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Minnesota Session Laws - 1998, Regular Session

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

                            CHAPTER 390-H.F.No. 2970 
                  An act relating to retirement; various retirement 
                  plans; adjusting pension coverage for certain 
                  privatized public hospital employees; providing for 
                  voluntary deduction of health insurance premiums from 
                  certain annuities; providing for increased survivor 
                  benefits relating to certain public employees murdered 
                  in the line of duty; authorizing certain service 
                  credit purchases; specifying prior service credit 
                  purchase payment amount determination procedures 
                  increasing salaries of various judges; modifying other 
                  judicial salaries; modifying the judges retirement 
                  plan member and employer contribution rates; 
                  authorizing the transfer of certain prior retirement 
                  contributions from the legislators retirement plan and 
                  from the elective state officers retirement plan; 
                  creating a contribution transfer account in the 
                  general fund of the state; appropriating money; 
                  reformulating the Columbia Heights volunteer 
                  firefighters relief association plan as a defined 
                  contribution plan under the general volunteer fire 
                  law; restructuring the Columbia Heights volunteer 
                  firefighter relief association board; modifying 
                  various higher education retirement plan provisions; 
                  modifying administrative expense provisions for 
                  various public pension plans; expanding the teacher 
                  retirement plans part-time teaching positions eligible 
                  to participate in the qualified full-time service 
                  credit for part-time teaching service program; making 
                  certain Minneapolis fire department relief association 
                  survivor benefit options retroactive; providing 
                  increased disability benefit coverage for certain 
                  local government correctional facility employees; 
                  increasing local government correctional employee and 
                  employer contribution rates; providing increased 
                  survivor benefits to certain Minneapolis employee 
                  retirement fund survivors; authorizing certain 
                  Hennepin county regional park employees to change 
                  retirement plan membership; modifying benefit increase 
                  provision for Eveleth police and firefighters; 
                  modifying the length of the actuarial services 
                  contract of the legislative commission on pensions and 
                  retirement; modifying the scope of quadrennial 
                  projection valuations; providing special disability 
                  coverage for local correctional employees; requiring 
                  report on tax sheltered annuity for higher education 
                  employees; amending Minnesota Statutes 1996, sections 
                  3A.13; 11A.17, subdivision 2; 136F.45, by adding 
                  subdivisions; 136F.48; 352.96, subdivision 4; 352D.09, 
                  subdivision 7; 352D.12; 353.27, subdivision 3; 353.33, 
                  subdivision 3a; 353D.05, subdivision 3; 354.445; 
                  354.66, subdivisions 2 and 3; 354A.094, subdivisions 2 
                  and 3; 354B.23, by adding a subdivision; 354C.12, by 
                  adding a subdivision; 383B.52; 422A.23, subdivision 2; 
                  and 490.123, subdivisions 1a and 1b; Minnesota 
                  Statutes 1997 Supplement, sections 3.85, subdivision 
                  11; 15A.083, subdivisions 5, 6a, and 7; 353.27, 
                  subdivision 2; 354B.25, subdivisions 1a and 5; 
                  354C.12, subdivision 4; and 356.215, subdivision 2; 
                  Laws 1977, chapter 61, section 6, as amended; Laws 
                  1995, chapter 262, article 10, section 1; Laws 1997, 
                  Second Special Session chapter 3, section 16; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapter 356; repealing Minnesota Statutes 1996, 
                  sections 11A.17, subdivisions 10a and 14; and 352D.09, 
                  subdivision 8; Minnesota Statutes 1997 Supplement, 
                  section 136F.45, subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                     PUBLIC MEDICAL FACILITY PRIVATIZATIONS 
           Section 1.  [LUVERNE COMMUNITY HOSPITAL; PENSION COVERAGE 
        FOR TRANSFERRED EMPLOYEES.] 
           Subdivision 1.  [AUTHORIZATION.] This section applies if 
        the Luverne Community Hospital is sold, leased, or transferred 
        to a private entity, nonprofit corporation, or public 
        corporation.  Notwithstanding Minnesota Statutes, sections 
        356.24 and 356.25, 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 applicable to nonpublic safety employees 
        under Minnesota Statutes, chapter 353, as amended, in effect on 
        the date of the sale, lease, or transfer. 
           Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
        ELIGIBILITY.] (a) An eligible individual is an individual who: 
           (1) is an employee of the Luverne Community Hospital 
        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 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 Internal Revenue 
        Code, as amended, or to another qualified plan. 
           Sec. 2.  [ARNOLD MEMORIAL HOSPITAL, ADRIAN, MINNESOTA; 
        PENSION COVERAGE FOR TRANSFERRED EMPLOYEES.] 
           Subdivision 1.  [AUTHORIZATION.] This section applies if 
        the Arnold Memorial Hospital in Adrian is sold, leased, or 
        transferred to a private entity, nonprofit corporation, or 
        public corporation.  Notwithstanding Minnesota Statutes, 
        sections 356.24 and 356.25, 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 applicable to nonpublic safety employees 
        under Minnesota Statutes, chapter 353, as amended, in effect on 
        the date of the sale, lease, or transfer. 
           Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
        ELIGIBILITY.] (a) An eligible individual is an individual who: 
           (1) is an employee of the Arnold Memorial Hospital in 
        Adrian 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 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 Internal Revenue 
        Code, as amended, or to another qualified plan. 
           Sec. 3.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective on the day following approval by 
        the Luverne city council and compliance with Minnesota Statutes, 
        section 645.021. 
           (b) Section 2 is effective on the day following approval by 
        the Adrian city council and compliance with Minnesota Statutes, 
        section 645.021. 
                                   ARTICLE 2 
                 MISCELLANEOUS GENERAL EMPLOYEE PENSION CHANGES 
           Section 1.  Minnesota Statutes 1996, section 3A.13, is 
        amended to read: 
           3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
        DEDUCTION.] 
           The provisions of section 352.15 shall apply to the 
        legislators retirement plan, chapter 3A.  The executive director 
        of the Minnesota state retirement system must, at the request of 
        a retired legislator who is enrolled in a health insurance plan 
        covering state employees, deduct the person's health insurance 
        premiums from the person's annuity and transfer the amount of 
        the premium to a health insurance carrier covering state 
        employees. 
           Sec. 2.  Minnesota Statutes 1996, section 11A.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ASSETS.] The assets of the supplemental 
        investment fund shall consist of the money certified and 
        transmitted to the state board from the participating public 
        retirement plans and funds and shall or from the board of the 
        Minnesota state colleges and universities under section 
        136F.45.  The assets must be used to purchase investment shares 
        in the investment accounts specified by the plan or fund. 
           Sec. 3.  Minnesota Statutes 1996, section 136F.45, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [SUBSEQUENT VENDOR CONTRACTS.] (a) The board may 
        limit the number of vendors under subdivision 1. 
           (b) In addition to any other tax-sheltered annuity program 
        investment options, the board may offer as an investment option 
        the Minnesota supplemental investment fund administered by the 
        state board of investment under section 11A.17. 
           (c) For the tax-sheltered annuity program vendor contracts 
        to be executed for the period beginning July 1, 2000, the board 
        shall actively solicit participation of and shall include as 
        vendors lower expense and "no-load" mutual funds or equivalent 
        investment products as those terms are defined by the federal 
        securities and exchange commission.  To the extent possible, in 
        addition to a range of insurance annuity contract providers and 
        other mutual fund provider arrangements, the board must assure 
        that no less than five insurance annuity providers and no less 
        than one nor more than three lower expense and "no-load" mutual 
        funds or equivalent investment products will be made available 
        for direct-access by employee participants.  To the extent that 
        offering a lower expense "no-load" product increases the total 
        necessary and reasonable expenses of the program and if the 
        board is unable to negotiate a rebate of fees from the mutual 
        fund or equivalent investment product providers, the board may 
        charge the participants utilizing the lower expense "no-load" 
        mutual fund products a fee to cover those expenses.  The 
        participant fee may not exceed one percent of the participant's 
        annual contributions or $20 per participant per year, whichever 
        is greater.  Any excess fee revenue generated under this 
        subdivision must be reimbursed to participant accounts in the 
        manner provided in subdivision 3a. 
           Sec. 4.  Minnesota Statutes 1996, section 136F.45, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [SHARING OF FEES.] (a) For purposes of this 
        subdivision, a gross fee amount is defined as the fees, 
        commissions, and other charges which an annuity investment 
        provider or vendor would charge a typical consumer of those 
        services for identical or similar products.  A net fee amount is 
        an amount below the gross fee amount reflecting a negotiated 
        reduction below gross fees. 
           (b) To offset the board's necessary and reasonable expenses 
        incurred under subdivisions 1 and 2, the Minnesota state 
        colleges and universities system is authorized to negotiate with 
        an annuity investment provider or vendor to establish a net fee 
        amount. 
           (c) Under the negotiated arrangements, the Minnesota state 
        colleges and universities system is authorized to either make 
        arrangements to recapture the difference between gross and net 
        fee amounts through a rebate from the annuity investment 
        provider or vendor, or deduct those amounts prior to 
        transmitting the contributions or premiums. 
           (d) The revenues collected or retained under these 
        negotiated arrangements must be used to offset the board's 
        necessary and reasonable expenses incurred under this section.  
        Any excess above the necessary and reasonable expenses must be 
        allocated annually to the accounts of the participants. 
           Sec. 5.  Minnesota Statutes 1996, section 136F.48, is 
        amended to read: 
           136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
           (a) This section applies to a person who:  
           (1) retires from the state university system, the technical 
        college system, or the community college system, or from a 
        successor system employing state university, technical college, 
        or community college faculty, 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; 
           (2) was employed on a full-time basis immediately preceding 
        retirement as a state university, technical college, or 
        community college faculty member or as an unclassified 
        administrator in one of those systems; 
           (3) begins drawing an annuity from the teachers retirement 
        association or from a first class city teacher plan; and 
           (4) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis in the system from 
        which the person retired 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 in the system from which the 
        person retired.  
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer president of the 
        institution where the person returns to work and the employee.  
        The employer president may require up to one-year notice of 
        intent to participate in the program as a condition of 
        participation under this section.  The employer president shall 
        determine the time of year the employee shall work.  The 
        employer or the president may not require a person to waive any 
        rights under a collective bargaining agreement as a condition of 
        participation under this section.  
