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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 392-H.F.No. 3127 
                  An act relating to retirement; various retirement 
                  plans; clarifying the laws applicable to the remaining 
                  local police and paid firefighter pension plans; 
                  repealing obsolete local police and paid firefighter 
                  pension plan laws; providing public employee pension 
                  coverage for certain foreign citizens; clarifying 
                  membership eligibility and allowable service credit 
                  for the public employees retirement association; 
                  requiring membership for charter school teachers in 
                  the teachers retirement association; providing for the 
                  payment of unpaid closed charter school retirement 
                  contributions from charter school lease aid; 
                  eliminating contribution rate increases in the local 
                  government correctional service retirement plan; 
                  establishing provisions relating to employees of the 
                  Kanabec hospital if the hospital is privatized; 
                  extending the expiration date for certain prior 
                  service credit purchase authorizations; recodifying 
                  social security coverage provisions; implementing 
                  recommended changes in salary actuarial assumptions; 
                  clarifying the restrictions on supplemental and local 
                  pension plans for plans funded from accumulated sick 
                  and vacation leave; reorganizing and revising various 
                  general retirement provisions; instructing the revisor 
                  of statutes; authorizing the commissioner of 
                  administration to lease pension fund facilities to 
                  deferred compensation service providers; authorizing 
                  certain volunteer firefighters to receive service 
                  pensions or disability benefits without terminating 
                  active service; amending Minnesota Statutes 2000, 
                  sections 69.77; 69.80; 353.01, by adding a 
                  subdivision; 353.64, subdivision 7a; 353A.08, 
                  subdivision 6a; 353E.02, subdivision 1, by adding a 
                  subdivision; 353E.03; 353F.02, subdivision 4; 
                  354A.011, subdivision 27; 354A.12, subdivision 3d; 
                  355.01, subdivisions 1, 3, 6, 8, by adding 
                  subdivisions; 355.02; 355.03; 355.05; 355.07; 355.08; 
                  356.001; 356.20, subdivisions 1, 2, 3, 4, 4a; 356.215, 
                  as amended; 356.216; 356.217; 356.219; 356.22; 356.23; 
                  356.24, subdivisions 1b, 1c, 2; 356.245; 356.25; 
                  356.30; 356.302; 356.303; 356.32; 356.40; 356.41; 
                  356.50; 356.55, as amended; 356.551; 356.611; 356.65, 
                  subdivision 2; 356.87; 356.89, subdivision 3; 423A.17; 
                  423A.171; 423B.09, subdivision 6; 424A.02, subdivision 
                  1; 424A.09; Minnesota Statutes 2001 Supplement, 
                  sections 352.01, subdivision 11; 353.01, subdivisions 
                  2a, 2b, 11b, 16; 353.27, subdivisions 4, 11; 354.05, 
                  subdivisions 2, 13; 356.24, subdivision 1; 356.555; 
                  356.62; 356.65, subdivision 1; Laws 1997,chapter 202, 
                  article 2, section 61, as amended; Laws 1999, chapter 
                  222, article 16, section 16; Laws 2000, chapter 461, 
                  article 10, section 3, as amended; Laws 2000, chapter 
                  461, article 12, section 20; Laws 2001, First Special 
                  Session chapter 10, article 6, section 21; proposing 
                  coding for new law in Minnesota Statutes, chapters 3A; 
                  355; 356; proposing coding for new law as Minnesota 
                  Statutes, chapter 356B; repealing Minnesota Statutes 
                  2000, sections 69.25; 69.26; 69.27; 69.28; 69.29; 
                  69.30; 69.32; 69.361; 69.37; 69.38; 69.39; 69.40; 
                  69.41; 69.42; 69.43; 69.44; 69.45; 69.46; 69.47; 
                  69.48; 69.49; 69.50; 69.51; 69.52; 69.53; 69.62; 
                  69.78; 297I.10, subdivision 2; 355.01, subdivisions 2, 
                  4, 5, 9, 10; 355.11; 355.12; 355.13; 355.14; 355.15; 
                  355.16; 355.17; 355.201; 355.202; 355.203; 355.204; 
                  355.205; 355.206; 355.207; 355.208; 355.209; 355.21; 
                  355.22; 355.23; 355.24; 355.25; 355.26; 355.27; 
                  355.28; 355.281; 355.282; 355.283; 355.284; 355.285; 
                  355.286; 355.287; 355.288; 355.29; 355.291; 355.292; 
                  355.293; 355.294; 355.295; 355.296; 355.297; 355.298; 
                  355.299; 355.30; 355.311; 355.391; 355.392; 355.393; 
                  355.41; 355.42; 355.43; 355.44; 355.45; 355.46; 
                  355.48; 355.49; 355.50; 355.51; 355.52; 355.54; 
                  355.55; 355.56; 355.57; 355.58; 355.59; 355.60; 
                  355.61; 355.621; 355.622; 355.623; 355.624; 355.625; 
                  355.626; 355.627; 355.628; 355.71; 355.72; 355.73; 
                  355.74; 355.75; 355.76; 355.77; 355.78; 355.79; 
                  355.80; 355.81; 355.90; 356.19; 356.305; 356.306; 
                  356.31; 356.325; 356.35; 356.36; 356.37; 356.371, 
                  subdivisions 2, 3; 356.372; 356.38; 356.39; 356.45; 
                  356.451; 356.452; 356.453; 356.454; 356.455; 356.615; 
                  356.71; 356.80; 356.81; 356.86; 356.865; 356.88; 
                  356.89; 423.37; 423.371; 423.372; 423.373; 423.374; 
                  423.375; 423.377; 423.378; 423.379; 423.38; 423.381; 
                  423.382; 423.383; 423.384; 423.385; 423.386; 423.387; 
                  423.388; 423.389; 423.39; 423.391; 423.392; 423.801; 
                  423.802; 423.803; 423.804; 423.805; 423.806; 423.808; 
                  423.809; 423.810; 423.812; 423.813; 423.814; 423.90; 
                  423A.03; 424.01; 424.02; 424.03; 424.04; 424.05; 
                  424.06; 424.08; 424.14; 424.15; 424.16; 424.165; 
                  424.17; 424.18; 424.19; 424.20; 424.21; 424.22; 
                  424.23; 424.24; 424.25; 424.27; 424.28; 424.29; 
                  Minnesota Statutes 2001 Supplement, sections 353.01, 
                  subdivision 39; 356.371, subdivision 1; 356.866; 
                  Special Laws 1889, chapter 425; Special Laws 1891, 
                  chapter 11; Laws 1897, chapters 389; 390; Laws 1915, 
                  chapter 68; Laws 1917, chapter 196; Laws 1919, 
                  chapters 68, 515; Laws 1921, chapter 118; Laws 1923, 
                  chapter 54; Laws 1925, chapter 197; Laws 1931, chapter 
                  48; Laws 1933, chapter 122; Laws 1935, chapters 92; 
                  192; 208; 259; Laws 1937, chapters 132; 197; 253; Laws 
                  1939, chapters 124; 304; Laws 1941, chapters 74; 182; 
                  196; Laws 1943, chapters 170; 267; 397; 413; 432; Laws 
                  1945, chapters 74; 182; 277; 300; Laws 1947, chapters 
                  40; 43; 101; 274; 329; Laws 1949, chapters 87; 144; 
                  153; 154; 164; 191; 235; 281; 378; Laws 1951, chapters 
                  43; 45; 48; 144; 233; 243; 420; 435; 499; Laws 1953, 
                  chapters 37; 44; 91; 235; 253; 348; 391; 401; 406; 
                  Laws 1955, chapters 42; 49; 75; 151; 187; 188; 293; 
                  294; 348; 375; 827; Laws 1957, chapters 10; 16; 36; 
                  127; 144; 164; 256; 257; 455; 630; 793; Laws 1959, 
                  chapters 108; 131; 191; 207; 208; 211; 437; Laws 1961, 
                  chapters 186; 290; 295; 300; 343; 376; 399; 434; 435, 
                  section 2; 443; 620; 631; 747; Extra Session Laws 
                  1961, chapters 28; 80; Laws 1963, chapters 36; 208; 
                  221; 271; 443; 453; 454; 464; 619; 636; 643; 670; 715; 
                  Laws 1965, chapters 174; 179; 190; 418; 457; 458; 465; 
                  498; 536; 540; 594; 604; 605; 636; 790; Laws 1967, 
                  chapters 644; 678; 702; 708; 730; 732; 736; 751; 775; 
                  783; 798; 807; 816; 848; Laws 1969, chapters 138; 442; 
                  443; 552; 576; 594; 614; 641; 668; 669; 670; 671; 672; 
                  686; 694; 716; 849; 1087; Laws 1971, chapters 51; 178; 
                  407; 549; 614; 807; 809; 810; Extra Session Laws 1971, 
                  chapter 41; Laws 1973, chapters 286; 287; 346; 359; 
                  432; 433; 587; Laws 1974, chapters 251; 382; Laws 
                  1975, chapters 120; 121; 127; 254, sections 1, 2, 3, 
                  4, 5, 6; 368, section 54; 389; 408; 423; 424; 425; 
                  Laws 1976, chapters 36; 78; 85; 99; 247; Laws 1977, 
                  chapters 83; 164, sections 1, 3; 169; 270; 275; 374, 
                  sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 
                  14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 
                  27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 
                  40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 
                  53, 54, 55, 56, 57, 58, 59, 60; 429, section 62; Laws 
                  1978, chapters 563, sections 12, 13, 14, 16, 17, 18, 
                  19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30; 579; 
                  648; 690, sections 9, 10; 793, section 96; Laws 1979, 
                  chapters 131, section 3; 216, sections 27, 28, 29, 30, 
                  31, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44; Laws 
                  1980, chapters 341, sections 2, 3, 4, 5, 6, 9, 10; 
                  600, sections 11, 12, 13, 14, 15, 16, 17, 18, 22; 607, 
                  article XV, section 23; Laws 1981, chapter 68, 
                  sections 31, 32, 33, 34, 35, 36, 37, 41, 42, 43; Laws 
                  1981, chapter 224, sections 236, 237, 239, 240, 243, 
                  244, 247, 248, 252, 253, 258, 259, 260, 261, 263, 264, 
                  265, 266, 267, 268, 270, 272, 273; Laws 1981, chapter 
                  297, sections 1, 2; Laws 1982, chapters 402; 443; 574, 
                  sections 3, 4, 5, 6, 8; 578, article II, section 1, 
                  subdivision 8, article III, section 18; 610, sections 
                  8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20; Laws 
                  1983, chapters 47; 74; 84, section 1; 291, sections 8, 
                  9, 10, 11, 12, 13, 14, 15, 16, 17; Laws 1984, chapter 
                  574, sections 18, 19, 20, 22, 23, 24, 25, 26, 33; Laws 
                  1985, chapters 259, sections 5, 6; 261, sections 14, 
                  15, 16, 18, 20, 32, 33, 34, 35, 36; Laws 1985, First 
                  Special Session chapter 16, article 2, section 6; Laws 
                  1986, chapters 359, sections 22, 23, 24, 25; 458, 
                  sections 23, 34; Laws 1987, chapter 372, article 2, 
                  sections 7, 8, 9, 10, 12; Laws 1988, chapter 709, 
                  articles 8, section 5; 9, section 5; Laws 1989, 
                  chapter 319, article 11, sections 2, 3, 4, 12; Laws 
                  1990, chapter 589, article 1, section 7; Laws 1991, 
                  chapters 96; 269, article 2, sections 12, 13; Laws 
                  1992, chapters 392, section 1; 393, section 1; 422; 
                  431, section 1; 448; 455; 563, sections 3, 4, 5; 586, 
                  section 1; Laws 1993, chapters 72; 110; 112, section 
                  2; 126; 202, article 1; Laws 1994, chapters 409; 410; 
                  474; 490; 541, section 3; Laws 1995, chapter 262, 
                  article 10, section 4; Laws 1996, chapter 448, article 
                  2, section 1; Laws 1997, chapter 233, article 1, 
                  section 58; Laws 1997, chapter 241, article 2, 
                  sections 2, 3, 4, 5, 6, 9, 10, 11, 13, 14, 15, 20; 
                  Laws 1999, chapter 222, article 3, section 6; Laws 
                  2000, chapter 461, article 10, section 2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                             LOCAL POLICE AND PAID 
                            FIRE RELIEF ASSOCIATION 
                          GOVERNING LAW CLARIFICATION 
           Section 1.  Minnesota Statutes 2000, section 69.77, is 
        amended to read: 
           69.77 [POLICE AND FIREFIGHTERS' RELIEF ASSOCIATION 
        GUIDELINES ACT.] 
           Subdivision 1.  [AUTHORIZED CONDITIONED EMPLOYER SUPPORT 
        FOR A RELIEF ASSOCIATION.] (a) Notwithstanding any law to the 
        contrary, only if the municipality and the relief association 
        comply with the provisions of this section, a municipality may 
        contribute public funds, including any applicable police or fire 
        state aid, or levy property taxes for the support of a police or 
        firefighters' relief association, enumerated in subdivision 1a, 
        however organized, which provides retirement coverage or pays a 
        service pension to a retired police officer or firefighter or a 
        retirement benefit to a surviving dependent of either an active 
        or retired police officer or firefighter, for the operation and 
        maintenance of the relief association only if the municipality 
        and the relief association comply with the provisions of this 
        section.  
           (b) The commissioner shall not include in the apportionment 
        of police or fire state aid to the county auditor pursuant to 
        under section 69.021, subdivision 6, any municipality in which 
        there exists a local police or salaried firefighters' relief 
        association as enumerated in subdivision 1a which does not 
        comply with the provisions of this section or the provisions of 
        any applicable special law relating to the funding or financing 
        of the association and that municipality shall may not qualify 
        initially to receive, or be entitled subsequently to retain, 
        state aid pursuant to under sections 69.011 to 69.051 until the 
        reason for the disqualification is remedied, whereupon the 
        municipality, if otherwise qualified, shall be is entitled to 
        again receive state aid for the year occurring immediately 
        subsequent to the year in which the disqualification is remedied.
           (c) The state auditor and the commissioner shall determine 
        if a municipality with a local police or salaried firefighters' 
        relief association fails to comply with the provisions of this 
        section or the funding or financing provisions of any applicable 
        special law. 
           Subd. 1a.  [COVERED RETIREMENT PLANS.] The provisions of 
        this section shall apply to the following local retirement funds 
        plans: 
           (1) any police pension fund or relief association which is 
        established pursuant to chapter 423 the Bloomington firefighters 
        relief association; 
           (2) any salaried firefighters' pension fund or relief 
        association which is established pursuant to chapter 424 the 
        Fairmont police relief association; 
           (3) any pension fund or relief association which is 
        established pursuant to this chapter which has five or more 
        members who receive compensation for services rendered in the 
        employment covered by the pension fund or relief association and 
        which provides for retirement coverage or a service pension 
        based on the compensation paid to members for that service the 
        Minneapolis firefighters relief association; 
           (4) any pension fund or relief association which is 
        established and operates in whole or in part pursuant to special 
        legislation and which provides for retirement coverage or a 
        service pension based on the compensation paid to members for 
        service as police officers or firefighters or which provides for 
        retirement coverage or a service pension to volunteer 
        firefighters based on the compensation paid to or the service 
        pension provided by a pension fund or relief association located 
        in the same municipality for police officers employed by the 
        municipality but not covered by clause (1), (2) or (3) the 
        Minneapolis police relief association; and 
           (5) any governmental subdivision retirement fund 
        established pursuant to any law providing for retirement 
        coverage to police officers or salaried firefighters or a 
        retirement benefit to their dependents and not otherwise 
        described in this subdivision the Virginia fire department 
        relief association. 
           Subd. 2.  [INAPPLICABLE PENALTY.] The penalty provided for 
        in subdivision 1 shall does not apply to a relief association 
        enumerated in subdivision 1a if the requirements of subdivisions 
        2a 3 to 2h 10 are met. 
           Subd. 2a 3.  [MINIMUM MEMBER CONTRIBUTION.] Each active 
        member of the relief association shall must pay into the special 
        fund of the association during a year of covered service, a 
        contribution for retirement coverage, including survivorship 
        benefits, of not less than eight percent of the maximum rate of 
        salary upon which retirement coverage is credited and service 
        pension and retirement benefit amounts are determined.  The 
        member contributions shall must be made by payroll deduction 
        from the salary of the member by the municipality, and 
        shall must be transmitted by the municipality to the relief 
        association as soon as practical.  The relief association shall 
        deposit the member contribution to the credit of the special 
        fund of the relief association.  The member contribution 
        requirement specified in this subdivision shall does not apply 
        to any members who are volunteer firefighters. 
           Subd. 2b 4.  [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS; 
        MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief 
        association shall determine the financial requirements of the 
        relief association and minimum obligation of the municipality 
        for the following calendar year in accordance with the 
        requirements of this subdivision.  The financial requirements of 
        the relief association and the minimum obligation of the 
        municipality shall must be determined on or before the 
        submission date established by the municipality pursuant to 
        under subdivision 2c 5. 
           (b) The financial requirements of the relief association 
        for the following calendar year shall must be based on the most 
        recent actuarial valuation or survey of the special fund of the 
        association if more than one fund is maintained by the 
        association, or of the association, if only one fund is 
        maintained, prepared in accordance with sections 356.215, 
        subdivisions 4 to 4k and 356.216, as required pursuant to under 
        subdivision 2h 10.  If an actuarial estimate is prepared by the 
        actuary of the relief association as part of obtaining a 
        modification of the benefit plan of the relief association and 
        the modification is implemented, the actuarial estimate shall 
        must be used in calculating the subsequent financial 
        requirements of the relief association. 
           (c) If the relief association has an unfunded actuarial 
        accrued liability as reported in the most recent actuarial 
        valuation or survey, the total of the amounts 
        calculated pursuant to under clauses (a), (b), and (c) 
        shall (1), (2), and (3) constitute the financial requirements of 
        the relief association for the following year.  If the relief 
        association does not have an unfunded actuarial accrued 
        liability as reported in the most recent actuarial valuation or 
        survey, the amount calculated pursuant to under clauses (a) and 
        (b) shall (1) and (2) constitute the financial requirements of 
        the relief association for the following year.  The financial 
        requirement elements are: 
           (a) (1) the normal level cost requirement for the following 
        year, expressed as a dollar amount, which shall must be 
        determined by applying the normal level cost of the relief 
        association as reported in the actuarial valuation or survey and 
        expressed as a percentage of covered payroll to the estimated 
        covered payroll of the active membership of the relief 
        association, including any projected increase change in the 
        active membership, for the following year.; 
           (b) (2) for the Bloomington fire department relief 
        association, the Fairmont police relief association, and the 
        Virginia fire department relief association, to the dollar 
        amount of normal cost thus determined shall under clause (1) 
        must be added an amount equal to the dollar amount of the 
        administrative expenses of the special fund of the association 
        if more than one fund is maintained by the association, or of 
        the association if only one fund is maintained, for the most 
        recent year, multiplied by the factor of 1.035.  For a relief 
        association in a municipality, The administrative expenses are 
        those authorized under section 69.80.  No amount of 
        administrative expenses under this clause shall are to be 
        included in the financial requirements of a the Minneapolis 
        firefighters relief association in a city of the first class 
        with a population of more than 300,000. or the Minneapolis 
        police relief association; and 
           (c) (3) to the dollar amount of normal cost and expenses 
        determined under clauses (a) and (b) shall (1) and (2) must be 
        added an amount equal to the level annual dollar amount which is 
        sufficient to amortize the unfunded actuarial accrued liability 
        by December 31, 2010, as determined from the actuarial valuation 
        or survey of the fund, using an interest assumption set at the 
        applicable rate specified in section 356.215, subdivision 4d.  
        The amortization date specified in this clause shall apply 
        applies to all local police or salaried firefighters' relief 
        associations and shall supersede that date supersedes any 
        amortization date specified in any applicable special law. 
           (d) The minimum obligation of the municipality shall be is 
        an amount equal to the financial requirements of the relief 
        association reduced by the estimated amount of member 
        contributions from covered salary anticipated for the following 
        calendar year and the estimated amounts anticipated for the 
        following calendar year from the applicable state aid program 
        established pursuant to under sections 69.011 to 69.051 
        receivable by the relief association after any allocation 
        made pursuant to under section 69.031, subdivision 5, clause 
        (2), subclause (c) paragraph (b), clause (2), or 423A.01, 
        subdivision 2, clause (6), from the local police and salaried 
        firefighters' relief association amortization aid program 
        established pursuant to under section 423A.02 and, subdivision 
        1, from the supplementary amortization state-aid program 
        established under Laws 1984, chapter 564, section 48, and Laws 
        1985, chapter 261, section 17 section 423A.02, subdivision 1a, 
        and from the additional amortization state aid under section 
        423A.02, subdivision 1b. 
           Subd. 2c 5.  [DETERMINATION SUBMISSION.] The officers of 
        the relief association shall submit the determination of the 
        financial requirements of the relief association and of the 
        minimum obligation of the municipality to the governing body on 
        or before the date established by the municipality, which shall 
        may not be earlier than August 1 and shall may not be later than 
        September 1 of each year.  The governing body of the 
        municipality shall must ascertain whether or not the 
        determinations were prepared in accordance with law. 
           Subd. 2d 6.  [MUNICIPAL PAYMENT.] (a) The municipality 
        shall provide for and shall pay, each year, at least the amount 
        of the minimum obligation of the municipality to the relief 
        association.  
           (b) If there is any deficiency in the municipal payment to 
        meet the minimum obligation of the municipality as of the end of 
        any calendar year, the amount of the deficiency shall must be 
        added to the minimum obligation of the municipality for the 
        following year calculated pursuant to under subdivision 2b 4 and 
        shall must include interest at the compound rate of six percent 
        per annum compounded from the date that the municipality was 
        required to make payment pursuant to under this subdivision 
        until the date that the municipality actually makes the required 
        payment. 
           Subd. 2e 7.  [BUDGET INCLUSION.] (a) The municipality shall 
        provide in the annual municipal budget for at least the minimum 
        obligation of the municipality calculated pursuant to under 
        subdivision 2b 4.  
           (b) The municipality may levy taxes for the payment of the 
        minimum obligation of the municipality without any limitation as 
        to rate or amount and irrespective of limitations imposed by 
        other provisions of law upon the rate or amount of taxation when 
        the balance of the special fund or any fund of the relief 
        association has attained a specified minimum asset level.  In 
        addition, any taxes levied pursuant to under this section shall 
        may not cause the amount or rate of other taxes levied in that 
        year or to be levied in a subsequent year by the municipality 
        which are subject to a limitation as to rate or amount to be 
        reduced.  
           (c) If the municipality does not include the full amount of 
        the minimum obligation of the municipality in the levy that the 
        municipality certified to the county auditor in any year, the 
        officers of the relief association shall certify the amount of 
        any deficiency to the county auditor.  Upon verifying the 
        existence of any deficiency in the levy certified by the 
        municipality, the county auditor shall spread a levy over the 
        taxable property of the municipality in the amount of the 
        deficiency certified to by the officers of the relief 
        association. 
           Subd. 2f 8.  [ACCELERATED AMORTIZATION.] Any sums of money 
        paid by the municipality to the relief association in excess of 
        the minimum obligation of the municipality in any year shall 
        must be used to amortize any unfunded actuarial accrued 
        liabilities of the relief association. 
           Subd. 2g 9.  [LOCAL POLICE AND PAID FIRE RELIEF ASSOCIATION 
        INVESTMENT AUTHORITY.] (a) The funds of the association must be 
        invested in securities that are authorized investments under 
        section 356A.06, subdivision 6 or 7, whichever 
        applies.  Notwithstanding the foregoing, Up to 75 percent of the 
        market value of the assets of the fund may be invested in 
        open-end investment companies registered under the federal 
        Investment Company Act of 1940, if the portfolio investments of 
        the investment companies comply with the type of securities 
        authorized for investment under section 356A.06, subdivision 7.  
        Securities held by the association before June 2, 1989, that do 
        not meet the requirements of this subdivision may be retained 
        after that date if they were proper investments for the 
        association on that date. 
           (b) The governing board of the association may select and 
        appoint investment agencies to act for and in its behalf or may 
        certify special fund assets for investment by the state board of 
        investment under section 11A.17.  The governing board of the 
        association may certify general fund assets of the relief 
        association for investment by the state board of investment in 
        fixed income pools or in a separately managed account at the 
        discretion of the state board of investment as provided in 
        section 11A.14.  The governing board of the association may 
        select and appoint a qualified private firm to measure 
        management performance and return on investment, and the firm 
        shall use the formula or formulas developed by the state board 
        under section 11A.04, clause (11). 
           Subd. 2h 10.  [ACTUARIAL VALUATION REQUIRED.] The 
        association shall obtain an actuarial valuation showing the 
        condition of the special fund of the relief association pursuant 
        to under sections 356.215 and 356.216 and any applicable 
        standards for actuarial work established by the legislative 
        commission on pensions and retirement.  The actuarial valuation 
        must be made as of December 31 of every year.  A copy of the 
        actuarial valuation shall must be filed with the director of the 
        legislative reference library, the governing body of the 
        municipality in which the association is organized, the 
        executive director of the legislative commission on pensions and 
        retirement, and the state auditor, not later than July 1 of the 
        following year. 
           Subd. 2i 11.  [MUNICIPAL APPROVAL OF BENEFIT CHANGES 
        REQUIRED.] Any amendment to the bylaws or articles of 
        incorporation of a relief association which increases or 
        otherwise affects the retirement coverage provided by or the 
        service pensions or retirement benefits payable from any police 
        or firefighters' relief association enumerated in subdivision 1a 
        shall is not be effective until it is ratified by the 
        municipality in which the relief association is located.  The 
        officers of the relief association shall not seek municipal 
        ratification prior to before obtaining either an updated 
        actuarial valuation including the proposed amendment or an 
        estimate of the expected actuarial impact of the proposed 
        amendment prepared by the actuary of the relief association and 
        submitting that actuarial valuation or estimate to the clerk of 
        the municipality. 
           Subd. 3 12.  [CITATION.] This section may be cited as the 
