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [REFUND.] (1) Any person who has made 
contributions pursuant to subdivision 1 who is no longer a 
member of the legislature is entitled to receive upon 
application to the director a refund of all contributions 
credited to the member's account with interest at the an annual 
rate of six percent per annum compounded annually.  
    (2) The refund of contributions as provided in clause (1) 
above terminates all rights of a former member of the 
legislature or survivors of the former member under this 
chapter.  Should the former member of the legislature again be a 
member of the legislature after having taken a refund as 
provided above, the member shall be considered a new member.  
However, a new member may reinstate the rights and credit for 
service forfeited, provided the new member repays all refunds 
taken plus interest at the an annual rate of six 8.5 percent 
per annum compounded annually.  
    (3) No person shall be required to apply for or accept a 
refund. 
    Sec. 2.  Minnesota Statutes 1990, section 352.01, 
subdivision 11, is amended to read: 
    Subd. 11.  [ALLOWABLE SERVICE.] "Allowable service" means:  
      (1) Service by an employee for which on or before July 1, 
1957, the employee was entitled to allowable service credit on 
the records of the system by reason of employee contributions in 
the form of salary deductions, payments in lieu of salary 
deductions, or in any other manner authorized by Minnesota 
Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
      (2) Service by an employee for which on or before July 1, 
1961, the employee chose to obtain credit for service by making 
payments to the fund under Minnesota Statutes 1961, section 
352.24. 
      (3) Except as provided in clauses (9) and (10), service by 
an employee after July 1, 1957, for any calendar month in which 
the employee is paid salary from which deductions are made, 
deposited, and credited in the fund, including deductions made, 
deposited, and credited as provided in section 352.041. 
      (4) Except as provided in clauses (9) and (10), service by 
an employee after July 1, 1957, for any calendar month for which 
payments in lieu of salary deductions are made, deposited, and 
credited in the fund, as provided in section 352.27 and 
Minnesota Statutes 1957, section 352.021, subdivision 4. 
      For purposes of clauses (3) and (4), except as provided in 
clauses (9) and (10), any salary paid for a fractional part of 
any calendar month is deemed the compensation for the entire 
calendar month. 
      (5) The period of absence from their duties by employees 
who are temporarily disabled because of injuries incurred in the 
performance of duties and for which disability the state is 
liable under the workers' compensation law until the date 
authorized by the director for the commencement of payments of a 
total and permanent disability benefit from the retirement fund. 
      (6) The unused part of an employee's annual leave allowance 
for which the employee is paid salary. 
      (7) Any service covered by a refund repaid as provided in 
section 352.23 or 352D.05, subdivision 4, except service 
rendered as an employee of the adjutant general for which the 
person has credit with the federal civil service retirement 
system. 
      (8) Any service before July 1, 1978, by an employee of the 
transit operating division of the metropolitan transit 
commission or by an employee on an authorized leave of absence 
from the transit operating division of the metropolitan transit 
commission who is employed by the labor organization which is 
the exclusive bargaining agent representing employees of the 
transit operating division, which was credited by the 
metropolitan transit commission-transit operating division 
employees retirement fund or any of its predecessor plans or 
funds as past, intermediate, future, continuous, or allowable 
service as defined in the metropolitan transit 
commission-transit operating division employees retirement fund 
plan document in effect on December 31, 1977. 
     (9) Service after July 1, 1983, by an employee who is 
employed on a part-time basis for less than 50 percent of full 
time, for which the employee is paid salary from which 
deductions are made, deposited, and credited in the fund, 
including deductions made, deposited, and credited as provided 
in section 352.041 or for which payments in lieu of salary 
deductions are made, deposited, and credited in the fund as 
provided in section 352.27 shall be credited on a fractional 
basis either by pay period, monthly, or annually based on the 
relationship that the percentage of salary earned bears to a 
full-time salary, with any salary paid for the fractional 
service credited on the basis of the rate of salary applicable 
for a full-time pay period, month, or a full-time year.  For 
periods of part-time service that is duplicated service credit, 
section 356.30, subdivision 1, clauses (i) and (j), govern. 
     The allowable service determined and credited on a 
fractional basis shall be used in calculating the amount of 
benefits payable, but service as determined on a fractional 
basis must not be used in determining the length of service 
required for eligibility for benefits.  
     (10) Any period of authorized leave of absence without pay 
that does not exceed one year and for which the employee 
obtained credit by payment to the fund in lieu of salary 
deductions.  To obtain credit, the employee shall pay an amount 
equal to the employee and employer contribution rate in section 
352.04, subdivisions 2 and 3, multiplied by the employee's 
hourly rate of salary on the date of return from leave of 
absence and by the days and months of the leave of absence 
without pay for which the employee wants allowable service 
credit.  The employing department, at its option, may pay the 
employer amount on behalf of its employees.  Payments made under 
this clause shall include interest at the an annual rate of six 
8.5 percent per year compounded annually from the date of 
termination of the leave of absence to the date payment is made 
unless payment is completed within one year of the return from 
leave of absence. 
    Sec. 3.  Minnesota Statutes 1990, section 352.04, 
subdivision 8, is amended to read: 
    Subd. 8.  [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 
DEDUCTIONS.] (a) If a department fails to take deductions past 
due for a period of 60 days or less from an employee's salary as 
provided in this section, those deductions must be taken on 
later payroll abstracts.  
    (b) If a department fails to take deductions past due for a 
period in excess of 60 days from an employee's salary as 
provided in this section, the department, and not the employee, 
shall pay the employee and employer contributions and an amount 
equivalent to six 8.5 percent of the total amount due in lieu of 
interest.  
    (c) If a department fails to take deductions past due for a 
period of 60 days or less and the employee is no longer in state 
service so that the required deductions cannot be taken from the 
salary of the employee, the department shall nevertheless pay 
the required employer contributions.  If any department fails to 
take deductions past due for a period in excess of 60 days and 
the employee is no longer in state service, the omitted 
contributions shall be recovered under paragraph (b).  
    (d) If an employee from whose salary required deductions 
were past due for a period of 60 days or less leaves state 
service before the payment of the omitted deductions and 
subsequently returns to state service, the unpaid amount is 
considered the equivalent of a refund.  The employee accrues no 
right by reason of the unpaid amount, except that the employee 
may pay the amount of omitted deductions as provided in section 
352.23. 
    Sec. 4.  Minnesota Statutes 1990, section 352.23, is 
amended to read: 
    352.23 [TERMINATION OF RIGHTS.] 
    When any employee accepts a refund as provided in section 
352.22, all existing service credits and all rights and benefits 
to which the employee was entitled before accepting the refund 
terminate.  They must not again be restored until the former 
employee acquires at least one year's allowable service credit 
after taking the last refund.  In that event, the employee may 
repay all refunds previously taken from the retirement fund.  
Repayment of refunds entitles the employee only to credit for 
service covered by (1) salary deductions, (2) payments made in 
lieu of salary deductions, and (3) payments made to obtain 
credit for service as permitted by laws in effect when payment 
was made.  If an employee before taking one or more refunds had 
credit for prior service or for military service without payment 
in either case, the employee may obtain credit for any forfeited 
service before July 1, 1929, and for any forfeited military 
service by making payments at a contribution rate of three 
percent of the average salary upon which deductions for the 
retirement fund were based, for the three-year period 
immediately preceding repayment of refund for service credit 
before July 1, 1929, and on the salary received at the time of 
entering military service to restore military service credit.  
Payments and for purchase of prior military service under this 
section and repayment of refunds are to be paid with interest at 
six an annual rate of 8.5 percent per year compounded annually.  
They may be paid in a lump sum or by payroll deduction in the 
manner provided in section 352.04.  
    Sec. 5.  Minnesota Statutes 1990, section 352.27, is 
amended to read: 
    352.27 [CREDIT FOR MILITARY SERVICE.] 
    Any employee given a leave of absence to enter military 
service who returns to state service upon discharge from 
military service as provided in section 192.262, may obtain 
credit for the period of military service.  The employee is not 
entitled to credit for any voluntary extension of military 
service at the instance of the employee beyond the initial 
period of enlistment, induction, or call to active duty, nor to 
credit for any period of service following a voluntary return to 
military service.  An employee may obtain credit by paying into 
the fund an employee contribution based upon the salary received 
at the date of return from military service.  The amount of this 
contribution must be the applicable amounts required in section 
352.04, subdivision 2, plus interest at six an annual rate of 
8.5 percent per year compounded annually.  The matching employer 
contribution and additional contribution provided in section 
352.04 must be paid by the department employing the employee 
upon return to state service from funds available to the 
department at the time and in the manner provided in section 
352.04.  
    Sec. 6.  Minnesota Statutes 1990, section 352.271, is 
amended to read: 
    352.271 [METROPOLITAN TRANSIT COMMISSION-TRANSIT OPERATING 
DIVISION EMPLOYEES; CREDIT FOR MILITARY SERVICE.] 
    Any employee of the metropolitan transit commission 
operating division who was on a leave of absence to enter 
military service on July 1, 1978, who has not taken a refund of 
employee contributions as authorized by article 12 of the 
metropolitan transit commission-transit operating division 
employees retirement fund document or section 352.22, 
subdivision 2a, and who returns to service as an employee of the 
metropolitan transit commission-transit operating division upon 
discharge from military service as provided in section 192.262 
is entitled to allowable service credit for the period of 
military service.  If an employee has taken a refund of employee 
contributions, and would otherwise be entitled to allowable 
service credit under this section, the employee is entitled to 
allowable service credit for the period of military service upon 
repayment to the executive director of the system of the amount 
refunded plus interest at the an annual rate of six 8.5 percent 
per year compounded annually from the date on which the refund 
was taken to the date of repayment.  No employee is entitled to 
allowable service credit for any voluntary extensions of 
military service at the instance of the employee beyond any 
initial period of enlistment, induction, or call to active duty. 
    Sec. 7.  Minnesota Statutes 1990, section 352B.11, 
subdivision 4, is amended to read: 
    Subd. 4.  [REENTRY INTO STATE SERVICE.] When a former 
member, who has become separated from state service that 
entitled the member to membership and has received a refund of 
retirement payments, reenters the state service in a position 
that entitles the member to membership, that member shall 
receive credit for the period of prior allowable state service 
if the member repays into the fund the amount of the refund, 
plus interest on it at the an annual rate of six 8.5 percent 
per year compounded annually, at any time before subsequent 
retirement.  Repayment may be made in installments or in a lump 
sum.  
    Sec. 8.  Minnesota Statutes 1990, section 352C.051, 
subdivision 3, is amended to read: 
    Subd. 3.  [REFUND REPAYMENT.] Any former constitutional 
officer or commissioner who has received a refund as provided in 
section 352C.09, subdivision 2, who is a currently contributing 
member of a retirement fund specified or enumerated in 
subdivision 1 or 2, may repay the refund to the elective state 
officers retirement plan, with interest at six an annual rate of 
8.5 percent per annum compounded annually. 
    Sec. 9.  Minnesota Statutes 1990, section 352C.09, 
subdivision 2, is amended to read: 
    Subd. 2.  (1) Any person who has made contributions 
pursuant to subdivision 1 who is no longer a constitutional 
officer or commissioner is entitled to receive upon application 
to the director a refund of all contributions credited to the 
individual's account with interest at the rate of six percent 
per annum compounded annually.  
    (2) The refund of contributions as provided in clause (1) 
above terminates all rights of a former constitutional officer 
or commissioner or survivors thereof under the provisions of 
this chapter.  Should the former constitutional officer or 
commissioner again hold such office after having taken a refund 
as provided above, the former officer or commissioner shall be 
considered a new member and may reinstate the rights and credit 
for service forfeited provided all refunds previously taken are 
repaid with interest at six an annual rate of 8.5 percent per 
annum compounded annually. 
    (3) No person shall be required to apply for or accept a 
refund. 
    Sec. 10.  Minnesota Statutes 1990, section 352D.05, 
subdivision 4, is amended to read: 
    Subd. 4.  A participant in the unclassified program may 
repay regular refunds taken pursuant to section 352.22, as 
provided in section 352.23.  A participant in the unclassified 
program or an employee covered by the general plan who has 
withdrawn the value of the total shares may repay the refund 
taken and thereupon restore the service credit, rights and 
benefits forfeited by paying into the fund the greater of (1) 
the amount refunded plus interest at 6-1/2 an annual rate of 8.5 
percent per annum compounded annually from the date that the 
refund was taken until the date that the refund is repaid, or 
(2) an amount equal to the total of the employee and employer 
matching and additional contributions for the forfeited 
employment period less the administrative fee provided in 
section 352D.09, subdivision 7, plus interest at the an annual 
rate of 6-1/2 8.5 percent per annum compounded annually from the 
date of the start of the forfeited employment period until the 
date that the refund is paid.  If the participant had withdrawn 
only the employee shares as permitted under prior laws, 
repayment shall be pro rata.  Payment shall be made in a lump 
sum.  
    Sec. 11.  Minnesota Statutes 1990, section 352D.11, 
subdivision 2, is amended to read: 
    Subd. 2.  [PAYMENTS BY EMPLOYEE.] An employee entitled to 
purchase service credit may make the purchase by paying to the 
state retirement system an amount equal to the current employee 
contribution rate in effect for the state retirement system 
applied to the current or final salary rate multiplied by the 
months and days of prior temporary, intermittent, or contract 
legislative service.  Payment shall be made in one lump sum 
unless the executive director of the state retirement system 
agrees to accept payment in installments over a period of not 
more than three years from the date of the agreement.  
Installment payments shall be charged interest at a an annual 
rate found appropriate by the executive director of 8.5 percent 
compounded annually. 
    Sec. 12.  Minnesota Statutes 1990, section 352D.12, is 
amended to read: 
    352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
    An employee who is a participant in the unclassified 
program and who has prior service credit in a covered plan under 
chapters 352, 353, 354, 354A, and 422A may, within the time 
limits in this section, elect to transfer to the unclassified 
program accumulated employee and equal employer contributions 
with interest at six an annual rate of 8.5 percent a year 
compounded annually, based on fiscal year balances.  
    If a participant has taken a refund from a fund listed in 
this section, the participant may repay the refund to that fund, 
notwithstanding any restrictions on repayment to that fund, plus 
six 8.5 percent interest a year compounded annually and have the 
accumulated employee and equal employer contributions 
transferred to the unclassified program with interest at six an 
annual rate of 8.5 percent a year compounded annually based on 
fiscal year balances. 
    A participant electing to transfer prior service 
contributions under this section must complete the application 
for the transfer and repay any refund within one year of July 1, 
1985 or the commencement of the employee's participation in the 
unclassified program, whichever is later. 
    Sec. 13.  Minnesota Statutes 1990, section 490.124, 
subdivision 12, is amended to read: 
    Subd. 12.  [REFUND.] (a) Any person who ceases to be a 
judge but who does not qualify for a retirement annuity or other 
benefit under section 490.121 shall be entitled to a refund in 
an amount equal to all the person's contributions to the judges' 
retirement fund plus interest computed to the first day of the 
month in which the refund is processed based on fiscal year 
balances at the an annual rate of five percent per annum 
compounded annually.  
    (b) A refund of contributions under paragraph (a) 
terminates all service credits and all rights and benefits of 
the judge and the judge's survivors.  A person who becomes a 
judge again after taking a refund under paragraph (a) may 
reinstate previously terminated service credits, rights, and 
benefits by repaying all refunds.  A repayment must include 
interest at six an annual rate of 8.5 percent per annum, 
compounded annually. 
    Sec. 14.  [EFFECTIVE DATE.] 
    Sections 1 to 13 are effective May 1, 1994. 

