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Office of the Revisor of Statutes

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

                            CHAPTER 241-S.F.No. 1486 
                  An act relating to retirement; revising various police 
                  state aid provisions to fully implement intended 1996 
                  modifications; ratifying the calculation of certain 
                  1996 police state aid amounts; modifying various fire 
                  state aid provisions; authorizing the exclusion of 
                  certain pipefitters from public employee retirement 
                  association membership; authorizing benefit increases 
                  for the Richfield fire department relief association; 
                  providing postretirement adjustments for retirees and 
                  benefit recipients of the Nashwauk police pension plan 
                  and the Eveleth police and fire retirement trust fund; 
                  clarifying the benefit floor for certain benefit 
                  recipients of the St. Paul police and fire 
                  consolidation accounts; providing alternative 
                  retirement coverage for transferred employees of the 
                  Jackson medical center, the Melrose hospital, and the 
                  Tracy municipal hospital; creating a trust for the 
                  state deferred compensation program; modifying the 
                  handling of sabbatical leave contributions by the 
                  teachers retirement association; modifying the timing 
                  of higher education supplemental retirement plan 
                  contributions; making administrative changes in the 
                  higher education individual retirement account plan 
                  and supplemental retirement plan; modifying various 
                  economic actuarial assumptions; clarifying certain 
                  retirement dates; authorizing certain purchases of 
                  prior service credit; extending the volunteer 
                  firefighter flexible service pension maximums; 
                  modifying retirement coverage for transferred 
                  university academic health center employees; modifying 
                  tax-sheltered annuity programs for university and 
                  college employees; including additional classes of 
                  persons in definition of state employee; providing 
                  general statewide and local employee pension plan 
                  modifications; modifying investment reporting 
                  provisions; making miscellaneous retirement plan 
                  modifications; amending Minnesota Statutes 1996, 
                  sections 69.021, subdivisions 4, 5, 6, 7a, 8, 9, 10, 
                  and 11; 69.031, subdivisions 1, 3, and 5; 69.051, 
                  subdivisions 1, 1a, and 1b; 136F.45, by adding 
                  subdivisions; 352.01, subdivisions 2a and 2b; 352.96, 
                  subdivisions 2, 3, and 6; 352F.02, subdivisions 3, 6, 
                  and by adding subdivisions; 352F.03; 352F.04; 352F.05; 
                  352F.06; 352F.07; 352F.08; 353.01, subdivision 2b; 
                  353B.07, subdivision 3; 353B.08, subdivision 6; 
                  353B.11, subdivisions 3, 4, and 5; 354.092, 
                  subdivisions 1, 3, and 4; 354B.21, subdivision 3; 
                  354B.25, subdivision 5, and by adding a subdivision; 
                  354C.11; 354C.12, subdivisions 1 and 4; 356.215, 
                  subdivision 4d; 356.219; 423A.02, subdivision 2; 
                  423B.06, subdivisions 1 and 1a; and 424A.02, 
                  subdivisions 3 and 10; Laws 1943, chapter 196, section 
                  4, as amended; Laws 1965, chapter 705, section 1, 
                  subdivision 4; Laws 1967, chapter 798, sections 2 and 
                  4; Laws 1992, chapter 563, section 5, as amended; and 
                  Laws 1996, chapter 408, article 8, sections 21, 22, 
                  subdivision 1, and 24; repealing Minnesota Statutes 
                  1996, section 356.218; Laws 1995, chapter 262, article 
                  1, sections 8, 9, 10, 11, and 12. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                     POLICE STATE AID AND PAID FIREFIGHTER 
                           RETIREMENT COVERAGE COSTS 
           Section 1.  Minnesota Statutes 1996, section 69.021, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DETERMINATION OF QUALIFIED STATE AID RECIPIENTS; 
        CERTIFICATION TO COMMISSIONER OF REVENUE FINANCE.] (a) The 
        commissioner shall determine which municipalities and 
        independent nonprofit firefighting corporations are qualified to 
        receive fire state aid and which municipalities and counties are 
        qualified to receive police state peace officer aid.  
           (b) The commissioner shall determine qualification for 
        state aid upon receipt of: 
           (1) the fire department personnel and equipment 
        certification or the police department and qualified peace 
        officers certificate, whichever is applicable applies, required 
        under section 69.011,; 
           (2) the financial compliance report required under section 
        6.495, subdivision 3, if applicable; and 
           (3) any other relevant information which comes to the 
        attention of the commissioner. 
           (c) Upon completion of the determination, on or before 
        October 1, the commissioner shall calculate under subdivision 6 
        the amount of (a) state peace officer: 
           (1) the police state aid which each county or municipality 
        is to receive under subdivisions 5, 6, 7a, and 10; and 
           (b) (2) the fire state aid which each municipality or 
        nonprofit firefighting corporation is to receive under 
        subdivisions 5 and 7. 
           (d) The commissioner shall certify to the commissioner of 
        finance the name of each county or municipality, and the amount 
        of state aid which each county or municipality is to receive, in 
        the case of police state peace officer aid; and.  The 
        commissioner shall certify to the commissioner of finance the 
        name of each municipality or independent nonprofit firefighting 
        corporation and the amount of state aid which each municipality 
        or independent nonprofit firefighting corporation is to receive, 
        in the case of fire state aid. 
           Sec. 2.  Minnesota Statutes 1996, section 69.021, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
        fire state aid available for apportionment shall be, before the 
        addition of the minimum fire state aid allocation amount under 
        subdivision 7, is equal to 107 percent of the amount of premium 
        taxes paid to the state upon the fire, lightning, sprinkler 
        leakage, and extended coverage premiums reported to the 
        commissioner by insurers on the Minnesota Firetown Premium 
        Report.  This amount shall be reduced by the amount required to 
        pay the state auditor's costs and expenses of the audits or 
        exams of the firefighters relief associations. 
           (b) The total amount for apportionment in respect to peace 
        officer state aid is equal to 104 percent of the amount of 
        premium taxes paid to the state upon the premiums reported to 
        the commissioner by insurers on the Minnesota Aid to Police 
        Premium Report, plus the payment amounts received under section 
        60A.152 since the last aid apportionment, and reduced by the 
        amount required to pay the state auditor's costs and expenses of 
        the audits or exams of the police relief associations.  The 
        total amount for apportionment in respect to firefighters fire 
        state aid shall must not be less than two percent of the 
        premiums reported to the commissioner by insurers on the 
        Minnesota Firetown Premium Report after subtracting the 
        following amounts: 
           (1) the amount required to pay the state auditor's costs 
        and expenses of the audits or exams of the firefighters relief 
        associations,; and 
           (2) one percent of the premiums reported by town and 
        farmers' mutual insurance companies and mutual property and 
        casualty companies with total assets of $5,000,000 or less.  
           (b) The total amount for apportionment as police state aid 
        is equal to 104 percent of the amount of premium taxes paid to 
        the state on the premiums reported to the commissioner by 
        insurers on the Minnesota Aid to Police Premium Report, plus the 
        payment amounts received under section 60A.152 since the last 
        aid apportionment, and reduced by the amount required to pay the 
        costs and expenses of the state auditor for audits or exams of 
        police relief associations.  The total amount for apportionment 
        in respect to the police state aid program shall must not be 
        less than two percent of the amount of premiums reported to the 
        commissioner by insurers on the Minnesota Aid to Police Premium 
        Report after subtracting the amount required to pay the state 
        auditor's cost and expenses of the audits or exams of the police 
        relief associations.  
           (c) The commissioner shall calculate the percentage of 
        increase or decrease reflected in the apportionment over or 
        under the previous year's available state aid using the same 
        premiums as a basis for comparison. 
           Sec. 3.  Minnesota Statutes 1996, section 69.021, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CALCULATION OF APPORTIONMENT OF POLICE STATE 
        PEACE OFFICERS AID TO COUNTIES.] The peace officers police state 
        aid available shall must be distributed to the counties in 
        proportion to the relationship that the total number of active 
        peace officers, as defined in section 69.011, subdivision 1, 
        clause (g), in each county who are employed either by 
        municipalities maintaining police departments or by the county, 
        bears to the total number of peace officers employed by all 
        municipalities and counties, subject to any reduction under 
        subdivision 10.  Any necessary additional adjustments shall be 
        made to subsequent apportionments. 
           Sec. 4.  Minnesota Statutes 1996, section 69.021, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [APPORTIONMENT OF POLICE STATE AID.] (a) Subject 
        to the reduction provided for under subdivision 10, the 
        commissioner shall apportion the police state peace officer aid 
        to each municipality and to the county in the following manner: 
           (1) for all municipalities maintaining police departments 
        and the county, the state aid must be distributed in proportion 
        to the relationship that the total number of peace officers, as 
        determined under section 69.011, subdivision 1, clause (g), and 
        subdivision 2, clause (b), employed by each that municipality 
        and by the or county for 12 calendar months and the proportional 
        or fractional number who were employed less than 12 months bears 
        to the total number of peace officers employed by all 
        municipalities and counties subject to any reduction under 
        subdivision 10; 
           (2) for each municipality which contracts with the county 
        for police service, a proportionate amount of the state aid 
        distributed to the county based on the full-time equivalent 
        number of peace officers providing contract service to that 
        municipality must be credited against the municipality's 
        contract obligation; and 
           (3) for each municipality which contracts with another 
        municipality for police service, a proportionate amount of the 
        state aid distributed to the municipality providing contract 
        service based on the full-time equivalent number of peace 
        officers providing contract service to that municipality on a 
        full-time equivalent basis must be credited against the contract 
        obligation of the municipality receiving contract service. 
           (b) No municipality entitled to receive state peace officer 
        aid may be apportioned less state peace officer aid for any year 
        under Laws 1976, chapter 315, than the amount which was 
        apportioned to it for calendar year 1975 based on premiums 
        reported to the commissioner for calendar year 1974; provided, 
        the amount of state peace officer aid to other municipalities 
        within the county and to the county must be adjusted in 
        proportion to the total number of peace officers in the 
        municipalities and the county, so that the amount of state peace 
        officer aid apportioned does not exceed the amount of state 
        peace officer aid available for apportionment. 
           Sec. 5.  Minnesota Statutes 1996, section 69.021, 
        subdivision 8, is amended to read: 
           Subd. 8.  [POPULATION AND MARKET VALUE.] In 
        computations relating to fire state aid requiring the use of 
        population figures, only official statewide federal census 
        figures are to be used.  Increases or decreases in population 
        disclosed by reason of any special census shall must not be 
        taken into consideration. 
           In calculations relating to fire state aid requiring the 
        use of market value property figures, only the latest available 
        market value property figures are to may be used. 
           Sec. 6.  Minnesota Statutes 1996, section 69.021, 
        subdivision 9, is amended to read: 
           Subd. 9.  [APPEAL.] In the event that any municipality, 
        county, fire relief association or police department relief 
        association feels itself to be aggrieved, it may request the 
        commissioner to review and adjust the apportionment of funds 
        within the county in the case of police state peace officer aid, 
        and or within the state in the case of fire state aid, and.  The 
        decision of the commissioner shall be is subject to appeal, 
        review, and adjustment by the district court in the county in 
        which the applicable fire or police department is located. 
           Sec. 7.  Minnesota Statutes 1996, section 69.021, 
        subdivision 10, is amended to read: 
           Subd. 10.  [REDUCTION IN POLICE STATE AID 
        APPORTIONMENT.] (a) The commissioner of revenue shall reduce the 
        apportionment of police state aid under subdivisions 5, 
        paragraph (b), 6, and 7 7a, for eligible employer units by 
        any excess police state aid. 
           (b) "Excess police state aid" is: 
           (1) for counties and for municipalities in which police 
        retirement coverage is provided wholly by the public employees 
        police and fire fund and all police officers are members of the 
        plan governed by sections 353.63 to 353.657, the amount in 
        excess of the employer's total prior calendar year obligation 
        under section 353.65, as defined in paragraph (c), as certified 
        by the executive director of the public employees retirement 
        association.; 
           (2) for municipalities in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        governed by sections 353.63 to 353.657 and in part by a local 
        police consolidation account governed by chapter 353A, the 
        amount in excess of the employer's total prior calendar year 
        obligation as defined in paragraph (c), as certified by the 
        executive director of the public employees retirement 
        association; 
           (3) for municipalities in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        governed by sections 353.63 to 353.657 and in part by a local 
        police relief association governed by sections 69.77 and 
        423A.01, the amount in excess of the employer's total prior 
        calendar year obligation as defined in paragraph (c), as 
        certified by the executive director of the public employees 
        retirement association, plus the amount of the financial 
        requirements of the relief association certified to the 
        applicable municipality during the prior calendar year under 
        section 69.77, subdivisions 2b and 2c, reduced by the amount of 
        member contributions deducted from the covered salary of the 
        relief association during the prior calendar year under section 
        69.77, subdivision 2a, as certified by the chief administrative 
        officer of the applicable municipality; and 
           (4) for the metropolitan airports commission, if there are 
        police officers hired before July 1, 1978, with retirement 
        coverage by the Minneapolis employees retirement fund remaining, 
        the amount in excess of the commission's total prior calendar 
        year obligation as defined in paragraph (c), as certified by the 
        executive director of the public employees retirement 
        association, plus the amount determined by expressing the 
        commission's total prior calendar year contribution to the 
        Minneapolis employees retirement fund under section 422A.101, 
        subdivisions 2 and 2a, as a percentage of the commission's total 
        prior calendar year covered payroll for commission employees 
        covered by the Minneapolis employees retirement fund and 
        applying that percentage to the commission's total prior 
        calendar year covered payroll for commission police officers 
        covered by the Minneapolis employees retirement fund, as 
        certified by the chief administrative officer of the 
        metropolitan airports commission. 
           (c) The employer's total prior calendar year obligation 
        with respect to the public employees police and fire plan is the 
        total prior calendar year obligation under section 353.65, 
        subdivision 3, for police officers as defined in section 353.64, 
        subdivision 2, and the actual total prior calendar year 
        obligation under section 353.65, subdivision 3, for 
        firefighters, as defined in section 353.64, subdivision 3, but 
        not to exceed for those firefighters the applicable following 
        amount: 
          municipality                       maximum amount 
          Albert Lea                          $54,157.01
          Anoka                                10,399.31
          Apple Valley                          5,442.44 
          Austin                               49,864.73
          Bemidji                              27,671.38
          Brooklyn Center                       6,605.92
          Brooklyn Park                        24,002.26  
          Burnsville                           15,956.00 
          Cloquet                               4,260.49 
          Coon Rapids                          39,920.00 
          Cottage Grove                         8,588.48
          Crystal                               5,855.00
          East Grand Forks                     51,009.88
          Edina                                32,251.00
          Elk River                             5,216.55
          Ely                                  13,584.16
          Eveleth                              16,288.27
          Fergus Falls                          6,742.00
          Fridley                              33,420.64
          Golden Valley                        11,744.61 
          Hastings                             16,561.00 
          Hopkins                               4,324.23  
          International Falls                  14,400.69 
          Lakeville                               782.35 
          Lino Lakes                            5,324.00 
          Little Falls                          7,889.41 
          Maple Grove                           6,707.54 
          Maplewood                             8,476.69 
          Minnetonka                           10,403.00 
          Montevideo                            1,307.66 
          Moorhead                             68,069.26 
          New Hope                              6,739.72 
          North St. Paul                        4,241.14 
          Northfield                              770.63 
          Owatonna                             37,292.67 
          Plymouth                              6,754.71 
          Red Wing                              3,504.01 
          Richfield                            53,757.96 
          Rosemount                             1,712.55 
          Roseville                             9,854.51 
          St. Anthony                          33,055.00 
          St. Louis Park                       53,643.11 
          Thief River Falls                    28,365.04 
          Virginia                             31,164.46 
          Waseca                               11,135.17 
          West St. Paul                        15,707.20 
          White Bear Lake                       6,521.04 
          Woodbury                              3,613.00 
          any other municipality                    0.00 
           (d) The total shall amount of excess police state aid must 
        be deposited in a separate the excess police state-aid account 
        in the general fund, administered and distributed as provided in 
        subdivision 11. 
           Sec. 8.  Minnesota Statutes 1996, section 69.021, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] 
        (a) An The excess police state-aid holding account is 
        established in the general fund.  The excess police state-aid 
        holding account must be administered by the commissioner. 
           (b) Excess police state aid determined according to section 
        69.021, subdivision 10, must be deposited in the excess police 
        state-aid holding account. 
           (c) From the balance in the excess police state-aid holding 
        account, $1,000,000 is appropriated to and must be transferred 
        annually to the ambulance service personnel longevity award and 
        incentive suspense account established by section 144C.03, 
        subdivision 2. 
           (d) If a police officer stress reduction program is created 
        by law and money is appropriated for that program, an amount 
        equal to that appropriation must be transferred from the balance 
        in the excess police state-aid holding account. 
           (e) On October 1, 1997, and annually on each subsequent 
        October 1, one-half of the balance of the excess police 
        state-aid holding account remaining after the deductions under 
        paragraphs (c) and (d) is appropriated for additional 
        amortization aid under section 423A.02, subdivision 1b. 
           (f) Annually, the remaining balance in the excess police 
        state-aid holding account, after the deductions under paragraphs 
        (c), (d), and (e), cancels to the general fund. 
           Sec. 9.  Minnesota Statutes 1996, section 69.031, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER OF FINANCE'S WARRANT.] The 
        commissioner of finance shall issue to the county, municipality, 
        or independent nonprofit firefighting corporation certified to 
        the commissioner of finance by the commissioner a warrant for an 
        amount equal to the amount of fire state aid or police state 
        aid, whichever applies, certified to for the applicable state 
        aid recipient by the commissioner pursuant to under section 
        69.021.  The amount of state aid due and not paid by October 1 
        accrues interest at the rate of one percent for each month or 
        part of a month the amount remains unpaid, beginning the 
        preceding July 1. 
           Sec. 10.  Minnesota Statutes 1996, section 69.031, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPROPRIATIONS.] There is hereby appropriated 
        annually from the state general fund to the commissioner of 
        revenue an amount sufficient to make the police and fire state 
        aid payments specified in this section and section 69.021. 
           Sec. 11.  Minnesota Statutes 1996, section 69.031, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEPOSIT OF STATE AID.] (1) (a) The municipal 
        treasurer, on receiving the fire state aid, shall, within 30 
        days after receipt, transmit it the fire state aid to the 
        treasurer of the duly incorporated firefighters' relief 
        association if there is one organized and the association has 
        filed a financial report with the municipality; but.  If the 
        relief association has not filed a financial report with the 
        municipality, the municipal treasurer shall delay transmission 
        of the fire state aid to the relief association until the 
        complete financial report is filed.  If there is no relief 
        association organized, or if any the association dissolve, be 
        removed, or has heretofore dissolved, or has been removed as 
        trustees of state aid, then the treasurer of the municipality 
        shall keep deposit the money in the municipal treasury as 
        provided for in section 424A.08 and shall the money may be 
        disbursed only for the purposes and in the manner set forth in 
        that section. 
           (2) (b) The municipal treasurer, upon receipt of the police 
        state aid, shall disburse the police state aid in the following 
        manner: 
           (a) (1) For a municipality in which a local police relief 
        association exists and all peace officers are members of the 
        association, the total state aid shall must be transmitted to 
        the treasurer of the relief association within 30 days of the 
        date of receipt, and the treasurer of the relief association 
        shall immediately deposit the total state aid in the special 
        fund of the relief association; 
           (b) (2) For a municipality in which police retirement 
        coverage is provided by the public employees police and fire 
        fund and all peace officers are members of the fund, the total 
        state aid shall must be applied toward the municipality's 
        employer contribution to the public employees police and fire 
        fund pursuant under to section 353.65, subdivision 3; or 
           (c) (3) For a municipality other than a city of the first 
        class with a population of more than 300,000 in which both a 
        police relief association exists and police retirement coverage 
        is provided in part by the public employees police and fire 
        fund, the municipality may elect at its option to transmit the 
        total state aid to the treasurer of the relief association as 
        provided in clause (a) (1), to use the total state aid to apply 
        toward the municipality's employer contribution to the public 
        employees police and fire fund subject to all the provisions set 
        forth in clause (b) (2), or to allot the total state aid 
        proportionately to be transmitted to the police relief 
        association as provided in this subdivision and to apply toward 
        the municipality's employer contribution to the public employees 
        police and fire fund subject to the provisions of clause (b) (2) 
        on the basis of the respective number of active full-time peace 
        officers, as defined in section 69.011, subdivision 1, clause 
        (g). 
           For a city of the first class with a population of more 
        than 300,000, in addition, the city may elect to allot the 
        appropriate portion of the total police state aid to apply 
        toward the employer contribution of the city to the public 
        employees police and fire fund based on the covered salary of 
        police officers covered by the fund each payroll period and to 
        transmit the balance to the police relief association.; or 
           (4) For a municipality in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        and in part by a local police consolidation account governed by 
        chapter 353A, the total police state aid must be applied towards 
        the municipality's total employer contribution to the public 
        employees police and fire fund and to the local police 
        consolidation account under sections 353.65, subdivision 3, and 
        353A.09, subdivision 5. 
           (3) (c) The county treasurer, upon receipt of the police 
        state aid for the county, shall apply the total state aid toward 
        the county's employer contribution to the public employees 
        police and fire fund pursuant to under section 353.65, 
        subdivision 3. 
           (4) (d) The designated metropolitan airports commission 
        official, upon receipt of the police state aid for the 
        metropolitan airports commission, shall apply the total police 
        state aid first toward the commission's employer contribution 
        for police officers to the Minneapolis employees retirement fund 
        under section 422A.101, subdivision 2a, and, if there is any 
        amount of police state aid remaining, shall apply that remainder 
        toward the commission's employer contribution for police 
        officers to the public employees police and fire plan under 
        section 353.65, subdivision 3. 
           Sec. 12.  [EFFECTIVE DATE.] 
           Sections 1 to 11 are effective on the day following final 
        enactment. 