           (c) For a person eligible under paragraphs (a) and (b), the 
        employing board shall make the same employer contribution for 
        hospital, medical, and dental benefits as would be made if the 
        person were employed full time.  
           (d) For work under paragraph (a), a person must receive a 
        percentage of the person's salary at the time of retirement that 
        is equal to the percentage of time the person works compared to 
        full-time work.  
           (e) If a collective bargaining agreement covering a person 
        provides for an early retirement incentive that is based on age, 
        the incentive provided to the person must be based on the 
        person's age at the time employment under this section ends.  
        However, the salary used to determine the amount of the 
        incentive must be the salary that would have been paid if the 
        person had been employed full time for the year immediately 
        preceding the time employment under this section ends. 
           (f) A person who returns to work under this section is a 
        member of the appropriate bargaining unit and is covered by the 
        appropriate collective bargaining contract.  Except as provided 
        in this section, the person's coverage is subject to any part of 
        the contract limiting rights of part-time employees. 
           Sec. 6.  Minnesota Statutes 1996, section 352.96, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
        executive director of the system with the advice and consent of 
        the board of directors shall establish rules and procedures to 
        carry out this section including allocation of administrative 
        costs against the assets accumulated under this section.  Funds 
        to pay these costs are appropriated from the fund or account in 
        which the assets accumulated under this section are placed of 
        the plan to participants.  Fees cannot be charged on 
        contributions and investment returns attributable to 
        contributions made to the Minnesota supplemental investment 
        funds before July 1, 1992.  Annual total fees charged for plan 
        administration for the Minnesota supplemental investment funds 
        cannot exceed 40/100 of one percent of the contributions and 
        investment returns attributable to contributions made on or 
        after July 1, 1992.  The rules established by the executive 
        director must conform to federal and state tax laws, 
        regulations, and rulings, and are not subject to the 
        administrative procedure act.  Except for the marketing rules, 
        rules relating to the options provided under subdivision 2, 
        clauses (2) and (3), must be approved by the state board of 
        investment.  
           Sec. 7.  Minnesota Statutes 1996, section 352D.09, 
        subdivision 7, is amended to read: 
           Subd. 7.  Up to one-tenth of one percent of salary shall be 
        deducted from the employee contributions and up to one-tenth of 
        one percent of salary from the employer contributions authorized 
        by section 352D.04, subdivision 2, The board of directors shall 
        establish a budget and charge participants a fee to pay the 
        administrative expenses of the unclassified program.  Fees 
        cannot be charged on contributions and investment returns 
        attributable to contributions made before July 1, 1992.  Annual 
        total fees charged for plan administration cannot exceed 10/100 
        of one percent of the contributions and investment returns 
        attributable to contributions made on or after July 1, 1992. 
           Sec. 8.  Minnesota Statutes 1996, section 353D.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATIVE EXPENSES.] The executive director 
        of the association with the advice and consent of the board 
        shall annually set an amount to recover the costs of the 
        association in administering the public employees defined 
        contribution plan that are not met by the amount recovered under 
        section 11A.17. 
           Sec. 9.  Minnesota Statutes 1996, section 354.445, is 
        amended to read: 
           354.445 [NO ANNUITY REDUCTION.] 
           (a) The annuity reduction provisions of section 354.44, 
        subdivision 5, do not apply to a person who: 
           (1) retires from the state university system, technical 
        college system, or the community college system, or from a 
        successor system employing state university, technical college, 
        or community college faculty, 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; 
           (2) was employed on a full-time basis immediately preceding 
        retirement as a state university, technical college, or 
        community college faculty member or as an unclassified 
        administrator in one of these systems; 
           (3) begins drawing an annuity from the teachers retirement 
        association; and 
           (4) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis in the system from 
        which the person retired 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 in the system from which the 
        person retired. 
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer president of the 
        institution where the person returns to work and the employee.  
        The employer president may require up to one-year notice of 
        intent to participate in the program as a condition of 
        participation under this section.  The employer president shall 
        determine the time of year the employee shall work.  The 
        employer or the president may not require a person to waive any 
        rights under a collective bargaining agreement as a condition of 
        participation under this section.  
           (c) Notwithstanding any law to the contrary, a person 
        eligible under paragraphs (a) and (b) may not earn further 
        service credit in 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. 
           (d) For a person eligible under paragraphs (a) and (b) who 
        earns more than $35,000 in a calendar year from employment after 
        retirement in the system from which the person retired, the 
        annuity reduction provisions of section 354.44, subdivision 5, 
        apply only to income over $35,000. 
           (e) A person who returns to work under this section is a 
        member of the appropriate bargaining unit and is covered by the 
        appropriate collective bargaining contract.  Except as provided 
        in this section, the person's coverage is subject to any part of 
        the contract limiting rights of part-time employees. 
           Sec. 10.  Minnesota Statutes 1996, section 354B.23, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
        to the plan exceed limits imposed by federal law or regulation 
        and it is necessary to return contributions to comply with the 
        federal limits, excess contributions must be returned to the 
        employee and to the employer in the same proportions as the 
        contributions were made. 
           (b) When an employer contribution required under section 
        354B.24 due to a sabbatical leave is made after completion of 
        the leave or an employer contribution is made due to omitted 
        deductions under subdivision 5, and these employer contributions 
        cause or would cause total contributions to the plan to exceed 
        limits imposed by federal law or regulation, the employer must 
        make that portion of the contribution that would exceed the 
        federal limit during the next calendar year. 
           Sec. 11.  Minnesota Statutes 1997 Supplement, section 
        354B.25, subdivision 1a, is amended 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 committee shall adopt recommendations by majority 
        vote of those members voting on each issue.  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. 12.  Minnesota Statutes 1997 Supplement, 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 in an amount such that 
        annual total fees charged for plan administration cannot exceed 
        40/100 of one percent of the assets of the Minnesota 
        supplemental investment funds; 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. 13.  Minnesota Statutes 1996, section 354C.12, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
        to the plan exceed limits imposed by federal law or regulation 
        and it is necessary to return contributions to comply with the 
        federal limits, one-half of the excess contributions must be 
        returned to the employee and half to the employer. 
           (b) When an employer contribution is made due to omitted 
        deductions under subdivision 2, and these employer contributions 
        cause or would cause total contributions to the plan to exceed 
        limits imposed by federal law or regulation, the employer must 
        make that portion of the contribution that would exceed the 
        federal limit during the next calendar year. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, 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 authorized by the 
        Minnesota state colleges and universities in an amount such that 
        annual total fees charged for plan administration cannot exceed 
        40/100 of one percent of the assets of the Minnesota 
        supplemental investment funds; 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. 15.  Minnesota Statutes 1996, section 383B.52, is 
        amended to read: 
           383B.52 [ADMINISTRATION COSTS.] 
           The board of county commissioners of Hennepin county is 
        hereby authorized to appropriate money for the administration of 
        the supplementary benefit program created by sections 383B.46 to 
        383B.52.  The board of county commissioners of Hennepin county 
        may charge participants a fee to recover the administrative 
        expenses of the supplementary benefit program.  Annual total 
        fees charged to administer the supplementary benefit program may 
        not exceed 40/100 of one percent of the assets of the program. 
           Sec. 16.  Minnesota Statutes 1996, section 422A.23, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] Upon the death 
        of a contributing (a) If an active member after having been in 
        the city service not less than dies prior to termination of 
        service with at least 18 months but before the effective date of 
        retirement, the board shall in lieu of the settlement 
        hereinbefore provided pay to the surviving spouse and/or 
        children of the member under the age of 18, or under the age of 
        22 if a full-time student at an accredited school, college or 
        university, and single, the following monthly benefit: 
           (a) Surviving spouse $325 per month, except for benefits 
        beginning after July 1, 1983, which shall be 30 percent of 
        member's average salary in effect over the last six months of 
        allowable service preceding the month in which the death 
        occurred. 
           (b) Each surviving child $150 per month, except for 
        benefits beginning after July 1, 1983, which shall be ten 
        percent of the member's average salary in effect over the last 
        six months of allowable service preceding the month in which the 
        death occurred but less than 20 years of service credit, the 
        surviving spouse or surviving child or children is eligible to 
        receive the survivor benefit specified in paragraph (b) or (c), 
        as applicable.  Payments for the Payment of a benefit of for 
        any surviving child under the age of 18 years shall be made to 
        the surviving parent, or if there be none, to the legal guardian 
        of such the surviving child.  The maximum monthly benefit shall 
        not exceed a total of $750. 
           (c) Effective for payments made after June 30, 1991, 
        surviving spouse and surviving child benefits under paragraphs 
        (a) and (b) beginning on or before July 1, 1983, are increased 
        to $500 per month and $225 per month, respectively.  The maximum 
        monthly payment under paragraph (b) is increased to $900.  The 
        increased cost resulting from the benefit increases in this 
        paragraph must be allocated to each employing unit listed in 
        section 422A.101, subdivisions 1a, 2, and 2a, on the basis of 
        the additional accrued liability resulting from increased 
        benefits paid to the survivors of employees from that unit. For 
        purposes of this subdivision, a surviving child is an unmarried 
        child of the deceased member under the age of 18, or under the 
        age of 22 if a full-time student at an accredited school, 
        college, or university. 
           (b) If the surviving spouse or surviving child benefit 
        commenced before July 1, 1983, the surviving spouse benefit is 
        $750 per month and the surviving child benefit is $225 per 
        month, beginning with the first monthly payment payable after 
        the effective date of this section.  The sum of surviving spouse 
        and surviving child benefits payable under this paragraph shall 
        not exceed $900 per month.  The increased cost resulting from 
        the benefit increases under this paragraph must be allocated to 
        each employing unit listed in section 422A.101, subdivisions 1a, 
        2, and 2a, on the basis of the additional accrued liability 
        resulting from increased benefits paid to the survivors of 
        employees from that unit. 
           (c) If the surviving spouse or surviving child benefit 
        commences after June 30, 1983, the surviving spouse benefit is 
        30 percent of the member's average salary in effect over the 
        last six months of allowable service preceding the month in 
        which death occurs.  The surviving child benefit is ten percent 
        of the member's average salary in effect over the last six 
        months of allowable service preceding the month in which death 
        occurs.  The sum of surviving spouse and surviving child 
        benefits payable under this paragraph shall not exceed 50 
        percent of the member's average salary in effect over the last 
        six months of allowable service. 
