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Minnesota Session Laws - 1999, Regular Session

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

                            CHAPTER 222-S.F.No. 319 
                  An act relating to retirement; various pension plans; 
                  providing special benefit coverage for privatized 
                  employees of the Luverne public hospital, the Waconia 
                  Ridgeview medical center, and the Glencoe area health 
                  center; creating a local government correctional 
                  service retirement plan; modifying actuarial cost 
                  provision; providing a special property tax levy for 
                  certain county retirement contributions; providing an 
                  ad hoc postretirement adjustment to Eveleth police and 
                  fire trust fund benefit recipients; establishing an 
                  additional postretirement adjustment for the Fairmont 
                  police relief association; extending survivor benefit 
                  provisions to include certain Fairmont police relief 
                  association survivors; providing a special ad hoc 
                  postretirement adjustment to certain retired St. Cloud 
                  police officers; merging the pre-March 1, 1999, local 
                  police and paid fire consolidation accounts into the 
                  public employees police and fire plan; extending the 
                  minimum volunteer firefighter fire state aid amount to 
                  post-1993 relief association members; modifying 
                  governance provisions for the Minneapolis fire 
                  department relief association and the Minneapolis 
                  police relief association; providing a targeted early 
                  retirement incentive program for certain employees of 
                  the metropolitan council; permitting the purchase of 
                  service credit by various public employees; mandating 
                  certain school district service credit purchase 
                  payments; making miscellaneous changes in the 
                  legislators retirement plan, the Minnesota state 
                  colleges and university system individual retirement 
                  account plan, the Minnesota state retirement system, 
                  and the teachers retirement association; including 
                  supplemental needs trusts as recipients of optional 
                  annuity forms; eliminating the service credit maximum 
                  for monthly benefit volunteer fire relief 
                  associations; mandating school district repayment of 
                  certain omitted deduction interest charges; expanding 
                  the membership of the state correctional employees 
                  retirement plan to include certain Minnesota extended 
                  treatment options program employees; downsizing the 
                  early retirement reduction rates for various public 
                  safety plans; grandparenting public employee police 
                  and fire plan coverage for certain Rice county 
                  correctional employees; requiring Rice county to repay 
                  certain police state aid amounts; providing employer 
                  penalties for pension plan membership certification 
                  failures or errors; providing special retirement 
                  coverage for certain state fire marshal employees; 
                  authorizing the purchase of credit for certain periods 
                  of prior military service, out-of-state public 
                  teaching service, maternity leaves, maternity 
                  breaks-in-employment, parochial or private school 
                  teaching service, Peace Corps service or VISTA 
                  service; clarifying various Minneapolis employees 
                  retirement plan survivor benefit provisions; 
                  increasing the number of vendors for certain 
                  tax-sheltered annuities for educational employees; 
                  modifying various benefit provisions for certain 
                  Minnesota state colleges and universities employees; 
                  reducing the membership of the legislative commission 
                  on pensions and retirement; requiring a study; 
                  authorizing the purchase or construction of an 
                  administration building for the Minnesota state 
                  retirement system, the public employees retirement 
                  association, and the teachers retirement association; 
                  authorizing the issuance of certain revenue bonds; 
                  amending Minnesota Statutes 1998, sections 3.751, 
                  subdivision 1; 3.85, subdivisions 3, 11, and 12; 
                  3A.02, subdivision 1b; 43A.27, subdivision 3; 69.021, 
                  subdivisions 7 and 10; 69.031, subdivision 5; 122A.46, 
                  subdivision 2; 136F.48; 273.1385, subdivision 2; 
                  275.70, subdivision 5; 352.03, subdivision 1; 352.90; 
                  352.91, by adding a subdivision; 352.92, subdivisions 
                  1 and 2; 352.93, subdivision 2a; 352B.08, subdivision 
                  2a; 353.01, subdivisions 2b, 10, and 16; 353.03, 
                  subdivision 4; 353.27, subdivisions 2 and 3; 353.64, 
                  subdivision 1; 353.65, subdivisions 2 and 3; 353.651, 
                  subdivision 4; 353A.083, by adding a subdivision; 
                  353A.09, subdivisions 4, 5, and by adding a 
                  subdivision; 353D.01, subdivision 2; 353D.02, by 
                  adding a subdivision; 353D.03, subdivision 3; 354.05, 
                  subdivision 40; 354.06, subdivision 1; 354.10, 
                  subdivision 4; 354.445; 354.66, subdivisions 1b, 1c, 
                  3, and 5; 354B.24, subdivision 3; 354B.25, 
                  subdivisions 2, 3, and 5; 354C.11; 354C.12, 
                  subdivision 4; 356.19, by adding subdivisions; 356.20, 
                  subdivision 2; 356.215, subdivision 4g; 356.24, 
                  subdivision 1; 356.30, subdivision 3; 356.302, 
                  subdivision 7; and 356.303, subdivision 4; 356.55, 
                  subdivisions 1 and 6; 356.61; 422A.06, subdivisions 3 
                  and 6; 422A.101, subdivision 4; 422A.18, subdivision 
                  2; 422A.22, subdivisions 4 and 5; and 422A.23; 
                  423A.02, subdivisions 1b, 2, and by adding 
                  subdivisions; and 423B.07; Laws 1977, chapter 61, 
                  section 6, as amended; proposing coding for new law in 
                  Minnesota Statutes, chapters 352; 353; 354; 354A; 
                  354B; 356; and 422A; proposing coding for new law as 
                  Minnesota Statutes, chapters 353E; and 353F; repealing 
                  Minnesota Statutes 1998, sections 353.33, subdivision 
                  3a; 353.65, subdivision 3a; 422A.16, subdivision 3a; 
                  and 424A.02, subdivision 5; Laws 1998, chapter 390, 
                  article 1, section 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                        FUTURE PERA PENSION BENEFITS FOR 
                  PRIVATIZED PUBLIC HOSPITAL AND OTHER PUBLIC
                                    EMPLOYEES 
           Section 1.  [353F.01] [PURPOSE AND INTENT.] 
           The purpose of this chapter is to ensure, to the extent 
        possible, that persons employed at public medical facilities and 
        other public employing units who are privatized and consequently 
        are excluded from retirement coverage by the public employees 
        retirement association will be entitled to receive future 
        retirement benefits under the general employees retirement plan 
        of the public employees retirement association commensurate with 
        the prior contributions made by them or made on their behalf 
        upon the privatization of the medical facility or other public 
        employing unit. 
           Sec. 2.  [353F.02] [DEFINITIONS.] 
           Subdivision 1.  [GENERALLY.] As used in this chapter, 
        unless the context clearly indicates otherwise, each of the 
        terms in the following subdivisions has the meaning indicated. 
           Subd. 2.  [ALLOWABLE SERVICE.] "Allowable service" has the 
        meaning provided in section 353.01, subdivision 16 of the 
        edition of Minnesota Statutes published in the year before the 
        year in which the privatization occurred. 
           Subd. 3.  [EFFECTIVE DATE.] "Effective date" means the date 
        that the operation of the medical facility or other public 
        employing unit is assumed by another employer or the date that 
        the medical facility or other public employing unit is purchased 
        by another employer and active membership in the public 
        employees retirement association consequently terminates. 
           Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
           (1) the Glencoe area health center; 
           (2) the Luverne public hospital; and 
           (3) the Waconia-Ridgeview medical center. 
           Subd. 5.  [OTHER PUBLIC EMPLOYING UNIT.] "Other public 
        employing unit" means Metro II, a joint powers organization 
        formed under section 471.59. 
           Subd. 6.  [TERMINATED MEDICAL FACILITY OR OTHER PUBLIC 
        EMPLOYING UNIT EMPLOYEE.] "Terminated medical facility or other 
        public employing unit employee" means a person who: 
           (1) was employed on the day before the effective date by 
        the medical facility or other public employing unit; or 
           (2) terminated employment with the medical facility or 
        other public employing unit on the day before the effective 
        date; and 
           (3) was a participant in the general employees retirement 
        plan of the public employees retirement association at the time 
        of termination of employment with the medical facility or other 
        public employing unit. 
           Subd. 7.  [YEARS OF ALLOWABLE SERVICE.] "Years of allowable 
        service" means the total number of years of allowable service 
        under section 353.01, subdivision 18, of the edition of 
        Minnesota Statutes published in the year before the year in 
        which the privatization occurred. 
           Sec. 3.  [353F.03] [VESTING RULE FOR CERTAIN EMPLOYEES.] 
           Notwithstanding any provision of chapter 353 to the 
        contrary, a terminated medical facility or other public 
        employing unit employee is eligible to receive a retirement 
        annuity under section 353.29 of the edition of Minnesota 
        Statutes published in the year before the year in which the 
        privatization occurred, without regard to the requirement for 
        three years of allowable service. 
           Sec. 4.  [353F.04] [AUGMENTATION INTEREST RATE FOR 
        TERMINATED MEDICAL FACILITY EMPLOYEES.] 
           The deferred annuity of a terminated medical facility or 
        other public employing unit employee is subject to augmentation 
        in accordance with section 353.71, subdivision 2, of the edition 
        of Minnesota Statutes published in the year in which the 
        privatization occurred, except that the rate of interest for 
        this purpose is 5.5 percent compounded annually until January 1 
        following the year in which such person attains age 55.  From 
        that date to the effective date of retirement, the rate is 7.5 
        percent.  These increased augmentation rates are no longer 
        applicable for any time after the terminated medical facility or 
        other public employing unit employee becomes covered again by a 
        retirement fund enumerated in section 356.30, subdivision 3.  
        These increased deferred annuity augmentation rates do not apply 
        to a terminated transferred medical facility or other public 
        employing unit employee who begins receipt of a retirement 
        annuity while employed by the employer which assumed operations 
        of the medical facility or other public employing unit or 
        purchased the medical facility or other public employing unit. 
           Sec. 5.  [353F.05] [AUTHORIZATION FOR ADDITIONAL ALLOWABLE 
        SERVICE FOR CERTAIN EARLY RETIREMENT PURPOSES.] 
           For the purpose of determining eligibility for early 
        retirement benefits provided under section 353.30, subdivision 
        1a, of the edition of Minnesota Statutes published in the year 
        before the year in which the privatization occurred, and 
        notwithstanding any provision of chapter 353, to the contrary, 
        the years of allowable service for a terminated medical facility 
        or other public employing unit employee who transfers employment 
        on the effective date and does not apply for a refund of 
        contributions under section 353.34, subdivision 1, of the 
        edition of Minnesota Statutes published in the year before the 
        year in which the privatization occurred, or any similar 
        provision, includes service with the successor employer to the 
        medical facility or other public employing unit following the 
        effective date.  The successor employer shall provide any 
        reports that the executive director of the public employees 
        retirement association may reasonably request to permit 
        calculation of benefits.  
           To be eligible for early retirement benefits under this 
        section, the individual must separate from service with the 
        successor employer to the medical facility.  The terminated 
        eligible individual, or an individual authorized to act on 
        behalf of that individual, may apply for an annuity following 
        application procedures under section 353.29, subdivision 4. 
           Sec. 6.  [353F.06] [APPLICATION OF REEMPLOYED ANNUITANT 
        EARNINGS LIMITATIONS.] 
           The reemployed annuitant earnings limitations of section 
        353.37 apply to any service by a terminated medical facility or 
        other public employing unit employee as an employee of the 
        successor employer to the medical facility. 
           Sec. 7.  [353F.07] [EFFECT ON REFUND.] 
           Notwithstanding any provision of chapter 353 to the 
        contrary, terminated medical facility or other public employing 
        unit employees may receive a refund of employee accumulated 
        contributions plus interest at the rate of six percent per year 
        compounded annually in accordance with section 353.34, 
        subdivision 2, of the edition of Minnesota Statutes published in 
        the year in which the privatization occurred, at any time after 
        the transfer of employment to the successor employer to the 
        medical facility or other public employing unit.  If a 
        terminated medical facility employee has received a refund from 
        a pension plan enumerated in section 356.30, subdivision 3, the 
        person may not repay that refund unless the person again becomes 
        a member of one of those enumerated plans and complies with 
        section 356.30, subdivision 2. 
           Sec. 8.  [353F.08] [COUNSELING SERVICES.] 
           The medical facility or other public employing unit and the 
        executive director of the public employees retirement 
        association shall provide terminated medical facility or other 
        public employing unit employees with counseling on their 
        benefits available under the general employees retirement plan 
        of the public employees retirement association during the 90 
        days following privatization. 
           Sec. 9.  [REPEALER.] 
           Laws 1998, chapter 390, article 1, section 1, is repealed. 
           Sec. 10.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 9 with respect to privatized medical 
        facilities are effective on the day following final enactment. 
           (b) Sections 1 to 9 with respect to Metro II are effective 
        on the first day of the month next following certification by 
        the executive director of the public employees retirement 
        association that the actuarial accrued liability of the special 
        benefit coverage proposed for extension to the privatized Metro 
        II employees under this article does not exceed the actuarial 
        gain otherwise to be accrued by the public employees retirement 
        association, as calculated by the consulting actuary retained by 
        the legislative commission on pensions and retirement.  The cost 
        of the actuarial calculations must be borne by Metro II. 
                                   ARTICLE 2 
                      ESTABLISHMENT OF LOCAL CORRECTIONAL 
                           EMPLOYEES RETIREMENT PLAN 
           Section 1.  Minnesota Statutes 1998, 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; and 
           (14) local government correctional service retirement plan, 
        public employees retirement association.  
           (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), or (14), 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 four years.  The contract 
        is subject to competitive bidding procedures as specified by the 
        commission. 
           Sec. 2.  Minnesota Statutes 1998, section 3.85, subdivision 
        12, is amended to read: 
           Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
        commission shall assess each retirement plan specified in 
        subdivision 11, paragraph (b), its appropriate portion of the 
        compensation paid to the actuary retained by the commission for 
        the actuarial valuation calculations, quadrennial projection 
        valuations, and quadrennial experience studies.  The total 
        assessment is 100 percent of the amount of contract compensation 
        for the actuarial consulting firm retained by the commission for 
        actuarial valuation calculations, including the public employees 
        police and fire plan consolidation accounts of the public 
        employees retirement association, annual experience data 
        collection and processing, quadrennial projection valuations, 
        and quadrennial experience studies.  
           The portion of the total assessment payable by each 
        retirement system or pension plan must be determined as follows: 
           (1) Each pension plan specified in subdivision 11, 
        paragraph (b), clauses (1) to (13) (14), must pay the following 
        indexed amount based on its total active, deferred, inactive, 
        and benefit recipient membership: 
               up to 2,000 members, inclusive         $2.55 per member 
               2,001 through 10,000 members           $1.13 per member 
               over 10,000 members                    $0.11 per member  
           The amount specified is applicable for the assessment of 
        the July 1, 1991, to June 30, 1992, fiscal year actuarial 
        compensation amounts.  For the July 1, 1992, to June 30, 1993, 
        fiscal year and subsequent fiscal year actuarial compensation 
        amounts, the amount specified must be increased at the same 
        percentage increase rate as the implicit price deflator for 
        state and local government purchases of goods and services for 
        the 12-month period ending with the first quarter of the 
        calendar year following the completion date for the actuarial 
        valuation calculations, as published by the federal Department 
        of Commerce, and rounded upward to the nearest full cent. 
           (2) The total per-member portion of the allocation must be 
        determined, and that total per-member amount must be subtracted 
        from the total amount for allocation.  Of the remainder dollar 
        amount, the following per-retirement system and per-pension plan 
        charges must be determined and the charges must be paid by the 
        system or plan: 
           (i) 37.87 percent is the total additional per-retirement 
        system charge, of which one-seventh must be paid by each 
        retirement system specified in subdivision 11, paragraph (b), 
        clauses (1), (2), (6), (7), (9), (10), and (11). 
           (ii) 62.13 percent is the total additional per-pension plan 
        charge, of which one-thirteenth one-fourteenth must be paid by 
        each pension plan specified in subdivision 11, paragraph (b), 
        clauses (1) to (13) (14).  
           (b) The assessment must be made following the completion of 
        the actuarial valuation calculations and the experience 
        analysis.  The amount of the assessment is appropriated from the 
        retirement fund applicable to the retirement plan.  Receipts 
        from assessments must be deposited in the state treasury and 
        credited to the general fund. 
           Sec. 3.  Minnesota Statutes 1998, section 273.1385, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID 
        REDUCTIONS.] (a) The aid amount received by any jurisdiction in 
        fiscal year 2000 or any year thereafter may not exceed the 
        amount it received in fiscal year 1999.  The commissioner may, 
        from time to time, request the most recent fiscal year payroll 
        information by jurisdiction to be certified by the executive 
        director of the public employees retirement association.  For 
        any jurisdiction where newly certified public employees 
        retirement association general plan payroll is significantly 
        lower than the fiscal 1997 amount, as determined by the 
        commissioner, the commissioner shall recalculate the aid amount 
        based on the most recent fiscal year payroll information, 
        certify the recalculated aid amount for the next distribution 
        year, and permanently reduce the aid amount to that jurisdiction.
           (b) Aid to a jurisdiction must not be reduced under this 
        section due to a transfer of an employee from the general plan 
        of the public employees retirement association to the local 
        government correctional service plan administered by the public 
        employees retirement association.  The executive director of the 
        public employees retirement association must provide the 
        commissioner of revenue with any information requested by the 
        commissioner to administer this paragraph. 
           Sec. 4.  Minnesota Statutes 1998, section 275.70, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
        portions of ad valorem taxes levied by a local governmental unit 
        for the following purposes or in the following manner: 
           (1) to pay the costs of the principal and interest on 
        bonded indebtedness or to reimburse for the amount of liquor 
        store revenues used to pay the principal and interest due on 
        municipal liquor store bonds in the year preceding the year for 
        which the levy limit is calculated; 
           (2) to pay the costs of principal and interest on 
        certificates of indebtedness issued for any corporate purpose 
        except for the following: 
           (i) tax anticipation or aid anticipation certificates of 
        indebtedness; 
           (ii) certificates of indebtedness issued under sections 
        298.28 and 298.282; 
           (iii) certificates of indebtedness used to fund current 
        expenses or to pay the costs of extraordinary expenditures that 
        result from a public emergency; or 
           (iv) certificates of indebtedness used to fund an 
        insufficiency in tax receipts or an insufficiency in other 
        revenue sources; 
           (3) to provide for the bonded indebtedness portion of 
        payments made to another political subdivision of the state of 
        Minnesota; 
           (4) to fund payments made to the Minnesota state armory 
        building commission under section 193.145, subdivision 2, to 
        retire the principal and interest on armory construction bonds; 
           (5) for unreimbursed expenses related to flooding that 
        occurred during the first half of calendar year 1997, as allowed 
        by the commissioner of revenue under section 275.74, paragraph 
        (b); 
           (6) for local units of government located in an area 
        designated by the Federal Emergency Management Agency pursuant 
        to a major disaster declaration issued for Minnesota by 
        President Clinton after April 1, 1997, and before June 11, 1997, 
        for the amount of tax dollars lost due to abatements authorized 
        under section 273.123, subdivision 7, and Laws 1997, chapter 
        231, article 2, section 64, to the extent that they are related 
        to the major disaster and to the extent that neither the state 
        or federal government reimburses the local government for the 
        amount lost; 
           (7) property taxes approved by voters which are levied 
        against the referendum market value as provided under section 
        275.61; 
           (8) to fund matching requirements needed to qualify for 
        federal or state grants or programs to the extent that either 
        (i) the matching requirement exceeds the matching requirement in 
        calendar year 1997, or (ii) it is a new matching requirement 
        that didn't exist prior to 1998; 
           (9) to pay the expenses reasonably and necessarily incurred 
        in preparing for or repairing the effects of natural disaster 
        including the occurrence or threat of widespread or severe 
        damage, injury, or loss of life or property resulting from 
        natural causes, in accordance with standards formulated by the 
        emergency services division of the state department of public 
        safety, as allowed by the commissioner of revenue under section 
        275.74, paragraph (b); 
           (10) for the amount of tax revenue lost due to abatements 
        authorized under section 273.123, subdivision 7, for damage 
        related to the tornadoes of March 29, 1998, to the extent that 
        neither the state or federal government provides reimbursement 
        for the amount lost; 
           (11) pay amounts required to correct an error in the levy 
        certified to the county auditor by a city or county in a levy 
        year, but only to the extent that when added to the preceding 
        year's levy it is not in excess of an applicable statutory, 
        special law or charter limitation, or the limitation imposed on 
        the governmental subdivision by sections 275.70 to 275.74 in the 
        preceding levy year; and 
           (12) to pay an abatement under section 469.1815; and 
           (13) to pay the employer contribution to the local 
        government correctional service retirement plan under section 
        353E.03, subdivision 2, to the extent that the employer 
        contribution exceeds 5.49 percent of total salary. 
           Sec. 5.  Minnesota Statutes 1998, 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 is an 
        amount (1) for a "basic member" equal to 8.75 percent of total 
        salary; and (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. 6.  Minnesota Statutes 1998, 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 is 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 must be made from funds 
        available to the employing subdivision by the means and in the 
        manner provided in section 353.28. 
           Sec. 7.  [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
        RETIREMENT PLAN.] 
           Subdivision 1.  [PLAN ADMINISTRATION; FUND.] (a) The public 
        employees local government correctional service retirement plan 
        is established as a separate plan to be administered by the 
        board of trustees and the executive director of the public 
        employees retirement association. 
           (b) The board of trustees and the executive director shall 
        undertake their activities in a manner consistent with chapter 
        356A.  
           (c) The association shall maintain a special fund to be 
        known as the public employees local government correctional 
        service retirement fund. 
           Subd. 2.  [REVENUE SOURCES.] Member contributions under 
        section 353E.03, subdivision 1, and employer contributions under 
        section 353E.03, subdivision 2, and other amounts authorized by 
        law, including any investment return on invested fund assets, 
        must be deposited in the fund.  
           Subd. 3.  [INVESTMENT.] (a) The public employees local 
        government correctional service retirement fund participates in 
        the Minnesota postretirement investment fund.  
           (b) The amounts provided in section 353.271 must be 
        deposited in that fund.  
           (c) The balance of any assets of the fund must be deposited 
        in the Minnesota combined investment fund as provided in section 
        11A.14, if applicable, or otherwise invested under section 
        11A.23. 
           Subd. 4.  [COLLECTION OF CONTRIBUTIONS.] The collection of 
        member and employer contributions is governed by section 353.27, 
        subdivisions 4, 7, 7b, 10, 11, and 12. 
           Subd. 5.  [FUND DISBURSEMENT RESTRICTED.] (a) The public 
        employees local government correctional service retirement fund 
        and its share of participation in the Minnesota postretirement 
        investment fund may be disbursed only for the purposes provided 
        for in this chapter.  
           (b) The proportional share of the necessary and reasonable 
        administrative expenses of the association and any benefits 
        provided in this chapter, other than benefits payable from the 
        Minnesota postretirement investment fund, must be paid from the 
        public employees local government correctional service 
        retirement fund.  Retirement annuities, disability benefits, 
        survivorship benefits, and any refunds of accumulated deductions 
        may be paid only from the correctional service retirement fund 
        after those needs have been certified by the executive director 
        and any applicable amounts withdrawn from the share of 
        participation in the Minnesota postretirement fund under section 
        11A.18.  
           (c) The amounts necessary to make the payments from the 
        public employees local government correctional service 
        retirement fund and its participation in the Minnesota 
        postretirement investment fund are annually appropriated from 
        those funds for those purposes. 
           Sec. 8.  [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 
           A local government correctional service employee is a 
        person who: 
           (1) is employed in a county-administered jail or 
        correctional facility or in a regional correctional facility 
        administered by multiple counties; 
           (2) spends at least 95 percent of the employee's working 
        time in direct contact with persons confined in the jail or 
        facility, as certified in writing, in advance, by the employer 
        to the executive director of the association; and 
           (3) is a "public employee" as defined in section 353.01, 
        but is not a member of the public employees police and fire fund.
           Sec. 9.  [353E.03] [CORRECTIONAL SERVICE PLAN 
        CONTRIBUTIONS.] 
           Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
        correctional service employee shall make an employee 
        contribution in an amount equal to 5.83 percent of salary. 
           Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
        contribute for a local government correctional service employee 
        an amount equal to 8.75 percent of salary. 
           Sec. 10.  [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 
        ANNUITY.] 
           Subdivision 1.  [ELIGIBILITY REQUIREMENTS.] After 
        termination of public employment, an employee covered under 
        section 353E.02 who has attained the age of at least 55 years 
        and has credit for not less than three years of coverage in the 
        local government correctional service plan is entitled, upon 
        application, to a normal retirement annuity.  Instead of a 
        normal retirement annuity, a retiring employee may elect to 
        receive the optional annuity provided in section 353.30, 
        subdivision 3. 
           Subd. 2.  [AVERAGE SALARY BASE.] In calculating the annuity 
        under subdivision 3, "average salary" means an amount equivalent 
        to the average of the highest salary earned as a local 
        government correctional employee upon which employee 
        contributions were paid for any five successive years of 
        allowable service.  Average salary must be based on all 
        allowable service if this service is less than five years. 
           Subd. 3.  [ANNUITY AMOUNT.] The average salary as defined 
        in subdivision 2, multiplied by the percent specified in section 
        356.19, subdivision 5a, for each year of allowable service, 
        determines the amount of the normal retirement annuity.  If a 
        person has earned allowable service in the public employees 
        retirement association or the public employees police and fire 
        fund prior to participation under this chapter, the retirement 
        annuity representing such service must be computed in accordance 
        with the formula specified in sections 353.29 and 353.30 or 
        353.651, whichever applies. 
           Subd. 4.  [EARLY RETIREMENT.] An employee covered under 
        section 353E.02 who has attained the age of at least 50 years 
        and has credit for not less than three years of coverage in the 
        local government correctional service plan is entitled, upon 
        application, to a reduced retirement annuity equal to the 
        annuity calculated under subdivision 3, reduced so that the 
        reduced annuity is the actuarial equivalent of the annuity that 
        would be payable if the employee deferred receipt of the annuity 
        from the day the annuity begins to accrue until age 55. 
           Subd. 5.  [ACCRUAL AND DURATION.] The retirement annuity 
        under this section begins to accrue as provided in section 
        353.29, subdivision 7.  The retirement annuity is payable for 
        the life of the recipient, or in accordance with the terms of 
        any optional annuity form selected by the retiring member. 
           Subd. 6.  [MULTIPLE SERVICE LIMITATION.] A former employee 
        who has both public employees retirement plan and public 
        employees local government correctional retirement plan credited 
        service must, if qualified, receive a retirement annuity from 
        each retirement plan that takes into account both periods of 
        service and both covered salary amounts, but no period of 
        service may be used more than once in calculating the annuity. 
           Sec. 11.  [353E.05] [AUGMENTATION IN CERTAIN CASES.] 
           Unless prior service has been transferred or unless a 
        combined service annuity under section 356.30 has been elected, 
        an employee who becomes a local government correctional employee 
        after being a member of the public employees retirement 
        association or the public employees police and fire fund is 
        covered under section 353.71, subdivision 2, with respect to 
        that prior service.  An employee who becomes a member of the 
        public employees retirement association or the public employees 
        police and fire plan after being a local government correctional 
        employee is also covered under section 353.71, subdivision 2, 
        with respect to that prior service, unless calculated under 
        section 356.30. 
           Sec. 12.  [353E.06] [DISABILITY BENEFITS.] 
           Subdivision 1.  [DUTY DISABILITY QUALIFICATION 
        REQUIREMENTS.] 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 that is medically determinable, 
        that was incurred in or arose out of any act of duty, and that 
        renders the employee physically or mentally unable to perform 
        the employee's duties, is entitled to a disability benefit.  The 
        disability benefit must be based on covered service under this 
        chapter only and is an amount equal to 47.5 percent of the 
        average salary defined in section 353E.04, subdivision 2, plus 
        an additional percent equal to that specified in section 356.19, 
        subdivision 5a, for each year of covered service under this 
        chapter in excess of 25 years. 
           Subd. 2.  [NONDUTY DISABILITY QUALIFICATION 
        REQUIREMENTS.] A local government correctional employee who has 
        at least one year of covered service under this chapter and 
        becomes disabled and physically or mentally unfit to perform the 
        duties of the position because of sickness or injury that is 
        medically determinable and that occurs while not engaged in 
        covered employment, is entitled to a disability benefit based on 
        covered service under this chapter.  The disability benefit must 
        be computed in the same manner as an annuity under section 
        353E.04, subdivision 3, and as though the employee had at least 
        ten years of covered correctional service. 
           Subd. 3.  [OPTIONAL ANNUITY.] A disabled local government 
        correctional employee may elect the normal disability benefit or 
        an optional annuity as provided in section 353.30, subdivision 
        3.  The election of an optional annuity must be made before the 
        commencement of payment of the disability benefit and is 
        effective on the date on which the disability benefit begins to 
        accrue as provided in section 353.33, subdivision 2.  Upon 
        becoming effective, the optional annuity begins to accrue on the 
        same date as provided for the disability benefit. 