                                   ARTICLE 2 
                      VARIOUS LOCAL PENSION MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 353.01, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
        employees shall not participate as members of the 
        association with retirement coverage by the public employees 
        retirement plan or the public employees police and fire 
        retirement plan: 
           (1) elected public officers, or persons appointed to fill a 
        vacancy in an elective office, who do not elect to participate 
        in the association by filing an application for membership; 
           (2) election officers; 
           (3) patient and inmate personnel who perform services in 
        charitable, penal, or correctional institutions of a 
        governmental subdivision; 
           (4) employees who are hired for a temporary position under 
        subdivision 12a, and employees who resign from a nontemporary 
        position and accept a temporary position within 30 days in the 
        same governmental subdivision, but not those employees who are 
        hired for an unlimited period but are serving a probationary 
        period.  If the period of employment extends beyond six 
        consecutive months and the employee earns more than $425 from 
        one governmental subdivision in any one calendar month, the 
        department head shall report the employee for membership and 
        require employee deductions be made on behalf of the employee 
        under section 353.27, subdivision 4. 
           Membership eligibility of an employee who resigns or is 
        dismissed from a temporary position and within 30 days accepts 
        another temporary position in the same governmental subdivision 
        is determined on the total length of employment rather than on 
        each separate position.  Membership eligibility of an employee 
        who holds concurrent temporary and nontemporary positions in one 
        governmental subdivision is determined by the length of 
        employment and salary of each separate position; 
           (5) employees whose actual salary from one governmental 
        subdivision does not exceed $425 per month, or whose annual 
        salary from one governmental subdivision does not exceed a 
        stipulation prepared in advance, in writing, that the salary 
        must not exceed $5,100 per calendar year or per school year for 
        school employees for employment expected to be of a full year's 
        duration or more than the prorated portion of $5,100 per 
        employment period for employment expected to be of less than a 
        full year's duration; 
           (6) employees who are employed by reason of work emergency 
        caused by fire, flood, storm, or similar disaster; 
           (7) employees who by virtue of their employment in one 
        governmental subdivision are required by law to be a member of 
        and to contribute to any of the plans or funds administered by 
        the Minnesota state retirement system, the teachers retirement 
        association, the Duluth teachers retirement fund association, 
        the Minneapolis teachers retirement association, the St. Paul 
        teachers retirement fund association, the Minneapolis employees 
        retirement fund, or any police or firefighters relief 
        association governed by section 69.77 that has not consolidated 
        with the public employees retirement association, or any police 
        or firefighters relief association that has consolidated with 
        the public employees retirement association but whose members 
        have not elected the type of benefit coverage provided by the 
        public employees police and fire fund under sections 353A.01 to 
        353A.10.  This clause must not be construed to prevent a person 
        from being a member of and contributing to the public employees 
        retirement association and also belonging to and contributing to 
        another public pension fund for other service occurring during 
        the same period of time.  A person who meets the definition of 
        "public employee" in subdivision 2 by virtue of other service 
        occurring during the same period of time becomes a member of the 
        association unless contributions are made to another public 
        retirement fund on the salary based on the other service or to 
        the teachers retirement association by a teacher as defined in 
        section 354.05, subdivision 2; 
           (8) persons who are excluded from coverage under the 
        federal Old Age, Survivors, Disability, and Health Insurance 
        Program for the performance of service as specified in United 
        States Code, title 42, section 410(a)(8)(A), as amended through 
        January 1, 1987, if no irrevocable election of coverage has been 
        made under section 3121(r) of the Internal Revenue Code of 1954, 
        as amended; 
           (9) full-time students who are enrolled and are regularly 
        attending classes at an accredited school, college, or 
        university and who are part-time employees as defined by a 
        governmental subdivision; 
           (10) resident physicians, medical interns, and pharmacist 
        residents and pharmacist interns who are serving in a degree or 
        residency program in public hospitals; 
           (11) students who are serving in an internship or residency 
        program sponsored by an accredited educational institution; 
           (12) persons who hold a part-time adult supplementary 
        technical college license who render part-time teaching service 
        in a technical college; 
           (13) foreign citizens working for a governmental 
        subdivision with a work permit of less than three years, or an 
        H-1b visa valid for less than three years of employment.  Upon 
        notice to the association that the work permit or visa extends 
        beyond the three-year period, the foreign citizens are eligible 
        for membership from the date of the extension; 
           (14) public hospital employees who elected not to 
        participate as members of the association before 1972 and who 
        did not elect to participate from July 1, 1988 to October 1, 
        1988; 
           (15) except as provided in section 353.86, volunteer 
        ambulance service personnel, as defined in subdivision 35, but 
        persons who serve as volunteer ambulance service personnel may 
        still qualify as public employees under subdivision 2 and may be 
        members of the public employees retirement association and 
        participants in the public employees retirement fund or the 
        public employees police and fire fund on the basis of 
        compensation received from public employment service other than 
        service as volunteer ambulance service personnel; and 
           (16) except as provided in section 353.87, volunteer 
        firefighters, as defined in subdivision 36, engaging in 
        activities undertaken as part of volunteer firefighter duties; 
        provided that a person who is a volunteer firefighter may still 
        qualify as a public employee under subdivision 2 and may be a 
        member of the public employees retirement association and a 
        participant in the public employees retirement fund or the 
        public employees police and fire fund on the basis of 
        compensation received from public employment activities other 
        than those as a volunteer firefighter; and 
           (17) pipefitters and associated trades personnel employed 
        by independent school district No. 625 (St. Paul) with coverage 
        by the pipefitters local 455 pension plan under a collective 
        bargaining agreement who were either first employed after May 1, 
        1997, or, if first employed before May 2, 1997, elected to be 
        excluded under section 12. 
           Sec. 2.  Minnesota Statutes 1996, section 353B.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FORMULA PERCENTAGE RATE.] (a) The formula 
        percentage rate shall be 2.333 percent per year of allowable 
        service for each of the first 20 years of allowable service, 
        1.333 percent per year of allowable service for each year of 
        allowable service in excess of 20 years but not in excess of 27 
        years, and .5 percent for each year of allowable service in 
        excess of 25 years for the former members of the following 
        consolidating relief associations: 
           (1) Rochester fire department relief association; 
           (2) Rochester police relief association; 
           (3) St. Cloud fire department relief association; 
           (4) St. Cloud police relief association; 
           (5) St. Louis Park police relief association; and 
           (6) Winona police relief association. 
           (b) The formula percentage rate shall be 2.5 percent per 
        year of allowable service for each of the first 20 years of 
        allowable service for the former members of the following 
        consolidating relief associations: 
           (1) Albert Lea police relief association; 
           (2) Anoka police relief association; 
           (3) Faribault fire department relief association; 
           (4) Faribault police benefit association; 
           (5) Mankato police benefit association; 
           (6) Red Wing police relief association; and 
           (7) West St. Paul police relief association.  
           (c) The formula percentage rate shall be 2.5 percent per 
        year of allowable service for each of the first 20 years of 
        allowable service and .5 percent per year of allowable service 
        for each year of service in excess of 25 years of allowable 
        service for the former members of the following consolidating 
        relief associations:  
           (1) Austin firefighters relief association; 
           (2) Austin police relief association; 
           (3) South St. Paul firefighters relief association; 
           (4) South St. Paul police relief association; and 
           (5) Virginia police relief association. 
           (d) The formula percentage rate shall be 2.1875 percent per 
        year of allowable service for each of the first 20 years of 
        allowable service and 1.25 percent per year of allowable service 
        for each year of allowable service in excess of 20 years of 
        allowable service but not in excess of 27 years of allowable 
        service for the former members of the Columbia Heights police 
        relief association.  
           (e) The formula percentage rate shall be 2.65 percent per 
        year of allowable service for each of the first 20 years of 
        allowable service and an additional annual benefit of $120 per 
        year of allowable service in excess of 20 years of allowable 
        service but not in excess of 25 years of allowable service for 
        the former members of the following consolidating relief 
        associations:  
           (1) Hibbing firefighters relief association; and 
           (2) Hibbing police relief association. 
           (f) The formula percentage rate or rates shall be the 
        following for the former members of the consolidating relief 
        associations as indicated: 
           (1) 2.5 percent per year of allowable service for each of 
        the first 20 years of allowable service, one percent per year of 
        allowable service in excess of 20 years of allowable service but 
        not more than 25 years of allowable service, and 1.5 percent per 
        year of allowable service in excess of 25 years of allowable 
        service, Albert Lea firefighters relief association; 
           (2) 2.5333 percent per year of allowable service for each 
        of the first 20 years of allowable service and 1.3333 percent 
        per year of allowable service in excess of 20 years of allowable 
        service, but not in excess of 27 years of allowable service, if 
        service as an active member terminated before January 31, 1994, 
        and 2.3333 percent per year of allowable service for each of the 
        first 20 years of allowable service and 1.3333 percent per year 
        of allowable service for each year of allowable service in 
        excess of 20 years of allowable service, but not in excess of 27 
        years of allowable service if service as an active member 
        terminated on or after January 31, 1994, Bloomington police 
        relief association; 
           (3) the greater of 2.5 percent per year of allowable 
        service for each of the first 20 years of allowable service 
        applied to the final salary base, or two percent per year of 
        allowable service for each of the first 20 years of allowable 
        service applied to top grade patrol officer's salary base, 
        Brainerd police relief association; 
           (4) 4.25 percent per year of allowable service for each of 
        the first 20 years of allowable service and an additional 
        benefit of $10 per month per year of allowable service in excess 
        of 20 years of allowable service but not more than 25 years of 
        allowable service, Buhl police relief association; 
           (5) 2.5 percent per year of allowable service for each of 
        the first 20 years of allowable service and an additional 
        benefit of $5 per month per year of allowable service in excess 
        of 20 years of allowable service but not more than 25 years of 
        allowable service, Chisholm firefighters relief association; 
           (6) 2.5 percent per year of allowable service for each of 
        the first 20 years of allowable service and an additional 
        benefit of $5 per month per year of allowable service in excess 
        of 20 years of allowable service but not more than 25 years of 
        allowable service and .5 percent per year of allowable service 
        in excess of 25 years of allowable service, Chisholm police 
        relief association; 
           (7) 2.1875 percent per year of allowable service for each 
        year of the first 20 years of allowable service, 1.25 percent 
        per year of allowable service in excess of 20 years of allowable 
        service but not more than 25 years of allowable service and 1.75 
        percent per year of allowable service in excess of 25 years of 
        allowable service, Columbia Heights fire department relief 
        association, paid division; 
           (8) 2.5 percent per year of allowable service for each year 
        of the first 20 years of allowable service and 1.5 percent per 
        year of allowable service rendered after attaining the age of 60 
        years, Crookston fire department relief association; 
           (9) 2.5 percent per year of allowable service for each year 
        of the first 30 years of allowable service, Crookston police 
        relief association; 
           (10) 2.25 percent per year of allowable service for each 
        year of the first 20 years of allowable service and 1.25 percent 
        per year of allowable service in excess of 20 years of allowable 
        service, but not more than 27 years of service, Crystal police 
        relief association; 
           (11) 1.99063 percent per year of allowable service for each 
        year of the first 20 years of allowable service, 1.25 percent 
        for the 21st year of allowable service, and 2.5 percent per year 
        of allowable service in excess of 21 years of allowable service 
        but not more than 25 years of allowable service, Duluth 
        firefighters relief association; 
           (12) 1.9875 percent per year of allowable service for each 
        year of the first 20 years of allowable service, 1.25 percent 
        for the 21st year of allowable service, and 2.5 percent per year 
        of allowable service in excess of 21 years of allowable service 
        but not more than 25 years of allowable service, Duluth police 
        relief association; 
           (13) 2.5 percent per year of allowable service for each 
        year of the first 20 years of allowable service, and two percent 
        per year of allowable service in excess of 20 years but not more 
        than 25 years of allowable service and not to include any year 
        of allowable service rendered after attaining the age of 55 
        years, Fairmont police benefit association; 
           (14) two percent per year of allowable service for each 
        year of the first ten years of allowable service, 2.67 percent 
        per year of allowable service in excess of ten years of 
        allowable service but not more than 20 years of allowable 
        service and 1.3333 percent per year of allowable service in 
        excess of 20 years of service but not more than 27 years of 
        allowable service, Fridley police pension association; 
           (15) 2.5 percent per year of allowable service for each 
        year of the first 20 years of allowable service and an 
        additional annual amount of $30 per year of allowable service in 
        excess of 20 years of allowable service but not more than 30 
        years of allowable service, Mankato fire department relief 
        association; 
           (16) for members who terminated active service as a 
        Minneapolis firefighter before June 1, 1993, 2.0625 percent per 
        year of allowable service for each year of the first 20 years of 
        allowable service, 1.25 percent per year of allowable service in 
        excess of 20 years of allowable service but not more than 24 
        years of allowable service and five percent for the 25th year of 
        allowable service, and for members who terminated active service 
        as a Minneapolis firefighter after May 31, 1993, two percent for 
        each year of the first 19 years of allowable service, 3.25 
        percent for the 20th year of allowable service, and two percent 
        per year of allowable service in excess of 20 years of service, 
        but not more than 25 years of allowable service, Minneapolis 
        fire department relief association; 
           (17) two percent per year of allowable service for each 
        year of the first 25 years of allowable service, Minneapolis 
        police relief association; 
           (18) the greater of 2.5 percent per year of allowable 
        service for each of the first 20 years of allowable service 
        applied to the final salary base, or two percent per year of 
        allowable service for each of the first 20 years of allowable 
        service applied to highest patrol officer's salary base plus .5 
        percent of the final salary base per year of allowable service 
        for each of the first three years of allowable service in excess 
        of 20 years of allowable service, New Ulm police relief 
        association; 
           (19) two percent per year of allowable service for each of 
        the first 25 years of allowable service and 1.5 percent per year 
        of allowable service in excess of 25 years of allowable service, 
        Red Wing fire department relief association; 
           (20) 2.55 2.75 percent per year of allowable service for 
        each of the first 20 years of allowable service, Richfield fire 
        department relief association; 
           (21) 2.4 percent per year of allowable service for each of 
        the first 20 years of allowable service and 1.3333 percent per 
        year of allowable service in excess of 20 years of allowable 
        service but not more than 27 years of allowable service, 
        Richfield police relief association; 
           (22) for a former member with less than 20 years of 
        allowable service on June 16, 1985, 2.6 percent, and for a 
        former member with 20 or more years of allowable service on June 
        16, 1985, 2.6175 percent for each of the first 20 years of 
        allowable service and, for each former member, one percent for 
        each year of allowable service in excess of 20 years, but no 
        more than 30 years, St. Louis Park fire department relief 
        association; 
           (23) 1.9375 percent per year of allowable service for each 
        of the first 20 years of allowable service, 2.25 percent per 
        year of allowable service in excess of 20 years of allowable 
        service but not more than 25 years of allowable service, and .5 
        percent per year of allowable service in excess of 25 years of 
        allowable service, St. Paul fire department relief association; 
           (24) two percent per year of allowable service for each of 
        the first 25 years of allowable service and .5 percent per year 
        of allowable service in excess of 25 years of allowable service, 
        St. Paul police relief association; 
           (25) 2.25 percent per year of allowable service for each of 
        the first 20 years of allowable service and one percent per year 
        of allowable service in excess of 20 years but not more than 25 
        years of allowable service and .5 percent per year of allowable 
        service in excess of 25 years, Virginia fire department relief 
        association; 
           (26) two percent per year of allowable service for each of 
        the first 20 years of allowable service, one percent per year of 
        allowable service in excess of 20 years but not more than 24 
        years of allowable service, three percent for the 25th year of 
        allowable service and one percent per year of allowable service 
        in excess of 25 years of allowable service but not more than 30 
        years of allowable service, West St. Paul firefighters relief 
        association; and 
           (27) 2.333 percent for each of the first 20 years of 
        allowable service, 1.333 percent for each year of allowable 
        service in excess of 20 years but no more than 28 years, and .5 
        percent for each year of allowable service in excess of 25 
        years, Winona fire department relief association. 
           Sec. 3.  Minnesota Statutes 1996, section 353B.08, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DUTY DISABILITY BENEFIT AMOUNT.] (a) The duty 
        disability benefit shall be an amount equal to the service 
        pension amount to which the person would have been entitled if 
        the person had credit for the greater of actual years of 
        allowable service or 20 years of allowable service, had attained 
        the minimum age for the receipt of a service pension, and had 
        applied for a service pension rather than a disability benefit 
        for the former members of the following consolidating relief 
        associations: 
           (1) Albert Lea firefighters relief association; 
           (2) Albert Lea police relief association; 
           (3) Anoka police relief association; 
           (4) Austin police relief association; 
           (5) Buhl police relief association; 
           (6) Chisholm police relief association; 
           (7) Duluth police relief association; 
           (8) Faribault fire department relief association; 
           (9) Mankato police benefit association; 
           (10) Minneapolis police relief association; 
           (11) New Ulm police relief association; 
           (12) Red Wing police relief association; 
           (13) St. Paul police relief association; 
           (14) South St. Paul police relief association; and 
           (15) Virginia police relief association. 
           (b) The duty disability benefit shall be an amount equal to 
        48 percent of the salary base for the former members of the 
        following consolidating relief associations: 
           (1) Fridley police pension association; 
           (2) Richfield police relief association; 
           (3) Rochester fire department relief association; 
           (4) Rochester police relief association; 
           (5) St. Cloud fire department relief association; 
           (6) St. Cloud police relief association; 
           (7) St. Louis Park police relief association; and 
           (8) Winona police relief association. 
           (c) The duty disability benefit shall be an amount equal to 
        50 percent of the salary base for the former members of the 
        following consolidating relief associations: 
           (1) Austin firefighters relief association; 
           (2) Crookston fire department relief association; 
           (3) Fairmont police benefit association; 
           (4) Mankato fire department relief association; 
           (5) Richfield fire department relief association; 
           (6) South St. Paul firefighters relief association; and 
           (7) (6) Virginia fire department relief association.  
           (d) The duty disability benefit shall be an amount equal to 
        45 percent of the salary base for the former members of the 
        Crystal police relief association. 
           (e) The duty disability benefit shall be an amount equal to 
        40 percent of the salary base for the former members of the 
        following consolidating relief associations: 
           (1) West St. Paul firefighters relief association; and 
           (2) West St. Paul police relief association.  
           (f) The duty disability benefit shall be the following for 
        the former members of the consolidating relief associations as 
        indicated: 
           (1) 52 percent of the salary base for former members who 
        were disabled before January 31, 1994, and 48 percent of the 
        salary base for former members who become disabled after January 
        31, 1994, Bloomington police relief association; 
           (2) 40 percent of the top salary for a patrol officer, 
        Brainerd police relief association; 
           (3) $100 per month, Chisholm firefighters relief 
        association; 
           (4) 37.5 percent of the salary base if the person has 
        credit for less than ten years of allowable service, 43.75 
        percent of the salary base if the person has credit for more 
        than nine years but less than 15 years of allowable service and 
        50 percent of the salary base if the person has credit for more 
        than 14 years of allowable service credit, Columbia Heights fire 
        department relief association, paid division; 
           (5) 43.75 percent of the salary base, Columbia Heights 
        police relief association; 
           (6) 25 percent of the salary base if the person has credit 
        for less than 12 years of allowable service and an additional 
        amount equal to 2.5 percent of the salary base per year if 
        allowable service for each year of allowable service in excess 
        of 11 years of allowable service, not more than 50 percent, 
        Crookston police relief association; 
           (7) 51.0625 percent of the salary base, Duluth firefighters 
        relief association; 
           (8) 12.5 percent of the salary base if the person has 
        credit for less than six years of allowable service, 2.5 percent 
        of the salary base per year of allowable service if the person 
        has more than five years of allowable service, but not more than 
        50 percent of the salary base, Faribault police benefit 
        association; 
           (9) the dollar amount which equals the benefit which would 
        be payable under chapter 176 for a comparable benefit which 
        qualifies for a workers' compensation benefit for a first class 
        disability, 75 percent of the amount payable in the event of a 
        first class disability for a second class disability and 50 
        percent of the amount payable in the event of a first class 
        disability for a third class disability, Hibbing firefighters 
        relief association; 
           (10) $120 per month, Hibbing police relief association; 
           (11) 51.25 percent of the salary base for a first class 
        disability, 41.25 percent of the salary base for a second class 
        disability, and 31.25 percent of the salary base for a third 
        class disability, Minneapolis fire department relief 
        association; 
           (12) 40 percent of the salary base if the person has credit 
        for less than 20 years of allowable service and two percent of 
        the salary base per year of allowable service if the person has 
        more than 19 years of allowable service, but not more than 50 
        percent, Red Wing fire department relief association; 
           (13) 54 percent of the salary base, Richfield fire 
        department relief association; 
           (14) 50 percent of the salary base if the person has credit 
        for less than 20 years of allowable service and an amount equal 
        to the service pension amount to which the person would have 
        been entitled based on the applicable amount of allowable 
        service if the person had attained the minimum age for the 
        receipt of a service pension and had applied for a service 
        pension rather than a disability benefit and if the person has 
        credit for at least 20 years of allowable service, St. Louis 
        Park fire department relief association; 
           (14) (15) 50 percent of the salary base if the person is 
        not able to perform the duties of any other gainful employment, 
        39.375 percent of the salary base if the person is only able to 
        perform the duties of light manual labor or office employment 
        and 33.75 percent of the salary base if the person is able to 
        perform the duties of other manual labor, St. Paul fire 
        department relief association; and 
           (15) (16) 42.667 percent of the salary base, Winona fire 
        department relief association. 
           Sec. 4.  Minnesota Statutes 1996, section 353B.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 
        surviving spouse benefit shall be 30 percent of the salary base 
        for the former members of the following consolidating relief 
        associations:  
           (1) Albert Lea firefighters relief association; 
           (2) Albert Lea police relief association; 
           (3) Anoka police relief association; 
           (4) Austin police relief association; 
           (5) Brainerd police benefit association; 
           (6) Crookston police relief association; 
           (7) Faribault fire department relief association; and 
           (8) West St. Paul firefighters relief association.  
           (b) The surviving spouse benefit shall be 25 percent of the 
        salary base for the former members of the following 
        consolidating relief associations:  
           (1) Chisholm police relief association; 
           (2) Duluth firefighters relief association; 
           (3) Duluth police pension association; 
           (4) Fairmont police benefit association; 
           (5) Red Wing fire department relief association; 
           (6) South St. Paul police relief association; and 
           (7) West St. Paul police relief association. 
           (c) The surviving spouse benefit shall be 24 percent of the 
        salary base for the former members of the following 
        consolidating relief associations: 
           (1) Fridley police pension association; 
           (2) Richfield police relief association; 
           (3) Rochester fire department relief association; 
           (4) Rochester police relief association; 
           (5) Winona fire department relief association; and 
           (6) Winona police relief association. 