           (d) Any surviving child benefit or surviving spouse benefit 
        computed under paragraph (c) and in effect for the month 
        immediately prior to the effective date of this section is 
        increased by 15 percent as of the first payment on or after the 
        effective date of this section. 
           (e) Surviving child benefits under this subdivision 
        terminate when the child no longer meets the definition of 
        surviving child. 
           Sec. 17.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SPECIAL 
        SURVIVING SPOUSE BENEFIT ELIGIBILITY.] 
           (a) Notwithstanding any provision of law to the contrary, 
        the surviving spouse of a deceased qualified public employee who 
        died as a result of an alleged homicide in the line of duty 
        within one month of eligibility for normal retirement is 
        entitled to receive the second portion of a 100 percent joint 
        and survivor optional annuity under Minnesota Statutes, section 
        353.31, subdivision 1b, calculated as if the deceased qualified 
        public employee had qualified for the "rule of 90" early normal 
        retirement annuity on the date of death. 
           (b) A deceased qualified public employee is a person who: 
           (1) was born on August 18, 1941; 
           (2) became a member of the public employees retirement 
        association on July 7, 1964; 
           (3) was a member of the basic program of the public 
        employees retirement association; 
           (4) was employed as a building inspector by the city of St. 
        Paul; 
           (5) died during the course of employment duties on December 
        24, 1997; and 
           (6) would have been eligible to retire under the "rule of 
        90" early normal retirement provision on or before February 1, 
        1998. 
           (c) The benefit under paragraph (a) is payable in lieu of 
        any other survivor benefit from the public employee retirement 
        association.  The benefit under paragraph (a) accrues on January 
        1, 1998, and the initial payment of the benefit must include any 
        applicable retroactive payment amounts.  The benefit under 
        paragraph (a) must be elected by the surviving spouse on a form 
        prescribed by the executive director of the public employee 
        retirement association. 
           Sec. 18.  [REIMBURSEMENT OF ACTUARIAL COST BY CITY OF ST. 
        PAUL.] 
           On the effective date of this section, the city of St. Paul 
        shall pay to the public employees retirement association $36,698 
        and whatever portion of a remaining $36,697 is not appropriated 
        from the general fund to the public employees retirement 
        association for this purpose in order to offset the increased 
        actuarial accrued liability related to the survivor benefit 
        increase provided in section 15. 
           Sec. 19.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION COVERAGE 
        TERMINATION.] 
           Subdivision 1.  [ELIGIBILITY.] (a) An eligible member 
        specified in paragraph (b) is authorized to apply for a 
        retirement annuity, provided necessary age and service 
        requirements are met, under Minnesota Statutes, section 353.29 
        or 353.30, as applicable, as further specified under subdivision 
        2. 
           (b) An eligible member is an individual who: 
           (1) is an active member of the public employees retirement 
        association coordinated plan; 
           (2) contributes to that plan based on employment by the 
        suburban Hennepin county regional park district and as an 
        elected member of the Minneapolis park and recreation board; and 
           (3) was born on February 25, 1936. 
           Subd. 2.  [RETIREMENT ANNUITY.] (a) Notwithstanding 
        Minnesota Statutes, section 353.01, subdivision 2a, clause (3), 
        and continuation of elected service, an eligible individual 
        under subdivision 1, paragraph (b), is deemed to have terminated 
        membership under Minnesota Statutes, section 353.01, subdivision 
        11b, following termination of the suburban Hennepin county 
        regional park district employment and meeting applicable length 
        of separation requirements. 
           (b) If the requirements of paragraph (a) are satisfied, the 
        eligible individual may apply for a retirement annuity under 
        Minnesota Statutes, section 353.29 or 353.30, whichever 
        applies.  In computing the annuity, the public employees 
        retirement association must exclude salary due to appointed and 
        elected Minneapolis park and recreation board service. 
           Subd. 3.  [TREATMENT OF MINNEAPOLIS PARK AND RECREATION 
        BOARD CONTRIBUTION TO THE PUBLIC EMPLOYEES RETIREMENT 
        ASSOCIATION.] (a) Upon termination of the suburban Hennepin 
        county regional park district employment, all employee 
        contributions to the public employees retirement association 
        coordinated plan by an eligible individual in subdivision 1, 
        paragraph (b), due to Minneapolis park and recreation board 
        appointed and elected service, and all corresponding employer 
        contributions, terminate. 
           (b) Following termination of contributions under paragraph 
        (a), an eligible member under subdivision 1, paragraph (b), must 
        elect, within one year of termination of contributions under 
        paragraph (a) or termination of elective service, whichever is 
        earlier, a refund under Minnesota Statutes, section 353.34, 
        subdivision 2, or coverage by the public employees defined 
        contribution plan under Minnesota Statutes, chapter 353D, as 
        further specified in paragraph (c). 
           (c) If public employee defined contribution plan coverage 
        is elected under this paragraph, contributions to that plan 
        commence as of the first day of the pay period following this 
        election.  Notwithstanding Minnesota Statutes, section 353D.12, 
        accumulated employee contributions made by an eligible member as 
        specified in subdivision 1, paragraph (b), and corresponding 
        employer contributions, due to the Minneapolis park and 
        recreation board appointed and elected service, must be 
        transferred with six percent annual interest to an account for 
        an eligible member in the public employees defined contribution 
        plan. 
           (d) If no election is made by an eligible member by the 
        required date in paragraph (b), the individual is assumed to 
        have elected the refund indicated in paragraph (b). 
           (e) Upon an election under paragraph (b), or a mandatory 
        refund under paragraph (d), all rights in the public employees 
        retirement association coordinated plan due to elected and 
        appointed service are forfeited and may not be reestablished. 
           Sec. 20.  [MNSCU STUDY.] 
           (a) The board of the Minnesota state colleges and 
        universities, in consultation with representatives of the 
        respective collective bargaining units, shall study the issue of 
        converting the tax sheltered annuity program under Minnesota 
        Statutes, section 136F.45, to an unrestricted investment vendor 
        program, recognizing that college and university employees 
        should have maximum flexibility to exercise their own judgment 
        about the investment of their personal retirement savings.  As 
        an unrestricted investment vendor program, the role of the 
        Minnesota state colleges and universities system would be to 
        minimize additional costs for activities other than those 
        necessary for administrative or monitoring duties required under 
        state or federal law. 
           (b) The study results must be reported to the chair of the 
        legislative commission on pensions and retirement, the chair of 
        the committee on governmental operations of the house of 
        representatives, and the chair of the committee on governmental 
        operations and veterans of the senate.  The study report must be 
        filed on or before February 1, 1999. 
           Sec. 21.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 11A.17, subdivisions 
        10a and 14; and 352D.09, subdivision 8, are repealed. 
           (b) Minnesota Statutes 1997 Supplement, section 136F.45, 
        subdivision 3, is repealed. 
           Sec. 22.  [EFFECTIVE DATE.] 
           (a) Sections 4 and 21, paragraph (b), are effective on the 
        day following final enactment.  Sections 5 and 9 do not abrogate 
        or modify any memorandum of understanding between an exclusive 
        representative of affected employees and the board of the 
        Minnesota state colleges and universities entered into before 
        the effective date of those sections.  
           (b) Sections 2, 3, 5, 9, 10, 11, 13, 19, and 20 are 
        effective on the day following final enactment. 
           (c) Sections 1, 6, 7, 8, 12, 14, 15, and 21, paragraph (a), 
        are effective July 1, 1999. 
           (d) Section 16 is effective upon approval by the 
        Minneapolis city council and compliance with Minnesota Statutes, 
        section 645.021. 
           (e) Sections 17 and 18 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. 
                                   ARTICLE 3 
                 QUALIFIED PART-TIME TEACHER RETIREMENT PROGRAM 
                               REPORTING DEADLINE
           Section 1.  Minnesota Statutes 1996, section 354.66, 
        subdivision 2, is amended to read: 
           Subd. 2.  [QUALIFIED PART-TIME POSITIONS TEACHER PROGRAM 
        PARTICIPATION REQUIREMENTS.] A teacher in the a Minnesota public 
        elementary schools school, a Minnesota secondary schools 
        school, or technical the Minnesota state colleges or in the 
        community college system or the state university and 
        universities system of the state who has three years or more of 
        allowable service in the association or three years or more of 
        full-time teaching service in Minnesota public elementary 
        schools, Minnesota secondary schools, or technical the Minnesota 
        state colleges or in the community college system or the state 
        university and universities system, may, by agreement with the 
        board of the employing district or with the authorized 
        representative of the board, may be assigned to teaching service 
        within the district in a part-time teaching position under 
        subdivision 3.  The association must receive a copy of the 
        agreement must be executed before October 1 of the year for 
        which the teacher requests to make retirement contributions 
        under subdivision 4.  A copy of the executed agreement must be 
        filed with the executive director of the association.  If the 
        copy of the executed agreement is filed with the association 
        after October 1 of the year for which the teacher requests to 
        make retirement contributions under subdivision 4, the employing 
        unit shall pay the fine specified in section 354.52, subdivision 
        6, for each calendar day that elapsed since the October 1 due 
        date.  The association may not accept an executed agreement that 
        is received by the association more than 15 months late.  The 
        association may not waive the fine required by this section. 
           Sec. 2.  Minnesota Statutes 1996, section 354.66, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] For 
        purposes of this section, the term "part-time teaching position" 
        shall mean a teaching position within the district in which the 
        teacher is employed for at least 50 full days or a fractional 
        equivalent thereof as prescribed in section 354.091, and for 
        which the teacher is compensated in an amount not exceeding 67 
        80 percent of the compensation established by the board for a 
        full-time teacher with identical education and experience with 
        the employing unit.  The compensation of a teacher in the state 
        colleges and university system may exceed the 67 80 percent 
        limit if the teacher does not teach just one of the three 
        quarters in the system's full school year, provided no 
        additional services are performed while the teacher participates 
        in the program. 
           Sec. 3.  Minnesota Statutes 1996, section 354A.094, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PART-TIME TEACHING POSITION, DEFINED.] For 
        purposes of this section, the term "part-time teaching position" 
        shall mean a teaching position within the district in which the 
        teacher is employed for at least 50 full days or a fractional 
        equivalent of 50 full days calculated using the appropriate 
        minimum number of hours which would result in a full day of 
        service credit by the appropriate association and for which the 
        teacher is compensated in an amount not to exceed 67 80 percent 
        of the compensation rate established by the board for a 
        full-time teacher with identical education and experience within 
        the district. 