           Subd. 4.  [DISABILITY BENEFIT APPLICATION.] A claim or 
        demand for a disability benefit must be initiated by written 
        application in the manner and form prescribed by the executive 
        director, filed in the office of the association, showing 
        compliance with the statutory conditions qualifying the 
        applicant for a disability benefit.  A member or former member 
        who became disabled during a period of membership may file an 
        application for disability benefits within three years following 
        termination of local government correctional service, but not 
        after that time has elapsed.  The disability benefit begins to 
        accrue the day following the commencement of disability, 90 days 
        preceding the filing of the application, or, if annual or sick 
        leave is paid for more than the 90-day period, from the date 
        salary ceased, whichever is latest.  No payment may accrue 
        beyond the end of the month in which entitlement has 
        terminated.  If the disabilitant dies before negotiating the 
        check for the month in which death occurs, payment must be made 
        to the optional annuitant or beneficiary. 
           Subd. 5.  [DISABILITY BENEFIT TERMINATION.] The disability 
        benefit paid to a disabled local government correctional 
        employee terminates at the end of the month in which the 
        employee reaches age 65.  If the disabled local government 
        correctional employee is still disabled when the employee 
        reaches age 65, the employee is deemed to be a retired employee 
        and, if the employee had elected an optional annuity under 
        subdivision 3, must receive an annuity in accordance with the 
        terms of the optional annuity previously elected.  If the 
        employee had not elected an optional annuity under subdivision 
        3, the employee may elect either to receive a normal retirement 
        annuity computed in the manner provided in section 353E.04, 
        subdivision 3, or to receive an optional annuity as provided in 
        section 353.30, subdivision 3, based on the same length of 
        service as used in the calculation of the disability benefit.  
        Election of an optional annuity must be made within 90 days 
        before attaining the age of 65 years, or reaching the five-year 
        anniversary of the effective date of the disability benefit, 
        whichever is later. 
           Subd. 6.  [RESUMPTION OF EMPLOYMENT.] If a disabled 
        employee resumes a gainful occupation from which earnings are 
        less than salary received at the date of disability or the 
        salary currently paid for similar positions, or should the 
        employee be entitled to receive workers' compensation benefits, 
        the disability benefit must be continued in an amount that, when 
        added to such earnings and workers' compensation benefits, does 
        not exceed the salary received at the date of disability or the 
        salary currently payable for the same employment position or an 
        employment position substantially similar to the one the person 
        held as of the date of the disability, whichever is greater. 
           Subd. 7.  [COMBINED SERVICE DISABILITY BENEFIT.] If the 
        employee is entitled to receive a disability benefit as provided 
        in subdivision 1 or 2 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 public employees retirement 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 public 
        employees retirement 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 
        public employees retirement plan service must be augmented as 
        provided in section 353.71 while the employee is receiving a 
        disability benefit under this section. 
           Subd. 8.  [CONTINUING BENEFIT ELIGIBILITY.] Continuing 
        eligibility for a disability benefit is subject to section 
        353.33, subdivision 6. 
           Sec. 13.  [353E.07] [SURVIVOR BENEFITS.] 
           Subdivision 1.  [MEMBER AT LEAST AGE 50.] If a member or 
        former member of the local government correctional service 
        retirement plan who has attained the age of at least 50 years 
        and has credit for not less than three years of allowable 
        service dies before the annuity or disability benefit has become 
        payable, notwithstanding any designation of beneficiary to the 
        contrary, the surviving spouse may elect to receive, in lieu of 
        a refund with interest provided in section 353.32, subdivision 
        1, a surviving spouse annuity equal to the 100 percent joint and 
        survivor annuity for which the member could have qualified had 
        the member terminated service on the date of death. 
           Subd. 2.  [MEMBER NOT YET AGE 50.] If the member was under 
        age 50, dies, and had credit for not less than three years of 
        allowable service on the date of death but did not yet qualify 
        for retirement, the surviving spouse may elect to receive a 100 
        percent joint and survivor annuity based on the age of the 
        employee and the surviving spouse at the time of death.  The 
        annuity is payable using the early retirement reduction under 
        section 353E.04, subdivision 4, to age 50 and one-half the early 
        retirement reduction from age 50 to the age payment begins.  
        Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 
        to a deferred annuity or surviving spouse benefit payable under 
        this subdivision. 
           Subd. 3.  [ELECTION; ACCRUAL.] A surviving spouse election 
        under subdivisions 1 and 2 may be made at any time after the 
        date of death of the local government correctional service 
        employee.  The surviving spouse benefit begins to accrue as of 
        the first of the next month following the date on which the 
        application for the benefit was filed. 
           Subd. 4.  [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 
        lieu of the 100 percent optional annuity under subdivision 1, 
        the surviving spouse of a deceased local government correctional 
        service employee may elect to receive survivor coverage in a 
        term certain of ten, 15, or 20 years.  The monthly term certain 
        annuity must be actuarially equivalent to the 100 percent 
        optional annuity under subdivision 1 and must be based on tables 
        approved by the actuary retained by the legislative commission 
        on pensions and retirement.  The optional annuity ceases upon 
        the expiration of the term certain period.  If a survivor elects 
        a term certain annuity and dies before the expiration of the 
        specified term certain period, the commuted value of the 
        remaining annuity payments must be paid in a lump sum to the 
        survivor's estate. 
           Subd. 5.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
        no surviving spouse eligible for benefits under subdivisions 1, 
        2, and 4, a dependent child as defined in section 353.01, 
        subdivision 15a, is eligible for a dependent child survivor 
        benefit.  Benefits to a dependent child must be paid from the 
        date of the employee's death to the date the dependent child 
        attains age 20 if the child is under age 15 on the date of 
        death.  If the child is 15 years or older on the date of death, 
        the benefit is payable for five years.  The payment to a 
        dependent child is an amount actuarially equivalent to the value 
        of a 100 percent joint and survivor optional annuity using the 
        age of the employee and age of the dependent child at the date 
        of death in lieu of the age of the surviving spouse.  If there 
        is more than one dependent child, each dependent child shall 
        receive a proportionate share of the actuarial value of the 
        employee's account, with the amount of the benefit payable to 
        each child to be determined based on the portion of the total 
        eligibility period that each child is eligible.  The process for 
        calculating the dependent child survivor benefit must be 
        approved by the actuary retained by the legislative commission 
        on pensions and retirement. 
           Subd. 6.  [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 
        equal to any excess of the accumulated contributions that were 
        credited to the account of the deceased employee over and above 
        the total of the annuities paid and payable to the surviving 
        spouse or dependent children must be paid to the deceased 
        member's last designated beneficiary or, if none, to the legal 
        representative of the estate of the deceased member. 
           Subd. 7.  [ELECTION THAT SECTION DOES NOT APPLY.] A member 
        may specify in writing that this section does not apply and that 
        payment must be made only to the designated beneficiary, as 
        otherwise provided by this chapter. 
           Sec. 14.  [353E.08] [SCOPE AND APPLICATION.] 
           The general provisions of chapter 353 apply to the local 
        government correctional service retirement plan except where 
        otherwise specifically provided in sections 353E.01 to 353E.07.  
           Sec. 15.  Minnesota Statutes 1998, section 356.19, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
        PLAN.] The applicable benefit accrual rate is 1.9 percent.  
           Sec. 16.  Minnesota Statutes 1998, section 356.20, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COVERED PUBLIC PENSION FUNDS.] This section 
        applies to the following public pension plans: 
           (1) State employees retirement fund. 
           (2) Public employees retirement fund. 
           (3) Teachers retirement association. 
           (4) State patrol retirement fund. 
           (5) Minneapolis teachers retirement fund association. 
           (6) St. Paul teachers retirement fund association. 
           (7) Duluth teachers retirement fund association. 
           (8) Minneapolis employees retirement fund. 
           (9) University of Minnesota faculty retirement plan. 
           (10) University of Minnesota faculty supplemental 
        retirement plan. 
           (11) Judges retirement fund. 
           (12) Any police or firefighter's relief association 
        enumerated in section 69.77, subdivision 1a, or 69.771, 
        subdivision 1. 
           (13) Public employees police and fire fund.  
           (14) Minnesota state retirement system correctional 
        officers retirement fund.  
           (15) Public employees local government correctional service 
        retirement plan. 
           Sec. 17.  Minnesota Statutes 1998, section 356.30, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COVERED FUNDS.] This section applies to the 
        following retirement funds: 
           (1) state employees retirement fund, established pursuant 
        to chapter 352; 
           (2) correctional employees retirement program, established 
        pursuant to chapter 352; 
           (3) unclassified employees retirement plan, established 
        pursuant to chapter 352D; 
           (4) state patrol retirement fund, established pursuant to 
        chapter 352B; 
           (5) legislators retirement plan, established pursuant to 
        chapter 3A; 
           (6) elective state officers' retirement plan, established 
        pursuant to chapter 352C; 
           (7) public employees retirement association, established 
        pursuant to chapter 353; 
           (8) public employees police and fire fund, established 
        pursuant to chapter 353; 
           (9) public employees local government correctional service 
        retirement plan, established pursuant to chapter 353E; 
           (10) teachers retirement association, established pursuant 
        to chapter 354; 
           (10) (11) Minneapolis employees retirement fund, 
        established pursuant to chapter 422A; 
           (11) (12) Minneapolis teachers retirement fund association, 
        established pursuant to chapter 354A; 
           (12) (13) St. Paul teachers retirement fund association, 
        established pursuant to chapter 354A; 
           (13) (14) Duluth teachers retirement fund association, 
        established pursuant to chapter 354A; and 
           (14) (15) judges' retirement fund, established by sections 
        490.121 to 490.132. 
           Sec. 18.  Minnesota Statutes 1998, section 356.302, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
        to the following retirement plans: 
           (1) state employees retirement fund, established by chapter 
        352; 
           (2) unclassified employees retirement plan, established by 
        chapter 352D; 
           (3) public employees retirement association, established by 
        chapter 353; 
           (4) teachers retirement association, established by chapter 
        354; 
           (5) Duluth teachers retirement fund association, 
        established by chapter 354A; 
           (6) Minneapolis teachers retirement fund association, 
        established by chapter 354A; 
           (7) St. Paul teachers retirement fund association, 
        established by chapter 354A; 
           (8) Minneapolis employees retirement fund, established by 
        chapter 422A; 
           (9) correctional employees retirement plan, established by 
        chapter 352; 
           (10) state patrol retirement fund, established by chapter 
        352B; 
           (11) public employees police and fire fund, established by 
        chapter 353; and 
           (12) public employees local government correctional service 
        retirement plan, established by chapter 353E; and 
           (13) judges' retirement fund, established by sections 
        490.121 to 490.132. 
           Sec. 19.  Minnesota Statutes 1998, section 356.303, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
        to the following retirement plans: 
           (1) legislators retirement plan, established by chapter 3A; 
           (2) state employees retirement fund, established by chapter 
        352; 
           (3) correctional employees retirement plan, established by 
        chapter 352; 
           (4) state patrol retirement fund, established by chapter 
        352B; 
           (5) elective state officers retirement plan, established by 
        chapter 352C; 
           (6) unclassified employees retirement plan, established by 
        chapter 352D; 
           (7) public employees retirement association, established by 
        chapter 353; 
           (8) public employees police and fire fund, established by 
        chapter 353; 
           (9) public employees local government correctional service 
        retirement plan, established by chapter 353E; 
           (10) teachers retirement association, established by 
        chapter 354; 
           (10) (11) Duluth teachers retirement fund association, 
        established by chapter 354A; 
           (11) (12) Minneapolis teachers retirement fund association, 
        established by chapter 354A; 
           (12) (13) St. Paul teachers retirement fund association, 
        established by chapter 354A; 
           (13) (14) Minneapolis employees retirement fund, 
        established by chapter 422A; and 
           (14) (15) judges' retirement fund, established by sections 
        490.121 to 490.132. 
           Sec. 20.  [REPEALER.] 
           Minnesota Statutes 1998, section 353.33, subdivision 3a, is 
        repealed. 
           Sec. 21.  [EFFECTIVE DATE.] 
           Sections 1 to 8 and 10 to 20 are effective on July 1, 1999. 
        Section 9 is effective on the first day of the first payroll 
        period beginning after June 30, 1999. 
                                   ARTICLE 3 
                       LOCAL POLICE AND PAID FIRE RELIEF 
                       ASSOCIATION BENEFIT MODIFICATIONS
           Section 1. Laws 1977, chapter 61, section 6, as amended by 
        Laws 1981, chapter 68, section 39, and Laws 1998, chapter 390, 
        article 7, section 3, is amended to read: 
           Sec. 6.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; 
        FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 
           (a) The city of Eveleth shall provide by annual levy an 
        amount sufficient to pay 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. 
           (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. 2.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
        HOC POSTRETIREMENT ADJUSTMENT.] 
           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, 1999. 
           Sec. 3.  [FAIRMONT POLICE RELIEF ASSOCIATION; ADDITIONAL 
        ANNUAL POSTRETIREMENT ADJUSTMENT.] 
           (a) If the requirement of paragraph (f) is met, every 
        recipient of a pension or benefit from the Fairmont police 
        relief association on June 30, annually, is entitled to receive 
        a postretirement adjustment as provided in this section in 
        addition to any pension or benefit increase payable by virtue of 
        an increase in the salary of active patrol officers in the city 
        of Fairmont on the following July 1. 
           (b) If the value of current assets of the relief 
        association is equal to at least 102 percent of the actuarial 
        accrued liability of the Fairmont police relief association as 
        of December 31 in the prior calendar year as calculated under 
        Minnesota Statutes, sections 356.215 and 356.216, one percent of 
        the value of current assets of the relief association is 
        available for the payment of the postretirement adjustment under 
        this section. 
           (c) The amount of the postretirement adjustment must be 
        calculated by the chief administrative officer of the relief 
        association.  The postretirement adjustment amount is payable 
        monthly.  The total amount of all service pensions, disability 
        pensions, and survivor benefits, without inclusion of any 
        postretirement adjustment paid previously under this section 
        must be calculated and the percentage amount of each recipient's 
        annual pension or benefit of the total amount, expressed as four 
        digits beyond the decimal point, must be determined.  The 
        monthly postretirement adjustment payable to each pension or 
        benefit recipient is 1/12 of the dollar amount determined by 
        applying each recipient's determined percentage of the total 
        amount of pensions and benefits to the total dollar amount 
        available for payment as a postretirement adjustment. 
           (d) The postretirement adjustment amount paid in any year 
        under this section does not compound and must not be added to 
        the pension base for the calculation of a subsequent 
        postretirement adjustment.  If a pension or benefit recipient 
        dies before the 12 monthly postretirement adjustments under this 
        section have been paid, the remaining monthly postretirement 
        adjustment payments cancel to the special fund of the relief 
        association.  Nothing in this section authorizes the payment of 
        the postretirement adjustment to an estate or to a person who 
        did not qualify for a postretirement adjustment in the person's 
        own right. 
           (e) The chief administrative officer of the relief 
        association will report the total amount of benefits paid under 
        this section to the executive director of the legislative 
        commission on pensions and retirement, the city clerk, and the 
        state auditor. 
           (f) Payment of the postretirement adjustment amount 
        provided under this section may be made in a given year only if 
        the average time-weighted total rate of return for the total 
        portfolio for the most recent five-year period exceeds by at 
        least two percent the actual average percent increase in the 
        current monthly salary of a first class patrol officer in the 
        most recent prior five fiscal years. 
           Sec. 4.  [FAIRMONT POLICE RELIEF ASSOCIATION; RETROACTIVITY 
        OF SURVIVING SPOUSE BENEFIT INCREASE.] 
           (a) The surviving spouse benefit amount under Laws 1963, 
        chapter 423, is payable to all surviving spouses receiving 
        benefits as of the date of the approval of this act. 
           (b) Any surviving spouse benefit increase under this 
        section is first payable on the first day of the month next 
        following the effective date of this section. 
           Sec. 5.  [FAIRMONT POLICE RELIEF ASSOCIATION; BYLAWS 
        AMENDMENTS REQUIRED.] 
           Sections 3 and 4 must be implemented by the appropriate 
        amendments to the bylaws of the Fairmont police relief 
        association. 
           Sec. 6.  [ST. CLOUD POLICE CONSOLIDATION ACCOUNT; SPECIAL 
        ONE-TIME POSTRETIREMENT ADJUSTMENT.] 
           (a) Notwithstanding any provision of general or special law 
        to the contrary, all service pensioners, disability pensioners, 
        and survivor benefit recipients of the St. Cloud police 
        consolidation account who had begun the receipt of pensions or 
        benefits before December 31, 1997, the effective date of the St. 
        Cloud police consolidation process under Minnesota Statutes, 
        chapter 353A, that began in April 1997, are entitled to receive 
        the pension or benefit increase granted under Laws 1997, chapter 
        233, article 1, section 72. 
           (b) The special one-time postretirement adjustment under 
        paragraph (a) is effective retroactive to January 1, 1998.  The 
        first payment of pensions and benefits next following the 
        effective date of this section must include any back payments of 
        the retroactive postretirement adjustment. 
           (c) Nothing in this section authorizes the payment of a 
        special postretirement adjustment to an estate. 
           Sec. 7.  [EFFECTIVE DATE.] 
           (a) Sections 1 and 2 are effective on approval by the 
        Eveleth city council and compliance with Minnesota Statutes, 
        section 645.021. 
           (b) Sections 3, 4, and 5 are effective on the day following 
        approval by the Fairmont city council and compliance with 
        Minnesota Statutes, section 645.021. 
           (c) Section 6 is effective on the day following approval by 
        the St. Cloud city council and compliance with Minnesota 
        Statutes, section 645.021. 
                                   ARTICLE 4
                            MERGER INTO PERA-P&F OF 
                             LOCAL POLICE AND FIRE 
                             CONSOLIDATION ACCOUNTS 
           Section 1.  Minnesota Statutes 1998, section 3.85, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
        commission shall assess each retirement plan specified in 
        subdivision 11, paragraph (b), the compensation paid to the 
        actuary retained by the commission for the actuarial valuation 
        calculations, quadrennial projection valuations, and quadrennial 
        experience studies.  The assessment is 100 percent of the amount 
        of contract compensation for the actuarial consulting firm 
        retained by the commission for actuarial valuation calculations, 
        including the public employees police and fire plan 
        consolidation accounts of the public employees retirement 
        association established before March 2, 1999, for which the 
        municipality declined merger under section 353.665, subdivision 
        1, or established after March 1, 1999, annual experience data 
        collection and processing, and quadrennial experience 
        studies and quadrennial projection valuations.  
           The portion of the total assessment payable by each 
        retirement system or pension plan must be determined as follows: 
           (1) Each pension plan specified in subdivision 11, 
        paragraph (b), clauses (1) to (13), must pay the following 
        indexed amount based on its total active, deferred, inactive, 
        and benefit recipient membership: 
               up to 2,000 members, inclusive         $2.55 per member 
               2,001 through 10,000 members           $1.13 per member 
               over 10,000 members                    $0.11 per member  
           The amount specified is applicable for the assessment of 
        the July 1, 1991, to June 30, 1992, fiscal year actuarial 
        compensation amounts.  For the July 1, 1992, to June 30, 1993, 
        fiscal year and subsequent fiscal year actuarial compensation 
        amounts, the amount specified must be increased at the same 
        percentage increase rate as the implicit price deflator for 
        state and local government purchases of goods and services for 
        the 12-month period ending with the first quarter of the 
        calendar year following the completion date for the actuarial 
        valuation calculations, as published by the federal Department 
        of Commerce, and rounded upward to the nearest full cent. 
           (2) The total per-member portion of the allocation must be 
        determined, and that total per-member amount must be subtracted 
        from the total amount for allocation.  Of the remainder dollar 
        amount, the following per-retirement system and per-pension plan 
        charges must be determined and the charges must be paid by the 
        system or plan: 
           (i) 37.87 percent is the total additional per-retirement 
        system charge, of which one-seventh must be paid by each 
        retirement system specified in subdivision 11, paragraph (b), 
        clauses (1), (2), (6), (7), (9), (10), and (11). 
           (ii) 62.13 percent is the total additional per-pension plan 
        charge, of which one-thirteenth must be paid by each pension 
        plan specified in subdivision 11, paragraph (b), clauses (1) to 
        (13).  
           (b) The assessment must be made following the completion of 
        the actuarial valuation calculations and the experience 
        analysis.  The amount of the assessment is appropriated from the 
        retirement fund applicable to the retirement plan.  Receipts 
        from assessments must be deposited in the state treasury and 
        credited to the general fund. 
           Sec. 2.  Minnesota Statutes 1998, section 69.021, 
        subdivision 10, is amended to read: 
           Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
        (a) The commissioner of revenue shall reduce the apportionment 
        of police state aid under subdivisions 5, paragraph (b), 6, and 
        7a, for eligible employer units by any excess police state aid. 
           (b) "Excess police state aid" is: 
           (1) for counties and for municipalities in which police 
        retirement coverage is provided wholly by the public employees 
        police and fire fund and all police officers are members of the 
        plan governed by sections 353.63 to 353.657, the amount in 
        excess of the employer's total prior calendar year obligation as 
        defined in paragraph (c), as certified by the executive director 
        of the public employees retirement association; 
           (2) for municipalities in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        governed by sections 353.63 to 353.657 and in part by a local 
        police consolidation account governed by chapter 353A, and 
        established before March 2, 1999, for which the municipality 
        declined merger under section 353.665, subdivision 1, or 
        established after March 1, 1999, the amount in excess of the 
        employer's total prior calendar year obligation as defined in 
        paragraph (c), plus the amount of the employer's total prior 
        calendar year obligation under section 353A.09, subdivision 5, 
        paragraphs (a) and (b), as certified by the executive director 
        of the public employees retirement association; 
           (3) for municipalities in which police retirement coverage 
        is provided by the public employees police and fire plan 
        governed by sections 353.63 to 353.657, in which police 
        retirement coverage was provided by a police consolidation 
        account under chapter 353A before July 1, 1999, and for which 
        the municipality has an additional municipal contribution under 
        section 353.665, subdivision 8, paragraph (b), the amount in 
        excess of the employer's total prior calendar year obligation as 
        defined in paragraph (c), plus the amount of any additional 
        municipal contribution under section 353.665, subdivision 8, 
        paragraph (b), until the year 2010, as certified by the 
        executive director of the public employees retirement 
        association; 
           (4) for municipalities in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        governed by sections 353.63 to 353.657 and in part by a local 
        police relief association governed by sections 69.77 and 
        423A.01, the amount in excess of the employer's total prior 
        calendar year obligation as defined in paragraph (c), as 
        certified by the executive director of the public employees 
        retirement association, plus the amount of the financial 
        requirements of the relief association certified to the 
        applicable municipality during the prior calendar year under 
        section 69.77, subdivisions 2b and 2c, reduced by the amount of 
        member contributions deducted from the covered salary of the 
        relief association during the prior calendar year under section 
        69.77, subdivision 2a, as certified by the chief administrative 
        officer of the applicable municipality; 
           (4) (5) for the metropolitan airports commission, if there 
        are police officers hired before July 1, 1978, with retirement 
        coverage by the Minneapolis employees retirement fund remaining, 
        the amount in excess of the commission's total prior calendar 
        year obligation as defined in paragraph (c), as certified by the 
        executive director of the public employees retirement 
        association, plus the amount determined by expressing the 
        commission's total prior calendar year contribution to the 
        Minneapolis employees retirement fund under section 422A.101, 
        subdivisions 2 and 2a, as a percentage of the commission's total 
        prior calendar year covered payroll for commission employees 
        covered by the Minneapolis employees retirement fund and 
        applying that percentage to the commission's total prior 
        calendar year covered payroll for commission police officers 
        covered by the Minneapolis employees retirement fund, as 
        certified by the chief administrative officer of the 
        metropolitan airports commission; and 
           (5) (6) for the department of natural resources and for the 
        department of public safety, the amount in excess of the 
        employer's total prior calendar year obligation under section 
        352B.02, subdivision 1c, for plan members who are peace officers 
        under section 69.011, subdivision 1, clause (g), as certified by 
        the executive director of the Minnesota state retirement system. 
           (c) The employer's total prior calendar year obligation 
        with respect to the public employees police and fire plan is the 
        total prior calendar year obligation under section 353.65, 
        subdivision 3, for police officers as defined in section 353.64, 
        subdivision 2, and the actual total prior calendar year 
        obligation under section 353.65, subdivision 3, for 
        firefighters, as defined in section 353.64, subdivision 3, but 
        not to exceed for those firefighters the applicable following 
        amounts: 
          Municipality                       Maximum Amount 
          Albert Lea                          $54,157.01
          Anoka                                10,399.31
          Apple Valley                          5,442.44 
          Austin                               49,864.73
          Bemidji                              27,671.38
          Brooklyn Center                       6,605.92
          Brooklyn Park                        24,002.26  
          Burnsville                           15,956.00 
          Cloquet                               4,260.49 
          Coon Rapids                          39,920.00 
          Cottage Grove                         8,588.48
          Crystal                               5,855.00
          East Grand Forks                     51,009.88
          Edina                                32,251.00
          Elk River                             5,216.55
          Ely                                  13,584.16
          Eveleth                              16,288.27
          Fergus Falls                          6,742.00
          Fridley                              33,420.64
          Golden Valley                        11,744.61 
          Hastings                             16,561.00 
          Hopkins                               4,324.23  
          International Falls                  14,400.69 
          Lakeville                               782.35 
          Lino Lakes                            5,324.00 
          Little Falls                          7,889.41 
          Maple Grove                           6,707.54 
          Maplewood                             8,476.69 
          Minnetonka                           10,403.00 
          Montevideo                            1,307.66 
          Moorhead                             68,069.26 
          New Hope                              6,739.72 
          North St. Paul                        4,241.14 
          Northfield                              770.63 
          Owatonna                             37,292.67 
          Plymouth                              6,754.71 
          Red Wing                              3,504.01 
          Richfield                            53,757.96 
          Rosemount                             1,712.55 
          Roseville                             9,854.51 
          St. Anthony                          33,055.00 
          St. Louis Park                       53,643.11 
          Thief River Falls                    28,365.04 
          Virginia                             31,164.46 
          Waseca                               11,135.17 
          West St. Paul                        15,707.20 
          White Bear Lake                       6,521.04 
          Woodbury                              3,613.00 
          any other municipality                    0.00 
           (d) The total amount of excess police state aid must be 
        deposited in the excess police state-aid account in the general 
        fund, administered and distributed as provided in subdivision 11.
           Sec. 3.  Minnesota Statutes 1998, section 69.031, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
        treasurer shall, within 30 days after receipt, transmit the fire 
        state aid to the treasurer of the duly incorporated 
        firefighters' relief association if there is one organized and 
        the association has filed a financial report with the 
        municipality.  If the relief association has not filed a 
        financial report with the municipality, the municipal treasurer 
        shall delay transmission of the fire state aid to the relief 
        association until the complete financial report is filed.  If 
        there is no relief association organized, or if the association 
        has dissolved, or has been removed as trustees of state aid, 
        then the treasurer of the municipality shall deposit the money 
        in the municipal treasury as provided for in section 424A.08 and 
        the money may be disbursed only for the purposes and in the 
        manner set forth in that section. 
           (b) The municipal treasurer, upon receipt of the police 
        state aid, shall disburse the police state aid in the following 
        manner: 
           (1) For a municipality in which a local police relief 
        association exists and all peace officers are members of the 
        association, the total state aid must be transmitted to the 
        treasurer of the relief association within 30 days of the date 
        of receipt, and the treasurer of the relief association shall 
        immediately deposit the total state aid in the special fund of 
        the relief association; 
           (2) For a municipality in which police retirement coverage 
        is provided by the public employees police and fire fund and all 
        peace officers are members of the fund, including municipalities 
        covered by section 353.665, the total state aid must be applied 
        toward the municipality's employer contribution to the public 
        employees police and fire fund under section sections 353.65, 
        subdivision 3, and 353.665, subdivision 8, paragraph (b), if 
        applicable; or 
           (3) For a municipality other than a city of the first class 
        with a population of more than 300,000 in which both a police 
        relief association exists and police retirement coverage is 
        provided in part by the public employees police and fire fund, 
        the municipality may elect at its option to transmit the total 
        state aid to the treasurer of the relief association as provided 
        in clause (1), to use the total state aid to apply toward the 
        municipality's employer contribution to the public employees 
        police and fire fund subject to all the provisions set forth in 
        clause (2), or to allot the total state aid proportionately to 
        be transmitted to the police relief association as provided in 
        this subdivision and to apply toward the municipality's employer 
        contribution to the public employees police and fire fund 
        subject to the provisions of clause (2) on the basis of the 
        respective number of active full-time peace officers, as defined 
        in section 69.011, subdivision 1, clause (g). 