           (d) The surviving spouse benefit shall be 40 percent of the 
        salary base for the former members of the following 
        consolidating relief associations: 
           (1) Columbia Heights fire department relief association, 
        paid division; and 
           (2) New Ulm police relief association; and 
           (3) Richfield fire department relief association.  
           (e) The surviving spouse benefit shall be $250 per month 
        for the former members of the following consolidating relief 
        associations: 
           (1) Hibbing firefighters relief association; and 
           (2) Hibbing police relief association. 
           (f) The surviving spouse benefit shall be 23.75 percent of 
        the salary base for the former members of the following 
        consolidating relief associations: 
           (1) Crystal police relief associations; and 
           (2) Minneapolis police relief association.  
           (g) The surviving spouse benefit shall be 32 percent of the 
        salary base for the former members of the following 
        consolidating relief associations: 
           (1) St. Cloud fire department relief association; and 
           (2) St. Cloud police relief association. 
           (h) The surviving spouse benefit shall be one-half of the 
        service pension or disability benefit which the deceased member 
        was receiving as of the date of death, or of the service pension 
        which the deferred member would have been receiving if the 
        service pension had commenced as of the date of death or of the 
        service pension which the active member would have received 
        based on the greater of the allowable service credit of the 
        person as of the date of death or 20 years of allowable service 
        credit if the person would have been eligible as of the date of 
        death, for the former members of the following consolidating 
        relief associations: 
           (1) Virginia fire department relief association; and 
           (2) Virginia police relief association. 
           (i) The surviving spouse benefit shall be the following for 
        the former members of the consolidating relief associations as 
        indicated: 
           (1) 30 percent of the salary base, reduced by any amount 
        awarded or payable from the service pension or disability 
        benefit of the deceased former firefighter to a former spouse of 
        the member by virtue of the legal dissolution of the member's 
        marriage to the former spouse if the surviving spouse married 
        the member after the time of separation from active service, 
        Austin firefighters relief association; 
           (2) 27.333 percent of the salary base, or one-half of the 
        service pension payable to or accrued by the deceased former 
        member, whichever is greater, Bloomington police relief 
        association; 
           (3) 72.25 percent of the salary base, Buhl police relief 
        association; 
           (4) 50 percent of the service pension which the active 
        member would have received based on allowable service credit to 
        the date of death and prospective service from the date of death 
        until the date on which the person would have attained the 
        normal retirement age, 50 percent of the service pension which 
        the deferred member would have been receiving if the service 
        pension had commenced as of the date of death or $175 per month 
        if the deceased member was receiving a service pension or 
        disability benefit as of the date of death, Chisholm 
        firefighters relief association; 
           (5) two-thirds of the service pension or disability benefit 
        which the deceased member was receiving as of the date of death, 
        or of the service pension which the deferred member would have 
        been receiving if the service pension had commenced as of the 
        date of death or of the service pension which the active member 
        would have received based on the greater of the allowable 
        service credit of the person as of the date of death or 20 years 
        of allowable service credit if the person would have been 
        eligible as of the date of death, Columbia Heights police relief 
        association; 
           (6) the greater of $300 per month or one-half of the 
        service pension or disability benefit which the deceased member 
        was receiving as of the date of death, or of the service pension 
        which the deferred member would have been receiving if the 
        service pension had commenced as of the date of death or of the 
        service pension which the active member would have received 
        based on the allowable service credit of the person as of the 
        date of death if the person would have been eligible as of the 
        date of death, Crookston fire department relief association; 
           (7) $100 per month, Faribault police benefit association; 
           (8) 60 percent of the service pension or disability benefit 
        which the deceased member was receiving as of the date of death, 
        or of the service pension which the deferred member would have 
        been receiving if the service pension had commenced as of the 
        date of death or of the service pension which the active member 
        would have received based on the allowable service credit of the 
        person as of the date of death if the person would have been 
        eligible as of the date of death, Mankato fire department relief 
        association; 
           (9) $175 per month, Mankato police benefit association; 
           (10) 26.25 percent of the salary base, Minneapolis fire 
        department relief association; 
           (11) equal to the service pension or disability benefit 
        which the deceased member was receiving as of the date of death, 
        or of the service pension which the deferred member would have 
        been receiving if the service pension had commenced as of the 
        date of death or of the service pension which the active member 
        would have received based on the allowable service credit of the 
        person as of the date of death if the person would have been 
        eligible as of the date of death, Red Wing police relief 
        association; 
           (12) 78.545 percent of the benefit amount payable prior to 
        the death of the deceased active, disabled, deferred, or retired 
        firefighter if that firefighter's benefit was 55 percent of 
        salary or would have been 55 percent of salary if the 
        firefighter had survived to begin benefit receipt; or 80 percent 
        of the benefit amount payable prior to the death of the deceased 
        active, disabled, deferred, or retired firefighter if that 
        firefighter's benefit was 54 percent of salary or would have 
        been 54 percent of salary if the firefighter had survived to 
        begin benefit receipt, Richfield fire department relief 
        association; 
           (13) 40 percent of the salary base for a surviving spouse 
        of a deceased active member, disabled member, or retired or 
        deferred member with at least 20 years of allowable service, or 
        the prorated portion of 40 percent of the salary base that bears 
        the same relationship to 40 percent that the deceased member's 
        years of allowable service bear to 20 years of allowable service 
        for the surviving spouse of a deceased retired or deferred 
        member with at least ten but less than 20 years of allowable 
        service, St. Louis Park fire department relief association; 
           (13) (14) 26.6667 percent of the salary base, St. Louis 
        Park police relief association; 
           (14) (15) 27.5 percent of the salary base, St. Paul fire 
        department relief association; 
           (15) (16) 20 percent of the salary base, St. Paul police 
        relief association; and 
           (16) (17) 27 percent of the salary base, South St. Paul 
        firefighters relief association. 
           Sec. 5.  Minnesota Statutes 1996, section 353B.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AMOUNT; SURVIVING CHILD BENEFIT.] (a) The 
        surviving child benefit shall be eight percent of the salary 
        base for the former members of the following consolidating 
        relief associations:  
           (1) Fridley police pension association; 
           (2) Red Wing fire department relief association; 
           (3) Richfield police relief association; 
           (4) Rochester fire department relief association; 
           (5) Rochester police relief association; 
           (6) St. Cloud police relief association; 
           (7) St. Louis Park police relief association; 
           (8) South St. Paul firefighters relief association; 
           (9) Winona fire department relief association; and 
           (10) Winona police relief association. 
           (b) The surviving child benefit shall be $25 per month for 
        the former members of the following consolidating relief 
        associations:  
           (1) Anoka police relief association; 
           (2) Austin firefighters relief association; 
           (3) Austin police relief association; 
           (4) Faribault police benefit association; 
           (5) Hibbing firefighters relief association; 
           (6) Mankato police benefit association; 
           (7) South St. Paul police relief association; and 
           (8) Virginia fire department relief association. 
           (c) The surviving child benefit shall be ten percent of the 
        salary base for the former members of the following 
        consolidating relief associations:  
           (1) Albert Lea police relief association; 
           (2) Crookston police relief association; 
           (3) Duluth firefighters relief association; 
           (4) Duluth police pension association; 
           (5) Faribault fire department relief association; and 
           (6) Minneapolis fire department relief association.  
           (d) The surviving child benefit shall be five percent of 
        the salary base for the former members of the following 
        consolidating relief associations:  
           (1) Columbia Heights fire department relief association, 
        paid division; 
           (2) St. Paul police relief association; and 
           (3) West St. Paul firefighters relief associations.  
           (e) The surviving child benefit shall be $15 per month for 
        the former members of the following consolidating relief 
        associations:  
           (1) Crookston fire department relief association; 
           (2) Hibbing police relief association; and 
           (3) West St. Paul police relief association. 
           (f) The surviving child benefit shall be 7.5 percent of the 
        salary base for the former members of the following 
        consolidating relief associations:  
           (1) Bloomington police relief association; and 
           (2) Crystal police relief association. 
           (g) The surviving child benefit shall be the following for 
        the former members of the consolidating relief associations as 
        indicated:  
           (1) ten percent of the salary base if a surviving spouse 
        benefit is also payable, that amount between ten percent of the 
        salary base and 50 percent of the salary base as determined by 
        the executive director of the public employees retirement 
        association, based on the financial circumstances and need of 
        the surviving child or surviving children, applied in a uniform 
        manner, reflective to the extent practicable or determinable to 
        the past administrative practices of the board of the 
        consolidating relief association before the effective date of 
        the consolidation if there is a surviving spouse but no 
        surviving spouse benefit is also payable on account of the 
        remarriage of the surviving spouse, or 50 percent of the salary 
        base, payable in equal shares for more than one surviving child, 
        if there is no surviving spouse, Albert Lea firefighters relief 
        association; 
           (2) four percent of the salary base, Brainerd police 
        benefit association; 
           (3) $125 per month if a surviving spouse benefit is also 
        payable or an amount equal to the surviving spouse benefit, 
        payable in equal shares if there is more than one surviving 
        child, if no surviving spouse benefit is payable, Buhl police 
        relief association; 
           (4) $15 per month, Chisholm firefighters relief 
        association; 
           (5) $125 per month, Chisholm police relief association; 
           (6) $50 per month, Columbia Heights police relief 
        association; 
           (7) 6.25 percent of the salary base, Fairmont police 
        benefit association; 
           (8) 12.5 percent of the service pension or disability 
        benefit which the deceased member was receiving as of the date 
        of death, or of the service pension which the deferred member 
        would have been receiving if the service pension had commenced 
        as of the date of death or of the service pension which the 
        active member would have received based on the allowable service 
        credit of the person as of the date of death if the person would 
        have been eligible as of the date of death, Mankato fire 
        department relief association; 
           (9) ten percent of the salary base if a surviving spouse 
        benefit is also payable or an amount determined by the executive 
        director of the public employees retirement association based on 
        the financial circumstances and need of the surviving child or 
        surviving children, applied in a uniform manner, and subject to 
        the largest applicable amount surviving child benefit maximum if 
        no surviving spouse benefit is also payable, Minneapolis police 
        relief association; 
           (10) $25 per month if a surviving spouse benefit is also 
        payable or an amount equal to the surviving spouse benefit, 
        payable in equal shares if there is more than one surviving 
        child, New Ulm police relief association; 
           (11) in an amount determined by the executive director of 
        the public employees retirement association based on the 
        financial circumstances and need of the surviving child or 
        surviving children, applied in a uniform manner, reflective to 
        the extent practicable or determinable to the past 
        administrative practices of the board of the consolidating 
        relief association before the effective date of the 
        consolidation and not more than the largest surviving child 
        benefit amount prescribed for any other actual or potential 
        consolidating relief association as provided in this section, 
        Red Wing police relief association; 
           (12) five percent of the salary base if a surviving spouse 
        benefit is also payable or 15 percent of the salary base if no 
        surviving spouse benefit is payable, 9.818 percent of the 
        benefit payable to the firefighter or to which the firefighter 
        would have been eligible at the time of death if that 
        firefighter's benefit was or would have been 55 percent of 
        salary and if a surviving spouse benefit is also payable or 
        29.454 percent if a surviving spouse benefit is not payable; or 
        ten percent of the benefit payable to the firefighter or to 
        which the firefighter would have been eligible at the time of 
        death if that firefighter's benefit was or would have been 54 
        percent of salary and if a surviving spouse benefit is also 
        payable or 30 percent if a surviving spouse benefit is not 
        payable, Richfield fire department relief association; 
           (13) 5.3334 percent of the salary base, St. Cloud fire 
        department relief association; 
           (14) five percent of the salary base if a surviving spouse 
        benefit is also payable or 15 percent of the salary base if no 
        surviving spouse benefit is also payable for the surviving child 
        or children of a deceased active member, disabled member, or 
        retired or deferred member with at least 20 years of active 
        service, or the prorated portion of five percent of the salary 
        base if a surviving spouse benefit is also payable or 15 percent 
        of the salary base if no surviving spouse benefit is also 
        payable that bears the same relationship to five or 15 percent 
        that the deceased member's years of allowable service bear to 20 
        years of allowable service for the surviving child or children 
        of a deceased retired or deferred member with at least ten but 
        less than 20 years of allowable service, St. Louis Park fire 
        department relief association; 
           (15) ten percent of the salary base, St. Paul fire 
        department relief association; and 
           (16) $50 per month, Virginia police relief association. 
           Sec. 6.  Minnesota Statutes 1996, section 353B.11, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SURVIVOR BENEFIT MAXIMUM.] (a) No surviving 
        children or surviving family maximum shall be applicable to 
        former members of the following consolidating relief 
        associations:  
           (1) Buhl police relief association; 
           (2) Chisholm firefighters relief association; 
           (3) Chisholm police relief association; 
           (4) Hibbing firefighters relief association; 
           (5) Mankato police benefit association; 
           (6) New Ulm police relief association; 
           (7) Red Wing fire department relief association; 
           (8) Red Wing police relief association; 
           (9) St. Paul police relief association; and 
           (10) South St. Paul police relief association.  
           (b) The surviving children maximum shall be 24 percent of 
        the salary base, if a surviving spouse benefit is also payable 
        or 48 percent of the salary base, if no surviving spouse benefit 
        is also payable, for the former members of the following 
        consolidating relief associations:  
           (1) Fridley police pension association; 
           (2) Richfield police relief association; 
           (3) Rochester fire department relief association; 
           (4) Rochester police relief association; 
           (5) Winona fire department relief association; and 
           (6) Winona police relief association.  
           (c) The surviving family maximum shall be 50 percent of the 
        salary base for the former members of the following 
        consolidating relief associations:  
           (1) Anoka police relief association; 
           (2) Austin firefighters relief association; 
           (3) Austin police relief association; 
           (4) Duluth firefighters relief association; and 
           (5) Richfield fire department relief association; and 
           (6) St. Louis Park fire department relief association. 
           (d) The surviving family maximum shall be an amount equal 
        to the service pension which a retiring member would have 
        received based on 20 years of allowable service credit if the 
        member had attained the age of at least 50 years in the case of 
        an active member, or of the service pension which the deferred 
        member would have been receiving if the service pension had 
        commenced as of the date of death in the case of a deferred 
        member, or of the service pension or disability benefit which 
        the deceased member was receiving as of the date of death, for 
        the former members of the following consolidating relief 
        associations:  
           (1) Columbia Heights police relief association; 
           (2) Virginia fire department relief association; and 
           (3) Virginia police relief association. 
           (e) The surviving children maximum shall be 25 percent of 
        the salary base, if a surviving spouse benefit is also payable 
        or 50 percent of the salary base, if no surviving spouse benefit 
        is also payable, for the former members of the following 
        consolidating relief associations:  
           (1) Duluth police pension association; and 
           (2) Fairmont police benefit association.  
           (f) The surviving children maximum shall be 22.5 percent of 
        the salary base, if a surviving spouse benefit is also payable 
        or 45 percent of the salary base, if no surviving spouse benefit 
        is also payable, for the former members of the Crystal police 
        relief association.  
           (g) The surviving children maximum shall be 16 percent of 
        the salary base, if a surviving spouse benefit is also payable 
        or 48 percent of the salary base, if no surviving spouse benefit 
        is also payable, for the former members of the following 
        consolidating relief associations:  
           (1) St. Cloud fire department relief association; and 
           (2) St. Cloud police relief association.  
           (h) The surviving children maximum shall be 20 percent of 
        the salary base, if a surviving spouse benefit is also payable 
        or 50 percent of the salary base, if no surviving spouse benefit 
        is also payable, for the former members of the following 
        consolidating relief associations:  
           (1) Albert Lea firefighters relief association; 
           (2) Albert Lea police relief association; and 
           (3) Faribault fire department relief association.  
           (i) The surviving family maximum shall be the following for 
        the former members of the consolidating relief associations:  
           (1) 60 percent of the salary base, Bloomington police 
        relief association; 
           (2) $450 per month, Crookston police relief association; 
           (3) 80 percent of the service pension or disability benefit 
        which the deceased member was receiving as of the date of death, 
        or of the service pension which the deferred member would have 
        been receiving if the service pension had commenced as of the 
        date of death or of the service pension which the active member 
        would have received based on the greater of the allowable 
        service credit of the person as of the date of death or 20 years 
        of allowable service credit if the person would have been 
        eligible as of the date of death, Mankato fire department relief 
        association; and 
           (4) 98.182 percent of the benefit amount payable or to 
        which the firefighter was eligible prior to the death of the 
        firefighter if that firefighter's benefit was or would have been 
        55 percent of salary, or 100 percent of the benefit amount 
        payable or to which the firefighter was eligible prior to the 
        death of the firefighter if that firefighter's benefit was or 
        would have been 54 percent of salary, Richfield fire department 
        relief association; and 
           (5) 57.5 percent of the salary base, St. Paul fire 
        department relief association.  
           (j) The surviving child maximum shall be the following for 
        the former members of the consolidating relief associations:  
           (1) 20 percent of the top salary payable to a patrol 
        officer, Brainerd police benefit association; 
           (2) ten percent of the salary base, if a surviving spouse 
        benefit is also payable or 15 percent of the salary base, if no 
        surviving spouse benefit is also payable, Columbia Heights fire 
        department relief association, paid division; 
           (3) $105 per month if a surviving spouse benefit is also 
        payable or $90 per month if no surviving spouse benefit is also 
        payable, Crookston fire department relief association; 
           (4) $125 per month, Faribault police benefit association; 
           (5) $30 per month if a surviving spouse benefit is also 
        payable or $180 per month if no surviving spouse benefit is also 
        payable, Hibbing police relief association; 
           (6) 25 percent of the salary base, if a surviving spouse 
        benefit is also payable or 51.25 percent of the salary base, if 
        no surviving spouse benefit is also payable, Minneapolis fire 
        department relief association; 
           (7) 17.5 percent of the salary base, if a surviving spouse 
        benefit is also payable or 50 percent of the salary base, if no 
        surviving spouse benefit is also payable, Minneapolis police 
        relief association; 
           (8) 24 percent of the salary base, St. Louis Park police 
        relief association; 
           (9) 23 percent of the salary base, if a surviving spouse 
        benefit is also payable or 50 percent of the salary base, if no 
        surviving spouse benefit is also payable, South St. Paul 
        firefighters relief association; 
           (10) ten percent of the salary base, West St. Paul 
        firefighters relief association; and 
           (11) $30 per month if a surviving spouse benefit is also 
        payable or $75 per month if no surviving spouse benefit is also 
        payable, West St. Paul police relief association. 
           Sec. 7.  Laws 1943, chapter 196, section 4, as amended by 
        Laws 1951, chapter 44, section 1, Laws 1955, chapter 88, section 
        1, Laws 1978, chapter 675, section 1, Laws 1991, chapter 28, 
        section 1, and Laws 1992, chapter 428, section 1, is amended to 
        read: 
           Sec. 4.  [RETIREMENT AGE, PENSION.] When any member of the 
        association reaches the age of 55 years, he may retire and then 
        shall receive a pension as long as he lives, at the following 
        rates:  
           (a) When he has served as a member of the police department 
        for a period of 20 years or more, excluding temporary employment 
        or probationary periods.  Such retired member shall be paid each 
        month a pension equal to one-half of his average monthly 
        earnings during the last preceding three years of his service 
        with said police department, plus an additional $3 per month for 
        each year of service not to exceed 20 years.  
           (b) An additional $8 per month for each year of service 
        over 20 that he has served as a member of such police department 
        after the age of 55 years, not to exceed five years for purposes 
        of pension computation, 
           (c) In the event he retires after reaching the age of 55 or 
        more and after having been a member of the department for at 
        least 15 years, but before having served 20 years in the 
        department, the amount of pension which he received shall be 
        that proportion of, pension equal to one-half of his average 
        monthly earnings during the last preceding three years of his 
        service with said police department, plus an additional $3 per 
        month for each year of service.  Major fractions of years of 
        service to be treated as one year and minor fractions 
        disregarded, 
           (d) In no event shall temporary employment or employment 
        for probationary period be considered in computing pension 
        allowances hereunder, 
           (e) When a service pensioner or an active member of the 
        police department who has 20 years or more of service, dies, 
        leaving a surviving spouse or children, a pension shall be paid 
        as follows:  
           1.  To the surviving spouse a pension of $375 a month for 
        life, 
           2.  To the child or children, if their surviving parent is 
        living, a pension of $10 per month for each child not over 
        sixteen years of age, provided, the total pension hereunder for 
        surviving spouse and children of the deceased member, shall not 
        exceed the sum of $395 per month, 
           3.  A child or children of a deceased member, or after the 
        death or remarriage of their surviving parent, be entitled to 
        receive a pension or pensions of $10 per month until they have 
        reached the age of 16 years. 
           (f) The city council may, by resolution, increase the 
        pension payable to a surviving spouse by an amount equal to any 
        increase in the revised consumer price index for all urban 
        consumers for the Minneapolis-St.Paul metropolitan area prepared 
        by the United States Department of Labor, provided that no 
        increase may exceed five percent a year. 
           Sec. 8.  Laws 1965, chapter 705, section 1, subdivision 4, 
        is amended to read: 
           Subd. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 625; 
        APPLICABILITY OF CERTAIN LAWS.] (a) As of July 1, 1965, the 
        organization, operation, maintenance and conduct of the affairs 
        of the converted district shall be governed by general laws 
        relating to independent districts, except as otherwise provided 
        in Extra Session Laws 1959, Chapter 71, as amended, and all 
        special laws and charter provisions relating only to the 
        converted district are repealed. 
           (b) Where an existing pension law is applicable to 
        employees of the special district, such law shall continue to be 
        applicable in the same manner and to the same extent to 
        employees of the converted district.  Notwithstanding this 
        requirement, pipefitters and associated trades personnel with 
        coverage by the pipefitters local 455 pension plan under a 
        collective bargaining agreement who either were first employed 
        after May 1, 1997, or, if first employed before May 2, 1997, 
        elected exclusion from coverage under section 12 are not covered 
        by the public employees retirement association. 
           (c) General laws applicable to independent school districts 
        wholly or partly within cities of the first class shall not be 
        applicable to the converted district. 