           Sec. 4.  Minnesota Statutes 1996, section 354A.094, 
        subdivision 3, is amended to read: 
           Subd. 3.  [QUALIFIED PART-TIME TEACHER PROGRAM 
        PARTICIPATION REQUIREMENTS.] A teacher in the public schools of 
        a city of the first class who has three years or more allowable 
        service in the applicable retirement fund association or three 
        years or more of full-time teaching service in Minnesota public 
        elementary schools, Minnesota secondary schools, and technical 
        Minnesota state colleges and universities system may, by 
        agreement with the board of the employing district, be assigned 
        to teaching service within the district in a part-time teaching 
        position.  The agreement must be executed before October 1 of 
        the year for which the teacher requests to make retirement 
        contributions under subdivision 4.  A copy of the executed 
        agreement must be filed with the executive director of the 
        retirement fund association.  If the copy of the executed 
        agreement is filed with the association after October 1 of the 
        year for which the teacher requests to make retirement 
        contributions under subdivision 4, the employing school district 
        shall pay a fine of $5 for each calendar day that elapsed since 
        the October 1 due date.  The association may not accept an 
        executed agreement that is received by the association more than 
        15 months late.  The association may not waive the fine required 
        by this section. 
           Sec. 5.  [EFFECTIVE DATE.] 
           (a) Sections 1 and 4 are effective on the day following 
        final enactment. 
           (b) Sections 2 and 3 are effective on July 1, 1998. 
                                   ARTICLE 4 
                         PRIOR SERVICE CREDIT PURCHASES 
           Section 1.  [356.55] [PRIOR SERVICE CREDIT PURCHASE PAYMENT 
        AMOUNT DETERMINATION PROCEDURE.] 
           Subdivision 1.  [APPLICATION.] Unless the prior service 
        credit purchase authorization special law or general statute 
        provision explicitly specifies a different purchase payment 
        amount determination procedure, this section governs the 
        determination of the prior service credit purchase payment 
        amount of any prior service credit purchase. 
           Subd. 2.  [DETERMINATION.] (a) Unless the prior service 
        credit purchase minimum amount determined under paragraph (d) is 
        greater, the prior service credit purchase amount is the result 
        obtained by subtracting the amount determined under paragraph 
        (c) from the amount determined under paragraph (b). 
           (b) The present value of the unreduced single life 
        retirement annuity, with the purchase of the additional service 
        credit included, must be calculated as follows: 
           (1) the age at first eligibility for an unreduced single 
        life retirement annuity, including the purchase of the 
        additional service credit, must be determined; 
           (2) the length of total service credit, including the 
        period of the purchase of the additional service credit, at the 
        age determined under clause (1) must be determined; 
           (3) the highest five successive years average salary at the 
        age determined under clause (1), assuming five percent annual 
        compounding salary increases from the most current annual salary 
        amount at the age determined under clause (1), must be 
        determined; 
           (4) using the benefit accrual rate or rates applicable to 
        the prospective purchaser of the service credit based on the 
        prospective purchaser's actual date of entry into covered 
        service, the length of service determined under clause (2), and 
        the final average salary determined under clause (3), the annual 
        unreduced single life retirement annuity amount must be 
        determined; 
           (5) the actuarial present value of the projected annual 
        unreduced single life retirement annuity amount determined under 
        clause (4) at the age determined under clause (1), using the 
        same actuarial factor that the plan would use to determine 
        actuarial equivalence for optional annuity forms and related 
        purposes, must be determined; and 
           (6) the discounted value of the amount determined under 
        clause (5) to the date of the prospective purchase, using an 
        interest rate of 8.5 percent and no mortality probability 
        decrement, must be determined. 
           (c) The present value of the unreduced single life 
        retirement annuity, without the purchase of the additional 
        service credit included, must be calculated as follows:  
           (1) the age at first eligibility for an unreduced single 
        life retirement annuity, not including the purchase of 
        additional service credit, must be determined; 
           (2) the length of accrued service credit, without the 
        period of the purchase of the additional service credit, at 
        the age determined under clause (1), must be determined; 
           (3) the highest five successive years average salary at the 
        age determined under clause (1), assuming five percent annual 
        compounding salary increases from the most current annual salary 
        amount to the age determined under clause (1), must be 
        determined; 
           (4) using the benefit accrual rate or rates applicable to 
        the prospective purchaser of the service credit based on the 
        prospective purchaser's actual date of entry into covered 
        service the length of service credit determined under clause 
        (2), and the final average salary determined under clause (3), 
        the annual unreduced single life retirement annuity amount must 
        be determined; 
           (5) the actuarial present value of the projected annual 
        unreduced single life retirement annuity amount determined under 
        clause (4) at the age determined under clause (1), using the 
        same actuarial factor that the plan would use to determine 
        actuarial equivalence for optional annuity forms and related 
        purposes, must be determined; 
           (6) the discounted value of the amount determined under 
        clause (5) to the date of the prospective purchase, using an 
        interest rate of 8.5 percent and no mortality probability 
        decrement, must be determined; and 
           (7) the net value of the discounted value determined under 
        clause (6), must be determined by applying a service ratio, 
        where the numerator is the total length of credited service 
        determined under paragraph (b), clause (2), reduced by the 
        period of the additional service credit proposed to be 
        purchased, and where the denominator is the total length of 
        service credit determined under clause (2). 
           (d) The minimum prior service credit purchase amount is the 
        amount determined by multiplying the most current annual salary 
        of the prospective purchaser by the combined current employee, 
        employer, and any additional employer contribution rates for the 
        applicable pension plan and by multiplying that results by the 
        number of years of service or fractions of years of service of 
        the potential service credit purchase. 
           Subd. 3.  [SOURCE OF DETERMINATION.] The prior service 
        credit purchase amounts under subdivision 2 must be calculated 
        by the chief administrative officer of the public pension plan 
        using a prior service credit purchase amount determination 
        process that has been verified for accuracy and consistency 
        under this section by the commission-retained actuary.  That 
        verification must be in writing and must occur before the first 
        prior service credit purchase for the plan under this section is 
        accepted and every five years thereafter or whenever the 
        preretirement interest rate, postretirement interest rate, 
        payroll growth, or mortality actuarial assumption for the 
        applicable pension plan is modified under section 356.215, 
        whichever occurs first. 
           Subd. 4.  [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 
        public pension plan may establish a fee to be charged to the 
        prospective purchaser for processing a prior service credit 
        purchase application and the prior service credit payment amount 
        calculation.  The fee must be established by the governing board 
        of the pension plan and must be uniform for comparable service 
        credit purchase situations or actuarial calculation requests.  
        The prior service credit purchase processing fee structure must 
        be published by the chief administrative officer of the 
        applicable retirement plan in the State Register. 
           Subd. 5.  [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 
        the prior service credit purchase authorization special law or 
        general statute provision explicitly specifies otherwise, the 
        prior service credit purchase payment amount determined under 
        subdivision 2 is payable by the purchaser, but the former 
        employer of the purchaser or the current employer of the 
        purchaser may, at its discretion, pay all or a portion of the 
        purchase payment amount in excess of an amount equal to the 
        employee contribution rate or rates in effect during the prior 
        service period applied to the actual salary rates in effect 
        during the prior service period, plus annual compound interest 
        at the rate of 8.5 percent from the date on which the 
        contributions would have been made if made contemporaneous with 
        the service period to the date on which the payment is actually 
        made. 
           Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
        As part of the regular data reporting to the consulting actuary 
        retained by the legislative commission on pensions and 
        retirement annually, the chief administrative officer of each 
        public pension plan that has accepted a prior service credit 
        purchase payment under this section shall report for any 
        purchase, the purchaser, the purchaser's employer, the age of 
        the purchaser, the period of the purchase, the purchaser's 
        prepurchase accrued service credit, the purchaser's postpurchase 
        accrued service credit, the purchaser's prior service credit 
        payment, the prior service credit payment made by the 
        purchaser's employer, and the amount of the additional benefit 
        or annuity purchased. 
           (b) As part of the regular annual actuarial valuation for 
        the applicable public pension plan prepared by the consulting 
        actuary retained by the legislative commission on pensions and 
        retirement, there must be an exhibit comparing for each purchase 
        the total prior service credit payment received from all sources 
        and the increased public pension plan actuarial accrued 
        liability resulting from each purchase. 
           Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
        PROCEDURE.] (a) This section expires and is repealed on July 1, 
        2001. 
           (b) Authority for any public pension plan to accept a prior 
        service credit payment calculated in a timely fashion under this 
        section expires on October 1, 2001. 
           Sec. 2.  [356.551] [POST-JULY 1, 2001, PRIOR SERVICE CREDIT 
        PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
           (a) Unless the prior service credit purchase authorization 
        special law or general statute provision explicitly specifies a 
        different purchase payment amount determination procedure, and 
        if section 356.55 has expired, this section governs the 
        determination of the prior service credit purchase payment 
        amount of any prior service credit purchase. 
           (b) The prior service credit purchase amount is an amount 
        equal to the actuarial present value, on the date of payment, as 
        calculated by the chief administrative officer of the pension 
        plan and reviewed 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 public pension plan specified in section 
        356.215, subdivision 4d, and the mortality table adopted for the 
        public pension plan.  The calculation must assume continuous 
        future service in the public pension plan 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 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 section 356.215, 
        subdivision 4d.  Payment must be made in one lump sum within one 
        year of the prior service credit authorization.  Payment of the 
        amount calculated under this subdivision must be made by the 
        applicable eligible person.  However, the current employer or 
        the prior employer 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 8.5 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 
        employer agrees to payments under this paragraph, the purchaser 
        must make the employee payments required under this paragraph 
        within 290 days of the prior service credit authorization.  If 
        that employee payment is made, the employer payment under this 
        paragraph must be remitted to the chief administrative officer 
        of the public pension plan within 60 days of receipt by the 
        chief administrative officer of the employee payments specified 
        under this paragraph. 
           (c) The prospective purchaser must provide any relevant 
        documentation required by the chief administrative officer of 
        the public pension plan to determine eligibility for the prior 
        service credit under this section. 