                                ARTICLE 2

                 PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
    Section 1.  Minnesota Statutes 1991 Supplement, section 
353.01, subdivision 16, is amended to read: 
    Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
means service during years of actual membership in the course of 
which employee contributions were made, periods covered by 
payments in lieu of salary deductions under section 353.35, and 
service in years during which the public employee was not a 
member but for which the member later elected, while a member, 
to obtain credit by making payments to the fund as permitted by 
any law then in effect. 
     (b) "Allowable service" also means a period of authorized 
leave of absence with pay from which deductions for employee 
contributions are made, deposited, and credited to the fund. 
     (c) "Allowable service" also means a period of authorized 
leave of absence without pay that does not exceed one year, and 
during or for which a member obtained credit by payments to the 
fund made in place of salary deductions, provided that the 
payments are made in an amount or amounts based on the member's 
average salary on which deductions were paid for the last six 
months of public service, or for that portion of the last six 
months while the member was in public service, to apply to the 
period in either case immediately preceding commencement of the 
leave of absence.  If the employee elects to pay employee 
contributions for the period of any leave of absence without 
pay, or for any portion of the leave, the employee shall also, 
as a condition to the exercise of the election, pay to the fund 
an amount equivalent to both the required employer and 
additional employer contributions for the employee.  The payment 
must be made within one year from the date the leave of absence 
terminates.  The employer by appropriate action of its governing 
body, made a part of its official records, before the date of 
the first payment of the employee contribution, may certify to 
the association in writing that it will cause to be paid the 
employer and additional employer contributions from the proceeds 
of a tax levy made under section 353.28.  Payments under this 
paragraph must include interest at the an annual rate of six 8.5 
percent a year compounded annually from the date of the 
termination of the leave of absence to the date payment is made. 
    (d) "Allowable service" also means a period during which a 
member is on an authorized sick leave of absence, without pay 
limited to one year, an authorized temporary layoff, or a 
maternity, paternity, or adoption leave.  The association will 
grant a maximum of two months service credit for a maternity, 
paternity, or adoption leave upon documentation from the 
member's governmental subdivision.  A member on personal leave 
of absence who provides the association with a birth certificate 
or other evidence of birth or adoption during the personal leave 
time period will be granted up to two months of service credit. 
    (e) "Allowable service" also means a period during which a 
member is on an authorized leave of absence to enter military 
service, provided that the member returns to public service upon 
discharge from military service under section 192.262 and pays 
into the fund employee contributions based upon the employee's 
salary at the date of return from military service.  Payment 
must be made within five years of the date of discharge from the 
military service.  The amount of these contributions must be in 
accord with the contribution rates and salary limitations, if 
any, in effect during the leave, plus interest at six an annual 
rate of 8.5 percent a year compounded annually from the date of 
return to public service to the date payment is made.  The 
matching employer contribution and additional employer 
contribution under section 353.27, subdivisions 3 and 3a, must 
be paid by the department employing the member upon return to 
public service if the member makes the employee contributions.  
The governmental subdivision involved may appropriate money for 
those payments.  A member may not receive credit for a voluntary 
extension of military service at the instance of the member 
beyond the initial period of enlistment, induction, or call to 
active duty. 
    (f) For calculating benefits under sections 353.30, 353.31, 
353.32, and 353.33 for state officers and employees displaced by 
the community corrections act, chapter 401, and transferred into 
county service under section 401.04, "allowable service" means 
combined years of allowable service as defined in paragraphs (a) 
to (e) and section 352.01, subdivision 11.  
    (g) For a public employee who has prior service covered by 
a local police or firefighters relief association that has 
consolidated with the public employees police and fire fund, and 
who has elected coverage by the public employees police and fire 
fund benefit plan as provided in section 353A.08 following the 
consolidation, "applicable service" is a period of service 
credited by the local police or firefighters relief association 
as of the effective date of the consolidation based on law and 
on bylaw provisions governing the relief association on the date 
of the initiation of the consolidation procedure. 
    Sec. 2.  Minnesota Statutes 1991 Supplement, section 
353.27, subdivision 12, is amended to read: 
    Subd. 12.  [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] (a) In 
the case of omission of required deductions from salary of an 
employee, the department head shall immediately, upon discovery, 
report the employee for membership and require employee 
deductions under subdivision 4.  Omitted employee deductions due 
for the 60-day period preceding membership must be deducted upon 
receipt of billing from the association from the employee's next 
salary payment and remitted to the association.  The employer 
shall pay any remaining omitted employee deductions and any 
omitted employer contributions, plus cumulative interest at the 
an annual rate of six 8.5 percent a year, compounded annually, 
from the date or dates each omitted employee contribution was 
first payable.  
    (b) An employer shall not hold an employee liable for 
omitted employee deductions beyond the pay period that covers 
the 60th day preceding membership nor attempt to recover from 
the employee those employee deductions paid by the employer.  
Omitted deductions not paid by the employee constitute a 
liability of the employer that failed to deduct the omitted 
deductions from the employee's salary.  The employer shall make 
payment with interest at the an annual rate of six 8.5 percent 
compounded annually.  Omitted employee deductions are no longer 
due if an employee terminates public service before making 
payment of omitted employee deductions to the association, but 
the employer remains liable to pay omitted employer 
contributions plus interest at the an annual rate of six 8.5 
percent compounded annually from the date the contributions were 
first payable.  
    (c) The association may not commence action for the 
recovery of omitted employee deductions and employer 
contributions after the expiration of three calendar years after 
the calendar year in which the contributions and deductions were 
omitted.  No payment may be made or accepted unless the 
association has already commenced action for recovery of omitted 
deductions.  An action for recovery commences on the date of the 
mailing of any written correspondence from the association 
requesting information from the governmental subdivision upon 
which to determine whether or not omitted deductions occurred. 
    Sec. 3.  Minnesota Statutes 1991 Supplement, section 
353.27, subdivision 12a, is amended to read: 
    Subd. 12a.  A terminated employee who has a period of 
employment in which previously omitted employer contributions 
were made under subdivision 12 but for whom no, or only partial, 
omitted employee contributions have been made, or a member who 
had prior coverage in the association for which previously 
omitted employer contributions were made under subdivision 12 
but who terminated service before required omitted employee 
deductions could be withheld from salary, may pay the omitted 
employee deductions for the period on which omitted employer 
contributions were previously paid plus interest at the an 
annual rate of six 8.5 percent compounded annually.  A 
terminated employee may pay the omitted employee deductions plus 
interest within six months of an initial notification from the 
association of eligibility to pay those omitted deductions.  If 
a terminated employee is reemployed in a position covered under 
a public pension fund under section 356.30, subdivision 3, and 
elects to pay omitted employee deductions, payment must be made 
no later than six months after a subsequent termination of 
public service. 
    Sec. 4.  Minnesota Statutes 1991 Supplement, section 
353.27, subdivision 12b, is amended to read: 
    Subd. 12b.  If deductions were omitted from salary 
adjustments or final salary of a terminated employee, the 
employer shall pay the employer and employer additional 
contributions, plus interest on both at an annual rate of 8.5 
percent compounded annually, and the employee shall pay the 
employee deductions. 
    Sec. 5.  Minnesota Statutes 1990, section 353.28, 
subdivision 5, is amended to read: 
    Subd. 5.  Any amount which becomes due and payable pursuant 
to under this section or section 353.27, subdivision 4, shall 
bear compound is payable with interest at the an annual rate of 
six 8.5 percent per year compounded annually from the date due 
for the next five calendar days, and compound interest at the 
rate of ten percent per year for amounts past due in excess of 
five calendar days until the date payment is actually received 
in the office of by the association, with a minimum interest 
charge of $10.  Interest for past due payments of excess police 
state aid under section 69.031, subdivision 5, must be charged 
at a an annual rate of six 8.5 percent compounded annually. 
    Sec. 6.  Minnesota Statutes 1990, section 353.35, is 
amended to read: 
    353.35 [CONSEQUENCES OF REFUND; REPAYMENT, RIGHTS 
RESTORED.] 
    When any former member accepts a refund, all existing 
service credits and all rights and benefits to which the person 
was entitled prior to the acceptance of the refund must 
terminate and must not again be restored until the person 
acquires at least 18 months allowable service credit after 
taking the last refund and repays all refunds taken and interest 
received under section 353.34, subdivisions 1 and 2, plus 
interest at six an annual rate of 8.5 percent per annum 
compounded annually.  If more than one refund has been taken, 
the person may repay all refunds or only the refund for the fund 
in which the person had most recently been a member, with 
interest at six an annual rate of 8.5 percent per annum 
compounded annually.  All refunds must be repaid within six 
months of the last date of termination of public service.  
    Sec. 7.  Minnesota Statutes 1990, section 353.36, 
subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYEE CONTRIBUTIONS; INTEREST; MATCHING 
PAYMENT.] A member who has at least one year of allowable 
service with the association, whose public service terminated 
before July 1, 1982, and who has prior public service on which 
salary deductions were not taken for the retirement fund and who 
does not have the required minimum number of years of allowable 
service credit to qualify for an annuity, may apply for an 
annuity if otherwise qualified, and within 90 days thereafter 
purchase whatever period of the member's prior public service 
which is necessary to bring the member's total allowable service 
credit to the minimum, provided that the most recent period of 
prior uncredited public service shall be is purchased first.  
The member may gain allowable service credit by paying on the 
salary covered under the law in effect at the time that the 
prior public service was performed.  The applicable member 
contribution percentage, if the member is a basic member, is 
eight percent, and if the member is a coordinated member, is 
four percent percentages for a basic member and a coordinated 
member are the current contribution percentages under section 
353.27, subdivision 2.  An amount equal to the employer and 
employer additional contributions specified in section 353.27, 
subdivisions 3 and 3a, plus interest on the total amount 
representing employee, employer and employer additional 
contributions at the an annual rate of six 8.5 percent per 
annum compounded annually from the date first payable to the 
date payment is made, shall must also be paid.  The employer, at 
its sole discretion, may agree to pay the amount representing 
the employer and employer additional contributions pursuant to 
under subdivision 2a.  An annuity shall accrue as provided in 
accrues under section 353.29, subdivision 7, but no annuity 
shall be is not paid until the applicant's payment is made in 
full for the prior public service.  If payment is not made 
within such 90 days, the application for retirement shall be is 
void. 
    Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1 to 7 are effective May 1, 1994. 