        "Police and Firefighters' Relief Associations Guidelines Act of 
        1969." 
           Sec. 2.  Minnesota Statutes 2000, section 69.80, is amended 
        to read: 
           69.80 [AUTHORIZED ADMINISTRATIVE EXPENSES.] 
           (a) Notwithstanding any provision of law to the contrary, 
        the payment of the following necessary, reasonable and direct 
        expenses of maintaining, protecting and administering the 
        special fund, when provided for in the bylaws of the association 
        and approved by the board of trustees, shall constitute 
        constitutes authorized administrative expenses of a police, 
        salaried firefighters', or volunteer firefighters' relief 
        association organized under any law of this state: 
           (a) (1) office expense, including, but not limited to, 
        rent, utilities, equipment, supplies, postage, periodical 
        subscriptions, furniture, fixtures, and salaries of 
        administrative personnel; 
           (b) (2) salaries of the president, secretary, and treasurer 
        of the association, or their designees, and any other official 
        of the relief association to whom a salary is payable under 
        bylaws or articles of incorporation in effect on January 1, 
        1986, and their itemized expenses incurred as a result of 
        fulfilling their responsibilities as administrators of the 
        special fund; 
           (c) (3) tuition, registration fees, organizational dues, 
        and other authorized expenses of the officers or members of the 
        board of trustees incurred in attending educational conferences, 
        seminars, or classes relating to the administration of the 
        relief association; 
           (d) (4) audit, actuarial, medical, legal, and investment 
        and performance evaluation expenses; 
           (e) (5) reimbursement to the officers and members of the 
        board of trustees, or their designees, for reasonable and 
        necessary expenses actually paid and incurred in the performance 
        of their duties as officers or members of the board; and 
           (f) (6) premiums on fiduciary liability insurance and 
        official bonds for the officers, members of the board of 
        trustees, and employees of the relief association. 
           (b) Any other expenses of the relief association shall must 
        be paid from the general fund of the association, if one 
        exists.  If a relief association has only one fund, that 
        fund shall be deemed to be is the special fund for purposes of 
        this section.  If a relief association has a special fund and a 
        general fund, and any expense of the relief association that is 
        directly related to the purposes for which both funds were 
        established, the payment of that expense shall must be 
        apportioned between the two funds on the basis of the benefits 
        derived by each fund. 
           Sec. 3.  Minnesota Statutes 2000, section 353A.08, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [MILITARY SERVICE CONTRIBUTION AND REFUND.] A 
        person who was an active member of a local police or 
        firefighters relief association upon its consolidation with the 
        public employees retirement association, and who was otherwise 
        eligible for automatic service credit for military service under 
        sections Minnesota Statutes 2000, section 423.57 and 424.23, and 
        who has not elected the type of benefit coverage provided by the 
        public employees police and fire fund at the time of 
        consolidation, must make employee contributions under section 
        353.01, subdivision 16, paragraph (h), to receive allowable 
        service credit from the association for a military service leave 
        after the effective date of the consolidation.  A person who 
        later elects, under subdivision 3, to retain benefit coverage 
        under the bylaws of the local relief association is eligible for 
        a refund from the association at the time of retirement.  The 
        association shall refund the employee contributions plus 
        interest at the rate of six percent, compounded quarterly, from 
        the date on which contributions were made until the first day of 
        the month in which the refund is paid.  The employer shall 
        receive a refund of the employer contributions.  The association 
        shall not pay a refund to a person who later elects, under 
        subdivision 3, the type of benefit coverage provided by the 
        public employees police and fire fund or to the person's 
        employer. 
           Sec. 4.  Minnesota Statutes 2000, section 423A.17, is 
        amended to read: 
           423A.17 [CONTINUATION OF SURVIVING SPOUSE BENEFITS UPON 
        REMARRIAGE.] 
           (a) Notwithstanding a provision of section 69.48; 423.387, 
        subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; or 
        424.24, subdivision 1, or other law, article of incorporation, 
        or bylaw governing a local police or salaried firefighters 
        relief association to the contrary, the governing body of a 
        municipality may mandate the applicable local police or salaried 
        firefighters relief association to provide that a surviving 
        spouse benefit is payable for the life of the surviving spouse 
        and remains payable even in the event of the remarriage of the 
        surviving spouse. 
           (b) If the surviving spouse benefit change described in 
        paragraph (a) is made, the change applies to a surviving spouse 
        benefit payable on the effective date of the change and to the 
        potential surviving spouses of all active, deferred, or retired 
        members of the relief association who have that status on the 
        effective date of the change.  
           (c) In addition, if the surviving spouse benefit change 
        described in paragraph (a) is made a person who formerly was 
        receiving surviving spouse benefits from the relief association 
        and who had those benefits discontinued by virtue of the 
        remarriage is entitled, upon application, to a resumption of the 
        surviving spouse benefit, beginning with the last day of the 
        month following receipt of the application by the secretary of 
        the relief association.  Nothing in this section authorizes the 
        payment of a benefit amount to an estate. 
           (d) The change must be made by a municipal resolution 
        adopted by a majority vote of the municipality.  The resolution 
        must be filed by the secretary of the relief association with 
        the executive director of the legislative commission on pensions 
        and retirement, the state auditor, and the secretary of state. 
           Sec. 5.  Minnesota Statutes 2000, section 423A.171, is 
        amended to read: 
           423A.171 [BYLAW AMENDMENTS.] 
           (a) Notwithstanding a provision of section 69.48; 423.387, 
        subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; 
        423B.10; or 424.24, subdivision 1, or other law governing a 
        local police or salaried firefighters' relief association to the 
        contrary, the board of trustees of a local relief association 
        governed by section 69.77 or its successor board under chapter 
        353A or 353B, with municipal approval as provided in section 
        69.77, subdivision 2i 11, may amend the bylaws of the relief 
        association to provide that a surviving spouse benefit is 
        payable to a surviving spouse who married a deferred or retired 
        member after the member's retirement, provided the marriage 
        occurred at least five years before the death of the member. 
           (b) If the surviving spouse benefit change described in 
        paragraph (a) is made, the change applies to a surviving spouse 
        benefit payable on the effective date of the change and to the 
        potential surviving spouses of all deferred or retired members 
        of the relief association who have that status on the effective 
        date of the change. 
           (c) The bylaw amendment is not effective until a certified 
        copy of the amendment and the municipal approval has been filed 
        by the municipal clerk with the executive director of the 
        legislative commission on pensions and retirement, the state 
        auditor, and the secretary of state. 
           (d) Notwithstanding the provisions of section 353B.11, a 
        surviving spouse benefit change made under this section for a 
        relief association that has consolidated with the public 
        employees retirement association is effective upon approval by 
        the public employees retirement association and the municipality 
        pursuant to under paragraph (c). 
           Sec. 6.  Minnesota Statutes 2000, section 424A.09, is 
        amended to read: 
           424A.09 [APPLICATION TO CERTAIN RELIEF ASSOCIATIONS.] 
           This chapter shall supersede supersedes any special law 
        applicable to any municipal volunteer firefighters' relief 
        association or independent nonprofit firefighting corporation 
        specifically authorizing the relief association or nonprofit 
        firefighting corporation to exceed the service pension 
        limitations contained in Minnesota Statutes 1978, sections 69.06 
        and 69.691.  Any relief association which amended its bylaws to 
        provide for a full pro rata service pension amount at the 
        specified retirement age with 15 years service credit or 75 
        percent of the pro rata service pension amount at the specified 
        retirement age with ten years of service pursuant to under 
        Minnesota Statutes 1978, section 69.06, may continue to provide 
        the specified service pension amounts at the applicable years of 
        credited service to any member who has credit for at least ten 
        or 15 years, whichever is the applicable minimum service period 
        specified in the bylaws governing the relief association, on or 
        before December 31, 1979 notwithstanding section 424A.02.  
           Sec. 7.  [APPLICATION; BLOOMINGTON FIREFIGHTERS RELIEF 
        ASSOCIATION.] 
           To the extent that Minnesota Statutes 2000, chapter 424, 
        applied to the Bloomington firefighters relief association on 
        the day before the effective date of section 5, Minnesota 
        Statutes 2000, chapter 424, continues to apply to the 
        Bloomington firefighters relief association after that date. 
           Sec. 8.  [REVISOR INSTRUCTIONS.] 
           (a) In the next and subsequent editions of Minnesota 
        Statutes, the revisor of statutes shall not print Minnesota 
        Statutes, sections 423.41 to 423.62, but shall denote those 
        sections as "[LOCAL, CITY OF FAIRMONT, POLICE PENSIONS.]." 
           (b) In the next and subsequent editions of Minnesota 
        Statutes, the revisor of statutes shall, in each section 
        indicated in column A, replace the cross-reference specified in 
        column B with the cross-reference set forth in column C: 
           Column A             Column B              Column C
           69.021, subd. 10     69.77, subd. 2a       69.77, subd. 3
           69.021, subd. 10     69.77, subd. 2b       69.77, subd. 4
           69.021, subd. 10     69.77, subd. 2c       69.77, subd. 5
           299A.465, subd. 5    424.03                Minnesota Statutes,
                                                        2000, 424.03 
           353A.07, subd. 6     69.77, subd. 2a       69.77, subd. 3 
           353A.09, subd. 4     69.77, subd. 2a       69.77, subd. 3 
           356.216              69.77, subd. 2b       69.77, subd. 4 
           356.219, subd. 2     69.77, subd. 2g       69.77, subd. 9 
           423.01, subd. 2      69.77, subd. 2b       69.77, subd. 4 
           423A.18              69.77, subd. 2i       69.77, subd. 11 
           423A.19, subd. 4     69.77, subd. 2i       69.77, subd. 11 
           423B.06, subd. 1     69.77, subd. 2a       69.77, subd. 3 
           423B.06, subd. 1     69.77, subd. 2b       69.77, subd. 4 
           423B.06, subd. 1     69.77, subd. 2c       69.77, subd. 5 
           423B.06, subd. 1     69.77, subd. 2d       69.77, subd. 6 
           423B.06, subd. 1     69.77, subd. 2e       69.77, subd. 7 
           423B.06, subd. 1     69.77, subd. 2f       69.77, subd. 8 
           423B.21, subd. 1     69.77, subd. 2b       69.77, subd. 4 
           Sec. 9.  [REPEALER; OBSOLETE POLICE AND FIRE PENSION LAWS.] 
           Subdivision 1.  [FIRST CLASS CITY FIRE; 
        REPEALER.] Minnesota Statutes 2000, sections 69.25; 69.26; 
        69.27; 69.28; 69.29; 69.30; 69.32; 69.361; 69.37; 69.38; 69.39; 
        69.40; 69.41; 69.42; 69.43; 69.44; 69.45; 69.46; 69.47; 69.48; 
        69.49; 69.50; 69.51; 69.52; 69.53; and 69.62, are repealed. 
           Subd. 2.  [THIRD CLASS CITY POLICE; REPEALER.] Minnesota 
        Statutes 2000, sections 423.37; 423.371; 423.372; 423.373; 
        423.374; 423.375; 423.377; 423.378; 423.379; 423.38; 423.381; 
        423.382; 423.383; 423.384; 423.385; 423.386; 423.387; 423.388; 
        423.389; 423.39; 423.391; and 423.392, are repealed. 
           Subd. 3.  [SECOND CLASS CITY POLICE; REPEALER.] Minnesota 
        Statutes 2000, sections 423.801; 423.802; 423.803; 423.804; 
        423.805; 423.806; 423.808; 423.809; 423.810; 423.812; 423.813; 
        423.814; and 423.90, are repealed. 
           Subd. 4.  [SECOND CLASS CITY FIRE; REPEALER.] Minnesota 
        Statutes 2000, sections 424.01; 424.02; 424.03; 424.04; 424.05; 
        424.06; 424.08; 424.14; 424.15; 424.16; 424.165; 424.17; 424.18; 
        424.19; 424.20; 424.21; 424.22; 424.23; 424.24; 424.25; 424.27; 
        424.28; and 424.29, are repealed. 
           Subd. 5.  [ALBERT LEA FIRE; REPEALER.] Laws 1943, chapters 
        170 and 397; Laws 1947, chapter 274; Laws 1949, chapters 87 and 
        281; Laws 1951, chapters 233, 420, and 435; Laws 1953, chapters 
        44 and 406; Laws 1957, chapter 127; Laws 1959, chapter 207; Laws 
        1963, chapter 643; Laws 1984, chapter 574, section 23; Laws 
        1985, chapter 261, section 36; and Laws 1993, chapter 72, are 
        repealed. 
           Subd. 6.  [ALBERT LEA POLICE; REPEALER.] Laws 1965, chapter 
        174; Laws 1976, chapter 247; and Laws 1985, chapter 261, section 
        36, are repealed. 
           Subd. 7.  [ANOKA POLICE; REPEALER.] Laws 1965, chapter 174; 
        Laws 1973, chapter 587; Laws 1978, chapter 563, section 28; and 
        Laws 1981, chapter 224, sections 263 and 264, are repealed. 
           Subd. 8.  [AUSTIN FIRE; REPEALER.] Laws 1943, chapter 170; 
        Laws 1949, chapter 87; Laws 1951, chapters 45 and 435; Laws 
        1957, chapter 164; Laws 1963, chapter 36; Laws 1965, chapter 
        418; Laws 1976, chapter 36; Laws 1978, chapter 579; Laws 1980, 
        chapter 341, sections 9 and 10; Laws 1981, chapter 224, sections 
        268 and 270; Laws 1992, chapter 455; and Laws 1994, chapter 490, 
        are repealed. 
           Subd. 9.  [AUSTIN POLICE; REPEALER.] Laws 1943, chapter 
        432; Laws 1976, chapter 36; Laws 1980, chapter 341, sections 9 
        and 10; and Laws 1981, chapter 224, sections 268 and 270, are 
        repealed. 
           Subd. 10.  [BLOOMINGTON POLICE; REPEALER.] Laws 1965, 
        chapter 498; Laws 1975, chapter 121; Laws 1978, chapter 563, 
        section 17; Laws 1980, chapter 341, section 6; Laws 1981, 
        chapter 224, section 240; and Laws 1993, chapter 202, article 1, 
        are repealed. 
           Subd. 11.  [BRAINERD POLICE; REPEALER.] Laws 1959, chapter 
        437, is repealed. 
           Subd. 12.  [BROOKLYN CENTER POLICE; REPEALER.] Laws 1967, 
        chapter 736; and Laws 1978, chapter 563, section 18, are 
        repealed. 
           Subd. 13.  [BUHL POLICE; REPEALER.] Laws 1957, chapter 630; 
        Laws 1975, chapter 425; Laws 1976, chapter 247; Laws 1981, 
        chapter 68, section 43; Laws 1982, chapter 578, article II, 
        section 1, subdivision 8; Laws 1984, chapter 574, sections 18 
        and 20; Laws 1985, chapter 261, section 18; and Laws 1986, 
        chapter 458, section 23, are repealed. 
           Subd. 14.  [CHISHOLM FIRE; REPEALER.] Laws 1935, chapter 
        208; Laws 1937, chapters 132 and 253; Laws 1939, chapter 124; 
        Laws 1947, chapter 329; Laws 1951, chapter 144; Laws 1953, 
        chapter 391; Laws 1955, chapters 293 and 827; Laws 1961, chapter 
        631; Laws 1971, chapter 809; Laws 1973, chapter 433; Laws 1976, 
        chapter 78; Laws 1978, chapter 648; Laws 1979, chapter 131, 
        section 3; Laws 1981, chapter 68, sections 36 and 37; and Laws 
        1991, chapter 269, article 2, section 12, are repealed. 
           Subd. 15.  [CHISHOLM POLICE; REPEALER.] Laws 1945, chapter 
        74; Laws 1949, chapter 164; Laws 1953, chapter 235; Laws 1959, 
        chapter 211; Laws 1961, chapter 290; Laws 1971, chapter 810; 
        Laws 1973, chapter 433; Laws 1976, chapter 78; Laws 1978, 
        chapters 563, section 27, and 648; Laws 1979, chapter 131, 
        section 3; Laws 1981, chapters 68, sections 31, 32, and 33; and 
        224, section 261; and Laws 1991, chapter 269, article 2, section 
        12, are repealed. 
           Subd. 16.  [CLOQUET FIRE; REPEALER.] Laws 1941, chapter 
        196; Laws 1953, chapter 253; Laws 1955, chapter 42; Laws 1961, 
        chapter 295; Laws 1965, chapter 594; Laws 1967, chapter 783; and 
        Laws 1969, chapter 716, are repealed. 
           Subd. 17.  [COLUMBIA HEIGHTS FIRE; REPEALER.] Laws 1965, 
        chapter 605; Laws 1975, chapter 424; Laws 1977, chapter 374, 
        sections 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 
        52, 53, 54, 55, 56, 57, 58, 59, and 60; Laws 1978, chapter 563, 
        sections 29 and 30; and Laws 1981, chapter 224, section 267, are 
        repealed. 
           Subd. 18.  [COLUMBIA HEIGHTS POLICE; REPEALER.] Laws 1977, 
        chapter 374, sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 
        14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 
        30, 31, 32, 33, 34, 35, 36, and 37; and Laws 1993, chapter 126, 
        are repealed. 
           Subd. 19.  [CROOKSTON FIRE; REPEALER.] Laws 1949, chapter 
        378; Laws 1957, chapter 144; Laws 1963, chapter 636; Laws 1971, 
        chapter 51; Laws 1978, chapter 563, sections 24, 25, and 26; 
        Laws 1981, chapter 224, sections 252 and 253; and Laws 1983, 
        chapter 291, sections 9, 10, 11, 12, 13, 14, 15, 16, and 17, are 
        repealed. 
           Subd. 20.  [CROOKSTON POLICE; REPEALER.] Laws 1976, chapter 
        85; Laws 1977, chapter 275; Laws 1983, chapter 84, section 1; 
        and Laws 1984, chapter 574, section 26, are repealed. 
           Subd. 21.  [CRYSTAL POLICE; REPEALER.] Laws 1963, chapter 
        619; Laws 1969, chapter 1087; and Laws 1980, chapter 607, 
        article XV, section 23, are repealed. 
           Subd. 22.  [DULUTH FIRE; REPEALER.] Laws 1917, chapter 196; 
        Laws 1919, chapter 515; Laws 1955, chapter 188; Laws 1961, 
        chapter 186; Laws 1963, chapter 208; Laws 1965, chapter 179; 
        Laws 1967, chapter 732; Laws 1975, chapter 127; Laws 1976, 
        chapter 78, section 4; Laws 1977, chapter 164, section 3; Laws 
        1992, chapter 448, section 1; and Laws 1994, chapter 474, are 
        repealed. 
           Subd. 23.  [DULUTH POLICE; REPEALER.] Laws 1915, chapter 
        68; Laws 1921, chapter 118; Laws 1923, chapter 54; Laws 1925, 
        chapter 197; Laws 1943, chapter 267; Laws 1949, chapter 153; 
        Laws 1953, chapter 91; Laws 1955, chapter 187; Laws 1959, 
        chapter 191; Laws 1975, chapter 408; Laws 1976, chapter 99; Laws 
        1980, chapter 600, section 11; and Laws 1992, chapter 448, are 
        repealed.  
           Subd. 24.  [EVELETH FIRE; REPEALER.] Laws 1935, chapter 
        208; Laws 1937, chapters 132 and 253; Laws 1939, chapter 124; 
        Laws 1941, chapters 74 and 182; Laws 1947, chapter 329; Laws 
        1951, chapter 144; Laws 1953, chapter 391; Laws 1955, chapter 
        293; Laws 1961, chapter 620; Laws 1963, chapter 670; and Laws 
        1969, chapter 552, are repealed. 
           Subd. 25.  [EVELETH POLICE; REPEALER.] Laws 1965, chapter 
        636; and Laws 1969, chapter 670, are repealed. 
           Subd. 26.  [FARIBAULT FIRE; REPEALER.] Laws 1947, chapter 
        43; Laws 1949, chapter 154; Laws 1951, chapter 43; Laws 1957, 
        chapter 36; Laws 1961, chapter 443; Laws 1967, chapter 807; Laws 
        1969, chapter 614; Laws 1975, chapter 389; Laws 1984, chapter 
        574, section 22; Laws 1985, chapter 259, sections 5 and 6; Laws 
        1985, First Special Session chapter 16, article 2, section 6; 
        and Laws 1993, chapter 112, section 2, are repealed. 
           Subd. 27.  [FARIBAULT POLICE; REPEALER.] Laws 1985, chapter 
        259, sections 5 and 6; Laws 1985, First Special Session chapter 
        16, article 2, section 6, are repealed. 
           Subd. 28.  [FRIDLEY FIRE; REPEALER.] Laws 1969, chapter 
        594, is repealed. 
           Subd. 29.  [FRIDLEY POLICE; REPEALER.] Laws 1977, chapter 
        83, is repealed. 
           Subd. 30.  [HIBBING FIRE; REPEALER.] Laws 1935, chapter 
        192; Laws 1943, chapter 413; Laws 1945, chapter 182; Laws 1947, 
        chapter 101; Laws 1951, chapter 48; Laws 1955, chapter 294; Laws 
        1959, chapter 208; Laws 1967, chapter 816; Laws 1969, chapter 
        686; Laws 1971, chapter 614; Laws 1975, chapter 254, sections 5 
        and 6; Laws 1977, chapter 169; Laws 1981, chapter 224, section 
        260; Laws 1982, chapter 443; Laws 1987, chapter 372, article 2, 
        sections 7, 8, and 9; and Laws 1991, chapter 269, article 2, 
        sections 12 and 13, are repealed. 
           Subd. 31.  [HIBBING POLICE; REPEALER.] Laws 1931, chapter 
        48; Laws 1933, chapter 122; Laws 1939, chapter 304; Laws 1945, 
        chapter 300; Laws 1947, chapter 40; Laws 1949, chapter 191; Laws 
        1951, chapter 243; Laws 1953, chapter 401; Laws 1957, chapter 
        793; Laws 1965, chapter 536; Laws 1967, chapter 678; Laws 1969, 
        chapter 672; Laws 1971, chapter 807; Laws 1983, chapter 74; Laws 
        1987, chapter 372, article 2, section 7; and Laws 1991, chapter 
        269, article 2, section 12, are repealed. 
           Subd. 32.  [MANKATO FIRE; REPEALER.] Laws 1949, chapter 
        144; Laws 1953, chapter 37; Laws 1957, chapter 16; Laws 1971, 
        chapter 407; Extra Session Laws 1971, chapter 41; Laws 1981, 
        chapter 224, sections 258 and 259; and Laws 1989, chapter 319, 
        article 11, section 3, are repealed. 
           Subd. 33.  [MANKATO POLICE; REPEALER.] Laws 1971, chapter 
        407; Extra Session Laws 1971, chapter 41; Laws 1981, chapter 
        224, sections 258 and 259; Laws 1986, chapter 458, section 34; 
        and Laws 1987, chapter 372, article 2, section 12, are repealed. 
           Subd. 34.  [MOORHEAD FIRE; REPEALER.] Laws 1951, chapter 
        499; Laws 1955, chapter 75; Laws 1965, chapter 190; Laws 1969, 
        chapter 138; Laws 1975, chapter 120; Laws 1978, chapter 563, 
        sections 12 and 13; Laws 1979, chapter 216, sections 34, 35, 36, 
        37, 38, 39, 40, 41, 42, 43, and 44; Laws 1981, chapter 224, 
        section 236; and Laws 1982, chapter 578, article III, section 
        18, are repealed. 
           Subd. 35.  [MOORHEAD POLICE; REPEALER.] Laws 1945, chapter 
        277; Laws 1967, chapter 775; Laws 1978, chapter 563, section 19; 
        Laws 1979, chapter 216, sections 27, 28, 29, 30, 31, and 44; 
        Laws 1980, chapter 600, section 16; Laws 1981, chapter 224, 
        section 243; and Laws 1982, chapter 578, article III, section 
        18, are repealed. 
           Subd. 36.  [NEW ULM POLICE; REPEALER.] Laws 1965, chapter 
        174; Laws 1974, chapter 251; Laws 1981, chapter 224, sections 
        265 and 266; and Laws 1985, chapter 261, section 20, are 
        repealed. 
           Subd. 37.  [RED WING FIRE; REPEALER.] Laws 1953, chapter 
        348; Laws 1955, chapter 49; Laws 1957, chapter 10; Laws 1961, 
        chapter 300; Laws 1965, chapter 604; Laws 1973, chapter 359; 
        Laws 1975, chapter 254, sections 1, 2, 3, and 4; and Laws 1984, 
        chapter 574, section 24, are repealed. 
           Subd. 38.  [RED WING POLICE; REPEALER.] Laws 1965, chapter 
        174; Laws 1973, chapter 346; Laws 1983, chapter 291, section 8; 
        and Laws 1994, chapter 410, are repealed. 
           Subd. 39.  [RICHFIELD FIRE; REPEALER.] Laws 1955, chapter 
        348; Extra Session Laws 1961, chapter 28; Laws 1963, chapter 
        464; Laws 1967, chapter 798; Laws 1978, chapter 563, sections 20 
        and 21; Laws 1980, chapter 607, article XV, section 23; Laws 
        1981, chapter 224, section 244; and Laws 1997, chapter 241, 
        article 2, sections 2, 3, 4, 5, 6, 9, 10, 13, 14, and 20, are 
        repealed. 
           Subd. 40.  [RICHFIELD POLICE; REPEALER.] Laws 1957, chapter 
        455; Laws 1965, chapter 458; Laws 1978, chapter 563, section 16; 
        Laws 1980, chapter 607, article XV, section 23; Laws 1981, 
        chapter 224, section 239; and Laws 1991, chapter 96, are 
        repealed. 
           Subd. 41.  [ROCHESTER FIRE; REPEALER.] Laws 1959, chapter 
        131; Laws 1969, chapter 694; Laws 1978, chapter 563, section 14; 
        Laws 1980, chapter 600, sections 18 and 22; and Laws 1981, 
        chapter 224, section 237, are repealed. 
           Subd. 42.  [ROCHESTER POLICE; REPEALER.] Laws 1969, chapter 
        641; Laws 1975, chapter 368, section 54; Laws 1978, chapters 
        563, section 23; and 793, section 96; Laws 1980, chapter 600, 
        sections 18 and 22; and Laws 1981, chapter 224, section 248, are 
        repealed. 
           Subd. 43.  [ST. CLOUD FIRE; REPEALER.] Laws 1961, chapter 
        343; Laws 1963, chapter 453; Laws 1967, chapter 702; Laws 1974, 
        chapter 382; Laws 1977, chapter 270; Laws 1978, chapter 690, 
        sections 9 and 10; and Laws 1982, chapter 402, are repealed. 
           Subd. 44.  [ST. CLOUD POLICE; REPEALER.] Laws 1973, chapter 
        432; Laws 1980, chapter 341, sections 2, 3, 4, and 5; Laws 1984, 
        chapter 574, section 25; and Laws 1999, chapter 222, article 3, 
        section 6, are repealed. 
           Subd. 45.  [ST. LOUIS PARK FIRE; REPEALER.] Laws 1967, 
        chapter 730; Laws 1969, chapter 576; Laws 1978, chapter 563, 
        section 22; Laws 1981, chapter 224, section 247; and Laws 1985, 
        chapter 261, sections 32, 33, 34, and 35, are repealed. 
           Subd. 46.  [ST. LOUIS PARK POLICE; REPEALER.] Laws 1963, 
        chapter 454; Laws 1980, chapter 600, section 17; Laws 1984, 
        chapter 574, section 19; and Laws 1990, chapter 589, article 1, 
        section 7, are repealed. 
           Subd. 47.  [ST. PAUL FIRE; REPEALER.] Laws 1917, chapter 
        196; Laws 1919, chapter 515; Laws 1955, chapter 375; Laws 1957, 
        chapters 256 and 257; Laws 1961, chapter 376; Laws 1963, chapter 
        221; Laws 1965, chapter 790; Laws 1967, chapters 644 and 708; 
        Laws 1969, chapters 443, 669, and 671; Laws 1973, chapter 287; 
        Laws 1975, chapter 423; Laws 1977, chapter 164, section 1; Laws 
        1981, chapter 68, section 35; Laws 1989, chapter 319, article 
        11, section 12; Laws 1992, chapters 422 and 563, sections 3, 4, 
        and 5; Laws 1993, chapter 110; Laws 1996, chapter 448, article 
        2, section 1; and Laws 1997, chapter 241, article 2, sections 11 
        and 15, are repealed. 
           Subd. 48.  [ST. PAUL POLICE; REPEALER.] Special Laws 1889, 
        chapter 425; Special Laws 1891, chapter 11; Laws 1897, chapters 
        389 and 390; Laws 1919, chapter 68; Laws 1921, chapter 118; Laws 
        1923, chapter 54; Laws 1925, chapter 197; Laws 1955, chapter 
        151; Laws 1961, chapters 434 and 435, section 2; Laws 1963, 
        chapter 271; Laws 1965, chapter 465; Laws 1969, chapters 442, 
        668, and 671; Laws 1971, chapter 549; Laws 1973, chapter 286; 
        Laws 1980, chapter 600, sections 12, 13, 14, and 15; Laws 1981, 
        chapter 68, section 34; Laws 1983, chapter 47; Laws 1988, 
        chapter 709, article 8, section 5; Laws 1989, chapter 319, 
        article 11, sections 2 and 12; Laws 1992, chapters 393, section 
        1; 563, section 5; and 586, section 1; Laws 1994, chapter 409; 
        Laws 1996, chapter 448, article 2, section 1; and Laws 1997, 
        chapter 241, article 2, sections 11 and 15, are repealed. 
           Subd. 49.  [SOUTH ST. PAUL FIRE; REPEALER] Laws 1943, 
        chapter 397; Laws 1947, chapter 274; Laws 1949, chapter 281; 
        Laws 1951, chapters 233 and 420; Laws 1953, chapters 44 and 406; 
        Laws 1957, chapter 127; Laws 1961, chapter 747; Laws 1963, 
        chapter 715; Laws 1965, chapter 457; Laws 1969, chapter 849; and 
        Laws 1971, chapter 178, are repealed. 
           Subd. 50.  [SOUTH ST. PAUL POLICE; REPEALER.] Laws 1994, 
        chapter 541, section 3, is repealed. 
           Subd. 51.  [THIEF RIVER FALLS POLICE; REPEALER.] Laws 1981, 
        chapters 68, sections 41 and 42; 224, sections 272 and 273; Laws 
        1985, chapter 261, section 14; and Laws 1992, chapter 431, 
        section 1, are repealed. 
           Subd. 52.  [VIRGINIA POLICE; REPEALER.] Laws 1935, chapters 
        92 and 259; Laws 1937, chapter 197; Laws 1949, chapter 235; Laws 
        1965, chapter 174; Laws 1982, chapter 574, sections 3, 4, 5, 6, 
        and 8; Laws 1985, chapter 261, sections 15 and 16; Laws 1989, 
        chapter 319, article 11, section 4; and Laws 1992, chapter 392, 
        section 1, are repealed. 
           Subd. 53.  [WEST ST. PAUL FIRE; REPEALER.] Laws 1961, 
        chapter 399; Laws 1965, chapter 540; Laws 1982, chapter 610, 
        sections 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20; 
        and Laws 1984, chapter 574, section 33, are repealed. 
           Subd. 54.  [WEST ST. PAUL POLICE; REPEALER] Laws 1965, 
        chapter 174; Laws 1967, chapter 751; Laws 1981, chapter 297, 
        sections 1 and 2; Laws 1987, chapter 372, article 2, section 10; 
        and Laws 1995, chapter 262, article 10, section 4, are repealed. 
           Subd. 55.  [WINONA FIRE; REPEALER.] Extra Session Laws 
        1961, chapter 80; Laws 1963, chapter 443; and Laws 1967, chapter 
        848, are repealed. 
           Subd. 56.  [WINONA POLICE; REPEALERS.] Laws 1959, chapter 
        108; Extra Session Laws 1961, chapter 80; Laws 1977, chapter 
        429, section 62; Laws 1986, chapter 359, sections 22, 23, 24, 
        and 25; and Laws 1988, chapter 709, article 9, section 5, are 
        repealed. 
           Subd. 57.  [OTHER REPEALER.] Minnesota Statutes 2000, 
        sections 69.78; 297I.10, subdivision 2; and 423A.03, are 
        repealed. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1 to 9 are effective on July 1, 2002. 