           (d) The provision of the statutes applicable only to 
        teachers retirement fund associations in cities of the first 
        class, limiting the amount of annuity to be paid from public 
        funds, limiting the taxes to be levied to carry out the plan of 
        such associations, and limiting the amount of annuities to be 
        paid to beneficiaries, all as contained in Minnesota Statutes, 
        Section 135.24, shall not be applicable to such converted 
        district, but the statutes applicable to such special district 
        prior to the conversion shall continue to be applicable and the 
        pension plan in operation prior to the conversion shall continue 
        in operation until changed in accordance with law, and the 
        teacher tenure law applicable to the special district shall 
        continue to apply to the converted district in the same manner 
        and to the same extent to teachers in the converted district; 
        provided further, where existing civil service provisions of any 
        law or charter are applicable to special district employees, 
        such provision shall continue to be applicable in the same 
        manner and to the same extent to employees of the converted 
        district.  Notwithstanding any contrary provision of Extra 
        Session Laws 1959, Chapter 71, as amended, if there was in the 
        special district a teachers retirement fund association 
        operating and existing under the provisions of Laws 1909, 
        Chapter 343, and all acts amendatory thereof, then such teachers 
        retirement fund association shall continue to exist and operate 
        in the converted district under and to be subject to the 
        provisions of Laws 1909, Chapter 343, and all acts amendatory 
        thereof, to the same extent and in the same manner as before the 
        conversion, and, without limiting the generality of the 
        foregoing, such teachers retirement fund association shall 
        continue, after the conversion as before the conversion, to 
        certify to the same authorities the amount necessary to raise by 
        taxation in order to carry out its retirement plan, and it shall 
        continue, after the conversion as before the conversion, to be 
        the duty of said authorities to include in the tax levy for the 
        ensuing year a tax in addition to all other taxes sufficient to 
        produce so much of the sums so certified as said authorities 
        shall approve, and such teachers retirement fund association 
        shall not be subject after the conversion to any limitation on 
        payments to any beneficiary from public funds or on taxes to be 
        levied to carry out the plan of such association to which it was 
        not subject before the conversion. 
           Sec. 9.  Laws 1967, chapter 798, section 2, is amended to 
        read: 
           Sec. 2.  [RICHFIELD FIRE DEPARTMENT RELIEF ASSOCIATION; 
        DISABILITY PENSION AMOUNT.] In lieu of the disability pension 
        and limitation as provided for in Minnesota Statutes, Section 
        424.20, the firemen's fire department relief association in the 
        city of Richfield may provide for disability benefits, as 
        defined in Minnesota Statutes, Section 424.19, of not more than 
        a sum equal to one-half 54 percent of the salary, as payable 
        from time to time during the period of pension payment 
        to firemen firefighters of the highest grade, not including 
        officers of the department, in the employ of the city of 
        Richfield, such.  The disability pension to be is payable as the 
        bylaws of the association provide. 
           Sec. 10.  Laws 1967, chapter 798, section 4, is amended to 
        read: 
           Sec. 4.  [SERVICE PENSION.] 
           Subdivision 1.  [AGE AT WHICH SERVICE PENSION IS PAYABLE.] 
        A member of the fire department, who enters the employment of 
        the department on or after January 1, 1968, shall not be 
        eligible to receive a service pension until he the person 
        reaches the age of 55 years, in lieu of the eligibility 
        requirement pertaining to age provided in Minnesota Statutes, 
        Sections 424.21 and 424.22. 
           Subd. 2.  [SERVICE PENSION AMOUNT.] (a) If its bylaws so 
        provide, in lieu of the service pension amount set forth in 
        Minnesota Statutes, section 424.21, the Richfield fire 
        department relief association may provide a service pension, as 
        specified in paragraph (b) or (c), as applicable, to a retiring 
        firefighter with at least 20 years of service, based on a 
        percentage of the salary as payable from time to time during the 
        period of pension payment to firefighters of the highest grade, 
        not including officers of the department, in the employ of the 
        city of Richfield. 
           (b) If the eligible firefighter terminated service before 
        the effective date of the alternative benefit improvement 
        authorized by Minnesota Statutes, section 423A.04, the service 
        pension is 54 percent of salary as defined in paragraph (a). 
           (c) If the eligible firefighter terminates service on or 
        after the effective date of the alternative benefit improvement 
        authorized by Minnesota Statutes, section 423A.04, the service 
        pension is 55 percent of salary as defined in paragraph (a). 
           Sec. 11.  Laws 1992, chapter 563, section 5, as amended by 
        Laws 1996, chapter 448, article 2, section 1, is amended to read:
           Sec. 5.  [ST. PAUL POLICE AND FIRE CONSOLIDATION ACCOUNTS; 
        LIMITATION ON POSTRETIREMENT BENEFIT REDUCTIONS.] 
           (a) A monthly service pension or retirement benefit payment 
        from the St. Paul fire department consolidation account or the 
        St. Paul police consolidation account may not be reduced in 
        amount to an amount that is less than that received by the 
        person for the immediately previous month.  
           (b) The service pension or retirement benefit payable from 
        the St. Paul fire department consolidation account or from the 
        St. Paul police consolidation account to a person who becomes 
        newly entitled to that service pension or retirement benefit may 
        not be an amount that is less than the service pension or 
        retirement benefit then payable to a comparably situated 
        pensioner or benefit recipient of that consolidation account. 
           (c) The limitation in paragraph (a) or (b) may not be 
        construed to limit the power of the executive director of the 
        public employees retirement association to require proof of 
        continuing eligibility for receipt of a disability benefit or a 
        survivor benefit, or to require the reduction in amount or 
        elimination of a disability benefit in the event of changed 
        medical circumstances, or to require the reduction in amount or 
        elimination of a survivor benefit in the event of changes in 
        eligibility. 
           Sec. 12.  [PUBLIC PENSION COVERAGE EXCLUSION FOR CERTAIN 
        TRADES PERSONNEL.] 
           Subdivision 1.  [EXCLUSION ELECTION.] (a) A pipefitter or 
        an associated tradesperson who is employed by independent school 
        district No. 625 (St. Paul) on the effective date of this 
        section and who has pension coverage by the pipefitters local 
        455 pension plan under a collective bargaining agreement may 
        elect to be excluded from pension coverage by the public 
        employees retirement association. 
           (b) The exclusion election under this section must be in 
        writing on a form prescribed by the executive director of the 
        public employees retirement association and filed with the 
        executive director.  The exclusion election is irrevocable.  
        Authority to make the coverage exclusion election expires on 
        January 1, 1998. 
           Subd. 2.  [ELIGIBILITY FOR MEMBER CONTRIBUTION REFUND.] A 
        person who has less than three years of allowable service in the 
        public employees retirement association and who elects the 
        pension coverage exclusion under subdivision 1 is entitled to 
        immediately apply for a refund under Minnesota Statutes, section 
        353.34, subdivisions 1 and 2, following the effective date of 
        the exclusion election. 
           Subd. 3.  [DEFERRED ANNUITY ELIGIBILITY.] In lieu of the 
        refund under subdivision 2, a person who elects the pension 
        coverage exclusion under subdivision 1 is entitled to a deferred 
        retirement annuity under Minnesota Statutes, sections 353.34, 
        subdivision 3, and 353.71, subdivision 2, based on any length of 
        allowable service credit under Minnesota Statutes, section 
        353.01, subdivision 16, to the credit of the person as of the 
        date of the coverage exclusion election. 
           Sec. 13.  [RICHFIELD FIRE DEPARTMENT RELIEF ASSOCIATION; 
        SURVIVOR BENEFIT AMOUNTS.] 
           Subdivision 1.  [ELIGIBILITY.] The Richfield fire 
        department relief association, if its bylaws so provide, may 
        provide surviving spouse and surviving child benefits as 
        specified in subdivisions 2 and 3.  For purposes of this 
        section, the definitions of surviving spouse and surviving child 
        as defined in Minnesota Statutes, section 424.24, subdivision 2, 
        apply.  The benefits set forth in subdivisions 2 and 3 are in 
        lieu of the survivor benefits set forth in Minnesota Statutes, 
        section 424.24, subdivision 1. 
           Subd. 2.  [SURVIVING SPOUSE BENEFIT AMOUNT.] (a) If the 
        retirement benefit amount for the firefighter was computed under 
        section 2, subdivision 2, paragraph (c), the surviving spouse 
        benefit amount is 78.545 percent of the benefit amount payable 
        prior to the death of the primary annuitant. 
           (b) If the firefighter was receiving a disability benefit 
        under section 1, or a retirement benefit under section 2, 
        subdivision 2, paragraph (b), the surviving spouse benefit 
        amount is 80 percent of the benefit amount payable prior to the 
        death of the primary annuitant. 
           (c) If the death of the active, disabled, deferred, or 
        retired firefighter occurs prior to the commencement of benefit 
        payments, the surviving spouse benefit amount is to be computed 
        under paragraph (a) if the firefighter would have been eligible 
        for an annuity under section 2, subdivision 2, paragraph (c), at 
        the time of death, based on the benefit the firefighter would 
        have received if benefits had commenced prior to death. 
           (d) If the death of the active, disabled, deferred, or 
        retired firefighter occurs prior to the commencement of benefit 
        payments, the surviving spouse benefit amount is to be computed 
        under paragraph (b) if the firefighter would have been eligible 
        for an annuity under section 1 or section 2, subdivision 2, 
        paragraph (b), at the time of death, based on the benefit the 
        firefighter would have received if benefits had commenced prior 
        to death. 
           Subd. 3.  [SURVIVING CHILD BENEFIT AMOUNT.] (a) If a 
        surviving spouse benefit is payable under subdivision 2, 
        paragraph (a) or (c), each surviving child may also receive a 
        benefit equal to 9.818 percent of the benefit payable to the 
        firefighter or to which the firefighter would have been eligible 
        at the time of death.  If there is no surviving spouse, but 
        benefits would be payable under subdivision 2, paragraph (a) or 
        (c), if there was, each surviving child may receive a benefit of 
        29.454 percent of the benefit payable to the firefighter or to 
        which the firefighter would have been eligible at the time of 
        death.  If a surviving child benefit or benefits are paid under 
        this paragraph, the maximum of the combination of survivor 
        benefits under this subdivision and subdivision 2 when these 
        benefits commence is 98.182 percent of the benefit amount 
        payable or to which the firefighter was eligible prior to the 
        death of the firefighter. 
           (b) If a surviving spouse benefit is payable under 
        subdivision 2, paragraph (b) or (d), each surviving child may 
        also receive a benefit equal to ten percent of the benefit 
        payable to the firefighter or to which the firefighter would 
        have been eligible at the time of death.  If there is no 
        surviving spouse, but benefits would be payable under 
        subdivision 2, paragraph (b) or (d), if there was, each 
        surviving child may receive a benefit of 30 percent of the 
        benefit payable to the firefighter or to which the firefighter 
        would have been eligible at the time of death.  If a surviving 
        child benefit or benefits are paid under this paragraph, the 
        maximum of the combination of survivor benefits under this 
        subdivision and subdivision 2 when these benefits commence is 
        100 percent of the benefit amount payable or to which the 
        firefighter was eligible prior to the death of the firefighter. 
           Sec. 14.  [SURVIVOR BENEFIT DURATION.] 
           Subdivision 1.  [DURATION OF SURVIVING SPOUSE BENEFITS.] A 
        surviving spouse benefit under section 3 is payable to a 
        surviving spouse of a deceased active, disabled, deferred, or 
        retired Richfield firefighter meeting the definition set forth 
        in Minnesota Statutes, section 424.24, subdivision 2, paragraph 
        (a), for the life of that person. 
           Subd. 2.  [DURATION OF SURVIVING CHILD BENEFIT.] A 
        surviving child benefit under section 3 is payable to a 
        surviving child of a deceased active, disabled, deferred, or 
        retired Richfield firefighter meeting the definition set forth 
        in Minnesota Statutes, section 424.24, subdivision 2, paragraph 
        (b), until the person reaches the age of 18. 
           Sec. 15.  [ST. PAUL POLICE AND FIRE CONSOLIDATION ACCOUNTS; 
        BENEFIT FLOOR FOR CERTAIN LOCAL RELIEF ASSOCIATION BENEFIT 
        RECIPIENTS.] 
           (a) Notwithstanding Minnesota Statutes, chapter 353A, the 
        benefit floor provided in paragraph (c) applies to the eligible 
        benefit recipients specified in paragraph (b).  An eligible 
        benefit recipient is entitled to a service pension or survivor 
        benefit, whichever applies, as calculated under the applicable 
        relief association benefit plan provisions and the applicable 
        provisions of Minnesota Statutes, chapter 353A, or the benefit 
        floor amount, whichever is greater. 
           (b) An eligible benefit recipient is a person who is either:
           (1) a vested former active member of the former St. Paul 
        fire department relief association or the former St. Paul police 
        relief association who terminated active service prior to the 
        date of the consolidation of the relief association with the 
        public employees police and fire plan; or 
           (2) the survivor of a vested former active member of the 
        former St. Paul fire department relief association or the former 
        St. Paul police relief association who terminated active service 
        prior to the date of the consolidation of the relief association 
        with the public employees police and fire plan. 
           (c) The benefit floor amount is an amount equal to the 
        highest service pension, surviving spouse benefit, or surviving 
        child benefit, whichever applies, then currently payable to any 
        comparable eligible benefit recipient. 
           Sec. 16.  [JACKSON MEDICAL CENTER; PENSION COVERAGE FOR 
        TRANSFERRED EMPLOYEES.] 
           Subdivision 1.  [AUTHORIZATION.] This section applies if 
        the Jackson medical center is sold, leased, or transferred to a 
        private entity, nonprofit corporation, or public corporation.  
        Notwithstanding any provision of Minnesota Statutes, sections 
        356.24 and 356.25 to the contrary, to facilitate the orderly 
        transition of employees affected by the sale, lease, or 
        transfer, the city may, at its discretion, make, from assets to 
        be transferred to the private entity, nonprofit corporation, or 
        public corporation, payments to a qualified pension plan 
        established for the transferred employees by the private entity, 
        nonprofit corporation, or public corporation, to provide 
        benefits substantially similar to those the employees would have 
        been entitled to under the provisions of the public employees 
        retirement association, Minnesota Statutes 1996, sections 353.01 
        to 353.46. 
           Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
        ELIGIBILITY.] (a) An eligible individual is an individual who: 
           (1) is an employee of the Jackson medical center 
        immediately prior to the sale, lease, or transfer of that 
        facility to a private entity, nonprofit corporation, or public 
        corporation; 
           (2) is terminated at the time of the sale, lease, or 
        transfer; and 
           (3) had less than three years of service credit in the 
        public employees retirement association plan at the date of 
        termination. 
           (b) For an eligible individual under paragraph (a), the 
        city may make a member contribution equivalent payment under 
        subdivision 3. 
           Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
        member contribution equivalent payment is an amount equal to the 
        total refund provided by Minnesota Statutes, section 353.34, 
        subdivisions 1 and 2.  To be eligible for the member 
        contribution equivalent payment, the individual in subdivision 
        2, paragraph (a), must apply for a refund under Minnesota 
        Statutes, section 353.34, subdivisions 1 and 2, within one year 
        of termination.  A member contribution equivalent amount 
        exceeding $200 must be made directly to an individual retirement 
        account under section 408(a) of the federal Internal Revenue 
        Code, as amended, or to another qualified plan.  A member 
        contribution equivalent amount of $200 or less may, at the 
        preference of the individual, be made to the individual or to an 
        individual retirement account under section 408(a) of the 
        federal Internal Revenue Code, as amended, or to another 
        qualified plan. 
           Sec. 17.  [MELROSE HOSPITAL AND PINE VILLA; RETIREMENT.] 
           Subdivision 1.  [TRANSFERRED EMPLOYEES.] This section 
        applies if the Melrose hospital and Pine Villa are sold, leased, 
        or transferred to a private entity or public corporation.  
        Notwithstanding any provision of Minnesota Statutes, sections 
        356.24 and 356.25, to the contrary, to facilitate the orderly 
        transition of employees affected by the sale, lease, or 
        transfer, the Melrose hospital and Pine Villa may, in their 
        discretion, make, from assets to be transferred to the private 
        entity or public corporation, payments to a qualified pension 
        plan established for the transferred employees by the private 
        entity or public corporation, to provide benefits substantially 
        similar to those the employees would have been entitled to under 
        the provisions of the public employees retirement association, 
        Minnesota Statutes 1996, sections 353.01 to 353.46. 
           Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES.] 
        (a) An eligible individual is an individual who: 
           (1) is an employee of the Melrose hospital and Pine Villa 
        immediately prior to the sale, lease, or transfer of that 
        facility to a private entity or public corporation; 
           (2) is terminated at the time of the sale, lease, or 
        transfer; and 
           (3) had less than three years of service credit in the 
        public employees retirement association plan at the date of 
        termination. 
           (b) For an eligible individual under paragraph (a), the 
        Melrose hospital and Pine Villa may make a member contribution 
        equivalent payment under paragraph (c). 
           (c) The member contribution equivalent payment is an amount 
        equal to the total refund provided by Minnesota Statutes, 
        section 353.34, subdivisions 1 and 2.  To be eligible for the 
        member contribution equivalent payment, the individual in 
        paragraph (a) must apply for a refund under Minnesota Statutes, 
        section 353.34, subdivisions 1 and 2, within one year of 
        termination.  A member contribution equivalent amount exceeding 
        $200 must be made directly to an individual retirement account 
        under section 408(a) of the federal Internal Revenue Code, as 
        amended, or to another qualified plan.  A member contribution 
        equivalent amount of $200 or less may, at the preference of the 
        individual, be made to the individual or to an individual 
        retirement account under section 408(a) of the federal Internal 
        Revenue Code, as amended, or to another qualified plan. 
           Sec. 18.  [TRACY MUNICIPAL HOSPITAL AND CLINIC; PENSION 
        COVERAGE FOR TRANSFERRED EMPLOYEES.] 
           Subdivision 1.  [AUTHORIZATION.] This section applies if 
        the Tracy municipal hospital and clinic is sold, leased, or 
        transferred to a private entity, nonprofit corporation, or 
        public corporation.  Notwithstanding any provision of Minnesota 
        Statutes, sections 356.24 and 356.25 to the contrary, to 
        facilitate the orderly transition of employees affected by the 
        sale, lease, or transfer, the city may, at its discretion, make, 
        from assets to be transferred to the private entity, nonprofit 
        corporation, or public corporation, payments to a qualified 
        pension plan established for the transferred employees by the 
        private entity, nonprofit corporation, or public corporation, to 
        provide benefits substantially similar to those the employees 
        would have been entitled to under the provisions of the public 
        employees retirement association, Minnesota Statutes 1996, 
        sections 353.01 to 353.46. 
           Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
        ELIGIBILITY.] (a) An eligible individual is an individual who: 
           (1) is an employee of the Tracy municipal hospital and 
        clinic immediately prior to the sale, lease, or transfer of that 
        facility to a private entity, nonprofit corporation, or public 
        corporation; 
           (2) is terminated at the time of the sale, lease, or 
        transfer; and 
           (3) had less than three years of service credit in the 
        public employees retirement association plan at the date of 
        termination. 
           (b) For an eligible individual under paragraph (a), the 
        city may make a member contribution equivalent payment under 
        subdivision 3. 
           Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
        member contribution equivalent payment is an amount equal to the 
        total refund provided by Minnesota Statutes, section 353.34, 
        subdivisions 1 and 2.  To be eligible for the member 
        contribution equivalent payment, the individual in subdivision 
        2, paragraph (a), must apply for a refund under Minnesota 
        Statutes, section 353.34, subdivisions 1 and 2, within one year 
        of termination.  A member contribution equivalent amount 
        exceeding $200 must be made directly to an individual retirement 
        account under section 408(a) of the federal Internal Revenue 
        Code, as amended, or to another qualified plan.  A member 
        contribution equivalent amount of $200 or less may, at the 
        preference of the individual, be made to the individual or to an 
        individual retirement account under section 408(a) of the 
        federal Internal Revenue Code, as amended, or to another 
        qualified plan. 
           Sec. 19.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
        INCREASE.] 
           Notwithstanding any general or special law to the contrary, 
        in addition to the current pensions and other retirement 
        benefits payable, the pensions and retirement benefits payable 
        to retired police officers and firefighters and their surviving 
        spouses by the Eveleth police and fire trust fund are increased 
        by $100 a month.  Increases are retroactive to January 1, 1997. 
           Sec. 20.  [LEGISLATIVE INTENT.] 
           The revisions to the Richfield fire department relief 
        association benefit plan in sections 2 to 6, 9, 10, 13, and 14 
        and the retroactive application of sections 9, 10, 13, and 14, 
        as indicated in section 21, paragraph (b), are intended to 
        encourage the consolidation of this relief association with the 
        public employees retirement association, in recognition of the 
        administrative efficiencies and potential cost savings expected 
        to occur, and in recognition of characteristics unique to this 
        association at no expense to the State or the public employees 
        retirement association. 
           Sec. 21.  [EFFECTIVE DATE.] 
           (a) Sections 1, 8, and 12 are effective on the day 
        following approval by majority vote of the board of independent 
        school district No. 625 (St. Paul) and compliance with Minnesota 
        Statutes, section 645.021. 
           (b) Sections 2 to 6, 9, 10, 13, 14 and 20 are effective on 
        the day following approval by the Richfield city council and 
        compliance with Minnesota Statutes, section 645.021.  Sections 
        9, 10, 13, and 14 apply to individuals who become service 
        pensioners, disabilitants, or survivors of firefighters who 
        terminated service on or after the effective date of Laws 1967, 
        chapter 798.  Retroactive payments and payments to an estate are 
        not authorized. 
           (c) Section 7 is effective on approval by the Nashwauk city 
        council and compliance with Minnesota Statutes, section 645.021. 
           (d) Sections 11 and 15 are effective on the day following 
        approval by the city council of the city of St. Paul and 
        compliance with Minnesota Statutes, section 645.021, subdivision 
        3.  Sections 11 and 15 must both be approved if either section 
        is to be effective.  Sections 11 and 15 are not intended to 
        result in a reduction in the benefit or pension paid to any 
        benefit recipient or service pensioner. 
           (e) Section 16 is effective on the day following approval 
        by the Jackson city council and compliance with Minnesota 
        Statutes, section 645.021. 