                                ARTICLE 3

                     TEACHERS RETIREMENT ASSOCIATION
    Section 1.  Minnesota Statutes 1991 Supplement, section 
354.094, subdivision 1, is amended to read: 
    Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] Before the 
end of the fiscal year during which any extended leave of 
absence is granted pursuant to section 125.60 or 136.88, the 
employing unit granting the leave must certify the leave to the 
association on a form specified by the executive director.  A 
member granted an extended leave of absence pursuant to section 
125.60 or 136.88 may pay employee contributions and receive 
allowable service credit toward annuities and other benefits 
under this chapter, for each year of the leave provided the 
member and the employing board make the required employer 
contribution in any proportion they may agree upon, during the 
period of the leave which shall not exceed five years.  A member 
may not receive more than five years of allowable service credit 
under this section.  The employee and employer contributions 
must be based upon the rates of contribution prescribed by 
section 354.42 for the salary received during the year 
immediately preceding the extended leave.  Payments for the 
years for which a member is receiving service credit while on 
extended leave must be made on or before the later of June 30 of 
each fiscal year for which service credit is received or within 
30 days after first notification of the amount due, if requested 
by the member, is given by the association.  No payment is 
permitted after the following September 30.  Payments received 
after June 30 must include six interest at an annual rate of 8.5 
percent interest from June 30 through the end of the month in 
which payment is received.  Notwithstanding the provisions of 
any agreements to the contrary, employee and employer 
contributions may not be made to receive allowable service 
credit if the member does not have full reinstatement rights as 
provided in section 125.60 or 136.88, both during and at the end 
of the extended leave. 
    Sec. 2.  Minnesota Statutes 1990, section 354.41, 
subdivision 9, is amended to read: 
    Subd. 9.  Any member who has been granted a leave of 
absence to serve as an elected officer of a professional 
teachers organization shall be entitled to acquire allowable 
service credit for the period of leave.  To acquire the 
allowable service credit, the member shall make any required 
employee contributions currently during the period of the leave, 
which shall be based upon the contract salary for which the 
member would have been eligible if the member had not been 
granted the leave of absence and shall be consistent with the 
contract in force for the year occurring immediately prior to 
the commencement of the leave of absence.  Any shortage which 
occurs in the amount of required employee contributions for any 
year may be paid directly to the fund with interest at the an 
annual rate of six 8.5 percent per annum compounded annually on 
or prior to the last day of the fiscal year next following the 
occurrence of the shortage.  
    Sec. 3.  Minnesota Statutes 1990, section 354.50, 
subdivision 2, is amended to read: 
    Subd. 2.  [INTEREST CHARGE.] If a member desires to repay 
the refunds, payment shall include six interest at an annual 
rate of 8.5 percent interest compounded annually from date of 
withdrawal to the date payment is made and shall be credited to 
the fund. 
    Sec. 4.  Minnesota Statutes 1990, section 354.51, 
subdivision 4, is amended to read: 
    Subd. 4.  [OTHER STATE OR SCHOOL TEACHING SERVICE; PURCHASE 
OF CREDIT.] Any teacher who has rendered teaching service prior 
to June 30, 1953, in another state, or in a state public school 
which is not an employing unit with employees for whom 
retirement coverage is provided pursuant to this chapter, or for 
the University of Minnesota, who was a member of the fund prior 
to or after the uncredited teaching service, who is not entitled 
to any benefits from any other retirement system based on the 
uncredited teaching service, who has credit for at least 15 
years of service as a member of the retirement fund with at 
least five years of service occurring subsequent to the period 
of uncredited teaching service, who became a member of the 
retirement fund prior to June 30, 1957, and who has not accepted 
a refund of accumulated member contributions or deductions and 
resumed teaching service covered by the retirement fund after 
July 1, 1957, shall be entitled to obtain service credit for the 
period of uncredited teaching service.  To obtain service 
credit, a teacher shall make a payment equal to six percent of 
the average annual salary of the teacher for the five year 
period occurring immediately prior to the completion of the 
minimum service requirement or July 1, 1951, whichever is later, 
multiplied for the number of years of the period of uncredited 
teaching service, but not to exceed $175 annually for any period 
of uncredited teaching service occurring prior to July 1, 1953, 
or $216 annually for any period of uncredited teaching service 
occurring subsequent to June 30, 1953.  The payment made by the 
teacher shall be accompanied by a matching payment representing 
the employer contribution.  This matching employer contribution 
payment is to be made by the agency which formerly employed the 
teacher, except that, at its discretion, the payment may be made 
by the current employer of the teacher.  The payments shall 
include interest at the an annual rate of six 8.5 percent per 
annum compounded annually from the end of the year of uncredited 
service to the date on which payment is first made.  Payment 
shall be made in a single payment unless the executive director 
authorizes installment payments.  If the payment made is less 
than the full required payment, including interest, the formula 
service credit granted shall be adjusted in accordance with 
section 354.05, subdivision 25, clause (3).  Any school district 
or institution which employs a teacher who makes a payment 
pursuant to this subdivision is authorized to make any required 
payments representing employer contributions and interest and 
the required amounts are hereby appropriated from any funds 
available to the school district or institution.  Any payments 
made pursuant to this subdivision shall be considered 
accumulations made after July 1, 1957 for purposes of computing 
an annuity pursuant to section 354.44, subdivision 2.  All 
payments shall be made to the executive director prior to July 
1, 1973 or within one year after the completion of the minimum 
state teaching service requirements whichever is later. 
    Sec. 5.  Minnesota Statutes 1990, section 354.51, 
subdivision 5, is amended to read: 
    Subd. 5.  In the event that full required member 
contributions are not deducted from the salary of a teacher, 
payment shall be made as follows:  
    (a) Payment of shortages in member deductions on salary 
earned after June 30, 1957, and prior to July 1, 1981, may be 
made any time prior to retirement.  Payment shall include six 
interest at an annual rate of 8.5 percent interest compounded 
annually from the end of the fiscal year in which the shortage 
occurred to the end of the month in which payment is made and 
the interest shall be credited to the fund.  If payment of a 
shortage in deductions is not made, the formula service credit 
of the member shall be prorated pursuant to section 354.05, 
subdivision 25, clause (3). 
    (b) Payment of shortages in member deductions on salary 
earned after June 30, 1981, shall be the sole obligation of the 
employing unit and shall be payable by the employing unit upon 
notification by the executive director of the shortage with 
interest at the an annual rate of six 8.5 percent per annum, 
compounded annually, from the end of the fiscal year in which 
the shortage occurred to the end of the month in which payment 
is made and the interest shall be credited to the fund.  
Effective July 1, 1986, the employing unit shall also pay the 
employer contributions as specified in section 354.42, 
subdivisions 3 and 5 for such shortages.  If the shortage 
payment is not paid by the employing unit within 60 days of 
notification, the executive director shall certify the amount of 
the shortage payment to the applicable county auditor, who shall 
spread a levy in the amount of the shortage payment over the 
taxable property of the taxing district of the employing unit if 
the employing unit is supported by property taxes, or to the 
commissioner of finance, who shall deduct the amount from any 
state aid or appropriation amount applicable to the employing 
unit if the employing unit is not supported by property taxes.  
     (c) Payment may not be made for shortages in member 
deductions on salary earned prior to July 1, 1957. 
    Sec. 6.  Minnesota Statutes 1990, section 354.52, 
subdivision 4, is amended to read: 
    Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
once each month, the chief administrative officer of each 
employing school district or managing body of schools and 
institutions to which the provisions of this chapter apply shall 
transmit all amounts due and furnish a signed statement 
indicating the amount due and transmitted, and shall transmit a 
statement containing such other information as the executive 
director shall require.  Signing the statement shall have the 
force and effect of an oath as to the correctness of the amount 
due and transmitted.  Any amount thus due and not transmitted 
shall accrue interest at the an annual rate of six 8.5 percent 
compounded annually commencing 15 days after the date first due 
until the amount is transmitted and shall be paid by the 
employing school district or other managing body.  The state 
treasurer shall credit all money received or withheld pursuant 
to the provisions of this chapter to the fund and the reports 
and date received by the state treasurer from each reporting 
agency shall be available for the board.  Any person willfully 
failing to perform any of the duties imposed by this section 
shall be guilty of a misdemeanor. 
    Sec. 7.  Minnesota Statutes 1990, section 354.53, 
subdivision 1, is amended to read: 
    Subdivision 1.  Any employee given a leave of absence to 
enter military service and who returns to teaching service upon 
discharge from military service as provided in section 192.262, 
shall obtain credit for the period of military service but shall 
not receive credit for any voluntary extension of military 
service at the instance of the member beyond the initial period 
of enlistment, induction or call to active duty.  The member 
shall obtain credit by paying into the fund an employee 
contribution based upon the salary of the member at the date of 
return from military service.  The amount of this contribution 
shall be as follows: 
   
       Period          Basic Member     Coordinated Member
     July 1, 1973       8 percent          4 percent
        thru
     June 30, 1979
     July 1, 1979
        and             8.5 percent        4.5 percent
     thereafter
    The contributions specified in this subdivision shall be 
multiplied by the number of years of military service together 
with interest thereon at the an annual rate of six 8.5 percent 
compounded annually from the time the military service was 
rendered to the first date of payment.  The employer 
contribution and additional contribution provided in section 
354.42 shall be paid by the unit in the manner provided in 
section 354.43. 
    Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1 to 7 are effective May 1, 1994. 