                                   ARTICLE 2
                       RETIREMENT PLAN ALLOWABLE SERVICE 
                           CREDIT FOR STRIKE PERIODS 
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        352.01, subdivision 11, is amended to read: 
           Subd. 11.  [ALLOWABLE SERVICE.] "Allowable service" means:  
           (1) Service by an employee for which on or before July 1, 
        1957, the employee was entitled to allowable service credit on 
        the records of the system by reason of employee contributions in 
        the form of salary deductions, payments in lieu of salary 
        deductions, or in any other manner authorized by Minnesota 
        Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
           (2) Service by an employee for which on or before July 1, 
        1961, the employee chose to obtain credit for service by making 
        payments to the fund under Minnesota Statutes 1961, section 
        352.24. 
           (3) Except as provided in clauses (8) and (9), service by 
        an employee after July 1, 1957, for any calendar month in which 
        the employee is paid salary from which deductions are made, 
        deposited, and credited in the fund, including deductions made, 
        deposited, and credited as provided in section 352.041. 
           (4) Except as provided in clauses (8) and (9), service by 
        an employee after July 1, 1957, for any calendar month for which 
        payments in lieu of salary deductions are made, deposited, and 
        credited in the fund, as provided in section 352.27 and 
        Minnesota Statutes 1957, section 352.021, subdivision 4. 
           For purposes of clauses (3) and (4), except as provided in 
        clauses (8) and (9), any salary paid for a fractional part of 
        any calendar month, including the month of separation from state 
        service, is deemed the compensation for the entire calendar 
        month. 
           (5) The period of absence from their duties by employees 
        who are temporarily disabled because of injuries incurred in the 
        performance of duties and for which disability the state is 
        liable under the workers' compensation law until the date 
        authorized by the director for the commencement of payments of a 
        total and permanent disability benefit from the retirement fund. 
           (6) Service covered by a refund repaid as provided in 
        section 352.23 or 352D.05, subdivision 4, except service 
        rendered as an employee of the adjutant general for which the 
        person has credit with the federal civil service retirement 
        system. 
           (7) Service before July 1, 1978, by an employee of the 
        transit operating division of the metropolitan transit 
        commission or by an employee on an authorized leave of absence 
        from the transit operating division of the metropolitan transit 
        commission who is employed by the labor organization which is 
        the exclusive bargaining agent representing employees of the 
        transit operating division, which was credited by the 
        metropolitan transit commission-transit operating division 
        employees retirement fund or any of its predecessor plans or 
        funds as past, intermediate, future, continuous, or allowable 
        service as defined in the metropolitan transit 
        commission-transit operating division employees retirement fund 
        plan document in effect on December 31, 1977. 
           (8) Service after July 1, 1983, by an employee who is 
        employed on a part-time basis for less than 50 percent of full 
        time, for which the employee is paid salary from which 
        deductions are made, deposited, and credited in the fund, 
        including deductions made, deposited, and credited as provided 
        in section 352.041 or for which payments in lieu of salary 
        deductions are made, deposited, and credited in the fund as 
        provided in section 352.27 shall be credited on a fractional 
        basis either by pay period, monthly, or annually based on the 
        relationship that the percentage of salary earned bears to a 
        full-time salary, with any salary paid for the fractional 
        service credited on the basis of the rate of salary applicable 
        for a full-time pay period, month, or a full-time year.  For 
        periods of part-time service that is duplicated service credit, 
        section 356.30, subdivision 1, clauses (i) and (j), govern. 
           Allowable service determined and credited on a fractional 
        basis shall be used in calculating the amount of benefits 
        payable, but service as determined on a fractional basis must 
        not be used in determining the length of service required for 
        eligibility for benefits.  
           (9) Any period of authorized leave of absence without pay 
        that does not exceed one year and for which the employee 
        obtained credit by payment to the fund in lieu of salary 
        deductions.  To obtain credit, the employee shall pay an amount 
        equal to the employee and employer contribution rate in section 
        352.04, subdivisions 2 and 3, multiplied by the employee's 
        hourly rate of salary on the date of return from leave of 
        absence and by the days and months of the leave of absence 
        without pay for which the employee wants allowable service 
        credit.  The employing department, at its option, may pay the 
        employer amount on behalf of its employees.  Payments made under 
        this clause must include interest at an annual rate of 8.5 
        percent compounded annually from the date of termination of the 
        leave of absence to the date payment is made unless payment is 
        completed within one year of the return from leave of absence. 
           (10) A period purchased under section 356.555. 
           (11) A period of time during which the employee was on 
        strike without pay, not to exceed a period of one year, if the 
        employee makes a payment in lieu of salary deductions or makes a 
        prior service credit purchase payment, whichever applies.  If 
        the payment is made within 12 months, the payment by the 
        employee must be an amount equal to the employee and employer 
        contribution rates set forth in section 352.04, subdivisions 2 
        and 3, applied to the employee's rate of salary in effect on the 
        conclusion of the strike for the period of the strike without 
        pay, plus compound interest at a monthly rate of 0.71 percent 
        from the last day of the strike until the date of payment.  If 
        the payment by the employee is not made within 12 months, the 
        payment must be in an amount equal to the payment amount 
        determined under section 356.55 or 356.551, whichever applies. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        353.01, subdivision 16, is amended to read: 
           Subd. 16.  [ALLOWABLE SERVICE; LIMITS AND COMPUTATION.] (a) 
        "Allowable service" means: 
           (1) 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; 
           (2) 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; 
           (3) a period of authorized leave of absence with pay from 
        which deductions for employee contributions are made, deposited, 
        and credited to the fund; 
           (4) a period of authorized personal, parental, or medical 
        leave of absence without pay, including a leave of absence 
        covered under the federal Family Medical Leave Act, that does 
        not exceed one year, and during or for which a member obtained 
        full or fractional service credit for each month in the leave 
        period by payments to the fund made in place of salary 
        deductions.  The payments must be 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 that immediately 
        precedes the commencement of the leave of absence.  If the 
        employee elects to pay the employee contributions for the period 
        of any authorized personal, parental, or medical 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 the required 
        employer and the additional employer contributions, if any, 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, if by appropriate action of its governing body, which 
        is made a part of its official records, and which is adopted 
        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 render 
        a minimum of three months of allowable service in order to be 
        eligible to pay employee and employer contributions for a 
        subsequent authorized leave of absence without pay.  Upon 
        payment, the employee must be granted allowable service credit 
        for full calendar months or fractions of a month during the 
        leave period as described in paragraph (d), clauses (1) and (2), 
        based on the salary or the compensated hours used in computing 
        the payment amount; 
           (5) 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.  Upon 
        payment, the member must be granted allowable service credit for 
        full calendar months or fractions of a month during the leave 
        period as described in paragraph (d), clauses (1) and (2), based 
        on the salary or the compensated hours used in computing the 
        payment amount; 
           (6) an authorized temporary layoff under subdivision 12.  
        For temporary layoffs that begin before January 1, 2002, 
        allowable service credit is limited to three months allowable 
        service per authorized temporary layoff in one calendar year.  
        For temporary layoffs that begin on or after January 1, 2002, 
        allowable service credit for the calendar month in which the 
        member does not receive salary due to the layoff must be 
        determined using the following formula: 
           (i) members who earned one month of allowable service 
        credit for each of the nine calendar months of compensated 
        employment with the governmental subdivision authorizing the 
        layoff that immediately preceded the layoff shall receive one 
        month of allowable service credit, limited to three months of 
        allowable service credit per year, for each month of the 
        temporary layoff; or 
           (ii) members who earned less than nine months of allowable 
        service credit in the year of compensated employment with the 
        governmental subdivision authorizing the layoff that immediately 
        preceded the layoff shall receive allowable service credit on a 
        fractional basis for each month of the authorized layoff, 
        limited to three months of allowable service credit, determined 
        by dividing the total number of months of service credit earned 
        for the compensated employment by nine and multiplying the 
        resulting number by the total number of months in the layoff 
        period that are not compensated; or 
           (7) a period during which a member is on an authorized 
        leave of absence to enter military service in the armed forces 
        of the United States, 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 three times the length of 
        the military leave period, or five years of the date of 
        discharge from the military service, whichever is less.  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.  Upon payment, the employee must be granted 
        allowable service credit for full calendar months or fractions 
        of a month during the leave period as described in paragraph 
        (d), clauses (1) and (2), based on the salary or compensated 
        hours used in computing the payment amount.; or 
           (8) a period of time during which a member who is a state 
        employee was on strike without pay, not to exceed a period of 
        one year, if the member makes a payment in lieu of salary 
        deductions or makes a prior service credit purchase payment, 
        whichever applies.  If the payment is made within 12 months, the 
        payment by the member must be an amount equal to the employee, 
        employer, and employer additional contribution rates set forth 
        in section 353.27, subdivisions 2, 3, and 3a, applied to the 
        employee's rate of salary in effect on the conclusion of the 
        strike for the period of the strike without pay, plus compound 
        interest at a monthly rate of 0.71 percent from the last day of 
        the strike until the date of payment.  If the payment by the 
        employee is not made within 12 months, the payment must be in an 
        amount equal to the payment amount determined under section 
        356.55 or 356.551, whichever applies. 
           (b) 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 paragraph (a), 
        clauses (1) to (6), and section 352.01, subdivision 11.  
           (c) 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. 
           (d) For persons who, after January 1, 2002, either first 
        become members or terminated membership under subdivision 11b, 
        and again become members, of the public employees retirement 
        plan, the public employees police and fire plan under this 
        chapter, or the local government correctional employee 
        retirement plan under chapter 353E, whichever applies, 
        "allowable service" means credit for compensated hours from 
        which deductions are made, or for which payments are made in 
        lieu of salary deductions as provided under this subdivision, 
        and which are deposited and credited in the fund as provided in 
        section 353.27, determined as follows: 
           (1) one month of allowable service credit for each month 
        during which the employee has received salary for 80 or more 
        compensated hours; or 
           (2) a fraction of one month of allowable service for each 
        month for which the employee has received salary for less than 
        80 compensated hours equal to the percentage relationship that 
        the number of compensated hours bear to 80 hours. 
           (e) Elected officials and other public employees who are 
        compensated solely on an annual basis shall be granted a full 
        year of credit for each year for which compensation is earned. 
           (f) Allowable service that is determined and credited on a 
        fractional basis must be used only in calculating the amount of 
        benefits payable.  In determining the length of service required 
        for vesting, a member shall be granted a month of service credit 
        for each month in which the member received compensation from 
        which employee contributions were deducted.  For periods of 
        part-time service that are duplicated service credit, section 
        356.30, subdivision 1, paragraphs (g) and (h), govern. 
           (g) No member shall receive more than 12 months of 
        allowable service credit in a year either for vesting purposes 
        or for benefit calculation purposes. 
           (h) "Allowable service" also means a period purchased under 
        section 356.555. 
           Sec. 3.  Minnesota Statutes 2001 Supplement, section 
        354.05, subdivision 13, is amended to read: 
           Subd. 13.  [ALLOWABLE SERVICE.] "Allowable service" means: 
           (1) Any service rendered by a teacher for which on or 
        before July 1, 1957, the teacher's account in the retirement 
        fund was credited by reason of employee contributions in the 
        form of salary deductions, payments in lieu of salary 
        deductions, or in any other manner authorized by Minnesota 
        Statutes 1953, sections 135.01 to 135.13, as amended by Laws 
        1955, chapters 361, 549, 550, 611, or 
           (2) Any service rendered by a teacher for which on or 
        before July 1, 1961, the teacher elected to obtain credit for 
        service by making payments to the fund pursuant to Minnesota 
        Statutes 1980, section 354.09 and section 354.51, or 
           (3) Any service rendered by a teacher after July 1, 1957, 
        for any calendar month when the member receives salary from 
        which deductions are made, deposited and credited in the fund, 
        or 
           (4) Any service rendered by a person after July 1, 1957, 
        for any calendar month where payments in lieu of salary 
        deductions are made, deposited and credited into the fund as 
        provided in Minnesota Statutes 1980, section 354.09, subdivision 
        4, and section 354.53, or 
           (5) Any service rendered by a teacher for which the teacher 
        elected to obtain credit for service by making payments to the 
        fund pursuant to Minnesota Statutes 1980, section 354.09, 
        subdivisions 1 and 4, sections 354.50, 354.51, Minnesota 
        Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes 
        1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973 
        Supplement, section 354.09, subdivision 3, or 
           (6) Both service during years of actual membership in the 
        course of which contributions were currently made and service in 
        years during which the teacher was not a member but for which 
        the teacher later elected to obtain credit by making payments to 
        the fund as permitted by any law then in effect, or 
           (7) Any service rendered where contributions were made and 
        no allowable service credit was established because of the 
        limitations contained in Minnesota Statutes 1957, section 
        135.09, subdivision 2, as determined by the ratio between the 
        amounts of money credited to the teacher's account in a fiscal 
        year and the maximum retirement contribution allowable for that 
        year, or 
           (8) A period purchased under section 356.555., or 
           (9) A period of time during which a teacher who is a state 
        employee was on strike without pay, not to exceed a period of 
        one year, if the teacher makes a payment in lieu of salary 
        deductions or makes a prior service credit purchase payment, 
        whichever applies.  If the payment is made within 12 months, the 
        payment by the teacher must be an amount equal to the employee 
        and employer contribution rates set forth in section 354.42, 
        subdivisions 2 and 3, applied to the teacher's rate of salary in 
        effect on the conclusion of the strike for the period of the 
        strike without pay, plus compound interest at a monthly rate of 
        0.71 percent from the last day of the strike until the date of 
        payment.  If the payment by the employee is not made within 12 
        months, the payment must be in an amount equal to the payment 
        amount determined under section 356.55 or 356.551, whichever 
        applies. 
           Sec. 4.  [EFFECTIVE DATE.] 
           (a) Sections 1, 2, and 3 are effective retroactive to July 
        1, 2001. 
           (b) The authority to obtain credit for allowable service 
        under section 1, clause (11); section 2, paragraph (a), clause 
        (8); and section 3, clause (9), expires 12 months after the date 
        of enactment. 