           For a city of the first class with a population of more 
        than 300,000, in addition, the city may elect to allot the 
        appropriate portion of the total police state aid to apply 
        toward the employer contribution of the city to the public 
        employees police and fire fund based on the covered salary of 
        police officers covered by the fund each payroll period and to 
        transmit the balance to the police relief association; or 
           (4) For a municipality in which police retirement coverage 
        is provided in part by the public employees police and fire fund 
        and in part by a local police consolidation account governed by 
        chapter 353A and established before March 2, 1999, for which the 
        municipality declined merger under section 353.665, subdivision 
        1, or established after March 1, 1999, the total police state 
        aid must be applied towards the municipality's total employer 
        contribution to the public employees police and fire fund and to 
        the local police consolidation account under sections 353.65, 
        subdivision 3, and 353A.09, subdivision 5. 
           (c) The county treasurer, upon receipt of the police state 
        aid for the county, shall apply the total state aid toward the 
        county's employer contribution to the public employees police 
        and fire fund under section 353.65, subdivision 3. 
           (d) The designated metropolitan airports commission 
        official, upon receipt of the police state aid for the 
        metropolitan airports commission, shall apply the total police 
        state aid first toward the commission's employer contribution 
        for police officers to the Minneapolis employees retirement fund 
        under section 422A.101, subdivision 2a, and, if there is any 
        amount of police state aid remaining, shall apply that remainder 
        toward the commission's employer contribution for police 
        officers to the public employees police and fire plan under 
        section 353.65, subdivision 3. 
           (e) The police state aid apportioned to the departments of 
        public safety and natural resources under section 69.021, 
        subdivision 7a, is appropriated to the commissioner of finance 
        for transfer to the funds and accounts from which the salaries 
        of peace officers certified under section 69.011, subdivision 
        2a, are paid.  The commissioner of revenue shall certify to the 
        commissioners of public safety, natural resources, and finance 
        the amounts to be transferred from the appropriation for police 
        state aid.  The commissioners of public safety and natural 
        resources shall certify to the commissioner of finance the 
        amounts to be credited to each of the funds and accounts from 
        which the peace officers employed by their respective 
        departments are paid.  Each commissioner must allocate the 
        police state aid first for employer contributions for employees 
        funded from the general fund and then for employer contributions 
        for employees funded from other funds.  For peace officers whose 
        salaries are paid from the general fund, the amounts transferred 
        from the appropriation for police state aid must be canceled to 
        the general fund. 
           Sec. 4.  Minnesota Statutes 1998, section 353.01, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
        employees shall not participate as members of the association 
        with retirement coverage by the public employees retirement plan 
        or the public employees police and fire retirement plan: 
           (1) elected public officers, or persons appointed to fill a 
        vacancy in an elective office, who do not elect to participate 
        in the association by filing an application for membership; 
           (2) election officers; 
           (3) patient and inmate personnel who perform services in 
        charitable, penal, or correctional institutions of a 
        governmental subdivision; 
           (4) employees who are hired for a temporary position under 
        subdivision 12a, and employees who resign from a nontemporary 
        position and accept a temporary position within 30 days in the 
        same governmental subdivision, but not those employees who are 
        hired for an unlimited period but are serving a probationary 
        period.  If the period of employment extends beyond six 
        consecutive months and the employee earns more than $425 from 
        one governmental subdivision in any one calendar month, the 
        department head shall report the employee for membership and 
        require employee deductions be made on behalf of the employee 
        under section 353.27, subdivision 4. 
           Membership eligibility of an employee who resigns or is 
        dismissed from a temporary position and within 30 days accepts 
        another temporary position in the same governmental subdivision 
        is determined on the total length of employment rather than on 
        each separate position.  Membership eligibility of an employee 
        who holds concurrent temporary and nontemporary positions in one 
        governmental subdivision is determined by the length of 
        employment and salary of each separate position; 
           (5) employees whose actual salary from one governmental 
        subdivision does not exceed $425 per month, or whose annual 
        salary from one governmental subdivision does not exceed a 
        stipulation prepared in advance, in writing, that the salary 
        must not exceed $5,100 per calendar year or per school year for 
        school employees for employment expected to be of a full year's 
        duration or more than the prorated portion of $5,100 per 
        employment period for employment expected to be of less than a 
        full year's duration; 
           (6) employees who are employed by reason of work emergency 
        caused by fire, flood, storm, or similar disaster; 
           (7) employees who by virtue of their employment in one 
        governmental subdivision are required by law to be a member of 
        and to contribute to any of the plans or funds administered by 
        the Minnesota state retirement system, the teachers retirement 
        association, the Duluth teachers retirement fund association, 
        the Minneapolis teachers retirement association, the St. Paul 
        teachers retirement fund association, the Minneapolis employees 
        retirement fund, or any police or firefighters relief 
        association governed by section 69.77 that has not consolidated 
        with the public employees retirement association, or any local 
        police or firefighters relief association that has consolidated 
        with the public employees retirement association consolidation 
        account but whose members who have not elected the type of 
        benefit coverage provided by the public employees police and 
        fire fund under sections 353A.01 to 353A.10, or any persons 
        covered by section 353.665, subdivision 4, 5, or 6, who have not 
        elected public employees police and fire plan benefit coverage.  
        This clause must not be construed to prevent a person from being 
        a member of and contributing to the public employees retirement 
        association and also belonging to and contributing to another 
        public pension fund for other service occurring during the same 
        period of time.  A person who meets the definition of "public 
        employee" in subdivision 2 by virtue of other service occurring 
        during the same period of time becomes a member of the 
        association unless contributions are made to another public 
        retirement fund on the salary based on the other service or to 
        the teachers retirement association by a teacher as defined in 
        section 354.05, subdivision 2; 
           (8) persons who are excluded from coverage under the 
        federal Old Age, Survivors, Disability, and Health Insurance 
        Program for the performance of service as specified in United 
        States Code, title 42, section 410(a)(8)(A), as amended through 
        January 1, 1987, if no irrevocable election of coverage has been 
        made under section 3121(r) of the Internal Revenue Code of 1954, 
        as amended; 
           (9) full-time students who are enrolled and are regularly 
        attending classes at an accredited school, college, or 
        university and who are part-time employees as defined by a 
        governmental subdivision; 
           (10) resident physicians, medical interns, and pharmacist 
        residents and pharmacist interns who are serving in a degree or 
        residency program in public hospitals; 
           (11) students who are serving in an internship or residency 
        program sponsored by an accredited educational institution; 
           (12) persons who hold a part-time adult supplementary 
        technical college license who render part-time teaching service 
        in a technical college; 
           (13) foreign citizens working for a governmental 
        subdivision with a work permit of less than three years, or an 
        H-1b visa valid for less than three years of employment.  Upon 
        notice to the association that the work permit or visa extends 
        beyond the three-year period, the foreign citizens are eligible 
        for membership from the date of the extension; 
           (14) public hospital employees who elected not to 
        participate as members of the association before 1972 and who 
        did not elect to participate from July 1, 1988, to October 1, 
        1988; 
           (15) except as provided in section 353.86, volunteer 
        ambulance service personnel, as defined in subdivision 35, but 
        persons who serve as volunteer ambulance service personnel may 
        still qualify as public employees under subdivision 2 and may be 
        members of the public employees retirement association and 
        participants in the public employees retirement fund or the 
        public employees police and fire fund on the basis of 
        compensation received from public employment service other than 
        service as volunteer ambulance service personnel; 
           (16) except as provided in section 353.87, volunteer 
        firefighters, as defined in subdivision 36, engaging in 
        activities undertaken as part of volunteer firefighter duties; 
        provided that a person who is a volunteer firefighter may still 
        qualify as a public employee under subdivision 2 and may be a 
        member of the public employees retirement association and a 
        participant in the public employees retirement fund or the 
        public employees police and fire fund on the basis of 
        compensation received from public employment activities other 
        than those as a volunteer firefighter; and 
           (17) pipefitters and associated trades personnel employed 
        by independent school district No. 625, St. Paul, with coverage 
        by the pipefitters local 455 pension plan under a collective 
        bargaining agreement who were either first employed after May 1, 
        1997, or, if first employed before May 2, 1997, elected to be 
        excluded under Laws 1997, chapter 241, article 2, section 12. 
           Sec. 5.  Minnesota Statutes 1998, section 353.01, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SALARY.] (a) "Salary" means:  
           (1) periodic compensation of a public employee, before 
        deductions for deferred compensation, supplemental retirement 
        plans, or other voluntary salary reduction programs, and also 
        means "wages" and includes net income from fees; and 
           (2) for a public employee who has prior service covered by 
        a local police or firefighters' relief association that has 
        consolidated with the public employees retirement association or 
        to which section 353.665 applies and who has elected 
        coverage either under the public employees police and fire fund 
        benefit plan under section 353A.08 following the 
        consolidation or under section 353.665, subdivision 4, "salary" 
        means the rate of salary upon which member contributions to the 
        special fund of the relief association were made prior to the 
        effective date of the consolidation as specified by law and by 
        bylaw provisions governing the relief association on the date of 
        the initiation of the consolidation procedure and the actual 
        periodic compensation of the public employee after the effective 
        date of consolidation. 
           (b) Salary does not mean: 
           (1) fees paid to district court reporters, unused annual or 
        sick leave payments, in lump-sum or periodic payments, severance 
        payments, reimbursement of expenses, lump-sum settlements not 
        attached to a specific earnings period, or workers' compensation 
        payments; 
           (2) employer-paid amounts used by an employee toward the 
        cost of insurance coverage, employer-paid fringe benefits, 
        flexible spending accounts, cafeteria plans, health care expense 
        accounts, day care expenses, or any payments in lieu of any 
        employer-paid group insurance coverage, including the difference 
        between single and family rates that may be paid to a member 
        with single coverage and certain amounts determined by the 
        executive director to be ineligible; 
           (3) the amount equal to that which the employing 
        governmental subdivision would otherwise pay toward single or 
        family insurance coverage for a covered employee when, through a 
        contract or agreement with some but not all employees, the 
        employer: 
           (i) discontinues, or for new hires does not provide, 
        payment toward the cost of the employee's selected insurance 
        coverages under a group plan offered by the employer; 
           (ii) makes the employee solely responsible for all 
        contributions toward the cost of the employee's selected 
        insurance coverages under a group plan offered by the employer, 
        including any amount the employer makes toward other employees' 
        selected insurance coverages under a group plan offered by the 
        employer; and 
           (iii) provides increased salary rates for employees who do 
        not have any employer-paid group insurance coverages; and 
           (4) except as provided in section 353.86 or 353.87, 
        compensation of any kind paid to volunteer ambulance service 
        personnel or volunteer firefighters, as defined in subdivisions 
        35 and 36.  
           Sec. 6.  Minnesota Statutes 1998, section 353.01, 
        subdivision 16, is amended to read: 
           Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
        means service during years of actual membership in the course of 
        which employee contributions were made, periods covered by 
        payments in lieu of salary deductions under section 353.35, and 
        service in years during which the public employee was not a 
        member but for which the member later elected, while a member, 
        to obtain credit by making payments to the fund as permitted by 
        any law then in effect. 
           (b) "Allowable service" also means a period of authorized 
        leave of absence with pay from which deductions for employee 
        contributions are made, deposited, and credited to the fund. 
           (c) "Allowable service" also means a period of authorized 
        leave of absence without pay that does not exceed one year, and 
        during or for which a member obtained credit by payments to the 
        fund made in place of salary deductions, provided that the 
        payments are made in an amount or amounts based on the member's 
        average salary on which deductions were paid for the last six 
        months of public service, or for that portion of the last six 
        months while the member was in public service, to apply to the 
        period in either case immediately preceding commencement of the 
        leave of absence.  If the employee elects to pay employee 
        contributions for the period of any leave of absence without 
        pay, or for any portion of the leave, the employee shall also, 
        as a condition to the exercise of the election, pay to the fund 
        an amount equivalent to both the required employer and 
        additional employer contributions for the employee.  The payment 
        must be made within one year from the expiration of the leave of 
        absence or within 20 days after termination of public service 
        under subdivision 11a.  The employer by appropriate action of 
        its governing body, made a part of its official records, before 
        the date of the first payment of the employee contribution, may 
        certify to the association in writing its commitment to pay the 
        employer and additional employer contributions from the proceeds 
        of a tax levy made under section 353.28.  Payments under this 
        paragraph must include interest at an annual rate of 8.5 percent 
        compounded annually from the date of the termination of the 
        leave of absence to the date payment is made.  An employee shall 
        return to public service and receive a minimum of three months 
        of allowable service to be eligible to pay employee and employer 
        contributions for a subsequent authorized leave of absence 
        without pay. 
           (d) "Allowable service" also means a periodic, repetitive 
        leave that is offered to all employees of a governmental 
        subdivision.  The leave program may not exceed 208 hours per 
        annual normal work cycle as certified to the association by the 
        employer.  A participating member obtains service credit by 
        making employee contributions in an amount or amounts based on 
        the member's average salary that would have been paid if the 
        leave had not been taken.  The employer shall pay the employer 
        and additional employer contributions on behalf of the 
        participating member.  The employee and the employer are 
        responsible to pay interest on their respective shares at the 
        rate of 8.5 percent a year, compounded annually, from the end of 
        the normal cycle until full payment is made.  An employer shall 
        also make the employer and additional employer contributions, 
        plus 8.5 percent interest, compounded annually, on behalf of an 
        employee who makes employee contributions but terminates public 
        service.  The employee contributions must be made within one 
        year after the end of the annual normal working cycle or within 
        20 days after termination of public service, whichever is 
        sooner.  The association shall prescribe the manner and forms to 
        be used by a governmental subdivision in administering a 
        periodic, repetitive leave. 
           (e) "Allowable service" also means a period during which a 
        member is on an authorized sick leave of absence, without pay, 
        limited to one year.  An employee who has received one year of 
        allowable service shall return to public service and receive a 
        minimum of three months of allowable service to receive 
        allowable service for a subsequent authorized sick leave of 
        absence. 
           (f) "Allowable service" also means an authorized temporary 
        layoff under subdivision 12, limited to three months allowable 
        service per authorized temporary layoff in one calendar year.  
        An employee who has received the maximum service allowed for an 
        authorized temporary layoff shall return to public service and 
        receive a minimum of three months of allowable service to 
        receive allowable service for a subsequent authorized temporary 
        layoff. 
           (g) Notwithstanding any law to the contrary, "allowable 
        service" also means a parental leave.  The association shall 
        grant a maximum of two months service credit for a parental 
        leave, within six months after the birth or adoption, upon 
        documentation from the member's governmental subdivision or 
        presentation of a birth certificate or other evidence of birth 
        or adoption to the association. 
           (h) "Allowable service" also means a period during which a 
        member is on an authorized leave of absence to enter military 
        service, provided that the member returns to public service upon 
        discharge from military service under section 192.262 and pays 
        into the fund employee contributions based upon the employee's 
        salary at the date of return from military service.  Payment 
        must be made within five years of the date of discharge from the 
        military service.  The amount of these contributions must be in 
        accord with the contribution rates and salary limitations, if 
        any, in effect during the leave, plus interest at an annual rate 
        of 8.5 percent compounded annually from the date of return to 
        public service to the date payment is made.  The matching 
        employer contribution and additional employer contribution under 
        section 353.27, subdivisions 3 and 3a, must be paid by the 
        governmental subdivision employing the member upon return to 
        public service if the member makes the employee contributions.  
        The governmental subdivision involved may appropriate money for 
        those payments.  A member may not receive credit for a voluntary 
        extension of military service at the instance of the member 
        beyond the initial period of enlistment, induction, or call to 
        active duty. 
           (i) For calculating benefits under sections 353.30, 353.31, 
        353.32, and 353.33 for state officers and employees displaced by 
        the Community Corrections Act, chapter 401, and transferred into 
        county service under section 401.04, "allowable service" means 
        combined years of allowable service as defined in paragraphs (a) 
        to (i) and section 352.01, subdivision 11.  
           (j) For a public employee who has prior service covered by 
        a local police or firefighters relief association that has 
        consolidated with the public employees retirement association or 
        to which section 353.665 applies, and who has elected the type 
        of benefit coverage provided by the public employees police and 
        fire fund either under section 353A.08 following the 
        consolidation or under section 353.665, subdivision 4, 
        "applicable service" is a period of service credited by the 
        local police or firefighters relief association as of the 
        effective date of the consolidation based on law and on bylaw 
        provisions governing the relief association on the date of the 
        initiation of the consolidation procedure. 
           Sec. 7.  Minnesota Statutes 1998, section 353.64, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
        person who prior to July 1, 1961, was a member of the police and 
        fire fund, by virtue of being a police officer or firefighter, 
        shall, as long as the person remains in either position, 
        continue membership in the fund.  
           (b) A person who was employed by a governmental subdivision 
        as a police officer and was a member of the police and fire fund 
        on July 1, 1978, by virtue of being a police officer as defined 
        by this section on that date, and if employed by the same 
        governmental subdivision in a position in the same department in 
        which the person was employed on that date, shall continue 
        membership in the fund whether or not that person has the power 
        of arrest by warrant after that date. 
           (c) A person who was employed by a governmental subdivision 
        as a police officer or a firefighter, whichever applies, was an 
        active member of the local police or salaried firefighters 
        relief association located in that governmental subdivision by 
        virtue of that employment as of the effective date of the 
        consolidation as authorized by sections 353A.01 to 353A.10, and 
        has elected coverage by the public employees police and fire 
        fund benefit plan, shall become a member of the police and fire 
        fund after that date if employed by the same governmental 
        subdivision in a position in the same department in which the 
        person was employed on that date. 
           (d) Any other employee serving on a full-time basis as a 
        police officer or firefighter on or after July 1, 1961, shall 
        become a member of the public employees police and fire fund.  
           (e) An employee serving on less than a full-time basis as a 
        police officer shall become a member of the public employees 
        police and fire fund only after a resolution stating that the 
        employee should be covered by the police and fire fund is 
        adopted by the governing body of the governmental subdivision 
        employing the person declaring that the position which the 
        person holds is that of a police officer. 
           (f) An employee serving on less than a full-time basis as a 
        firefighter shall become a member of the public employees police 
        and fire fund only after a resolution stating that the employee 
        should be covered by the police and fire fund is adopted by the 
        governing body of the governmental subdivision employing the 
        person declaring that the position which the person holds is 
        that of a firefighter. 
           (g) A police officer or firefighter employed by a 
        governmental subdivision who by virtue of that employment is 
        required by law to be a member of and to contribute to any 
        police or firefighter relief association governed by section 
        69.77 which has not consolidated with the public employees 
        police and fire fund and, any police officer or firefighter of a 
        relief association that has consolidated with the association 
        for which the employee has not elected coverage by the public 
        employees police and fire fund benefit plan as provided in 
        sections 353A.01 to 353A.10, or any police officer or 
        firefighter to whom section 353.665 applies who has not elected 
        coverage by the public employees police and fire fund benefit 
        plan as provided in section 353.665, subdivision 4, shall not 
        become a member of the public employees police and fire fund. 
           Sec. 8.  Minnesota Statutes 1998, section 353.65, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
        contribution is an amount equal to 7.6 6.2 percent of the total 
        salary of the member.  This contribution 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, the member's employee contribution is based on the 
        total salary received from all sources.  
           Sec. 9.  Minnesota Statutes 1998, section 353.65, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
        contribution shall be an amount equal to 11.4 9.3 percent of the 
        total salary of every member.  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. 10.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
        ACCOUNTS INTO PERA-P&F.] 
           Subdivision 1.  [MERGER AUTHORIZED.] (a) Notwithstanding 
        any provision of law to the contrary, unless the applicable 
        municipality elects otherwise under paragraph (b), every local 
        police and fire consolidation account under chapter 353A in 
        existence on March 1, 1999, becomes a part of the public 
        employees police and fire plan and fund governed by sections 
        353.63 to 353.659 on July 1, 1999. 
           (b) If a municipality desires to retain its consolidation 
        account or consolidation accounts, whichever applies, the 
        governing body of the municipality must adopt a resolution to 
        that effect and must file a copy of the resolution with the 
        secretary of state, the state auditor, the legislative auditor, 
        the finance commissioner, the revenue commissioner, the 
        executive director of the public employees retirement 
        association, and the executive director of the legislative 
        commission on pensions and retirement.  The retention election 
        must apply to both consolidation accounts if the municipality is 
        associated with more than one consolidation account.  The 
        retention resolution must be adopted and filed with all 
        recipients before June 15, 1999. 
           Subd. 2.  [TRANSFER OF LIABILITIES.] Unless the 
        municipality has elected to retain the consolidation account 
        under subdivision 1, paragraph (b), all current and future 
        liabilities of a former local police or fire consolidation 
        account are the liabilities of the public employees police and 
        fire fund as of July 1, 1999, and the accrued benefits of the 
        members are the obligation of the public employees police and 
        fire fund. 
           Subd. 3.  [TRANSFER OF ASSETS.] Unless the municipality has 
        elected to retain the consolidation account under subdivision 1, 
        paragraph (b), the assets of the former local police or fire 
        consolidation account must be transferred and upon transfer, the 
        actuarial value of the assets of a former local police or fire 
        consolidation account less an amount equal to the residual 
        assets as determined under subdivision 7, paragraph (f), are the 
        assets of the public employees police and fire fund as of July 
        1, 1999.  The participation of a consolidation account in the 
        Minnesota postretirement investment fund becomes part of the 
        participation of the public employees police and fire fund in 
        the Minnesota postretirement investment fund.  The remaining 
        assets, excluding the amounts for distribution under subdivision 
        7, paragraph (f), become an asset of the public employees police 
        and fire fund.  The public employees police and fire fund also 
        must be credited as an asset with the amount of receivable 
        assets under subdivision 7, paragraph (e). 
           Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
        person who is a police officer or a firefighter who, as such, is 
        an active member of a merging local police or fire consolidation 
        account on June 30, 1999, and who has not previously elected 
        benefit coverage under the relevant provisions of the public 
        employees police and fire fund benefit plan under section 
        353A.08, subdivision 3, may elect benefit coverage under the 
        relevant provisions of the public employees police and fire fund 
        benefit plan.  This election must be made in writing on a form 
        prescribed by the executive director before September 1, 1999, 
        and is irrevocable. 
           (b) If an eligible person makes no affirmative election of 
        benefit coverage before September 1, 1999, the person retains 
        the benefit coverage provided by the relief association benefit 
        plan as reflected in the applicable provisions of chapter 353B 
        and may elect benefit coverage under the relevant provisions of 
        the public employees police and fire fund benefit plan when the 
        person terminates active employment for purposes of receiving a 
        service pension, disability benefit, or within 90 days of the 
        date the member terminates active employment and defers receipt 
        of a service pension, whichever applies.  
           (c) Notwithstanding any provision of section 353A.083 and 
        any municipal action under authority of that statute to the 
        contrary, the provisions of the public employees police and fire 
        fund benefit plan applicable to active members of the merging 
        local police or fire consolidation accounts who elect the public 
        employees police and fire fund benefit plan under section 
        353A.08, subdivision 3, or paragraph (a), are the applicable 
        provisions of sections 353.63 to 353.659. 
           Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
        RECIPIENTS.] (a) A person who received a service pension, a 
        disability pension or benefit, or a survivor benefit from a 
        merging local police or fire consolidation account for the month 
        of June 1999, and who has not previously elected participation 
        in the Minnesota postretirement investment fund for any future 
        postretirement adjustments rather than the postretirement 
        adjustment mechanism or mechanisms of the relief association 
        benefit plan under section 353A.08, subdivision 1, may elect 
        participation in the Minnesota postretirement investment fund 
        for any future postretirement adjustments or retention of the 
        postretirement adjustment mechanism or mechanisms of the relief 
        association benefit plan as reflected in the applicable 
        provisions of chapter 353B.  This election must be in writing on 
        a form prescribed by the executive director and must be made 
        before September 1, 1999. 
           (b) If an eligible person is a minor, the election must be 
        made by the person's parent or legal guardian.  If the eligible 
        person makes no affirmative election under this subdivision, the 
        person retains the postretirement adjustment mechanism or 
        mechanisms of the relief association benefit plan as reflected 
        in the applicable provisions of chapter 353B. 
           (c) The survivor benefit payable on behalf of any service 
        pension or disability benefit recipient who elects participation 
        in the Minnesota postretirement investment fund must be 
        calculated under the relief association benefit plan in effect 
        on the effective date of consolidation under chapter 353A as 
        reflected in the applicable provisions of chapter 353B. 
           Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
        who terminated before July 1, 1999, active employment as a 
        police officer or a firefighter that gave rise to membership in 
        a local relief association that has consolidated with the public 
        employees police and fire plan under chapter 353A and is merging 
        under this section and who had sufficient service credit to 
        entitle the person to an eventual service pension retains the 
        benefit plan as reflected in the applicable provisions of 
        chapter 353B, except that the deferred member may elect before 
        September 1, 1999, to participate, upon retirement, in the 
        Minnesota postretirement investment fund.  Any election to 
        participate in the Minnesota postretirement investment fund is 
        applicable to any survivor benefit attributable to a deferred 
        member covered by this subdivision. 
           Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
        June 30, 1999, the actuary retained by the legislative 
        commission on pensions and retirement shall determine the final 
        funded status of local police and fire consolidation accounts 
        under chapter 353A that the applicable municipality has not 
        elected to retain under subdivision 1, paragraph (b), as 
        provided in this subdivision. 
           (b) The final funded status calculation must be made using 
        the benefit plan provisions applicable to the consolidation 
        account and the actuarial assumptions used for the June 30, 
        1998, actuarial valuation of the account. 
           (c) The actuary must calculate the total actuarial accrued 
        liability of the consolidation account, which is the sum of the 
        actuarial accrued liability for all consolidation account 
        members who are not included in the participation of the account 
        in the Minnesota postretirement investment fund calculated using 
        the entry age normal actuarial cost method.  If local 
        legislation enacted during the 1999 regular session or any 
        special session occurring before October 1, 1999, provides a 
        benefit increase for one consolidation account member or more, 
        whether the applicable municipality has given final approval to 
        the local legislation yet or not, the total actuarial accrued 
        liability calculation must include that benefit increase.  The 
        actuary also must calculate any account unfunded accrued 
        liability or any account funding surplus.  An account unfunded 
        accrued liability is the actuarial accrued liability reduced by 
        the amount of the current value of assets, if the resulting 
        number is positive.  An account funding surplus is the actuarial 
        accrued liability reduced by the amount of the current value of 
        assets, if the resulting number is negative.  If a municipality 
        is associated with two consolidation accounts and one has an 
        account funding surplus and one has an account unfunded accrued 
        liability in the preliminary calculation under this paragraph, 
        the actuary must make a second calculation for the account with 
        a preliminary account unfunded accrued liability, after 
        crediting to that account an amount up to 75 percent of the 
        one-half of the market value of the assets of the account with 
        an account funding surplus that are in excess of 100 percent of 
        the account actuarial accrued liability and that are less than 
        that percentage of the total actuarial accrued liability that 
        equals the public employees police and fire fund funded ratio as 
        of June 30, 1999, but not to exceed the account's unfunded 
        actuarial accrued liability. 
           (d) The actuary also must calculate the amortizable base 
        for every consolidation account.  The amortizable base is the 
        present value of future benefits for all account members who are 
        not included in the participation of the account in the 
        Minnesota postretirement investment fund reduced by the present 
        value of 19 percent of future covered salary and further reduced 
        by the current value of account assets other than its 
        participation in the Minnesota postretirement investment fund, 
        after adjustment for fiscal year 1999 net mortality gains and 
        losses and for the net actuarial affect of the election of 
        postretirement adjustment coverage under subdivision 5. 
           (e) If the amortizable base under paragraph (d) is a 
        positive number, the receivable assets are an amount equal to 
        the amortizable base number. 
           (f) If the amortizable base under paragraph (d) is a 
        negative number, the actuary must calculate the residual asset 
        amount.  The residual asset amount is: 
           (1) one-half of the amount by which the current assets of 
        the account exceed 100 percent of the total actuarial accrued 
        liability up to that percentage of the total actuarial accrued 
        liability that equals the public employees police and fire fund 
        funded ratio on June 30, 1999; and 
           (2) the amount by which the current assets of the account 
        exceed that percentage of the total actuarial accrued liability 
        that equals the public employees police and fire fund funded 
        ratio on June 30, 1999.  Following the calculation of the 
        residual asset amount for each applicable municipality and the 
        verification of the amount by the legislative auditor, the 
        executive director of the public employees retirement 
        association shall pay the applicable residual asset amount with 
        interest equal to the average yield on the invested treasurer's 
        cash fund from July 1, 1999, to the first of the month in which 
        the payment is issued to each qualifying municipality.  The 
        residual asset amount must be used by the municipality to defray 
        fire department expenditure items if the residual asset amount 
        was derived from a fire consolidation account or to defray 
        police department expenditure items if the residual asset amount 
        was derived from a police consolidation account.  Before the 
        residual asset amount payment is made by the public employees 
        retirement association, the governing body of the applicable 
        municipality, following a public hearing on the issue, must 
        formulate and adopt a plan for the expenditure of the residual 
        amount and must file that plan in the form of a municipal 
        resolution with the state auditor.  The residual asset amount 
        must be deposited in a special fund or account in the municipal 
        treasury established for that purpose.  The special fund or 
        account must be invested and any investment return attributable 
        to the residual asset amount must be credited to that special 
        fund or account and its disbursement similarly restricted.  The 
        special fund or account must be audited periodically by the 
        state auditor. 
           Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
        Effective on the first day of the first full pay period 
        following June 30, 1999, the employee contribution rate for 
        merging former consolidation account active members is the rate 
        specified in section 353.65, subdivision 2, and the regular 
        municipal contribution rate on behalf of former consolidation 
        account active members is the rate specified in section 353.65, 
        subdivision 3. 
           (b) The municipality associated with a merging former local 
        consolidation account that had a positive value amortizable base 
        calculation under subdivision 7, paragraph (d), after the 
        preliminary calculation or the second calculation, whichever 
        applies, must make an additional municipal contribution to the 
        public employees police and fire plan for the period from 
        January 1, 2000, to December 31, 2009.  The amount of the 
        additional municipal contribution is the amount calculated by 
        the actuary retained by the legislative commission on pensions 
        and retirement and certified by the executive director of the 
        public employees retirement association by which the amortizable 
        base amount would be amortized on a level dollar annual 
        end-of-the-year contribution basis, using an 8.5 percent 
        interest rate assumption.  The additional municipal contribution 
        is payable during the month of January, is without any interest, 
        or if made after January 31, but before the next following 
        December 31, is payable with interest for the period since 
        January 1 at a rate which is equal to the preretirement interest 
        rate assumption specified in section 356.215, subdivision 4d, 
        applicable to the public employees police and fire fund 
        expressed as a monthly rate and compounded on a monthly basis or 
        if made after December 31 of the year in which the additional 
        municipal contribution is due is payable with interest at a rate 
        which is four percent greater than the highest interest rate 
        assumption specified in section 356.215, subdivision 4d, 
        expressed as a monthly rate and compounded monthly from January 
        1 of the year in which the additional municipal contribution is 
        due until the date on which payment is made. 
           Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
        election authorized under subdivision 4, 5, or 6, the benefit 
        plan election by any person or on behalf of any person under 
        section 353A.08 remains binding.  Merging former consolidation 
        account members who elected the entirety of the public employees 
        police and fire benefit plan are entitled to an applicable 
        annuity or benefit under the provisions of sections 353.63 to 
        353.68 in effect on the day that the merging former 
        consolidation account member terminated active service as a 
        police officer or firefighter, whichever applies.  
           Subd. 10.  [CONSOLIDATION ACCOUNT TERMINATION.] Unless the 
        municipality has elected to retain the consolidation account 
        under subdivision 1, paragraph (b), upon the payment of all 
        residual asset amounts under subdivision 7 and the transfer of 
        all liabilities and remaining assets under subdivisions 2 and 3, 
        the local consolidation accounts under chapter 353A in existence 
        on March 1, 1999, are terminated, and all benefits accrued up to 
        the date of termination are the obligation of the public 
        employees police and fire fund. 
           Sec. 11.  Minnesota Statutes 1998, section 353A.09, 
        subdivision 4, is amended to read: 
           Subd. 4.  [MEMBER CONTRIBUTIONS.] Following the effective 
        date of consolidation, the applicable member contribution rate 
        and applicable salary rate to which the member contribution rate 
        applies for persons who were formerly members of the relief 
        association shall be determined as follows:  
           (1) if the person has elected coverage by the public 
        employees police and fire fund benefit plan under section 
        353A.08, the applicable member contribution rate shall be that 
        rate specified in Minnesota Statutes 1998, section 353.65, 
        subdivision 2, and the applicable salary rate to which the 
        member contribution rate applies shall be the actual salary of 
        the person, as defined in section 353.01, subdivision 10; and 
           (2) if the person has not elected coverage by the public 
        employees police and fire fund benefit plan under section 
        353A.08, the applicable member contribution rate shall be the 
        rate specified in section 69.77, subdivision 2a, or the rate 
        specified in the applicable general law, special law, or bylaw 
        provision governing the relief association as of the date of the 
        initiation of consolidation, whichever is greater, and the 
        applicable salary rate to which the member contribution rate 
        applies shall be the salary rate specified in the applicable 
        general law, special law, or bylaw provision governing the 
        relief association as of the date of the initiation of 
        consolidation or the actual salary of the person, including 
        overtime pay and any regularly occurring special payments but 
        excluding lump sum annual leave payments, worker's compensation 
        payments, and severance payments, whichever salary rate is 
        greater.  
           The member contribution rate and applicable salary rate to 
        which the member contribution rate applies shall be effective as 
        of the first day of the first pay period occurring after the 
        effective date of consolidation.  
           The chief administrative officer of the municipal police 
        department or municipal fire department, whichever applies, 
        shall cause the member contributions required under this 
        subdivision to be deducted in the manner and subject to the 
        terms provided in section 353.27, subdivision 4.  
           Sec. 12.  Minnesota Statutes 1998, section 353A.09, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REGULAR AND ADDITIONAL MUNICIPAL CONTRIBUTIONS.] 
        (a) Following the effective date of consolidation, the 
        applicable regular municipal contribution rate and applicable 
        salary rate to which the regular municipal contribution rate 
        applies on behalf of persons who were formerly members of the 
        relief association shall be as follows:  
           (1) on behalf of persons who have elected coverage by the 
        public employees police and fire fund benefit plan under section 
        353A.08, the applicable regular municipal contribution rate 
        shall be that specified in Minnesota Statutes 1998, section 
        353.65, subdivision 3, and the applicable salary rate to which 
        the regular municipal contribution rate applies shall be that 
        specified in subdivision 4, clause (1); and 
           (2) on behalf of persons who have not elected coverage by 
        the public employees police and fire fund benefit plan under 
        section 353A.08, the applicable regular municipal contribution 
        rate shall be 12 percent and the applicable salary rate to which 
        the regular municipal contribution rate applies shall be that 
        specified in subdivision 4, clause (2).  
           (b) Following the effective date of consolidation, the 
        applicable additional municipal contribution amount shall be the 
        sum of the following:  
           (1) the annual level dollar contribution as calculated by 
        the actuary retained by the commission as of the effective date 
        of consolidation which is required to amortize by December 31, 
        2010, that portion of the present value of future benefits 
        computed on the basis of the benefit plan producing the largest 
        present value of future benefits for each individual which 
        remains after subtracting the present value of future member 
        contributions as provided in subdivision 4, the present value of 
        future regular municipal contributions as provided in clause 
        (a), and the market value of the assets of the relief 
        association transferred to the fund; and 
           (2) the amount of the annual contribution as calculated by 
        the actuary retained by the commission as of the most recent 
        actuarial valuation date which is required to amortize on a 
        level annual dollar basis the amount of any net actuarial 
        experience loss incurred during the year which ended as of the 
        day immediately before the most recent actuarial valuation date 
        by December 31 of the year occurring 15 years later. 
           (c) Regular municipal contributions shall be made in the 
        manner provided in section 353.28.  Additional municipal 
        contributions shall be paid during the calendar year following 
        the annual certification of the amount of the annual additional 
        municipal contribution by the executive director of the public 
        employees retirement association and, if made during the month 
        of January, shall be payable without any interest, or if made 
        after January 31, but before the next following December 31, 
        shall be payable with interest for the period since January 1 at 
        a rate which is equal to the preretirement interest rate 
        assumption specified in section 356.215, subdivision 4d, 
        applicable to the fund expressed as a monthly rate and 
        compounded on a monthly basis or if made after December 31 of 
        the year in which the additional municipal contribution is due 
        shall be payable with interest at a rate which is four percent 
        greater than the highest interest rate assumption specified in 
        section 356.215, subdivision 4d, expressed as a monthly rate and 
        compounded monthly from January 1 of the year in which the 
        additional municipal contribution is due until the date on which 
        payment is made.  
           Sec. 13.  Minnesota Statutes 1998, section 353A.09, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [AUTHORITY TO MODIFY CONTRIBUTION RATES.] (a) 
        Notwithstanding subdivisions 4 and 5, a municipality associated 
        with a consolidation account, with municipal governing body 
        approval, may implement the contribution rates specified in 
        section 353.65, subdivisions 2 and 3, rather than the rates 
        specified in subdivisions 4 and 5. 
           (b) If the contribution rates specified in section 353.65, 
        subdivisions 2 and 3, are subsequently modified, the applicable 
        municipal governing body must approve that subsequent 
        modification. 
           (c) The municipal governing body approval must be in the 
        form of a municipal resolution.  The municipal resolution must 
        specify the effective date for the contribution rate 
        modification.  The municipal resolution must be filed with the 
        executive director of the public employees retirement 
        association, the state auditor, the secretary of state, and the 
        executive director of the legislative commission on pensions and 
        retirement. 
           Sec. 14.  Minnesota Statutes 1998, section 356.215, 
        subdivision 4g, is amended to read: 
           Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
        the exhibit indicating the level normal cost, the actuarial 
        valuation must contain an exhibit indicating the additional 
        annual contribution sufficient to amortize the unfunded 
        actuarial accrued liability.  For funds governed by chapters 3A, 
        352, 352B, 352C, 353, 354, 354A, and 490, the additional 
        contribution must be calculated on a level percentage of covered 
        payroll basis by the established date for full funding in effect 
        when the valuation is prepared.  For funds governed by chapter 
        3A, sections 352.90 through 352.951, chapters 352B, 352C, 
        sections 353.63 through 353.68, and chapters 353C, 354A, and 
        490, the level percent additional contribution must be 
        calculated assuming annual payroll growth of 6.5 percent.  For 
        funds governed by sections 352.01 through 352.86 and chapter 
        354, the level percent additional contribution must be 
        calculated assuming an annual payroll growth of five percent.  
        For the fund governed by sections 353.01 through 353.46, the 
        level percent additional contribution must be calculated 
        assuming an annual payroll growth of six percent.  For all other 
        funds, the additional annual contribution must be calculated on 
        a level annual dollar amount basis. 
           (b) For any fund other than the Minneapolis employees 
        retirement fund, after the first actuarial valuation date 
        occurring after June 1, 1989, if there has not been a change in 
        the actuarial assumptions used for calculating the actuarial 
        accrued liability of the fund, a change in the benefit plan 
        governing annuities and benefits payable from the fund, a change 
        in the actuarial cost method used in calculating the actuarial 
        accrued liability of all or a portion of the fund, or a 
        combination of the three, which change or changes by themselves 
        without inclusion of any other items of increase or decrease 
        produce a net increase in the unfunded actuarial accrued 
        liability of the fund, the established date for full funding for 
        the first actuarial valuation made after June 1, 1989, and each 
        successive actuarial valuation is the first actuarial valuation 
        date occurring after June 1, 2020.  
           (c) For any fund or plan other than the Minneapolis 
        employees retirement fund, after the first actuarial valuation 
        date occurring after June 1, 1989, if there has been a change in 
        any or all of the actuarial assumptions used for calculating the 
        actuarial accrued liability of the fund, a change in the benefit 
        plan governing annuities and benefits payable from the fund, a 
        change in the actuarial cost method used in calculating the 
        actuarial accrued liability of all or a portion of the fund, or 
        a combination of the three, and the change or changes, by 
        themselves and without inclusion of any other items of increase 
        or decrease, produce a net increase in the unfunded actuarial 
        accrued liability in the fund, the established date for full 
        funding must be determined using the following procedure:  
           (i) the unfunded actuarial accrued liability of the fund 
        must be determined in accordance with the plan provisions 
        governing annuities and retirement benefits and the actuarial 
        assumptions in effect before an applicable change; 
           (ii) the level annual dollar contribution or level 
        percentage, whichever is applicable, needed to amortize the 
        unfunded actuarial accrued liability amount determined under 
        item (i) by the established date for full funding in effect 
        before the change must be calculated using the interest 
        assumption specified in subdivision 4d in effect before the 
        change; 
           (iii) the unfunded actuarial accrued liability of the fund 
        must be determined in accordance with any new plan provisions 
        governing annuities and benefits payable from the fund and any 
        new actuarial assumptions and the remaining plan provisions 
        governing annuities and benefits payable from the fund and 
        actuarial assumptions in effect before the change; 
           (iv) the level annual dollar contribution or level 
        percentage, whichever is applicable, needed to amortize the 
        difference between the unfunded actuarial accrued liability 
        amount calculated under item (i) and the unfunded actuarial 
        accrued liability amount calculated under item (iii) over a 
        period of 30 years from the end of the plan year in which the 
        applicable change is effective must be calculated using the 
        applicable interest assumption specified in subdivision 4d in 
        effect after any applicable change; 
           (v) the level annual dollar or level percentage 
        amortization contribution under item (iv) must be added to the 
        level annual dollar amortization contribution or level 
        percentage calculated under item (ii); 
           (vi) the period in which the unfunded actuarial accrued 
        liability amount determined in item (iii) is amortized by the 
        total level annual dollar or level percentage amortization 
        contribution computed under item (v) must be calculated using 
        the interest assumption specified in subdivision 4d in effect 
        after any applicable change, rounded to the nearest integral 
        number of years, but not to exceed 30 years from the end of the 
        plan year in which the determination of the established date for 
        full funding using the procedure set forth in this clause is 
        made and not to be less than the period of years beginning in 
        the plan year in which the determination of the established date 
        for full funding using the procedure set forth in this clause is 
        made and ending by the date for full funding in effect before 
        the change; and 
           (vii) the period determined under item (vi) must be added 
        to the date as of which the actuarial valuation was prepared and 
        the date obtained is the new established date for full funding.  
           (d) For the Minneapolis employees retirement fund, the 
        established date for full funding is June 30, 2020. 
           (e) For the following plans for which the annual actuarial 
        valuation indicates an excess of valuation assets over the 
        actuarial accrued liability, the valuation assets in excess of 
        the actuarial accrued liability must be recognized in the 
        following manner: 
           (1) the public employees retirement association police and 
        fire plan, the valuation assets in excess of the actuarial 
        accrued liability serve to reduce the current contribution 
        requirements by an amount equal to the amortization of the 
        excess expressed as a level percentage of pay over a 30-year 
        period beginning anew with each annual actuarial valuation of 
        the plan; and 
           (2) the correctional employees retirement plan of the 
        Minnesota state retirement system, and the state patrol 
        retirement plan, an excess of valuation assets over actuarial 
        accrued liability must be amortized in the same manner over the 
        same period as an unfunded actuarial accrued liability but must 
        serve to reduce the required contribution instead of increasing 
        it. 
           Sec. 15.  Minnesota Statutes 1998, section 423A.02, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
        Annually, on October 1, the commissioner of revenue shall 
        allocate the additional amortization state aid transferred under 
        section 69.021, subdivision 11, to: 
           (1) all police or salaried firefighter relief associations 
        governed by and in full compliance with the requirements of 
        section 69.77, that had an unfunded actuarial accrued liability 
        in the actuarial valuation prepared under sections 356.215 and 
        356.216 as of the preceding December 31; and 
           (2) all local police or salaried firefighter consolidation 
        accounts governed by chapter 353A that are certified by the 
        executive director of the public employees retirement 
        association as having for the current fiscal year an additional 
        municipal contribution amount under section 353A.09, subdivision 
        5, paragraph (b), and that have implemented section 353A.083, 
        subdivision 1, if the effective date of the consolidation 
        preceded May 24, 1993, and that have implemented section 
        353A.083, subdivision 2, if the effective date of the 
        consolidation preceded June 1, 1995.; and 
           (3) the public employees police and fire fund on behalf of 
        municipalities that received amortization aid in 1999 and are 
        required to make an additional municipal contribution under 
        section 353.665, subdivision 8, for the duration of the required 
        additional contribution. 
           (b) The commissioner shall allocate the state aid on the 
        basis of the proportional share of the relief association or 
        consolidation account of the total unfunded actuarial accrued 
        liability of all recipient relief associations and consolidation 
        accounts as of December 31, 1993, for relief associations, and 
        as of June 30, 1994, for consolidation accounts. 
           (c) Beginning October 1, 2000, and annually thereafter, the 
        commissioner shall allocate the state aid on the basis of 64.5 
        percent to the public employees police and fire fund or local 
        consolidation account, whichever applies, on behalf of 
        municipalities to which section 353.665, subdivision 8, 
        paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply 
        for distribution in accordance with paragraph (b) and subject to 
        the limitation in subdivision 4, 34.2 percent to the city of 
        Minneapolis to fund any unfunded actuarial accrued liability in 
        the actuarial valuation prepared under sections 356.215 and 
        356.216 as of the preceding December 31 for the Minneapolis 
        police relief association or the Minneapolis fire department 
        relief association, and 1.3 percent to the city of Virginia to 
        fund any unfunded actuarial accrued liability in the actuarial 
        valuation prepared under sections 356.215 and 356.216 as of the 
        preceding December 31 for the Virginia fire department relief 
        association.  In the event that there is no unfunded actuarial 
        accrued liability in both the Minneapolis police relief 
        association and the Minneapolis fire department relief 
        association, the commissioner shall allocate that 34.2 percent 
        of the aid as follows:  49 percent to the Minneapolis teachers 
        retirement fund association, provided that, annually, beginning 
        on July 1, 2005, if a teacher's association five-year average 
        time-weighted rate of investment return does not equal or exceed 
        the performance of a composite portfolio assumed passively 
        managed (indexed) invested ten percent in cash equivalents, 60 
        percent bonds and similar debt securities, and 30 percent in 
        domestic stock calculated using the formula under section 
        11A.04, clause (11), the aid under this section ceases until the 
        five-year annual rate of return equals or exceeds the 
        performance of a composite portfolio, 21 percent to the St. Paul 
        teachers retirement fund association, provided that, annually, 
        beginning on July 1, 2005, if a teacher's association five-year 
        average time-weighted rate of investment return does not equal 
        or exceed the performance of a composite portfolio assumed 
        passively managed (indexed) invested ten percent in cash 
        equivalents, 60 percent bonds and similar debt securities, and 
        30 percent in domestic stock calculated using the formula under 
        section 11A.04, clause (11), the aid under this section ceases 
        until the five-year annual rate of return equals or exceeds the 
        performance of a composite portfolio, and 30 percent as 
        additional funding to support minimum fire state aid for 
        volunteer firefighter relief associations, with the allocation 
        made at the same time and under the same procedures in 
        subdivision 3.  In the event there is no actuarial accrued 
        unfunded liability in the Virginia fire department relief 
        association, the commissioner shall allocate that 1.3 percent of 
        the aid as follows:  49 percent to the Minneapolis teachers 
        retirement fund association, provided that, annually, beginning 
        on July 1, 2005, if a teacher's association five-year average 
        time-weighted rate of investment return does not equal or exceed 
        the performance of a composite portfolio assumed passively 
        managed (indexed) invested ten percent in cash equivalents, 60 
        percent bonds and similar debt securities, and 30 percent in 
        domestic stock calculated using the formula under section 
        11A.04, clause (11), the aid under this section ceases until the 
        five-year annual rate of return equals or exceeds the 
        performance of a composite portfolio, 21 percent to the St. Paul 
        teachers retirement fund association, provided that, annually, 
        beginning on July 1, 2005, if a teacher's association five-year 
        average time-weighted rate of investment return does not equal 
        or exceed the performance of a composite portfolio assumed 
        passively managed (indexed) invested ten percent in cash 
        equivalents, 60 percent bonds and similar debt securities, and 
        30 percent in domestic stock calculated using the formula under 
        section 11A.04, clause (11), the aid under this section ceases 
        until the five-year annual rate of return equals or exceeds the 
        performance of a composite portfolio, and 30 percent as 
        additional funding to support minimum fire state aid for 
        volunteer firefighter relief associations, with the allocation 
        made at the same time and under the same procedures in 
        subdivision 3.  
           (d) Additional amortization state aid payable to the public 
        employees retirement association on behalf of a municipality 
        must be credited by the executive director of the public 
        employees retirement association against any additional 
        municipal contribution to which the applicable municipality is 
        obligated to make under section 353A.09, subdivision 5, or under 
        section 353.665, subdivision 8. 
           (e) The amounts required under this subdivision are 
        annually appropriated to the commissioner of revenue. 
           Sec. 16.  Minnesota Statutes 1998, section 423A.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
        qualified for amortization state aid under subdivision 1 on 
        December 31, 1984, and has an additional municipal contribution 
        payable under section 353A.09, subdivision 5, paragraph (b), as 
        of the most recent December 31, continues upon application to be 
        entitled to receive amortization state aid under subdivision 1 
        and supplementary amortization state aid under subdivision 1a, 
        after the local police or salaried firefighters' relief 
        association has been consolidated into the public employees 
        police and fire fund.  If a municipality loses entitlement for 
        amortization state aid and supplementary amortization state aid 
        in any year because of not having an additional municipal 
        contribution under section 353A.09, subdivision 5, paragraph 
        (b), the municipality is not entitled to the aid amounts in any 
        subsequent year.  If the actuarial assumptions specified in 
        section 356.215 are changed in 1997, and the change results in a 
        municipality having an additional municipal contribution, and 
        the municipality had previously lost entitlement for 
        amortization aid and supplementary amortization due to not 
        having an additional municipal contribution, then the 
        municipality is again entitled to receive amortization aid and 
        supplementary amortization aid in the same amount as it 
        previously received.  A municipality that received amortization 
        aid in 1999 and is required to make an additional municipal 
        contribution under section 353.665, subdivision 8, continues to 
        qualify for the amortization state aid and the supplemental 
        amortization aid until December 31, 2009. 
           Sec. 17.  Minnesota Statutes 1998, section 423A.02, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
        total of amortization aid, supplemental amortization aid, and 
        additional amortization aid under this section payable to the 
        executive director of the public employees retirement 
        association on behalf of a municipality to which section 
        353.665, subdivision 8, paragraph (b), applies, may not exceed 
        the amount of the additional municipal contribution payable by 
        an individual municipality under section 353.665, subdivision 8, 
        paragraph (b). 
           (b) Any aid amount in excess of the limit under this 
        subdivision for an individual municipality must be redistributed 
        to the other municipalities to which section 353.665, 
        subdivision 8, paragraph (b), applies.  The excess aid must be 
        distributed in proportion to each municipality's additional 
        municipal contribution under section 353.665, subdivision 8, 
        paragraph (b). 
           (c) When the total aid for each municipality under this 
        section equals the limit under paragraph (a), any aid in excess 
        of the limit must be redistributed under subdivisions 1, 1a, and 
        1b. 
           Sec. 18.  Minnesota Statutes 1998, section 423A.02, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
        amortization state aid, supplemental amortization state aid, and 
        additional amortization state aid programs terminate when the 
        assets of the Minneapolis teachers retirement fund association 
        equal the actuarial accrued liability of that plan and when the 
        assets of the St. Paul teachers retirement fund association 
        equal the actuarial accrued liability of that plan. 
           Sec. 19.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
           (a) As of July 1, 1999, no actuarial valuations are 
        required of the local police and fire consolidation accounts 
        which were in existence before March 1, 1999, and have not been 
        retained under Minnesota Statutes, section 353.655, subdivision 
        1, paragraph (b). 
           (b) The actuary retained by the legislative commission on 
        pensions and retirement shall prepare all calculations required 
        under Minnesota Statutes, section 353.665, and shall present 
        them to the commission in a separate report. 
           (c) The calculated actuarial accrued liability of the 
        public employees police and fire plan for July 1, 1999, must 
        contain all liabilities associated with the former local police 
        and fire consolidation accounts affected by Minnesota Statutes, 
        section 353.665. 
           (d) The asset value of the public employees police and fire 
        plan for July 1, 1999, is the sum of the following: 
           (1) the current assets of the public employees police and 
        fire plan as of June 30, 1999, without reference to any local 
        consolidation accounts in existence on March 1, 1999; 
           (2) the amount of assets transferred from the Minnesota 
        postretirement investment fund with respect to local 
        consolidation accounts under Minnesota Statutes, section 
        353.655, subdivision 3; 
           (3) that portion of the market value of assets of the local 
        consolidation accounts affected by Minnesota Statutes, section 
        353.665, and not retained under Minnesota Statutes, section 
        353.665, subdivision 1, paragraph (b), after subtracting the 
        amount in clause (2) determined by multiplying the total by the 
        ratio that the current asset value of public employee police and 
        fire fund assets other than the participation in the Minnesota 
        postretirement investment fund as of June 30, 1999, without 
        reference to any local consolidation accounts in existence on 
        March 1, 1999, bears to the market value of the same assets; and 
           (4) a receivable amount equal to the present value of the 
        future additional municipal contributions required under 
        Minnesota Statutes, section 353.655, subdivision 8, paragraph 
        (b). 
           Sec. 20.  [REPEALER.] 
           Minnesota Statutes 1998, section 353.65, subdivision 3a, is 
        repealed. 
           Sec. 21.  [EFFECTIVE DATE.] 
           Sections 1 to 7, 10, 11, 12, 13, and 15 to 20 are effective 
        on the day following final enactment.  Sections 8 and 9 are 
        effective on the first day of the first full pay period that 
        begins after June 30, 1999.  Section 14 is effective on July 1, 
        2000. 
                                   ARTICLE 5
                         MINIMUM VOLUNTEER FIREFIGHTER  
                            STATE AID AMOUNT CHANGES  
           Section 1.  Minnesota Statutes 1998, section 69.021, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
        MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
        shall apportion the fire state aid relative to the premiums 
        reported on the Minnesota Firetown Premium Reports filed under 
        this chapter to each municipality and/or firefighters' relief 
        association.  
           (b) The commissioner shall calculate an initial fire state 
        aid allocation amount for each municipality or fire department 
        under paragraph (c) and a minimum fire state aid allocation 
        amount for each municipality or fire department under paragraph 
        (d).  The municipality or fire department must receive the 
        larger fire state aid amount. 
           (c) The initial fire state aid allocation amount is the 
        amount available for apportionment as fire state aid under 
        subdivision 5, without inclusion of any additional funding 
        amount to support a minimum fire state aid amount under section 
        423A.02, subdivision 3, allocated one-half in proportion to the 
        population as shown in the last official statewide federal 
        census for each fire town and one-half in proportion to the 
        market value of each fire town, including (1) the market value 
        of tax exempt property and (2) the market value of natural 
        resources lands receiving in lieu payments under sections 
        477A.11 to 477A.14, but excluding the market value of minerals.  
        In the case of incorporated or municipal fire departments 
        furnishing fire protection to other cities, towns, or townships 
        as evidenced by valid fire service contracts filed with the 
        commissioner, the distribution must be adjusted proportionately 
        to take into consideration the crossover fire protection 
        service.  Necessary adjustments shall be made to subsequent 
        apportionments.  In the case of municipalities or independent 
        fire departments qualifying for the aid, the commissioner shall 
        calculate the state aid for the municipality or relief 
        association on the basis of the population and the market value 
        of the area furnished fire protection service by the fire 
        department as evidenced by duly executed and valid fire service 
        agreements filed with the commissioner.  If one or more fire 
        departments are furnishing contracted fire service to a city, 
        town, or township, only the population and market value of the 
        area served by each fire department may be considered in 
        calculating the state aid and the fire departments furnishing 
        service shall enter into an agreement apportioning among 
        themselves the percent of the population and the market value of 
        each service area.  The agreement must be in writing and must be 
        filed with the commissioner. 
           (d) The minimum fire state aid allocation amount is the 
        amount in addition to the initial fire state allocation amount 
        that is derived from any additional funding amount to support a 
        minimum fire state aid amount under section 423A.02, subdivision 
        3, and allocated to municipalities with volunteer firefighter 
        relief associations based on the number of active volunteer 
        firefighters who are members of the relief association as 
        reported in the annual financial reporting for the calendar year 
        1993 to the office of the state auditor, but not to exceed 30 
        active volunteer firefighters, so that all municipalities or 
        fire departments with volunteer firefighter relief associations 
        receive in total at least a minimum fire state aid amount per 
        1993 active volunteer firefighter to a maximum of 30 
        firefighters.  If a relief association did not exist in calendar 
        year 1993, the number of active volunteer firefighters who are 
        members of the relief association as reported in the annual 
        financial reporting for calendar year 1998 to the office of the 
        state auditor, but not to exceed 30 active volunteer 
        firefighters, shall be used in this determination. 
           (e) The fire state aid must be paid to the treasurer of the 
        municipality where the fire department is located and the 
        treasurer of the municipality shall, within 30 days of receipt 
        of the fire state aid, transmit the aid to the relief 
        association if the relief association has filed a financial 
        report with the treasurer of the municipality and has met all 
        other statutory provisions pertaining to the aid apportionment. 
           (f) The commissioner may make rules to permit the 
        administration of the provisions of this section.  Any 
        adjustments needed to correct prior misallocations must be made 
        to subsequent apportionments. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on the day following final enactment 
        and applies to the first fire state aid and minimum fire state 
        aid allocation occurring after that date. 