                                 ARTICLE 4

                   PURCHASES OF PRIOR SERVICE AND OTHER

                          RETIREMENT LAW CHANGES
    Section 1.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; 
PURCHASES OF PRIOR SERVICE CREDIT.] 
    Subdivision 1.  [ELIGIBILITY; MINNEAPOLIS CONSTRUCTION 
EQUIPMENT OPERATOR.] (a) Notwithstanding any provision of 
Minnesota Statutes, section 353.27, subdivision 12, to the 
contrary, an eligible person described in paragraph (b) is 
entitled to purchase allowable service credit in the coordinated 
program of the public employees retirement association for the 
period described in paragraph (c) by paying the amount specified 
in subdivision 8. 
    (b) An eligible person is a person who: 
    (1) is currently a member of the coordinated program of the 
public employees retirement association; 
    (2) was born on August 22, 1956; 
    (3) was employed on a temporary or seasonal basis by a city 
of the first class on June 24, 1983; 
    (4) was first eligible for membership in the public 
employees retirement association in 1985; and 
    (5) did not become a member of the public employees 
retirement association until September 1986, because no timely 
employee or employer contributions were made until that time. 
    (c) The period for service credit purchase is the period of 
eligible service between January 1985 and September 1986, as 
determined by the executive director of the public employees 
retirement association based on satisfactory evidence of the 
eligible person's employment status. 
     Subd. 2.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit 
for prior eligible service under subdivision 1, there must be 
paid to the public employees retirement association an amount 
equal to the present value on the date of payment, of the amount 
of the additional retirement annuity obtained by purchase of the 
additional service credit. 
    (b) Calculation of this amount must be made by the 
executive director of the public employees retirement 
association using the applicable preretirement interest rate 
specified in Minnesota Statutes, section 356.215, subdivision 
4d, and the mortality table adopted for the coordinated program 
of the retirement association.  The calculation must assume 
continuous future service in the association until, and 
retirement at, the age at which the minimum requirements of the 
retirement association for normal retirement or retirement with 
an annuity unreduced for retirement at an early age, including 
Minnesota Statutes, section 356.30, are met with the additional 
service credit purchased.  The calculation must also assume a 
future salary history that includes annual salary increases at 
the salary increase rate specified in section 356.215, 
subdivision 4d. 
    (c) The eligible person must establish in the records of 
the association proof of the service for which the purchase of 
prior service is requested.  The manner of the proof of service 
must be in accordance with procedures prescribed by the 
executive director of the retirement association.  
    (d) The portion of the total cost of the purchase payable 
by the eligible person is specified in subdivision 3.  The 
remaining portion of total cost is to be paid by the applicable 
employing unit as specified in subdivision 4. 
    Subd. 3.  [ELIGIBLE PERSON PAYMENT.] (a) To receive credit 
for the period of service credit purchase specified in 
subdivision 1, paragraph (c), the eligible person specified in 
subdivision 1, paragraph (b), must pay a member contribution 
equivalent amount. 
    (b) The member contribution equivalent amount is an amount 
equal to four percent of the person's actual salary rate or 
rates during the period for service credit purchase, plus six 
percent annually compounded interest from the date on which a 
member contribution should have been made if membership during 
the period of service credit purchase had been properly 
determined to the date on which payment is made.  Payment must 
be made in a lump sum.  Authority to make the member 
contribution equivalent amount expires on September 1, 1992.  If 
the member contribution equivalent amount was tendered by the 
eligible person before the effective date of this section, no 
additional contribution amount or interest is payable by the 
eligible person. 
    Subd. 4.  [MANDATORY EMPLOYING UNIT PAYMENT.] (a) Within 30 
days of the effective date of this section or 60 days of the 
receipt by the executive director of the public employees 
retirement association of the payment from the eligible person 
under subdivision 3, whichever is later, the governmental unit 
employing the eligible person described in subdivision 1, 
paragraph (b), during the period of service credit purchase 
described in subdivision 1, paragraph (c), shall pay the 
difference between the amounts specified in subdivisions 2 and 3.
    (b) The mandatory employing unit payment amount is payable 
by the governmental unit in a lump sum. 
    Subd. 5.  [SERVICE CREDIT GRANT.] Service credit for the 
purchase period must be granted to the account of the eligible 
person upon receipt of the purchase payment amount specified in 
subdivision 2. 
    Subd. 6.  [ELIGIBILITY; EVELETH FIREFIGHTER.] (a) 
Notwithstanding any provision of Minnesota Statutes, chapter 
353, to the contrary, a person described in paragraph (b) is 
entitled to purchase credit for the period of prior uncredited 
service specified in paragraph (c) from the public employees 
police and fire fund by paying the amount specified in 
subdivision 4. 
    (b) A person eligible under paragraph (a) is a member of 
the public employees police and fire plan who: 
    (1) was born on June 5, 1935; 
    (2) was initially employed as a firefighter by the city of 
Eveleth on August 20, 1970; and 
    (3) is currently employed as a firefighter by the city of 
Eveleth. 
    (c) The period of prior service available for purchase 
under this section is a period equivalent to one year and eleven 
months originally covered under the Eveleth fire relief 
association, for which the individual did not receive service 
credit in the public employees police and fire fund when the 
Eveleth fire relief association terminated and coverage was 
transferred to the public employees police and fire fund under 
Laws 1977, chapter 61. 
    Subd. 7.  [ELIGIBILITY; STILLWATER FIRE CHIEF.] (a) 
Notwithstanding any provision of Minnesota Statutes, chapter 
353, to the contrary, a person described in paragraph (b) is 
entitled to purchase credit for the period of prior uncredited 
service specified in paragraph (c) from the public employees 
police and fire fund by paying the amount specified in 
subdivision 8. 
    (b) A person eligible under paragraph (a) is a person who: 
    (1) was born on February 7, 1944; 
    (2) was initially employed as a firefighter by the city of 
Stillwater on August 7, 1965; and 
    (3) is currently employed as fire chief by the city of 
Stillwater. 
    (c) The period of prior service available for purchase 
under this section is a period of five months in 1965 during 
which no member or employer contributions to the public 
employees police and fire fund were made. 
    Subd. 8.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit 
for prior service under this section, there must be paid to the 
public employees retirement association or the public employees 
police and fire fund, whichever applies, an amount equal to the 
present value, on the date of payment, of the amount of the 
additional retirement annuity obtained by the purchase of the 
additional service credit.  Calculation of this amount must be 
made using the applicable preretirement interest rate for the 
association specified in Minnesota Statutes, section 356.215, 
subdivision 4d, and the mortality table adopted for the fund or 
association.  The calculation must assume continuous future 
service in the fund or association until, and retirement at, the 
age at which the minimum requirements of the fund for normal 
retirement or retirement with an annuity unreduced for 
retirement at an early age, including Minnesota Statutes, 
section 356.30, are met with the additional service credit 
purchased.  The calculation must also assume a future salary 
history that includes annual salary increases at the applicable 
salary increase rate for the fund or association specified in 
Minnesota Statutes, section 356.215, subdivision 4d.  The member 
must establish in the records of the fund proof of the service 
for which the purchase of prior service is requested.  The 
manner of the proof of service must be in accordance with 
procedures prescribed by the executive director of the public 
employees retirement association. 
    (b) Payment must be made in one lump sum. 
    (c) Payment of the amount calculated under this subdivision 
must be made by the member.  However, the current or former 
governmental subdivision employer of the member may, at its 
discretion, pay all or any portion of the payment amount that 
exceeds an amount equal to the employee contribution rates in 
effect during the period or periods of prior service applied to 
the actual salary rates in effect during the period or periods 
of prior service, plus interest at the rate of six percent a 
year compounded annually from the date on which the 
contributions would otherwise have been made to the date on 
which the payment is made. 
    Sec. 2.  [ELIGIBILITY FOR REFUND.] 
    Subdivision 1.  [ELIGIBILITY.] Notwithstanding the 
requirements of Minnesota Statutes, section 353.34, subdivision 
7, or other law to the contrary, a member of the public 
employees retirement association who was born on December 23, 
1950, who is a Hennepin county employee on a sick leave of 
absence first reported to the public employees retirement 
association on June 19, 1991, may immediately elect to receive a 
refund of employee contributions as provided in section 353.34, 
subdivision 2. 
    Subd. 2.  [SERVICE CREDIT LIMITATION.] Allowable service 
under Minnesota Statutes section 353.01, subdivision 16, clause 
(d), for the individual described in subdivision 1 ends one year 
from the beginning of the sick leave or on the date of the 
refund, whichever is earlier. 
    Sec. 3.  [APPLICABILITY OF CERTAIN PRIOR LAW CHANGES.] 
    (a) A person with service under Minnesota Statutes, chapter 
3A, after June 2, 1989, who did not receive credit for a period 
of service between January 6, 1981, and June 2, 1989, by virtue 
of the limitation previously contained in the final paragraph of 
Minnesota Statutes, section 3A.02, subdivision 1, is entitled to 
receive credit for any period of uncredited service as a result 
of the limitation upon payment of the amount specified in 
paragraph (b). 
    (b) The additional service credit payment amount is an 
amount equal to nine percent of the salary of the person with 
service uncredited under Minnesota Statutes, chapter 3A, during 
the period of uncredited service, plus interest at an annual 
rate of six percent, compounded annually, from the midpoint of 
the period of uncredited service to the date of payment.  
Payment must be made by January 1, 1994, or the date of 
retirement, whichever is earlier. 
    Sec. 4.  [SHOREWOOD COUNCIL MEMBERS; TERMINATION OF 
PARTICIPATION; REFUND OF CONTRIBUTIONS.] 
    Notwithstanding the prohibition on revocation in Minnesota 
Statutes, section 353D.02, any member of the Shorewood city 
council on the effective date of this section who has elected 
coverage under the public employees defined contribution plan 
may elect to revoke participation in the plan.  The revocation 
election must be made on or before January 1, 1994.  Revocation 
is effective on receipt of notice by the public employees 
retirement association, and employee contributions must be 
returned to the council member.  The remaining value of the 
former participant's account, if any, become property of the 
association. 
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1, 2, and 4 are effective the day following final 
enactment.  Section 3 is effective the day following final 
enactment and applies to any person described in section 3, 
paragraph (a), including persons on deferred retirement status.  