                                   ARTICLE 3
                          PERA MEMBERSHIP ELIGIBILITY
                          AND SERVICE CREDIT PRORATION 
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        353.01, subdivision 2a, is amended to read: 
           Subd. 2a.  [INCLUDED EMPLOYEES.] (a) Public employees whose 
        salary from one governmental subdivision exceeds $425 in any 
        month shall participate as members of the association.  If the 
        salary is less than $425 in a subsequent month, the employee 
        retains membership eligibility.  Eligible public employees shall 
        participate as members of the association with retirement 
        coverage by the public employees retirement plan or the public 
        employees police and fire retirement plan under this chapter, or 
        the local government correctional employees retirement plan 
        under chapter 353E, whichever applies, as a condition of their 
        employment on the first day of employment unless they: 
           (1) are specifically excluded under subdivision 2b; 
           (2) do not exercise their option to elect retirement 
        coverage in the association as provided in subdivision 2d, 
        paragraph (a); or 
           (3) are employees of the governmental subdivisions listed 
        in subdivision 2d, paragraph (b), where the governmental 
        subdivision has not elected to participate as a governmental 
        subdivision covered by the association. 
           (b) A public employee who was a member of the association 
        on June 30, 2002, based on employment that qualified for 
        membership coverage by the public employees retirement plan or 
        the public employees police and fire plan under this chapter, or 
        the local government correctional employees retirement plan 
        under chapter 353E as of June 30, 2002, retains that membership 
        until the employee terminates public employment under 
        subdivision 11a or terminates membership under subdivision 11b. 
           Sec. 2.  Minnesota Statutes 2001 Supplement, section 
        353.01, subdivision 2b, is amended to read: 
           Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
        employees are not eligible to participate as members of the 
        association with retirement coverage by the public employees 
        retirement plan, the local government correctional employees 
        retirement plan under chapter 353E, or the public employees 
        police and fire retirement plan: 
           (1) public officers, other than county sheriffs, who are 
        elected to a governing body, or persons who are appointed to 
        fill a vacancy in an elective office of a governing body, whose 
        term of office first commences on or after July 1, 2002, for the 
        service to be rendered in that elective position.  Elected 
        governing body officials who were active members of the 
        association's coordinated or basic retirement plans as of June 
        30, 2002, continue participation throughout incumbency in office 
        until termination of public service occurs as defined in 
        subdivision 11a; 
           (2) election officers or election judges; 
           (3) patient and inmate personnel who perform services for 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.  An employer must not apply the 
        definition of temporary position so as to exclude employees who 
        are hired to fill positions that are permanent or that are for 
        an unspecified period but who are serving a probationary period 
        at the start of the employment.  If the period of employment 
        extends beyond six consecutive months and the employee earns 
        more than $425 from one governmental subdivision in any 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. 
           The 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 who are employed by reason of work emergency 
        caused by fire, flood, storm, or similar disaster; 
           (6) 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 consolidation account but 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; 
           (7) persons who are members of a religious order and 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; 
           (8) employees who at the time they are hired by a of a 
        governmental subdivision who have not reached the age of 23 and 
        are enrolled on a full-time basis to attend or are attending 
        classes on a full-time basis at an accredited school, college, 
        or university in an undergraduate, graduate, or 
        professional-technical program, or a public or charter high 
        school, if the employment is predicated on the student status of 
        the individual; 
           (9) resident physicians, medical interns, and pharmacist 
        residents and pharmacist interns who are serving in a degree or 
        residency program in public hospitals; 
           (10) students who are serving in an internship or residency 
        program sponsored by an accredited educational institution; 
           (11) persons who hold a part-time adult supplementary 
        technical college license who render part-time teaching service 
        in a technical college; 
           (12) except for employees of Hennepin county, 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 to be reported for 
        membership from the date of the extension; 
           (13) 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; 
           (14) 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, whichever applies, on the 
        basis of compensation received from public employment service 
        other than service as volunteer ambulance service personnel; 
           (15) 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, whichever applies, on the 
        basis of compensation received from public employment activities 
        other than those as a volunteer firefighter; 
           (16) pipefitters and associated trades personnel employed 
        by independent school district No. 625, St. Paul, with coverage 
        under a collective bargaining agreement by the pipefitters local 
        455 pension plan 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; 
           (17) electrical workers, plumbers, carpenters, and 
        associated trades personnel employed by independent school 
        district No. 625, St. Paul, or the city of St. Paul, who have 
        retirement coverage under a collective bargaining agreement by 
        the electrical workers local 110 pension plan, the united 
        association plumbers local 34 pension plan, or the carpenters 
        local 87 pension plan who were either first employed after May 
        1, 2000, or, if first employed before May 2, 2000, elected to be 
        excluded under Laws 2000, chapter 461, article 7, section 5; 
           (18) bricklayers, allied craftworkers, cement masons, 
        glaziers, glassworkers, painters, allied tradesworkers, and 
        plasterers employed by the city of St. Paul or independent 
        school district No. 625, St. Paul, with coverage under a 
        collective bargaining agreement by the bricklayers and allied 
        craftworkers local 1 pension plan, the cement masons local 633 
        pension plan, the glaziers and glassworkers local L-1324 pension 
        plan, the painters and allied trades local 61 pension plan, or 
        the Twin Cities plasterers local 265 pension plan who were 
        either first employed after May 1, 2001, or if first employed 
        before May 2, 2001, elected to be excluded under Laws 2001, 
        First Special Session chapter 10, article 10, section 6; 
           (19) plumbers employed by the metropolitan airports 
        commission, with coverage under a collective bargaining 
        agreement by the plumbers local 34 pension plan, who either were 
        first employed after May 1, 2001, or if first employed before 
        May 2, 2001, elected to be excluded under Laws 2001, First 
        Special Session chapter 10, article 10, section 6; 
           (20) employees who are hired after June 30, 2002, to fill 
        seasonal positions under subdivision 12b which are limited in 
        duration by the employer to 185 consecutive calendar days or 
        less in each business year of employment with the governmental 
        subdivision; 
           (21) persons who are provided supported employment or 
        work-study positions by a governmental subdivision and who 
        participate in an employment or industries program maintained 
        for the benefit of these persons where the governmental 
        subdivision limits the position's duration to three years or 
        less, including persons participating in a federal or state 
        subsidized on-the-job training, work experience, senior citizen, 
        youth, or unemployment relief program where the training or work 
        experience is not provided as a part of, or for, future 
        permanent public employment; 
           (22) independent contractors and the employees of 
        independent contractors; and 
           (23) reemployed annuitants of the association during the 
        course of that reemployment. 
           Sec. 3.  Minnesota Statutes 2001 Supplement, section 
        353.01, subdivision 11b, is amended to read: 
           Subd. 11b.  [TERMINATION OF MEMBERSHIP.] (a) "Termination 
        of membership" means the conclusion of membership in the 
        association and occurs: 
           (1) upon termination of public service under subdivision 
        11a; 
           (2) when a member does not return to work within 30 days of 
        the expiration of an authorized temporary layoff under 
        subdivision 12 or an authorized leave of absence under 
        subdivision 31 as evidenced by the appropriate record filed by 
        the governmental subdivision; or 
           (3) when a person files a written election to discontinue 
        employee deductions under section 353.27, subdivision 7, 
        paragraph (a), clause (1). 
           (b) The termination of membership must be reported to the 
        association by the governmental subdivision. 
           (c) If the employee subsequently returns to a position in 
        the same governmental subdivision, the employee shall not again 
        be required to earn a salary in excess of $425 per month to 
        qualify for membership, unless the employee has taken a refund 
        of accumulated employee deduction plus interest under section 
        353.34, subdivision 1. 
           Sec. 4.  Minnesota Statutes 2001 Supplement, section 
        353.01, subdivision 16, is amended to read: 
           Subd. 16.  [ALLOWABLE SERVICE; LIMITS AND COMPUTATION.] (a) 
        "Allowable service" means: 
           (1) 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; 
           (2) 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; 
           (3) a period of authorized leave of absence with pay from 
        which deductions for employee contributions are made, deposited, 
        and credited to the fund; 
           (4) a period of authorized personal, parental, or medical 
        leave of absence without pay, including a leave of absence 
        covered under the federal Family Medical Leave Act, that does 
        not exceed one year, and during or for which a member obtained 
        full or fractional service credit for each month in the leave 
        period by payments to the fund made in place of salary 
        deductions.  The payments must be 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 that immediately 
        precedes the commencement of the leave of absence.  If the 
        employee elects to pay the employee contributions for the period 
        of any authorized personal, parental, or medical 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 the required 
        employer and the additional employer contributions, if any, 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, whichever 
        is earlier.  The employer, if by appropriate action of its 
        governing body, which is made a part of its official records, 
        and which is adopted 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 render 
        a minimum of three months of allowable service in order to be 
        eligible to pay employee and employer contributions for a 
        subsequent authorized leave of absence without pay.  Upon 
        payment, the employee must be granted allowable service credit 
        for full calendar months or fractions of a month during the 
        leave purchased period as described in paragraph (d), clauses (1)
        and (2), based on the salary or the compensated hours used in 
        computing the payment amount; 
           (5) 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.  Upon 
        payment, the member must be granted allowable service credit for 
        full calendar months or fractions of a month during the leave 
        purchased period as described in paragraph (d), clauses (1) and 
        (2), based on the salary or the compensated hours used in 
        computing the payment amount; 
           (6) an authorized temporary layoff under subdivision 12.  
        For temporary layoffs that begin before January 1, 2002, 
        allowable service credit is, limited to three months allowable 
        service per authorized temporary layoff in one calendar year.  
        For temporary layoffs that begin on or after January 1, 2002, 
        allowable service credit for the calendar month in which the 
        member does not receive salary due to the layoff must be 
        determined using the following formula: 
           (i) members who earned one month of allowable service 
        credit for each of the nine calendar months of compensated 
        employment with the governmental subdivision authorizing the 
        layoff that immediately preceded the layoff shall receive one 
        month of allowable service credit, limited to three months of 
        allowable service credit per year, for each month of the 
        temporary layoff; or 
           (ii) members who earned less than nine months of allowable 
        service credit in the year of compensated employment with the 
        governmental subdivision authorizing the layoff that immediately 
        preceded the layoff shall receive allowable service credit on a 
        fractional basis for each month of the authorized layoff, 
        limited to three months of allowable service credit, determined 
        by dividing the total number of months of service credit earned 
        for the compensated employment by nine and multiplying the 
        resulting number by the total number of months in the layoff 
        period that are not compensated An employee who has received the 
        maximum service credit allowed for an authorized temporary 
        layoff must return to public service and must obtain a minimum 
        of three months of allowable service subsequent to the layoff in 
        order to receive allowable service for a subsequent authorized 
        temporary layoff; or 
           (7) a period during which a member is on an authorized 
        leave of absence to enter military service in the armed forces 
        of the United States, provided that if 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 a period that is 
        three times the length of the military leave period, or within 
        five years of the date of discharge from the military service, 
        whichever is less.  Payment may not be accepted following 20 
        days after termination of public service under subdivision 11a.  
        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 corresponding employer 
        contribution, and additional employer contribution under section 
        353.27, subdivisions 3 and 3a, if applicable, must be paid by 
        the governmental subdivision employing the member upon the 
        person's 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.  Upon payment, 
        the employee must be granted allowable service credit for full 
        calendar months or fractions of a month during the leave 
        purchased period as described in paragraph (d), clauses (1) and 
        (2), based on the salary or compensated hours used in computing 
        the payment amount. 
           (b) 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 the combined years of allowable service as defined in 
        paragraph (a), clauses (1) to (6), and section 352.01, 
        subdivision 11.  
           (c) 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. 
           (d) For persons who, after January 1, 2002, either first 
        become members or terminated membership under subdivision 11b, 
        and again become members, of the public employees retirement 
        plan, the public employees police and fire plan under this 
        chapter, or the local government correctional employee 
        retirement plan under chapter 353E, whichever applies, 
        "allowable service" means credit for compensated hours from 
        which deductions are made, or for which payments are made in 
        lieu of salary deductions as provided under this subdivision, 
        and which are deposited and credited in the fund as provided in 
        section 353.27, determined as follows: 
           (1) one month of allowable service credit for each month 
        during which the employee has received salary for 80 or more 
        compensated hours; or 
           (2) a fraction of one month of allowable service for each 
        month for which the employee has received salary for less than 
        80 compensated hours equal to the percentage relationship that 
        the number of compensated hours bear to 80 hours. 
           (e) Elected officials and other public employees who are 
        compensated solely on an annual basis shall be granted a full 
        year of credit for each year for which compensation is earned. 
           (f) Allowable service that is determined and credited on a 
        fractional basis must be used only in calculating the amount of 
        benefits payable.  In determining the length of service required 
        for vesting, a member shall be granted a month of service credit 
        for each month in which the member received compensation from 
        which employee contributions were deducted.  For periods of 
        part-time service that are duplicated service credit, section 
        356.30, subdivision 1, paragraphs (g) and (h), govern. 
           (g) No member shall may receive more than 12 months of 
        allowable service credit in a year either for vesting purposes 
        or for benefit calculation purposes. 
           (h) (e) "Allowable service" also means a period purchased 
        under section 356.555. 
           Sec. 5.  Minnesota Statutes 2000, section 353.01, is 
        amended by adding a subdivision to read:  
           Subd. 40.  [REDUCED SALARY DURING PERIOD OF WORKERS' 
        COMPENSATION.] (a) A member who is receiving temporary workers' 
        compensation payments related to the member's service to the 
        public employer and who either is receiving a reduced salary 
        from the employer during that period or is receiving no salary 
        from the employer during that period is entitled to receive 
        allowable service and salary credit for the period of time that 
        the member is receiving the workers' compensation payments upon 
        making the payments specified in this subdivision. 
           (b) The differential salary amount is the difference 
        between the average rate of salary received by the member, if 
        any, during the period of time that the member is collecting 
        temporary workers' compensation payments and the average rate of 
        salary of the member on which contributions to the applicable 
        plan were made during the period of the last six months of 
        covered employment occurring immediately before beginning to 
        collect the temporary workers' compensation payments, applied to 
        the member's normal employment period, measured in hours or 
        otherwise, as applicable. 
           (c) To receive eligible service credit, the member shall 
        pay an amount equal to the applicable employee contribution rate 
        under section 353.27, subdivision 2; 353.65, subdivision 2; or 
        353E.03, subdivision 1, as applicable, multiplied by the 
        differential salary amount; plus an employer equivalent payment 
        equal to the applicable employer contribution rate in section 
        353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, 
        subdivision 2, as applicable, multiplied by the differential 
        salary amount; plus, if applicable, an equivalent employer 
        additional amount equal to the additional employer contribution 
        rate in section 353.27, subdivision 3a, multiplied by the 
        differential salary amount. 
           (d) The employer may, by appropriate action of its 
        governing body and documented in its official records, pay the 
        employer equivalent contributions and, as applicable, the 
        equivalent employer additional contributions on behalf of the 
        member. 
           (e) Payment under this subdivision must include interest on 
        the contribution amount or amounts, whichever applies, at an 8.5 
        percent annual rate, prorated for applicable months from the 
        date on which the temporary workers' compensation payments 
        terminate to the date on which the payment or payments are 
        received by the executive director.  Payment under this 
        subdivision must be completed within one year after the 
        termination of the temporary workers' compensation payments to 
        the member, or within 20 days after the termination of public 
        service by the employee under subdivision 11a, whichever is 
        earlier. 
           Sec. 6.  Minnesota Statutes 2001 Supplement, section 
        353.27, subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYER REPORTING REQUIREMENTS; CONTRIBUTIONS; 
        MEMBER STATUS.] (a) A representative authorized by the head of 
        each department shall deduct employee contributions from the 
        salary of each employee who qualifies for membership under this 
        chapter and remit payment in a manner prescribed by the 
        executive director for the aggregate amount of the employee 
        contributions, the employer contributions and the additional 
        employer contributions to be received within 14 calendar days.  
        The head of each department or the person's designee shall for 
        each pay period submit to the association a salary deduction 
        report in the format prescribed by the executive director.  Data 
        required to be submitted as part of salary deduction reporting 
        must include, but are not limited to:  
           (1) the legal names and social security numbers of 
        employees who are members; 
           (2) the amount of each employee's salary deduction; 
           (3) the amount of salary from which each deduction was 
        made; 
           (4) the beginning and ending dates of the payroll period 
        covered and the date of actual payment; and 
           (5) adjustments or corrections covering past pay periods; 
        and 
           (6) the number of compensated hours of each employee during 
        the payroll period.  
           (b) Employers must furnish the data required for enrollment 
        for each new employee who qualifies for membership in the format 
        prescribed by the executive director.  The required enrollment 
        data on new employees must be submitted to the association prior 
        to or concurrent with the submission of the initial employee 
        salary deduction.  The employer shall also report to the 
        association all member employment status changes, such as leaves 
        of absence, terminations, and death, and shall report the 
        effective dates of those changes, on an ongoing basis for the 
        payroll cycle in which they occur.  The employer shall furnish 
        data, forms, and reports as may be required by the executive 
        director for proper administration of the retirement system.  
        Before implementing new or different computerized reporting 
        requirements, the executive director shall give appropriate 
        advance notice to governmental subdivisions to allow time for 
        system modifications. 
           (c) Notwithstanding paragraph (a), the association may 
        provide for less frequent reporting and payments for small 
        employers. 
           Sec. 7.  Minnesota Statutes 2001 Supplement, section 
        353.27, subdivision 11, is amended to read: 
           Subd. 11.  [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 
        INFORMATION.] All governmental subdivisions shall furnish 
        promptly such other information relative to the employment 
        status of all employees or former employees, including but not 
        limited to payroll abstracts pertaining to all past and present 
        employees, as may be requested by the association or its 
        executive director, including schedules of salaries applicable 
        to various categories of employment, and the number of actual or 
        estimated compensated hours for employees.  In the event payroll 
        abstract records have been lost or destroyed, for whatever 
        reason or in whatever manner, so that such schedules of salaries 
        cannot be furnished therefrom, the employing governmental 
        subdivision, in lieu thereof, shall furnish to the association 
        an estimate of the earnings of any employee or former employee 
        for any period as may be requested by the association or its 
        executive director. Should the association receive such 
        schedules of estimated earnings, the executive director is 
        hereby authorized to use the same as a basis for making whatever 
        computations might be necessary for determining obligations of 
        the employee and employer to the retirement fund.  If estimates 
        are not furnished by the employer pursuant to the request of the 
        association or its executive director, the association may 
        estimate the obligations of the employee and employer to the 
        retirement fund based upon such records as are in its 
        possession.  Where payroll abstracts have been lost or 
        destroyed, the governmental agency need not furnish any 
        information pertaining to employment prior to July 1, 1963.  The 
        association shall make no estimate of any obligation of any 
        employee, former employee, or employer covering employment prior 
        to July 1, 1963. 
           Sec. 8.  Minnesota Statutes 2000, section 353.64, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [PENSION COVERAGE FOR CERTAIN METROPOLITAN 
        TRANSIT POLICE OFFICERS.] A person who is employed as a 
        full-time police officer on or after the first day of the first 
        payroll period after July 1, 1993, by the metropolitan council 
        and who is not eligible for coverage under the agreement with 
        the Secretary of the federal Department of Health and Human 
        Services making the provisions of the federal Old Age, 
        Survivors, and Disability Insurance Act because the person's 
        position is excluded from application under United States Code, 
        sections 418(d)(5)(A) and 418(d)(8)(D), and under section 
        355.07, is a member of the public employees police and fire fund 
        and is considered to be a police officer within the meaning of 
        this section.  The metropolitan council shall deduct the 
        employee contribution from the salary of each full-time police 
        officer as required by section 353.65, subdivision 2, shall make 
        the employer contribution for each full-time police officer as 
        required by section 353.65, subdivision 3, and shall meet the 
        employer recording and reporting requirements in section 353.65, 
        subdivision 4. 
           Sec. 9.  [REPEALER.] 
           Minnesota Statutes 2001 Supplement, section 353.01, 
        subdivision 39, is repealed. 
           Sec. 10.  [APPLICATION.] 
           Section 8 applies in the counties of Anoka, Carver, Dakota, 
        Hennepin, Ramsey, Scott, and Washington. 
           Sec. 11.  [EFFECTIVE DATE.] 
           (a) Except as provided in paragraphs (c) and (d), sections 
        1, 2, and 3 are effective on July 1, 2002. 
           (b) Sections 4, 6, 7, and 9 are effective retroactively 
        from January 1, 2002. 
           (c) The amendment to Minnesota Statutes, section 353.01, 
        subdivision 2b, clause (12), in section 2, is effective on the 
        day after the date on which the governing body of Hennepin 
        county and the chief clerical officer of the county complete in 
        a timely manner their compliance with Minnesota Statutes, 
        section 645.021, subdivisions 2 and 3. 
           (d) The amendments to Minnesota Statutes, section 353.01, 
        subdivision 2b, clauses (8) and (20), are effective 
        retroactively from January 1, 2002. 
           (e) Section 5 is effective on the day following final 
        enactment. 
           (f) Section 8 is effective July 1, 2002, and applies to 
        salaries earned by part-time metropolitan transit police 
        officers after June 30, 2002. 