           (d) Service credit for the purchase period must be granted 
        by the public pension plan to the purchaser upon receipt of the 
        purchase payment amount specified in paragraph (b). 
           Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
           Subdivision 1.  [INDEPENDENT SCHOOL DISTRICT NO. 77, 
        MANKATO, TEACHER.] (a) Notwithstanding any provision of 
        Minnesota Statutes, section 354.094, or other law to the 
        contrary, an eligible person described in paragraph (b) is 
        entitled to obtain allowable and formula service credit in the 
        teachers retirement association for the period described in 
        paragraph (c) upon the payment of the full service credit 
        purchase amount specified in Minnesota Statutes, section 356.55. 
           (b) An eligible person is a person who was: 
           (1) born on June 23, 1946; 
           (2) granted an extended leave of absence from employment 
        under the teacher mobility program by independent school 
        district No. 77, Mankato, on March 3, 1986, for the period July 
        1, 1986, to June 30, 1989; and 
           (3) granted a leave which was erroneously characterized in 
        the "other" category on the leave of absence report submitted to 
        the teachers retirement association. 
           (c) The period for service credit purchase is July 1, 1986, 
        to June 30, 1989. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee contribution 
        rate or rates in effect during the prior service period applied 
        to the actual salary rates in effect during the prior service 
        period, plus annual compound interest at the rate of 8.5 percent 
        from the date on which the contributions would have been made if 
        made contemporaneous with the service period to the date on 
        which the payment is actually made and independent school 
        district No. 77, Mankato, must pay the balance of the prior 
        service credit purchase payment amount calculated under 
        Minnesota Statutes, section 356.55, within 30 days of the 
        payment by the eligible person.  The executive director of the 
        teachers retirement association must notify the superintendent 
        of independent school district No. 77, Mankato, of its payment 
        amount and payment due date if the eligible person makes the 
        required payment. 
           (e) If independent school district No. 77, Mankato, fails 
        to pay its portion of the required prior service credit purchase 
        payment amount, the executive director may notify the 
        commissioner of finance of that fact and the commissioner of 
        finance may order that the required school district payment be 
        deducted from the next subsequent payment or payments of state 
        education aid to the school district and be transmitted to the 
        teachers retirement association. 
           Subd. 2.  [INDEPENDENT SCHOOL DISTRICT NO. 199, INVER GROVE 
        HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
        section 354.096, an eligible person described in paragraph (b) 
        is entitled to purchase allowable service credit in the teachers 
        retirement association for the period described in paragraph (c) 
        by paying the amount specified in Minnesota Statutes, section 
        356.55, subdivision 2. 
           (b) An eligible person is a person who: 
           (1) was on medical leave for multiple sclerosis in the fall 
        of 1990; 
           (2) was employed by independent school district No. 199, 
        Inver Grove Heights, during the period that the medical leave 
        was taken; and 
           (3) was not properly notified of the deadline to purchase 
        service credit for the medical leave period. 
           (c) The period for service credit purchase is 18 days of a 
        period of medical leave during the fall of 1990. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee contribution 
        rate or rates in effect during the prior service period applied 
        to the actual salary rates in effect during the prior service 
        period, plus annual compound interest at the rate of 8.5 percent 
        from the date on which the contributions would have been made if 
        made contemporaneous with the service period to the date on 
        which the payment is actually made and independent school 
        district No. 199, Inver Grove Heights, must pay the balance of 
        the prior service credit purchase payment amount calculated 
        under Minnesota Statutes, section 356.55, within 30 days of the 
        payment by the eligible person.  The executive director of the 
        teachers retirement association must notify the superintendent 
        of independent school district No. 199, Inver Grove Heights, of 
        its payment amount and payment due date if the eligible person 
        makes the required payment. 
           (e) If independent school district No. 199, Inver Grove 
        Heights, fails to pay its portion of the required prior service 
        credit purchase payment amount, the executive director may 
        notify the commissioner of finance of that fact and the 
        commissioner of finance may order that the required school 
        district payment be deducted from the next subsequent payment or 
        payments of state education aid to the school district and be 
        transmitted to the teachers retirement association. 
           Subd. 3.  [PRE-JANUARY 1, 1998, LATE REPORTED QUALIFIED 
        PART-TIME TEACHER PROGRAM AGREEMENT PERIODS.] (a) 
        Notwithstanding any provision of Minnesota Statutes, section 
        354.66, to the contrary, an eligible person described in 
        paragraph (b) is entitled to obtain allowable and formula 
        service credit in the teachers retirement association for the 
        period described in paragraph (c) upon the payment of the full 
        service credit purchase amount specified in Minnesota Statutes, 
        section 356.55. 
           (b) An eligible person is a person who rendered part-time 
        teaching service after the end of the 1993-1994 school year and 
        before the beginning of the 1998-1999 school year under an 
        agreement with a school district or other applicable employer 
        under Minnesota Statutes, section 354.66, that was executed 
        before the applicable October 1, but was not filed by the 
        employing unit with the teachers retirement association before 
        the applicable October 1 deadline. 
           (c) The period for service credit purchase is the 
        uncredited portion of a full year of service credit during the 
        1994-1995, 1995-1996, 1996-1997, and 1997-1998 school years 
        where the uncredited period of service resulted solely from a 
        failure of the employing unit to file the part-time teaching 
        participation agreement with the teachers retirement association 
        in a timely fashion. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        November 30, 1998, an amount equal to the employee contribution 
        rate or rates in effect during the prior service period applied 
        to the actual salary rates in effect during the prior service 
        period, plus annual compound interest at the rate of 8.5 percent 
        from the date on which the contributions would have been made if 
        made contemporaneous with the service period to the date on 
        which the payment is actually made and the employing unit that 
        agreed to the part-time teaching service participation program 
        must pay the balance of the prior service credit purchase 
        payment amount calculated under Minnesota Statutes, section 
        356.55, within 30 days of the payment by the eligible person.  
        The executive director of the teachers retirement association 
        must notify the chief administrative officer of the applicable 
        employing unit of its payment amount and payment due date if the 
        eligible person makes the required payment. 
           (e) If the applicable employing unit fails to pay its 
        portion of the required prior service credit purchase payment 
        amount, the executive director may notify the commissioner of 
        finance of that fact and the commissioner of finance may order 
        that the required employer payment be deducted from the next 
        subsequent payment or payments of any state education or other 
        aid to that employing unit and be transmitted to the teachers 
        retirement association. 
           Subd. 4.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION; MIDDLE 
        MANAGEMENT ASSOCIATION EMPLOYEE.] (a) Notwithstanding Minnesota 
        Statutes, sections 352.01, subdivision 2, and 352.029, 
        subdivision 1, and Minnesota Statutes 1997 Supplement, section 
        352.01, subdivision 2a, an eligible employee described in 
        paragraph (b) is eligible for membership in the Minnesota state 
        retirement system general plan and is eligible to purchase 
        service credit in that plan as specified in paragraph (d). 
           (b) An eligible employee is a person who: 
           (1) has been employed by the middle management association 
        since February 14, 1994; and 
           (2) was born on September 13, 1958. 
           (c) An eligible employee in paragraph (b) remains eligible 
        for membership in the Minnesota state retirement system general 
        plan, under this subdivision, while the individual remains 
        employed by the middle management association or a successor 
        organization providing contribution requirements and other 
        general requirements for membership are met. 
           (d) An eligible employee under 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 this act for service with the middle management 
        association.  An eligible employee may not purchase service 
        credit for any period during which the employer has made 
        contributions on behalf of the employee to a defined 
        contribution pension plan or for any period during which the 
        employee or the employer have made contributions to a defined 
        benefit pension plan covering public, nonprofit, or private 
        sector employees, other than a volunteer firefighter relief 
        association governed by Minnesota Statutes, chapter 424A.  
        Authority to make the payment terminates on July 1, 1999, or 
        upon termination of employment with the middle management 
        association, whichever is earlier. 
           Subd. 5.  [INDEPENDENT SCHOOL DISTRICT NO. 13, COLUMBIA 
        HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
        section 354.094, an eligible person described in paragraph (b) 
        is entitled to purchase allowable and formula service credit in 
        the teachers retirement association for the period described in 
        paragraph (c) by paying the amount specified in Minnesota 
        Statutes, section 356.55, subdivision 2. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who was born on January 26, 1944, was initially hired by 
        independent school district No. 13, Columbia Heights, on August 
        30, 1967, was granted a five year extended leave of absence by 
        independent school district No. 13, Columbia Heights, for the 
        period July 1, 1994, through June 30, 1999, and was unable to 
        make contributions under Minnesota Statutes, section 354.094, 
        subdivision 1, because of the failure of independent school 
        district No. 13, Columbia Heights, to timely forward the 
        person's leave payment to the teachers retirement association. 
           (c) The period for service credit purchase is the extended 
        leave of absence for the 1996-1997 school year. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee, employer, 
        and employer additional contribution rates in effect during the 
        prior service period applied to the actual salary rates in 
        effect during the prior service period, plus annual compound 
        interest at the rate of 8.5 percent from the date on which the 
        contributions would have been made if made contemporaneous with 
        the service period to the date on which the payment is actually 
        made and independent school district No. 13, Columbia Heights, 
        must pay the balance of the prior service credit purchase 
        payment amount calculated under Minnesota Statutes, section 
        356.55, within 30 days of the payment by the eligible person.  
        The executive director of the teachers retirement association 
        must notify the superintendent of independent school district 
        No. 13, Columbia Heights, of its payment amount and payment due 
        date if the eligible person makes the required payment. 
           (e) If independent school district No. 13, Columbia 
        Heights, fails to pay its portion of the required prior service 
        credit purchase payment amount, the executive director may 
        notify the commissioner of finance of that fact and the 
        commissioner of finance may order that the required employer 
        payment be deducted from any state education or other aid 
        payable to independent school district No. 13, Columbia Heights, 
        and be transmitted to the teachers retirement association. 
           Subd. 6.  [WINONA STATE UNIVERSITY FACULTY MEMBER.] (a) 
        Notwithstanding Minnesota Statutes, section 354.094, an eligible 
        person described in paragraph (b) is entitled to purchase 
        allowable service credit in the teachers retirement association 
        for the period described in paragraph (c) by paying the amount 
        specified in Minnesota Statutes, section 356.55, subdivision 2. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who was born on September 5, 1943, was initially hired by 
        Winona state university on September 4, 1979, was granted an 
        extended leave of absence by Winona state university on March 
        18, 1996, and was unable to make contributions under Minnesota 
        Statutes, section 354.094, subdivision 1, because of the failure 
        of Winona state university to timely submit the leave of absence 
        report to the teachers retirement association. 