                                   ARTICLE 6
                     MINNEAPOLIS POLICE AND FIRE DEPARTMENT  
                         RELIEF ASSOCIATIONS GOVERNANCE  
                                    CHANGES 
           Section 1.  Minnesota Statutes 1998, section 423B.07, is 
        amended to read: 
           423B.07 [AUTHORIZED FUND DISBURSEMENTS.] 
           The police pension fund may be used only for the payment of:
           (1) service, disability, or dependency pensions; 
           (2) notwithstanding a contrary provision of section 69.80, 
        the salary of the secretary of the association in an amount not 
        to exceed 30 percent of the base salary of a first grade patrol 
        officer, the salary of the president of the association in an 
        amount not to exceed ten percent of the base salary of a first 
        grade patrol officer, and the salaries of the other elected 
        members of the board of trustees in an amount not to exceed 
        three units; 
           (3) expenses of officers and employees of the association 
        in connection with the protection of the fund; 
           (4) expenses of operating and maintaining the association, 
        including the administrative expenses related to the 
        administration of the insurance plan authorized in section 
        423B.08; and 
           (5) other expenses authorized by section 69.80, or other 
        applicable law. 
           Sec. 2.  [CONTINUATION OF BOARD.] 
           Notwithstanding Minnesota Statutes, section 423A.01, 
        subdivision 2, or any other law to the contrary, the board of 
        trustees of the Minneapolis firefighters relief association 
        shall continue to govern the association until there are fewer 
        than 100 benefit recipients of the relief association pension 
        fund.  The special fund thereafter must become a trust fund in 
        accordance with Minnesota Statutes, section 423A.01, subdivision 
        2. 
           Sec. 3.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective on December 31, 1999. 
           (b) Section 2 is effective on the day following approval by 
        the Minneapolis city council and compliance with Minnesota 
        Statutes, section 645.021, subdivision 3. 
                                   ARTICLE 7
                         METROPOLITAN COUNCIL TARGETED  
                           EARLY RETIREMENT INCENTIVE  
           Section 1.  [RETIREMENT INCENTIVE.] 
           The metropolitan council may offer its eligible employees, 
        as specified in sections 2 and 3, the retirement incentive 
        provided in section 4. 
           Sec. 2.  [INCLUSION.] 
           If the metropolitan council chooses to offer the retirement 
        incentive under section 4, it must designate the positions or 
        group of positions within the council divisions specified in 
        section 3, clause (1), that will qualify for participation in 
        its retirement incentive program and may exclude otherwise 
        eligible employees.  After initially designating the qualified 
        positions or group of positions, the council may at any time 
        modify its designation in order to further limit the qualified 
        positions or group of positions. 
           Sec. 3.  [ELIGIBILITY.] 
           An employee of the metropolitan council is eligible to 
        participate in the retirement incentive program if the employee: 
           (1) was employed in the environmental services, community 
        development, or regional administration divisions of the council 
        on January 1, 1999; 
           (2) on or after the effective date of this article notifies 
        the council's regional administrator in writing of the 
        employee's intention to retire, the plan or plans from which the 
        individual will retire, and the employee's date of separation 
        from employment with the council; 
           (3) is, on the date the council receives the employee's 
        written notice of intention to retire, within the positions or 
        group of positions then currently designated by the council 
        under section 2; 
           (4) on the date of retirement has at least 25 years of 
        combined allowable service in any covered fund or funds listed 
        in Minnesota Statutes, section 356.30, subdivision 3; 
           (5) on the date of retirement is at least 55 years of age; 
           (6) upon retirement is immediately eligible for a 
        retirement annuity from a defined benefit plan listed in 
        Minnesota Statutes, section 356.30, subdivision 3; and 
           (7) has a retirement annuity accrual date in the applicable 
        plan or plans on or after July 1, 1999, and before July 1, 2000. 
           Sec. 4.  [RETIREMENT INCENTIVE.] 
           Subdivision 1.  [FORMULA INCREASE.] For an eligible 
        employee who elects to participate in the retirement incentive 
        program, the benefit accrual rate multiplier percentage or 
        percentages used to calculate the retirement annuity from each 
        defined benefit plan listed in Minnesota Statutes, section 
        356.30, subdivision 3, from which the employee is eligible to 
        receive a retirement annuity must be increased by .25 percentage 
        point for each year of allowable service, and pro rata for 
        completed months less than a full year, in the applicable plan 
        or plans.  If the eligible employee has more than 30 years of 
        combined service in covered plans, the .25 percentage point 
        increase applies only to the first 30 years of allowable service 
        in such covered funds. 
           Subd. 2.  [CERTIFICATION OF ELIGIBILITY.] Before applying 
        the formula increase in subdivision 1, the applicable retirement 
        plan or plans must receive a certification from the council's 
        regional administrator that the employee meets the eligibility 
        criteria in clauses (1), (2), and (3) of section 3. 
           Subd. 3.  [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 
        metropolitan council chooses to offer a retirement incentive 
        under this section, it must make an additional employer 
        contribution or contributions as specified in paragraph (b) to 
        the applicable retirement plan or plans from which the eligible 
        individual retired under the incentive program. 
           (b) The additional employer contribution for the applicable 
        employee to each applicable plan is an amount equal to the 
        difference in the actuarial present value of the annuity payable 
        by the plan for the employee, with and without the retirement 
        incentive under subdivision 1.  The actuarial present value 
        calculations must be made by the chief administrative officer of 
        the applicable retirement plan. 
           (c) An additional employer contribution under paragraph (b) 
        must be paid within 60 days from the effective date of the 
        applicable annuity for the eligible employee who elects to 
        participate in the retirement incentive.  
           Sec. 5.  [LIMIT ON REHIRING AND FUTURE SERVICES.] 
           The metropolitan council may not rehire or contract for 
        services from a former employee who retires with an early 
        retirement incentive under this article. 
           Sec. 6.  [APPLICATION OF OTHER LAWS.] 
           Unilateral implementation of retirement incentives under 
        this article by the metropolitan council is not an unfair labor 
        practice for purposes of Minnesota Statutes, chapter 179A. 
           Sec. 7.  [EFFECTIVE DATE.] 
           Sections 1 to 6 are effective on the day following final 
        enactment. 
                                   ARTICLE 8
                      VARIOUS SMALL GROUP PENSION CHANGES
           Section 1.  Minnesota Statutes 1998, section 354.66, 
        subdivision 5, is amended to read: 
           Subd. 5.  [OTHER MEMBERSHIP PRECLUDED.] A teacher entitled 
        to full accrual of allowable service credit and employee 
        contributions for part time teaching service pursuant to this 
        section shall not be entitled during the same period of time to 
        be a member of, accrue allowable service credit in or make 
        employee contributions to any other Minnesota public employee 
        pension plan, except the plan established in chapter 3A, the 
        plan established in chapter 352D if the teacher also is a 
        legislator, or a volunteer firefighters' relief association 
        governed by sections 69.771 to 69.776. 
           Sec. 2.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; PURCHASE 
        OF SERVICE CREDIT BY RUSH CITY SCHOOL DISTRICT EMPLOYEE.] 
           (a) Notwithstanding Minnesota Statutes, section 353.01, 
        subdivision 16, or any other law to the contrary, an eligible 
        person described in paragraph (b) may purchase service credit in 
        the public employees retirement association for the period 
        described in paragraph (c). 
           (b) An eligible person is a person who: 
           (1) was born on October 28, 1948; 
           (2) was first employed by the Rush City school district in 
        September 1968; 
           (3) has received service credit from the public employees 
        retirement association for a period of leave for military 
        service from April 1969 through March 1970; and 
           (4) has not received service credit from the public 
        employees retirement association for a period of leave for 
        military service from April 1970 through March 1971. 
           (c) The period for service credit purchase is the 
        uncredited portion of the period from April 1970 through March 
        1971. 
           (d) An eligible person may purchase service credit under 
        this section by making the payment determined under Minnesota 
        Statutes, section 356.55, for the period in paragraph (c). 
           (e) The person who desires to purchase service credit under 
        this section must apply with the executive director to make the 
        purchase.  The application must include all necessary 
        documentation of the person's qualifications to make the 
        purchase, signed written permission to allow the executive 
        director to request and receive necessary verification of 
        applicable facts and eligibility requirements, and any other 
        relevant information that the executive director may require. 
           (f) Service credit for the purchase period must be granted 
        by the public employees retirement association to the purchaser 
        on receipt of the purchase payment amount. 
           Sec. 3.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
        SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED 
        LEAVE.] 
           (a) An eligible teacher as defined in paragraph (b) is 
        entitled to purchase allowable and formula service credit from 
        the teachers retirement association for an uncredited leave 
        during the 1996-1997 school year under terms specified in 
        paragraph (c). 
           (b) An eligible teacher is a person who: 
           (1) was born on November 14, 1944; 
           (2) became a member of the teachers retirement association 
        on September 29, 1972; 
           (3) is employed by independent school district No. 786 
        (Bertha-Hewitt); and 
           (4) failed to obtain one year of service credit due to the 
        classification of a 1996-1997 school year leave as an "other" 
        leave rather than an extended leave. 
           (c) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person may pay, before January 1, 
        2000, or the date of retirement, whichever is earlier, an amount 
        equal to the employee contribution rate or rates in effect 
        during the leave period specified in paragraph (b) applied to 
        the actual salary rate or rates in effect during that period, 
        plus any applicable employer contributions the employee agreed 
        to pay under an agreement with independent school district No. 
        786 (Bertha-Hewitt), plus annual compound interest at the rate 
        of 8.5 percent from June 30, 1997, to the date on which the 
        payment is actually made.  Independent school district No. 786 
        (Bertha-Hewitt) must pay the remaining 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. 786 (Bertha-Hewitt) of its 
        payment amount and payment due date if the eligible person makes 
        the required payment. 
           (d) If independent school district No. 786 (Bertha-Hewitt) 
        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 and be transmitted to the teachers 
        retirement association. 
           (e) An eligible teacher must provide any relevant 
        documentation required by the executive director to determine 
        eligibility for the prior service credit under this section. 
           (f) Service credit for the purchase period must be granted 
        by the teachers retirement association to the account of the 
        eligible teacher upon receipt of the purchase payment amount 
        specified in paragraph (c). 
           Sec. 4.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
        UNREQUESTED LEAVE PERIOD BY VIRGINIA TEACHER.] 
           (a) A qualified teacher described in paragraph (b) is 
        entitled to purchase one year of allowable and formula service 
        credit from the teachers retirement association for a one-year 
        portion of the period of unrequested leave from teaching service 
        specified in paragraph (b), clause (5), upon the payment of the 
        purchase price specified in paragraph (c). 
           (b) A qualified teacher is a person who: 
           (1) was born in 1943; 
           (2) is a current member of the teachers retirement 
        association; 
           (3) initially was employed as a teacher in 1966 by the 
        Alexandria school district; 
           (4) was subsequently employed as an industrial arts teacher 
        at the Virginia high school by the Virginia school district; and 
           (5) was placed on unrequested leave by the Virginia school 
        district for the 1983-1984 and 1984-1985 school years. 
           (c) The purchase payment amount must be determined as 
        provided in Minnesota Statutes, section 356.55. 
           (d) Payment of the prior service credit purchase amount 
        must be made by January 1, 2000. 
           Sec. 5.  [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL 
        BUREAU OF HEALTH EMPLOYEE.] 
           (a) An eligible person, as described in paragraph (b), is 
        entitled to purchase coordinated service credit in the public 
        employees retirement association general plan for the period of 
        employment described in paragraph (b), clause (2), by making 
        payment as specified in paragraph (c). 
           (b) An eligible person is a person who: 
           (1) was born on May 22, 1932; 
           (2) was employed by the St. Paul Bureau of Health from 
        March 17, 1958, to September 21, 1962, was covered by the St. 
        Paul bureau of health relief association as a result of that 
        employment, and who forfeited all service credit in that relief 
        association upon leaving that employment; and 
           (3) later became a coordinated member of the general plan 
        of the public employees retirement association and currently is 
        a coordinated member of that plan. 
           (c) An eligible person described in paragraph (b) may 
        purchase service credit from the public employees retirement 
        association by paying the amount specified in Minnesota 
        Statutes, section 356.55, prior to termination of public 
        employees retirement association covered employment or prior to 
        July 1, 2000, whichever is earlier.  If the city of St. Paul 
        agrees to make a payment under Minnesota Statutes, section 
        356.55, subdivision 5, an eligible person must make the employee 
        payments prior to termination of public employees retirement 
        association covered employment or prior to July 1, 2000, 
        whichever is earlier.  If the employee payment is made in a 
        timely fashion, the city payment must be remitted 60 days 
        thereafter. 
           (d) An eligible person must provide any relevant 
        documentation required by the executive director to determine 
        eligibility for the prior service credit under this section. 
           (e) Service credit for the purchase period must be granted 
        by the public employees retirement association to the account of 
        the eligible person upon receipt of the purchase payment amount 
        specified in paragraph (c). 
           Sec. 6.  [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA, 
        TEACHER; PRIOR SERVICE CREDIT PURCHASE.] 
           (a) Notwithstanding Minnesota Statutes, section 354.095, 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 is a person who: 
           (1) was on medical leave for a period that includes the 
        1994-1995 and the 1995-1996 school years; 
           (2) was employed by independent school district No. 276, 
        Minnetonka, during the period that the medical leave was taken; 
        and 
           (3) due to the failure of independent school district No. 
        276, Minnetonka, to file certain papers with the teachers 
        retirement association was not able to obtain service credit for 
        the 1994-1995 and 1995-1996 school year portions of the medical 
        leave. 
           (c) The period for service credit purchase is the 1994-1995 
        and 1995-1996 school years. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1999, 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.  Independent school district No. 276, Minnetonka, must pay 
        one-half of the remaining 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.  Recognizing that the teachers retirement association 
        failed to provide adequate information on the opportunity of the 
        eligible person to make timely payments for the 1995-1996 school 
        year following receipt of the medical leave of absence forms on 
        August 16, 1996, the teachers retirement association is 
        responsible for one-half of the remaining balance of the prior 
        service credit purchase payment amount calculated under 
        Minnesota Statutes, section 356.55.  The executive director of 
        the teachers retirement association must notify the 
        superintendent of independent school district No. 276, 
        Minnetonka, of its payment amount and payment due date if the 
        eligible person makes the required payment. 
           (e) If independent school district No. 276, Minnetonka, 
        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.  
           Sec. 7.  [HOPKINS SCHOOL DISTRICT; REPAYMENT OF INTEREST 
        CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE PAYMENTS.] 
           (a) Independent school district No. 270, Hopkins, shall pay 
        the amount of $1,004.08, plus compound interest on the amount at 
        the annual rate of six percent from June 1, 1997, to the date of 
        payment, to an eligible person described in paragraph (b) to 
        compensate the person for a past overcharge in a member 
        contribution shortage payment.  The shortage was caused by the 
        failure of the school district to make the required member 
        contribution deductions during the 1968-1969 school year and the 
        overpayment was caused by the failure of the teachers retirement 
        association to notify the eligible person in a timely fashion of 
        the shortage. 
           (b) An eligible person is a person who: 
           (1) was employed by independent school district No. 270, 
        Hopkins, during the 1968-1969 school year and suffered an under 
        deduction by the school district of $114.66; 
           (2) took a member contribution refund in the early 1970's 
        and repaid the refund in November 1974; and 
           (3) had an appeal denied by the teachers retirement 
        association board of trustees at a May 8, 1998, hearing, 
        reflected in a May 21, 1998, findings and final order. 
           (c) The payment must be made within 30 days of the 
        effective date of this section.  If independent school district 
        No. 270, Hopkins, fails to make a timely payment of its 
        obligation, the teachers retirement association must make the 
        payment and may notify the commissioner of finance of the school 
        district's failure to pay.  In that event, the commissioner of 
        finance may order that the required school district payment be 
        deducted from the next subsequent payment of state education aid 
        to the school district and transmitted to the teachers 
        retirement association. 
           Sec. 8.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
        SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.] 
           (a) Notwithstanding any provision of Minnesota Statutes, 
        chapter 354, to the contrary, an eligible teacher as defined in 
        paragraph (b) is entitled to purchase allowable and formula 
        service credit from the teachers retirement association for the 
        uncredited portion of a sabbatical leave during the 1976-1977 
        school year under paragraph (c). 
           (b) An eligible teacher is a person who was born on 
        September 10, 1942, became a member of the teachers retirement 
        association on October 31, 1968, is employed by independent 
        school district No. 16, Spring Lake Park, and will qualify for 
        an early normal retirement annuity under the "rule of 90" on 
        September 16, 2000. 
           (c) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person may pay, before January 1, 
        2000, or the date of retirement, whichever is earlier, 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. 16, 
        Spring Lake Park, 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. 16, Spring Lake Park, of its 
        payment amount and payment due date if the eligible person makes 
        the required payment. 
           (d) If independent school district No. 16, Spring Lake 
        Park, 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 and be transmitted 
        to the teachers retirement association. 
           (e) An eligible teacher must provide any relevant 
        documentation required by the executive director to determine 
        eligibility for the prior service credit under this section. 
           (f) Service credit for the purchase period must be granted 
        by the teachers retirement association to the account of the 
        eligible teacher upon receipt of the purchase payment amount 
        specified in paragraph (c). 
           Sec. 9.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE 
        BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.] 
           (a) An eligible person described in paragraph (b) is 
        entitled to purchase service credit from the public employees 
        retirement association for the period of omitted deductions 
        December 19, 1992, through December 27, 1994. 
           (b) An eligible person for purposes of paragraph (a) is a 
        person who: 
           (1) was born on August 17, 1950; 
           (2) was employed through Winona county until 1992; 
           (3) is currently employed by the state board of public 
        defense in the third judicial district public defender's office; 
        and 
           (4) had omitted member contributions for public employment 
        during the period December 19, 1992, through December 27, 1994. 
           (c) The prior service credit purchase payment amount is 
        governed by Minnesota Statutes, section 356.55.  Authority to 
        purchase the service credit expires on July 1, 2000. 
           (d) Notwithstanding Minnesota Statutes, section 356.55, 
        subdivision 5, the eligible person must pay, on or before 
        September 1, 1999, an amount equal to the employee contribution 
        rate 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.  The state board of public defense 
        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. 
           (e) A person purchasing service credit under this section 
        must provide sufficient documentation of eligibility to the 
        executive director of the public employees retirement 
        association. 
           Sec. 10.  [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL 
        PORTION OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.] 
           (a) An eligible person, as described in paragraph (b), is 
        entitled to purchase allowable and formula service credit in the 
        teachers retirement association for the period specified in 
        paragraph (c) by making the payment specified in Minnesota 
        Statutes, section 356.55. 
           (b) An eligible person is a person who: 
           (1) was born February 1, 1943; 
           (2) was initially employed as a teacher by the Richfield 
        school district in 1966; 
           (3) is currently employed as an elementary school principal 
        by independent school district No. 11 (Anoka-Hennepin); and 
           (4) was on an extended leave of absence from June 29, 1984, 
        to June 28, 1989, but failed to obtain service credit for the 
        final two years of the leave. 
           (c) The prior service credit purchase period is July 1, 
        1987, through June 28, 1989. 
           Sec. 11.  [EFFECTIVE DATE.] 
           Section 1 is effective on January 2, 2001.  Sections 2 to 
        10 are effective on the day following final enactment. 
                                   ARTICLE 9
                         MISCELLANEOUS PENSION CHANGES 
           Section 1.  Minnesota Statutes 1998, section 3A.02, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
        separation from service after the beginning of the 1981 
        legislative session, a former member of the legislature who has 
        attained the age of at least 60 years set by the board of 
        directors of the Minnesota state retirement system and who is 
        otherwise qualified in accordance with subdivision 1 is entitled 
        upon making written application on forms supplied by the 
        director to a retirement allowance in an amount equal to the 
        retirement allowance specified in subdivision 1 reduced so that 
        the reduced annuity is the actuarial equivalent of the annuity 
        that would be payable if the former member of the legislature 
        deferred receipt of the annuity and the annuity amount were 
        augmented at an annual rate of three percent compounded annually 
        from the date the annuity begins to accrue until age 62. 
           (b) The age set by the board of directors under paragraph 
        (a) cannot be less than the early retirement age under section 
        352.116, subdivision 1a. 
           (c) If there is an actuarial cost to the plan of resetting 
        the early retirement age under paragraph (a), the retired 
        legislator is required to pay an additional amount to cover the 
        full actuarial value.  The additional amount must be paid in a 
        lump sum within 30 days of the certification of the amount by 
        the executive director.  
           (d) The executive director of the Minnesota state 
        retirement system shall report to the legislative commission on 
        pensions and retirement on the utilization of this provision on 
        or before September 1, 2000. 
           Sec. 2.  Minnesota Statutes 1998, section 122A.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
        grant an extended leave of absence without salary to any full- 
        or part-time elementary or secondary teacher who has been 
        employed by the district for at least five years and has at 
        least ten years of allowable service, as defined in section 
        354.05, subdivision 13, or the bylaws of the appropriate 
        retirement association or ten years of full-time teaching 
        service in Minnesota public elementary and secondary schools.  
        The maximum duration of an extended leave of absence pursuant to 
        under this section must be determined by mutual agreement of the 
        board and the teacher at the time the leave is granted and shall 
        be at least three but no more than five years.  An extended 
        leave of absence pursuant to under this section shall be taken 
        by mutual consent of the board and the teacher.  If the school 
        board denies a teacher's request, it must provide reasonable 
        justification for the denial. 
           Sec. 3.  Minnesota Statutes 1998, section 352.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
        policy-making function of the system is vested in a board of 11 
        members, who must be known as the board of directors.  This 
        board shall consist of three members appointed by the governor, 
        one of whom must be a constitutional officer or appointed state 
        official and two of whom must be public members knowledgeable in 
        pension matters, four state employees elected by state employees 
        covered by the system excluding employees in categories 
        specifically authorized to designate or elect a member by this 
        subdivision, one employee of the transit operating division of 
        the metropolitan council's transit commission operations or its 
        successor agency designated by the executive committee of the 
        labor organization that is the exclusive bargaining agent 
        representing employees of the transit division, one member of 
        the state patrol retirement fund elected by members of that fund 
        at a time and in a manner fixed by the board, one employee 
        covered by the correctional employees plan elected by employees 
        covered by that plan, and one retired employee elected by 
        disabled and retired employees of all plans administered by the 
        system at a time and in a manner to be fixed by the board.  Two 
        state employee members, whose terms of office begin on the first 
        Monday in May after their election, must be elected biennially.  
        Elected members and the appointed member of the metropolitan 
        council's office of transit operations hold office for a term of 
        four years, except the retired member whose term is two years, 
        and until their successors are elected or appointed, and have 
        qualified.  An employee of the system is not eligible for 
        membership on the board of directors.  A state employee on leave 
        of absence is not eligible for election or reelection to 
        membership on the board of directors.  The term of any board 
        member who is on leave for more than six months automatically 
        ends on expiration of this period the term of office. 
           Sec. 4.  Minnesota Statutes 1998, section 354.05, 
        subdivision 40, is amended to read: 
           Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
        return, claim, or other document that is not personally 
        delivered to the association on or before the applicable due 
        date is considered to be a timely receipt if officially 
        postmarked received on or before the due date or if delivered or 
        filed under section 645.151. 
           Sec. 5.  Minnesota Statutes 1998, section 354.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  The management of the association is vested 
        in a board of eight trustees known as the board of trustees of 
        the teachers retirement association.  It is composed of the 
        following persons:  the commissioner of children, families, and 
        learning, the commissioner of finance, a representative of the 
        Minnesota school boards association, four members of the 
        association elected by the members of the association, and one 
        retiree elected by the retirees of the association.  The five 
        elected members of the board of trustees must be chosen by mail 
        ballot in a manner fixed by the board of trustees of the 
        association.  In every odd-numbered year there shall be elected 
        two members of the association to the board of trustees for 
        terms of four years commencing on the first of July next 
        succeeding their election.  In every other odd-numbered year one 
        retiree of the association must be elected to the board of 
        trustees for a term of two four years commencing on the first of 
        July next succeeding the election.  The filing of candidacy for 
        a retiree election must include a petition of endorsement signed 
        by at least ten retirees of the association.  Each election must 
        be completed by June first of each succeeding odd-numbered 
        year.  In the case of elective members, any vacancy must be 
        filled by appointment by the remainder of the board, and the 
        appointee shall serve until the members or retirees of the 
        association at the next regular election have elected a trustee 
        to serve for the unexpired term caused by the vacancy.  No 
        member or retiree may be appointed by the board, or elected by 
        the members of the association as a trustee, if the person is 
        not a member or retiree of the association in good standing at 
        the time of the appointment or election.  
           Sec. 6.  Minnesota Statutes 1998, section 354.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
        beneficiary designated by a retiree or member under section 
        354.05, subdivision 22, may be changed or revoked by the retiree 
        or member on a form provided by the executive director.  A 
        change or revocation made under this subdivision is valid only 
        if the properly completed form is received by the association 
        postmarked on or before the date of death of the retiree or the 
        member.  If a designated beneficiary dies before the retiree or 
        member designating the beneficiary, and a new beneficiary is not 
        designated, the retiree's or member's estate is the beneficiary. 
           Sec. 7.  Minnesota Statutes 1998, section 354C.11, is 
        amended to read: 
           354C.11 [COVERAGE.] 
           Subdivision 1.  [AUTHORIZATION.] Personnel Individuals 
        employed by the board of trustees of the Minnesota state 
        colleges and universities who are in the unclassified service of 
        the state, and who have completed at least two years of 
        employment by the board or a predecessor board with a full-time 
        contract are participants authorized to participate in the 
        supplemental retirement plan, effective on the next following 
        July 1, if the person is employed in an eligible after meeting 
        eligibility requirements specified in subdivision 2. 
           Subd. 2.  [ELIGIBILITY.] (a) An individual must participate 
        in the supplemental retirement plan if the individual is 
        employed by the board of trustees in the unclassified service of 
        the state and has completed at least two years with a full time 
        contract of applicable unclassified employment with the board or 
        an applicable predecessor board in any of the positions 
        specified in paragraph (b). 
           (b) Eligible positions or employment classifications are: 
           (1) an unclassified administrative position as defined in 
        section 354B.20, subdivision 6, or is employed in; 
           (2) an employment classification included in one of the 
        following collective bargaining units under section 179A.10, 
        subdivision 2: 
           (1) (i) the state university instructional unit; 
           (2) (ii) the community college instructional unit; 
           (3) (iii) the technical college instructional unit; and 
           (4) (iv) the state university administrative unit; or 
           (3) an unclassified employee of the board included in the 
        general professional unit or supervisory employees unit under 
        section 179A.10, subdivision 2. 
           Subd. 3.  [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 
        person qualifies for participation in the 
        supplemental retirement plan, all subsequent service by the 
        person as an unclassified employee of the state university 
        board, the state board for community colleges, the higher 
        education board, or the technical colleges board of trustees in 
        a position or employment classification listed in subdivision 2, 
        paragraph (b), is covered by the supplemental retirement plan. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 and 3 to 7 are effective on the day following 
        final enactment.  Section 2 is effective on July 1, 1999. 
                                   ARTICLE 10
                     INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS 
                      AS OPTIONAL ANNUITY FORM RECIPIENTS 
           Section 1.  [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 
        ANNUITY FORM RECIPIENT.] 
           Subdivision 1.  [INCLUSION AS RECIPIENT.] Notwithstanding 
        any provision to the contrary of the laws, articles of 
        incorporation, or bylaws governing a covered retirement plan 
        specified in subdivision 3, a retiring member may designate a 
        qualified supplemental needs trust under subdivision 2 as the 
        remainder recipient on an optional retirement annuity form for a 
        period not to exceed the lifetime of the beneficiary of the 
        supplemental needs trust. 
           Subd. 2.  [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified 
        supplemental needs trust is a trust that: 
           (1) was established on or after July 1, 1992; 
           (2) was established solely for the benefit of one person 
        who has a disability under federal Social Security 
        Administration supplemental security income or retirement, 
        survivors, and disability insurance disability determination 
        standards and who was determined as such before the creation of 
        the trust; 
           (3) is funded, in whole or in part, by the primary 
        recipient of the optional annuity form and, unless the trust is 
        a Zebley trust, is not funded by the beneficiary, the 
        beneficiary's spouse, or a person who is required to pay a sum 
        to or for the trust beneficiary under the terms of litigation or 
        a litigation settlement; 
           (4) is established to cover reasonable living expenses and 
        other basic needs of the disabilitant, in whole or in part, in 
        instances when public assistance does not provide sufficiently 
        for these needs; 
           (5) is not permitted to make disbursement to replace or 
        reduce public assistance otherwise available; 
           (6) is irrevocable; 
           (7) terminates upon the death of the disabled person for 
        whose benefit it was established; and 
           (8) is determined by the executive director to be a trust 
        that contains excluded assets for purposes of the qualification 
        for public entitlement benefits under the applicable federal and 
        state laws and regulations. 