                                ARTICLE 5 

                   FIRST CLASS CITY TEACHER RETIREMENT 

                            FUND ASSOCIATIONS

                   EMPLOYER CONTRIBUTION RATE INCREASE 
    Section 1.  Minnesota Statutes 1990, section 354A.12, 
subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYER CONTRIBUTIONS RETIREMENT CONTRIBUTION 
LEVY DISALLOWED.] Notwithstanding any law to the contrary, 
levies for teachers retirement fund associations in cities of 
the first class, including levies for any employer social 
security taxes for teachers covered by the Duluth teachers 
retirement fund association or the Minneapolis teachers 
retirement fund association or the St. Paul teachers retirement 
fund association, are disallowed. 
    Subd. 2a.  [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION 
RATES.] (a) The employing units shall make the following 
employer contributions to teachers retirement fund associations: 
    (a) (1) for any coordinated member of a teachers retirement 
fund association in a city of the first class, the employing 
unit shall pay the employer social security taxes in accordance 
with section 355.46, subdivision 3, clause (b); 
    (b) (2) for any coordinated member of one of the following 
teachers retirement fund associations in a city of the first 
class, the employing unit shall make a regular employer 
contribution to the respective retirement fund association in an 
amount equal to the designated percentage of the salary of the 
coordinated member as provided below: 
     Duluth teachers retirement
     fund association                        5.79 4.50 percent
     Minneapolis teachers retirement
     fund association                        4.50 percent
     St. Paul teachers retirement
     fund association                        4.50 percent;
    (c) (3) for any basic member of one of the following 
teachers retirement fund associations in a city of the first 
class, the employing unit shall make a regular employer 
contribution to the respective retirement fund in an amount 
equal to the designated percentage of the salary of the basic 
member as provided below: 
     Minneapolis teachers retirement
     fund association                   13.35 8.50 percent
     St. Paul teachers retirement
     fund association                   12.63 8.00 percent
    (4) for a basic member of a teachers retirement fund 
association in a city of the first class, the employing unit 
shall make an additional employer contribution to the respective 
fund in an amount equal to the designated percentage of the 
salary of the basic member, as provided below: 
  Minneapolis teachers retirement     
  fund association                    4.85 percent  
  St. Paul teachers retirement   
  fund association                    4.63 percent   
    (5) for a coordinated member of a teachers retirement fund 
association in a city of the first class, the employing unit 
shall make an additional employer contribution to the respective 
fund in an amount equal to the applicable percentage of the 
coordinated member's salary, as provided below: 
  Duluth teachers retirement 
  fund association                    1.29 percent 
  Minneapolis teachers retirement  
  fund association  
     July 1, 1992 - June 30, 1993     0.00 percent 
     July 1, 1993, and thereafter     1.00 percent 
  St. Paul teachers retirement  
  fund association       
     July 1, 1992 - June 30, 1993     0.00 percent  
     July 1, 1993, and thereafter     1.00 percent 
    (b) For basic members of the Minneapolis teachers 
retirement fund association and the St. Paul teachers retirement 
fund association who retire on or after July 1, 1993, the 
employing unit shall continue to make an additional employer 
contribution to the retirement fund in an amount equal to the 
average salary of the employing unit's basic members multiplied 
by the relevant percentages in paragraph (a), clause (4). 
    (c) The regular and additional employer contributions shall 
must be remitted directly to each the respective teachers 
retirement fund association each month. 
    (d) Payments of regular and additional employer 
contributions for school district or technical college employees 
who are paid from normal operating funds, shall must be made 
from the appropriate fund of the district or technical college. 
    Subd. 2b.  [REPORT ON CONTRIBUTION INSUFFICIENCIES.] By 
January 1 of each year, the executive secretary or director of 
each first class city teachers retirement fund association shall 
report to the chair of the legislative commission on pensions 
and retirement, the chair of the committee on appropriations of 
the house of representatives, and the chair of the committee on 
finance of the senate on the amount raised by the additional 
employer contribution rates then in effect and the sufficiency 
of the total statutory support when compared to the total 
required contributions determined under Minnesota Statutes, 
section 356.215. 
    Sec. 2.  [FIRST CLASS CITY SCHOOL DISTRICTS; REPORT ON 
ADDITIONAL STATE AID NEEDS.] 
    (a) By January 1, annually, until January 1, 1997, the 
superintendents of special school district No. 1 and independent 
school district No. 625 shall report on their districts' 
additional educational revenue needs attributable to the 
increased employer contribution rate requirements set forth in 
section 1. 
    (b) The report required in paragraph (a) must be submitted 
to the chairs of the following committees or divisions: 
    (1) education committee, house of representatives, 
    (2) education finance division of the education committee, 
house of representatives; 
    (3) education committee, senate; and 
    (4) education funding division of the education committee, 
senate. 
    (c) Following receipt of the report, the divisions and 
committees specified in paragraph (b) shall review the indicated 
additional educational revenue needs and shall indicate their 
recommendations on increased educational revenue to the 
applicable school districts in the form of appropriate 
legislation. 
    Sec. 3.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective on July 1, 1992. 