           (c) The period for service credit purchase is the first 
        year of a three year extended leave of absence that began with 
        the 1996-1997 school year. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee, employer, 
        and employer additional contribution rates in effect during the 
        prior service period applied to the actual salary rates in 
        effect during the prior service period, plus annual compound 
        interest at the rate of 8.5 percent from the date on which the 
        contributions would have been made if made contemporaneous with 
        the service period to the date on which the payment is actually 
        made and Winona state university must pay the balance of the 
        prior service credit purchase payment amount calculated under 
        Minnesota Statutes, section 356.55, within 30 days of the 
        payment by the eligible person.  The executive director of the 
        teachers retirement association must notify the president of 
        Winona state university of its payment amount and payment due 
        date if the eligible person makes the required payment. 
           (e) If Winona state university fails to pay its portion of 
        the required prior service credit purchase payment amount, the 
        executive director may notify the commissioner of finance of 
        that fact and the commissioner of finance may order that the 
        required employer payment be deducted from any appropriation to 
        the Minnesota state colleges and universities system and be 
        transmitted to the teachers retirement association. 
           Subd. 7.  [INDEPENDENT SCHOOL DISTRICT NO. 621, MOUNDS 
        VIEW, TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
        354.092, an eligible person described in paragraph (b) is 
        entitled to purchase allowable service credit in the teachers 
        retirement association for the period described in paragraph (c) 
        by paying the amount specified in Minnesota Statutes, section 
        356.55, subdivision 2. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who was born on December 19, 1940, was initially employed 
        as a teacher on August 27, 1968, and is employed by independent 
        school district No. 621, Mounds View. 
           (c) The period for service credit purchase is the 
        uncredited portion of a sabbatical leave during the 1984-1985 
        school year. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee contribution 
        rate or rates in effect during the prior service period applied 
        to the actual salary rates in effect during the prior service 
        period, plus annual compound interest at the rate of 8.5 percent 
        from the date on which the contributions would have been made if 
        made contemporaneous with the service period to the date on 
        which the payment is actually made.  Independent school district 
        No. 621, Mounds View, must pay the balance of the prior service 
        credit purchase payment amount calculated under Minnesota 
        Statutes, section 356.55, within 30 days of the payment by the 
        eligible person.  The executive director of the teachers 
        retirement association must notify the superintendent of 
        independent school district No. 621, Mounds View, of its payment 
        amount and payment due date if the eligible person makes the 
        required payment. 
           (e) If independent school district No. 621, Mounds View, 
        fails to pay its portion of the required prior service credit 
        purchase payment amount, the executive director may notify the 
        commissioner of finance of that fact and the commissioner of 
        finance may order that the required employer payment be deducted 
        from the next subsequent payment or payments of state education 
        aid to the school district be transmitted to the teachers 
        retirement association. 
           Subd. 8.  [INDEPENDENT SCHOOL DISTRICT NO. 709, DULUTH, 
        TEACHER.] (a) Notwithstanding any provision of Minnesota 
        Statutes, chapter 354A, the articles of incorporation of the 
        Duluth teachers retirement fund association, or the Duluth 
        teachers retirement fund association bylaws to the contrary, an 
        eligible person described in paragraph (b) is entitled to 
        purchase allowable service credit in the Duluth teachers 
        retirement fund association for the periods described in 
        paragraph (c) by paying the amount specified in Minnesota 
        Statutes, section 356.55, subdivision 2. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who was born on October 29, 1942, was first employed by 
        independent school district No. 709, Duluth, on September 7, 
        1966, was granted a maternity leave that began on February 26, 
        1968, was employed by independent school district No. 709, 
        Duluth, on a less-than-full-time basis during the 1970-1971 and 
        1971-1972 school years, and was employed on a full-time contract 
        basis from September 4, 1972, through the 1997-1998 school year. 
           (c) The period for service credit purchase is any portion 
        of the period February 26, 1968, to September 4, 1972, that was 
        not previously credited as allowable service by the Duluth 
        teachers retirement fund association, but not to exceed one year 
        of service credit for any school year. 
           Subd. 9.  [INDEPENDENT SCHOOL DISTRICT NO. 200, HASTINGS, 
        TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
        354.094, an eligible person described in paragraph (b) is 
        entitled to purchase allowable and formula service credit in the 
        teachers retirement association for the period described in 
        paragraph (c) by paying the amount specified in Minnesota 
        Statutes, section 356.55, subdivision 2. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who was born on December 17, 1941, was initially employed 
        by independent school district No. 200, Hastings, and was first 
        granted an extended leave of absence for the 1996-1997 school 
        year. 
           (c) The period for service credit purchase is the 1996-1997 
        school year. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1998, an amount equal to the employee contribution 
        rate or rates in effect during the prior service period applied 
        to the actual salary rates in effect during the prior service 
        period, plus annual compound interest at the rate of 8.5 percent 
        from the date on which the contributions would have been made if 
        made contemporaneous with the service period to the date on 
        which the payment is actually made.  Independent school district 
        No. 200, Hastings, must pay the balance of the prior service 
        credit purchase payment amount calculated under Minnesota 
        Statutes, section 356.55, within 30 days of the payment by the 
        eligible person.  The executive director of the teachers 
        retirement association must notify the superintendent of 
        independent school district No. 200, Hastings, of its payment 
        amount and payment due date if the eligible person makes the 
        required payment. 
           (e) If independent school district No. 200, Hastings, fails 
        to pay its portion of the required prior service credit purchase 
        payment amount, the executive director may notify the 
        commissioner of finance of that fact and the commissioner of 
        finance may order that the required employer payment be deducted 
        from the next subsequent payment or payments of state education 
        aid to the school district be transmitted to the teachers 
        retirement association. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1, 2, and 3 are effective on the day following 
        final enactment. 
                                   ARTICLE 5 
               JUDGES RETIREMENT PLAN CONTRIBUTION MODIFICATIONS
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        15A.083, subdivision 5, is amended to read: 
           Subd. 5.  [TAX COURT.] The salary of a judge of the tax 
        court is the same as 98.52 percent of the salary for a district 
        court judge.  The salary of the chief tax court judge is the 
        same as 98.52 percent of the salary for a chief district court 
        judge. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        15A.083, subdivision 6a, is amended to read: 
           Subd. 6a.  [ADMINISTRATIVE LAW JUDGE; SALARIES.] The salary 
        of the chief administrative law judge is the same as 98.52 
        percent of the salary of a district court judge.  The salaries 
        of the assistant chief administrative law judge and 
        administrative law judge supervisors are 95 93.60 percent of the 
        salary of a district court judge.  The salary of an 
        administrative law judge employed by the office of 
        administrative hearings is 90 88.67 percent of the salary of a 
        district court judge as set under section 15A.082, subdivision 3.
           Sec. 3.  Minnesota Statutes 1997 Supplement, section 
        15A.083, subdivision 7, is amended to read: 
           Subd. 7.  [WORKERS' COMPENSATION COURT OF APPEALS AND 
        COMPENSATION JUDGES.] Salaries of judges of the workers' 
        compensation court of appeals are the same as 98.52 percent of 
        the salary for district court judges.  The salary of the chief 
        judge of the workers' compensation court of appeals is the same 
        as 98.52 percent of the salary for a chief district court 
        judge.  Salaries of compensation judges are 90 88.67 percent of 
        the salary of district court judges.  The chief workers' 
        compensation settlement judge at the department of labor and 
        industry may be paid an annual salary that is up to five percent 
        greater than the salary of workers' compensation settlement 
        judges at the department of labor and industry. 
           Sec. 4.  Minnesota Statutes 1996, section 490.123, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
        covered by the federal old age, survivors, disability, and 
        health insurance program shall contribute to the fund from each 
        salary payment a sum equal to 6.27 8.00 percent of salary.  
           (b) A judge not so covered shall contribute to the fund 
        from each salary payment a sum equal to 8.15 percent of salary. 
           (c) The contribution under this subdivision is payable by 
        salary deduction. 
           Sec. 5.  Minnesota Statutes 1996, section 490.123, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
        contribution rate on behalf of a judge is 22 20.5 percent of 
        salary. 
           The employer contribution must be paid by the state court 
        administrator and is payable at the same time as member 
        contributions under subdivision 1a are remitted. 
           Sec. 6.  Laws 1997, Second Special Session chapter 3, 
        section 16, is amended to read: 
           Sec. 16.  [SALARIES OF CONSTITUTIONAL OFFICERS, 
        LEGISLATORS, AND JUDGES.] 
           (a) The salaries of constitutional officers are increased 
        by 2.5 percent effective July 1, 1997, and by 2.5 percent 
        effective January 1, 1998. 
           (b) The salaries of legislators are increased by 5.0 
        percent effective January 4, 1999. 
           (c) The salaries of the judges of the supreme court, court 
        of appeals, and district court are increased by 4.0 percent 
        effective July 1, 1997, and by 5.0 percent effective January 1, 
        1998, and by 1.5 percent effective July 1, 1998. 
           (d) Effective July 1, 1999, the salaries of judges of the 
        supreme court, court of appeals, and district court are 
        increased by the average of the general salary adjustments for 
        state employees in fiscal year 1998 provided by negotiated 
        collective bargaining agreements or arbitration awards ratified 
        by the legislature in the 1998 legislative session. 
           (e) Effective January 1, 2000, the salaries of judges of 
        the supreme court, court of appeals, and district court are 
        increased by the average of the general salary adjustments for 
        state employees in fiscal year 1999 provided by negotiated 
        collective bargaining agreements or arbitration awards ratified 
        by the legislature in the 1998 legislative session. 