                                   ARTICLE 4 
                       PERA LOCAL GOVERNMENT CORRECTIONAL
                         RETIREMENT PLAN MODIFICATIONS
           Section 1.  Minnesota Statutes 2000, section 353E.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RETIREMENT COVERAGE.] Local government 
        correctional service employees are The members of the local 
        government correctional service retirement plan established by 
        this chapter are: 
           (1) local government correctional service employees as 
        defined in subdivision 2; and 
           (2) medical center protection officers as defined in 
        subdivision 2a. 
           Sec. 2.  Minnesota Statutes 2000, section 353E.02, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [MEDICAL CENTER PROTECTION OFFICER.] (a) A 
        medical center protection officer, for purposes of subdivision 
        1, is a person whom the employer certifies: 
           (1) is employed by the Hennepin county medical center as a 
        protection officer; 
           (2) is directly responsible for the direct security of the 
        medical center; 
           (3) is expected to respond to any incidents within the 
        medical center as part of the person's regular employment duties 
        and is trained to do so; and 
           (4) is a "public employee" as defined in section 353.01, 
        but is not a member of the public employees police and fire plan.
           (b) The certification required under paragraph (a) must be 
        made in writing on a form prescribed by the executive director 
        of the public employees retirement association. 
           Sec. 3.  Minnesota Statutes 2000, section 353E.03, is 
        amended to read: 
           353E.03 [CORRECTIONAL SERVICE PLAN CONTRIBUTIONS.] 
           Subdivision 1.  [MEMBER CONTRIBUTIONS.] A member of the 
        local government correctional service employee retirement plan 
        shall make an employee contribution in an amount equal to 6.01 
        5.83 percent of salary. 
           Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
        contribute for a member of the local government correctional 
        service employee retirement plan an amount equal to 9.02 8.75 
        percent of salary. 
           Sec. 4.  Laws 2000, chapter 461, article 10, section 3, as 
        amended by Laws 2001, First Special Session chapter 10, article 
        3, section 28, is amended to read: 
           Sec. 3.  [EFFECTIVE DATE.] 
           Section 1 is effective on the day following final enactment.
        Section 2 is effective on the first day of the first full pay 
        period beginning after January 1, 2003. 
           Sec. 5.  [REPEALER.] 
           Laws 2000, chapter 461, article 10, section 2, is repealed. 
           Sec. 6.  [EFFECTIVE DATE.] 
           (a) Sections 1, 2, and 3 are effective on July 1, 2002. 
           (b) Section 4 is effective on the day following final 
        enactment. 
           (c) Section 5 is effective on August 1, 2002. 

                                   ARTICLE 5
                              PENSION COVERAGE FOR
                          PRIVATIZED PUBLIC HOSPITALS
           Section 1.  Minnesota Statutes 2000, section 353F.02, 
        subdivision 4, is amended to read: 
           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.; and 
           (4) the Kanabec hospital. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective upon the latter of: 
           (1) the day after the governing body of Kanabec county and 
        its chief clerical officer timely complete their compliance with 
        Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
           (2) the first day of the month next following certification 
        to the Kanabec county board 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 Kanabec hospital employees under 
        section 1 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 the Kanabec hospital. 

                                   ARTICLE 6
                             CLOSED CHARTER SCHOOL
                        UNPAID RETIREMENT CONTRIBUTIONS
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        354.05, subdivision 2, is amended to read: 
           Subd. 2.  [TEACHER.] (a) "Teacher" means: 
           (1) a person who renders service as a teacher, supervisor, 
        principal, superintendent, librarian, nurse, counselor, social 
        worker, therapist, or psychologist in the a public schools 
        school of the state located outside of the corporate limits of 
        the cities a city of the first class, or in any charter school, 
        irrespective of the location of the school, or in any 
        charitable, penal, or correctional institutions of a 
        governmental subdivision, or who is engaged in educational 
        administration in connection with the state public school 
        system, but excluding the University of Minnesota, whether the 
        position be a public office or an employment, not including 
        members or officers of any general governing or managing board 
        or body; 
           (2) an employee of the teachers retirement association; 
           (3) a person who renders teaching service on a part-time 
        basis and who also renders other services for a single employing 
        unit.  A person whose teaching service comprises at least 50 
        percent of the combined employment salary is a member of the 
        association for all services with the single employing unit.  If 
        the person's teaching service comprises less than 50 percent of 
        the combined employment salary, the executive director must 
        determine whether all or none of the combined service is covered 
        by the association; or 
           (4) a person who is not covered by the plans established 
        under chapter 352D, 354A, or 354B and who is employed by the 
        board of trustees of the Minnesota state colleges and 
        universities system in an unclassified position as: 
           (i) a president, vice-president, or dean; 
           (ii) a manager or a professional in an academic or an 
        academic support program other than specified in item (i); 
           (iii) an administrative or a service support faculty 
        position; or 
           (iv) a teacher or a research assistant. 
           (b) Teacher "Teacher" does not mean: 
           (1) a person who works for a school or institution as an 
        independent contractor as defined by the Internal Revenue 
        Service; 
           (2) a person employed in subsidized on-the-job training, 
        work experience or public service employment as an enrollee 
        under the federal Comprehensive Employment and Training Act from 
        and after March 30, 1978, unless the person has, as of the later 
        of March 30, 1978, or the date of employment, sufficient service 
        credit in the retirement association to meet the minimum vesting 
        requirements for a deferred retirement annuity, or the employer 
        agrees in writing on forms prescribed by the executive director 
        to make the required employer contributions, including any 
        employer additional contributions, on account of that person 
        from revenue sources other than funds provided under the federal 
        Comprehensive Training and Employment Act, or the person agrees 
        in writing on forms prescribed by the executive director to make 
        the required employer contribution in addition to the required 
        employee contribution; 
           (3) a person holding a part-time adult supplementary 
        technical college license who renders part-time teaching service 
        or a customized trainer as defined by the Minnesota state 
        colleges and universities system in a technical college if (i) 
        the service is incidental to the regular nonteaching occupation 
        of the person; and (ii) the applicable technical college 
        stipulates annually in advance that the part-time teaching 
        service or customized training service will not exceed 300 hours 
        in a fiscal year and retains the stipulation in its records; and 
        (iii) the part-time teaching service or customized training 
        service actually does not exceed 300 hours in a fiscal year; or 
           (4) a person exempt from licensure under section 122A.30. 
           Sec. 2.  Minnesota Statutes 2000, section 354A.011, 
        subdivision 27, is amended to read: 
           Subd. 27.  [TEACHER.] (a) "Teacher" means any person who 
        renders service in for a public school district, other than a 
        charter school, located in the corporate limits of one of the 
        cities of the first class which was so classified on January 1, 
        1979, as any of the following: 
           (a) (1) a full-time employee in a position for which a 
        valid license from the state department of children, families, 
        and learning is required; 
           (b) (2) an employee of the teachers retirement fund 
        association located in the city of the first class unless the 
        employee has exercised the option pursuant to Laws 1955, chapter 
        10, section 1, to retain membership in the Minneapolis employees 
        retirement fund established pursuant to chapter 422A; 
           (c) (3) a part-time employee in a position for which a 
        valid license from the state department of children, families, 
        and learning is required; or 
           (d) (4) a part-time employee in a position for which a 
        valid license from the state department of children, families, 
        and learning is required who also renders other nonteaching 
        services for the school district, unless the board of trustees 
        of the teachers retirement fund association determines that the 
        combined employment is on the whole so substantially dissimilar 
        to teaching service that the service shall may not be covered by 
        the association. 
           (b) The term shall does not mean any person who renders 
        service in the school district as any of the following: 
           (1) an independent contractor or the employee of an 
        independent contractor; 
           (2) an employee who is a full-time teacher covered by the 
        teachers retirement association or by another teachers 
        retirement fund association established pursuant to this chapter 
        or chapter 354; 
           (3) an employee exempt from licensure pursuant to section 
        122A.30; 
           (4) an employee who is a teacher in a technical college 
        located in a city of the first class unless the person elects 
        coverage by the applicable first class city teacher retirement 
        fund association under section 354B.21, subdivision 2; or 
           (5) a teacher employed by a charter school, irrespective of 
        the location of the school; or 
           (6) an employee who is a part-time teacher in a technical 
        college in a city of the first class and who has elected 
        coverage by the applicable first class city teacher retirement 
        fund association under section 354B.21, subdivision 2, but (i) 
        the teaching service is incidental to the regular nonteaching 
        occupation of the person; (ii) the applicable technical college 
        stipulates annually in advance that the part-time teaching 
        service will not exceed 300 hours in a fiscal year; and (iii) 
        the part-time teaching actually does not exceed 300 hours in the 
        fiscal year to which the certification applies.  
           Sec. 3.  Minnesota Statutes 2000, section 354A.12, 
        subdivision 3d, is amended to read: 
           Subd. 3d.  [SUPPLEMENTAL ADMINISTRATIVE EXPENSE 
        ASSESSMENT.] (a) The active and retired membership of the 
        Minneapolis teachers retirement fund association and of the St. 
        Paul teachers retirement fund association is responsible for 
        defraying supplemental administrative expenses other than 
        investment expenses of the respective teacher retirement fund 
        association. 
           (b) Investment expenses of the teachers retirement fund 
        association are those expenses incurred by or on behalf of the 
        retirement fund in connection with the investment of the assets 
        of the retirement fund other than investment security 
        transaction costs.  Other administrative expenses are all 
        expenses incurred by or on behalf of the retirement fund for all 
        other retirement fund functions other than the investment of 
        retirement fund assets.  Investment and other administrative 
        expenses must be accounted for using generally accepted 
        accounting principles and in a manner consistent with the 
        comprehensive annual financial report of the teachers retirement 
        fund association for the immediately previous fiscal year under 
        section 356.20. 
           (c) Supplemental administrative expenses other than 
        investment expenses of a first class city teacher retirement 
        fund association are those expenses for the fiscal year that: 
           (1) exceed, for the St. Paul teachers retirement fund 
        association $443,745, or for the Minneapolis teacher retirement 
        fund association $671,513, plus, in each case, an additional 
        amount derived by applying the percentage increase in the 
        consumer price index for urban wage earners and clerical workers 
        all items index published by the Bureau of Labor Statistics of 
        the United States Department of Labor since July 1, 2001, to the 
        applicable dollar amount; and 
           (2) exceed the amount computed by applying the most recent 
        percentage of pay administrative expense amount, other than 
        investment expenses, for the teachers retirement association 
        governed by chapter 354 to the covered payroll of the respective 
        teachers retirement fund association for the fiscal year. 
           (d) The board of trustees of each first class city teachers 
        retirement fund association shall allocate the total dollar 
        amount of supplemental administrative expenses other than 
        investment expenses determined under paragraph (c), clause (2), 
        among the various active and retired membership groups of the 
        teachers retirement fund association and shall assess the 
        various membership groups their respective share of the 
        supplemental administrative expenses other than investment 
        expenses, in amounts determined by the board of trustees.  The 
        supplemental administrative expense assessments must be paid by 
        the membership group in a manner determined by the board of 
        trustees of the respective teachers retirement association.  
        Supplemental administrative expenses payable by the active 
        members of the pension plan must be picked up by the employer in 
        accordance with section 356.62. 
           (e) With respect to the St. Paul teachers retirement fund 
        association, the supplemental administrative expense assessment 
        must be fully disclosed to the various active and retired 
        membership groups of the teachers retirement fund association.  
        The chief administrative officer of the St. Paul teachers 
        retirement fund association shall prepare a supplemental 
        administrative expense assessment disclosure notice, which must 
        include the following: 
           (1) the total amount of administrative expenses of the St. 
        Paul teachers retirement fund association, the amount of the 
        investment expenses of the St. Paul teachers retirement fund 
        association, and the net remaining amount of administrative 
        expenses of the St. Paul teachers retirement fund association; 
           (2) the amount of administrative expenses for the St. Paul 
        teachers retirement fund association that would be equivalent to 
        the teachers retirement association noninvestment administrative 
        expense level described in paragraph (c); 
           (3) the total amount of supplemental administrative 
        expenses required for assessment calculated under paragraph (c); 
           (4) the portion of the total amount of the supplemental 
        administrative expense assessment allocated to each membership 
        group and the rationale for that allocation; 
           (5) the manner of collecting the supplemental 
        administrative expense assessment from each membership group, 
        the number of assessment payments required during the year, and 
        the amount of each payment or the procedure used to determine 
        each payment; and 
           (6) any other information that the chief administrative 
        officer determines is necessary to fairly portray the manner in 
        which the supplemental administrative expense assessment was 
        determined and allocated. 
           (f) The disclosure notice must be provided annually in the 
        annual report of the association. 
           (g) The supplemental administrative expense assessments 
        must be deposited in the applicable teachers retirement fund 
        upon receipt. 
           (h) Any omitted active membership group assessments that 
        remain undeducted and unpaid to the teachers retirement fund 
        association for 90 days must be paid by the respective school 
        district.  The school district may recover any omitted active 
        membership group assessment amounts that it has previously 
        paid.  The teachers retirement fund association shall deduct any 
        omitted retired membership group assessment amounts from the 
        benefits next payable after the discovery of the omitted amounts.
           Sec. 4.  [STATE PAYMENT OF CERTAIN UNPAID CHARTER SCHOOL 
        RETIREMENT CONTRIBUTIONS.] 
           Subdivision 1.  [UNPAID CONTRIBUTIONS.] (a) The state of 
        Minnesota shall make any unpaid employee, employer, and employer 
        additional contributions to the applicable retirement 
        association for teaching or other service in a designated 
        charter school which closed before April 1, 2002, without having 
        paid the required contributions to the retirement association.  
           (b) By June 1, 2002, the chief administrative officer of 
        the retirement association shall certify to the commissioner of 
        children, families, and learning the amount of accrued 
        contributions, plus applicable interest, which were not paid by 
        each designated charter school before its closure.  On July 1, 
        2002, the commissioner of children, families, and learning shall 
        pay the amounts certified from the state total building lease 
        aid otherwise payable under Minnesota Statutes, section 124D.11, 
        subdivision 4a, to the affected retirement associations.  The 
        forecasted amount of charter school lease aid must not be 
        adjusted to reflect the amount remitted under this section.  
        Rather, charter school lease aid must be prorated by the amount 
        remitted.  The commissioner shall remit directly to the 
        retirement association the amounts certified under this 
        section.  The applicable retirement association shall credit 
        employee contribution payments to the applicable member accounts 
        and shall credit to the applicable members allowable and formula 
        service and covered salary for the period when the teaching or 
        other service was actually performed in the charter school.  
        State payments representing unpaid employee contributions must 
        be considered accumulated employee or member deductions for 
        purposes of Minnesota Statutes, section 353.34; 354.49; or 
        354A.37. 
           Subd. 2.  [COVERED RETIREMENT ASSOCIATIONS.] This section 
        applies to the following public retirement associations 
        providing retirement coverage for employees in charter schools: 
           (1) the teachers retirement association; 
           (2) the Minneapolis teachers retirement fund association; 
           (3) the St. Paul teachers retirement fund association; 
           (4) the Duluth teachers retirement fund association; and 
           (5) the public employees retirement association. 
           Subd. 3.  [DESIGNATED CLOSED CHARTER SCHOOLS.] This section 
        applies to the Frederick Douglass charter school and any other 
        charter school that is determined by the commissioner of 
        children, families, and learning to have closed before April 1, 
        2002. 
           Sec. 5.  [CONTINUING RECOVERY AUTHORITY.] 
           Nothing in section 4 relieves the sponsor of a closed 
        charter school and the operator of a closed charter school from 
        any financial responsibility that those parties may have to pay 
        unpaid employee, employer, or employer additional contributions 
        to the applicable public retirement plans.  The commissioner of 
        revenue shall undertake all reasonable efforts to recover these 
        amounts.  Any recovered amounts must be deposited in the general 
        fund and are appropriated to the department of children, 
        families, and learning to offset the payment of unpaid 
        contributions under section 4.  
           Sec. 6.  [EFFECTIVE DATE.] 
           (a) Sections 1 and 2 are effective on July 1, 2002. 
           (b) Sections 4 and 5 are effective on the day following 
        final enactment. 

                                   ARTICLE 7 
                            TEACHER RETIREMENT PLANS 
                            SERVICE CREDIT PURCHASE 
                               DEADLINE EXTENSION 
           Section 1.  Laws 1999, chapter 222, article 16, section 16, 
        is amended to read: 
           Sec. 16.  [REPEALER.] 
           Sections 1 to 13 are repealed on May 16, 2002 2003. 
           Sec. 2.  Laws 2000, chapter 461, article 12, section 20, is 
        amended to read: 
           Sec. 20.  [EFFECTIVE DATE.] 
           (a) Sections 4, 5, and 11 to 20 are effective on the day 
        following final enactment. 
           (b) Sections 1, 2, 3, and 6 to 10 are effective on the day 
        following final enactment and apply retroactively to a faculty 
        member of the Lake Superior College who was granted an extended 
        leave of absence under article 19, section 4, of the united 
        technical college educators master agreement for the 1999-2000 
        academic year prior to March 20, 2000. 
           (c) Sections 5, 11, and 14, paragraph (c), expire on May 
        16, 2002 2003. 
           Sec. 3.  Laws 2001, First Special Session chapter 10, 
        article 6, section 21, is amended to read: 
           Sec. 21.  [EXPIRATION DATE.] 
           (a) The amendments in sections 1, 2, 3, 4, 10, 12, 16, 17, 
        18, 19, and 20 expire May 16, 2003. 
           (b) Sections 9 and 15 expire May 16, 2002 2003. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective on the day following final 
        enactment. 