                               ARTICLE 6 

                       FIRST CLASS CITY TEACHERS 

                       ADMINISTRATIVE PROVISIONS 
    Section 1.  Minnesota Statutes 1990, section 354A.011, 
subdivision 4, is amended to read: 
    Subd. 4.  [ALLOWABLE SERVICE.] "Allowable service" means 
any service rendered by a member teacher during a period in 
which the member teacher receives salary from which employee 
contribution salary deductions are made to and credited by the 
teachers retirement fund association or any service rendered by 
a person during any period where assessments or payments in lieu 
of salary deductions were made if authorized by any law or 
provision of the association's articles of incorporation or 
bylaws then in effect or pursuant to section 354A.091, 354A.092, 
354A.093, or 354A.094. 
    Sec. 2.  Minnesota Statutes 1990, section 354A.011, 
subdivision 8, is amended to read: 
    Subd. 8.  [BASIC MEMBER.] "Basic member" means any member 
of the teachers retirement fund association who is covered by 
the basic program of the association due to the fact that the 
member is not covered by any agreement or modification made 
between the state and the Secretary of Health, Education and 
Welfare making the provisions of the federal old age, survivors 
and disability insurance act applicable to certain teachers 
covered by the association.  
    Sec. 3.  Minnesota Statutes 1990, section 354A.011, 
subdivision 11, is amended to read: 
    Subd. 11.  [COORDINATED MEMBER.] "Coordinated member" means 
any member of the teachers retirement fund association who 
is covered by the coordinated program of the association due to 
the fact that the member is covered by any agreement or 
modification made between the state and the Secretary of Health, 
Education and Welfare making the provisions of the federal old 
age, survivors and disability insurance act applicable to 
certain teachers covered by the association; except in the case 
of a member of the Duluth teachers retirement fund association, 
in which it means additionally that the member either first 
became a member prior to July 1, 1981, and elected to be covered 
by the new law coordinated program of the Duluth teachers 
retirement fund association or first became a member on or 
subsequent to July 1, 1981. 
    Sec. 4.  Minnesota Statutes 1990, section 354A.011, 
subdivision 12, is amended to read: 
    Subd. 12.  [COORDINATED SERVICE.] "Coordinated service" 
means the allowable service credited by the respective teachers 
retirement fund association for which the member was covered by 
the coordinated program of the association.  
    Sec. 5.  Minnesota Statutes 1990, section 354A.011, 
subdivision 13, is amended to read: 
    Subd. 13.  [DESIGNATED BENEFICIARY.] "Designated 
beneficiary" means the person designated by a member or retiree 
of a teachers retirement fund association to be entitled to 
receive the balance of the accumulated member contributions to 
the credit of the member in the event of the member's death, or 
if no person has been designated by the member or if the 
designated beneficiary predeceases the member, the estate of the 
deceased member benefits to which a beneficiary is entitled 
under this chapter.  A beneficiary designation is valid only if 
it is made on an appropriate form provided by the executive 
director and the properly completed form is received by the fund 
postmarked on or before the date of death of the retiree or 
member.  If a retiree or member does not designate such a person 
or if the person designated predeceases the retiree or member, 
beneficiary in such cases means the estate of the deceased 
retiree or member.  
    Sec. 6.  Minnesota Statutes 1990, section 354A.011, 
subdivision 15, is amended to read: 
    Subd. 15.  [MEMBER.] "Member" for purposes of entitlement 
to annuities or benefits pursuant to sections 354A.31 to 354A.41 
and any other applicable provisions of this chapter means every 
teacher who joins and is engaged in teaching service and who 
under section 354A.05 contributes to the respective teachers 
retirement fund association and who has not retired or 
terminated teaching service.  "Member" for purposes of 
determining who may participate in the organization and 
governance of the teachers retirement fund association, 
including the eligibility to elect members of and to serve as a 
member of the board of trustees, means every teacher who joins 
and contributes to the respective teachers retirement fund 
association and any other person designated as a member by the 
articles of incorporation or the bylaws of the respective 
teachers retirement fund association.  
    Sec. 7.  Minnesota Statutes 1990, section 354A.011, 
subdivision 21, is amended to read: 
    Subd. 21.  [RETIREMENT.] "Retirement" means the time after 
the date of cessation of active teaching service by a teacher 
who is thereafter entitled to an accrued retirement annuity 
commencing as designated by the board of trustees and payable 
pursuant to an application for an annuity filed with the 
board under.  The applicable provisions of law, articles of 
incorporation and bylaws in effect on that date, which shall the 
date of cessation of active teaching service thereafter 
determine the rights of the person.  
    Sec. 8.  Minnesota Statutes 1990, section 354A.011, 
subdivision 24, is amended to read: 
    Subd. 24.  [SALARY.] "Salary" or "covered salary" means the 
entire compensation paid to a member teacher excluding any lump 
sum annual leave or sick leave payments and all forms of 
severance payments, even if a portion of the compensation is 
paid from other than public funds.  
    Sec. 9.  Minnesota Statutes 1991 Supplement, section 
354A.011, subdivision 26, is amended to read: 
    Subd. 26.  [SPOUSE.] "Spouse" means the person who was 
legally married to and living with the member immediately prior 
to the member's death. 
    Sec. 10.  Minnesota Statutes 1990, section 354A.011, 
subdivision 27, is amended to read: 
    Subd. 27.  [TEACHER.] "Teacher" means any person who 
renders service in a public school district located in the 
corporate limits of one of the cities of the first class which 
was so classified on January 1, 1979, as any of the following: 
    (a) a full time employee in a position for which a valid 
license from the state board of education is required; 
    (b) an employee of the teachers retirement fund association 
located in the city of the first class unless the employee has 
exercised the option pursuant to Laws 1955, chapter 10, section 
1, to retain membership in the Minneapolis employees retirement 
fund established pursuant to chapter 422A; 
    (c) a part time employee in a position for which a valid 
license from the state board of education is required; or 
    (d) a part-time employee in a position for which a valid 
license from the state board of education is required who also 
renders other nonteaching services for the school district 
unless the board of trustees of the teachers retirement fund 
association determines that the combined employment is on the 
whole so substantially dissimilar to teaching service that the 
service shall not be covered by the association. 
    The term shall not mean any person who renders service in 
the school district as any of the following: 
    (1) an independent contractor or the employee of an 
independent contractor; 
    (2) for the Duluth and St. Paul teachers retirement fund 
associations, and for the Minneapolis teachers retirement fund 
association, unless the person is designated by the board of 
education of special school district number 1 pursuant to 
section 356.451 as a provisional member of the teachers 
retirement fund association, a person employed in subsidized 
on-the-job training, work experience or public service 
employment as an enrollee under the federal Comprehensive 
Employment and Training Act from and after March 30, 1978, 
unless the person has as of the later of March 30, 1978, or the 
date of employment, sufficient service credit in the teachers 
retirement fund association to meet the minimum vesting 
requirements for a deferred retirement annuity, or the employer 
agrees in writing to make the required employer contributions, 
including any employer additional contributions, on account of 
that person from revenue sources other than funds provided under 
the federal Comprehensive Employment and Training Act, or the 
person agrees in writing to make the required employer 
contributions, including any employer additional contributions, 
in addition to the required employee or member contributions; 
    (3) an employee who is a full-time teacher covered by 
another teachers retirement fund association established 
pursuant to this chapter or chapter 354; 
    (4) (3) an employee holding a part-time adult supplementary 
technical college license who renders part-time teaching service 
in a technical college if (1) the service is incidental to the 
regular nonteaching occupation of the person; and (2) the 
applicable technical college stipulates annually in advance that 
the part-time teaching service will not exceed 300 hours in a 
fiscal year; and (3) the part-time teaching service actually 
does not exceed 300 hours in a fiscal year; or 
    (5) (4) an employee exempt from licensure pursuant to 
section 125.031. 
    Sec. 11.  Minnesota Statutes 1990, section 354A.021, 
subdivision 6, is amended to read: 
    Subd. 6.  [TRUSTEES' FIDUCIARY OBLIGATION.] The trustees or 
directors of each teachers retirement fund association shall 
administer each fund in accordance with the applicable portions 
of this chapter, of the articles of incorporation, of the 
bylaws, and of chapter chapters 356 and 356A.  The purpose of 
this subdivision is to establish each teachers retirement fund 
association as a trust under the laws of the state of Minnesota 
for all purposes related to section 401(a) of the Internal 
Revenue Code of the United States, including all amendments.  
    Sec. 12.  Minnesota Statutes 1990, section 354A.05, is 
amended to read: 
    354A.05 [MEMBERSHIP IN A TEACHERS RETIREMENT ASSOCIATION IN 
A CITY OF THE FIRST CLASS.] 
    Only Teachers contributing to the respective teachers 
retirement fund association, as provided in this chapter and the 
articles of incorporation and the bylaws of the association, 
shall be are entitled to the benefit of coverage by or 
entitlement to annuities or benefits from the association.  All 
teachers in a city of the first class in which there exists a 
teachers retirement fund association shall be entitled to be are 
members of that teachers retirement fund association and to 
participate in the benefits provided by the special retirement 
fund. 
    Sec. 13.  Minnesota Statutes 1990, section 354A.08, is 
amended to read: 
    354A.08 [AUTHORIZED INVESTMENTS.] 
    Any A teachers retirement fund association may receive, 
hold, and dispose of real estate or personal property acquired 
by it, whether the acquisition was by gift, purchase, or any 
other lawful means, as provided in this chapter or in the 
association's articles of incorporation.  In addition to other 
authorized real estate investments, an association may also 
invest funds in Minnesota situs nonfarm real estate ownership 
interests or loans secured by mortgages or deeds of trust. 
    Sec. 14.  Minnesota Statutes 1990, section 354A.096, is 
amended to read: 
    354A.096 [MEDICAL LEAVE.] 
    Any teacher in the coordinated program of either the 
Minneapolis teachers retirement fund association or the St. Paul 
teachers retirement fund association or the new law coordinated 
program of the Duluth teachers retirement fund association who 
is on an authorized medical leave of absence and subsequently 
returns to teaching service is entitled to receive allowable 
service credit, not to exceed one year, for the period of leave, 
upon making the prescribed payment to the fund.  This payment 
must include the required employee and employer contributions at 
the rates specified in section 354A.12, subdivisions 1 and 2, as 
applied to the member's average full-time monthly salary rate on 
the date of return from the leave of absence commenced plus 
annual interest at the rate of 8.5 percent per year from 
the midpoint date of end of the fiscal year during which the 
leave until the date of payment terminates to the end of the 
month during which payment is made.  The member must pay the 
total amount required unless the employing unit, at its option, 
pays the employer contributions.  The total amount required must 
be paid by the end of the fiscal year following the fiscal year 
in which the leave of absence terminated or before the member 