           (f) Section 17 is effective on the day following approval 
        by the Melrose city council and compliance with Minnesota 
        Statutes, section 645.021. 
           (g) Section 18 is effective on the day following approval 
        by the Tracy city council and compliance with Minnesota 
        Statutes, section 645.021. 
           (h) Section 19 is effective on the day following approval 
        by the Eveleth city council and compliance with Minnesota 
        Statutes, section 645.021. 
                                   ARTICLE 3 
                          GENERAL EMPLOYEE RETIREMENT  
                                 MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 352.96, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PURCHASE OF SHARES.] The amount of compensation 
        so deferred may be used to purchase: 
           (1) shares in the Minnesota supplemental investment fund 
        established in section 11A.17; 
           (2) saving accounts in federally insured financial 
        institutions; 
           (3) life insurance contracts, fixed annuity and variable 
        annuity contracts from companies that are subject to regulation 
        by the commissioner of commerce; or 
           (4) investment options from open-end investment companies 
        registered under the federal Investment Company Act of 1940, 
        United States Code, title 15, sections 80a-1 to 80a-64; 
           (5) investment options from a firm that is a registered 
        investment advisor under the Investment Advisors Act of 1940, 
        United States Code, title 15, section 80b-1 to 80b-21; 
           (6) investment options of a bank as defined in United 
        States Code, title 15, section 80b-2, subsection (a), paragraph 
        (2), or a bank holding company as defined in the Bank Holding 
        Company Act of 1956, United States Code, title 12, section 1841, 
        subsection (a), paragraph (1); or 
           (7) a combination of clause (1), (2), or (3), (4), (5), or 
        (6), as provided by the plan as specified by the participant. 
           The shares accounts or contracts purchased shall stand in 
        the name of the state or other employing unit, for the officer 
        or employee whose deferred compensation purchased the shares, 
        until distributed to the officer or employee in a manner agreed 
        upon by the employee and the executive director of the Minnesota 
        state retirement system, acting for the employer.  All amounts 
        contributed to the deferred compensation plan and all earnings 
        on those amounts will be held for the exclusive benefit of the 
        plan participants and beneficiaries.  These amounts will be held 
        in trust, in custodial accounts, or in qualifying annuity 
        contracts as required by federal law and in accordance with 
        section 356A.06, subdivision 1.  This subdivision does not 
        authorize an employer contribution, except as authorized in 
        section 356.24, paragraph (a), clause (4).  The state, political 
        subdivision, or other employing unit is not responsible for any 
        loss that may result from investment of the deferred 
        compensation. 
           Sec. 2.  Minnesota Statutes 1996, section 352.96, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXECUTIVE DIRECTOR TO ADMINISTER SECTION.] This 
        section must be administered by the executive director of the 
        system with the advice and consent of the board of directors 
        under subdivision 4.  Fiduciary activities of the deferred 
        compensation plan must be undertaken in a manner consistent with 
        chapter 356A.  If the state board of investment so elects, it 
        may solicit bids for options under subdivision 2, clauses 
        (2) and, (3), (4), (5), and (6).  The state board of investment 
        may retain consulting services to assist it in soliciting and 
        evaluating bids and in the periodic review of companies offering 
        options under subdivision 2, clause clauses (3), (4), (5), and 
        (6).  The periodic review must occur at least every two years.  
        The state board of investment may annually establish a budget 
        for its costs in the soliciting, evaluating, and periodic review 
        processes.  The state board of investment may charge a 
        proportional share of all costs related to the periodic review 
        to each company currently under contract and may charge a 
        proportional share of all costs related to soliciting and 
        evaluating bids to each company selected by the state board.  
        All contracts must be approved before execution by the state 
        board of investment.  Contracts must provide that all options in 
        subdivision 2 must:  be presented in an unbiased manner and in a 
        manner that conforms to rules adopted by the executive director, 
        be reported on a periodic basis to all employees participating 
        in the deferred compensation program, and not be the subject of 
        unreasonable solicitation of state employees to participate in 
        the program.  The contract may not call for any person to 
        jeopardize the tax-deferred status of money invested by state 
        employees under this section.  All costs or fees in relation to 
        the options provided under subdivision 2, clause 
        clauses (3), (4), (5), and (6), must be paid by the underwriting 
        companies ultimately selected by the state board of investment. 
           Sec. 3.  Minnesota Statutes 1996, section 352.96, 
        subdivision 6, is amended to read: 
           Subd. 6.  [EXEMPTION FROM PROCESS.] As money to which legal 
        title is vested in the state of Minnesota, No amount of deferred 
        compensation is assignable or subject to execution, levy, 
        attachment, garnishment, or other legal process, except as 
        provided in section 518.58, 518.581, or 518.611. 
           Sec. 4.  Minnesota Statutes 1996, section 354.092, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] A sabbatical leave for the 
        purpose of this section means a sabbatical leave as defined in 
        section 125.18 or the applicable personnel policy of 
        the Minnesota state university and community college boards 
        colleges and universities. 
           Sec. 5.  Minnesota Statutes 1996, section 354.092, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER AND EMPLOYEE CONTRIBUTIONS.] Employer 
        contributions and deductions for employee contributions at the 
        applicable rate specified in section 354.42 must be made by the 
        employing unit from based on the full normal base contract 
        salary that would have been paid to the member for a if the 
        member were not on sabbatical leave.  The member may also make 
        direct payment of employee contributions at the appropriate 
        rates specified in section 354.42 based upon the difference 
        between the salary received for the sabbatical leave and the 
        salary received for a comparable period during the year 
        immediately preceding the leave.  This direct payment must be 
        made by the end of the fiscal year following the fiscal year in 
        which the leave of absence terminated and must be without 
        interest.  The employer must meet the reporting and remittance 
        requirements under section 354.52. 
           Sec. 6.  Minnesota Statutes 1996, section 354.092, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SERVICE CREDIT.] If the employee contributions 
        made under this section are less than the employee contributions 
        made for a comparable period during the year immediately 
        preceding the leave, the allowable and formula service credit of 
        the member shall be prorated according to section 354.05, 
        subdivision 25, clause (3), except that if the member is paid 
        full salary for any sabbatical leave of absence, either past or 
        prospective, the allowable and formula service credit shall not 
        be prorated.  A member may not receive more than three years of 
        allowable service credit in any ten consecutive years under this 
        section unless the allowable service credit was paid for by the 
        member before July 1, 1962.  For sabbatical leaves that begin 
        after June 30, 1986, the required employer contributions 
        specified in section 354.42 must be paid by the employing unit 
        within 30 days after the association's written notification to 
        the employing unit of the amount due.  Notwithstanding the 
        provisions of any agreements to the contrary, employee and 
        employer contributions may not be made to receive allowable 
        service credit under this section if the member does not retain 
        the right to full reinstatement both during and at the end of 
        the sabbatical leave. 
           Sec. 7.  Minnesota Statutes 1996, section 354B.25, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [ADVISORY COMMITTEE.] (a) A committee is created 
        to advise the state board of investment and the board of 
        trustees of the Minnesota state colleges and universities 
        concerning administration of the individual retirement account 
        plan and the supplemental retirement plan established in chapter 
        354C.  The exclusive representatives of the state university 
        instructional unit, the community college instructional unit, 
        and the technical college instructional unit shall each appoint 
        two members to the committee.  The exclusive representatives of 
        the general professional unit, the supervisory employees unit 
        and the state university administrative unit shall each appoint 
        one member to the committee.  The chancellor of the Minnesota 
        state colleges and universities shall appoint three members, at 
        least one of whom shall be a personnel administrator.  No member 
        of the committee shall be retired.  Members serve at the 
        pleasure of the applicable appointing authority, but no member 
        shall serve for more than a total of five years.  Members shall 
        be reimbursed from the administrative expense account of the 
        individual retirement account plan for expenses as provided in 
        section 15.059, subdivision 3. 
           (b) The committee shall: 
           (1) advise the board of trustees of the Minnesota state 
        colleges and universities on the structure and operation of the 
        individual retirement account plan and the supplemental 
        retirement plan; 
           (2) along with any other consultants selected by the board, 
        advise the state board of investment on selection of financial 
        institutions and on the type of investment products to be 
        offered by these institutions for the plans; 
           (3) advise the board of trustees of the Minnesota state 
        colleges and universities on administration of the plans, 
        including selection of a third-party plan administrator, if any, 
        for the individual retirement account plan. 
           (c) The board of trustees of the Minnesota state colleges 
        and universities shall provide the advisory committee with 
        meeting space and other administrative support.  
           (d) Expenses of the advisory committee are considered 
        administrative expenses of the plans under subdivision 5 and 
        section 354C.12, subdivision 4, and must be allocated between 
        the two plans in proportion to the market value of the total 
        assets of the plans as of the most recent prior audited annual 
        financial report. 
           Sec. 8.  Minnesota Statutes 1996, section 354B.25, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
        ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
        administrative expenses of the individual retirement account 
        plan must be paid by plan participants in the following manner: 
           (1) from plan participants with amounts invested in the 
        Minnesota supplemental investment fund, the plan administrator 
        may charge an administrative expense assessment as provided in 
        section 11A.17, subdivisions 10a and 14; and 
           (2) from plan participants with amounts through annuity 
        contracts and custodial accounts purchased under subdivision 2, 
        paragraph (a), the plan administrator may charge an 
        administrative expense assessment of a designated amount, not to 
        exceed two percent of member and employer contributions, as 
        those contributions are made. 
           (b) Any administrative expense charge that is not actually 
        needed for the administrative expenses of the individual 
        retirement account plan must be refunded to member accounts. 
           (c) The board of trustees shall report annually, before 
        October 1, to the advisory committee created in subdivision 1a 
        on administrative expenses of the plan.  The report must include 
        a detailed accounting of charges for administrative expenses 
        collected from plan participants and expenditure of the 
        administrative expense charges.  The administrative expense 
        charges collected from plan participants must be kept in a 
        separate account from any other funds under control of the board 
        of trustees and may be used only for the necessary and 
        reasonable administrative expenses of the plan. 
           Sec. 9.  Minnesota Statutes 1996, section 354C.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BASIC CONTRIBUTIONS AND DEDUCTIONS.] (a) 
        The employer of personnel covered by the supplemental retirement 
        plan as provided in section 354C.11 shall deduct a sum equal to 
        five percent of the annual salary of the person between $6,000 
        and $15,000.  The employer may accomplish this deduction by 
        making equal deductions each payroll period, based on 
        anticipated annual salary.  The employer may adjust these 
        deductions as necessary to deduct the correct amount annually.  
        Deductions cease upon termination of employment covered by the 
        supplemental retirement plan.  
           (b) The basic contribution deduction must be made in the 
        same manner as other retirement deductions are made from the 
        salary of the person under section 352.04, subdivision 4; 
        352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12, 
        whichever applies. 
           (c) The employer shall also make a contribution to the 
        supplemental retirement plan on behalf of covered personnel 
        equal to the salary deduction made under paragraph (a). 
           Sec. 10.  Minnesota Statutes 1996, section 354C.12, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADMINISTRATIVE EXPENSES.] The board of trustees 
        of the Minnesota state colleges and universities is authorized 
        to pay the necessary and reasonable administrative expenses of 
        the supplemental retirement plan.  The administrative fees or 
        charges must be paid by participants in the following manner: 
           (1) from participants whose contributions are invested with 
        the state board of investment, the plan administrator may 
        recover administrative expenses in the manner provided by 
        section 11A.17, subdivisions 10a and 14; or 
           (2) from participants where contributions are invested 
        through contracts purchased from any other authorized source, 
        the plan administrator may assess an amount of up to two percent 
        of the employee and employer contributions. 
           Any recovered or assessed amounts that are not needed for 
        the necessary and reasonable administrative expenses of the plan 
        must be refunded to member accounts. 
           The board of trustees shall report annually, before October 
        1, to the advisory committee created in section 354B.25, 
        subdivision 1a, on administrative expenses of the plan.  The 
        report must include a detailed accounting of charges for 
        administrative expenses collected from plan participants and 
        expenditure of the administrative expense charges.  The 
        administrative expense charges collected from plan participants 
        must be kept in a separate account from any other funds under 
        control of the board of trustees and may be used only for the 
        necessary and reasonable administrative expenses of the plan.  
           Sec. 11.  [EFFECTIVE DATE.] 
           (a) Sections 1, 2, and 3 are effective on the day following 
        enactment. 
           (b) Sections 4, 5, and 6 are effective on July 1, 1997, and 
        apply to sabbatical leaves that begin on or after that date. 
           (c) Sections 7, 8, 9, and 10 are effective on July 1, 1997. 
                                   ARTICLE 4 
                       ACTUARIAL ASSUMPTION MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 356.215, 
        subdivision 4d, is amended to read: 
           Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds 
        governed by chapters 352B, 353C, and by sections 352.90 through 
        352.951 and 353.63 through 353.68, The actuarial valuation must 
        use a the applicable following preretirement interest assumption 
        of 8.5 percent, a and the applicable following postretirement 
        interest assumption of five percent, and a future salary 
        increase assumption of 6.5 percent.: 
                                          preretirement   postretirement 
                                          interest rate   interest rate 
                   plan                    assumption       assumption 
         general state employees 
           retirement plan                    8.5%             5.0% 
         correctional state employees 
           retirement plan                    8.5              5.0 
         state patrol retirement plan         8.5              5.0 
         legislators retirement plan          8.5              5.0 
         elective state officers
           retirement plan                    8.5              5.0 
         judges retirement plan               8.5              5.0 
         general public employees 
           retirement plan                    8.5              5.0 
         public employees police and fire 
           retirement plan                    8.5              5.0 
         local government correctional 
           service retirement plan            8.5              5.0 
         teachers retirement plan             8.5              5.0 
         Minneapolis employees 
           retirement plan                    6.0              5.0 
         Duluth teachers retirement plan      8.5              8.5 
         Minneapolis teachers retirement
           plan                               8.5              8.5 
         St. Paul teachers retirement 
           plan                               8.5              7.5 
         Minneapolis police relief 
           association                        6.0              6.0 
         other local police relief 
           associations                       5.0              5.0 
         Minneapolis fire department 
           relief association                 6.0              6.0 
         other local salaried firefighter 
           relief associations                5.0              5.0 
         local monthly benefit volunteer 
           firefighter relief associations    5.0              5.0 
           (b) For funds governed by chapter 354A, The actuarial 
        valuation must use preretirement and postretirement assumptions 
        of 8.5 percent and a the applicable following single rate future 
        salary increase assumption of 6.5 percent, but the actuarial 
        valuation must reflect the payment of postretirement adjustments 
        to retirees, based on the methods specified in the bylaws of the 
        fund as approved by the legislature.  For a fund governed by 
        chapter 422A, the actuarial valuation shall use a preretirement 
        interest assumption of six percent, a postretirement interest 
        assumption of five percent, and an assumption that in each 
        future year the salary on which a retirement or other benefit is 
        based is 1.04 multiplied by the salary for the preceding year.  
           (c) For all other funds not specified in paragraph (a), 
        (b), (d), or (e), the actuarial valuation must use a 
        preretirement interest assumption of five percent, a 
        postretirement interest assumption of five percent, and a future 
        salary increase assumption of 3.5 percent. 
           (d) For funds governed by chapters 3A, 352C, and 490, the 
        actuarial valuation must use a preretirement interest assumption 
        of 8.5 percent, a postretirement interest assumption of five 
        percent, and a future salary increase assumption of 6.5 percent 
        in each future year in which the salary amount payable is not 
        determinable from section 3.099, 15A.081, subdivision 6, or 
        15A.083, subdivision 1, whichever applies, or from applicable 
        compensation council recommendations under section 15A.082. 
           (e) For funds governed by sections 352.01 through 352.86, 
        353.01 through 353.46, and chapter 354, the actuarial valuation 
        must use a preretirement interest assumption of 8.5, a 
        postretirement interest assumption of five percent, and a or the 
        applicable following graded rate future salary increase 
        assumption as follows: 
                General state   General public   
                  employees       employees         Teachers  
                 retirement      retirement        retirement 
         Age        plan            plan              plan 
           (1) single rate future salary increase assumption 
                                                  future salary 
                   plan                        increase assumption 
         legislators retirement plan                  5.0% 
         elective state officers retirement 
           plan                                       5.0 
         judges retirement plan                       5.0 
         Minneapolis employees retirement plan        4.0 
         Minneapolis police relief association        4.0 
         other local police relief associations       3.5 
         Minneapolis fire department relief 
           association                                4.0 
         other local salaried firefighter relief 
           associations                               3.5 
           (2) graded rate future salary increase assumption 
                                                  future salary 
                   plan                        increase assumption 
         general state employees retirement 
           plan                                   assumption A 
         correctional state employees 
           retirement plan                        assumption A 
         state patrol retirement plan             assumption A 
         general public employees retirement 
           plan                                   assumption B 
         public employees police and fire 
           fund retirement plan                   assumption C 
         local government correctional service 
           retirement plan                        assumption C 
         teachers retirement plan                 assumption D 
         Duluth teachers retirement plan          assumption E 
         Minneapolis teachers retirement plan     assumption F 
         St. Paul teachers retirement plan        assumption G 
         age    A      B      C      D      E      F      G 
         16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 
         17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 
         18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
         19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
         20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 
         21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 
         22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 
         23  7.0725   7.70  10.50   7.20   7.90   7.40   7.25 
         24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 
         25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 
         26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 
         27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 
         28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 
         29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 
         30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 
         31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 
         32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 
         33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 
         34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 
         35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 
         36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 
         37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 
         38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 
         39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 
         40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 
         41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 
         42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 
         43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 
         44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 
         45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 
         46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 
         47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 
         48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 
         49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 
         50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 
         51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 
         52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 
         53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 
         54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 
         55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 
         56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 
         57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
         58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
         59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
         60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
         70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
           (c) The actuarial valuation must use the applicable 
        following payroll growth assumption for calculating the 
        amortization requirement for the unfunded actuarial accrued 
        liability where the amortization retirement is calculated as a 
        level percentage of an increasing payroll: 
                                                     payroll growth
                      plan                             assumption 
         general state employees retirement plan          5.00% 
         correctional state employees retirement plan     5.00 
         state patrol retirement plan                     5.00 
         legislators retirement plan                      5.00 
         elective state officers retirement plan          5.00 
         judges retirement plan                           5.00 
         general public employees retirement plan         6.00 
         public employees police and fire 
           retirement plan                                6.00 
         local government correctional service 
           retirement plan                                6.00 
         teachers retirement plan                         5.00 
         Duluth teachers retirement plan                  5.00 
         Minneapolis teachers retirement plan             5.00 
         St. Paul teachers retirement plan                5.00 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 1997, and applies to 
        actuarial valuations prepared on or after that date. 
                                   ARTICLE 5  
                            MISCELLANEOUS PROVISIONS 
           Section 1.  [CLARIFICATION OF RETIREMENT ELIGIBILITY FOR 
        CERTAIN PERA-P&F RETIREE.] 
           (a) Notwithstanding any provision of Minnesota Statutes 
        1996, section 353.01, subdivision 28, to the contrary, a person 
        described in paragraph (b) must be considered by the public 
        employees police and fire plan to have retired on October 31, 
        1996, even though the person may have rendered occasional 
        employment services during November and December, 1996, for a 
        governmental subdivision other than the governmental subdivision 
        that employed the person immediately before October 31, 1996.  
           (b) A person to whom paragraph (a) applies is a person who: 
           (1) was born on October 11, 1943; 
           (2) was hired as a police officer by the city of Rochester 
        on February 16, 1971; and 
           (3) terminated employment as a Rochester police officer on 
        October 31, 1996. 
           (c) A person described in paragraph (b) must not be 
        required to repay any public employees police and fire plan 
        retirement annuity amount received before the date of enactment, 
        but the amount of the employment earnings paid to the person by 
        the applicable governmental unit for November and December, 
        1996, must be deducted by the public employees retirement 
        association from a subsequent retirement annuity payment. 
           Sec. 2.  [RETIREMENT COVERAGE FOR CERTAIN PART-TIME 
        TEACHERS.] 
           Subdivision 1.  [ELIGIBLE PART-TIME TEACHER.] (a) A 
        part-time teacher described in paragraph (b) is eligible for the 
        retirement coverage specified in subdivision 2. 
           (b) An eligible part-time teacher is a person who: 
           (1) was a part-time hourly teacher of nursing employed by 
        special school district No. 1 at the Minneapolis area 
        vocational-technical institute and the Minneapolis technical 
        college during the period April 7, 1975, to June 23, 1990; 
           (2) was not provided Minnesota public employee retirement 
        plan pension coverage under Minnesota Statutes, chapter 354A for 
        the employment period April 7, 1975, to March 7, 1986; 
           (3) was not included in coverage by the federal old age, 
        survivors, disability and health insurance program (social 
        security) for the employment period July 1, 1978, to March 7, 
        1986; and 
           (4) was a member of the Minneapolis teachers retirement 
        fund association for the employment period March 7, 1986, to 
        June 28, 1991. 
           Subd. 2.  [RETIREMENT COVERAGE.] An eligible part-time 
        teacher under subdivision 1 is entitled to service credit in the 
        applicable program of the Minneapolis teachers retirement fund 
        association for the person's period of part-time teaching 
        employment by special school district No. 1, April 7, 1975, to 
        March 7, 1986, upon the payment of the amount specified in 
        subdivision 3, paragraph (a). 
           Subd. 3.  [AMOUNT.] (a) The payment amount is an amount 
        equal to the actuarial present value, on the date of payment, as 
        calculated by the actuary retained by the legislative commission 
        on pensions and retirement, of the amount of the additional 
        retirement annuity obtained by the acquisition of the additional 
        service credit in this section.  Calculation of this amount must 
        be made using the preretirement interest rate applicable to the 
        Minneapolis teachers retirement fund association specified in 
        Minnesota Statutes, section 356.215, subdivision 4d, and the 
        mortality table adopted for the pension plan. 
           The calculation must assume continuous future service in 
        the 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 full-time equivalent salary, or actual salary, 
        whichever is greater, and a future salary history that includes 
        annual salary increases at the applicable salary increase rate 
        for the plan specified in Minnesota Statutes, section 356.215, 
        subdivision 4d. 
           (b) Payment must be made in one lump sum before July 1, 
        1998. 