           (f) The commissioner of employee relations shall calculate 
        the average of the general salary adjustments provided by 
        negotiated collective bargaining agreements or arbitration 
        awards ratified by the legislature in the 1998 legislative 
        session.  Negotiated collective bargaining agreements or 
        arbitration awards that do not include general salary 
        adjustments may not be included in these calculations.  The 
        commissioner shall weigh the general salary adjustments by the 
        number of full-time equivalent employees covered by each 
        agreement or arbitration award.  The commissioner shall 
        calculate the average general salary adjustment for each fiscal 
        year covered by the agreements or arbitration awards.  The 
        results of these calculations must be expressed as percentages, 
        rounded to the nearest one-tenth of one percent.  The 
        commissioner shall calculate the new salaries for the positions 
        listed in paragraphs (d) and (e) using the applicable 
        percentages from the calculations in this paragraph and report 
        them to the speaker of the house, the president of the senate, 
        the chief justice of the supreme court, and the governor. 
           Sec. 7.  [SALARY INCREASE CONDITIONED ON MEMBER 
        CONTRIBUTION INCREASE.] 
           (a) The increase in judicial salaries under section 6 is 
        not applicable to a judge if the member contribution rate 
        increase under section 4, paragraph (a), is not also deducted 
        from the salary of the judge. 
           (b) The increase in judicial salaries under section 6 also 
        applies to judges who are not covered by the federal old age, 
        survivors, disability, and health insurance program. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 to 7 are effective on July 1, 1998. 
                                   ARTICLE 6 
                    UNCLASSIFIED STATE EMPLOYEE PENSION PLAN 
                                 MODIFICATIONS 
           Section 1.  Minnesota Statutes 1996, section 352D.12, is 
        amended to read: 
           352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
           (a) An employee who is a participant in the unclassified 
        program and who has prior service credit in a covered plan under 
        chapters 3A, 352, 352C, 353, 354, 354A, and 422A may, within the 
        time limits specified in this section, elect to transfer to the 
        unclassified program prior service contributions to one or more 
        of those plans.  Participants with six or more years of prior 
        service credit in a plan governed by chapter 3A or 352C on July 
        1, 1998, may not transfer prior service contributions.  
        Participants with less than six years of prior service credit in 
        a plan governed by chapter 3A or 352C on July 1, 1998, must be 
        contributing to the unclassified plan on or after January 5, 
        1999, in order to transfer prior contributions. 
           (b) For participants with prior service credit in a plan 
        governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
        contributions" means the accumulated employee and equal employer 
        contributions with interest at an annual rate of 8.5 percent 
        compounded annually, based on fiscal year balances.  For 
        participants with less than six years of service credit as of 
        July 1, 1998, and with prior service credit in a plan governed 
        by chapter 3A or 352C, "prior service contributions" means an 
        amount equal to twice the amount of the accumulated member 
        contributions plus annual compound interest at the rate of 8.5 
        percent, computed on fiscal year balances.  
           (c) If a participant has taken a refund from a fund 
        retirement plan listed in this section, the participant may 
        repay the refund to that fund plan, notwithstanding any 
        restrictions on repayment to that fund plan, plus 8.5 percent 
        interest compounded annually and have the accumulated employee 
        and equal employer contributions transferred to the unclassified 
        program with interest at an annual rate of 8.5 percent 
        compounded annually based on fiscal year balances.  If a person 
        repays a refund and subsequently elects to have the money 
        transferred to the unclassified program, the repayment amount, 
        including interest, is added to the fiscal year balance in the 
        year which the repayment was made. 
           (d) A participant electing to transfer prior service 
        contributions credited to a retirement plan governed by chapter 
        352, 353, 354, 354A, or 422A as provided under this section must 
        complete the application for the transfer and repay any refund 
        within one year of July 1, 1985 or the commencement of the 
        employee's participation in the unclassified program, whichever 
        is later.  A participant electing to transfer prior service 
        contributions credited to a retirement plan governed by chapter 
        3A or 352C as provided under this section must complete the 
        application for the transfer and repay any refund between 
        January 5, 1999, and June 1, 1999, if the employee commenced 
        participation in the unclassified program before January 5, 
        1999, or within one year of the commencement of the employee's 
        participation in the unclassified program if the employee 
        commenced participation in the unclassified program after 
        January 4, 1999. 
           Sec. 2.  [FUNDING.] 
           Money appropriated in Laws 1997, chapter 202, article 1, 
        section 31, may be used to make transfers of funds on behalf of 
        legislators and constitutional officers under section 1. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective July 1, 1998. 
                                   ARTICLE 7 
                    LOCAL POLICE AND FIRE RELIEF ASSOCIATION  
                                PENSION CHANGES 
           Section 1.  [COLUMBIA HEIGHTS VOLUNTEER FIRE DEPARTMENT 
        RELIEF ASSOCIATION; INCORPORATION AND PLAN RESTRUCTURING.] 
           Subdivision 1.  [ORGANIZATION AND PLAN RESTRUCTURING.] 
        Notwithstanding the provisions of Laws 1977, chapter 374, 
        sections 38 to 60, as amended, the entity currently known as the 
        "Columbia Heights fire department relief association, volunteer 
        division" shall become incorporated under Minnesota Statutes, 
        chapter 317A, and be known as the "Columbia Heights volunteer 
        fire department relief association."  The new entity will be 
        governed by Minnesota Statutes, chapters 69, 317A, 356, 356A, 
        and 424A, and any other laws applicable to volunteer fire 
        department relief associations.  The Columbia Heights volunteer 
        fire department relief association may adopt the existing bylaws 
        of the "Columbia Heights fire department relief association, 
        volunteer division"; provided, however, that the bylaws must 
        provide that future benefits payable to any member of the 
        association are defined contribution lump sum service pensions 
        under Minnesota Statutes, section 424A.02, subdivision 4.  
           Subd. 2.  [BOARD RESTRUCTURING.] The board must be 
        reconstituted in conformance with Minnesota Statutes, section 
        424A.04 within 90 days after the effective date of this section. 
           Sec. 2.  [MINNEAPOLIS FIRE; OPTIONAL ANNUITY EXTENSION TO 
        CERTAIN SURVIVORS.] 
           (a) Notwithstanding Laws 1997, chapter 233, article 4, 
        section 18, the surviving spouse of any service pensioner or 
        disability benefit recipient of the Minneapolis fire department 
        relief association who died between July 1, 1997, and October 1, 
        1997, is entitled to a surviving spouse benefit equal to the 100 
        percent joint and survivor annuity amount which the decedent 
        would have been eligible to select if the decedent had been 
        entitled and able to select an optional annuity form on the date 
        of death. 
           (b) The benefit under paragraph (a) is in lieu of any other 
        survivor benefit payable from the Minneapolis fire department 
        relief association. 
           (c) The benefit under this section accrues as of October 1, 
        1997, and is payable on the first day of the month next 
        following the effective date of this section.  The initial 
        benefit payment must include the increase amounts retroactive to 
        October 1, 1997. 
           Sec. 3.  Laws 1977, chapter 61, section 6, as amended by 
        Laws 1981, chapter 68, section 39, is amended to read: 
           Sec. 6.  [FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 
           Commencing January 1, 1978, (a) The city of Eveleth shall 
        provide by annual levy an amount sufficient to pay the greater 
        of either (a) an amount which when added to the investment 
        income of the trust fund is sufficient to pay the benefits 
        provided under the trust fund for the succeeding year as 
        certified by the board of trustees of the trust fund.; or (b) an 
        amount equal to the level annual dollar amount sufficient to 
        amortize the unfunded accrued liability of the trust fund by 
        December 31, 1991, as determined in accordance with Minnesota 
        Statutes, Sections 69.77, 356.215 and 356.216, in the latest 
        actuarial valuation. 
           The annual levy under this section shall not be included in 
        any limitation as to rate or amount set by charter and shall be 
        a special levy for purposes of Minnesota Statutes, Section 
        275.50, Subdivision 5.  All revenues generated by the levy 
        required under this section shall be transferred to the trust 
        fund. 
           (b) If the city of Eveleth fails to contribute the amount 
        required in paragraph (a) in a given year, no postretirement 
        adjustment granted under Laws 1995, chapter 262, article 10, 
        section 1, or Laws 1997, chapter 241, article 2, section 19, is 
        payable in the following year. 
           Sec. 4.  Laws 1995, chapter 262, article 10, section 1, is 
        amended to read: 
           Section 1.  [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, 1995.  
        If the city of Eveleth fails to contribute an amount required in 
        a given year sufficient to amortize the unfunded actuarial 
        accrued liability of the police and fire trust fund by December 
        31, 1998, the increases under this section in the following year 
        are not payable. 
           Sec. 5.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective the day after approval by the 
        Columbia Heights city council and compliance with Minnesota 
        Statutes, section 645.021. 
           (b) Section 2 is effective upon approval by the city 
        council of the city of Minneapolis and compliance with Minnesota 
        Statutes, section 645.021, subdivision 3. 
                                   ARTICLE 8
                  ACTUARIAL SERVICES CONTRACT-RELATED CHANGES 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        3.85, subdivision 11, is amended to read: 
           Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
        commission shall contract with an established actuarial 
        consulting firm to conduct annual actuarial valuations for the 
        retirement plans named in paragraph (b).  The contract must 
        include provisions for performing cost analyses of proposals for 
        changes in benefit and funding policies.  
           (b) The contract for actuarial valuation must include the 
        following retirement plans:  
           (1) the teachers retirement plan, teachers retirement 
        association; 
           (2) the general state employees retirement plan, Minnesota 
        state retirement system; 
           (3) the correctional employees retirement plan, Minnesota 
        state retirement system; 
           (4) the state patrol retirement plan, Minnesota state 
        retirement system; 
           (5) the judges retirement plan, Minnesota state retirement 
        system; 
           (6) the Minneapolis employees retirement plan, Minneapolis 
        employees retirement fund; 
           (7) the public employees retirement plan, public employees 
        retirement association; 
           (8) the public employees police and fire plan, public 
        employees retirement association; 
           (9) the Duluth teachers retirement plan, Duluth teachers 
        retirement fund association; 
           (10) the Minneapolis teachers retirement plan, Minneapolis 
        teachers retirement fund association; 
           (11) the St. Paul teachers retirement plan, St. Paul 
        teachers retirement fund association; 
           (12) the legislators retirement plan, Minnesota state 
        retirement system; and 
           (13) the elective state officers retirement plan, Minnesota 
        state retirement system.  
           (c) The contract must specify completion of annual 
        actuarial valuation calculations on a fiscal year basis with 
        their contents as specified in section 356.215, and the 
        standards for actuarial work adopted by the commission.  