retires, whichever is earlier.  Payment must be accompanied by a 
copy of the resolution or action of the employing authority 
granting the leave and the employing authority, upon granting 
the leave, must certify the leave to the association in a manner 
specified by the executive director.  A member may not receive 
more than one year of allowable service credit during any fiscal 
year by making payment under this section.  A member may not 
receive disability benefits under section 354A.36 and receive 
allowable service credit under this section for the same period 
of time. 
    Sec. 15.  Minnesota Statutes 1990, section 354A.31, 
subdivision 3, is amended to read: 
    Subd. 3.  [RESUMPTION OF TEACHING AFTER COMMENCEMENT OF A 
RETIREMENT ANNUITY.] Any person who retired and is receiving a 
coordinated program retirement annuity under the provisions of 
sections 354A.31 to 354A.41 and who has resumed teaching service 
for the school district in which the teachers retirement fund 
association exists is entitled to continue to receive retirement 
annuity payments, except that annuity payments must be reduced 
during the calendar year immediately following the calendar year 
in which the person's income from the teaching service is in an 
amount greater than the annual maximum earnings allowable for 
that age for the continued receipt of full benefit amounts 
monthly under the federal old age, survivors, and disability 
insurance program as set by the secretary of health and human 
services under the provisions of United States Code, title 42, 
section 403.  The amount of the reduction must be one-half 
one-third the amount in excess of the applicable reemployment 
income maximum specified in this subdivision and must be 
deducted from the annuity payable for the calendar year 
immediately following the calendar year in which the excess 
amount was earned.  If the person has not yet reached the 
minimum age for the receipt of social security benefits, the 
maximum earnings for the person must be equal to the annual 
maximum earnings allowable for the minimum age for the receipt 
of social security benefits. 
    If the person is retired for only a fractional part of the 
calendar year during the initial year of retirement, the maximum 
reemployment income specified in this subdivision must be 
prorated for that calendar year. 
    After a person has reached the age of 70, no reemployment 
income maximum is applicable regardless of the amount of any 
compensation received for teaching service for the school 
district in which the teachers retirement fund association 
exists. 
    Sec. 16.  Minnesota Statutes 1990, section 354A.36, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF DISABILITY BENEFIT.] The 
coordinated permanent disability benefit shall be is an amount 
equal to the normal coordinated retirement annuity computed 
pursuant to under section 354A.31, subdivision 4, based on 
allowable service credited to the date of disability but without 
any reduction for the commencement of the benefit prior to the 
attainment of normal retirement age or age 62 with at least 30 
years of service credit as specified in section 354A.31, 
subdivision 6.  The disabled coordinated member shall not be 
entitled to elect an optional annuity form pursuant to section 
354A.32 prior to attaining normal retirement age as provided in 
subdivision 10.  
    Sec. 17.  Minnesota Statutes 1990, section 354A.38, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF REFUND REPAYMENT AMOUNT.] If the 
coordinated member elects to repay a refund pursuant to under 
subdivision 2, the repayment to the fund shall must be in an 
amount equal to refunds which the member has accepted plus 
interest at the rate of six 8-1/2 percent compounded annually 
from the date that the refund was accepted to the date that the 
refund is repaid. 
    Sec. 18.  [FIRST CLASS CITY TEACHERS PLANS; RETIREE 
RESUMING SERVICE.] 
    In accordance with Minnesota Statutes, section 354A.12, 
subdivision 4, the Minneapolis teachers retirement fund 
association, the St. Paul teachers retirement fund association, 
and the Duluth teachers retirement fund association may amend 
the articles of incorporation or bylaws of the respective 
association.  This authorization is to provide that any person 
who is retired and receiving a basic program formula retirement 
annuity under the articles of incorporation or bylaws of the 
Minneapolis teachers retirement fund association or the St. Paul 
teachers retirement fund association, or any person who is 
retired and receiving an old law coordinated program formula 
retirement annuity under the articles of incorporation or bylaws 
of the Duluth retirement fund association, and who has resumed 
teaching service for the school district covered by that same 
retirement fund association, is entitled to continue to receive 
retirement annuity payments.  However, the annuity payments must 
be reduced in accordance with Minnesota Statutes, section 
354A.31, subdivision 3, if the person's income from teaching 
service is an amount greater than the maximum earnings allowable 
for that age for the continued receipt of full benefit amounts 
monthly under the federal old age, survivors, and disability 
insurance program as set by the Secretary of Health and Human 
Services under United States Code, title 42, section 403. 
    Sec. 19.  [MINNEAPOLIS RESERVE TEACHERS; EXCLUSION OF PRIOR 
SERVICE.] 
    A reserve teacher providing service to special school 
district No. 1 prior to July 1, 1988, for whom contributions 
were not made to the Minneapolis teachers retirement fund 
association is not eligible to receive service credit for the 
period or periods of omitted contributions, unless service 
credit has previously been granted for the period or periods.  
On or after July 1, 1992, reserve teachers meeting the 
definition of a teacher as defined under Minnesota Statutes, 
section 354A.011, subdivision 27, and providing service to 
special school district No. 1 must become members and 
contributions must be deducted as required by Minnesota 
Statutes, section 354A.12. 
    Sec. 20.  [OMITTED CONTRIBUTION REIMBURSEMENT; MINNEAPOLIS 
TEACHERS RETIREMENT FUND ASSOCIATION AND SPECIAL SCHOOL DISTRICT 
NO. 1.] 
    Subdivision 1.  [REIMBURSEMENT AUTHORIZATION.] Special 
school district No. 1 is authorized to be reimbursed for a 
portion of contributions certified by the executive director of 
the Minneapolis teachers retirement fund association to the 
commissioner of finance under Laws 1991, chapter 317, sections 3 
and 6, if the omitted contributions occurred during the period 
of July 1, 1988, to July 1, 1991, and were certified to the 
commissioner of finance before January 31, 1992. 
    Subd. 2.  [TEACHER NOTIFICATION.] The executive director of 
the Minneapolis teachers retirement fund association and the 
school board must jointly notify in writing teachers with 
omitted contributions, identified in subdivision 1, of their 
option to make payment of omitted employee contributions without 
interest. 
    Subd. 3.  [PAYMENT PROCEDURE.] If an individual notified 
under subdivision 2 elects to make payment, the full amount must 
be remitted to the association in a lump sum within 60 days of 
notification, or the individual may elect to make payment 
through a payroll deduction.  If the individual chooses to make 
payment through a payroll deduction, that option must be 
selected within 60 days of notification.  The payroll deduction 
period may not exceed one year.  The employing unit must 
transmit amounts withheld through payroll deductions to the 
association along with normal payroll contributions. 
    Subd. 4.  [SCHOOL DISTRICT REIMBURSEMENT.] On a quarterly 
basis, the executive director of the association will determine 
the amounts received by the association under subdivision 3 
through direct lump-sum payments and payroll deductions.  The 
employing unit will be notified of these amounts received by the 
association, and the employing unit may withhold an equivalent 
amount from subsequent obligations under Minnesota Statutes, 
section 354A.12, subdivision 2. 
    Subd. 5.  [EFFECT OF TEACHER NONPAYMENT.] (a) If a teacher 
notified under subdivision 2 does not elect to make payments 
under subdivision 3, or if full payment is not received within 
the required time limits, the teacher is not entitled to the 
service credit for the period of omitted contributions 
identified in subdivision 1, or for any earlier period, and the 
teacher forfeits any option to purchase that service credit at a 
later date. 
    (b) For individuals identified in paragraph (a), the 
association must determine an amount equivalent to the omitted 
employee contribution, without interest, for the period 
specified in subdivision 1.  This amount must be applied by the 
employer against subsequent obligations under Minnesota 
Statutes, section 354A.12, subdivision 2. 
    Sec. 21.  [MINNEAPOLIS TEACHERS MODIFICATION OF DISABILITY 
BENEFITS.] 
    (a) In accordance with Minnesota Statutes, section 354A.12, 
subdivision 4, the Minneapolis teachers retirement fund 
association may amend its articles of incorporation to clarify 
certain provisions governing disability benefits for members of 
the basic program and to conform certain administrative 
provisions to the statutory provisions applicable to disability 
benefits for coordinated program members, as provided in 
paragraphs (b) to (g).  
    (b) Article 5, section 5.11, may be amended to change the 
definition of "disability" from the "inability to render further 
satisfactory service as a teacher" to the "inability to engage 
in any substantial gainful activity" by reason of any medically 
determinable physical or mental impairment that can be expected 
to be of long continued and indefinite duration, which may not 
be less than one year.  
    (c) Article 21, section 21.3, may be amended to clarify 
that disability benefits accrue from the later of either 90 days 
following commencement of the permanent disability or the first 
day of the month following the date on which the written 
application for the disability benefit has been filed with the 
board. 
    (d) Article 21, section 21.4, may be amended to provide 
that basic program disability recipients submit to regular 
medical examinations at least once each year during the first 
five years of disability and at least once in every subsequent 
three-year period, in conformity with the requirements 
applicable to the coordinated program contained in Minnesota 
Statutes, section 354A.36, subdivision 6. 
    (e) Article 21, section 21.5, may be amended to provide 
that if a basic member disability recipient resumes gainful 
employment, and the earnings from that employment, together with 
the disability benefit payments, exceed the monthly compensation 
the member would have received if the member had remained in 
active teaching service in the position held prior to becoming 
disabled, the disability benefit must be reduced by the excess. 
    (f) Article 21 may be amended by adding a subsection to 
provide that a basic program disability recipient who remains 
disabled until normal retirement age must be transferred to 
retirement status.  The disability benefit terminates upon the 
transfer, and the person is subsequently entitled to receive a 
retirement annuity in accordance with the optional annuity 
previously elected or, if the person had not elected an optional 
annuity, then, at the person's option, either a straight life 
retirement annuity in accordance with the articles of 
incorporation or a straight life retirement annuity equal to the 
disability benefit paid prior to the date on which the person 
attained normal retirement age, whichever is greater, or an 
optional annuity as provided in the articles of incorporation.  
If an optional annuity is elected, the election must be made 
prior to the person's attaining normal retirement age and takes 
effect on the date of the election.  
    (g) Paragraphs (b) to (f) apply to a basic member who 
applies for a disability benefit after the effective date of the 
amendments.  Paragraphs (c) to (f) also apply to basic program 
members who made application for disability benefits before the 
effective date of the amendments and who are currently receiving 
disability benefits. 
    Sec. 22.  [REPEALER.] 
    Minnesota Statutes 1990, sections 354A.011, subdivision 2; 
and 354A.40, subdivisions 2 and 3, are repealed. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Section 17 is effective May 1, 1994.  Sections 1 to 16 and 
18 to 22 are effective the day following final enactment. 