           (c) Payment of the amount calculated under this subdivision 
        must be made by the eligible teacher.  However, special school 
        district No. 1, Minneapolis, 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 8-1/2 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.  If the 
        school district agrees to payments under this paragraph, the 
        eligible teacher must make the employee payments required under 
        this paragraph before July 1, 1998.  If that employee payment is 
        made, the school district payment under this paragraph must be 
        remitted to the executive secretary of the Minneapolis teachers 
        retirement fund association within 60 days of receipt by the 
        executive secretary of the employee payments specified under 
        this paragraph. 
           Subd. 4.  [SERVICE CREDIT GRANT.] Service credit for the 
        purchase period must be granted by the Minneapolis teachers 
        retirement fund association to the account of the eligible 
        teacher upon receipt of the purchase payment amount specified in 
        subdivision 3. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective on the day following final 
        enactment. 
                                   ARTICLE 6 
                         VOLUNTEER FIREFIGHTER SERVICE 
                                PENSION MAXIMUMS
           Section 1.  Minnesota Statutes 1996, section 424A.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) On or 
        before August 1 of each year as part of the certification of the 
        financial requirements and minimum municipal obligation made 
        pursuant to section 69.772, subdivision 4, or 69.773, 
        subdivision 5, the secretary or some other official of the 
        relief association designated in the bylaws of each relief 
        association shall calculate and certify to the governing body of 
        the applicable qualified municipality the average amount of 
        available financing per active covered firefighter for the most 
        recent three-year period.  The amount of available financing 
        shall include any amounts of fire state aid received or 
        receivable by the relief association, any amounts of municipal 
        contributions to the relief association raised from levies on 
        real estate or from other available revenue sources exclusive of 
        fire state aid, and one-tenth of the amount of assets in excess 
        of the accrued liabilities of the relief association calculated 
        pursuant to sections 69.772, subdivision 2; 69.773, subdivisions 
        2 and 4; or 69.774, subdivision 2, if any.  
           (b) The maximum service pension which the relief 
        association has authority to provide for in its bylaws for 
        payment to a member retiring after the calculation date when the 
        minimum age and service requirements specified in subdivision 1 
        are met must be determined using the table in paragraph (c) or 
        (d), whichever applies. 
           (c) For a relief association where the governing bylaws 
        provide for a monthly service pension to a retiring member, the 
        maximum monthly service pension amount per month for each year 
        of service credited that may be provided for in the bylaws is 
        the maximum service pension figure corresponding to the average 
        amount of available financing per active covered firefighter: 
          Minimum Average Amount of      Maximum Service Pension
          Available Financing per        Amount Payable per Month
               Firefighter               for Each Year of Service
                 $...                             $ .25
                   42                               .50
                   84                              1.00
                  126                              1.50
                  168                              2.00
                  209                              2.50
                  252                              3.00
                  294                              3.50
                  335                              4.00
                  378                              4.50
                  420                              5.00
                  503                              6.00
                  587                              7.00
                  672                              8.00
                  755                              9.00
                  839                             10.00
                  923                             11.00
                 1007                             12.00
                 1090                             13.00
                 1175                             14.00
                 1259                             15.00
                 1342                             16.00
                 1427                             17.00
                 1510                             18.00
                 1594                             19.00
                 1677                             20.00
                 1762                             21.00
                 1845                             22.00
                 1888                             22.50
                 1929                             23.00
                 2014                             24.00
                 2098                             25.00
                 2183                             26.00
                 2267                             27.00
                 2351                             28.00
                 2436                             29.00
                 2520                             30.00
                 any amount more than 2520        30.00
                 2604                             31.00
                 2689                             32.00
                 2773                             33.00
                 2857                             34.00
                 2942                             35.00
                 3026                             36.00
                 3110                             37.00
                 3963                             38.00
                 4047                             39.00
                 4137                             40.00
                 any amount more than 4137        40.00
           (d) For a relief association in which the governing bylaws 
        provide for a lump sum service pension to a retiring member, the 
        maximum lump sum service pension amount for each year of service 
        credited that may be provided for in the bylaws is the maximum 
        service pension figure corresponding to the average amount of 
        available financing per active covered firefighter for the 
        applicable specified period: 
         Minimum Average Amount         Maximum Lump Sum Service
         of Available Financing         Pension Amount Payable
            per Firefighter             for Each Year of Service
         (1) for service pensions payable before January 1, 1994 
                $..                              $10
                 11                               20
                 16                               30
                 23                               40
                 27                               50
                 32                               60
                 43                               80
                 54                              100
                 65                              120
                 77                              140
                 86                              160
                 97                              180
                108                              200
                131                              240
                151                              280
                173                              320
                194                              360
                216                              400
                239                              440
                259                              480
                281                              520
                302                              560
                324                              600
                347                              640
                367                              680
                389                              720
                410                              760
                432                              800
                486                              900
                540                             1000
                594                             1100
                648                             1200
                702                             1300
                756                             1400
                810                             1500
                864                             1600
                918                             1700
                972                             1800
               1026                             1900
               1080                             2000
               1134                             2100
               1188                             2200
               1242                             2300
               1296                             2400
               1350                             2500
               1404                             2600
               1458                             2700
               1512                             2800
               1566                             2900
               1620                             3000
               1672                             3100
               1726                             3200
               1753                             3250
               1780                             3300
               1820                             3375
               any amount more than 1820        3375
           (2) in addition to the service pension maximum under clause 
        (1), for service pensions payable after December 31, 1993, and 
        before January 1, 1995 
               1834                             3400
               1888                             3500
               any amount more than 1888        3500
           (3) in addition to the service pension maximum under 
        clauses (1) and (2), for service pensions payable after December 
        31, 1994, and before January 1, 1996 
               1942                             3600
               1996                             3700
               2023                             3750
               any amount more than 2023        3750
           (4) in addition to the service pension maximum under 
        clauses (1) to (3), for service pensions payable after December 
        31, 1995 
               2050                             3800
               2104                             3900
               2158                             4000
               any amount more than 2158        4000
               2212                             4100
               2265                             4200
               2319                             4300
               2373                             4400
               2427                             4500
               2481                             4600
               2535                             4700
               2589                             4800
               2643                             4900
               2697                             5000
               2751                             5100
               2805                             5200
               2859                             5300
               2913                             5400
               2967                             5500
               any amount more than 2967        5500
           (e) For a relief association in which the governing bylaws 
        provide for a monthly benefit service pension as an alternative 
        form of service pension payment to a lump sum service pension, 
        the maximum service pension amount for each pension payment type 
        must be determined using the applicable table contained in this 
        subdivision. 
           (f) If a relief association establishes a service pension 
        in compliance with the applicable maximum contained in paragraph 
        (c) or (d) and the minimum average amount of available financing 
        per active covered firefighter is subsequently reduced because 
        of a reduction in fire state aid or because of an increase in 
        the number of active firefighters, the relief association may 
        continue to provide the prior service pension amount specified 
        in its bylaws, but may not increase the service pension amount 
        until the minimum average amount of available financing per 
        firefighter under the table in paragraph (c) or (d), whichever 
        applies, permits. 
           (g) No relief association is authorized to provide a 
        service pension in an amount greater than $30 $40 per month per 
        year of service credit or in an amount greater 
        than $3,375 $5,500 lump sum per year of service credit before 
        January 1, 1994, $3,500 lump sum per year of service credit 
        before January 1, 1995, $3,750 lump sum per year of service 
        credit before January 1, 1996, and $4,000 lump sum per year of 
        service credit after December 31, 1995, even if the minimum 
        average amount of available financing per firefighter for a 
        relief association providing a monthly benefit service pension 
        is greater than $2,240 $4,137, or, for a relief association 
        providing a lump sum service pension, is greater than $1,753 
        before January 1, 1994, $1,888 before January 1, 1995, $2,023 
        before January 1, 1996, or $2,158 after December 31, 1995 $2,967.
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective for pensions payable after December 
        31, 1997. 
                                   ARTICLE 7 
               RETIREMENT COVERAGE MODIFICATIONS FOR TRANSFERRED 
            UNIVERSITY OF MINNESOTA ACADEMIC HEALTH CENTER EMPLOYEES 
           Section 1.  Minnesota Statutes 1996, section 352F.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EFFECTIVE DATE.] "Effective date" is the date 
        terminated hospital employees transfer employment to Fairview 
        under a definitive integration agreement between the University 
        of Minnesota and Fairview or the date terminated academic health 
        center employees are transferred to the University of Minnesota 
        Physicians or University Affiliated Family Physicians, whichever 
        is applicable. 
           Sec. 2.  Minnesota Statutes 1996, section 352F.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TERMINATED HOSPITAL EMPLOYEE.] "Terminated 
        hospital employee" means a person who: 
           (1) was employed on the day before the effective date by 
        the University of Minnesota at the University of Minnesota 
        hospital and clinics or the academic health center and was paid 
        on a biweekly payroll; 
           (2) terminated employment with the University of Minnesota 
        on the day before the effective date or in the case of employees 
        of the academic health center, terminated employment with the 
        University of Minnesota after the effective date but immediately 
        transferred employment to the University of Minnesota Physicians 
        or University Affiliated Family Physicians; and 
           (3) was a participant in the general state employees 
        retirement plan of the Minnesota state retirement system at the 
        time of termination of employment with the University of 
        Minnesota. 
           Sec. 3.  Minnesota Statutes 1996, section 352F.02, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [ACADEMIC HEALTH CENTER.] "Academic health center"
        means the seven professional schools in health care related 
        disciplines at the University of Minnesota. 
           Sec. 4.  Minnesota Statutes 1996, section 352F.02, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [UNIVERSITY OF MINNESOTA 
        PHYSICIANS.] "University of Minnesota Physicians" means the 
        multi-specialty single group medical practice group in which 
        medical school faculty will practice medicine beginning in 1997. 
           Sec. 5.  Minnesota Statutes 1996, section 352F.02, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [UNIVERSITY AFFILIATED FAMILY PHYSICIANS.] 
        "University affiliated family physicians" means the private 
        practice group of the department of family practice in the 
        university's medical school. 
           Sec. 6.  Minnesota Statutes 1996, section 352F.03, is 
        amended to read: 
           352F.03 [VESTING RULE FOR CERTAIN EMPLOYEES.] 
           Notwithstanding any provision of chapter 352 to the 
        contrary, a terminated hospital employee or academic health 
        center employee is eligible to receive a retirement annuity 
        under Minnesota Statutes 1994, section 352.115, without regard 
        to the requirement for three years of allowable service. 
           Sec. 7.  Minnesota Statutes 1996, section 352F.04, is 
        amended to read: 
           352F.04 [AUGMENTATION INTEREST RATE FOR TERMINATED 
        UNIVERSITY HOSPITAL EMPLOYEES.] 
           The deferred annuity of a terminated hospital employee is 
        subject to augmentation in accordance with Minnesota Statutes 
        1994, section 352.72, subdivision 2, except that the rate of 
        interest for this purpose is 5.5 percent compounded annually 
        until January 1 following the year in which such person attains 
        age 55.  From that date to the effective date of retirement, the 
        rate is 7.5 percent.  These increased augmentation rates are no 
        longer applicable for any time after the terminated 
        hospital employee or academic health center employee becomes 
        covered again by a retirement fund enumerated in section 356.30, 
        subdivision 3.  These increased deferred annuity augmentation 
        rates do not apply to a terminated transferred hospital employee 
        or academic health center employee who begins receipt of a 
        retirement annuity while employed by Fairview. 
           Sec. 8.  Minnesota Statutes 1996, section 352F.05, is 
        amended to read: 
           352F.05 [AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR 
        CERTAIN EARLY RETIREMENT PURPOSES.] 
           For purpose of determining eligibility for early retirement 
        benefits provided under Minnesota Statutes 1994, section 
        352.116, subdivision 1, paragraphs (a) and (b), and 
        notwithstanding any provision of chapter 352 to the contrary, 
        the years of allowable service for a terminated hospital 
        employee who transfers to employment at Fairview, University of 
        Minnesota Physicians, or University Affiliated Family Physicians 
        on the effective date and does not apply for a refund of 
        contributions under Minnesota Statutes 1994, section 352.22, 
        subdivision 2, or any similar provision in future Minnesota 
        Statutes, includes service with Fairview, University of 
        Minnesota Physicians, or University Affiliated Family Physicians 
        following the effective date.  Fairview, University of Minnesota 
        Physicians, or University Affiliated Family Physicians shall 
        provide any reports that the executive director of the Minnesota 
        state retirement system may reasonably request to permit 
        calculation of benefits. 
           To be eligible for early retirement benefits under this 
        section, the individual must separate from service with 
        Fairview, University of Minnesota Physicians, or University 
        Affiliated Family Physicians.  The terminated eligible 
        individual, or an individual authorized to act on behalf of that 
        individual, may apply for an annuity following application 
        procedures under section 352.115, subdivision 7. 
           Sec. 9.  Minnesota Statutes 1996, section 352F.06, is 
        amended to read: 
           352F.06 [APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 
        LIMITATIONS.] 
           The reemployed annuitant earnings limitations of section 
        352.115, subdivision 10, apply to any service by a terminated 
        hospital employee as an employee of Fairview, University of 
        Minnesota Physicians, or University Affiliated Family Physicians.
           Sec. 10.  Minnesota Statutes 1996, section 352F.07, is 
        amended to read: 
           352F.07 [EFFECT ON REFUND.] 
           Notwithstanding any provision of chapter 352 to the 
        contrary, terminated hospital employees may receive a refund of 
        employee accumulated contributions plus interest at the rate of 
        six percent per year compounded annually in accordance with 
        Minnesota Statutes 1994, section 352.22, subdivision 2, at any 
        time after the transfer of employment to Fairview, University of 
        Minnesota Physicians, or University Affiliated Family 
        Physicians.  If a terminated hospital employee has received a 
        refund from a pension plan enumerated in section 356.30, 
        subdivision 3, the person may not repay that refund unless the 
        person again becomes a member of one of those enumerated plans 
        and complies with section 356.30, subdivision 2.  
           Sec. 11.  Minnesota Statutes 1996, section 352F.08, is 
        amended to read: 
           352F.08 [COUNSELING SERVICES.] 
           The University of Minnesota hospital and clinics or the 
        academic health center, whichever is applicable and the 
        Minnesota state retirement system shall provide terminated 
        hospital employees with counseling on their benefits available 
        under the general state employees retirement plan of the 
        Minnesota state retirement system. 
           Sec. 12.  [EFFECTIVE DATE.] 
           Sections 1 to 11 are effective the day following final 
        enactment. 
                                   ARTICLE 8 
                       GENERAL STATEWIDE EMPLOYEE PENSION 
                               PLAN MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 136F.45, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [TAX-SHELTERED ANNUITY ADMINISTRATIVE 
        EXPENSES.] (a) The reasonable and necessary administrative 
        expenses of the tax-sheltered annuity program, to a maximum of 
        $100,000 annually, must be paid by the financial institutions 
        authorized by the board of trustees of the Minnesota state 
        colleges and universities system to provide tax-sheltered 
        annuity investment options. 
           (b) Annually, the board of trustees shall establish a 
        budget for the tax-sheltered annuity program administrative 
        expenses.  The total budgeted administrative expense must be 
        allocated among the applicable financial institutions by the 
        board of trustees. 
           Sec. 2.  Minnesota Statutes 1996, section 136F.45, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [PERIODIC REVIEW.] If the board so chooses, it 
        may solicit bids or proposals for options under subdivision 1.  
        The board may retain consulting services to assist it in 
        soliciting and evaluating bids or proposals and in the periodic 
        review of companies offering options under subdivision 1.  The 
        board may annually establish a budget for its costs in the 
        soliciting, evaluating, and periodic review processes.  The 
        board may charge a proportional share of all costs related to 
        the periodic review to each company currently under contract and 
        may charge a proportional share of all costs related to 
        soliciting and evaluating bids or proposals to each company 
        selected by the board.  Contracts must provide that all options 
        in subdivision 1 must:  (1) be presented in an unbiased manner, 
        (2) be reported on a periodic basis to all employees 
        participating in the tax-sheltered annuity program, and (3) not 
        be the subject of unreasonable solicitation of state employees 
        to participate in the program.  The contract may not permit any 
        person to jeopardize the tax-deferred status of money invested 
        by state employees under this section.  All costs or fees in 
        relation to the bid solicitation and evaluation process for the 
        options provided under subdivision 1 must be paid by the 
        underwriting companies ultimately selected by the board. 
           Sec. 3.  Minnesota Statutes 1996, section 352.01, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
        includes: 
           (1) employees of the Minnesota historical society; 
           (2) employees of the state horticultural society; 
           (3) employees of the Disabled American Veterans, Department 
        of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
        if employed before July 1, 1963; 
           (4) employees of the Minnesota crop improvement 
        association; 
           (5) employees of the adjutant general who are paid from 
        federal funds and who are not covered by any federal civilian 
        employees retirement system; 
           (6) employees of the state universities employed under the 
        university activities program; 
           (7) currently contributing employees covered by the system 
        who are temporarily employed by the legislature during a 
        legislative session or any currently contributing employee 
        employed for any special service as defined in clause (8) of 
        subdivision 2b; 
           (8) employees of the armory building commission; 
           (9) permanent employees of the legislature and persons 
        employed or designated by the legislature or by a legislative 
        committee or commission or other competent authority to conduct 
        a special inquiry, investigation, examination, or installation; 
           (10) trainees who are employed on a full-time established 
        training program performing the duties of the classified 
        position for which they will be eligible to receive immediate 
        appointment at the completion of the training period; 
           (11) employees of the Minnesota safety council; 
           (12) any employees on authorized leave of absence from the 
        transit operating division of the former metropolitan transit 
        commission who are employed by the labor organization which is 
        the exclusive bargaining agent representing employees of the 
        transit operating division; 
           (13) employees of the metropolitan council, metropolitan 
        parks and open space commission, metropolitan sports facilities 
        commission, metropolitan mosquito control commission, or 
        metropolitan radio board unless excluded or covered by another 
        public pension fund or plan under section 473.415, subdivision 
        3; 
           (14) judges of the tax court; and 
           (15) personnel employed on June 30, 1992, by the University 
        of Minnesota in the management, operation, or maintenance of its 
        heating plant facilities, whose employment transfers to an 
        employer assuming operation of the heating plant facilities, so 
        long as the person is employed at the University of Minnesota 
        heating plant by that employer or by its successor organization; 
           (16) seasonal help in the classified service employed by 
        the department of revenue; and 
           (17) a person who renders teaching or other service for the 
        Minnesota state colleges and universities system and who also 
        renders service on a part-time basis for an employer with 
        employees covered by the general state employees retirement plan 
        of the Minnesota state retirement system, for all service with 
        the Minnesota state colleges and universities system, if the 
        person's nonteaching service comprises at least 50 percent of 
        the combined total salary received by the person as determined 
        by the chancellor of the Minnesota state colleges and 
        universities system or if the person is certified for general 
        state employees retirement plan coverage by the chancellor of 
        the Minnesota state colleges and universities system. 
           (b) Employees specified in paragraph (a), clause (15), are 
        included employees under paragraph (a) providing that if 
        employer and employee contributions are made in a timely manner 
        in the amounts required by section 352.04.  Employee 
        contributions must be deducted from salary.  Employer 
        contributions are the sole obligation of the employer assuming 
        operation of the University of Minnesota heating plant 
        facilities or any successor organizations to that employer. 
           Sec. 4.  Minnesota Statutes 1996, section 352.01, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
        include: 
           (1) elective state officers; 
           (2) students employed by the University of Minnesota, the 
        state universities, and community colleges unless approved for 
        coverage by the board of regents, the state university board, or 
        the state board for community colleges, as the case may be; 
           (3) employees who are eligible for membership in the state 
        teachers retirement association except employees of the 
        department of children, families, and learning who have chosen 
        or may choose to be covered by the Minnesota state retirement 
        system instead of the teachers retirement association; 
           (4) employees of the University of Minnesota who are 
        excluded from coverage by action of the board of regents; 
           (5) officers and enlisted personnel in the national guard 
        and the naval militia who are assigned to permanent peacetime 
        duty and who under federal law are or are required to be members 
        of a federal retirement system; 
           (6) election officers; 
           (7) persons engaged in public work for the state but 
        employed by contractors when the performance of the contract is 
        authorized by the legislature or other competent authority; 
           (8) officers and employees of the senate and house of 
        representatives or a legislative committee or commission who are 
        temporarily employed; 
           (9) receivers, jurors, notaries public, and court employees 
        who are not in the judicial branch as defined in section 43A.02, 
        subdivision 25, except referees and adjusters employed by the 
        department of labor and industry; 
           (10) patient and inmate help in state charitable, penal, 
        and correctional institutions including the Minnesota veterans 
        home; 
           (11) persons employed for professional services where the 
        service is incidental to regular professional duties and whose 
        compensation is paid on a per diem basis; 
           (12) employees of the Sibley House Association; 
           (13) the members of any state board or commission who serve 
        the state intermittently and are paid on a per diem basis; the 
        secretary, secretary-treasurer, and treasurer of those boards if 
        their compensation is $5,000 or less per year, or, if they are 
        legally prohibited from serving more than three years; and the 
        board of managers of the state agricultural society and its 
        treasurer unless the treasurer is also its full-time secretary; 
           (14) state troopers; 
           (15) temporary employees of the Minnesota state fair 
        employed on or after July 1 for a period not to extend beyond 
        October 15 of that year; and persons employed at any time by the 
        state fair administration for special events held on the 
        fairgrounds; 
           (16) emergency employees in the classified service; except 
        that if an emergency employee, within the same pay period, 
        becomes a provisional or probationary employee on other than a 
        temporary basis, the employee shall be considered a "state 
        employee" retroactively to the beginning of the pay period; 
           (17) persons described in section 352B.01, subdivision 2, 
        clauses (2) to (5); 
           (18) temporary employees in the classified service, and 
        temporary employees in the unclassified service appointed for a 
        definite period of not more than six months and employed less 
        than six months in any one-year period and seasonal help in the 
        classified service employed by the department of revenue; 
           (19) trainee employees, except those listed in subdivision 
        2a, clause (10); 
           (20) persons whose compensation is paid on a fee basis; 
           (21) state employees who in any year have credit for 12 
        months service as teachers in the public schools of the state 
        and as teachers are members of the teachers retirement 
        association or a retirement system in St. Paul, Minneapolis, or 
        Duluth; 
           (22) employees of the adjutant general employed on an 
        unlimited intermittent or temporary basis in the classified and 
        unclassified service for the support of army and air national 
        guard training facilities; 
           (23) chaplains and nuns who are excluded from coverage 
        under the federal Old Age, Survivors, Disability, and Health 
        Insurance Program for the performance of service as specified in 
        United States Code, title 42, section 410(a)(8)(A), as amended, 
        if no irrevocable election of coverage has been made under 
        section 3121(r) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1992; 
           (24) examination monitors employed by departments, 
        agencies, commissions, and boards to conduct examinations 
        required by law; 
           (25) persons appointed to serve as members of fact-finding 
        commissions or adjustment panels, arbitrators, or labor referees 
        under chapter 179; 
           (26) temporary employees employed for limited periods under 
        any state or federal program for training or rehabilitation 
        including persons employed for limited periods from areas of 
        economic distress except skilled and supervisory personnel and 
        persons having civil service status covered by the system; 
           (27) full-time students employed by the Minnesota 
        historical society intermittently during part of the year and 
        full-time during the summer months; 
           (28) temporary employees, appointed for not more than six 
        months, of the metropolitan council and of any of its statutory 
        boards, if the board members are appointed by the metropolitan 
        council; 
           (29) persons employed in positions designated by the 
        department of employee relations as student workers; 
           (30) members of trades employed by the successor to the 
        metropolitan waste control commission with trade union pension 
        plan coverage under a collective bargaining agreement first 
        employed after June 1, 1977; 
           (31) persons employed in subsidized on-the-job training, 
        work experience, or public service employment as enrollees under 
        the federal Comprehensive Employment and Training Act 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 retirement system to meet the minimum vesting requirements 
        for a deferred annuity, or the employer agrees in writing on 
        forms prescribed by the director 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 on forms prescribed by the 
        director to make the required employer contribution in addition 
        to the required employee contribution; 
           (32) off-duty peace officers while employed by the 
        metropolitan council; 
           (33) persons who are employed as full-time police officers 
        by the metropolitan council and as police officers are members 
        of the public employees police and fire fund; 
           (34) persons who are employed as full-time firefighters by 
        the department of military affairs and as firefighters are 
        members of the public employees police and fire fund; 
           (35) foreign citizens with a work permit of less than three 
        years, or an H-1b/JV visa valid for less than three years of 
        employment, unless notice of extension is supplied which allows 
        them to work for three or more years as of the date the 
        extension is granted, in which case they are eligible for 
        coverage from the date extended; and 
           (36) persons who are employed by the board of trustees of 
        the Minnesota state colleges and universities and who elect to 
        remain members of the public employees retirement association or 
        the Minneapolis employees retirement fund, whichever applies, 
        under section 136C.75. 