           Subd. 3.  [COVERED RETIREMENT PLAN.] The provisions of this 
        section apply to the following retirement plans: 
           (1) general state employees retirement plan of the 
        Minnesota state retirement system, established under chapter 
        352; 
           (2) correctional employees retirement plan of the Minnesota 
        state retirement system, established under chapter 352; 
           (3) state patrol retirement plan, established under chapter 
        352B; 
           (4) legislators retirement plan, established under chapter 
        3A; 
           (5) judges retirement plan, established under chapter 490; 
           (6) public employees retirement plan, established under 
        chapter 353; 
           (7) public employees police and fire plan, established 
        under chapter 353; 
           (8) teachers retirement plan, established under chapter 
        354; 
           (9) Duluth teachers retirement fund association, 
        established under chapter 354A; 
           (10) St. Paul teachers retirement fund association, 
        established under chapter 354A; 
           (11) Minneapolis teachers retirement fund association, 
        established under chapter 354A; 
           (12) Minneapolis employees retirement plan, established 
        under chapter 422A; 
           (13) Minneapolis firefighters relief association, 
        established under chapter 69; 
           (14) Minneapolis police relief association, established 
        under chapter 423B; and 
           (15) public employees local government correctional service 
        retirement plan, established under chapter 353E. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on the day following final enactment.
                                   ARTICLE 11
                   VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 
           Section 1.  [REPEALER.] 
           Minnesota Statutes 1998, section 424A.02, subdivision 5, is 
        repealed. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 1999. 
                                   ARTICLE 12 
                                 ANNUITY LIMITS 
           Section 1.  Minnesota Statutes 1998, section 356.61, is 
        amended to read: 
           356.61 [LIMITATION ON PUBLIC EMPLOYEE RETIREMENT 
        ANNUITIES.] 
           Notwithstanding any provision of law, bylaws, articles of 
        incorporation, retirement and disability allowance plan 
        agreements or retirement plan contracts to the contrary, no 
        person who has pension or retirement coverage by a public 
        pension plan is entitled to receive a monthly retirement annuity 
        or disability benefit which, at the time of commencement of the 
        retirement annuity or disability benefit, exceeds 1/12 of the 
        amount of the annual benefit permitted by the terms of section 
        415 of the Internal Revenue Code with respect to a participant 
        in a plan qualified under section 401(a) of the Internal Revenue 
        Code, as amended through December 31, 1982.  
           The benefit limitation is to be determined on the date the 
        benefit is initially payable or on the date the employee 
        terminated employment, if earlier.  The benefit limitation on 
        any date is the benefit limitation for the limitation year in 
        which the date occurs.  The limitations apply only to the annual 
        benefit which is derived from employer contributions.  Mandatory 
        and voluntary employee contributions, if any, are treated as a 
        separate defined contribution plan maintained by the employer 
        which is subject to the limitations placed on annual additions 
        to defined contribution plans.  
           The maximum annual benefit for any limitation year is the 
        lesser of (1) or (2) below:  
           (1) A dollar limitation of $90,000, adjusted as of January 
        1 of each calendar year to the dollar limitation as determined 
        for that year by the commissioner of Internal Revenue.  The 
        amount determined for any year will apply to limitation years 
        ending with or within that calendar year.  
           (2) A compensation limitation of 100 percent of the average 
        of compensation paid or made available to the participant by the 
        employer during those three consecutive calendar years of 
        employment, or actual number of consecutive calendar years of 
        employment if employed less than three consecutive years, which 
        give the highest average.  Compensation means any compensation 
        which is includable in the employee's gross income, plus any 
        elective deferral as defined in section 402(g)(3) of the federal 
        Internal Revenue Code of 1986, as amended through May 15, 1999, 
        and any amount which was contributed or deferred by the employer 
        at the election of the employee and which is not includable in 
        the gross income of the employee by reason of section 125 or 457 
        of the federal Internal Revenue Code.  
           A benefit is deemed not to exceed the maximum benefit 
        limitation if: 
           (1) the retirement benefits payable under the plan and 
        under any other defined benefit plans of the employer do not 
        exceed the $10,000 limit set in section 415(b)(4) of the 
        Internal Revenue Code for the plan year, or for any prior plan 
        year, and 
           (2) the employer has not at any time maintained a defined 
        contribution plan in which the employee participated.  
           A public pension plan is any Minnesota public pension plan 
        or fund which provides pension or retirement coverage for public 
        employees other than volunteer firefighters, including any plan 
        or fund enumerated in sections 356.20, subdivision 2, or 356.30, 
        subdivision 3, any local police or firefighter's relief 
        association to which section 69.77 applies, or any retirement or 
        pension plan or fund, including a supplemental retirement plan 
        or fund, established, maintained or supported by any 
        governmental subdivision or public body whose revenues are 
        derived from taxation, fees, assessments or from other public 
        sources.  
           The figure for the monthly retirement annuity or disability 
        benefit to be used for the calculation of this limitation must 
        not include any reduction or adjustment required for retirement 
        prior to the normal retirement age or required for the election 
        of an optional annuity.  
           If the figure for the monthly retirement annuity or 
        disability benefit exceeds the limit contained in this section, 
        the annuity or benefit payable must be reduced appropriately.  
           The managing board of each public pension plan from which a 
        retirement annuity or disability benefit is payable shall, at 
        the time that the retirement annuity or disability benefit 
        commences, contact all other public pension plans to determine 
        whether or not the recipient of the retirement annuity or 
        disability benefit is also receiving or is entitled to receive a 
        retirement annuity or disability benefit from any other public 
        pension plan.  If a person is entitled to receive or is 
        receiving a retirement annuity or disability benefit from more 
        than one public pension plan, all retirement annuities or 
        disability benefits from all public pension plans must be 
        totaled in determining whether or not the limitation applies.  A 
        reduction in the amount of the retirement annuity or disability 
        benefit required under this section is made by the public 
        pension plan which provided retirement coverage for the most 
        recent period of service. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
                                   ARTICLE 13
                 CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
           Section 1.  Minnesota Statutes 1998, section 352.90, is 
        amended to read: 
           352.90 [POLICY.] 
           It is the policy of the legislature to provide special 
        retirement benefits and contributions for certain correctional 
        employees who may be required to retire at an early age because 
        they lose the mental or physical capacity required to maintain 
        the safety, security, discipline, and custody of inmates at 
        state correctional facilities or of patients at the Minnesota 
        security hospital or at the Minnesota sexual psychopathic 
        personality treatment center or of patients in the Minnesota 
        extended treatment options on-campus program at the Cambridge 
        regional human services center.  
           Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
        amended by adding a subdivision to read: 
           Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
        CAMBRIDGE.] "Covered correctional service" means service by a 
        state employee in one of the following employment positions with 
        the Minnesota extended treatment options on-campus program at 
        the Cambridge regional human services center if at least 75 
        percent of the employee's working time is spent in direct 
        contact with patients who are in the Minnesota extended 
        treatment options program and if service in such a position is 
        certified to the executive director by the commissioner of human 
        services, unless the person elects to retain current retirement 
        coverage under section 6: 
           (1) behavior analyst I; 
           (2) human services support specialist; 
           (3) mental retardation residential program lead; 
           (4) psychologist 2; 
           (5) recreation program assistant; 
           (6) recreation therapist senior; 
           (7) registered nurse senior; 
           (8) skills development specialist; and 
           (9) social worker senior. 
           Sec. 3.  Minnesota Statutes 1998, section 352.92, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] Employee 
        contributions of covered correctional employees must be in an 
        amount equal to 5.50 5.69 percent of salary.  
           Sec. 4.  Minnesota Statutes 1998, section 352.92, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
        contribute for covered correctional employees an amount equal to 
        7.70 7.98 percent of salary. 
           Sec. 5.  Minnesota Statutes 1998, section 352.93, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
        employee, or former employee if service ended after June 30, 
        1989, who becomes at least 50 years old and who has at least 
        three years of allowable service is entitled upon application to 
        a reduced retirement annuity equal to the annuity calculated 
        under subdivision 2, reduced so that the reduced annuity is the 
        actuarial equivalent of the annuity that would be payable if the 
        employee deferred receipt of the annuity from the day the 
        annuity begins to accrue to age 55 by two-tenths of one percent 
        for each month that the correctional employee is under age 55 at 
        the time of retirement. 
           Sec. 6.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
        RETIREMENT COVERAGE.] 
           (a) An employee in a position specified as qualifying under 
        section 2 may elect to retain coverage under the general 
        employees retirement plan of the Minnesota state retirement 
        system or may elect to transfer coverage and contribute to the 
        correctional employees retirement plan.  An employee electing to 
        participate in the correctional employees retirement plan shall 
        begin making contributions to the correctional plan beginning 
        the first full pay period after July 1, 1999, or the first full 
        pay period following filing of their election to transfer 
        coverage to the correctional employees retirement plan, 
        whichever is later.  The election to retain coverage or to 
        transfer coverage must be made in writing by the person on a 
        form prescribed by the executive director of the Minnesota state 
        retirement system and must be filed with the executive director 
        no later than December 31, 1999. 
           (b) An employee failing to make an election by December 15, 
        1999, must be notified by certified mail by the executive 
        director of the Minnesota state retirement system of the 
        deadline to make a choice.  A person who does not submit an 
        election form must continue coverage in the general employees 
        retirement plan and forfeits all rights to transfer retirement 
        coverage to the correctional employees retirement plan. 
           (c) The election to retain coverage in the general 
        employees retirement plan or the election to transfer retirement 
        coverage to the correctional employees retirement plan is 
        irrevocable once it is filed with the executive director. 
           Sec. 7.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
        PERSONS.] 
           Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
        (a) An employee who has future retirement coverage transferred 
        to the correctional employees retirement plan under section 6, 
        and who does not elect to retain general state employees 
        retirement plan coverage, is entitled to elect to obtain prior 
        service credit for eligible state service performed on or after 
        July 1, 1997, and before the first day of the first full pay 
        period beginning after December 31, 1999.  All prior service 
        credit must be purchased. 
           (b) Eligible state service is any period of service on or 
        after the date which the employee started employment with the 
        Minnesota extended treatment options program in a position 
        specified in Minnesota Statutes, section 352.91, subdivision 3e, 
        in which at least 75 percent of the employee's working time is 
        determined to have been spent in direct contact with Minnesota 
        extended treatment options program patients or July 1, 1997, 
        whichever is later, and the date the employee joined the 
        correctional employees plan.  
           (c) The department of human services shall certify eligible 
        state service to the executive director of the Minnesota 
        retirement system. 
           Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
        electing to obtain prior service credit under subdivision 1 must 
        pay an additional employee contribution for that prior service.  
        The additional member contribution is the contribution 
        differential percentage applied to the actual salary paid to the 
        employee during the period of the prior eligible state service, 
        plus interest at the rate of six percent per annum, compounded 
        annually.  The contribution differential percentage is the 
        difference between 5.5 percent of salary and the applicable 
        employee contribution rate of the general state employees 
        retirement plan during the prior eligible state service. 
           (b) The additional member contribution must be paid only in 
        a lump sum.  Payment must accompany the election to obtain prior 
        service credit.  No election or payment may be made by the 
        person or accepted by the executive director after June 30, 2001.
           Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
        from the general state employees retirement plan to the 
        correctional employees retirement plan in an amount equal to the 
        present value of benefits earned under the general employees 
        retirement plan for each employee transferring to the 
        correctional employees retirement plan, as determined by the 
        actuary retained by the legislative commission on pensions and 
        retirement in accordance with Minnesota Statutes, section 
        356.215, multiplied by the accrued liability funding ratio of 
        active members as derived from the most recent actuarial 
        valuation prepared by the commission-retained actuary.  The 
        transfer of assets must be made within 45 days after the 
        employee elects to transfer coverage to the correctional 
        employees retirement plan. 
           Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
        of assets in subdivision 3, service credit in the general state 
        employees plan of the Minnesota state retirement system is 
        forfeited and may not be reinstated.  The service credit and 
        transferred assets must be credited to the correctional 
        employees retirement plan. 
           Subd. 5.  [COUNSELING.] (a) The commissioners of human 
        services and employee relations, and the executive director of 
        the Minnesota state retirement system have the joint 
        responsibility of providing affected employees with appropriate 
        and timely retirement and related benefit counseling. 
           (b) Counseling must include the anticipated impact of the 
        retirement coverage change on the person's future retirement 
        benefit amounts, future retirement eligibility, future 
        applicability of mandatory retirement laws, and future 
        postemployment insurance coverage. 
           (c) The commissioner of human services must consult with 
        the appropriate collective bargaining agents of the affected 
        employees regarding the content, form, and timing of the 
        counseling required by this section. 
           Sec. 8.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
        RIGHTS.] 
           (a) Nothing in sections 1, 2, and 6 to 9 may be considered 
        to restrict the entitlement of a person under state law to repay 
        a previously taken refund of employee or member contributions to 
        a Minnesota public pension plan if all qualifying requirements 
        are met. 
           (b) The period of correctional employees retirement plan 
        contributions, plus interest, must be restored upon the 
        repayment of the appropriate refund amount if the service was 
        correctional employees retirement plan covered service on the 
        date when the service was rendered or on the date when the 
        refund was taken. 
           Sec. 9.  [EARLY RETIREMENT INCENTIVE.] 
           This section applies to an employee who has future 
        retirement coverage transferred to the correctional employee 
        retirement plan under section 6 and who is at least 55 years old 
        on the effective date of section 6.  That employee may 
        participate in a health insurance early retirement incentive 
        available under the terms of a collective bargaining agreement, 
        notwithstanding any provision of the collective bargaining 
        agreement that limits participation to persons who select the 
        option during the payroll period in which they become 55 years 
        old.  A person selecting the health insurance early retirement 
        incentive under this section must retire by the later of 
        December 31, 2000, or within the pay period following the time 
        at which the person has at least three years of covered 
        correctional service, including any purchased service credit.  
        An employee meeting this criteria who wishes to extend the 
        person's employment must do so under Minnesota Statutes, section 
        43A.34, subdivision 3. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1, 2, 3, 4, and 6 to 9 are effective on the first 
        day of the first full pay period beginning after July 1, 1999.  
        Section 5 is effective July 1, 1999. 
                                   ARTICLE 14
                         PUBLIC SAFETY EMPLOYEE PENSION 
                                  PLAN CHANGES 
           Section 1.  Minnesota Statutes 1998, section 352B.08, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
        least 50 years old and who has at least three years of allowable 
        service is entitled upon application to a reduced retirement 
        annuity equal to the annuity calculated under subdivision 2, 
        reduced by two-tenths one-tenth of one percent for each month 
        that the member is under age 55 at the time of retirement. 
           Sec. 2.  Minnesota Statutes 1998, section 353.64, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
        person who prior to July 1, 1961, was a member of the police and 
        fire fund, by virtue of being a police officer or firefighter, 
        shall, as long as the person remains in either position, 
        continue membership in the fund.  
           (b) A person who was employed by a governmental subdivision 
        as a police officer and was a member of the police and fire fund 
        on July 1, 1978, by virtue of being a police officer as defined 
        by this section on that date, and if employed by the same 
        governmental subdivision in a position in the same department in 
        which the person was employed on that date, shall continue 
        membership in continues to be a member of the fund, whether or 
        not that person has the power of arrest by warrant and is 
        licensed by the peace officers standards and training board 
        after that date.  A person who was employed as a correctional 
        officer by Rice county before July 1, 1998, for the duration of 
        employment in the correctional position held on July 1, 1998, 
        continues to be a member of the public employees police and fire 
        plan, whether or not the person has the power of arrest by 
        warrant and is licensed by the peace officers standards and 
        training board after that date. 
           (c) A person who was employed by a governmental subdivision 
        as a police officer or a firefighter, whichever applies, was an 
        active member of the local police or salaried firefighters 
        relief association located in that governmental subdivision by 
        virtue of that employment as of the effective date of the 
        consolidation as authorized by sections 353A.01 to 353A.10, and 
        has elected coverage by the public employees police and fire 
        fund benefit plan, shall become a member of the police and fire 
        fund after that date if employed by the same governmental 
        subdivision in a position in the same department in which the 
        person was employed on that date. 
           (d) Any other employee serving on a full-time basis as a 
        police officer as defined in subdivision 2 or as a firefighter 
        as defined in subdivision 3 on or after July 1, 1961, shall 
        become a member of the public employees police and fire fund.  
           (e) An employee serving on less than a full-time basis as a 
        police officer shall become a member of the public employees 
        police and fire fund only after a resolution stating that the 
        employee should be covered by the police and fire fund is 
        adopted by the governing body of the governmental subdivision 
        employing the person declaring that the position which the 
        person holds is that of a police officer. 
           (f) An employee serving on less than a full-time basis as a 
        firefighter shall become a member of the public employees police 
        and fire fund only after a resolution stating that the employee 
        should be covered by the police and fire fund is adopted by the 
        governing body of the governmental subdivision employing the 
        person declaring that the position which the person holds is 
        that of a firefighter. 
           (g) A police officer or firefighter employed by a 
        governmental subdivision who by virtue of that employment is 
        required by law to be a member of and to contribute to any 
        police or firefighter relief association governed by section 
        69.77 which has not consolidated with the public employees 
        police and fire fund and any police officer or firefighter of a 
        relief association that has consolidated with the association 
        for which the employee has not elected coverage by the public 
        employees police and fire fund benefit plan as provided in 
        sections 353A.01 to 353A.10 shall not become a member of the 
        public employees police and fire fund. 
           Sec. 3.  Minnesota Statutes 1998, section 353.651, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
        firefighter member who has become at least 50 years old and who 
        has at least three years of allowable service is entitled upon 
        application to a retirement annuity equal to the normal annuity 
        calculated under subdivision 3, reduced by two-tenths one-tenth 
        of one percent for each month that the member is under age 55 at 
        the time of retirement. 
           Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
        CERTAIN INSTANCES.] 
           (a) If a public employee continues in retirement plan 
        coverage by the public employees police and fire retirement plan 
        by virtue of this article and subsequently is covered by the 
        federal old age, survivors, and disability insurance program for 
        service as a Rice county correctional officer, the retirement 
        annuity of the person under section 353.651 or the disability 
        benefit of the person under section 353.656 must be reduced 
        dollar for dollar for the social security benefit that the 
        person is entitled to receive by virtue of Rice county 
        correctional service rendered after the effective date of 
        section 1. 
           (b) To be effective, the retirement annuity or disability 
        benefit application form for a Rice county correctional employee 
        must include signed written permission by the person for the 
        public employees retirement association to obtain the necessary 
        information from the federal old age, survivors, and disability 
        insurance program to implement the offset provision in paragraph 
        (a). 
           Sec. 5.  [353.88] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
        AND CERTIFICATION FAILURES.] 
           (a) If the board of trustees of the public employees 
        retirement association, upon the recommendation of the executive 
        director, determines that a governmental subdivision has 
        certified a public employee for membership in the public 
        employees police and fire retirement plan when the public 
        employee was not eligible for that retirement plan coverage, the 
        public employee must be covered by the correct retirement plan 
        for subsequent service, the public employee retains the coverage 
        for the period of the misclassification, and the governmental 
        subdivision shall pay in a lump sum the difference in the 
        actuarial present value of the retirement annuities to which the 
        public employee would have been entitled if the public employee 
        was properly classified.  The governmental subdivision payment 
        is payable within 30 days of the board's determination.  If 
        unpaid, it must be collected under section 353.28.  The lump sum 
        payment must be deposited in the public employees retirement 
        fund. 
           (b) If the executive director of the public employees 
        retirement association determines that a governmental 
        subdivision has failed to certify a person for retirement plan 
        membership and coverage under this chapter, in addition to the 
        procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
        12a, or 12b, the director shall charge a fine of $25 for each 
        membership certification failure. 
           Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
        account in effect on July 1, 1999, the public employees police 
        and fire fund benefit plan applicable to consolidation account 
        members who have elected or will elect that benefit plan 
        coverage under section 353A.08 is the most recent change adopted 
        by the applicable municipality under subdivision 1, 2, or 3, 
        unless the applicable municipality approves the extension of the 
        post-June 30, 1999, public employees police and fire fund 
        benefit plan to the consolidation account. 
           Sec. 7.  [COLLECTION OF POLICE STATE OVERPAYMENTS.] 
           (a) As police state aid that was received by Rice county on 
        account of correctional officers who were improperly included in 
        retirement coverage by the public employees police and fire 
        plan, the total of the following amounts must be deducted in 20 
        equal annual installments from any police state aid payable to 
        Rice county under Minnesota Statutes, chapter 69: 
                  amount                 year  
                 $11,543                 1994
                  19,096                 1995 
                  39,111                 1996  
                  19,170                 1997 
                  13,764                 1998.  
           (b) Rice county correctional officers who are members of 
        the public employees police and fire plan may not be included in 
        the police officer certification under Minnesota Statutes, 
        section 69.011, subdivision 2, paragraph (b), and the employer 
        contributions to the public employees police and fire fund on 
        behalf of those correctional employees may not be included in 
        the employer police retirement coverage prior calendar year 
        obligation for the determination of excess police state aid 
        under Minnesota Statutes, section 69.021, subdivision 10, unless 
        the correctional officer is a peace officer as defined in 
        Minnesota Statutes, section 69.011, subdivision 1, paragraph (g).
           Sec. 8.  [EFFECTIVE DATE.] 
           (a) Sections 1, 3, and 7 are effective on July 1, 1999.  
        Sections 2, 4, and 6 are effective on the day following final 
        enactment.  Section 5 is effective on August 1, 2000. 
           (b) If all consolidation accounts in effect on March 1, 
        1999, are merged with the public employees police and fire fund 
        after July 1, 1999, section 6 is repealed as of June 30, 1999. 
                                   ARTICLE 15
                          SPECIAL RETIREMENT COVERAGE  
                             FOR CERTAIN STATE FIRE 
                               MARSHAL EMPLOYEES
           Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
        EMPLOYEES.] 
           Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
        who is employed by the department of public safety, state fire 
        marshal division, as a deputy state fire marshal, fire/arson 
        investigator, who elects special benefit coverage under 
        subdivision 8, is entitled to retirement benefits or disability 
        benefits, as applicable, as stated in this section for eligible 
        service under this section rendered after July 1, 1999, for 
        which allowable service credit is received.  The covered member 
        must be at least age 55 to qualify for the retirement annuity 
        specified in subdivision 3. 
           Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
        specified in subdivision 1 who meets all eligibility 
        requirements specified in this chapter applicable to general 
        plan members is eligible for retirement benefits as specified in 
        subdivision 3. 
           Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
        in subdivision 1 will have a retirement annuity applicable for 
        allowable service credit under this section calculated by 
        multiplying the employee's average salary, as defined in section 
        352.115, subdivision 2, by the percent specified in section 
        356.19, subdivision 2a, for each year or portions of a year of 
        allowable service credit.  No reduction for retirement prior to 
        normal retirement age, as specified in section 352.01, 
        subdivision 25, applies to service to which this section applies.
           Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
        eligible member described in subdivision 1, who is less than 55 
        years of age and who becomes disabled and physically or mentally 
        unfit to perform the duties of the position because of sickness 
        or injury while not engaged in covered employment, is entitled 
        to a disability benefit amount equivalent to an annuity computed 
        under subdivision 3 assuming the member has 15 years of service 
        qualifying under this section and waiving the minimum age 
        requirement.  If the eligible member becomes disabled under this 
        subdivision with more than 15 years of service covered under 
        this section, the eligible member is entitled to a disability 
        benefit amount equivalent to an annuity computed under 
        subdivision 3 based on all years of service credited under this 
        section and waiving the minimum age requirement. 
           Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
        member defined in subdivision 1, who is less than 55 years of 
        age and who becomes disabled and physically or mentally unfit to 
        perform the duties of the position because of sickness or injury 
        while engaged in covered employment, is entitled to a disability 
        benefit amount equivalent to an annuity computed under 
        subdivision 3 assuming the member has 20 years of service 
        qualifying under this section and waiving the minimum age 
        requirement.  An eligible member who becomes disabled under this 
        subdivision with more than 20 years of service credited under 
        this section is entitled to a disability benefit amount 
        equivalent to an annuity computed under subdivision 3 based on 
        all years of service credited under this section and waiving the 
        age requirement. 
           Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
        eligible employee is entitled to receive a disability benefit as 
        provided in subdivision 4 or 5 and has allowable service credit 
        under this section for less service than the length of service 
        upon which the disability benefit in subdivision 4 or 5 is 
        based, and also has allowable service in the general plan not 
        includable in this section, the employee is entitled to a 
        disability benefit or deferred retirement annuity based on the 
        general plan service not includable in this section only for the 
        service that, when combined with the service includable in this 
        section, exceeds the number of years on which the disability 
        benefit provided in subdivision 4 or 5 is based.  The benefit 
        recipient under subdivision 4 or 5 who also has credit for 
        regular plan service must in all respects qualify under section 
        352.113 to be entitled to receive a disability benefit based on 
        the general plan service not includable in this section, 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 general plan service not includable in this 
        section must be augmented as provided in section 352.72, 
        subdivision 2, while the employee is receiving a disability 
        benefit under this section. 
           Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
        retirement annuity and disability coverage under this section 
        must be financed by an employee contribution of 2.78 percent of 
        covered salary and an employer contribution of 4.20 percent of 
        covered salary.  These contributions are in addition to the 
        contributions required by section 352.04, subdivisions 2 and 3, 
        and must be made in the manner provided for in section 352.04, 
        subdivisions 4, 5, and 6. 
           Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
        section, an employee of the department of public safety 
        described in subdivision 1 who is employed in a position 
        described in that subdivision on or after July 1, 1999, must 
        file a notice with the executive director of the Minnesota state 
        retirement system on a form prescribed by the executive director 
        stating whether or not the employee elects to be covered by this 
        section.  Notice must be filed by September 1, 1999, or within 
        90 days of employment, whichever is later.  Elections are 
        irrevocable during any period of covered employment.  A failure 
        to file a timely notice shall be deemed a waiver of coverage by 
        this section. 
           Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
        accrual rate is 2.0 percent. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
                                   ARTICLE 16
                            TEACHER RETIREMENT PLANS  
                         PRIOR SERVICE CREDIT PURCHASE  
                                 AUTHORIZATION  
           Section 1.  [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association and who performed 
        service in the United States armed forces before becoming a 
        teacher as defined in section 354.05, subdivision 2, or who 
        failed to obtain service credit for a military leave of absence 
        under the provisions of section 354.53, is entitled to purchase 
        allowable and formula service credit for the initial period of 
        enlistment, induction, or call to active duty without any 
        voluntary extension by making payment under section 356.55 
        provided the teacher is not entitled to receive a current or 
        deferred retirement annuity from a United States armed forces 
        pension plan and has not purchased service credit from any other 
        defined benefit public employee pension plan for the same period 
        of service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher upon 
        receipt of the purchase payment amount.  Payment must be made 
        before the teacher's effective date of retirement.  
           Sec. 2.  [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association is entitled to purchase 
        up to ten years of allowable and formula service credit for 
        out-of-state teaching service by making payment under section 
        356.55, provided the out-of-state teaching service was performed 
        for an educational institution established and operated by 
        another state, governmental subdivision of another state, or the 
        federal government and the teacher is not entitled to receive a 
        current or deferred age and service retirement annuity or 
        disability benefit and has not purchased service credit from 
        another defined benefit public employee pension plan for that 
        out-of-state teaching service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher on 
        receipt of the purchase payment amount. 
           Sec. 3.  [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN 
        SERVICE PURCHASES.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association and who was granted a 
        maternity leave of absence by a school district or other 
        employing unit covered by the teachers retirement association 
        for which the teacher did not previously receive allowable and 
        formula service credit, or who had a maternity break in teaching 
        service for which the teacher did not receive or purchase 
        service credit from another defined benefit public employee 
        pension plan is entitled to purchase the actual period of the 
        leave or of the break in teaching service, up to five years, of 
        allowable and formula service credit for applicable maternity 
        leaves of absence or applicable maternity break in teaching 
        service periods by making payment under section 356.55. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher on 
        receipt of the purchase payment amount. 
           Sec. 4.  [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association is entitled to purchase 
        up to ten years of allowable and formula service credit for 
        private or parochial school teaching service by making payment 
        under section 356.55, provided that the teacher is not entitled 
        to receive a current or deferred age and service retirement 
        annuity or disability benefit from the applicable 
        employer-sponsored pension plan and has not purchased service 
        credit from the applicable defined benefit employer-sponsored 
        pension plan for that service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher on 
        receipt of the purchase payment amount. 
           Sec. 5.  [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT 
        PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association is entitled to purchase 
        up to ten years of allowable and formula service credit for 
        service rendered in the federal peace corps program or in the 
        federal volunteers in service to America program by making 
        payment under section 356.55, provided that the teacher has not 
        purchased service credit from any defined benefit pension plan 
        for that service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher on 
        receipt of the purchase payment amount. 