                                   ARTICLE 8
                            RECODIFICATION OF SOCIAL
                          SECURITY COVERAGE PROVISIONS
           Section 1.  Minnesota Statutes 2000, section 355.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IN GENERAL.] For the purposes of this 
        chapter, as amended, each of the terms defined in this section 
        have has the meanings meaning ascribed to them herein.  
           Sec. 2.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [CONSTITUTIONAL OFFICER.] "Constitutional 
        officer" means a person who serves as the governor, lieutenant 
        governor, attorney general, secretary of state, state auditor, 
        or state treasurer, who is duly elected and who was sworn into 
        office. 
           Sec. 3.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [DIRECTOR.] "Director" means the executive 
        director of the public employees retirement association. 
           Sec. 4.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [DULUTH TEACHER.] "Duluth teacher" means a 
        person employed by independent school district No. 709, Duluth, 
        who holds a position covered by the Duluth teachers retirement 
        fund association established under chapter 354A. 
           Sec. 5.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2d.  [EDUCATIONAL EMPLOYEE.] "Educational employee" 
        means an employee of the state of Minnesota or of a public 
        subdivision of the state who performs services in a position 
        covered by the teachers retirement association under chapter 354.
           Sec. 6.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2e.  [EMPLOYEE.] "Employee" means a person employed 
        by the state of Minnesota or by a political subdivision of the 
        state and includes an officer of the state of Minnesota or of a 
        political subdivision of the state. 
           Sec. 7.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 2f.  [EMPLOYEE TAX.] "Employee tax" means the tax 
        imposed by section 3101 of the Internal Revenue Code of 1986. 
           Sec. 8.  Minnesota Statutes 2000, section 355.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYMENT.] The term (a) "Employment" means any 
        service performed by an employee in the employ of the state, or 
        any political subdivision thereof, for such that employer, 
        except: 
           (1) service which in the absence of an agreement entered 
        into under this chapter, as amended, would constitute 
        "employment" as defined in the Social Security act; or 
           (2) service which under the Social Security Act may is not 
        permitted to be included in an agreement between the state and 
        the federal Secretary of Health, Education, and Welfare Human 
        Services entered into under this chapter, as amended.  
           (b) Service which under the Social Security Act may is 
        permitted to be included in an agreement only upon certification 
        by the governor in accordance with section 218(d) (3) of that 
        act shall must be included in the term "employment" if and when 
        the governor issues, with respect to such that service, a the 
        appropriate federal certificate to the federal Secretary of 
        Health, Education, and Welfare Human Services.  
           Sec. 9.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [FEDERAL INSURANCE CONTRIBUTIONS ACT.] "Federal 
        Insurance Contributions Act" means subchapters A and B of 
        chapter 21 of the Internal Revenue Code of 1986, as amended 
        through December 31, 2000. 
           Sec. 10.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [GOVERNMENTAL EMPLOYER.] "Governmental employer" 
        means any political subdivision as defined in section 218 of the 
        Social Security Act.  The term includes a city, county, town, 
        hospital district, or other body, politic and corporate, located 
        in Minnesota. 
           Sec. 11.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3c.  [HIGHER EDUCATION EMPLOYEE.] "Higher education 
        employee" means an employee of the state of Minnesota who 
        performs services in a Minnesota state colleges and universities 
        system in a position covered by the individual retirement 
        account plan under section 354B.21 and who remains a member of 
        the teachers retirement association for purposes of social 
        security coverage only. 
           Sec. 12.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3d.  [HOSPITAL EMPLOYEE.] "Hospital employee" means 
        an officer or employee of a public hospital who performs 
        services in a position covered by the public employees 
        retirement association under chapter 353. 
           Sec. 13.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3e.  [JUDGE.] "Judge" means a judge as defined in 
        section 490.121, subdivision 3. 
           Sec. 14.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3f.  [LEGISLATOR.] "Legislator" means a member of the 
        legislature who is duly elected and who was sworn into office. 
           Sec. 15.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3g.  [LOCAL GOVERNMENTAL SUBDIVISION.] "Local 
        governmental subdivision" means: 
           (1) a political subdivision as defined in section 218(b) of 
        the Social Security Act; 
           (2) an instrumentality of the state; 
           (3) an instrumentality of one or more of the political 
        subdivisions of the state, including the league of Minnesota 
        cities; 
           (4) an instrumentality of the state and one or more of its 
        political subdivisions; 
           (5) a governmental subdivision as defined in section 
        353.01, subdivision 6; and 
           (6) any instrumentality established under a joint powers 
        agreement under section 471.59 wherein the instrumentality is 
        responsible for the employment and the payment of the salaries 
        of the employees of the instrumentality. 
           Sec. 16.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3h.  [MINNEAPOLIS TEACHER.] "Minneapolis teacher" 
        means a person employed by special school district No. 1, 
        Minneapolis, who holds a position covered by the Minneapolis 
        teachers retirement fund association established under chapter 
        354A. 
           Sec. 17.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3i.  [POLITICAL SUBDIVISION.] "Political subdivision" 
        means any political subdivision as defined in section 218(b) of 
        the Social Security Act, and includes any instrumentality of the 
        state, any instrumentality of one or more of its political 
        subdivisions, including the league of Minnesota municipalities, 
        any instrumentality of the state and one or more of its 
        political subdivisions, and an instrumentality established under 
        a joint powers agreement under section 471.59, wherein the 
        instrumentality is responsible for the employment and payment of 
        the salaries of employees of the instrumentality. 
           Sec. 18.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3j.  [PUBLIC EMPLOYEE.] "Public employee" means an 
        officer or an employee of a local governmental subdivision of 
        the state who performs services in a position covered by the 
        public employees retirement association established under 
        chapter 353. 
           Sec. 19.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3k.  [PUBLIC HOSPITAL.] "Public hospital" means a 
        hospital that is owned or operated by a governmental employer or 
        a combination of governmental employers, or a hospital that is 
        an integral part of a governmental employer or of a combination 
        of governmental employers. 
           Sec. 20.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 3l.  [ST. PAUL TEACHER.] "St. Paul teacher" means a 
        person employed by independent school district No. 625, St. 
        Paul, who holds a position covered by the St. Paul teachers 
        retirement fund association established under chapter 354A. 
           Sec. 21.  Minnesota Statutes 2000, section 355.01, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SECRETARY OF HEALTH AND HUMAN SERVICES.] The 
        term "Secretary of Health, Education, and Welfare Human Services"
        means the secretary of the federal Department of Health and 
        Human Services and includes any individual to whom the Secretary 
        of Health, Education, and Welfare Human Services has delegated 
        any functions under the Social Security Act with respect to 
        coverage under such act of employees of states and their 
        political subdivisions.  
           Sec. 22.  Minnesota Statutes 2000, section 355.01, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SOCIAL SECURITY ACT.] The term "Social Security 
        Act" means the Act of Congress approved August 14, 1935, chapter 
        531, Statutes at Large, volume 49, page 620, officially cited as 
        the "Social Security Act," as such act has been and may from 
        time to time be amended (including the relevant regulations and 
        requirements issued pursuant thereto).  
           Sec. 23.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [SPECIAL AUTHORITY OR DISTRICT.] "Special 
        authority or district" means a municipal housing and 
        redevelopment authority organized under sections 469.001 to 
        469.047, a soil and water conservation district organized under 
        chapter 103C, a port authority organized under sections 469.048 
        to 469.068, an economic development authority organized under 
        sections 469.090 to 469.108, or a hospital district organized or 
        reorganized under sections 447.31 to 447.37. 
           Sec. 24.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [SPECIAL AUTHORITY OR DISTRICT 
        EMPLOYEE.] "Special authority or district employee" means an 
        employee, other than an elected official, of a municipal housing 
        and redevelopment authority organized under sections 469.001 to 
        469.047, of a soil and water conservation district organized 
        under chapter 103C, of a port authority organized under sections 
        469.048 to 469.068, of an economic development authority 
        organized under sections 469.090 to 469.108, or of a hospital 
        district organized or reorganized under sections 447.31 to 
        447.37. 
           Sec. 25.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [STATE EMPLOYEE.] "State employee" means an 
        employee of the state of Minnesota or of a political subdivision 
        who performs services in a position covered by the general state 
        employees retirement plan of the Minnesota state retirement 
        system governed by chapter 352, except any position for which 
        the compensation is on a fee basis. 
           Sec. 26.  Minnesota Statutes 2000, section 355.01, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [WAGES.] "Wages" means all remuneration for 
        employment, including the cash value of all remuneration paid in 
        any medium other than cash.  The term does not include that part 
        of the remuneration which, even if it were for employment within 
        the meaning of the Federal Insurance Contributions Act, would 
        not constitute wages within the meaning of that act. 
           Sec. 27.  Minnesota Statutes 2000, section 355.02, is 
        amended to read: 
           355.02 [AGREEMENTS.] 
           Subdivision 1.  [GENERAL AUTHORITY.] (a) The state agency 
        director, with the approval of the governor, is hereby 
        authorized to enter into an agreement on behalf of the state 
        with the federal Secretary of Health, Education, and Welfare 
        Human Services, consistent with the terms and provisions of this 
        chapter, as amended, for the purpose of extending the benefits 
        of the federal old age and, survivors, and disability insurance 
        system to employees of the state or any political subdivision 
        thereof with respect to services specified in such the agreement 
        which constitute "employment," whenever so specifically 
        authorized by the statutory provisions of this state pertaining 
        to any coverage group of such employees to which the agreement 
        may become applicable under the Social Security Act.  
           Pursuant to such (b) Under this specific authorization the 
        agreement may contain such those provisions relating to 
        coverage, benefits, contributions, effective date, modification 
        and termination of the agreement, administration, and other 
        appropriate provisions as the state agency director and the 
        federal Secretary of Health, Education, and Welfare Human 
        Services shall agree upon, but, except as may be otherwise 
        required by or under the Social Security Act as to the services 
        to be covered, such agreement shall must provide in effect that: 
           (1) benefits will be provided for employees whose services 
        are covered by the agreement (and their dependents and 
        survivors) on the same basis as though such those services 
        constituted employment within the meaning of title II of the 
        Social Security Act; 
           (2) the state or other employer will pay to the federal 
        Secretary of the Treasury, at such time or times as may be 
        prescribed under the Social Security Act, contributions with 
        respect to wages, equal to the sum of the taxes which would be 
        imposed by the Federal Insurance Contributions Act if the 
        services covered by the agreement constituted employment within 
        the meaning of that act; 
           (3) Such the agreement shall be is effective with respect 
        to services in employment covered by the agreement performed 
        after a date specified therein but in no event may it be 
        effective with respect to any such services performed prior to 
        the first day of the calendar year in which such agreement is 
        entered into or in which the modification of the agreement 
        making it applicable to such services, is entered into except 
        that an agreement or modification entered into prior to January 
        1, 1960, may be effective with respect to services performed 
        after December 31, 1955, or after a later date specified in such 
        agreement or modification; and 
           (4) all services which constitute employment and are 
        performed in the employ of the state or any of its political 
        subdivisions by employees thereof, may be covered by such the 
        agreement whenever so specifically authorized by the statutory 
        provisions of this state pertaining to any coverage group of 
        such employees to which the agreement may become applicable 
        under the Social Security Act.  
           Subd. 2.  [INTERSTATE INSTRUMENTALITY.] (a) Any 
        instrumentality jointly created by this state and any other 
        state or states is hereby authorized, upon the granting of like 
        authority by such the other state or states, to: 
           (1) to enter into an agreement with the federal Secretary 
        of Health, Education, and Welfare Human Services whereby the 
        benefits of the federal old age and, survivors, and disability 
        insurance system shall be are extended to employees of such the 
        instrumentality,; 
           (2) to require its employees to pay (and for that purpose 
        to deduct from their wages) contributions equal to the amounts 
        which they would be required to pay under section 355.03, 
        subdivision 1, if they were covered by an agreement made 
        pursuant to under subdivision 1,; and 
           (3) to make payments to the federal Secretary of the 
        Treasury in accordance with such that agreement, including 
        payments from its own funds, and otherwise to comply with such 
        those agreements.  Such 
           (b) The agreements shall must, to the extent practicable, 
        be consistent with the terms and provisions of subdivision 1 and 
        other provisions of this chapter, as amended. 
           Subd. 3.  [GROUPS COVERED BY SOCIAL SECURITY.] The 
        following groups must be covered by an agreement or a 
        modification to an agreement between the state agency and the 
        federal Secretary of Health and Human Services: 
           (1) constitutional officers; 
           (2) Duluth teachers; 
           (3) educational employees; 
           (4) higher education employees; 
           (5) hospital employees; 
           (6) judges; 
           (7) legislators; 
           (8) Minneapolis teachers; 
           (9) public employees; 
           (10) St. Paul teachers; 
           (11) special authority or district employees; and 
           (12) state employees. 
           Sec. 28.  Minnesota Statutes 2000, section 355.03, is 
        amended to read: 
           355.03 [EMPLOYEES AND EMPLOYERS, CONTRIBUTIONS.] 
           Subdivision 1.  [EMPLOYEE CONTRIBUTION AMOUNT.] Every 
        employee of the state, or of any of its political subdivisions, 
        whose services are covered by the agreement entered into under 
        section 355.02 shall be required to must pay for the period 
        of such the coverage, into the contribution fund established by 
        section 355.04, contributions, with respect to wages, equal to 
        the amount of the employee's tax which would be imposed by the 
        Federal Insurance Contributions Act if such those services 
        constituted employment within the meaning of that act.  
        Such This liability shall arise arises in consideration of the 
        employee's retention in the service of the state, or any of its 
        political subdivisions, or the employee's entry upon such that 
        service, after the enactment of this chapter, as amended. 
           Subd. 2.  [EMPLOYEE DEDUCTION.] The contribution imposed by 
        this section shall must be collected by the covered employee's 
        employer by deducting the amount of the contribution from wages 
        as and when paid, but.  The failure to make such deduction shall 
        does not relieve the employee from liability for such 
        contribution.  
           Subd. 2a.  [EMPLOYER CONTRIBUTION.] (a) Employer 
        contributions that are required under the agreement must be paid 
        by the applicable employing unit. 
           (b) Employer contributions on behalf of St. Paul teachers, 
        Duluth teachers, Minneapolis teachers, or education employees 
        may be paid from normal school operating funds.  Employer 
        contributions on behalf of state employees must be paid by the 
        applicable department or agency from its appropriation or other 
        revenue, in the same proportion as salaries are paid, and must 
        be charged as an administrative cost of the state governmental 
        unit. 
           (c) Employing units may pay the employer contribution from 
        taxes collected or from other governmental revenue.  An 
        employing unit may include in its tax levy the amount necessary 
        to pay its social security obligations.  If the taxes authorized 
        to be levied cause the total levy amount to exceed any 
        limitation on the power of the employing unit to levy taxes, the 
        unit may still levy the necessary amount.  The employing unit, 
        in the event of a deficit, may issue debt obligations, payable 
        in not more than two years, in an amount which may cause its 
        indebtedness to exceed any limitation without holding an 
        election and may levy taxes to amortize the indebtedness.  The 
        authorized social security expenditures must not be included in 
        computing the cost of government for purposes of any home rule 
        charter or other charter. 
           (d) If the required employer contribution for social 
        security is increased and, as a result of that increase, there 
        is insufficient money available to a state governmental unit, 
        there is appropriated to the state department or agency from the 
        general fund the amount required to meet the deficiency, based 
        on certifications from the director to the commissioner of 
        finance.  The transfer of the appropriated amount may only occur 
        after the commissioner of finance notifies the chair and ranking 
        minority member of the house committee on ways and means and the 
        chair and ranking minority member of the senate finance 
        committee of the amount to be transferred. 
           (e) For members of the general state employees retirement 
        plan of the Minnesota state retirement system who are employed 
        by the state horticultural society, the department of Minnesota 
        for the disabled American veterans organization, the department 
        of Minnesota of the veterans of foreign wars organization, the 
        Minnesota crop improvement association, the Minnesota historical 
        society, the armory building commission, and the 
        Minnesota-Wisconsin-Minneapolis-St. Paul survival plan project, 
        the applicable employing unit must pay the employer contribution 
        from any revenue source that it has. 
           Subd. 3.  [ADJUSTMENTS; REFUNDS.] If more or less than the 
        correct amount of the contribution imposed by this section is 
        paid or deducted with respect to any remuneration, proper 
        adjustments, or refund if adjustment is impracticable, shall 
        must be made, without interest, in such manner and at such times 
        as the state agency shall prescribe director prescribes.  
           Subd. 4.  [DELINQUENT PAYMENTS.] Delinquent payments that 
        are due under this chapter, with compound interest at the rate 
        of six percent per annum, may be recovered by legal action in a 
        court of competent jurisdiction against an employing unit that 
        is liable for the amount.  The director may request that the 
        delinquent payment and interest amount be deducted from any 
        other money that is payable to the applicable employing unit by 
        any department or agency of the state.  An action for the 
        recovery of delinquent payments is not subject to any statutory 
        provision that would otherwise limit the time within which an 
        action may be commenced. 
           Sec. 29.  [355.035] [REIMBURSEMENT BY EMPLOYING UNITS.] 
           An employing unit which employs a member of a covered group 
        must reimburse the state agency for its pro rata share of the 
        cost of the administration of the agency with respect to social 
        security coverage in accordance with the rules of the director 
        pertaining to this reimbursement.  
           Sec. 30.  [355.036] [REPORTS.] 
           An employing unit which employs a member of a covered group 
        must make any reports in the form required and must include the 
        information that the director requires.  An employing unit also 
        must comply with the reporting requirements that the director or 
        the federal Secretary of Health and Human Services may from time 
        to time determine are necessary to ensure the correctness and 
        verification of relevant information. 
           Sec. 31.  [355.037] [PROCEEDS OF SPECIAL BENEFIT TAXES.] 
           The proceeds of the special benefit taxes that are 
        authorized to be levied for redevelopment purposes under section 
        469.033, subdivision 6, may be used to defray all or part of the 
        costs incurred by any housing and redevelopment authority under 
        this chapter. 
           Sec. 32.  Minnesota Statutes 2000, section 355.05, is 
        amended to read: 
           355.05 [RULES.] 
           The state agency shall make and publish such director may 
        promulgate those rules, not inconsistent with the provisions of 
        this chapter, as amended, as it finds necessary or appropriate 
        to the efficient administration of the functions with which it 
        is charged under this chapter, as amended. 
           Sec. 33.  Minnesota Statutes 2000, section 355.07, is 
        amended to read: 
           355.07 [DECLARATION OF POLICY.] 
           (a) In order to extend to employees of the state and, its 
        political subdivisions, and its other governmental employers, 
        and to the dependents and survivors of such the employees of 
        those employing units, the basic protection accorded to others 
        by the old age and, survivors, and disability insurance system 
        embodied in the Social Security Act, it is hereby declared to be 
        the policy of the legislature, subject to the limitations of 
        this chapter, that these steps are taken to provide protection 
        to employees of the state and its political subdivisions on as 
        broad a basis as may be authorized by the legislature and is 
        permitted under the Social Security Act.  
           (b) It is also the policy of the legislature that the 
        protection afforded employees in positions covered by a 
        retirement system on the date an agreement under this chapter is 
        made applicable to service performed in those positions, or 
        receiving periodic benefits under the retirement system at that 
        time, will not be impaired as a result of making the agreement 
        so applicable or as a result of legislative enactment in 
        anticipation thereof when combined with the benefits accorded 
        the employee by the Social Security Act.  
           (c) To this end, the agreement referred to in section 
        355.02 shall must not be made applicable to any service 
        performed in any position covered by a retirement system unless 
        a referendum is first held by secret ballot in which a majority 
        of "eligible employees," as defined in section 218(d) (3) of the 
        Social Security Act, vote in favor thereof, or unless a 
        retirement system is divided in two divisions or parts, one of 
        which is composed of positions of members of the system who 
        desire coverage and one of which is composed of positions of 
        members of the system who do not desire coverage under section 
        218(d) (3) of the Social Security Act, in accordance with 
        subsections (6) and (7) thereof.  
           (d) Nothing in any provision of this chapter shall 
        authorize authorizes the extension of the insurance system 
        established by this chapter, as amended, to service in any 
        police officer's or firefighter's position or in any position 
        covered by a retirement system applicable exclusively to 
        positions in one or more law enforcement or fire fighting units, 
        agencies or departments.  
           Sec. 34.  Minnesota Statutes 2000, section 355.08, is 
        amended to read: 
           355.08 [APPLICATION OF SOCIAL SECURITY ACT.] 
           The provisions of the Social Security Act, and all acts 
        amendatory thereof, shall govern relative to employees of the 
        state and, its political subdivisions, and its other 
        governmental employers subject to Minnesota Statutes, this 
        chapter 355, as amended, anything in said this chapter to the 
        contrary notwithstanding.  
           Sec. 35.  [355.091] [DIVISION OF RETIREMENT PLANS.] 
           (a) The public retirement plans enumerated in paragraph (b) 
        must be divided into two parts in accordance with section 
        218(d)(6)(c) of the Social Security Act, with one part composed 
        of plan members who did not elect social security coverage in 
        the applicable referendum and the other part composed of plan 
        members who did elect social security coverage in the applicable 
        referendum. 
           (b) The applicable public retirement plans are: 
           (1) the elective state officers retirement plan; 
           (2) the judges retirement plan; 
           (3) the legislators retirement plan; 
           (4) the Minneapolis teachers retirement fund association; 
           (5) the general employees retirement plan of the public 
        employees retirement association; 
           (6) the St. Paul teachers retirement fund association; and 
           (7) the teachers retirement association. 
           (c) Plan participants and persons electing participation 
        under section 354B.21 remain members of the teachers retirement 
        association for purposes of social security coverage only, and 
        remain covered by the applicable agreement entered into under 
        section 355.01, but are not members of the teachers retirement 
        association for any other purpose while employed in covered 
        employment. 
           Sec. 36.  [REPEALER.] 
           Minnesota Statutes 2000, sections 355.01, subdivisions 2, 
        4, 5, 9, and 10; 355.11; 355.12; 355.13; 355.14; 355.15; 355.16; 
        355.17; 355.201; 355.202; 355.203; 355.204; 355.205; 355.206; 
        355.207; 355.208; 355.209; 355.21; 355.22; 355.23; 355.24; 
        355.25; 355.26; 355.27; 355.28; 355.281; 355.282; 355.283; 
        355.284; 355.285; 355.286; 355.287; 355.288; 355.29; 355.291; 
        355.292; 355.293; 355.294; 355.295; 355.296; 355.297; 355.298; 
        355.299; 355.30; 355.311; 355.391; 355.392; 355.393; 355.41; 
        355.42; 355.43; 355.44; 355.45; 355.46; 355.48; 355.49; 355.50; 
        355.51; 355.52; 355.54; 355.55; 355.56; 355.57; 355.58; 355.59; 
        355.60; 355.61; 355.621; 355.622; 355.623; 355.624; 355.625; 
        355.626; 355.627; 355.628; 355.71; 355.72; 355.73; 355.74; 
        355.75; 355.76; 355.77; 355.78; 355.79; 355.80; 355.81; and 
        355.90, are repealed. 
           Sec. 37.  [EFFECTIVE DATE.] 
           Sections 1 to 36 are effective on July 1, 2002. 

                                   ARTICLE 9
                              PUBLIC PENSION PLAN
                         ACTUARIAL ASSUMPTION REVISIONS
           Section 1.  Minnesota Statutes 2000, section 356.215, 
        subdivision 4d, is amended to read: 
           Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
        actuarial valuation must use the applicable following 
        preretirement interest assumption and the applicable following 
        postretirement interest assumption: 
                                           preretirement  postretirement 
                                           interest rate  interest rate 
                   plan                      assumption     assumption 
             general state employees 
                 retirement plan                  8.5%          6.0% 
             correctional state employees 
                 retirement plan                  8.5           6.0 
             state patrol retirement plan         8.5           6.0 
             legislators retirement plan          8.5           6.0 
             elective state officers
                 retirement plan                  8.5           6.0 
             judges retirement plan               8.5           6.0 
             general public employees 
                 retirement plan                  8.5           6.0 
             public employees police and fire 
                 retirement plan                  8.5           6.0 
             local government correctional 
                 service retirement plan          8.5           6.0 
             teachers retirement plan             8.5           6.0 
             Minneapolis employees 
                 retirement plan                  6.0           5.0 
             Duluth teachers retirement plan      8.5           8.5 
             Minneapolis teachers retirement
                 plan                             8.5           8.5 
             St. Paul teachers retirement 
                 plan                             8.5           8.5 
             Minneapolis police relief 
                 association                      6.0           6.0 
             other local Fairmont police relief 
                 associations association         5.0           5.0 
             Minneapolis fire department 
                 relief association               6.0           6.0 
             other local salaried firefighters 
                 Virginia fire department 
                 relief associations association  5.0           5.0 
             local monthly benefit volunteer 
                 firefighters relief associations 5.0           5.0 
           (b) The actuarial valuation must use the applicable 
        following single rate future salary increase assumption or the 
        applicable following graded rate future salary increase 
        assumption: 
           (1) single rate future salary increase assumption 
                                                    future salary 
                   plan                           increase assumption 
             legislators retirement plan                  5.0% 
             elective state officers retirement 
                 plan                                     5.0 
             judges retirement plan                       5.0 
             Minneapolis police relief association        4.0 
             other local Fairmont police relief 
                 associations association                 3.5 
             Minneapolis fire department relief 
                 association                              4.0 
             other local salaried firefighters 
                 Virginia fire department 
                 relief associations association          3.5 
           (2) modified single rate future salary increase assumption 
                                                    future salary 
                   plan                           increase assumption
             Minneapolis employees            the prior calendar year 
               retirement plan                amount increased first by 
                                              1.0198 percent to prior 
                                              fiscal year date and  
                                              then increased by 4.0
                                              percent annually for 
                                              each future year
           (3) select and ultimate future salary increase assumption 
        or graded rate future salary increase assumption 
                                                     future salary 
                   plan                           increase assumption 
             general state employees             select calculation and
                 retirement plan                      assumption A 
             correctional state employees 
                 retirement plan                      assumption H 
             state patrol retirement plan             assumption H 
             general public employees            select calculation and
                 retirement plan                      assumption B 
             public employees police and fire 
                 fund retirement plan                 assumption C 
             local government correctional service 
                 retirement plan                      assumption H 
             teachers retirement plan                 assumption D 
             Duluth teachers retirement plan          assumption E 
             Minneapolis teachers retirement plan     assumption F 
             St. Paul teachers retirement plan        assumption G 
             
             The select calculation: is,
             during the ten-year select period, 0.2 a designated percent
             is multiplied by the result of ten minus T, where T is 
             the number of completed years of service, and is added
             to the applicable future salary increase assumption.  The
             designated percent is 0.2 percent for the correctional state
             employees retirement plan, the state patrol retirement 
             plan, the public employees police and fire plan, and the 
             local government correctional service plan; 0.3 percent 
             for the general state employees retirement plan, the 
             general public employees retirement plan, the teachers 
             retirement plan, the Duluth teachers retirement fund  
             association, and the St. Paul teachers retirement fund  
             association; and 0.4 percent for the Minneapolis teachers
             retirement fund association.   
            
             The ultimate future salary increase assumption is: 
             
             age  A     B      C     D     E     F     G      H 
             16  6.95% 6.95% 11.50% 8.20% 8.00% 7.50% 7.25% 7.7500
                                                6.50  6.90 
             17  6.90  6.90  11.50  8.15  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             18  6.85  6.85  11.50  8.10  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             19  6.80  6.80  11.50  8.05  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             20  6.75  6.75  11.50  8.00  8.00  7.50  7.25  7.7500
                       6.40         6.00  6.90  6.50  6.90
             21  6.70  6.70  11.50  7.95  8.00  7.50  7.25  7.1454
                 6.75  6.40         6.00  6.90  6.50  6.90
             22  6.65  6.65  11.00  7.90  8.00  7.50  7.25  7.0725
                 6.75  6.40         6.00  6.90  6.50  6.90
             23  6.75  6.40  10.50  6.00  6.85  6.50  6.85  7.0544
             24  6.66  6.55  10.00  7.80  7.80  7.30  7.20  7.0363
                 6.75  6.40         6.00  6.80  6.50  6.80
             25  6.50  6.50   9.50  7.75  7.70  7.20  7.15  7.0000 
                 6.75  6.40         6.00  6.75  6.50  6.75 
             26  6.45  6.45   9.20  7.70  7.60  7.10  7.10  7.0000
                 6.75  6.36         6.00  6.70  6.50  6.70
             27  6.40  6.40   8.90  7.65  7.50  7.00  7.05  7.0000 
                 6.75  6.32         6.00  6.65  6.50  6.65
             28  6.35  6.35   8.60  7.60  7.40  6.90  7.00  7.0000
                 6.75  6.28         6.00  6.60  6.50  6.60
             29  6.30  6.30   8.30  7.55  7.30  6.80  6.95  7.0000
                 6.75  6.24         6.00  6.55  6.50  6.55
             30  6.25  6.30   8.00  7.50  7.20  6.70  6.90  7.0000
                 6.75  6.20         6.00  6.50  6.50  6.50
             31  6.20  6.25   7.80  7.45  7.10  6.60  6.85  7.0000
                 6.75  6.16         6.00  6.45  6.50  6.45
             32  6.15  6.21   7.60  7.40  7.00  6.50  6.80  7.0000
                 6.75  6.12         6.00  6.40  6.50  6.40
             33  6.10  6.17   7.40  7.30  6.90  6.40  6.75  7.0000
                 6.75  6.08         6.00  6.35  6.50  6.35
             34  6.05  6.09   7.20  7.10  6.80  6.30  6.70  7.0000
                 6.75  6.04         6.00  6.30  6.50  6.30
             35  6.00  6.05   7.00  7.00  6.70  6.20  6.65  7.0000
                 6.75  6.00         6.00  6.25  6.50  6.25
             36  6.95  6.01   6.80  6.85  6.60  6.10  6.60  6.9019
                 6.75  5.96         6.00  6.20  6.50  6.20
             37  5.90  5.97   6.60  6.70  6.50  6.00  6.55  6.8074
                 6.75  5.92         6.00  6.15  6.50  6.15
             38  5.85  5.93   6.40  6.55  6.40  5.90  6.50  6.7125
                 6.75  5.88         5.90  6.10  6.50  6.10
             39  5.80  5.89   6.20  6.40  6.30  5.80  6.40  6.6054
                 6.75  5.84         5.80  6.05  6.50  6.05
             40  5.75  5.85   6.00  6.25  6.20  5.70  6.30  6.5000
                 6.75  5.80         5.70  6.00  6.50  6.00
             41  5.70  5.81   5.90  6.10  6.10  5.60  6.20  6.3540
                 6.75  5.76         5.60  5.90  6.50  5.95
             42  5.65  5.77   5.80  5.95  6.00  5.50  6.10  6.2087
                 6.75  5.72         5.50  5.80  6.50  5.90
             43  5.60  5.73   5.70  5.80  5.90  5.45  6.00  6.0622
                 6.65  5.68         5.40  5.70  6.50  5.85
             44  5.55  5.69   5.60  5.65  5.80  5.40  5.90  5.9048
                 6.55  5.64         5.30  5.60  6.50  5.80
             45  5.50  5.65   5.50  5.50  5.70  5.35  5.80  5.7500
                 6.45  5.60         5.20  5.50  6.50  5.75
             46  5.45  5.62   5.45  5.45  5.60  5.30  5.70  5.6940
                 6.35  5.56         5.10  5.40  6.40  5.70
             47  5.40  5.59   5.40  5.40  5.50  5.25  5.65  5.6375
                 6.25  5.52         5.00  5.30  6.30
             48  5.35  5.56   5.35  5.35  5.45  5.20  5.60  5.5822
                 6.15  5.48         5.00  5.20  6.20
             49  5.30  5.53   5.30  5.30  5.40  5.15  5.55  5.5404
                 6.05  5.44         5.00  5.10  6.10
             50  5.25  5.50   5.25  5.25  5.35  5.10  5.50  5.5000
                 5.95  5.40         5.00  5.00  6.00
             51  5.20  5.45   5.25  5.20  5.30  5.05  5.45  5.4384
                 5.85  5.36         5.00  5.00  5.90
             52  5.15  5.40   5.25  5.15  5.25  5.00  5.40  5.3776
                 5.75  5.32         5.00  5.00  5.80
             53  5.10  5.35   5.25  5.10  5.25  5.00  5.35  5.3167
                 5.65  5.28         5.00  5.00  5.70
             54  5.05  5.30   5.25  5.05  5.25  5.00  5.30  5.2826
                 5.55  5.24         5.00  5.00  5.60
             55  5.00  5.25   5.25  5.00  5.25  5.00  5.25  5.2500 
                 5.45  5.20               5.00  5.50
             56  5.00  5.20   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.35  5.16               5.00  5.40  5.20
             57  5.00  5.15   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.12               5.00  5.30  5.15
             58  5.00  5.10   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.08         5.10  5.00  5.20  5.10
             59  5.00  5.05   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.04         5.20  5.00  5.10  5.05
             60  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.30  5.00        5.00
             61  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.40  5.00        5.00
             62  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.50  5.00        5.00
             63  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.60  5.00        5.00
             64  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             65  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             66  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             67  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             68  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             69  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             70  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             71  5.00  5.00         5.00
                 5.25               5.70
           (c) The actuarial valuation must use the applicable 
        following payroll growth assumption for calculating the 
        amortization requirement for the unfunded actuarial accrued 
        liability where the amortization retirement is calculated as a 
        level percentage of an increasing payroll: 
                                                         payroll growth
                   plan                                    assumption 
             general state employees retirement plan          5.00% 
             correctional state employees retirement plan     5.00 
             state patrol retirement plan                     5.00 
             legislators retirement plan                      5.00 
             elective state officers retirement plan          5.00 
             judges retirement plan                           5.00 
             general public employees retirement plan         6.00 
             public employees police and fire 
                 retirement plan                              6.00 
             local government correctional service 
                 retirement plan                              6.00 
             teachers retirement plan                         5.00 
             Duluth teachers retirement plan                  5.00 
             Minneapolis teachers retirement plan             5.00 
             St. Paul teachers retirement plan                5.00 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on June 30, 2002. 