           Sec. 5.  Minnesota Statutes 1996, section 354B.21, 
        subdivision 3, is amended to read: 
           Subd 3.  [DEFAULT COVERAGE.] (a) If an eligible person 
        fails to elect coverage by the plan under subdivision 2 or if 
        the person fails to make a timely election, the following 
        retirement coverage applies: 
           (1) for employees of the board who are employed in faculty 
        positions in the technical colleges, in the state universities 
        or in the community colleges, the retirement coverage is by the 
        plan established by this chapter; 
           (2) for employees of the board who are employed in faculty 
        positions in the technical colleges, the retirement coverage is 
        by the plan established by this chapter unless on June 30, 1997, 
        the employee was a member of the teachers retirement association 
        established under chapter 354 and then the retirement coverage 
        is by the teachers retirement association, or, unless the 
        employee was a member of a first class city teacher retirement 
        fund established under chapter 354A on June 30, 1995, and then 
        the retirement coverage is by the Duluth teachers retirement 
        fund association if the person was a member of that plan on June 
        30, 1995, or the Minneapolis teachers retirement fund 
        association if the person was a member of that plan on June 30, 
        1995, or the St. Paul teachers retirement fund association if 
        the person was a member of that plan on June 30, 1995; and 
           (3) for employees of the board who are employed in eligible 
        unclassified administrative positions, the retirement coverage 
        is by the plan established by this chapter. 
           (b) If an employee fails to correctly certify prior 
        membership in the teachers retirement association to the 
        Minnesota state colleges and universities system, the system 
        shall not pay interest on employee contributions, employer 
        contributions, and additional employer contributions to the 
        teachers retirement association under section 354.52, 
        subdivision 4. 
           Sec. 6.  Minnesota Statutes 1996, section 354C.11, is 
        amended to read: 
           354C.11 [COVERAGE.] 
           Personnel employed by the board of trustees of the 
        Minnesota state colleges and universities who are in the 
        unclassified service of the state, and who have completed at 
        least two years of employment by the board or a predecessor 
        board with a full-time contract are participants in the 
        supplemental retirement plan, effective on the next following 
        July 1, if the person is employed in an eligible unclassified 
        administrative position as defined in section 354B.20, 
        subdivision 6, or is employed in an employment classification 
        included in one of the following collective bargaining units 
        under section 179A.10, subdivision 2: 
           (1) the state university instructional unit; 
           (2) the community college instructional unit; 
           (3) the technical college instructional unit; and 
           (4) the state university administrative unit. 
           Once a person qualifies for participation in the 
        supplemental plan, all subsequent service by the person as an 
        unclassified employee of the state university board, the state 
        board for community colleges, the higher education board, or the 
        technical colleges is covered by the supplemental plan. 
           Sec. 7.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION.] 
           Subdivision 1.  [ELIGIBLE EMPLOYEE.] (a) An eligible 
        employee described in paragraph (b) is eligible to purchase 
        service credit in the Minnesota state retirement system general 
        plan as specified in subdivision 2. 
           (b) An eligible employee is a person who: 
           (1) is employed in the classified service by the department 
        of revenue as seasonal help, newly authorized to receive 
        prospective service credit under section 3; and 
           (2) was employed in the classified service by the 
        department of revenue as seasonal help in each of the last three 
        fiscal years. 
           Subd. 2.  [RETIREMENT COVERAGE.] An eligible employee under 
        subdivision 1, paragraph (b), is entitled to purchase service 
        credit in the Minnesota state retirement system general plan for 
        the period of service prior to the effective date of section 3 
        as seasonal help in the classified service by the department of 
        revenue.  Any period for which the individual has received 
        service credit or is eligible to receive service credit in any 
        other Minnesota public pension plan, other than a volunteer fire 
        plan, is not eligible for purchase. 
           Subd. 3.  [AMOUNT.] (a) To receive service credit under 
        subdivision 2, the Minnesota state retirement system must 
        receive an amount equal to the actuarial present value, on the 
        date of payment, as calculated by the actuary retained by the 
        legislative commission on pensions and retirement, of the amount 
        of the additional retirement annuity obtained by the acquisition 
        of the additional service credit in this section.  Calculation 
        of this amount must be made using the preretirement interest 
        rate applicable to the Minnesota state retirement system general 
        plan specified in Minnesota Statutes, section 356.215, 
        subdivision 4d, and the mortality table adopted for the pension 
        plan.  The calculation must assume continuous future service in 
        the 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 
        assume that the individual accrues future service credit each 
        year based on a three year average using the most recent three 
        year period prior to the effective date of section 3 for service 
        provided compared to full-time service.  The salary used in the 
        calculation must be the eligible person's actual current hourly 
        salary.  The calculation must assume a future salary history 
        that includes annual salary increases at the applicable salary 
        increase rate for the plan specified in Minnesota Statutes, 
        section 356.215, subdivision 4d. 
           (b) Payment must be made in one lump sum before July 1, 
        1998, or before retirement, whichever is earlier. 
           (c) Payment of the amount calculated under this subdivision 
        must be made by the eligible employee.  However, the Minnesota 
        department of revenue 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 periods of 
        prior service applied to the actual salary rates in effect 
        during the periods of prior service, plus interest at the rate 
        of 8-1/2 percent a year compounded annually from the date on 
        which the contributions would have been made if retirement 
        coverage were authorized at the time, to the date on which the 
        payment is made.  If the department agrees to payments under 
        this paragraph, the eligible employee must make the employee 
        payments required under this paragraph before July 1, 1998.  If 
        that employee payment is made, the department payment under this 
        paragraph must be remitted to the executive director of the 
        Minnesota state retirement system within 60 days of receipt by 
        the executive director of the employee payments specified under 
        this paragraph. 
           Subd. 4.  [SERVICE CREDIT GRANT.] Service credit for the 
        purchase period must be granted by the Minnesota state 
        retirement system to the account of the eligible employee upon 
        receipt of the purchase payment amount specified in subdivision 
        3. 
           Sec. 8.  [STUDY.] 
           The state board of investment, in consultation with the 
        commissioner of commerce, shall study and make recommendations 
        to the legislature on the most desirable method for evaluating 
        insurance companies for purposes of Minnesota Statutes, section 
        356.24, subdivision 1, and on the most desirable method for the 
        use of Internal Revenue Code, section 403(b), annuities and the 
        most effective delivery mechanism to employees.  The board shall 
        report to the legislative commission on pensions and retirement 
        by February 1, 1998. 
           Sec. 9.  [REPEALER.] 
           Laws 1995, chapter 262, article 1, sections 8, 9, 10, 11, 
        and 12, are repealed. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1 to 9 are effective on July 1, 1997. 
                                   ARTICLE 9 
                           PENSION MODIFICATIONS WITH 
                              A LOCAL APPLICATION 
           Section 1.  Minnesota Statutes 1996, section 423A.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
        qualified for amortization state aid under subdivision 1 on 
        December 31, 1984, and has an additional municipal contribution 
        payable under section 353A.09, subdivision 5, paragraph (b), as 
        of the most recent December 31, continues upon application to be 
        entitled to receive amortization state aid under subdivision 1 
        and supplementary amortization state aid under subdivision 1a, 
        after the local police or salaried firefighters' relief 
        association has been consolidated into the public employees 
        police and fire fund.  If a municipality loses entitlement for 
        amortization state aid and supplementary amortization state aid 
        in any year because of not having an additional municipal 
        contribution, the municipality is not entitled to the aid 
        amounts in any subsequent year.  If the actuarial assumptions 
        specified in section 356.215 are changed in 1997, and the change 
        results in a municipality having an additional municipal 
        contribution, and the municipality had previously lost 
        entitlement for amortization aid and supplementary amortization 
        due to not having an additional municipal contribution, then the 
        municipality is again entitled to receive amortization aid and 
        supplementary amortization aid in the same amount as it 
        previously received.  
           Sec. 2.  Minnesota Statutes 1996, section 423B.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SOURCES.] The fund is derived from the 
        following sources: 
           (1) gifts provided to the fund; 
           (2) rewards received by active members of the Minneapolis 
        police department; 
           (3) money coming into the hands of active members of the 
        Minneapolis police department in their official capacity and 
        remaining unclaimed for six months; 
           (4) proceeds from sales of property coming into the hands 
        of active members of the Minneapolis police department in their 
        official capacity and remaining unclaimed for six months, upon 
        sale by the chief of police of the city; 
           (5) an amount equal to the minimum percentage specified in 
        section 69.77, subdivision 2a, of the salary of a first grade 
        patrol officer deducted from the monthly salary of each active 
        member; 
           (6) all money derived from taxation as provided by sections 
        69.77, subdivisions 2b, 2c, 2d, 2e, and 2f; and 423A.01, 
        subdivision 2; 
           (7) all money received from the state amortization aid 
        programs under section 423A.02, to fund the unfunded actuarial 
        accrued liability of the association; 
           (8) all money received from the state under chapter 69, as 
        state police aid; 
           (9) all money provided by the state for the association in 
        addition to clauses (7) and (8); 
           (10) all money derived from taxation by the municipality 
        for the support of the association and the payment of pensions; 
        and 
           (11) money from the investment of, earnings on, and 
        interest on the assets of the fund. 
           Sec. 3.  Minnesota Statutes 1996, section 423B.06, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [SALES OF UNCLAIMED PROPERTY.] The chief of 
        police of the city shall sell property coming into the hands of 
        active members of the Minneapolis police department in their 
        official capacity and remaining unclaimed for six months.  
           Sec. 4.  [TEACHER RETIREMENT DATE.] 
           Notwithstanding Minnesota Statutes, section 354.44, 
        subdivision 4, teachers terminating active teaching service at 
        the high school in independent school district No. 701, Hibbing, 
        during June, 1997, shall have May 30, 1997, as their date of 
        retirement for the purpose of receiving retirement benefits from 
        the teachers retirement association. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective on the day following final 
        enactment. 
                                   ARTICLE 10 
                       INVESTMENT REPORTING MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 69.051, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
        each salaried firefighters' and relief association, police 
        relief association, and of each volunteer firefighters' relief 
        association as defined in section 424A.001, subdivision 4, with 
        assets of at least $200,000 or liabilities of at least $200,000, 
        according to the most recent actuarial valuation or financial 
        report if no valuation is required, shall:  
           (a) (1) Prepare a financial report covering the special and 
        general funds of the relief association for the preceding fiscal 
        year on a form prescribed by the state auditor.  The financial 
        report shall contain financial statements and disclosures which 
        present the true financial condition of the relief association 
        and the results of relief association operations in conformity 
        with generally accepted accounting principles and in compliance 
        with the regulatory, financing and funding provisions of this 
        chapter and any other applicable laws.  The financial report 
        shall be countersigned by the municipal clerk or clerk-treasurer 
        of the municipality in which the relief association is located 
        if the relief association is a firefighters' relief association 
        which is directly associated with a municipal fire department or 
        is a police relief association, or countersigned by the 
        secretary of the independent nonprofit firefighting corporation 
        and by the municipal clerk or clerk-treasurer of the largest 
        municipality in population which contracts with the independent 
        nonprofit firefighting corporation if the relief association is 
        a subsidiary of an independent nonprofit firefighting 
        corporation; 
           (b) (2) File the financial report in its office for public 
        inspection and present it to the city council after the close of 
        the fiscal year.  One copy of the financial report shall be 
        furnished to the state auditor after the close of the fiscal 
        year; and 
           (c) (3) Submit to the state auditor audited financial 
        statements which have been attested to by a certified public 
        accountant, public accountant, or the state auditor within 180 
        days after the close of the fiscal year, except that the state 
        auditor may upon request of a city and a showing of inability to 
        conform, extend the deadline.  The state auditor may accept this 
        report in lieu of the report required in clause (b) (2). 
           Sec. 2.  Minnesota Statutes 1996, section 69.051, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
        volunteer firefighters' relief association and each independent 
        nonprofit firefighting corporation, as defined in section 
        424A.001, subdivision 4, with assets of less than $200,000 and 
        liabilities less than $200,000, according to the most recent 
        financial report, shall: 
           (a) prepare a detailed statement of the financial affairs 
        for the preceding fiscal year of the relief association's 
        special and general funds in the style and form prescribed by 
        the state auditor, for the preceding fiscal year showing all 
        money received, with the sources, and respective amounts 
        thereof.  The detailed statement must show the sources and 
        amounts of all money received; all disbursements for which 
        orders have been drawn upon the treasurer; all, accounts 
        payable; all and accounts receivable; the amount of money 
        remaining in the treasury; total assets including a listing of 
        all investments; the accrued liabilities; and all items 
        necessary to show accurately the revenues and expenditures and 
        financial position of the relief association;. 
           (b) The detailed financial statement required under 
        paragraph (a) shall must be certified by an independent public 
        accountant or auditor or by the auditor or accountant who 
        regularly examines or audits the financial transactions of the 
        municipality.  In addition to certifying the financial condition 
        of the special and general funds of the relief association, the 
        accountant or auditor conducting the examination shall give an 
        opinion as to the condition of the special and general funds of 
        the relief association, and shall comment upon any exceptions to 
        the report.  The independent accountant or auditor shall have at 
        least five years of public accounting, auditing, or similar 
        experience, and shall not be an active, inactive, or retired 
        member of the relief association or the fire or police 
        department;. 
           (c) The detailed statement required under paragraph (a) 
        shall must be countersigned by the municipal clerk or 
        clerk-treasurer of the municipality, or, where applicable, by 
        the secretary of the independent nonprofit firefighting 
        corporation and by the municipal clerk or clerk-treasurer of the 
        largest municipality in population which contracts with the 
        independent nonprofit firefighting corporation if the relief 
        association is a subsidiary of an independent nonprofit 
        firefighting corporation;. 
           (d) The volunteer firefighters' relief association board 
        must file the detailed statement required under paragraph (a) in 
        the relief association office for public inspection and present 
        it to the city council within 45 days after the close of the 
        fiscal year;, and must 
           (e) submit within 90 days after the close of the fiscal 
        year a copy of the detailed statement to the state auditor 
        within 90 days of the close of the fiscal year.  
           Sec. 3.  Minnesota Statutes 1996, section 69.051, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [QUALIFICATION.] The state auditor may, upon a 
        demonstration by a relief association of hardship or inability 
        to conform, extend the deadline for reports under subdivisions 1 
        or 1a, but not beyond November 30th following the due date.  If 
        the reports are not received by November 30th, the municipality 
        or relief association will forfeit its current year state aid, 
        and until the state auditor receives the required information, 
        the relief or municipality will be ineligible to receive any 
        future state aid.  A municipality or police or firefighters' 
        relief association shall not qualify initially to receive, or be 
        entitled subsequently to retain, state aid pursuant to this 
        chapter if the financial reporting requirement or the applicable 
        requirements of this chapter or any other statute or special law 
        have not been complied with or are not fulfilled.  
           Sec. 4.  Minnesota Statutes 1996, section 356.219, is 
        amended to read: 
           356.219 [DISCLOSURE OF ADDITIONAL PUBLIC PENSION PLAN 
        INVESTMENT INFORMATION.] 
           Subdivision 1.  [REPORT REQUIRED.] (a) Except as indicated 
        in subdivision 4, the state board of investment on behalf of the 
        public pension funds and programs for which it is the investment 
        authority and any Minnesota public pension plan not wholly fully 
        invested through the state board of investment, including a 
        local police or firefighters' relief association governed by 
        sections 69.77 or 69.771 to 69.775, shall report the information 
        specified in subdivision 2 3 to the state auditor.  The state 
        auditor may prescribe a form or forms for the purposes of the 
        reporting requirements contained in this section. 
           (b) A local police or firefighters' relief association 
        governed by section 69.77 or sections 69.771 to 69.775 is fully 
        invested during a given calendar year for purposes of this 
        section if all assets of the applicable pension plan beyond 
        sufficient cash equivalent investments to cover six months 
        expected expenses are invested under section 11A.17.  The board 
        of any fully invested public pension plan remains responsible 
        for submitting investment policy statements and subsequent 
        revisions as required by subdivision 3, paragraph (a). 
           (c) For purposes of this section, the state board of 
        investment is considered to be the investment authority for any 
        Minnesota public pension fund required to be invested by the 
        state board of investment under section 11A.23, or for any 
        Minnesota public pension fund authorized to invest in the 
        supplemental investment fund under section 11A.17 and which is 
        fully invested. 
           Subd. 2.  [ASSET CLASS DEFINITION.] (a) For purposes of 
        this section, "asset class" means any of the following asset 
        groupings as authorized in applicable law, by-laws, or articles 
        of incorporation: 
           (1) cash and any cash equivalent investments with 
        maturities of one year or less when issued; 
           (2) debt securities with maturities greater than one year 
        when issued, including but not limited to mortgage participation 
        certificates and pools, asset backed securities, guaranteed 
        investment contracts, and authorized government and corporate 
        obligations of corporations organized under laws of the United 
        States or any state, or the Dominion of Canada or its provinces; 
           (3) stocks or convertible issues of any corporation 
        organized under laws of the United States or any state, or the 
        Dominion of Canada or its provinces, or any corporation listed 
        on the New York Stock Exchange or the American Stock Exchange; 
           (4) international stocks or convertible issues; 
           (5) international debt securities; and 
           (6) real estate and venture capital. 
           (b) If the pension plan is investing under section 69.77, 
        subdivision 2g, section 69.775, or other applicable law, in 
        open-end investment companies registered under the federal 
        Investment Company Act of 1940, or in the Minnesota supplemental 
        investment fund under section 11A.17, this investment must be 
        included under an asset class indicated in paragraph (a), 
        clauses (1) through (6), as appropriate.  If the investment 
        vehicle includes underlying securities from more than one asset 
        class as indicated by paragraph (a), clauses (1) through (6), 
        the investment may be treated as a separate asset class. 
           Subd. 2 3.  [CONTENT AND TIMING OF REPORTS.] (a) The 
        following information shall be included in the report required 
        by subdivision 1: 
           (1) the market value of all investments at the close of the 
        reporting period; 
           (2) regular payroll-based contributions to the fund; 
           (3) other contributions and revenue paid into the fund, 
        including, but not limited to, state or local non-payroll-based 
        contributions, repaid refunds, and buybacks; 
           (4) total benefits paid to members; 
           (5) fees paid for investment management services; 
           (6) salaries and other administrative expenses paid; and 
           (7) total return on investment. 
           The report required by subdivision 1 must also include a 
        written statement of the investment policy in effect on June 30, 
        1988, and 1997, if that statement has not been previously 
        submitted.  Following that date, subsequent reports must include 
        any investment policy changes made subsequently and shall 
        include the effective date of each policy change rather than a 
        complete statement of investment policy, unless the state 
        auditor requests submission of a complete current statement.  
        The report must also include the information required by the 
        following paragraphs, as applicable.  The information required 
        under this subdivision must be reported separately for each 
        investment account or investment portfolio included in the 
        pension fund. 
           (b) For public pension plans other than volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately for each quarter for the fiscal 
        years of the pension fund ending during calendar years 1989 
        through 1991 and on a monthly basis thereafter.  For volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately each quarter. 
           (c) Firefighters' relief associations that have assets with 
        a market value of less than $300,000 must submit a written 
        statement of their current investment policy on or before 
        October 1, 1996, must report any subsequent investment policy 
        changes, including the effective date of the change, within 90 
        days of the change, must begin collecting the required 
        information under paragraph (a), clauses (1) to (7), on January 
        1, 1997, and must submit the required information to the state 
        auditor on or before October 1, 1998, and subsequently within 
        six months of the end of each fiscal year.  Other associations 
        must submit the required information through fiscal year 1993 to 
        the state auditor on or before October 1, 1994, and subsequently 
        within six months of the end of each fiscal year. 