           Sec. 6.  [354.538] [CHARTER SCHOOL TEACHING SERVICE CREDIT 
        PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement association is entitled to purchase 
        up to ten years of allowable and formula service credit for 
        charter school teaching service by making payment under section 
        356.55, provided that the teacher is not entitled to receive a 
        current or deferred age and service retirement annuity or 
        disability benefit from the applicable employer-sponsored 
        pension plan and has not purchased service credit from the 
        applicable defined benefit employer-sponsored pension plan for 
        that service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit for the purchase period must be granted by the 
        teachers retirement association to the purchasing teacher on 
        receipt of the purchase payment amount. 
           Sec. 7.  [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association and who performed 
        service in the United States armed forces before becoming a 
        teacher as defined in section 354A.011, subdivision 27, or who 
        failed to obtain service credit for a military leave of absence 
        period under section 354A.093, is entitled to purchase allowable 
        service credit for the initial period of enlistment, induction, 
        or call to active duty without any voluntary extension by making 
        payment under section 356.55 provided the teacher is not 
        entitled to receive a current or deferred retirement annuity 
        from a United States armed forces pension plan and has not 
        purchased service credit from another defined benefit public 
        employee pension plan for the same period of service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director or secretary of the respective 
        teachers retirement fund association to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director or secretary to 
        request and receive necessary verification of applicable facts 
        and eligibility requirements, and any other relevant information 
        that the executive director or secretary may require.  Payment 
        must be made before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the applicable 
        teachers retirement fund association to the purchasing teacher 
        on receipt of the purchase payment amount. 
           Sec. 8.  [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with one of the retirement fund associations under this chapter 
        and who rendered out-of-state teaching service for an 
        educational institution established and operated by another 
        state, governmental subdivision of another state, or the federal 
        government, is entitled to purchase up to ten years of allowable 
        service credit for that out-of-state service by making payment 
        under section 356.55, provided the teacher is not entitled to 
        receive a current or deferred age and service retirement annuity 
        or disability benefit and has not purchased service credit from 
        another defined benefit public employee pension plan for that 
        out-of-state teaching service.  Payment must be made before the 
        teacher's effective date of retirement.  
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director or secretary of the respective 
        teachers retirement fund association to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director or secretary to 
        request and receive necessary verification of applicable facts 
        and eligibility requirements, and any other relevant information 
        that the executive director or secretary may require. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the applicable 
        teachers retirement fund association to the purchasing teacher 
        on receipt of the purchase payment amount. 
           Sec. 9.  [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE 
        SERVICE CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association and who was 
        granted a maternity leave of absence by a school district or 
        other employing unit covered by the teachers retirement 
        association for which the teacher did not previously receive 
        allowable service credit or who had a maternity break in 
        teaching service for which the teacher did not receive or 
        purchase service credit from another defined benefit public 
        employee pension plan is entitled to purchase the actual period 
        of the leave or of the break in teaching service, up to five 
        years, of allowable service credit for applicable maternity 
        leaves of absence or applicable maternity break in teaching 
        service periods by making payment under section 356.55. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director or secretary of the respective 
        retirement fund association to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director or secretary to 
        request and receive any necessary verification of applicable 
        facts and eligibility requirements, and any other relevant 
        information that the executive director or secretary may require.
        Payment must be made before the teacher's effective date of 
        retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the applicable 
        teachers retirement fund association to the purchasing teacher 
        on receipt of the purchase payment amount. 
           Sec. 10.  [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association is entitled to 
        purchase up to ten years of allowable service credit for private 
        or parochial school teaching service by making payment under 
        section 356.55, provided that the teacher is not entitled to 
        receive a current or deferred age and service retirement annuity 
        or disability benefit from the applicable employer-sponsored 
        pension plan and has not purchased service credit from the 
        applicable defined benefit employer-sponsored pension plan for 
        that service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the teachers 
        retirement fund association to the purchasing teacher on receipt 
        of the purchase payment amount. 
           Sec. 11.  [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT 
        PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association is entitled to 
        purchase up to ten years of allowable service credit for service 
        rendered in the federal Peace Corps program or in the federal 
        Volunteers in Service to America program by making payment under 
        section 356.55, provided that the teacher has not purchased 
        service credit from any defined benefit pension plan for that 
        service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the teachers 
        retirement fund association to the purchasing teacher on receipt 
        of the purchase payment amount. 
           Sec. 12.  [354A.103] [CHARTER SCHOOL TEACHING SERVICE 
        CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association is entitled to 
        purchase up to ten years of allowable service credit for charter 
        school teaching service by making payment under section 356.55, 
        provided that the teacher is not entitled to receive a current 
        or deferred age and service retirement annuity or disability 
        benefit from the applicable employer-sponsored pension plan and 
        has not purchased service credit from the applicable defined 
        benefit employer-sponsored pension plan for that service. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the teachers 
        retirement fund association to the purchasing teacher on receipt 
        of the purchase payment amount. 
           Sec. 13.  [354A.104] [PREVIOUSLY UNCREDITED PART-TIME 
        TEACHING SERVICE CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association and who performed 
        part-time teaching service in the applicable school district and 
        was not eligible previously for service credit for that service 
        is entitled to purchase the previously uncredited service by 
        making payment under section 356.55. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
        desires to purchase service credit under subdivision 1 must 
        apply with the executive director to make the purchase.  The 
        application must include all necessary documentation of the 
        teacher's qualifications to make the purchase, signed written 
        permission to allow the executive director to request and 
        receive necessary verification of applicable facts and 
        eligibility requirements, and any other relevant information 
        that the executive director may require.  Payment must be made 
        before the teacher's effective date of retirement.  
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the teachers 
        retirement fund association to the purchasing teacher on receipt 
        of the purchase payment amount. 
           Sec. 14.  Minnesota Statutes 1998, section 356.55, 
        subdivision 1, is amended to read: 
           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.  The purchase 
        payment amount determination procedure must recognize any 
        service credit accrued to the purchaser in a pension plan listed 
        in section 356.30, subdivision 3.  Any service credit in a 
        Minnesota defined benefit public employee pension plan available 
        to be reinstated by the purchaser through the repayment of a 
        refund of member or employee contributions previously received 
        must be repaid in full before any purchase of prior service 
        credit payment is made under this section. 
           Sec. 15.  Minnesota Statutes 1998, section 356.55, 
        subdivision 6, is amended to read: 
           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 a supplemental report to 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 a comparison for each purchase showing the total prior 
        service credit payment received from all sources and the 
        increased public pension plan actuarial accrued liability 
        resulting from each purchase. 
           Sec. 16.  [REPEALER.] 
           Sections 1 to 13 are repealed on May 16, 2002. 
           Sec. 17.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall replace the current headnote 
        for Minnesota Statutes, section 354.53, with the headnote 
        "CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE." 
           Sec. 18.  [EFFECTIVE DATE.] 
           (a) This article is effective on May 16, 1999.  
           (b) A teacher who retires on or before May 16, 1999, is not 
        eligible to purchase service credit under the provisions of this 
        article.  A teacher who has rendered teaching service after May 
        16, 1999, and who has filed an application for retirement that 
        is effective on or before July 1, 1999, may purchase service 
        credit under this article on or before September 1, 1999, 
        notwithstanding that the person is not a teacher rendering 
        active teaching service on the date of the payment.  Payment 
        must be received on or before September 1, 1999.  If this 
        payment is received on or after the effective date of 
        retirement, the increased benefit resulting from the purchase is 
        effective on the first day of the month following the month 
        during which payment is received. 
                                   ARTICLE 17
                        MINNEAPOLIS EMPLOYEES RETIREMENT  
                                  PLAN CHANGES  
           Section 1.  Minnesota Statutes 1998, section 422A.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
        accumulation fund consists of the assets held in the fund, 
        increased by including amounts contributed by or for employees, 
        amounts contributed by the city, amounts contributed by 
        municipal activities supported in whole or in part by revenues 
        other than taxes and amounts contributed by any public 
        corporation, amounts paid by the state, and by income from 
        investments.  There must be paid from the fund the amounts 
        required to be transferred to the retirement benefit fund, or 
        the disability benefit fund, refunds of contributions, death 
        benefits payable on death before retirement that are not payable 
        from the survivors' benefit fund including the 
        death-while-active refund specified in section 422A.22, 
        subdivision 4, postretirement increases in retirement allowances 
        granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
        and expenses of the administration of the retirement fund which 
        were not charged by the retirement board against the income of 
        the retirement benefit fund from investments as the cost of 
        handling the investments of the retirement benefit fund. 
           Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
        fund shall consist consists of the amount held for survivor 
        benefits, increased by contributions for survivor benefits made 
        by and for employees, including contributions made by the 
        employer, by any municipal activity supported in whole or in 
        part by revenue other than taxes or by any public corporation.  
        A proportionate share of income from investments shall must be 
        allocated to this fund.  There shall be paid from such fund the 
        Survivor benefits specified in section 422A.23 except that the 
        refund of net accumulated deductions from the salary of a 
        contributing member shall upon death in service be paid from the 
        deposit accumulation fund must be paid from this fund. 
           Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
        INSTANCES.] (a) If a participating employing unit, other than 
        the state, has a negative asset balance in the deposit 
        accumulation fund, the executive director shall bill the 
        employing unit for the amount of the deficiency.  Any amount 
        billed must include six percent interest, compounded annually, 
        for any year or portion of a year from the billing date until 
        the date of payment. 
           (b) If assets in the deposit accumulation fund are 
        insufficient to make a transfer to the retirement benefit fund, 
        the city of Minneapolis shall pay the amount of that 
        insufficiency to the retirement benefit fund within three days 
        of certification of the insufficiency by the executive director 
        of the fund.  The city of Minneapolis may bill any other 
        participating employing unit other than the state for its 
        proportion of the amount paid.  Any amount billed by the city 
        under this paragraph must include interest as specified in 
        paragraph (a).  
           Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
        disability allowance under this section shall be the amount of 
        service allowance to which the employee would be entitled under 
        section 422A.15, notwithstanding the age requirements expressed 
        therein; or the lesser of the following amounts:  50 percent of 
        the final average compensation, or an amount equal to two 
        percent of final average compensation for each year of allowable 
        service for the first ten years, and thereafter 2.5 percent of 
        final average compensation per year of allowable service, 
        including in the latter assumed service between the date the 
        disability occurred and the 60th birthday of the employee. 
           If the amount of annuity (b) Annuities payable from the 
        Minnesota postretirement investment fund to any class of 
        annuitants is adjusted pursuant to section 11A.18, the amount of 
        benefits payable from the disability benefit fund for that class 
        of annuitants under this section shall also be adjusted at the 
        same time and rate as retirement annuities in the retirement 
        benefit fund. 
           Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
        of a contributing an active member while still in the service of 
        the city, and before reaching the compulsory age of 
        retirement prior to termination of service, there shall be paid 
        to such person the beneficiary or persons as beneficiaries 
        designated by the member shall have nominated by written 
        designation on a form specified by the executive director and 
        filed with the retirement board, in such form as the retirement 
        board shall require, the net accumulated amount of employee 
        deductions from salary, pay, or compensation, including interest 
        , to the member's credit on date of compounded annually to the 
        date of the member's death.  The amount must not include any 
        contributions made by the employee or on the employee's behalf, 
        or any interest or investment earnings on those contributions, 
        which were allocated to the survivor benefit fund under section 
        422A.06, subdivision 6. 
           (b) If the employee fails to make a designation, or if 
        the person or persons beneficiary or beneficiaries designated by 
        such the employee predeceases such the employee, the net 
        accumulated amount of deductions from salary, pay, or 
        compensation including interest, to the credit of such employee 
        on date of death shall benefit specified in paragraph (a) must 
        be paid to such the deceased employee's estate. 
           (c) A benefit payable under this subdivision is in addition 
        to any applicable survivor benefit under section 422A.23. 
           Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
        reemployment of a former covered employee to the service, in 
        employment covered by the Minneapolis employees retirement fund, 
        service credit for such past service or for any part thereof 
        shall which was forfeited by taking a refund must be granted 
        reinstated only upon repayment of the amount of the separation 
        refund, with interest, from the time of separation payment of 
        the refund until the date repaid.  
           Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
        amended to read: 
           422A.23 [SURVIVOR BENEFITS.] 
           Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
        AMOUNT.] (a) If a contributing an active or deferred member dies 
        after having been in the service with ten or more years of 
        service credit, and before actual retirement, as determined by 
        the retirement board, the present worth of the city's annual 
        installments of $60 then to the credit of the contributing 
        member, shall be paid to a beneficiary designated by such 
        contributing member in such form as the retirement board shall 
        require, who shall be the surviving spouse, or surviving child, 
        or children of such member or, if there be no surviving spouse 
        or surviving child or children, then to a person actually 
        dependent on and receiving principal support from such member, 
        or surviving mother or father, or grandchildren, or surviving 
        brother or sister, or surviving children of the deceased brother 
        or sister of such member except as noted in paragraph (d), the 
        individual specified in paragraph (b) is eligible to receive the 
        benefit specified in paragraph (c). 
           (b) An individual eligible for the benefit specified in 
        paragraph (c) is a beneficiary designated by the member on a 
        form specified by the executive director.  If the beneficiary 
        designated by the member is not one of the class of persons 
        named in the preceding sentence, such benefit from the 
        accumulation of city deposits shall be paid in the following 
        order:  (1) to the surviving spouse, the whole thereof; (2) if 
        there be no surviving spouse, to the surviving children, share 
        and share alike; (3) if there be no surviving spouse or child or 
        children, to the dependent or dependents as those terms are 
        herein defined, of the member, share and share alike; (4) if 
        there be no surviving spouse, child or children, or dependents, 
        to the surviving mother and father, share and share alike; (5) 
        if there be no surviving mother and father, to the 
        grandchildren, in equal shares; if there be no grandchildren, to 
        the surviving brothers and sisters of the member, in equal 
        shares; (6) if there be no surviving brothers and sisters, to 
        the surviving children of the deceased brothers and sisters of 
        the member, in equal shares; or (7) if there is none of the 
        foregoing persons who survives the member, the accumulation of 
        the city deposits shall be applied to the funeral expenses of 
        the member failed to designate a beneficiary, or if the 
        beneficiary or beneficiaries designated by the employee 
        predecease the employee, the benefit in paragraph (c) is payable 
        to the deceased employee's estate. 
           (c) The benefit is a lump-sum payment of the present value 
        of the city's or other contributing employer's annual 
        installments of $60 to the credit of the member. 
           (d) No benefit is payable under this subdivision if a 
        monthly survivor benefit is paid on behalf of the deceased 
        employee under another subdivision of this section. 
           Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
        active member dies prior to termination of service with at least 
        18 months 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.  Payment of a benefit 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 the surviving 
        child.  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 
        increased from $500 per month to $750 per month and the 
        surviving child benefit is $225 per month, beginning with the 
        first monthly payment payable after May 28, 1998.  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 May 28, 1998, is increased by 15 percent as 
        of the first payment on or after May 28, 1998. 
           (e) Surviving child benefits under this subdivision 
        terminate when the child no longer meets the definition of 
        surviving child. 
           Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
        in this section following the death of an active employee or 
        deferred member, as applicable, commence with on the first day 
        of the month following the month in which the active employee or 
        deferred member dies and shall end with the last day of the 
        month preceding the month in which eligibility 
        ceases.  Eligibility for the benefits herein provided shall be 
        determined by the retirement board and its determination shall 
        be final.  Each beneficiary or parent or guardian of a dependent 
        child or legal representative shall furnish such Information as 
        the board may deem deemed necessary by the executive director to 
        determine eligibility for the benefits provided by this section, 
        and must be submitted.  Failure to furnish any required 
        information shall be sufficient grounds for the denial or 
        discontinuance of benefits.  A determination made by the 
        executive director may be appealed to the retirement board, 
        whose determination is final.  If the surviving spouse of the 
        deceased active employee or deferred member becomes entitled to 
        a retirement allowance by reason of membership in this fund, the 
        surviving spouse shall is authorized to receive the retirement 
        allowance in addition to the all applicable surviving spouse's 
        benefit spouse benefits to which the surviving spouse is 
        entitled as specified in this section and section 422A.22, 
        subdivision 4, if applicable.  The cost of all monthly 
        survivor's benefits provided in this section shall be is an 
        obligation of the members and of the city, any of its boards, 
        departments, commissions or public corporations or other 
        applicable employing units. 
           Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
        retirement board shall create a reserve account for survivor's 
        benefits from which shall be paid on an actuarial basis all 
        survivor benefits due and payable.  At the end of each fiscal 
        year, as part of the annual actuarial valuation of the fund 
        prepared by the commission-retained actuary, a determination of 
        the normal cost of the benefits payable from the survivor's 
        benefit account shall be made and the board shall reduce or 
        increase the employee contribution rate of one-fourth of one 
        percent if and when it is determined based on the annual 
        actuarial valuation that the member contribution rate is in 
        excess of or is less than the amount necessary to pay for 50 
        percent of the calculated normal cost of the survivor benefits 
        provided in this section. 
           Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
        COVERAGE.] (a) If the contributing active or deferred member 
        dies after having been in the service of the city 20 or more 
        years, and before the effective date of retirement, as 
        determined by the retirement board, the board shall pay with 20 
        or more years of service credit, a beneficiary as defined in 
        paragraph (b) is eligible to receive the benefit specified in 
        paragraph (c). 
           (b) The beneficiary eligible for a benefit under paragraph 
        (c) is the surviving spouse of the deceased employee.  If there 
        is no surviving spouse, the beneficiary may be a dependent 
        surviving child of the member or dependent parent designated by 
        the employee on a form prescribed by the executive director. 
           (c) The benefit payable to the beneficiary designated in 
        paragraph (b) is a monthly allowance for life to the designated 
        beneficiary of the employee.  The monthly allowance herein 
        provided for shall be is the actuarial equivalent of a single 
        life service allowance specified in section 422A.15, subdivision 
        1, which would have been payable to the employee on the date of 
        death, notwithstanding the age requirement stated in section 
        422A.15, subdivision 1.  For purposes of this section, the 
        amount of any excess contributions or voluntary additions by the 
        member shall not be included in the calculations in determining 
        the monthly allowance.  
           The survivor allowance under this subdivision shall be 
        computed and determined under a procedure specified by the 
        commission-retained actuary utilizing the appropriate mortality 
        table established by the board of trustees based on the 
        experience of the fund as recommended by the commission-retained 
        actuary and using the applicable postretirement interest rate 
        assumption specified in section 356.215, subdivision 4d. 
           (d) For benefits payable under this subdivision following 
        the death of a deferred member, the benefit must be calculated 
        as of the date of termination from service and increased by five 
        percent per year until January 1, 1981, and by three percent per 
        year thereafter, compounded annually. 
           Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
        beneficiary designated by the employee shall be the surviving 
        spouse of such employee.  If there is no surviving spouse, the 
        designated beneficiary may be a dependent surviving child or 
        dependent parent of such employee as dependency is defined in 
        sections 422A.01 to 422A.25.  If the beneficiary designated by 
        the employee is not of the class of persons provided for in this 
        subdivision, or if the designated beneficiary predeceases the 
        employee, a refund shall be made as provided for in section 
        422A.22, in lieu of a life income.  If the employee does not 
        elect to designate a beneficiary to receive a life income as 
        herein provided, the designated beneficiary, if of the class of 
        persons set forth in this subdivision, may elect within 60 days 
        after the date of death of the employee to receive a life income 
        computed and determined as though the employee had retired on 
        the date of death under the option 2 plan of retirement, as 
        provided for in sections 422A.01 to 422A.25, and had designated 
        such person as beneficiary.  For purposes of subdivision 2, 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.  For 
        purposes of subdivision 7, a dependent surviving child or 
        dependent parent must meet the definition of dependent, as 
        defined in section 422A.01, subdivision 12, at the time of the 
        active or deferred member's death. 
           Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
        contributed to the survivor's benefit account as herein provided 
        dies before the effective date of retirement on a service or 
        disability pension and is not survived by a beneficiary eligible 
        to receive a monthly allowance as herein provided If no monthly 
        survivor benefit is payable under subdivision 2 or 7, there 
        shall be paid from the survivor's survivor benefit account to a 
        beneficiary designated by the employee on a form prescribed by 
        the executive director a lump-sum death benefit of $750 if death 
        occurs prior to the end of the employee's tenth year of 
        service credit or of $1500 if the employee had prior to death 
        completed ten or more calendar years of service credit.  Upon 
        reinstatement of a former employee to the service, credit for 
        such past service or for any part thereof shall be granted only 
        upon repayment of the amount of the separation refund, with 
        interest, from the time of separation Any benefit under this 
        subdivision may be paid in addition to a benefit payable under 
        subdivision 1. 
           Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
        payable from the Minnesota postretirement investment fund to any 
        class of annuitants is adjusted pursuant to section 11A.18, the 
        amount of benefits payable from the survivor's benefit fund 
        pursuant to subdivisions 7 or 8 for that class of annuitants 
        shall also be adjusted at the same time and rate.  Annuities 
        payable under this section must be adjusted at the same time and 
        rate as retirement annuities in the retirement benefit fund. 
           Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
        survivor benefit is must not suspended, be discontinued or 
        terminated, or otherwise stopped due to a surviving spouse's 
        remarriage. 
           Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
        annuities payable under this section must be computed and 
        determined under a procedure specified by the actuary retained 
        by the legislative commission on pensions and retirement 
        utilizing the appropriate mortality table based on the 
        experience of the fund as recommended by that actuary and 
        approved by the legislative commission on pensions and 
        retirement and using the applicable postretirement interest rate 
        assumption specified in section 356.215, subdivision 4d. 
           Sec. 8.  [422A.231] [COST ALLOCATION.] 
           (a) Notwithstanding any law to the contrary, all current 
        and future contribution requirements due to this article are 
        payable by the participating contributing employing units other 
        than the state. 
           (b) In each actuarial valuation of the retirement fund, the 
        actuary retained by the legislative commission on pensions and 
        retirement shall include an exhibit on the impact of the benefit 
        increases contained in this article on the survivor benefit 
        fund.  The actuary shall calculate the expected change in the 
        present value of the future benefits payable from the survivor 
        benefit fund attributable to this article, using the actuarial 
        method and assumptions applicable to the Minneapolis employees 
        retirement fund, from the prior actuarial valuation and shall 
        compare that result with the actual change in the present value 
        of future benefits payable from the survivor benefit fund 
        attributable to this article from the prior actuarial valuation. 
           (c) The executive director shall assess each participating 
        employer, other than the state, its proportional share of the 
        net increase amount calculated under paragraph (b).  The 
        assessment must be made on the first business day of the 
        following February, plus compound interest at an annual rate of 
        six percent on the amount from the actuarial valuation date to 
        the date of payment. 
           Sec. 9.  [REPEALER.] 
           Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
        is repealed. 
           Sec. 10.  [EFFECTIVE DATE.] 
           (a) This article is effective upon approval by the 
        Minneapolis city council and compliance with Minnesota Statutes, 
        section 645.021. 
           (b) All sections of this article must be approved for the 
        approval of any section to be effective. 
                                   ARTICLE 18
                         EMPLOYER MATCHING CONTRIBUTION  
                             TAX-SHELTERED ANNUITY  
                                    CHANGES 
           Section 1.  Minnesota Statutes 1998, section 356.24, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
        unlawful for a school district or other governmental subdivision 
        or state agency to levy taxes for, or contribute public funds to 
        a supplemental pension or deferred compensation plan that is 
        established, maintained, and operated in addition to a primary 
        pension program for the benefit of the governmental subdivision 
        employees other than: 
           (1) to a supplemental pension plan that was established, 
        maintained, and operated before May 6, 1971; 
           (2) to a plan that provides solely for group health, 
        hospital, disability, or death benefits; 
           (3) to the individual retirement account plan established 
        by chapter 354B; 
           (4) to a plan that provides solely for severance pay under 
        section 465.72 to a retiring or terminating employee; 
           (5) for employees other than personnel employed by the 
        state university board or the community college board and 
        covered by the board of trustees of the Minnesota state colleges 
        and universities supplemental retirement plan under chapter 
        354C, if provided for in a personnel policy of the public 
        employer or in the collective bargaining agreement between the 
        public employer and the exclusive representative of public 
        employees in an appropriate unit, in an amount matching employee 
        contributions on a dollar for dollar basis, but not to exceed an 
        employer contribution of $2,000 a year per employee; 
           (i) to the state of Minnesota deferred compensation plan 
        under section 352.96; or 
           (ii) in payment of the applicable portion of the premium on 
        a tax-sheltered annuity contract qualified under section 403(b) 
        of the Internal Revenue Code, if purchased from a qualified 
        insurance company, or to a qualified investment entity, as 
        defined in subdivision 1a, and, in either case, if the employing 
        unit has complied with any applicable pension plan provisions of 
        the Internal Revenue Code with respect to the tax-sheltered 
        annuity program during the preceding calendar year; or 
           (6) for personnel employed by the state university board or 
        the community college board and not covered by clause (5), to 
        the supplemental retirement plan under chapter 354C, if provided 
        for in a personnel policy or in the collective bargaining 
        agreement of the public employer with the exclusive 
        representative of the covered employees in an appropriate unit, 
        in an amount matching employee contributions on a dollar for 
        dollar basis, but not to exceed an employer contribution of 
        $2,000 a year for each employee.  
           (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
        INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
        company is a company that: 
           (1) meets the definition in section 60A.02, subdivision 4; 
           (2) is licensed to engage in life insurance or annuity 
        business in the state; 
           (3) is determined by the commissioner of commerce to have a 
        rating within the top two rating categories by a recognized 
        national rating agency or organization that regularly rates 
        insurance companies; and 
           (4) is determined by the state board of investment to be 
        among the ten up to 20 applicant insurance companies with 
        competitive investment options and investment returns on annuity 
        products. 
           (b) A qualified investment entity is an open-end investment 
        company that: 
           (1) is registered under the federal Investment Company Act 
        of 1940; 
           (2) is licensed to do business in the state; 
           (3) is determined by the commissioner of commerce to be in 
        sound financial standing; and 
           (4) is determined by the state board of investment to be 
        among up to five applicant investment entities with competitive 
        investment options and investment returns. 
           (c) The state board of investment determination must be 
        made on or before January 1, 1993 July 1, 2000, and must be 
        reviewed periodically.  The state board of investment may retain 
        actuarial services to assist it in this determination and in its 
        periodic review.  The state board of investment may annually 
        establish a budget for its costs in any determination and 
        periodic review processes.  The state board of investment may 
        charge a proportional share of all costs related to the periodic 
        review to those qualified insurance companies and qualified 
        investment entities currently under contract and may charge a 
        proportional share of all costs related to soliciting and 
        evaluating bids in a determination process to each company and 
        investment entity selected by the state board of investment.  
        All contracts must be approved before execution by the state 
        board of investment.  The state board of investment shall 
        establish policies and procedures under section 11A.04, clause 
        (2), to carry out this paragraph. 
           (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
        for unrepresented employees or a collective bargaining agreement 
        may establish limits on the number of vendors under paragraph 
        (b), clause (5), subdivision 1 that it will utilize and 
        conditions under which the vendors may contact employees both 
        during working hours and after working hours. 
           Sec. 2.  [COMMISSION STUDY.] 
           The legislative commission on pensions and retirement shall 
        study the issue of the appropriate means to provide partially 
        employer-funded tax-sheltered savings opportunities for 
        educational employees, including the establishment of a single 
        comprehensive program structure for all applicable educational 
        employers and the elimination of any restriction on investment 
        vendors in providing partially employer-funded investment 
        opportunities to educational employees. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Section 1 is effective May 15, 2000.  Section 2 is 
        effective on the day following final enactment. 
                                   ARTICLE 19
                          MNSCU INDIVIDUAL RETIREMENT  
                              ACCOUNT PLAN CHANGES  
           Section 1.  Minnesota Statutes 1998, section 43A.27, 
        subdivision 3, is amended to read:  
           Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
        purchase at personal expense individual and dependent hospital, 
        medical, and dental coverages if the person is: 
           (1) a retired employee of the state or an organization 
        listed in subdivision 2 or section 43A.24, subdivision 2, who, 
        at separation of service: 
           (i) is immediately eligible to receive a retirement benefit 
        under chapter 354B or an annuity under a retirement program 
        sponsored by the state or such organization of the state and; 
           (ii) immediately meets the age and service requirements in 
        section 352.115, subdivision 1; and 
           (ii) (iii) has five years of service or meets the service 
        requirement of the collective bargaining agreement or plan, 
        whichever is greater; or 
           (2) a retired employee of the state who is at least 50 
        years of age and has at least 15 years of state service.  
           (b) The commissioner shall offer at least one plan which is 
        actuarially equivalent to those made available through 
        collective bargaining agreements or plans established pursuant 
        to under section 43A.18 to employees in positions equivalent to 
        that from which retired. 
           (c) A spouse of a deceased retired employee who received an 
        annuity under a state retirement program person eligible under 
        paragraph (a) may purchase the coverage listed in this 
        subdivision if the spouse was a dependent under the retired 
        employee's coverage at the time of the employee's retiree's 
        death. 