                                   ARTICLE 10
                          AUTHORIZATION OF ADDITIONAL
                         SUPPLEMENTAL RETIREMENT PLANS
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        356.24, subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTION; EXCEPTIONS.] 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 
        board of trustees of the Minnesota state colleges and 
        universities and covered under the higher education 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 
        contribution made to any investment eligible under section 
        403(b) of the Internal Revenue Code, 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; 
           (6) for personnel employed by the board of trustees of the 
        Minnesota state colleges and universities 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 
        $2,700 a year for each employee; 
           (7) to a supplemental plan or to a governmental trust to 
        save for postretirement health care expenses qualified for 
        tax-preferred treatment under the Internal Revenue Code, if 
        provided for in a personnel policy or in the collective 
        bargaining agreement of a public employer with the exclusive 
        representative of the covered employees in an appropriate unit; 
        or 
           (8) to the laborer's national industrial pension fund for 
        the employees of a governmental subdivision who are covered by a 
        collective bargaining agreement that provides for coverage by 
        that fund and that sets forth a fund contribution rate, but not 
        to exceed an employer contribution of $2,000 per year per 
        employee; 
           (9) to the plumbers' and pipefitters' national pension fund 
        for the employees of a governmental subdivision who are covered 
        by a collective bargaining agreement that provides for coverage 
        by that fund and that sets forth a fund contribution rate, but 
        not to exceed an employer contribution of $2,000 per year per 
        employee; 
           (10) to the international union of operating engineers 
        pension fund for the employees of a governmental subdivision who 
        are covered by a collective bargaining agreement that provides 
        for coverage by that fund and that sets forth a fund 
        contribution rate, but not to exceed an employer contribution of 
        $2,000 per year per employee; or 
           (11) to a supplemental plan organized and operated under 
        the federal Internal Revenue Code, as amended, that is wholly 
        and solely funded by the employee's accumulated sick leave, 
        accumulated vacation leave, and accumulated severance pay. 
           Sec. 2.  Minnesota Statutes 2000, section 356.25, is 
        amended to read: 
           356.25 [LOCAL GOVERNMENTAL PENSION FUND PROHIBITIONS; 
        EXCLUSIONS.] 
           Notwithstanding any other provision of law or charter, no 
        city, county, public agency or instrumentality, or other 
        political subdivision shall, after August 1, 1975, is required 
        or permitted to establish for any of its employees any local 
        pension plan or fund financed in whole or in part from public 
        funds, other than: 
           (1) a supplemental pension or deferred compensation plan 
        authorized under section 356.24; or 
           (2) a volunteer firefighter's relief association 
        established pursuant to under chapter 424A and governed by 
        sections 69.771 to 69.776. 
           Sec. 3.  [RATIFICATION AND VALIDATION OF CERTAIN PAST 
        ACTIONS.] 
           Any supplemental pension plan that is organized and 
        operated under section 401(a) of the federal Internal Revenue 
        Code, as amended, that is wholly and solely funded by an 
        employee's accumulated sick leave, accumulated vacation leave, 
        and accumulated severance pay, and that was established before 
        the effective date of this act and any contributions to the plan 
        that may be characterized as public funds within the meaning of 
        Minnesota Statutes, section 356.24, are hereby ratified and 
        validated. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective on the day following final 
        enactment. 

                                   ARTICLE 11
                             GENERAL RETIREMENT LAW
                       REORGANIZATION AND RECODIFICATION
                         PUBLIC RETIREMENT PLAN PURPOSE
           Section 1.  Minnesota Statutes 2000, section 356.001, is 
        amended to read: 
           356.001 [PURPOSE OF PUBLIC PLANS.] 
           Subdivision 1.  [EXCLUSIVE BENEFIT OF MEMBERS AND 
        BENEFICIARIES.] (a) The public plans and funds specified in 
        subdivision 4 are established to provide for the retirement of 
        their members and to provide funds for the beneficiaries of 
        members in the event of death of a member.  
           (b) The public plans and funds are established and shall 
        must be maintained for the exclusive benefit of the members and 
        the beneficiaries of the members.  Except as provided in 
        subdivisions 2 and 3, no part of the moneys of the plans and 
        funds shall may revert to the plan or fund or be used for or 
        diverted to purposes other than the exclusive benefit of the 
        members or their beneficiaries.  
           Subd. 2.  [ALLOWABLE EXPENSES.] The necessary, reasonable, 
        and direct expenses of maintaining, protecting, and 
        administering the public plan or fund, as authorized in the laws 
        governing the plan or fund, shall must be considered as 
        expenditures for the exclusive benefit of the members or their 
        beneficiaries. 
           Subd. 3.  [EFFECT OF AMENDMENTS OR TERMINATION.] (a) If a 
        public plan or fund as defined in subdivision 4 is terminated or 
        the plan or fund provisions are amended, no part of the moneys 
        held in the plan or fund shall may be used for or diverted to 
        any purpose other than the exclusive benefit of the members or 
        their beneficiaries, except as provided in this subdivision.  
           (b) If a plan or fund is terminated, all affected members 
        have a nonforfeitable interest in their benefits that were 
        accrued and funded to date.  The value of the accrued benefits 
        to be credited to the account of each affected member shall must 
        be calculated as of the date of termination and the funding 
        ratio of the plan or fund must be applied to the accrued benefit 
        of each affected member.  
           (c) The board of trustees of the plan or fund shall then, 
        as soon as administratively feasible following the termination, 
        pay each eligible member or beneficiary on behalf of a member 
        the amount in the member's account in a lump sum.  In the case 
        of a member whose whereabouts is unknown, the board shall notify 
        the member at the last known address by certified mail with 
        return receipt requested advising the member of the member's 
        right to a pending distribution.  If the member cannot be 
        located in this manner, the board shall establish a custodial 
        account for the member's benefit in a federally insured bank, 
        savings association, or credit union in which the member's 
        account balance shall must be deposited.  If the board receives 
        proof of death of a member that is satisfactory to the board, 
        the account balance shall must be paid to the beneficiary of the 
        member.  
           Subd. 4.  [COVERED PLANS AND FUNDS.] This section applies 
        to all public pension and retirement plans and funds established 
        pursuant to under the laws of the state of Minnesota that 
        receive contributions from moneys derived from taxation.  
           Subd. 5.  [CONSTRUCTION.] Nothing contained in this section 
        shall may be construed to authorize, or otherwise imply, a 
        legislative policy or intent favoring the termination of any 
        plan or fund to which this section applies.  
                   PUBLIC PENSION PLAN ACTUARIAL, FINANCIAL, 
                            AND INVESTMENT REPORTING
           Sec. 2.  Minnesota Statutes 2000, section 356.20, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REPORT REQUIRED.] (a) The governing or 
        managing board or administrative officials of the public pension 
        and retirement funds enumerated in subdivision 2 shall annually 
        prepare and file a financial report following the close of each 
        fiscal year.  
           (b) This requirement shall also apply applies to any plan 
        or fund which may be a successor to any organization so 
        enumerated or to any newly formed retirement plan, fund or 
        association operating under the control or supervision of any 
        public employee group, governmental unit, or institution 
        receiving a portion of its support through legislative 
        appropriations.  
           (c) The report shall must be prepared under the supervision 
        and at the direction of the management of each fund and shall 
        must be signed by the presiding officer of the managing board of 
        the fund and the chief administrative official of the fund.  
           Sec. 3.  Minnesota Statutes 2000, section 356.20, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COVERED PUBLIC PENSION PLANS AND FUNDS.] This 
        section applies to the following public pension plans: 
           (1) the general state employees retirement fund. plan of 
        the Minnesota state retirement system; 
           (2) the general employees retirement plan of the public 
        employees retirement fund. association; 
           (3) the teachers retirement association.; 
           (4) the state patrol retirement fund. plan; 
           (5) the Minneapolis teachers retirement fund association.; 
           (6) the St. Paul teachers retirement fund association.; 
           (7) the Duluth teachers retirement fund association.; 
           (8) the Minneapolis employees retirement fund.; 
           (9) the University of Minnesota faculty retirement plan.; 
           (10) the University of Minnesota faculty supplemental 
        retirement plan.; 
           (11) the judges retirement fund.; 
           (12) Any a police or firefighter's relief association 
        enumerated specified or described in section 69.77, subdivision 
        1a, or 69.771, subdivision 1.; 
           (13) the public employees police and fire fund. plan of the 
        public employees retirement association; 
           (14) the correctional state employees retirement plan of 
        the Minnesota state retirement system correctional officers 
        retirement fund.; and 
           (15) public employees the local government correctional 
        service retirement plan of the public employees retirement 
        association. 
           Sec. 4.  Minnesota Statutes 2000, section 356.20, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FILING REQUIREMENT.] The financial report is a 
        public record.  A copy of the report or a synopsis of the report 
        containing the information required by this section shall must 
        be distributed annually to each member of the fund and to the 
        governing body of each governmental subdivision of the state 
        which makes employers contributions thereto or in whose behalf 
        taxes are levied for the employers' contribution.  A signed copy 
        of the report shall must be delivered to the executive director 
        of the legislative commission on pensions and retirement and to 
        the legislative reference library not later than six months 
        after the close of each fiscal year or one month following the 
        completion and delivery to the retirement fund of the actuarial 
        valuation report of the fund by the actuary retained by the 
        legislative commission on pensions and retirement, if 
        applicable, whichever is later.  
           Sec. 5.  Minnesota Statutes 2000, section 356.20, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONTENTS OF FINANCIAL REPORT.] (a) The financial 
        report required by this section must contain financial 
        statements and disclosures that indicate the financial 
        operations and position of the retirement plan and fund.  The 
        report must conform with generally accepted governmental 
        accounting principles, applied on a consistent basis.  The 
        report must be audited.  The report must include, as part of its 
        exhibits or footnotes, an actuarial disclosure item based on the 
        actuarial valuation calculations prepared by the 
        commission-retained actuary or by the actuary retained by the 
        retirement fund or plan, if applicable, according to applicable 
        actuarial requirements enumerated in section 356.215, and 
        specified in the most recent standards for actuarial work 
        adopted by the legislative commission on pensions and 
        retirement.  The accrued assets, the accrued liabilities, 
        including accrued reserves, and the unfunded actuarial accrued 
        liability of the fund or plan must be disclosed.  The disclosure 
        item must contain a declaration by the actuary retained by the 
        legislative commission on pensions and retirement or the actuary 
        retained by the fund or plan, whichever applies, specifying that 
        the required reserves for any retirement, disability, or 
        survivor benefits provided under a benefit formula are computed 
        in accordance with the entry age actuarial cost method and with 
        the most recent applicable standards for actuarial work adopted 
        by the legislative commission on pensions and retirement. 
           (a) (b) Assets of the fund or plan contained in the 
        disclosure item must include the following statement of the 
        actuarial value of current assets as defined in section 356.215, 
        subdivision 1: 
                                            Value         Value 
                                           at cost       at market
         Cash, cash equivalents, and  
           short-term securities           .........     ......... 
         Accounts receivable               .........     .........
         Accrued investment income         .........     .........  
         Fixed income investments          .........     ......... 
         Equity investments other 
           than real estate                .........     ......... 
         Real estate investments           .........     ......... 
         Equipment                         .........     ......... 
         Equity in the Minnesota 
           postretirement investment
           fund                            .........     ......... 
         Other                             .........     .........  
          
         Total assets 
           Value at cost                                 .........
           Value at market                               ......... 
           Value of current assets                       ......... 
           (b) (c) The unfunded actuarial accrued liability of the 
        fund or plan contained in the disclosure item must include the 
        following measures of unfunded actuarial accrued liability, 
        using the value of current assets:  
           (1) unfunded actuarial accrued liability, determined by 
        subtracting the current assets and the present value of future 
        normal costs from the total current and expected future benefit 
        obligations; and 
           (2) unfunded pension benefit obligation, determined by 
        subtracting the current assets from the actuarial present value 
        of credited projected benefits. 
           If the current assets of the fund or plan exceed the 
        actuarial accrued liabilities, the excess must be disclosed and 
        indicated as a surplus. 
           (c) (d) The pension benefit obligations schedule included 
        in the disclosure must contain the following information on the 
        benefit obligations: 
           (1) the pension benefit obligation, determined as the 
        actuarial present value of credited projected benefits on 
        account of service rendered to date, separately identified as 
        follows: 
                 (i) for annuitants;
                       retirement annuities;
                       disability benefits;
                       surviving spouse and child benefits;
                 (ii)  for former members without vested rights;
                 (iii) for deferred annuitants' benefits, including 
                       any augmentation;
                 (iv)  for active employees;
                       accumulated employee contributions,
                       including allocated investment income;
                       employer-financed benefits vested;
                       employer-financed benefits nonvested;
                       total pension benefit obligation; and
           (2) if there are additional benefits not appropriately 
        covered by the foregoing items of benefit obligations, a 
        separate identification of the obligation. 
           (d) (e) Any additional statements or exhibits or more 
        detailed or subdivided itemization of a disclosure item that 
        will enable the management of the fund to portray a true 
        interpretation of the fund's financial condition must be 
        included in the additional statements or exhibits. 
           Sec. 6.  Minnesota Statutes 2000, section 356.20, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [FINANCIAL REPORT FOR POLICE OR FIREFIGHTERS 
        RELIEF ASSOCIATION.] For any police or firefighter's relief 
        association referred to in subdivision 2, clause (12), a 
        financial report duly filed pursuant to and meeting the 
        requirements of section 69.051 shall must be deemed to have met 
        the requirements of subdivision 4. 
           Sec. 7.  Minnesota Statutes 2000, section 356.215, as 
        amended by Laws 2001, First Special Session chapter 10, article 
        11, section 18, is amended to read: 
           356.215 [ACTUARIAL VALUATIONS AND EXPERIENCE STUDIES.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of 
        sections 3.85 and 356.20 to 356.23, each of the terms in the 
        following paragraphs have the meaning given. 
           (b) "Actuarial valuation" means a set of calculations 
        prepared by the actuary retained by the legislative commission 
        on pensions and retirement if so required under section 3.85, or 
        otherwise, by an approved actuary, to determine the normal cost 
        and the accrued actuarial liabilities of a benefit plan, 
        according to the entry age actuarial cost method and based upon 
        stated assumptions including, but not limited to rates of 
        interest, mortality, salary increase, disability, withdrawal, 
        and retirement and to determine the payment necessary to 
        amortize over a stated period any unfunded accrued actuarial 
        liability disclosed as a result of the actuarial valuation of 
        the benefit plan. 
           (c) "Approved actuary" means a person who is regularly 
        engaged in the business of providing actuarial services and who 
        has at least 15 years of service to major public employee 
        pension or retirement funds or who is a fellow in the society of 
        actuaries.  
           (d) "Entry age actuarial cost method" means an actuarial 
        cost method under which the actuarial present value of the 
        projected benefits of each individual currently covered by the 
        benefit plan and included in the actuarial valuation is 
        allocated on a level basis over the service of the individual, 
        if the benefit plan is governed by section 69.773, or over the 
        earnings of the individual, if the benefit plan is governed by 
        any other law, between the entry age and the assumed exit age, 
        with the portion of this the actuarial present value which is 
        allocated to the valuation year to be the normal cost and the 
        portion of this the actuarial present value not provided for at 
        the valuation date by the actuarial present value of future 
        normal costs to be the actuarial accrued liability, with 
        aggregation in the calculation process to be the sum of the 
        calculated result for each covered individual and with 
        recognition given to any different benefit formulas which may 
        apply to various periods of service. 
           (e) "Experience study" means a report providing experience 
        data and an actuarial analysis of the adequacy of the actuarial 
        assumptions on which actuarial valuations are based. 
           (f) "Current assets" means: 
           (1) for the July 1, 1999, actuarial valuation, the value of 
        all assets at cost, including realized capital gains or losses, 
        plus one-third of any unrealized capital gains or losses; 
           (2) for the July 1, 2000, actuarial valuation, the market 
        value of all assets as of June 30, 2000, reduced by: 
           (i) 60 percent of the difference between the market value 
        of all assets as of June 30, 1999, and the actuarial value of 
        assets used in the July 1, 1999, actuarial valuation, and 
           (ii) 80 percent of the difference between the actual net 
        change in the market value of assets between June 30, 1999, and 
        June 30, 2000, and the computed increase in the market value of 
        assets between June 30, 1999, and June 30, 2000, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 1999, actuarial valuation; 
           (3) for the July 1, 2001, actuarial valuation, the market 
        value of all assets as of June 30, 2001, reduced by: 
           (i) 30 percent of the difference between the market value 
        of all assets as of June 30, 1999, and the actuarial value of 
        assets used in the July 1, 1999, actuarial valuation; 
           (ii) 60 percent of the difference between the actual net 
        change in the market value of assets between June 30, 1999, and 
        June 30, 2000, and the computed increase in the market value of 
        assets between June 30, 1999, and June 30, 2000, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 1999, actuarial valuation; and 
           (iii) 80 percent of the difference between the actual net 
        change in the market value of assets between June 30, 2000, and 
        June 30, 2001, and the computed increase in the market value of 
        assets between June 30, 2000, and June 30, 2001, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 2000, actuarial valuation; 
           (4) (2) for the July 1, 2002, actuarial valuation, the 
        market value of all assets as of June 30, 2002, reduced by: 
           (i) ten percent of the difference between the market value 
        of all assets as of June 30, 1999, and the actuarial value of 
        assets used in the July 1, 1999, actuarial valuation; 
           (ii) 40 percent of the difference between the actual net 
        change in the market value of assets between June 30, 1999, and 
        June 30, 2000, and the computed increase in the market value of 
        assets between June 30, 1999, and June 30, 2000, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 1999, actuarial valuation; 
           (iii) 60 percent of the difference between the actual net 
        change in the market value of assets between June 30, 2000, and 
        June 30, 2001, and the computed increase in the market value of 
        assets between June 30, 2000, and June 30, 2001, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 2000, actuarial valuation; and 
           (iv) 80 percent of the difference between the actual net 
        change in the market value of assets between June 30, 2001, and 
        June 30, 2002, and the computed increase in the market value of 
        assets between June 30, 2001, and June 30, 2002, if the assets 
        had increased at the percentage preretirement interest rate 
        assumption used in the July 1, 2001, actuarial valuation; or 
           (5) (3) for any actuarial valuation after July 1, 2002, the 
        market value of all assets as of the preceding June 30, reduced 
        by: 
           (i) 20 percent of the difference between the actual net 
        change in the market value of assets between the June 30 that 
        occurred three years earlier and the June 30 that occurred four 
        years earlier and the computed increase in the market value of 
        assets over that fiscal year period if the assets had increased 
        at the percentage preretirement interest rate assumption used in 
        the actuarial valuation for the July 1 that occurred four years 
        earlier; 
           (ii) 40 percent of the difference between the actual net 
        change in the market value of assets between the June 30 that 
        occurred two years earlier and the June 30 that occurred three 
        years earlier and the computed increase in the market value of 
        assets over that fiscal year period if the assets had increased 
        at the percentage preretirement interest rate assumption used in 
        the actuarial valuation for the July 1 that occurred three years 
        earlier; 
           (iii) 60 percent of the difference between the actual net 
        change in the market value of assets between the June 30 that 
        occurred one year earlier and the June 30 that occurred two 
        years earlier and the computed increase in the market value of 
        assets over that fiscal year period if the assets had increased 
        at the percentage preretirement interest rate assumption used in 
        the actuarial valuation for the July 1 that occurred two years 
        earlier; and 
           (iv) 80 percent of the difference between the actual net 
        change in the market value of assets between the immediately 
        prior June 30 and the June 30 that occurred one year earlier and 
        the computed increase in the market value of assets over that 
        fiscal year period if the assets had increased at the percentage 
        preretirement interest rate assumption used in the actuarial 
        valuation for the July 1 that occurred one year earlier. 
           (g) "Unfunded actuarial accrued liability" means the total 
        current and expected future benefit obligations, reduced by the 
        sum of current assets and the present value of future normal 
        costs. 
           (h) "Pension benefit obligation" means the actuarial 
        present value of credited projected benefits, determined as the 
        actuarial present value of benefits estimated to be payable in 
        the future as a result of employee service attributing an equal 
        benefit amount, including the effect of projected salary 
        increases and any step rate benefit accrual rate differences, to 
        each year of credited and expected future employee service. 
           Subd. 2.  [REQUIREMENTS.] (a) It is the policy of the 
        legislature that it is necessary and appropriate to determine 
        annually the financial status of tax supported retirement and 
        pension plans for public employees.  To achieve this goal:  
           (1) the legislative commission on pensions and retirement 
        shall have prepared by the actuary retained by the commission 
        annual actuarial valuations of the retirement plans enumerated 
        in section 3.85, subdivision 11, paragraph (b), and quadrennial 
        experience studies of the retirement plans enumerated in section 
        3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7); 
        and 
           (2) the commissioner of finance may have prepared by the 
        actuary retained by the commission, two years after each set of 
        quadrennial experience studies, quadrennial projection 
        valuations of at least one of the retirement plans enumerated in 
        section 3.85, subdivision 11, paragraph (b), for which the 
        commissioner determines that the analysis may be beneficial.  
           (b) The governing or managing board or administrative 
        officials of each public pension and retirement fund or plan 
        enumerated in section 356.20, subdivision 2, clauses (9), (10), 
        and (12), shall have prepared by an approved actuary annual 
        actuarial valuations of their respective funds as provided in 
        this section.  This requirement also applies to any fund or plan 
        that is the successor to any organization enumerated in section 
        356.20, subdivision 2, or to the governing or managing board or 
        administrative officials of any newly formed retirement fund, 
        plan, or association operating under the control or supervision 
        of any public employee group, governmental unit, or institution 
        receiving a portion of its support through legislative 
        appropriations, and any local police or fire fund coming within 
        the provisions of to which section 356.216 applies. 
           Subd. 2a.  [PROJECTION VALUATION REQUIREMENTS.] (a) A 
        quadrennial projection valuation required authorized under 
        subdivision 2 is intended to serve as an additional analytical 
        tool with which policy makers may assess the future funding 
        status of public plans through forecasting and testing various 
        potential outcomes over time if certain plan assumptions or 
        valuation methods were to be modified.  
           (b) In consultation with the retirement fund directors, the 
        state economist, the state demographer, the commissioner of 
        finance, and the commissioner of employee relations, the actuary 
        retained by the legislative commission on pensions and 
        retirement shall perform the quadrennial projection valuations 
        on behalf of the commissioner of finance, testing future 
        implications for plan funding by modifying assumptions and 
        methods currently in place.  The commission-retained actuary 
        shall provide advice to the commissioner as to the periods over 
        which such projections should be made, the nature and scope of 
        the scenarios to be analyzed, and the measures of funding status 
        to be employed, and shall report the results of these analyses 
        in the same manner as for quadrennial experience studies. 
           Subd. 3.  [REPORTS.] (a) The actuarial valuations required 
        annually must be made as of the beginning of each fiscal year.  
           (b) Two copies of the valuation must be delivered to the 
        executive director of the legislative commission on pensions and 
        retirement, to the commissioner of finance and to the 
        legislative reference library, not later than the first day of 
        the sixth month occurring after the end of the previous fiscal 
        year.  
           (c) Two copies of a quadrennial experience study must be 
        filed with the executive director of the legislative commission 
        on pensions and retirement, with the commissioner of finance, 
        and with the legislative reference library, not later than the 
        first day of the 11th month occurring after the end of the last 
        fiscal year of the four-year period which the experience study 
        covers.  
           (d) For actuarial valuations and experience studies 
        prepared at the direction of the legislative commission on 
        pensions and retirement, two copies of the document must be 
        delivered to the governing or managing board or administrative 
        officials of the applicable public pension and retirement fund 
        or plan. 
           Subd. 4.  [ACTUARIAL VALUATION; CONTENTS.] (a) The 
        actuarial valuation must be made in conformity with the 
        requirements of the definition contained in subdivision 1 and 
        the most recent standards for actuarial work adopted by the 
        legislative commission on pensions and retirement.  
           (b) The actuarial valuation must measure all aspects of the 
        benefit plan of the fund in accordance with changes in benefit 
        plans, if any, and salaries reasonably anticipated to be in 
        force during the ensuing fiscal year.  The actuarial valuation 
        must be prepared in accordance with the entry age actuarial cost 
        method.  The actuarial valuation required under this section 
        must include the information required in subdivisions 4a 5 to 4k 
        15. 
           Subd. 4a 5.  [NORMAL COST.] For a fund providing benefits 
        in whole or in part under a defined benefit plan, the actuarial 
        valuation must indicate the level normal cost of the benefits 
        provided by under the laws governing the fund as of the date of 
        the valuation, calculated in accordance with the entry age 
        actuarial cost method.  The normal cost must be expressed as a 
        level percentage of the present value of future payrolls of the 
        active participants of the fund as of the date of the valuation. 
           Subd. 4b 6.  [ACCRUED LIABILITY.] For a fund providing 
        benefits under a defined benefit plan, the actuarial valuation 
        must contain an exhibit indicating the actuarial accrued 
        liabilities of the fund.  This figure is the present value of 
        future benefits, reduced by the present value of future normal 
        costs, calculated in accordance with the entry age actuarial 
        cost method. 
           Subd. 4c 7.  [DEFINED CONTRIBUTION PLAN ACCUMULATIONS.] For 
        each fund providing benefits under the a money purchase or 
        defined contribution plan, the actuarial valuation shall must 
        contain an exhibit indicating the member contributions 
        accumulated at interest, as apportioned to members accounts, to 
        the date of the valuation.  These accumulations shall must be 
        separately tabulated in a manner which properly reflects any 
        differences in money purchase or defined contribution annuity 
        rates which may apply. 
           Subd. 4d 8.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
        actuarial valuation must use the applicable following 
        preretirement interest assumption and the applicable following 
        postretirement interest assumption: 
                                           preretirement  postretirement 
                                           interest rate  interest rate 
                    plan                      assumption     assumption 
             general state employees 
                 retirement plan                  8.5%          6.0% 
             correctional state employees 
                 retirement plan                  8.5           6.0 
             state patrol retirement plan         8.5           6.0 
             legislators retirement plan          8.5           6.0 
             elective state officers
                 retirement plan                  8.5           6.0 
             judges retirement plan               8.5           6.0 
             general public employees 
                 retirement plan                  8.5           6.0 
             public employees police and fire 
                 retirement plan                  8.5           6.0 
             local government correctional 
                 service retirement plan          8.5           6.0 
             teachers retirement plan             8.5           6.0 
             Minneapolis employees 
                 retirement plan                  6.0           5.0 
             Duluth teachers retirement plan      8.5           8.5 
             Minneapolis teachers retirement
                 plan                             8.5           8.5 
             St. Paul teachers retirement 
                 plan                             8.5           8.5 
             Minneapolis police relief 
                 association                      6.0           6.0 
             other local Fairmont police relief 
                 associations association         5.0           5.0 
             Minneapolis fire department 
                 relief association               6.0           6.0 
             other local salaried firefighters 
             Virginia fire department
             relief associations association      5.0           5.0 
             local monthly benefit volunteer 
                 firefighters relief associations 5.0           5.0 
           (b) The actuarial valuation must use the applicable 
        following single rate future salary increase assumption, the 
        applicable following modified single rate future salary increase 
        assumption, or the applicable following graded rate future 
        salary increase assumption: 
           (1) single rate future salary increase assumption 
                                                    future salary 
                    plan                          increase assumption 
             legislators retirement plan                  5.0% 
             elective state officers retirement 
                 plan                                     5.0 
             judges retirement plan                       5.0 
             Minneapolis police relief association        4.0 
             other local Fairmont police relief 
             associations association                     3.5 
             Minneapolis fire department relief 
                 association                              4.0 
             other local salaried firefighters  
                 Virginia fire department
                 relief associations association          3.5 
           (2) modified single rate future salary increase assumption 
                                                    future salary 
                       plan                       increase assumption
                 Minneapolis employees        the prior calendar year 
                   retirement plan            amount increased first by 
                                              1.0198 percent to prior 
                                              fiscal year date and
                                              then increased by 4.0 
                                              percent annually for
                                              each future year
           (3) select and ultimate future salary increase assumption 
        or graded rate future salary increase assumption 
                                                     future salary 
                       plan                       increase assumption 
             general state employees             select calculation and
                 retirement plan                      assumption A 
             correctional state employees 
                 retirement plan                      assumption H 
             state patrol retirement plan             assumption H 
             general public employees            select calculation and
                 retirement plan                      assumption B 
             public employees police and fire 
                 fund retirement plan                 assumption C 
             local government correctional service 
                 retirement plan                      assumption H 
             teachers retirement plan                 assumption D 
             Duluth teachers retirement plan          assumption E 
             Minneapolis teachers retirement plan     assumption F 
             St. Paul teachers retirement plan        assumption G 
             
             The select calculation is:
             during the ten-year select period, 0.2 a designated percent
             is multiplied by the result of ten minus T, where T is 
             the number of completed years of service, and is added
             to the applicable future salary increase assumption.  The
             designated percent is 0.2 percent for the correctional state
             employees retirement plan, the state patrol retirement
             plan, the public employees police and fire plan, and the
             local government correctional service plan; 0.3 percent
             for the general state employees retirement plan, the
             general public employees retirement plan, the teachers
             retirement plan, the Duluth teachers retirement fund
             association, and the St. Paul teachers retirement fund
             association; and 0.4 percent for the Minneapolis teachers
             retirement fund association.
             