                               ARTICLE 7 

                     CORRECTION OF PRIOR ENACTMENTS 
    Section 1.  Minnesota Statutes 1990, section 353A.07, 
subdivision 3, as amended by Laws 1992, chapter 432, article 2, 
section 30, is amended to read: 
    Subd. 3.  [TRANSFER OF ASSETS.] On the effective date of 
consolidation, the chief administrative officer of the relief 
association shall transfer the entire assets of the special fund 
of the relief association to the public employees retirement 
association.  The transfer must include any investment 
securities of the consolidation account which are not determined 
to be ineligible or inappropriate by the executive director of 
the state board under section 353A.05, subdivision 2, at the 
market value of the investment security as of the effective date 
of the consolidation.  The transfer must include any accounts 
receivable determined by the executive director of the state 
board as capable of being collected.  The transfer must also 
include an amount, in cash, representing any remaining 
investment security or other asset of the consolidation account 
which was liquidated, after defraying any accounts payable.  
    As of the effective date of consolidation, subject to the 
authority of the state board, the board of trustees of the 
public employee retirement association has legal title to and 
management responsibility for any transferred assets as trustees 
for any person having a beneficial interest arising out of 
benefit coverage provided by the relief association.  The public 
employees retirement association is the successor in interest 
for all claims for and against the consolidation account or the 
municipality with respect to the consolidation account of the 
relief association.  In, except a claim against the relief 
association or the municipality or any person connected with the 
relief association or the municipality in a fiduciary capacity, 
based on any act or acts by that person which were not done in 
good faith and which constituted a breach of the obligation of 
the person as a fiduciary.  As a successor in interest, the 
public employees retirement association may assert any 
applicable defense in any judicial proceeding which the board of 
the relief association or the municipality would have otherwise 
been entitled to assert.  
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective on the day following final enactment.
    Presented to the governor April 17, 1992 
    Signed by the governor April 29, 1992, 8:36 a.m.