           (b) If a public pension plan has a total market value of 
        $10 million or more as of the beginning of the calendar year, 
        the report required by subdivision 1 must include the market 
        value of the total portfolio and the market value of each 
        investment account, investment portfolio, or asset class 
        included in the pension fund as of the beginning of the calendar 
        year and for each month, and the amount and date of each 
        injection and withdrawal to the total portfolio and to each 
        investment account, investment portfolio, or asset class.  If a 
        public pension plan once files a report under this paragraph, it 
        must continue reporting under this paragraph for any year in 
        which the public pension plan is not fully invested as specified 
        in subdivision 1, paragraph (b), even if asset values drop below 
        $10 million in market value in a subsequent year. 
           (c) For public pension plans to which paragraph (b) 
        applies, the report required by subdivision 1 must also include 
        a calculation of the total time-weighted rate of return 
        available from index-matching investments assuming the asset 
        class performance targets and target asset mix indicated in the 
        written statement of investment policy.  The provided 
        information must include a description of indices used in the 
        analyses and an explanation of why those indices are 
        appropriate.  This paragraph does not apply to any fully 
        invested plan, as defined by subdivision 1, paragraph (b).  
        Reporting by the state board of investment under this paragraph 
        is limited to information on the Minnesota public pension plans 
        required to be invested by the state board of investment under 
        section 11A.23. 
           (d) If a public pension plan has a total market value of 
        less than $10 million as of the beginning of the calendar year 
        and was never required to file under paragraph (b), the report 
        required by subdivision 1 must include the amount and date of 
        each total portfolio injection and withdrawal.  In addition, the 
        report must include the market value of the total portfolio as 
        of the beginning of the calendar year and for each quarter. 
           (e) Any public pension plan reporting under paragraph (b) 
        or (d) may include computed time-weighted rates of return with 
        the report, in addition to all other required information, as 
        applicable.  If returns are supplied, the individual who 
        computed the returns must certify that the returns are net of 
        all costs and fees, including investment management fees, and 
        that the procedures used to compute the returns are consistent 
        with bank administration institute studies of investment 
        performance measurement and association of investment management 
        and research presentation standards. 
           (f) For public pension plans reporting under paragraph (d), 
        the public pension plan must retain information specifying the 
        date and amount of each injection and withdrawal to each 
        investment account and investment portfolio.  The public pension 
        plan must also retain the market value of each investment 
        account and investment portfolio at the beginning of the 
        calendar year and for each quarter.  Information that is 
        required to be collected and retained for any given year or 
        years under this paragraph must be submitted to the office of 
        the state auditor if the office of the state auditor requests in 
        writing that the information be submitted by a public pension 
        plan or plans, or be submitted by the state board of investment 
        for any plan or plans for which the state board of investment is 
        the investment authority under this section.  If the state 
        auditor requests information under this subdivision, and the 
        public plan fails to comply, the pension plan will be subject to 
        penalties under subdivision 5, unless penalties are waived by 
        the state auditor under that subdivision. 
           Subd. 4.  [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 
        of requirements in subdivision 3, the applicable administration 
        for the individual retirement account plans under chapters 354B 
        and 354D and for the university of Minnesota faculty retirement 
        plan shall submit computed time-weighted rates of return to the 
        office of the state auditor.  These time-weighted rates of 
        return must cover the most recent complete calendar year, and 
        must be computed for each investment option available to plan 
        members.  To the extent feasible, the returns must be computed 
        net of all costs, fees, and charges, so that the computed return 
        reflects the net time-weighted return available to the 
        investor.  If this is not practical, the existence of any 
        remaining cost, fee, or charge which could further lower the net 
        return must be disclosed.  The procedures used to compute the 
        returns must be consistent with bank administration institute 
        studies of investment performance measurement and association of 
        investment management and research presentation standards, or, 
        if applicable, securities exchange commission requirements.  The 
        individual who computes the returns must certify that the 
        supplied returns comply with this subdivision.  The applicable 
        plan administrator must also submit, with the return 
        information, the total amounts invested by the plan members, in 
        aggregate, in each investment option as of the last day of the 
        calendar year. 
           Subd. 3 5.  [PENALTY FOR NONCOMPLIANCE.] Failure to comply 
        with the reporting requirements of this section shall result in 
        a withholding of all state aid or state appropriation to which 
        the pension plan may otherwise be directly or indirectly 
        entitled until the pension plan has complied with the reporting 
        requirements.  The state auditor shall instruct the 
        commissioners of revenue and finance to withhold state aid or 
        state appropriation from any pension plan that fails to comply 
        with the reporting requirements contained in this section, until 
        the pension plan has complied with the reporting 
        requirements.  The state auditor may waive the withholding of 
        state aid or state appropriations if the state auditor 
        determines in writing that compliance would create an excessive 
        hardship. 
           The state auditor shall agree to waive the withholding of 
        all state aid required by this subdivision for a volunteer 
        firefighters' relief association governed by sections 69.77 or 
        69.771 to 69.775 if: 
           (1) the relief association certifies to the state auditor 
        that the financial records necessary to comply with this 
        reporting requirement for the fiscal years of the pension fund 
        ending during calendar years 1991 to 1993 no longer exist; or 
           (2) the state auditor determines that reconstructing 
        historical financial data for the fiscal years of the pension 
        fund ending during calendar years 1991 to 1993 would create an 
        excessive hardship for the relief association. 
           Subd. 4 6.  [INVESTMENT DISCLOSURE REPORT.] Using the 
        information provided under subdivision 2, (a) The state auditor 
        shall prepare an annual report to the legislature on 
        the components of investment performance resulting from stages 
        in the investment decision making process of the various public 
        pension plans subject to this section.  The content of the 
        report is specified in paragraphs (b) to (e). 
           (b) For each public pension plan reporting under 
        subdivision 3, paragraph (b), the state auditor shall compute 
        and report total portfolio and asset class time-weighted rates 
        of return, net of all costs and fees. 
           (c) For each public pension plan reporting under 
        subdivision 3, paragraph (d), the state auditor shall compute 
        and report total portfolio time-weighted rates of return, net of 
        all costs and fees.  If the state auditor has requested data for 
        a plan under subdivision 3, paragraph (f), the state auditor may 
        also compute and report asset class time-weighted rates of 
        return, net of all costs and fees. 
           (d) The report by the state auditor must include the 
        information submitted by the pension plans under subdivision 3, 
        paragraph (c), or a synopsis of that information. 
           (e) The report by the state auditor may also include a 
        presentation of multi-year performance, information collected 
        under subdivision 4, and any other information or analysis 
        deemed appropriate by the state auditor.  The state auditor may 
        contract with a qualified consultant or consulting firm to 
        perform the analysis and prepare the report required under this 
        subdivision.  
           Subd. 5 7.  [EXPENSE OF REPORT.] All expenses incurred 
        relating to the investment disclosure report by the state 
        auditor described in subdivision 4 6 must be borne by the office 
        of the state auditor and may not be charged back to the entities 
        described in subdivision subdivisions 1 or 4. 
           Subd. 8.  [TIMING OF REPORTS.] (a) For salaried firefighter 
        relief associations, police relief associations, and volunteer 
        firefighter relief associations, the information required under 
        this section must be submitted by the due date for reports 
        required under section 69.051, subdivision 1 or 1a, as 
        applicable.  If a relief association satisfies the definition of 
        a fully invested plan under subdivision 1, paragraph (b), for 
        the calendar year covered by the report required under section 
        69.051, subdivision 1 or 1a, as applicable, the chief 
        administrative officer of the covered pension plan shall certify 
        compliance on a form prescribed by the state auditor.  The state 
        auditor shall transmit annually to the state board of investment 
        a list or lists of covered pension plans which submitted 
        certifications, in order to facilitate reporting by the state 
        board of investment under paragraph (c) of this subdivision. 
           (b) For the Minneapolis teachers retirement fund 
        association, the St. Paul teachers retirement fund association, 
        the Duluth teachers retirement fund association, the Minneapolis 
        employees retirement fund, the University of Minnesota faculty 
        supplemental retirement plan, and the applicable administrators 
        for the University of Minnesota faculty retirement plan and the 
        individual retirement account plans under chapter 354B and 354D, 
        the information required under this section must be submitted to 
        the state auditor by June 1 of each year. 
           (c) The state board of investment, on behalf of pension 
        funds specified in subdivision 1, paragraph (c), must report 
        information required under this section by September 1 of each 
        year. 
           Sec. 5.  Minnesota Statutes 1996, section 424A.02, 
        subdivision 10, is amended to read: 
           Subd. 10.  [LOCAL APPROVAL OF BYLAW AMENDMENTS; FILING 
        REQUIREMENTS.] (a) Each relief association to which this section 
        applies shall file a revised copy of its governing bylaws with 
        the commissioner of commerce state auditor upon the adoption of 
        any amendment to its governing bylaws by the relief association 
        or upon the approval of any amendment to its governing bylaws 
        granted by the governing body of each municipality served by the 
        fire department to which the relief association is directly 
        associated.  Failure of the relief association to file a copy of 
        the bylaws or any bylaw amendments with the commissioner of 
        commerce state auditor shall disqualify the municipality from 
        the distribution of any future fire state aid until this filing 
        requirement has been completed.  
           (b) If the special fund of the relief association does not 
        have a surplus over full funding pursuant to section 69.772, 
        subdivision 3, clause (2), subclause (e), or 69.773, subdivision 
        4, and if the municipality is required to provide financial 
        support to the special fund of the relief association pursuant 
        to section 69.772 or 69.773, no bylaw amendment which would 
        affect the amount of, the manner of payment of, or the 
        conditions for qualification for service pensions or ancillary 
        benefits or disbursements other than administrative expenses 
        authorized pursuant to section 69.80 payable from the special 
        fund of the relief association shall be effective until it has 
        been ratified by the governing body or bodies of the appropriate 
        municipalities.  If the municipality is not required to provide 
        financial support to the special fund pursuant to this section, 
        the relief association may adopt or amend without municipal 
        ratification its articles of incorporation or bylaws which 
        increase or otherwise affect the service pensions or ancillary 
        benefits payable from the special fund so long as the changes do 
        not cause the amount of the resulting increase in the accrued 
        liability of the special fund to exceed 90 percent of the amount 
        of the prior surplus over full funding and the changes do not 
        result in the financial requirements of the special fund 
        exceeding the expected amount of the future fire state aid to be 
        received by the relief association.  
           (c) If the relief association pays only a lump sum pension, 
        the financial requirements are to be determined by the board of 
        trustees following the preparation of an estimate of the 
        expected increase in the accrued liability and annual accruing 
        liability of the relief association attributable to the change.  
        If the relief association pays a monthly benefit service 
        pension, the financial requirements are to be determined by the 
        board of trustees following either an updated actuarial 
        valuation including the proposed change or an estimate of the 
        expected actuarial impact of the proposed change prepared by the 
        actuary of the relief association.  If a relief association 
        adopts or amends its articles of incorporation or bylaws without 
        municipal ratification pursuant to this subdivision, and, 
        subsequent to the amendment or adoption, the financial 
        requirements of the special fund pursuant to this section are 
        such so as to require financial support from the municipality, 
        the provision which was implemented without municipal 
        ratification shall no longer be effective without municipal 
        ratification, and any service pensions or ancillary benefits 
        payable after that date shall be paid only in accordance with 
        the articles of incorporation or bylaws as amended or adopted 
        with municipal ratification.  
           Sec. 6.  [REVIEW OF LARGE PLAN REPORTING REQUIREMENTS.] 
           Prior to January 1, 1999, the state auditor shall report to 
        the legislative commission on pensions and retirement with any 
        recommendations for enhancing the consistency and utility of 
        information provided by or on behalf of a public pension plan 
        under Minnesota Statutes, section 356.219, subdivision 3, 
        paragraph (c). 
           Sec. 7.  [REPEALER.] 
           Minnesota Statutes 1996, section 356.218, is repealed. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 to 7 are effective January 1, 1998, except that 
        no penalty for non-compliance with section 4 may be assessed on 
        account of any failure to comply with reporting requirements of 
        that section prior to January 1, 1999. 
                                   ARTICLE 11 
                          CORRECTIONAL RETIREMENT PLAN 
                                 MODIFICATIONS 
           Section 1.  Laws 1996, chapter 408, article 8, section 21, 
        is amended to read:  
           Sec. 21.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
        RETIREMENT COVERAGE.] 
           (a) An employee in a position specified as qualifying under 
        sections 12, 14, and 15, or an auto mechanic lead, an 
        electrician, an electrician master of record, a groundskeeper 
        intermediate, or a plumber master in charge at the Minnesota 
        correctional facility-Red Wing, may elect to retain coverage 
        under the general employees retirement plan of the Minnesota 
        state retirement system or the teachers retirement association, 
        or may elect to have coverage transferred to and to contribute 
        to the correctional employees retirement plan.  An employee 
        electing to participate in the correctional employees retirement 
        plan shall begin making contributions to the correctional plan 
        beginning the first full pay period after January 1, 1997, or 
        the first full pay period following filing of their election to 
        transfer coverage to the correctional employees retirement plan, 
        whichever is later.  The election to retain coverage or to 
        transfer coverage must be made in writing by the person on a 
        form prescribed by the executive director of the Minnesota state 
        retirement system and must be filed with the executive director 
        no later than June 30 December 31, 1997. 
           (b) An employee failing to make an election by June 15, 
        1997, must be notified by certified mail by the executive 
        director of the Minnesota state retirement system or of the 
        teachers retirement association, whichever applies, of the 
        deadline to make a choice.  A person who does not submit an 
        election form must continue coverage in the general employees 
        retirement plan or the teachers retirement association, 
        whichever applies, and forfeits all rights to transfer 
        retirement coverage to the correctional employees retirement 
        plan. 
           (c) The election to retain coverage in the general employee 
        retirement plan or the teachers retirement association or the 
        election to transfer retirement coverage to the correctional 
        employees retirement plan is irrevocable once it is filed with 
        the executive director. 
           Sec. 2.  Laws 1996, chapter 408, article 8, section 22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
        (a) An employee who has future retirement coverage transferred 
        to the correctional employees retirement plan under sections 11, 
        12, 14, and 15, and 16, or an auto mechanic lead, an 
        electrician, an electrician master of record, a groundskeeper 
        intermediate, or a plumber master in charge at the Minnesota 
        correctional facility-Red Wing, and who does not elect to retain 
        general state employee retirement plan or teachers retirement 
        association coverage is entitled to elect to obtain prior 
        service credit for eligible state service performed on or after 
        July 1, 1975, and before the first day of the first full pay 
        period beginning after June 30 December 31, 1997, with the 
        department of corrections or with the department of human 
        services at the Minnesota security hospital or the Minnesota 
        sexual psychopathic personality treatment center.  All prior 
        service credit must be purchased.  
           (b) Eligible state service with the department of 
        corrections or with the department of human services is any 
        prior period of continuous service on or after July 1, 1975, 
        performed as an employee of the department of corrections or of 
        the department of human services that would have been eligible 
        for the correctional employees retirement plan coverage under 
        sections 11, 12, 14, and 15, and 16, or an auto mechanic lead, 
        an electrician, an electrician master of record, a groundskeeper 
        intermediate, or a plumber master in charge at the Minnesota 
        correctional facility-Red Wing, if that prior service had been 
        performed after the first day of the first full pay period 
        beginning after December 31, 1996, rather than before that 
        date.  Service is continuous if there has been no period of 
        discontinuation of eligible state service for a period greater 
        than 180 calendar days. 
           (c) The department of corrections or the department of 
        human services, whichever applies, shall certify eligible state 
        service to the executive director of the Minnesota state 
        retirement system. 
           (d) A covered correctional plan employee employed on 
        January 1, 1997, who has past service in a job classification 
        covered under section 11, 12, 14, or 15, or 16, or an auto 
        mechanic lead, an electrician, an electrician master of record, 
        a groundskeeper intermediate, or a plumber master in charge at 
        the Minnesota correctional facility-Red Wing, on January 1, 
        1997, is entitled to purchase the past service if the applicable 
        department certifies that the employee met the eligibility 
        requirements for coverage.  The employee must make the 
        additional employee contributions under section 17.  Payments 
        for past service must be completed by June 30, 1999. 
           Sec. 3.  Laws 1996, chapter 408, article 8, section 24, is 
        amended to read: 
           Sec. 24.  [EARLY RETIREMENT INCENTIVE.] 
           This section applies to an employee who has future 
        retirement coverage transferred to the correctional employee 
        retirement plan under sections 11, 12, 14, and 15, and 16, and 
        who is at least 55 years old on the effective date of sections 
        11, 12, 14, and 15, and 16.  This section also applies to an 
        auto mechanic lead, an electrician, an electrician master of 
        record, a groundskeeper intermediate, or a plumber master in 
        charge at the Minnesota correctional facility-Red Wing who has 
        transferred to the correctional employee retirement plan under 
        this act.  That employee may participate in a health insurance 
        early retirement incentive available under the terms of a 
        collective bargaining agreement in effect on the day before the 
        effective date of sections 11, 12, 14, and 15, and 16, 
        notwithstanding any provision of the collective bargaining 
        agreement that limits participation to persons who select the 
        option during the payroll period in which their 55th birthday 
        occurs.  A person selecting the health insurance early 
        retirement incentive under this section must retire by the later 
        of December 31, 1997 June 30, 1998, or within the pay period 
        following the time at which the person has at least three years 
        of covered correctional service, including any purchased service 
        credit.  An employee meeting this criteria who wishes to extend 
        the person's employment must do so under Minnesota Statutes, 
        section 43A.34, subdivision 3. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective on the day following final 
        enactment. 
                                   ARTICLE 12 
                            MISCELLANEOUS PROVISIONS 
           Section 1.  [EXEMPTION; METROPOLITAN STATE UNIVERSITY.] 
           (a) Minnesota Statutes, section 352.115, subdivision 10, 
        does not apply to a person who: 
           (1) was born June 22, 1939; 
           (2) retires from the faculty of Metropolitan State 
        University with at least ten years of combined service credit in 
        a system under the jurisdiction of the board of trustees of the 
        Minnesota state colleges and universities; 
           (3) was employed on a full-time basis immediately preceding 
        retirement; 
           (4) begins drawing an annuity from the Minnesota state 
        retirement system; and 
           (5) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis at Metropolitan State 
        University under an agreement in which the person may not earn a 
        salary of more than $35,000 in a calendar year from employment 
        after retirement at Metropolitan State University. 
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer and the employee.  The 
        employer may require up to a one-year notice of intent to 
        participate in the program as a condition of participation under 
        this section.  The employer shall determine the time of year the 
        employee shall work. 
           (c) Minnesota Statutes, section 136F.48, applies to a 
        person described in paragraph (a), even though the person draws 
        an annuity from the Minnesota state retirement system instead of 
        a teachers retirement association. 
           (d) Notwithstanding any law to the contrary, a person 
        eligible under paragraphs (a) and (b) may not earn further 
        service credit in the Minnesota state retirement system or the 
        teachers retirement association and is not eligible to 
        participate in the individual retirement account plan or the 
        supplemental retirement plan established in chapter 354B as a 
        result of service under this section.  No employer or employee 
        contribution to any of these plans may be made on behalf of such 
        a person.  
           Sec. 2.  [ACCEPTANCE OF BENEFICIARY DESIGNATION CHANGE IN 
        CERTAIN INSTANCES.] 
           (a) Notwithstanding any provision of Minnesota Statutes 
        1996, chapter 354, to the contrary, the teachers retirement 
        association may consider as validly filed a beneficiary 
        designation change form under Minnesota Statutes 1996, section 
        354.10, subdivision 4, and a joint specification form under 
        Minnesota Statutes 1996, section 354.46, subdivision 5, which 
        was postmarked on January 8, 1997, and received by the teachers 
        retirement association on January 10, 1997, on behalf of a 
        teacher who was born on February 28, 1947, and who died on 
        December 22, 1996. 
           (b) The designated beneficiary of the teacher specified in 
        paragraph (a) is entitled to receive the applicable monthly 
        survivor benefit retroactive to January 1, 1997. 
           Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE FOR CERTAIN PUBLIC 
        EMPLOYEES.] 
           (a) A person described in paragraph (b) is entitled to 
        purchase the period of allowable service credit from the public 
        employees retirement association described in paragraph (c) if 
        the purchase payment specified in paragraph (d) is made to the 
        public employees retirement association. 
           (b) An eligible person is a person who: 
           (1) was born on August 10, 1939; 
           (2) was initially employed on a full-time basis by the 
        parks and recreation division of the city of St. Paul on 
        February 12, 1964; 
           (3) was initially covered by the public employees 
        retirement association on November 1, 1964; and 
           (4) left public service on September 16, 1996. 
           (c) The period of purchasable allowable service credit is 
        the period beginning on February 12, 1964, and ending on October 
        31, 1964. 
           (d) To purchase credit for prior eligible service under 
        paragraph (c), there must be paid to the public employees 
        retirement association an amount equal to the present value of 
        the amount of the additional disability benefit obtained by 
        purchase of the additional service credit.  The 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 retirement association.  The person making the purchase 
        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.  Payment of the amount calculated under 
        this subdivision is the obligation of the eligible person and 
        must be made prior to July 1, 1998, in a lump sum.  However, the 
        former employer of the eligible individual may, at its 
        discretion, pay all or any portion of the payment amount that 
        exceeds an amount equal to the employee contribution rate or 
        rates in effect during the period or periods of prior service, 
        plus interest at the rate of 8.5 percent per year compounded 
        annually from the date on which the contributions would 
        otherwise have been made to the date on which the payment is 
        made.  If the employer agrees to payments under this paragraph, 
        the person must make the employee payments required under this 
        paragraph prior to July 1, 1998.  If that employee payment is 
        made, the employing unit payment under this paragraph must be 
        remitted to the executive director of the retirement association 
        within 60 days of receipt by the executive director of the 
        employee payments specified under this paragraph. 
           (e) Service credit for the purchase period or periods must 
        be granted to the account of the eligible person upon receipt of 
        the purchase payment amount specified in paragraph (d) and the 
        disability benefit of the person must be recalculated in light 
        of the additional service credit. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1, 2, and 3 are effective on the day following 
        final enactment. 
           Presented to the governor May 30, 1997 
           Signed by the governor June 3, 1997, 1:45 p.m.