           The contract must specify completion of annual experience 
        data collection and processing and a quadrennial published 
        experience study for the plans listed in paragraph (b), clauses 
        (1), (2), and (7), as provided for in the standards for 
        actuarial work adopted by the commission.  The experience data 
        collection, processing, and analysis must evaluate the following:
           (1) individual salary progression; 
           (2) rate of return on investments based on current asset 
        value; 
           (3) payroll growth; 
           (4) mortality; 
           (5) retirement age; 
           (6) withdrawal; and 
           (7) disablement.  
           (d) The actuary retained by the commission shall annually 
        prepare a report to the legislature, including the commentary on 
        the actuarial valuation calculations for the plans named in 
        paragraph (b) and summarizing the results of the actuarial 
        valuation calculations.  The commission-retained actuary shall 
        include with the report the actuary's recommendations concerning 
        the appropriateness of the support rates to achieve proper 
        funding of the retirement funds by the required funding dates.  
        The commission-retained actuary shall, as part of the 
        quadrennial published experience study, include recommendations 
        to the legislature on the appropriateness of the actuarial 
        valuation assumptions required for evaluation in the study.  
           (e) If the actuarial gain and loss analysis in the 
        actuarial valuation calculations indicates a persistent pattern 
        of sizable gains or losses, as directed by the commission, the 
        actuary retained by the commission shall prepare a special 
        experience study for a plan listed in paragraph (b), clause (3), 
        (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the 
        manner provided for in the standards for actuarial work adopted 
        by the commission. 
           (f) The term of the contract between the commission and the 
        actuary retained by the commission is two four years, plus not 
        to exceed two one-year extensions before competitive bidding.  
        The contract is subject to competitive bidding procedures as 
        specified by the commission. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        356.215, subdivision 2, is amended to read: 
           Subd. 2.  [REQUIREMENTS.] (a) It is the policy of the 
        legislature that it is necessary and appropriate to determine 
        annually the financial status of tax supported retirement and 
        pension plans for public employees.  To achieve this goal, the 
        legislative commission on pensions and retirement shall have 
        prepared by the actuary retained by the commission annual 
        actuarial valuations of the retirement plans enumerated in 
        section 3.85, subdivision 11, paragraph (b), quadrennial 
        experience studies of the retirement plans enumerated in section 
        3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), 
        and, two years after each set of quadrennial experience studies, 
        quadrennial projection valuations of at least one of the 
        retirement plans enumerated in section 3.85, subdivision 11, 
        paragraph (b), clauses (1), (2), and (7), and of any other 
        retirement plan enumerated in section 3.85, subdivision 11, 
        paragraph (b), for which it determines that the analysis is may 
        be beneficial.  The governing or managing board or 
        administrative officials of each public pension and retirement 
        fund or plan enumerated in section 356.20, subdivision 2, 
        clauses (9), (10), and (12), shall have prepared by an approved 
        actuary annual actuarial valuations of their respective funds as 
        provided in this section.  This requirement also applies to any 
        fund that is the successor to any organization enumerated in 
        section 356.20, subdivision 2, or to the governing or managing 
        board or administrative officials of any newly formed retirement 
        fund or association operating under the control or supervision 
        of any public employee group, governmental unit, or institution 
        receiving a portion of its support through legislative 
        appropriations, and any local police or fire fund coming within 
        the provisions of section 356.216. 
           (b) The A quadrennial projection valuations valuation 
        required under paragraph (a) are is intended to serve as an 
        additional analytical tool with which policy makers may assess 
        the future funding status of public plans through forecasting 
        and testing various potential outcomes over time if certain plan 
        assumptions or valuation methods were to be modified.  In 
        consultation with the executive director of the legislative 
        commission on pensions and retirement, the retirement fund 
        directors, the state economist, the state demographer, the 
        commissioner of finance, and the commissioner of employee 
        relations, the actuary retained by the legislative commission on 
        pensions and retirement shall perform the quadrennial projection 
        valuations, testing future implications for plan funding by 
        modifying assumptions and methods currently in place.  The 
        commission-retained actuary shall provide advice to the 
        commission as to the periods over which such projections should 
        be made, the nature and scope of the scenarios to be analyzed, 
        and the measures of funding status to be employed, and shall 
        report the results of these analyses in the same manner as for 
        quadrennial experience studies. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective on the day following final 
        enactment. 
                                   ARTICLE 9
                 PERA CORRECTIONAL EMPLOYEE DISABILITY COVERAGE 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        353.27, subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) Except as provided 
        in paragraph (b), the employee contribution shall be an 
        amount (a) (1) for a "basic member" equal to 8.75 percent of 
        total salary; and (b) (2) for a "coordinated member" equal to 
        4.75 percent of total salary. 
           (b) For local government correctional service employees, as 
        defined in section 353.33, subdivision 3a, the employee 
        contribution is an amount equal to 4.96 percent of total salary. 
           (c) These contributions must be made by deduction from 
        salary in the manner provided in subdivision 4.  Where any 
        portion of a member's salary is paid from other than public 
        funds, such member's employee contribution must be based on the 
        total salary received from all sources. 
           Sec. 2.  Minnesota Statutes 1996, section 353.27, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) Except as provided 
        in paragraph (b), the employer contribution shall be an amount 
        equal to the employee contribution under subdivision 2. 
           (b) On behalf of local government correctional service 
        employees, as defined in section 353.33, subdivision 3a, the 
        employer contribution is an amount equal to 5.06 percent of 
        total salary. 
           (c) This contribution shall be made from funds available to 
        the employing subdivision by the means and in the manner 
        provided in section 353.28. 
           Sec. 3.  Minnesota Statutes 1996, section 353.33, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [CORRECTIONAL EMPLOYEE DISABILITY BENEFIT 
        COVERAGE.] (a) For purposes of the disability benefit coverage 
        provided under this subdivision, a local government correctional 
        service employee is a person who: 
           (1) is an "essential employee" as defined in section 
        179A.03, subdivision 7; 
           (2) is employed in a county-administered jail or 
        correctional facility or in a regional correctional facility 
        administered by multiple counties; 
           (3) spends at least 75 percent of the employee's working 
        time in direct contact with persons confined in the jail or 
        facility, as certified by the employer to the executive director 
        of the association before August 1, 1998, or within 30 days of 
        employment in the qualifying county employment position, 
        whichever is later; and 
           (4) is a "public employee" as defined in section 353.01, 
        and is not a member of the public employees retirement 
        association police and fire fund. 
           (b) A local government correctional employee who becomes 
        disabled and physically or mentally unfit to perform the duties 
        of the position as a direct result of an injury, sickness, or 
        other disability incurred in or arising out of any act of duty 
        that renders the employee physically or mentally unable to 
        perform the employee's correctional facility duties, is entitled 
        to a disability benefit based on covered service under this 
        chapter only in an amount equal to 45 percent of the average 
        salary defined in section 353.29, subdivision 2, plus an 
        additional 1.8 percent for each year of service as a 
        correctional service employee after July 1, 1998, in excess of 
        25 years. 
           (c) If the eligible employee is entitled to receive a 
        disability benefit as provided in paragraph (b) and has credit 
        for less covered correctional service than the length of service 
        upon which the correctional disability benefit is based, and 
        also has credit for regular plan service, the employee is 
        entitled to a disability benefit or deferred retirement annuity 
        based on the regular plan service only for the service that, 
        when combined with the correctional service, exceeds the number 
        of years on which the correctional disability benefit is based.  
        The disabled employee who also has credit for regular plan 
        service must in all respects qualify under section 353.33 to be 
        entitled to receive a disability benefit based on the regular 
        plan service, except that the service may be combined to satisfy 
        length of service requirements.  Any deferred annuity to which 
        the employee may be entitled based on regular plan service must 
        be augmented as provided in section 353.71 while the employee is 
        receiving a disability benefit under this subdivision. 
           Subd. 3b.  [OPTIONAL ANNUITY ELECTION.] A disabled member 
        may elect to receive the normal disability benefit or an 
        optional annuity under section 353.30, subdivision 3.  The 
        election of an optional annuity must be made prior to the 
        commencement of payment of the disability benefit.  The optional 
        annuity must begin to accrue on the same date as provided for 
        the disability benefit.  
           (1) If a person who is not the spouse of a member is named 
        as beneficiary of the joint and survivor optional annuity, the 
        person is eligible to receive the annuity only if the spouse, on 
        the disability application form prescribed by the executive 
        director, permanently waives the surviving spouse benefits under 
        sections 353.31, subdivision 1, and 353.32, subdivision 1a.  If 
        the spouse of the member refuses to permanently waive the 
        surviving spouse coverage, the selection of a person other than 
        the spouse of the member as a joint annuitant is invalid. 
           (2) If the spouse of the member permanently waives survivor 
        coverage, the dependent children, if any, continue to be 
        eligible for survivor benefits under section 353.31, subdivision 
        1, including the minimum benefit in section 353.31, subdivision 
        1a.  The designated optional annuity beneficiary may draw the 
        monthly benefit; however, the amount payable to the dependent 
        child or children and joint annuitant must not exceed the 70 
        percent maximum family benefit under section 353.31, subdivision 
        1a.  If the maximum is exceeded, the benefit of the joint 
        annuitant must be reduced to the amount necessary so that the 
        total family benefit does not exceed the 70 percent maximum 
        family benefit amount. 
           (3) If the spouse is named as the beneficiary of the joint 
        and survivor optional annuity, the spouse may draw the monthly 
        benefits; however, the amount payable to the dependent child or 
        children and the joint annuitant must not exceed the 70 percent 
        maximum family benefit under section 353.31, subdivision 1a.  If 
        the maximum is exceeded, each dependent child will receive ten 
        percent of the member's specified average monthly salary, and 
        the benefit to the joint annuitant must be reduced to the amount 
        necessary so that the total family benefit does not exceed the 
        70 percent maximum family benefit amount.  The joint and 
        survivor optional annuity must be restored to the surviving 
        spouse, plus applicable postretirement adjustments under section 
        356.41, as the dependent child or children become no longer 
        dependent under section 353.01, subdivision 15. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the first full pay period 
        beginning after June 30, 1998.  Section 3 is effective July 1, 
        1998, and applies to disabilities that occur after June 30, 1998.
           Presented to the governor April 10, 1998 
           Signed by the governor April 20, 1998, 11:25 a.m.

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