           (d) Coverages must be coordinated with relevant health 
        insurance benefits provided through the federally sponsored 
        Medicare program.  Until the retired employee reaches age 65, 
        the retired employee and dependents must be pooled in the same 
        group as active employees for purposes of establishing premiums 
        and coverage for hospital, medical, and dental insurance.  
        Coverage for retired employees and their dependents may not 
        discriminate on the basis of evidence of insurability or 
        preexisting conditions unless identical conditions are imposed 
        on active employees in the group that the employee left.  
        Appointing authorities shall provide notice to employees no 
        later than the effective date of their retirement of the right 
        to exercise the option provided in this subdivision.  The 
        retired employee must notify the commissioner or designee of the 
        commissioner within 30 days after the effective date of the 
        retirement of intent to exercise this option. 
           Sec. 2.  Minnesota Statutes 1998, 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 Minnesota state university colleges 
        and universities 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 the Minnesota state 
        colleges and universities system; 
           (3) begins drawing a retirement benefit from the individual 
        retirement account plan or an annuity from the teachers 
        retirement association, from the general state employees 
        retirement plan or the unclassified state employees retirement 
        program of the Minnesota state retirement system, or from a 
        first class city teacher retirement 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 president of the institution where 
        the person returns to work and the employee.  The president may 
        require up to one-year notice of intent to participate in the 
        program as a condition of participation under this section.  The 
        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. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
           Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
        subdivision 4, the annuity reduction provisions of section 
        352.115, subdivision 10, do not apply to a person who: 
           (1) retires from the Minnesota state colleges and 
        universities system 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 faculty member or as an unclassified 
        administrator in that system; 
           (3) begins drawing an annuity from the general state 
        employees retirement plan of the Minnesota state retirement 
        system; 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. 
           Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
        the amount of time worked, and the duration of participation 
        under this section must be mutually agreed upon by the president 
        of the institution where the person returns to work and the 
        employee.  The president may require up to one-year notice of 
        intent to participate in the program as a condition of 
        participation under this section.  The 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.  
           Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
        law to the contrary, a person eligible under this section may 
        not, based on employment to which the waiver in this section 
        applies, earn further service credit in a Minnesota public 
        defined benefit plan and is not eligible to participate in a 
        Minnesota public defined contribution plan, other than a 
        volunteer fire plan governed by chapter 424A.  No employer or 
        employee contribution to any of these plans may be made on 
        behalf of such a person. 
           Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
        this section who earns more than $35,000 in a calendar year from 
        reemployment in the Minnesota state colleges and universities 
        system following retirement, the annuity reduction provisions of 
        section 352.115, subdivision 10, apply only to income over 
        $35,000. 
           Subd. 5.  [CONTINUING RIGHTS.] 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. 4.  Minnesota Statutes 1998, 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 Minnesota state university colleges 
        and universities 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 that system; 
           (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 president of the institution where 
        the person returns to work and the employee.  The president may 
        require up to one-year notice of intent to participate in the 
        program as a condition of participation under this section.  The 
        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, based on 
        employment to which the waiver in this section applies, 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 a 
        Minnesota public defined benefit plan and is not eligible to 
        participate in a Minnesota public defined contribution plan, 
        other than a volunteer fire plan governed by chapter 424A.  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 due to 
        employment by the Minnesota state colleges and universities 
        system, 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. 5.  Minnesota Statutes 1998, section 354.66, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
        section, the term "district" means a school district, the 
        community or the Minnesota state college colleges system and 
        the state university universities system. 
           Sec. 6.  Minnesota Statutes 1998, section 354.66, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
        paragraph (b), participation in the part-time mobility program 
        must be based on a full fiscal year and the employment pattern 
        of the teacher during the most recent fiscal year.  
           (b) For a teacher in the Minnesota state colleges and 
        universities system who teaches only during the first semester 
        in an academic year and retires immediately after the first 
        semester, participation in the part-time mobility program must 
        be based on one-half of a full fiscal year and the employment 
        pattern of the teacher during the most recent one-half of the 
        most recent fiscal year. 
           Sec. 7.  Minnesota Statutes 1998, section 354.66, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
        purposes of this section, the term "part-time teaching position" 
        shall mean means 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 80 percent of the compensation established by the 
        board for a full-time teacher with identical education and 
        experience with the employing unit.  
           (b) The compensation of a teacher in the state colleges and 
        universities system may exceed the 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.  For a 
        teacher to which subdivision 1c, paragraph (b), applies, the 
        term "part-time teaching position" means a teaching position 
        within the district in which the teacher is employed for at 
        least 25 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 40 percent of the 
        compensation established by the board for a full-time teacher, 
        with identical education and experience with the employing unit. 
           Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
        addition to contributions required by subdivision 2, a plan 
        participant on an approved sabbatical leave may shall make an 
        optional additional a member contribution.  The optional 
        additional member may not exceed based on the applicable member 
        contribution rate specified in section 354B.23, subdivision 1, 
        applied to the difference between the amount of salary actually 
        received during the sabbatical leave and the amount of full-time 
        salary actually received for a comparable period of an identical 
        length to the member would have received if not on sabbatical 
        leave that occurred during the fiscal year immediately preceding 
        the sabbatical leave.  
           (b) Any optional additional member contribution must be 
        made before the last day of the fiscal year next following the 
        fiscal year in which the sabbatical leave terminates.  The 
        optional additional member contribution may not include interest 
        through payroll deduction as though the member were employed 
        full-time.  
           (c) When an optional additional member contribution is 
        made, the employing unit must make the employer contribution at 
        the rate set forth specified in section 354B.23, subdivision 3, 
        on the salary that was the basis for the optional additional 
        member contribution under paragraph (a). 
           (d) An employer contribution required under this section 
        must be made no later than 60 days after the date on which the 
        optional additional member contribution was made.  
           Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
        INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
        for the purchase of fixed annuity contracts, variable annuity 
        contracts, a combination of fixed and variable annuity 
        contracts, or custodial accounts from financial institutions 
        which have been selected by the state board of investment under 
        subdivision 3, as the investment vehicle for the retirement 
        coverage of plan participants and to provide retirement benefits 
        to plan participants.  Custodial accounts from financial 
        institutions shall include open-end investment companies 
        registered under the federal Investment Company Act of 1940, as 
        amended investment products. 
           (b) The annuity contracts or accounts investment products 
        must be purchased with contributions under section 354B.23 or 
        with money or assets otherwise provided by law by authority of 
        the board and deemed acceptable by the applicable financial 
        institution. 
           (c) In addition to contracts and accounts from financial 
        institutions, The Minnesota supplemental investment fund 
        established under section 11A.17 and administered by the state 
        board of investment is one of the investment options products 
        for the individual retirement account plan.  Direct access must 
        also be provided to lower expense and no load mutual funds, as 
        those terms are defined by the federal securities and exchange 
        commission, including stock funds, bond funds, and balanced 
        funds.  Other investment products or combination of investment 
        products which may be included are: 
           (1) savings accounts at federally insured financial 
        institutions; 
           (2) life insurance contracts, fixed and variable annuity 
        contracts from companies that are subject to regulation by the 
        commerce commissioner; 
           (3) investment options from open ended investment companies 
        registered under the federal Investment Company Act of 1940, 
        United States Code, title 15, sections 80a-1 to 80a-64; 
           (4) investment options from a firm that is a registered 
        investment advisor under the federal Investment Advisors Act of 
        1940, United States Code, title 15, sections 80b-1 to 80b-21; 
        and 
           (5) investment options of a bank as defined in United 
        States Code, title 15, section 80b-2, subsection (a), paragraph 
        2, or a bank holding company as defined in the Bank Holding 
        Company Act of 1956, United States Code, title 12, section 1841, 
        subsection (a), paragraph (1). 
           Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
        The financial institutions investment options provided for under 
        subdivision 2 must be selected by the state board of 
        investment.  Financial institutions include open-end investment 
        companies registered under the federal Investment Company Act of 
        1940, as amended. 
           (b) The state board of investment may select up to five 
        financial institutions to provide annuity contracts, custodial 
        accounts, or a combination, as investment options for the 
        individual retirement account plan in addition to the Minnesota 
        supplemental investment fund.  In making its selection, at a 
        minimum, the state board of investment shall consider at least 
        the following: 
           (1) the experience and ability of the financial institution 
        to provide retirement and death benefits and products that are 
        suited to meet the needs of plan participants; 
           (2) the relationship of those retirement and death benefits 
        and products provided by the financial institution to their 
        cost; and 
           (3) the financial strength and stability of the financial 
        institution; and 
           (4) the fees and expenses associated with the investment 
        products in comparison to other products of similar risk and 
        rates of return. 
           (c) (b) After selecting a financial institution, the state 
        board of investment must periodically review each financial 
        institution selected under paragraph (b) and the offered 
        products.  The periodic review must occur at least every three 
        years.  In making its review, the state board of investment may 
        retain appropriate consulting services to assist it in its 
        periodic review, establish a budget for the cost of the periodic 
        review process, and charge a proportional share of these costs 
        to the reviewed financial institution. 
           (d) (c) Contracts with financial institutions under this 
        section must be executed by the board and must be approved by 
        the state board of investment before execution. 
           (e) (d) The state board of investment shall also establish 
        policies and procedures under section 11A.04, clause (2), to 
        carry out the provisions of this subdivision. 
           Sec. 11.  Minnesota Statutes 1998, 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 may be paid by charged to plan participants by the 
        plan sponsor 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 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 form of an annual fee, an asset 
        based fee, a percentage of the contributions to the plan, or a 
        combination thereof. 
           (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. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
        PROGRAM.] 
           Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
        member who has three years or more of service in the Minnesota 
        state colleges and universities system, by agreement with the 
        board or with the authorized representative of the board, may be 
        assigned to teaching service in a part-time teaching position 
        under subdivision 2. 
           Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
        purposes of this section, "part-time teaching position" means a 
        teaching position within the Minnesota state colleges and 
        universities system in which the teacher is employed for at 
        least 50 full days or a fractional equivalent as prescribed in 
        section 354.091, and for which the faculty member is compensated 
        in an amount not exceeding 80 percent of the compensation 
        established by the board for a full-time faculty member with 
        identical education and experience with the employing unit. 
           Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
        assigned to a part-time position under this section shall 
        continue to make employee contributions to the individual 
        retirement account plan during the period of part-time 
        employment on the same basis and in the same amounts as would 
        have been paid if the person had been employed on a full-time 
        basis provided that, prior to June 30 each year the member and 
        the board make that portion of the required employer 
        contribution to the plan, in any proportion which they may agree 
        upon, that is based on the difference between the amount of 
        compensation that would have been paid if the person had been 
        employed on a full-time basis and the amount of compensation 
        actually received by the person for the services rendered in the 
        part-time assignment.  The employing unit shall make that 
        portion of the required employer contributions to the plan on 
        behalf of the person that is based on the amount of compensation 
        actually received by the person for the services rendered in the 
        part-time assignment.  The employee and employer contributions 
        shall be based upon the rates of contribution prescribed by 
        section 354B.23.  Employee contributions for part-time teaching 
        service pursuant to this section shall not continue for more 
        than ten years. 
           Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
        entitled to make employee contributions for part-time teaching 
        service pursuant to this section shall not be entitled during 
        the same period of time to be a member of, accrue allowable 
        service credit in or make employee contributions to any other 
        Minnesota public employee pension plan, except a volunteer 
        firefighters relief association governed by sections 69.771 to 
        69.776. 
           Subd. 5.  [INSURANCE.] If the board enters into an 
        agreement authorized by this section, the board shall continue 
        any insurance programs furnished or authorized a full-time 
        teacher on an identical basis and with identical sharing of 
        costs for a part-time teacher pursuant to this section.  
        However, the requirements of this subdivision may be modified by 
        a collective bargaining agreement between a board and an 
        exclusive representative pursuant to chapter 179A.  Teachers as 
        defined in section 136F.43 employed on a less than 75 percent 
        time basis pursuant to this section are eligible for state paid 
        insurance benefits as if the teachers were employed full-time. 
           Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
        public employees as defined in section 179A.03, subdivision 14, 
        during the school year preceding the period of part-time 
        employment pursuant to this section qualify for employee 
        contributions to the retirement plan for part-time teaching 
        service under subdivision 4.  Notwithstanding section 179A.03, 
        subdivision 14, clauses (e) and (f), teachers who are employed 
        on a part-time basis for purposes of this section and who would 
        therefore be disqualified from the bargaining unit by one or 
        both of those provisions, continue to be in the bargaining unit 
        during the period of part-time employment under this section for 
        purposes of compensation, fringe benefits, and the grievance 
        procedure. 
           Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
        not limit the authority of the board to assign a teacher to a 
        part-time teaching position which does not qualify for full 
        accrual of service credit from and employee contributions to the 
        retirement fund under this section. 
           Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
        prohibit a teacher who qualifies for full accrual of service 
        credit from and employee contributions to the retirement fund 
        pursuant to this section in any year from being employed as a 
        substitute teacher by any school district during that year.  
        Notwithstanding sections 354.091 and 354.42, a teacher may not 
        qualify for full accrual of service credit from and employee 
        contributions to the retirement fund for other teaching service 
        rendered for any part of any year for which the teacher 
        qualifies for employee contributions to the retirement plan 
        pursuant to this section. 
           Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) 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 and may bill 
        participants to recover these expenses.  The administrative fees 
        or charges must may be paid by charged to participants in the 
        following manner: as an annual fee, an asset based fee, a 
        percentage of contributions to the plan, or a contribution 
        thereof. 
           (1) from participants whose contributions are invested with 
        the state board of investment, the plan administrator may 
        recover administrative expenses in the manner 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.  
           (b) 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. 
           (c) 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. 14.  [EFFECTIVE DATE.] 
           Sections 1 to 13 are effective on July 1, 1999. 
                                   ARTICLE 20
                                 OTHER CHANGES 
           Section 1.  Minnesota Statutes 1998, section 3.85, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MEMBERSHIP.] The commission consists of six five 
        members of the senate appointed by the subcommittee on 
        committees of the committee on rules and administration and six 
        five members of the house of representatives appointed by the 
        speaker.  Members shall be appointed at the commencement of each 
        regular session of the legislature for a two-year term beginning 
        January 16 of the first year of the regular session.  Vacancies 
        that occur while the legislature is in session shall be filled 
        like regular appointments.  If the legislature is not in 
        session, senate vacancies shall be filled by the last 
        subcommittee on committees of the senate committee on rules and 
        administration or other appointing authority designated by the 
        senate rules, and house vacancies shall be filled by the last 
        speaker of the house, or if the speaker is not available, by the 
        last chair of the house rules committee. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on the day following final enactment.
                                   ARTICLE 21
                      KANDIYOHI COUNTY AND LITCHFIELD CITY 
                    VOLUNTEER RESCUE SQUAD MEMBERS ADDED TO 
                   PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN 
           Section 1.  Minnesota Statutes 1998, section 353D.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] (a) Eligibility to participate in 
        the defined contribution plan is available to: 
           (1) elected local government officials of a governmental 
        subdivision who elect to participate in the plan under section 
        353D.02, subdivision 1, and who, for the elected service 
        rendered to a governmental subdivision, are not members of the 
        public employees retirement association within the meaning of 
        section 353.01, subdivision 7; 
           (2) physicians who, if they did not elect to participate in 
        the plan under section 353D.02, subdivision 2, would meet the 
        definition of member under section 353.01, subdivision 7; and 
           (3) basic and advanced life support emergency medical 
        service personnel employed by or providing services for any 
        public ambulance service or privately operated ambulance service 
        that receives an operating subsidy from a governmental entity 
        that elects to participate under section 353D.02, subdivision 
        3.; and 
           (4) members of a municipal rescue squad associated with 
        Litchfield in Meeker county, or of a county rescue squad 
        associated with Kandiyohi county, if an independent nonprofit 
        rescue squad corporation, incorporated under chapter 317A, 
        performing emergency management services, and if not affiliated 
        with a fire department or ambulance service and if its members 
        are not eligible for membership in that fire department's or 
        ambulance service's relief association or comparable pension 
        plan. 
           (b) For purposes of this chapter, an elected local 
        government official includes a person appointed to fill a 
        vacancy in an elective office.  Service as an elected local 
        government official only includes service for the governmental 
        subdivision for which the official was elected by the 
        public-at-large.  Service as an elected local government 
        official ceases and eligibility to participate terminates when 
        the person ceases to be an elected official.  An elected local 
        government official does not include an elected county sheriff.  
           (c) Elected local government officials, physicians, and 
        first response personnel and emergency medical service 
        personnel, and rescue squad personnel who are currently covered 
        by a public or private pension plan because of their employment 
        or provision of services are not eligible to participate in the 
        public employees defined contribution plan.  
           (d) A former participant is a person who has terminated 
        eligible employment or service and has not withdrawn the value 
        of the person's individual account. 
           Sec. 2.  Minnesota Statutes 1998, section 353D.02, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [ELIGIBLE RESCUE SQUAD PERSONNEL.] The 
        municipality or county, as applicable, associated with a rescue 
        squad under section 353D.01, subdivision 2, paragraph (a), 
        clause (4), may elect to participate in the plan.  If the 
        municipality or county, as applicable, elects to participate, 
        the eligible personnel may elect to participate or decline to 
        participate.  An eligible individual's election must be made 
        within 30 days of the service's election to participate or 30 
        days of the date on which the individual begins to provide 
        service to the rescue squad, whichever is later.  Elections 
        under this subdivision by a government unit or individual are 
        irrevocable.  The municipality or county, as applicable, must 
        specify by resolution eligibility requirements for rescue squad 
        personnel which must be satisfied if the individual is to be 
        authorized to make the election under this subdivision. 
           Sec. 3.  Minnesota Statutes 1998, section 353D.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMBULANCE SERVICE, RESCUE SQUAD PERSONNEL 
        CONTRIBUTION.] A public ambulance service or privately operated 
        ambulance service that receives an operating subsidy from a 
        governmental entity that elects to participate in the plan shall 
        fund benefits for its qualified personnel who individually elect 
        to participate.  Personnel who are paid for their services may 
        elect to make member contributions in an amount not to exceed 
        the service's contribution on their behalf.  Ambulance service 
        contributions on behalf of salaried employees must be a fixed 
        percentage of salary.  An ambulance service making contributions 
        for volunteer or largely uncompensated personnel, or a 
        municipality or county making contributions on behalf of rescue 
        squad members who are volunteers or largely uncompensated 
        personnel, may assign a unit value for each call or each period 
        of alert duty for the purpose of calculating ambulance 
        service or rescue squad service contributions, as applicable. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective on the day following final 
        enactment. 
                                   ARTICLE 22
                           PUBLIC PENSION FACILITIES
           Section 1.  Minnesota Statutes 1998, section 3.751, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WAIVER OF IMMUNITY.] When a controversy 
        arises out of a contract for work, services, the delivery of 
        goods, or debt obligations of the state incurred under article 
        XI of the Minnesota Constitution, or revenue obligations of a 
        retirement fund incurred under section 356.89 entered into by a 
        state agency through established procedure, in respect to which 
        controversy a party to the contract would be entitled to redress 
        against the state in a court, if the state were suable, and no 
        claim against the state has been made in a bill pending in the 
        legislature for the same redress against it, the state waives 
        immunity from suit in connection with the controversy and 
        confers jurisdiction on the district court to determine it in 
        the manner provided for civil actions in the district court.  
        Only a party to the contract may bring action against the state. 
           Sec. 2.  Minnesota Statutes 1998, section 353.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [OFFICES.] The commissioner of administration 
        shall make provision for suitable office space in the state 
        capitol or other state office buildings, or at such other 
        location in St. Paul as is determined by the commissioner for 
        the use of the board of trustees and its executive director.  
        The commissioner shall give the board at least four months 
        notice for any proposed removal from their present location.  
        Any and all rental charges shall be paid by the trustees from 
        the public employees retirement fund. 
           Sec. 3.  [356.89] [PUBLIC PENSION FACILITIES.] 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section. 
           (b) "Boards" mean the board of directors of the Minnesota 
        state retirement system, the board of trustees of the public 
        employees retirement association, and the board of trustees of 
        the teachers retirement association. 
           (c) "Commissioner" means the commissioner of administration.
           Subd. 2.  [BUILDING; RELATED FACILITIES.] (a) The 
        commissioner of administration may provide a building and 
        related facilities to be jointly occupied by the board of 
        directors of the Minnesota state retirement system, the board of 
        trustees of the public employees retirement association, and the 
        board of trustees of the teachers retirement association for the 
        administration of their public pension systems.  
           (b) Design of the facilities is not subject to section 
        16B.33.  The competitive acquisition process set forth in 
        chapter 16C does not apply if the process set forth in 
        subdivision 3 is followed.  
           (c) The boards and the commissioner must submit the plans 
        for a public pension facility under this section to the chair of 
        the house ways and means committee and to the chair of the 
        senate state government finance committee for their approval 
        before the plans are implemented.  
           Subd. 3.  [CONTRACTING PROCEDURES.] (a) The commissioner 
        may enter into a contract for facilities with a contractor to 
        furnish the architectural, engineering, and related services as 
        well as the labor, materials, supplies, equipment, and related 
        construction services on the basis of a request for 
        qualifications and competitive responses received through a 
        request for proposals process that must include the items listed 
        in paragraphs (b) to (i). 
           (b) Before issuing a request for qualifications and a 
        request for proposals, the commissioner, with the assistance of 
        the boards, shall prepare performance criteria and 
        specifications that include: 
           (1) a general floor plan or layout indicating the general 
        dimensions of the public building and space requirements; 
           (2) design criteria for the exterior and site area; 
           (3) performance specifications for all building systems and 
        components to ensure quality and cost efficiencies; 
           (4) conceptual floor plans for systems space; 
           (5) preferred types of interior finishes, styles of 
        windows, lighting and outlets, doors, and features such as 
        built-in counters and telephone wiring; 
           (6) mechanical and electrical requirements; 
           (7) special interior features required; and 
           (8) a completion schedule. 
           (c) The commissioner shall first solicit statements of 
        qualifications from eligible contractors and select more than 
        one qualified contractor based upon experience, technical 
        competence, past performance, capability to perform, and other 
        appropriate facts.  Contractors selected under this process must 
        be, employ, or have as a partner, member, coventurer, or 
        subcontractor, persons licensed and registered under chapter 326 
        to provide the services required to design and complete the 
        project.  The commissioner does not have to select any of the 
        respondents if none reasonably fulfill the criteria set forth in 
        this paragraph. 
           (d) The contractors selected shall be asked to respond to a 
        request for proposals.  Responses must include site plans, 
        design concept, elevation, statement of material to be used, 
        floor layouts, a detailed development budget, and a total cost 
        to complete the project.  The proposal must indicate that the 
        contractor obtained at least two proposals from subcontractors 
        for each item of work and must set forth how the subcontractors 
        were selected.  The commissioner, with the assistance of the 
        boards, shall evaluate the proposals based upon design, cost, 
        quality, aesthetics, and the best overall value to the state 
        pension funds.  The commissioner need not select any of the 
        proposals submitted and reserves the right to reject any and all 
        proposals, and may terminate the process or revise the request 
        for proposals and solicit new proposals if the commissioner 
        determines that the best interests of the pension funds would be 
        better served by doing so.  Proposals submitted are nonpublic 
        data until the contract is awarded. 
           (e) The contractor selected must comply with sections 
        574.26 to 574.261.  Before executing a final contract, the 
        contractor selected shall certify a firm construction price and 
        completion date. 
           (f) The commissioner may consider building sites in the 
        city of St. Paul and surrounding suburbs. 
           (g) Any land, building, or facility leased, constructed, or 
        acquired and any leasehold interest acquired under this section 
        must be held by the state in trust for the three retirement 
        systems as tenants in common.  Each retirement system fund must 
        consider its interest as a fixed asset of its pension fund in 
        accordance with governmental accounting standards. 
           (h) The commissioner may lease to another governmental 
        subdivision any portion of the funds' building and lands that is 
        not required for their direct use upon terms and conditions they 
        deem to be in the best interest of the pension funds.  Any 
        income accruing from the rentals must be separately accounted 
        for and utilized to offset ongoing administrative expenses and 
        any excess must be carried forward for future administrative 
        expenses.  The commissioner may also enter into lease agreements 
        for the establishment of satellite offices should the boards 
        find them to be necessary in order to assure their members 
        reasonable access to their services.  The commissioner may lease 
        under section 16B.24 any portion of the facilities not required 
        for the direct use of the boards. 
           (i) The boards shall formulate and adopt a written working 
        agreement that sets forth the nature of each retirement system's 
        ownership interest, the duties and obligations of each system 
        toward the construction, operation, and maintenance costs of its 
        facilities, and identifies one retirement fund to serve as 
        manager for operating and maintenance purposes.  The boards may 
        contract with independent third parties for maintenance-related 
        activities, services, and supplies, and may use the services of 
        the department of administration where economically feasible to 
        do so.  If the boards cannot agree or resolve a dispute about 
        operations or maintenance of the facilities, they may request 
        the commissioner of administration to appoint a representative 
        from the department's real estate management division to serve 
        as arbitrator of the dispute with authority to issue a written 
        resolution of the dispute. 
           Subd. 4.  [REVENUE BONDS.] The commissioner of finance, on 
        request of the governor, may sell and issue revenue bonds in an 
        aggregate principal amount up to $38,000,000 to achieve the 
        purposes described in subdivisions 1 and 2, plus the amount 
        needed to pay issuance costs and interest costs and to establish 
        necessary reserves to secure the bonds.  The commissioner of 
        finance may issue bonds for the purpose of refunding bonds 
        issued under this subdivision.  The bonds may be sold and issued 
        on terms and in a manner the commissioner of finance determines 
        to be in the best interests of the state.  The proceeds of the 
        bonds must be credited to a bond proceeds account in the pension 
        building fund, which the commissioner of finance must create in 
        the state treasury. 
           Subd. 5.  [SECURITY.] The boards may pledge any or all 
        assets of the boards as security for the bonds.  The bonds and 
        the interest on them must be paid solely from and secured by all 
        assets of the boards pledged and appropriated for these purposes 
        to the debt service fund created in subdivision 6 and any 
        investment income thereon and any reserve established for this 
        purpose.  The bonds are not public debt, and the full faith, 
        credit, and taxing powers of the state are not pledged for their 
        payment.  The bonds and the interest on them must not be paid, 
        directly or indirectly, in whole or in part, from a tax of 
        statewide application on any class of property, income, 
        transaction, or privilege. 
           Subd. 6.  [DEBT SERVICE FUND.] There is established in the 
        state treasury a separate and special pension building debt 
        service fund.  Money in the funds managed by the boards is 
        appropriated to the boards for transfer to the pension building 
        debt service fund.  Money appropriated and transferred to the 
        fund and investment income thereon on hand or required to be 
        transferred to the fund must be used and is irrevocably 
        appropriated to pay when due the principal of and interest on 
        the bonds authorized in subdivision 4.  
           Subd. 7.  [COVENANTS; AGREEMENTS.] The commissioner of 
        finance may, for and on behalf of the state, enter into 
        covenants and agreements not inconsistent with subdivisions 1 to 
        6 as may be necessary or desirable to facilitate the sale and 
        issuance of the bonds on terms favorable to the state, 
        including, but not limited to, covenants and agreements relating 
        to the payment of and security for the bonds, tax exemption, and 
        disclosure of information required by federal and state 
        securities laws.  The covenants and agreements of the 
        commissioner of finance constitute an enforceable contract of 
        the state and the state pledges and agrees with the holders of 
        any bonds that the state will not limit or alter the rights 
        vested in the commissioner of finance to fulfill the terms of 
        the covenants or agreements made with the holders of the bonds, 
        or in any way impair the rights and remedies of the holders 
        until the bonds, together with the interest thereon, with 
        interest on any unpaid installments of interest, and all costs 
        and expenses in connection with any action or proceeding by or 
        on behalf of the holders, are fully met and discharged.  The 
        commissioner of finance may include this pledge and agreement of 
        the state in any covenant or agreement with the holders of the 
        bonds.  Sections 16A.672 and 16A.675 apply to the bonds. 
           Sec. 4.  [APPROPRIATION.] 
           $38,000,000 is appropriated from the pension building fund 
        created in Minnesota Statutes, section 356.89, to design, 
        construct, furnish, and equip a new facility to be jointly 
        occupied by the Minnesota state retirement system, the public 
        employees retirement association, and the teachers retirement 
        association, as provided in section 356.89. 
           Sec. 5.  [REPORT.] 
           The executive directors of the Minnesota state retirement 
        system, the public employees retirement association, and the 
        teachers retirement association must jointly report to the 
        legislature by July 15, 2001, on a plan to consolidate 
        administrative services for the three pension systems if the 
        systems share a building. 
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 1 to 5 are effective the day following final 
        enactment. 
           Presented to the governor May 21, 1999 
           Signed by the governor May 25, 1999, 11:39 a.m.

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