                  The ultimate future salary increase assumption is:
             
             age  A     B      C     D     E     F     G      H 
             16  6.95% 6.95% 11.50% 8.20% 8.00% 7.50% 7.25% 7.7500
                                                6.50  6.90 
             17  6.90  6.90  11.50  8.15  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             18  6.85  6.85  11.50  8.10  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             19  6.80  6.80  11.50  8.05  8.00  7.50  7.25  7.7500
                                                6.50  6.90
             20  6.75  6.75  11.50  8.00  8.00  7.50  7.25  7.7500
                       6.40         6.00  6.90  6.50  6.90
             21  6.70  6.70  11.50  7.95  8.00  7.50  7.25  7.1454
                 6.75  6.40         6.00  6.90  6.50  6.90
             22  6.65  6.65  11.00  7.90  8.00  7.50  7.25  7.0725
                 6.75  6.40         6.00  6.90  6.50  6.90
             23  6.75  6.40  10.50  6.00  6.85  6.50  6.85  7.0544
             24  6.66  6.55  10.00  7.80  7.80  7.30  7.20  7.0363
                 6.75  6.40         6.00  6.80  6.50  6.80
             25  6.50  6.50   9.50  7.75  7.70  7.20  7.15  7.0000 
                 6.75  6.40         6.00  6.75  6.50  6.75 
             26  6.45  6.45   9.20  7.70  7.60  7.10  7.10  7.0000
                 6.75  6.36         6.00  6.70  6.50  6.70
             27  6.40  6.40   8.90  7.65  7.50  7.00  7.05  7.0000 
                 6.75  6.32         6.00  6.65  6.50  6.65
             28  6.35  6.35   8.60  7.60  7.40  6.90  7.00  7.0000
                 6.75  6.28         6.00  6.60  6.50  6.60
             29  6.30  6.30   8.30  7.55  7.30  6.80  6.95  7.0000
                 6.75  6.24         6.00  6.55  6.50  6.55
             30  6.25  6.30   8.00  7.50  7.20  6.70  6.90  7.0000
                 6.75  6.20         6.00  6.50  6.50  6.50
             31  6.20  6.25   7.80  7.45  7.10  6.60  6.85  7.0000
                 6.75  6.16         6.00  6.45  6.50  6.45
             32  6.15  6.21   7.60  7.40  7.00  6.50  6.80  7.0000
                 6.75  6.12         6.00  6.40  6.50  6.40
             33  6.10  6.17   7.40  7.30  6.90  6.40  6.75  7.0000
                 6.75  6.08         6.00  6.35  6.50  6.35
             34  6.05  6.09   7.20  7.10  6.80  6.30  6.70  7.0000
                 6.75  6.04         6.00  6.30  6.50  6.30
             35  6.00  6.05   7.00  7.00  6.70  6.20  6.65  7.0000
                 6.75  6.00         6.00  6.25  6.50  6.25
             36  6.95  6.01   6.80  6.85  6.60  6.10  6.60  6.9019
                 6.75  5.96         6.00  6.20  6.50  6.20
             37  5.90  5.97   6.60  6.70  6.50  6.00  6.55  6.8074
                 6.75  5.92         6.00  6.15  6.50  6.15
             38  5.85  5.93   6.40  6.55  6.40  5.90  6.50  6.7125
                 6.75  5.88         5.90  6.10  6.50  6.10
             39  5.80  5.89   6.20  6.40  6.30  5.80  6.40  6.6054
                 6.75  5.84         5.80  6.05  6.50  6.05
             40  5.75  5.85   6.00  6.25  6.20  5.70  6.30  6.5000
                 6.75  5.80         5.70  6.00  6.50  6.00
             41  5.70  5.81   5.90  6.10  6.10  5.60  6.20  6.3540
                 6.75  5.76         5.60  5.90  6.50  5.95
             42  5.65  5.77   5.80  5.95  6.00  5.50  6.10  6.2087
                 6.75  5.72         5.50  5.80  6.50  5.90
             43  5.60  5.73   5.70  5.80  5.90  5.45  6.00  6.0622
                 6.65  5.68         5.40  5.70  6.50  5.85
             44  5.55  5.69   5.60  5.65  5.80  5.40  5.90  5.9048
                 6.55  5.64         5.30  5.60  6.50  5.80
             45  5.50  5.65   5.50  5.50  5.70  5.35  5.80  5.7500
                 6.45  5.60         5.20  5.50  6.50  5.75
             46  5.45  5.62   5.45  5.45  5.60  5.30  5.70  5.6940
                 6.35  5.56         5.10  5.40  6.40  5.70
             47  5.40  5.59   5.40  5.40  5.50  5.25  5.65  5.6375
                 6.25  5.52         5.00  5.30  6.30
             48  5.35  5.56   5.35  5.35  5.45  5.20  5.60  5.5822
                 6.15  5.48         5.00  5.20  6.20
             49  5.30  5.53   5.30  5.30  5.40  5.15  5.55  5.5404
                 6.05  5.44         5.00  5.10  6.10
             50  5.25  5.50   5.25  5.25  5.35  5.10  5.50  5.5000
                 5.95  5.40         5.00  5.00  6.00
             51  5.20  5.45   5.25  5.20  5.30  5.05  5.45  5.4384
                 5.85  5.36         5.00  5.00  5.90
             52  5.15  5.40   5.25  5.15  5.25  5.00  5.40  5.3776
                 5.75  5.32         5.00  5.00  5.80
             53  5.10  5.35   5.25  5.10  5.25  5.00  5.35  5.3167
                 5.65  5.28         5.00  5.00  5.70
             54  5.05  5.30   5.25  5.05  5.25  5.00  5.30  5.2826
                 5.55  5.24         5.00  5.00  5.60
             55  5.00  5.25   5.25  5.00  5.25  5.00  5.25  5.2500 
                 5.45  5.20               5.00  5.50
             56  5.00  5.20   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.35  5.16               5.00  5.40  5.20
             57  5.00  5.15   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.12               5.00  5.30  5.15
             58  5.00  5.10   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.08         5.10  5.00  5.20  5.10
             59  5.00  5.05   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25  5.04         5.20  5.00  5.10  5.05
             60  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.30  5.00        5.00
             61  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.40  5.00        5.00
             62  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.50  5.00        5.00
             63  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.60  5.00        5.00
             64  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             65  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             66  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             67  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             68  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             69  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             70  5.00  5.00   5.25  5.00  5.25  5.00  5.25  5.2500
                 5.25               5.70  5.00        5.00
             71  5.00  5.00         5.00
                 5.25               5.70
           (c) The actuarial valuation must use the applicable 
        following payroll growth assumption for calculating the 
        amortization requirement for the unfunded actuarial accrued 
        liability where the amortization retirement is calculated as a 
        level percentage of an increasing payroll: 
                                                         payroll growth
                          plan                             assumption 
             general state employees retirement plan          5.00% 
             correctional state employees retirement plan     5.00 
             state patrol retirement plan                     5.00 
             legislators retirement plan                      5.00 
             elective state officers retirement plan          5.00 
             judges retirement plan                           5.00 
             general public employees retirement plan         6.00 
             public employees police and fire 
                 retirement plan                              6.00 
             local government correctional service 
                 retirement plan                              6.00 
             teachers retirement plan                         5.00 
             Duluth teachers retirement plan                  5.00 
             Minneapolis teachers retirement plan             5.00 
             St. Paul teachers retirement plan                5.00 
           Subd. 4e 9.  [OTHER ASSUMPTIONS.] The actuarial valuation 
        must use assumptions concerning mortality, disability, 
        retirement, withdrawal, retirement age, and any other relevant 
        demographic or economic factor.  These assumptions must be set 
        at levels consistent with those determined in the most recent 
        quadrennial experience study completed under subdivision 5 16, 
        if required, or representative of the best estimate of future 
        experience, if a quadrennial experience study is not required.  
        The actuarial valuation must contain an exhibit indicating any 
        actuarial assumptions used in preparing the valuation report. 
           Subd. 4f 10.  [PUBLIC SECTOR ACCOUNTING DISCLOSURE 
        INFORMATION.] The actuarial valuation must contain those 
        actuarial calculations that are necessary to allow the 
        retirement plan administration or participating employing units 
        to prepare the pension-related portions of annual financial 
        reporting that meet generally accepted accounting principles for 
        the public sector.  
           Subd. 4g 11.  [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 and the public employees retirement association 
        general plan, 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 itself or 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 is the first 
        actuarial valuation date occurring after June 1, 2020.  
           (c) For any fund or plan other than the Minneapolis 
        employees retirement fund and the public employees retirement 
        association general plan, 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 itself 
        or 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 8 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 8 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 8 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 general employees retirement plan of the public 
        employees retirement association general plan, the established 
        date for full funding is June 30, 2031. 
           (f) For the retirement 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 as a 
        reduction in 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. 
           Subd. 4h 12.  [ACTUARIAL GAINS AND LOSSES.] The actuarial 
        valuation must contain an exhibit consisting of an analysis by 
        the actuary explaining the net increase or decrease in the 
        unfunded actuarial accrued liability since the last valuation.  
        The explanation must subdivide the net increase or decrease in 
        the unfunded actuarial accrued liability into at least the 
        following parts: 
           (a) (1) increases or decreases in the unfunded actuarial 
        accrued liability because of changes in benefits; 
           (b) (2) increases and decreases in the unfunded actuarial 
        accrued liability because of changes in actuarial assumptions; 
           (c) (3) increases or decreases in the unfunded actuarial 
        accrued liability attributable to actuarial gains or losses 
        resulting from any experience deviations from the assumptions on 
        which the valuation is based, as follows: 
           (i) actual investment earnings; 
           (ii) actual postretirement mortality rates; 
           (iii) actual salary increase rates; and 
           (iv) the remainder of the increase or decrease not 
        attributable to any separate source; 
           (d) (4) increases or decreases in unfunded actuarial 
        accrued liability because of other reasons, including the effect 
        of any amortization contribution paid or additional amortization 
        contribution previously calculated but unpaid; and 
           (e) (5) increases or decreases in unfunded actuarial 
        accrued liability because of changes in eligibility requirements 
        or groups included in the membership of the fund. 
           Subd. 4i 13.  [MEMBERSHIP TABULATION.] (a) The actuarial 
        valuation must contain a tabulation of active membership and 
        annuitants in the fund.  If the membership of a fund is under 
        more than one general benefit program, a separate tabulation 
        must be made for each general benefit program.  
           (b) The tabulations must be prepared by the administration 
        of the pension fund and must contain the following information: 
        (1) Active members                               Number 
             As of last valuation date
                       New entrants
                   Total 
             Separations from active service
             Refund of contributions
             Separation with deferred annuity
             Separation with neither refund
                  nor deferred annuity
             Disability
             Death
             Retirement with service annuity
             Total separations
             As of current valuation date                            
        (2) Annuitants                                   Number          
             As of last valuation date
             New entrants
             Total
             Terminations
             Deaths
             Other
             Total terminations
             As of current valuation date
           (c) The tabulation required under paragraph (b), clause 
        (2), must be made separately for each of the following classes 
        of benefit recipients: 
           (1) service retirement annuitants; 
           (2) disability benefit recipients; 
           (3) survivor benefit recipients; and 
           (4) deferred annuitants. 
           Subd. 4j 14.  [ADMINISTRATIVE EXPENSES.] (a) The actuarial 
        valuation must indicate the administrative expenses of the fund, 
        expressed both in dollars and as a percentage of covered payroll.
           (b) Administrative expenses are the costs incurred by the 
        retirement plans in the course of operating the plan, excluding 
        investment expenses.  Investment expenses include all expenses 
        incurred for the retention of professional external investment 
        managers and professional investment consultants, custodian bank 
        fees, investment transaction costs, and the costs incurred by 
        the retirement plans to manage investment portfolios or assets 
        internally.  Investment expenses must be deducted from the 
        investment return used in the actuarial valuation, and must not 
        be included in administrative expenses when calculating the 
        allowance for expenses. 
           Subd. 4k 15.  [BENEFIT PLAN SUMMARY.] The actuarial 
        valuation must contain a summary of the principal provisions of 
        the benefit plan upon which the valuation is based. 
           Subd. 5 16.  [QUADRENNIAL EXPERIENCE STUDY; CONTENTS.] A 
        quadrennial experience study, if required, must contain an 
        actuarial analysis by the approved actuary of the experience of 
        the fund and a comparison of the experience with the actuarial 
        assumptions on which the most recent actuarial valuation of the 
        retirement fund was based. 
           Subd. 6 17.  [ACTUARIAL SERVICES BY APPROVED ACTUARIES.] 
        (a) The actuarial valuation or quadrennial experience study must 
        be made and any actuarial consulting services for a retirement 
        fund or plan must be provided by an approved actuary.  The 
        actuarial valuation or quadrennial experience study must include 
        a signed written declaration that it has been prepared according 
        to sections 356.20 to 356.23 and according to the most recent 
        standards for actuarial work adopted by the legislative 
        commission on pensions and retirement.  
           (b) Actuarial valuations, or experience studies prepared by 
        an approved actuary retained by a retirement fund or plan must 
        be submitted to the legislative commission on pensions and 
        retirement within ten days of the submission of the document to 
        the retirement fund or plan. 
           Subd. 7 18.  [ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS.] (a) 
        The actuarial assumptions used for the preparation of actuarial 
        valuations under this section that are other than those set 
        forth in this section may be changed only with the approval of 
        the legislative commission on pensions and retirement.  
           (b) A change in the applicable actuarial assumptions may be 
        proposed by the governing board of the applicable pension fund 
        or relief association, by the actuary retained by the 
        legislative commission on pensions and retirement, by the 
        actuarial advisor to a pension fund governed by chapter 352, 
        353, 354, or 354A, or by the actuary retained by a local police 
        or firefighters relief association governed by sections 69.77 or 
        69.771 to 69.776, if one is retained. 
           Sec. 8.  Minnesota Statutes 2000, section 356.216, is 
        amended to read: 
           356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 
        AND FIRE FUNDS.] 
           (a) The provisions of section 356.215 governing that govern 
        the contents of actuarial valuations shall must apply to any 
        local police or fire pension fund or relief association required 
        to make an actuarial report under this section, except as 
        follows: 
           (1) in calculating normal cost and other requirements, if 
        required to be expressed as a level percentage of covered 
        payroll, the salaries used in computing covered payroll shall 
        must be the maximum rate of salary from on which retirement and 
        survivorship credits and amounts of benefits are determined and 
        from which any member contributions are calculated and deducted; 
           (2) in lieu of the amortization date specified in section 
        356.215, subdivision 4g 11, the appropriate amortization target 
        date specified in section 69.77, subdivision 2b, or 69.773, 
        subdivision 4, clause (c), shall must be used in calculating any 
        required amortization contribution; 
           (3) in addition to the tabulation of active members and 
        annuitants provided for in section 356.215, subdivision 4i 13, 
        the member contributions for active members for the calendar 
        year and the prospective annual retirement annuities under the 
        benefit plan for active members shall must be reported; 
           (4) actuarial valuations required pursuant to under section 
        69.773, subdivision 2, shall must be made at least every four 
        years and actuarial valuations required pursuant to under 
        section 69.77 shall be made annually; and 
           (5) the actuarial balance sheet showing accrued assets 
        valued at market value if the actuarial valuation is required to 
        be prepared at least every four years or valued as current 
        assets under section 356.215, subdivision 1, clause (6), or 
        paragraph (b), whichever applies, if the actuarial valuation is 
        required to be prepared annually, actuarial accrued liabilities, 
        and the unfunded actuarial accrued liability shall must include 
        the following required reserves: 
             (a) (i) For active members 
              1.  Retirement benefits 
              2.  Disability benefits 
              3.  Refund liability due to death or withdrawal 
              4.  Survivors' benefits 
             (b) (ii) For deferred annuitants' benefits 
             (c) (iii) For former members without vested rights 
             (d) (iv) For annuitants 
              1.  Retirement annuities 
              2.  Disability annuities 
              3.  Surviving spouses' annuities 
              4.  Surviving children's annuities 
           In addition to those required reserves, separate items 
        shall must be shown for additional benefits, if any, which may 
        not be appropriately included in the reserves listed above.; and 
           (6) actuarial valuations shall be are due by the first day 
        of the seventh month after the end of the fiscal year which the 
        actuarial valuation covers. 
           (b) For a the Minneapolis firefighters relief association 
        or the Minneapolis police relief association in a city of the 
        first class with a population of more than 300,000, the 
        following provisions additionally apply: 
           (1) in calculating the actuarial balance sheet, unfunded 
        actuarial accrued liability, and amortization contribution of 
        the relief association, "current assets" means the value of all 
        assets at cost, including realized capital gains and losses, 
        plus or minus, whichever applies, the average value of total 
        unrealized capital gains or losses for the most recent 
        three-year period ending with the end of the plan year 
        immediately preceding the actuarial valuation report 
        transmission date; and 
           (2) in calculating the applicable portions of the actuarial 
        valuation, an annual preretirement interest assumption of six 
        percent, an annual postretirement interest assumption of six 
        percent, and an annual salary increase assumption of four 
        percent must be used. 
           Sec. 9.  Minnesota Statutes 2000, section 356.217, is 
        amended to read: 
           356.217 [MODIFICATIONS IN ACTUARIAL SERVICES.] 
           (a) The cost of any requested benefit projections prepared 
        by the commission-retained actuary relating to the Minnesota 
        postretirement investment fund for at the request of the state 
        board of investment is payable by the state board of investment. 
           (b) Actuarial valuations under section 356.215, for July 1, 
        1991, and thereafter, are not required to have an individual 
        commentary section.  The commentary section, if omitted from the 
        individual plan actuarial valuation valuations, must be included 
        in an appropriate generalized format as part of the report to 
        the legislature under section 3.85, subdivision 11. 
           (c) Actuarial valuations under section 356.215, for July 1, 
        1991, and thereafter, are not required to contain separate 
        actuarial valuation results for basic and coordinated programs 
        unless each program has a membership of at least ten percent of 
        the total membership of the fund.  Actuarial valuations under 
        section 356.215, for July 1, 1991, and thereafter, are not 
        required to contain cash flow forecasts. 
           (d) Actuarial valuations of the public employees police and 
        fire fund local consolidation accounts for July 1, 1991, and 
        thereafter, are not required to contain separate tabulations or 
        summaries of active member, service retirement, disability 
        retirement, and survivor data for each local consolidation 
        account. 
           (e) The commission-retained actuary is: 
           (1) required to publish experience findings for those 
        retirement plans for which experience findings are required only 
        on a quadrennial basis for the four-year period ending June 30, 
        1992, and every four years thereafter; 
           (2) not required to prepare a separate experience analysis 
        or publish separate experience findings for basic and 
        coordinated programs if separate actuarial valuation results for 
        the programs are not required; and 
           (3) not required to calculate investment rate of return 
        experience results on any basis other than current asset value 
        as defined in section 356.215, subdivision 1, clause 
        (6) paragraph (f). 
           Sec. 10.  Minnesota Statutes 2000, section 356.219, is 
        amended to read: 
           356.219 [DISCLOSURE OF PUBLIC PENSION PLAN INVESTMENT 
        PORTFOLIO AND PERFORMANCE INFORMATION.] 
           Subdivision 1.  [REPORT REQUIRED.] (a) Except as indicated 
        in subdivision 4, the state board of investment, on behalf of 
        the public pension funds and programs for which it is the 
        investment authority, and any Minnesota public pension plan that 
        is not fully invested through the state board of investment, 
        including a local police or firefighters' relief association 
        governed by sections 69.77 or 69.771 to 69.775, shall report the 
        information specified in subdivision 3 to the state auditor.  
        The state auditor may prescribe a form or forms for the purposes 
        of the reporting requirements contained in this section. 
           (b) A local police or firefighters' relief association 
        governed by section 69.77 or sections 69.771 to 69.775 is fully 
        invested during a given calendar year for purposes of this 
        section if all assets of the applicable pension plan beyond 
        sufficient cash equivalent investments to cover six months 
        expected expenses are invested under section 11A.17.  The board 
        of any fully invested public pension plan remains responsible 
        for submitting investment policy statements and subsequent 
        revisions as required by subdivision 3, paragraph (a). 
           (c) For purposes of this section, the state board of 
        investment is considered to be the investment authority for any 
        Minnesota public pension fund required to be invested by the 
        state board of investment under section 11A.23, or for any 
        Minnesota public pension fund authorized to invest in the 
        supplemental investment fund under section 11A.17 and which is 
        fully invested by the state board of investment. 
           Subd. 2.  [ASSET CLASS DEFINITION.] (a) For purposes of 
        this section, "asset class" means any of the following asset 
        groupings as authorized in applicable law, bylaws, or articles 
        of incorporation: 
           (1) cash and any cash equivalent investments with 
        maturities of one year or less when issued; 
           (2) debt securities with maturities greater than one year 
        when issued, including but not limited to mortgage participation 
        certificates and pools, asset backed securities, guaranteed 
        investment contracts, and authorized government and corporate 
        obligations of corporations organized under laws of the United 
        States or any state, or the Dominion of Canada or its provinces; 
           (3) stocks or convertible issues of any corporation 
        organized under laws of the United States or any state, or the 
        Dominion of Canada or its provinces, or any corporation listed 
        on the New York Stock Exchange or the American Stock Exchange; 
           (4) international stocks or convertible issues; 
           (5) international debt securities; and 
           (6) real estate and venture capital. 
           (b) If the pension plan is investing under section 69.77, 
        subdivision 2g, section 69.775, or any other applicable law, in 
        open-end investment companies registered under the federal 
        Investment Company Act of 1940, or in the Minnesota supplemental 
        investment fund under section 11A.17, this investment must be 
        included under an asset class indicated in paragraph (a), 
        clauses (1) through (6), as appropriate.  If the investment 
        vehicle includes underlying securities from more than one asset 
        class as indicated by paragraph (a), clauses (1) through (6), 
        the investment may be treated as a separate asset class. 
           Subd. 3.  [CONTENT OF REPORTS.] (a) The report required by 
        subdivision 1 must include a written statement of the investment 
        policy in effect on June 30, 1997, if that statement has not 
        been previously submitted.  Following that date, subsequent 
        reports must include investment policy changes and the effective 
        date of each policy change rather than a complete statement of 
        investment policy, unless the state auditor requests submission 
        of a complete current statement.  The report must also include 
        the information required by the following paragraphs, as 
        applicable. 
           (b) If a public pension plan has a total market value of 
        $10,000,000 or more as of the beginning of the calendar year, 
        the report required by subdivision 1 must include the market 
        value of the total portfolio and the market value of each 
        investment account, investment portfolio, or asset class 
        included in the pension fund as of the beginning of the calendar 
        year and for each month, and the amount and date of each 
        injection and withdrawal to the total portfolio and to each 
        investment account, investment portfolio, or asset class.  If a 
        public pension plan once files a report under this paragraph, it 
        must continue reporting under this paragraph for any subsequent 
        year in which the public pension plan is not fully invested as 
        specified in subdivision 1, paragraph (b), even if asset values 
        drop below $10,000,000 in market value in a that subsequent year.
           (c) For public pension plans to which paragraph (b) 
        applies, the report required by subdivision 1 must also include 
        a calculation of the total time-weighted rate of return 
        available from index-matching investments assuming the asset 
        class performance targets and target asset mix indicated in the 
        written statement of investment policy.  The provided 
        information must include a description of indices used in the 
        analyses and an explanation of why those indices are 
        appropriate.  This paragraph does not apply to any fully 
        invested plan, as defined by subdivision 1, paragraph (b).  
        Reporting by the state board of investment under this paragraph 
        is limited to information on the Minnesota public pension plans 
        required to be invested by the state board of investment under 
        section 11A.23. 
           (d) If a public pension plan has a total market value of 
        less than $10,000,000 as of the beginning of the calendar year 
        and was never required to file under paragraph (b), the report 
        required by subdivision 1 must include the amount and date of 
        each total portfolio injection and withdrawal.  In addition, the 
        report must include the market value of the total portfolio as 
        of the beginning of the calendar year and for each quarter. 
           (e) Any public pension plan reporting under paragraph (b) 
        or (d) may include computed time-weighted rates of return with 
        the report, in addition to all other required information, as 
        applicable.  If these returns are supplied, the individual who 
        computed the returns must certify that the returns are net of 
        all costs and fees, including investment management fees, and 
        that the procedures used to compute the returns are consistent 
        with bank administration institute studies of investment 
        performance measurement and association of investment management 
        and research presentation standards. 
           (f) For public pension plans reporting under paragraph (d), 
        the public pension plan must retain supporting information 
        specifying the date and amount of each injection and withdrawal 
        to each investment account and investment portfolio.  The public 
        pension plan must also retain the market value of each 
        investment account and investment portfolio at the beginning of 
        the calendar year and for each quarter.  Information that is 
        required to be collected and retained for any given year or 
        years under this paragraph must be submitted to the office of 
        the state auditor if the office of the state auditor requests in 
        writing that the information be submitted by a public pension 
        plan or plans, or be submitted by the state board of investment 
        for any plan or plans for which the state board of investment is 
        the investment authority under this section.  If the state 
        auditor requests information under this subdivision, and the 
        public plan fails to comply, the pension plan will be is subject 
        to penalties under subdivision 5, unless penalties are waived by 
        the state auditor under that subdivision. 
           Subd. 4.  [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 
        of requirements in subdivision 3, the applicable administration 
        for the individual retirement account plans under chapters 354B 
        and 354D and for the University of Minnesota faculty retirement 
        plan shall submit computed time-weighted rates of return to the 
        office of the state auditor.  These time-weighted rates of 
        return must cover the most recent complete calendar year, and 
        must be computed separately for each investment option available 
        to plan members.  To the extent feasible, the returns must be 
        computed net of all investment costs, fees, and charges, so that 
        the computed return reflects the net time-weighted return 
        available to the investor.  If this is not practical, the 
        existence of any remaining investment cost, fee, or charge which 
        could further lower the net return must be disclosed.  The 
        procedures used to compute the returns must be consistent with 
        bank administration institute studies of investment performance 
        measurement and association of investment management and 
        research presentation standards, or, if applicable, securities 
        exchange commission requirements.  The individual who computes 
        the returns must certify that the supplied returns comply with 
        this subdivision.  The applicable plan administrator must also 
        submit, with the return information, the total amounts invested 
        by the plan members, in aggregate, in each investment option as 
        of the last day of the calendar year. 
           Subd. 5.  [PENALTY FOR NONCOMPLIANCE.] Failure to comply 
        with the reporting requirements of this section shall must 
        result in a withholding of all state aid or state appropriation 
        to which the pension plan may otherwise be directly or 
        indirectly entitled until the pension plan has complied with the 
        reporting requirements.  The state auditor shall instruct the 
        commissioners of revenue and finance to withhold any state aid 
        or state appropriation from any pension plan that fails to 
        comply with the reporting requirements contained in this 
        section, until the pension plan has complied with the reporting 
        requirements.  The state auditor may waive the withholding of 
        state aid or state appropriations if the state auditor 
        determines in writing that compliance would create an excessive 
        hardship for the pension plan. 
           Subd. 6.  [INVESTMENT DISCLOSURE REPORT.] (a) The state 
        auditor shall prepare an annual report to the legislature on the 
        investment performance of the various public pension plans 
        subject to this section.  The content of the report is specified 
        in paragraphs (b) to (e). 
           (b) For each public pension plan reporting under 
        subdivision 3, paragraph (b), the state auditor shall compute 
        and report total portfolio and asset class time-weighted rates 
        of return, net of all investment-related costs and fees. 
           (c) For each public pension plan reporting under 
        subdivision 3, paragraph (d), the state auditor shall compute 
        and report total portfolio time-weighted rates of return, net of 
        all costs and fees.  If the state auditor has requested data for 
        a plan under subdivision 3, paragraph (f), the state auditor may 
        also compute and report asset class time-weighted rates of 
        return, net of all costs and fees. 
           (d) The report by the state auditor must include the 
        information submitted by the pension plans under subdivision 3, 
        paragraph (c), or a synopsis of that information. 
           (e) The report by the state auditor may also include a 
        presentation of multiyear performance, information collected 
        under subdivision 4, and any other information or analysis 
        deemed appropriate by the state auditor.  
           Subd. 7.  [EXPENSE OF REPORT.] All administrative expenses 
        incurred relating to the investment report by the state auditor 
        described in subdivision 6 must be borne by the office of the 
        state auditor and may not be charged back to the entities 
        described in subdivisions 1 or 4. 
           Subd. 8.  [TIMING OF REPORTS.] (a) For salaried firefighter 
        relief associations, police relief associations, and volunteer 
        firefighter relief associations, the information required under 
        this section must be submitted by the due date for reports 
        required under section 69.051, subdivision 1 or 1a, as 
        applicable.  If a relief association satisfies the definition of 
        a fully invested plan under subdivision 1, paragraph (b), for 
        the calendar year covered by the report required under section 
        69.051, subdivision 1 or 1a, as applicable, the chief 
        administrative officer of the covered pension plan shall certify 
        that compliance on a form prescribed by the state auditor.  The 
        state auditor shall transmit annually to the state board of 
        investment a list or lists of covered pension plans which 
        submitted certifications, in order to facilitate reporting by 
        the state board of investment under paragraph (c) of this 
        subdivision. 
           (b) For the Minneapolis teachers retirement fund 
        association, the St. Paul teachers retirement fund association, 
        the Duluth teachers retirement fund association, the Minneapolis 
        employees retirement fund, the University of Minnesota faculty 
        supplemental retirement plan, and the applicable administrators 
        for the University of Minnesota faculty retirement plan and the 
        individual retirement account plans under chapters 354B and 
        354D, the information required under this section must be 
        submitted to the state auditor by June 1 of each year. 
           (c) The state board of investment, on behalf of pension 
        funds specified in subdivision 1, paragraph (c), must report 
        information required under this section by September 1 of each 
        year. 
           Sec. 11.  Minnesota Statutes 2000, section 356.22, is 
        amended to read: 
           356.22 [INTERPRETATION.] 
           Subdivision 1.  [PROVISION OF ADDITIONAL VALUATIONS.] No 
        provision in sections 356.20 to 356.23 shall may be construed to 
        in any way to limit any of the enumerated pension and retirement 
        funds from furnishing additional actuarial valuations or 
        experience studies, or additional data and actuarial 
        calculations, as may be requested by the legislature or any 
        standing committee or by the legislative commission on pensions 
        and retirement. 
           Subd. 2.  [ACCELERATED AMORTIZATION.] No provision in 
        sections 356.20 to 356.23 shall may be construed to preclude any 
        public pension and retirement fund enumerated in section 356.20, 
        subdivision 2, from requesting, or the legislature from 
        providing for, the amortization of any unfunded actuarial 
        accrued liability in a shorter period of time than by the 
        established date for full funding as determined pursuant to 
        under section 356.215, subdivision 4g 11.  
           Subd. 3.  [ADDITIONAL REQUIRED VALUATIONS.] The legislature 
        or any committee or commission thereof now in existence or 
        hereafter created which has assigned to it the subject of public 
        pensions or public retirement plans may require actuarial 
        valuations and experience studies in conformity with the 
        provisions of sections 356.20 to 356.23 from any public pension 
        and retirement plan or fund, whether enumerated in sections 
        356.20 to 356.23 or otherwise.  
           Sec. 12.  Minnesota Statutes 2000, section 356.23, is 
        amended to read: 
           356.23 [SUPPLEMENTAL VALUATIONS; ALTERNATIVE REPORTS AND 
        VALUATIONS.] 
           Subdivision 1.  [SUPPLEMENTAL ACTUARIAL VALUATIONS.] Any 
        supplemental actuarial valuations prepared on behalf of any 
        governing or managing board of any pension and retirement fund 
        enumerated in section 356.20, subdivision 2, by an approved 
        actuary, shall must be prepared in accordance with the 
        applicable provisions of sections 356.20 to 356.23 and with the 
        standards adopted by the legislative commission on pensions and 
        retirement.  Any pension and retirement fund which prepares an 
        alternative actuarial valuation under subdivision 2 shall also 
        must have a supplemental actuarial valuation prepared.  
           Subd. 2.  [ALTERNATIVE REPORTS AND VALUATIONS.] In addition 
        to the financial reports and actuarial valuations required by 
        sections 356.20 to 356.23, the governing or managing board of 
        any fund concerned may submit alternative reports and actuarial 
        valuations for distribution to the legislature, any of its 
        committees, or the legislative commission on pensions and 
        retirement on a different basis or on different assumptions than 
        are specified in sections 356.20 to 356.23.  The assumptions and 
        basis of any alternative reports and valuations shall must be 
        clearly stated in the document.  
                        LIMITATIONS ON SUPPLEMENTAL AND  
                             LOCAL RETIREMENT PLANS  
           Sec. 13.  Minnesota Statutes 2001 Supplement, section 
        356.24, subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
        for a school district or other governmental subdivision or state 
        agency to levy taxes for, or to 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 
        board of trustees of the Minnesota state colleges and 
        universities and covered under the higher education supplemental 
        retirement plan under chapter 354C, if the supplemental plan 
        coverage is 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 
        contribution made to any investment eligible under section 
        403(b) of the Internal Revenue Code, 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; 
           (6) for personnel employed by the board of trustees of the 
        Minnesota state colleges and universities and not covered by 
        clause (5), to the supplemental retirement plan under chapter 
        354C, if the supplemental plan coverage is 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 $2,700 a year for each 
        employee; 
           (7) to a supplemental plan or to a governmental trust to 
        save for postretirement health care expenses qualified for 
        tax-preferred treatment under the Internal Revenue Code, if the 
        supplemental plan coverage is provided for in a personnel policy 
        or in the collective bargaining agreement of a public employer 
        with the exclusive representative of the covered employees in an 
        appropriate unit; or 
           (8) to the laborer's national industrial pension fund for 
        the employees of a governmental subdivision who are covered by a 
        collective bargaining agreement that provides for coverage by 
        that fund and that sets forth a fund contribution rate, but not 
        to exceed an employer contribution of $2,000 per year per 
        employee; 
           (9) to the plumbers' and pipefitters' national pension fund 
        for the employees of a governmental subdivision who are covered 
        by a collective bargaining agreement that provides for coverage 
        by that fund and that sets forth a fund contribution rate, but 
        not to exceed an employer contribution of $2,000 per year per 
        employee; 
           (10) to the international union of operating engineers 
        pension fund for the employees of a governmental subdivision who 
        are covered by a collective bargaining agreement that provides 
        for coverage by that fund and that sets forth a fund 
        contribution rate, but not to exceed an employer contribution of 
        $2,000 per year per employee; or 
           (11) to a supplemental plan organized and operated under 
        the federal Internal Revenue Code, as amended, that is wholly 
        and solely funded by the employee's accumulated sick leave, 
        accumulated vacation leave, and accumulated severance pay. 
           Sec. 14.  Minnesota Statutes 2000, section 356.24, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy for 
        unrepresented employees or, a collective bargaining agreement 
        for represented employees, or a school board for school district 
        employees may establish limits on the number of vendors of plans 
        covered by the exceptions set forth in subdivision 1 that it 
        will utilize and conditions under which the those vendors may 
        contact employees both during working hours and after working 
        hours. 
           Sec. 15.  Minnesota Statutes 2000, section 356.24, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [STATE BOARD OF INVESTMENT REVIEW.] (a) Any 
        insurance company, mutual fund company, or similar company 
        providing investments eligible under section 403(b) of the 
        Internal Revenue Code and eligible to receive employer 
        contributions under this section may request the state board of 
        investment, in conjunction with the department of commerce, to 
        review the financial standing of the company, the 
        competitiveness of its investment options and returns, and the 
        level of all charges and fees impacting those returns.  
           (b) The state board of investment may establish a fee for 
        each review.  The state board of investment must maintain and 
        have available a list of all reviewed companies.  
           (c) In reviewing companies under this section, the state 
        board of investment must not be considered to be acting as a 
        fiduciary or to be engaged in a fiduciary activity under chapter 
        356A or common law. 
           Sec. 16.  Minnesota Statutes 2000, section 356.24, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMIT ON CERTAIN CONTRIBUTIONS OR BENEFIT 
        CHANGES.] No change in benefits or employer contributions in a 
        supplemental pension plan to which this section applies that 
        occurs after May 6, 1971, is effective without prior legislative 
        authorization. 
           Sec. 17.  Minnesota Statutes 2000, section 356.245, is 
        amended to read: 
           356.245 [LOCAL ELECTED OFFICIALS.] 
           An elected official who is covered by section 353.01, 
        subdivision 2a, is eligible to participate in the state of 
        Minnesota deferred compensation plan under section 356.24.  A 
        The applicable local governmental unit may make the matching 
        employer contributions authorized by that section on the part of 
        a participating elected official. 
           Sec. 18.  Minnesota Statutes 2000, section 356.25, is 
        amended to read: 
           356.25 [LOCAL GOVERNMENTAL PENSION FUND PROHIBITIONS; 
        EXCLUSIONS.] 
           Notwithstanding any other provision of law or charter to 
        the contrary, no city, county, public agency or instrumentality, 
        or other political subdivision shall, after August 1, 1975, is 
        required or permitted to establish for any of its employees any 
        a local pension plan or fund financed in whole or in part from 
        public funds, other than a volunteer firefighter's relief 
        association that is established pursuant to under chapter 424A 
        and is governed by sections 69.771 to 69.776. 
                 PUBLIC RETIREMENT PLAN PORTABILITY MECHANISMS 
           Sec. 19.  Minnesota Statutes 2000, section 356.30, is 
        amended to read: 
           356.30 [COMBINED SERVICE ANNUITY.] 
           Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (a) 
        Notwithstanding any provisions of the laws governing the 
        retirement plans enumerated in subdivision 3, a person who has 
        met the qualifications of paragraph (b) may elect to receive a 
        retirement annuity from each enumerated retirement plan in which 
        the person has at least one-half year of allowable service, 
        based on the allowable service in each plan, subject to the 
        provisions of paragraph (c). 
           (b) A person may receive, upon retirement, a retirement 
        annuity from each enumerated retirement plan in which the person 
        has at least one-half year of allowable service, and 
        augmentation of a deferred annuity calculated under the laws 
        governing each public pension plan or fund named in subdivision 
        3, from the date the person terminated all public service if: 
           (1) the person has allowable service totaling an amount 
        that allows the person to receive an annuity in any two or more 
        of the enumerated plans; and 
           (2) the person has not begun to receive an annuity from any 
        enumerated plan or the person has made application for benefits 
        from each applicable plan and the effective dates of the 
        retirement annuity with each plan under which the person chooses 
        to receive an annuity are within a one-year period.  
           (c) The retirement annuity from each plan must be based 
        upon the allowable service, accrual rates, and average salary in 
        the applicable plan except as further specified or modified in 
        the following clauses:  
           (1) the laws governing annuities must be the law in effect 
        on the date of termination from the last period of public 
        service under a covered retirement plan with which the person 
        earned a minimum of one-half year of allowable service credit 
        during that employment; 
           (2) the "average salary" on which the annuity from each 
        covered plan in which the employee has credit in a formula plan 
        shall must be based on the employee's highest five successive 
        years of covered salary during the entire service in covered 
        plans; 
           (3) the accrual rates to be used by each plan must be those 
        percentages prescribed by each plan's formula as continued for 
        the respective years of allowable service from one plan to the 
        next, recognizing all previous allowable service with the other 
        covered plans; 
           (4) the allowable service in all the plans must be combined 
        in determining eligibility for and the application of each 
        plan's provisions in respect to reduction in the annuity amount 
        for retirement prior to normal retirement age; and 
           (5) the annuity amount payable for any allowable service 
        under a nonformula plan of a covered plan must not be affected, 
        but such service and covered salary must be used in the above 
        calculation.  
           (d) This section does not apply to any person whose final 
        termination from the last public service under a covered plan is 
        prior to was before May 1, 1975.  
           (e) For the purpose of computing annuities under this 
        section, the accrual rates used by any covered plan, except the 
        public employees police and fire plan, the judges' retirement 
        fund, and the state patrol retirement plan, must not exceed the 
        percent specified in section 356.19 356.315, subdivision 4, per 
        year of service for any year of service or fraction thereof.  
        The formula percentage used by the judges' retirement fund must 
        not exceed the percent percentage rate specified in section 
        356.19 356.315, subdivision 8, per year of service for any year 
        of service or fraction thereof.  The accrual rate used by the 
        public employees police and fire plan and the state patrol 
        retirement plan must not exceed the percent percentage rate 
        specified in section 356.19 356.315, subdivision 6, per year of 
        service for any year of service or fraction thereof.  The 
        accrual rate or rates used by the legislators retirement plan 
        and the elective state officers retirement plan must not exceed 
        2.5 percent, but this limit does not apply to the adjustment 
        provided under section 3A.02, subdivision 1, paragraph (c), or 
        352C.031, paragraph (b). 
           (f) Any period of time for which a person has credit in 
        more than one of the covered plans must be used only once for 
        the purpose of determining total allowable service.  
           (g) If the period of duplicated service credit is more than 
        one-half year, or the person has credit for more than one-half 
        year, with each of the plans, each plan must apply its formula 
        to a prorated service credit for the period of duplicated 
        service based on a fraction of the salary on which deductions 
        were paid to that fund for the period divided by the total 
        salary on which deductions were paid to all plans for the period.
           (h) If the period of duplicated service credit is less than 
        one-half year, or when added to other service credit with that 
        plan is less than one-half year, the service credit must be 
        ignored and a refund of contributions made to the person in 
        accord with that plan's refund provisions. 
           Subd. 2.  [REPAYMENT OF REFUNDS.] A person who has service 
        credit in one of the funds retirement plans enumerated in 
        subdivision 3 and who is employed or was formerly employed in a 
        position covered by one of these funds covered plans but also 
        has received a refund from any other of these funds covered 
        plans, may repay the refund to the respective fund plan under 
        terms and conditions that are consistent with the laws governing 
        the other fund plan, except that the person need not be a 
        currently contributing member of the fund plan to which the 
        refund is repaid at the time the repayment is made.  Unless 
        otherwise provided by statute, the repayment of a refund under 
        this subdivision may only be made within six months following 
        termination of employment from a position covered by one of the 
        funds covered plans enumerated in subdivision 3 or before the 
        date of retirement from the fund plan to which the refund is 
        repaid, whichever is earlier. 
           Subd. 2a.  [PURCHASES OF PRIOR SERVICE.] If a purchase of 
        prior service is made under the provisions of Laws 1988, chapter 
        709, article 3, or any similar special or general law provision 
        which allows a purchase of service credit in any of the funds 
        retirement plans enumerated in subdivision 3, the amount of 
        required reserves calculated as prescribed in Laws 1988, chapter 
        709, article 3, must be paid to each fund plan based on the 
        amount of benefit increase payable from that fund plan as a 
        result of the purchase of prior service. 
           Subd. 3.  [COVERED FUNDS PLANS.] This section applies to 
        the following retirement funds plans: 
           (1) the general state employees retirement fund plan of the 
        Minnesota state retirement system, established pursuant to under 
        chapter 352; 
           (2) the correctional state employees retirement program 
        plan of the Minnesota state retirement system, 
        established pursuant to under chapter 352; 
           (3) the unclassified employees retirement plan program, 
        established pursuant to under chapter 352D; 
           (4) the state patrol retirement fund plan, established 
        pursuant to under chapter 352B; 
           (5) the legislators retirement plan, established pursuant 
        to under chapter 3A; 
           (6) the elective state officers' retirement plan, 
        established pursuant to under chapter 352C; 
           (7) the general employees retirement plan of the public 
        employees retirement association, established pursuant to under 
        chapter 353; 
           (8) the public employees police and fire fund retirement 
        plan of the public employees retirement association, established 
        pursuant to under chapter 353; 
           (9) public employees the local government correctional 
        service retirement plan of the public employees retirement 
        association, established pursuant to under chapter 353E; 
           (10) the teachers retirement association, established 
        pursuant to under chapter 354; 
           (11) the Minneapolis employees retirement fund, established 
        pursuant to under chapter 422A; 
           (12) the Minneapolis teachers retirement fund association, 
        established pursuant to under chapter 354A; 
           (13) the St. Paul teachers retirement fund association, 
        established pursuant to under chapter 354A; 
           (14) the Duluth teachers retirement fund association, 
        established pursuant to under chapter 354A; and 
           (15) the judges' retirement fund, established by sections 
        490.121 to 490.132. 
           Sec. 20.  Minnesota Statutes 2000, section 356.302, is 
        amended to read: 
           356.302 [DISABILITY BENEFIT WITH COMBINED SERVICE.] 
           Subdivision 1.  [DEFINITIONS.] (a) The terms used in this 
        section are defined in this subdivision. 
           (b) "Average salary" means the highest average of covered 
        salary for the appropriate period of credited service that is 
        required for the calculation of a disability benefit by the 
        covered retirement plan and that is drawn from any period of 
        credited service and successive years of covered salary in a 
        covered retirement plan. 
           (c) "Covered retirement plan" or "plan" means a retirement 
        plan listed in subdivision 7. 
           (d) "Duty-related" means a disabling illness or injury that 
        occurred while the person was actively engaged in employment 
        duties or that arose out of the person's active employment 
        duties. 
           (e) "General employee retirement plan" means a covered 
        retirement plan listed in subdivision 7, clauses (1) to (8) and 
        (13). 
           (f) "Occupationally disabled" means the condition of having 
        a medically determinable physical or mental impairment that 
        makes a person unable to satisfactorily perform the minimum 
        requirements of the person's employment position or a 
        substantially similar employment position. 
           (g) "Public safety employee retirement plan" means a 
        covered retirement plan listed in subdivision 7, clauses (9) to 
        (11) (12). 
           (h) "Totally and permanently disabled" means the condition 
        of having a medically determinable physical or mental impairment 
        that makes a person unable to engage in any substantial gainful 
        activity and that is expected to continue or has continued for a 
        period of at least one year or that is expected to result 
        directly in the person's death. 
           Subd. 2.  [ENTITLEMENT.] Notwithstanding any provision of 
        law to the contrary governing any covered retirement plan, a 
        member of a covered retirement plan may receive a combined 
        service disability benefit from each covered retirement plan in 
        which the person has credit for at least one-half year of 
        allowable service if that person meets the applicable qualifying 
        conditions.  Subdivision 3 applies to a member of a general 
        employee retirement plan.  Subdivision 4 applies to a member of 
        a public safety employee retirement plan.  Subdivision 5 applies 
        to a member of a covered retirement plan with both general 
        employee and public safety employee retirement plan service. 
           Subd. 3.  [GENERAL EMPLOYEE PLAN ELIGIBILITY REQUIREMENTS.] 
        A disabled member of a covered retirement plan who has credit 
        for allowable service in a combination of general employee 
        retirement plans is entitled to a combined service disability 
        benefit if the member: 
           (1) is less than 65 years of age on the date of the 
        application for the disability benefit; 
           (2) has become totally and permanently disabled; 
           (3) has credit for allowable service in any combination of 
        general employee retirement plans totaling at least three years; 
           (4) has credit for at least one-half year of allowable 
        service with the current general employee retirement plan before 
        the commencement of the disability; 
           (5) has at least three continuous years of allowable 
        service credit by the general employee retirement plan or has at 
        least a total of three years of allowable service credit by a 
        combination of general employee retirement plans in a 72-month 
        period during which no interruption of allowable service credit 
        from a termination of employment exceeded 29 days; and 
           (6) is was not receiving a retirement annuity or disability 
        benefit from any covered general employee retirement plan at the 
        time of the commencement of the disability.  
           Subd. 4.  [PUBLIC SAFETY PLAN ELIGIBILITY REQUIREMENTS.] A 
        disabled member of a covered retirement plan who has credit for 
        allowable service in a combination of public safety employee 
        retirement plans is entitled to a combined service disability 
        benefit if the member: 
           (1) has become occupationally disabled; 
           (2) has credit for allowable service in any combination of 
        public safety employee retirement plans totaling at least one 
        year if the disability is duty-related or totaling at least 
        three years if the disability is not duty-related; 
           (3) has credit for at least one-half year of allowable 
        service with the current public safety employee retirement plan 
        before the commencement of the disability; and 
           (4) is was not receiving a retirement annuity or disability 
        benefit from any covered public safety employee retirement plan 
        at the time of the commencement of the disability. 
           Subd. 5.  [GENERAL AND PUBLIC SAFETY PLAN ELIGIBILITY 
        REQUIREMENTS.] A disabled member of a covered retirement plan 
        who has credit for allowable service in a combination of both a 
        public safety employee retirement plans plan and general 
        employee retirement plans plan must meet the qualifying 
        requirements in subdivisions 3 and 4 to receive a combined 
        service disability benefit from the applicable general employee 
        and public safety employee retirement plans, except that the 
        person need only be a member of a covered retirement plan at the 
        time of the commencement of the disability and that the minimum 
        allowable service requirements of subdivisions 3, clauses (3) 
        and (5), and 4, clauses (3) and (4), may be met in any 
        combination of covered retirement plans. 
           Subd. 6.  [COMBINED SERVICE DISABILITY BENEFIT 
        COMPUTATION.] (a) The combined service disability benefit from 
        each covered retirement plan must be based on the allowable 
        service in each retirement plan, except as specified in 
        paragraphs (b) to (f). 
           (b) The disability benefit must be governed by the law in 
        effect for each covered retirement plan on the date of the 
        commencement of the member's most recent qualifying disability 
        as a member of a covered retirement plan. 
           (c) All plans must base the disability benefit on the same 
        average salary figure to the extent practicable. 
           (d) If the method of the covered retirement plan used to 
        compute a disability benefit varies based on the length of 
        allowable service credit, the benefit accrual formula 
        percentages used by the plan must recognize the allowable 
        service credit in the plan as a continuation of any previous 
        allowable service credit with other covered retirement plans. 
           (e) If the covered retirement plan is a defined benefit or 
        formula plan and the method used to compute a disability benefit 
        does not vary based on the length of allowable service credit, 
        the portion of the specified benefit amount from the plan must 
        bear the same proportion to the total specified benefit amount 
        as the allowable service credit in that plan bears to the total 
        allowable service credit in all covered retirement plans.  If 
        the covered retirement plan is a defined contribution or 
        nonformula plan, the disability benefit amount for allowable 
        service under the plan is not affected, but the service and the 
        covered salary under the plan must be used as applicable in 
        calculations by other covered retirement plans. 
           (f) A period for which a person has allowable service 
        credit in more than one covered retirement plan must be used 
        only once in determining the total allowable service credit for 
        calculating the combined service disability benefit, with any 
        period of duplicated service credit handled under as provided in 
        section 356.30, subdivision 1, clause (3), items (i) and 
        (j) paragraphs (g) and (h). 
           (g) If a person is entitled to a minimum benefit payable 
        from one of the public pension plans named enumerated in section 
        356.30, subdivision 3, the person may receive additional credit 
        for only those years of service in another covered pension plan 
        that, when added to the years of service in the pension plan 
        that is paying the minimum benefit, exceed the years of service 
        on which the minimum benefit is based. 
           (h) A partially employed recipient of a disability benefit 
        must have any current reemployment income plus the total 
        disability payment payments from all plans listed enumerated in 
        subdivision 7 added together, and then compared to their final 
        salary rate as a public employee.  If current income plus the 
        total disability payments exceed the final salary of the person 
        at the time of retirement, then disability benefit payments from 
        all the plans will must be reduced on a prorated basis relative 
        to the years of service in each fund so that earnings plus 
        benefit payments do not exceed their the final salary rate. 
           Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
        to the following retirement plans: 
           (1) the general state employees retirement fund plan of the 
        Minnesota state retirement system, established by chapter 352; 
           (2) the unclassified state employees retirement plan 
        program of the Minnesota state retirement system, established by 
        chapter 352D; 
           (3) the general employees retirement plan of the public 
        employees retirement association, established by chapter 353; 
           (4) the teachers retirement association, established by 
        chapter 354; 
           (5) the Duluth teachers retirement fund association, 
        established by chapter 354A; 
           (6) the Minneapolis teachers retirement fund association, 
        established by chapter 354A; 
           (7) the St. Paul teachers retirement fund association, 
        established by chapter 354A; 
           (8) the Minneapolis employees retirement fund, established 
        by chapter 422A; 
           (9) the state correctional employees retirement plan of the 
        Minnesota state retirement system, established by chapter 352; 
           (10) the state patrol retirement fund plan, established by 
        chapter 352B; 
           (11) the public employees police and fire fund plan of the 
        public employees retirement association, established by chapter 
        353; 
           (12) public employees the local government correctional 
        service retirement plan of the public employees retirement 
        association, established by chapter 353E; and 
           (13) the judges' retirement fund plan, established by 
        sections 490.121 to 490.132. 
           Sec. 21.  Minnesota Statutes 2000, section 356.303, is 
        amended to read: 
           356.303 [SURVIVOR BENEFIT WITH COMBINED SERVICE.] 
           Subdivision 1.  [DEFINITIONS.] (a) The terms used in this 
        section are defined in this subdivision. 
           (b) "Average salary" means the highest average of covered 
        salary for the appropriate period of credited service that is 
        required for the calculation of a survivor annuity or a survivor 
        benefit, whichever applies, by the covered retirement plan and 
        that is drawn from any period of credited service and covered 
        salary in a covered retirement plan. 
           (c) "Covered retirement plan" or "plan" means a retirement 
        plan listed enumerated in subdivision 4. 
           (d) "Deceased member" means a person who on the date of 
        death was an active member of a covered retirement plan and who 
        has reached the minimum age, if any, that is required by the 
        covered retirement plan as part of qualifying for a survivor 
        annuity or survivor benefit. 
           (e) "Surviving child" means a child of a deceased member 
        (1) who is unmarried,; (2) who has not reached age 18, or, if a 
        full-time student, who has not reached a higher age as specified 
        in by the applicable covered retirement plan,; and (3) if 
        specified by that plan, who was actually dependent on the 
        deceased member for a specified proportion of support before the 
        deceased member's death.  "Surviving child" includes a natural 
        child, an adopted child, or a child of a deceased member who is 
        conceived during the member's lifetime and who is born after the 
        member's death. 
           (f) "Surviving spouse" means the legally married husband or 
        wife, whichever applies, of the deceased member who was residing 
        with the deceased member on the date of death and who, if 
        specified by the applicable covered retirement plan, had been 
        married to the deceased member for a specified period of time 
        before the death of the deceased member. 
           (g) "Survivor annuity" means the entitlement to a future 
        amount payable to a survivor as the remainder interest of an 
        optional annuity form implied by law as having been chosen by a 
        deceased member before the date of death and effective on the 
        date of death or provided automatically. 
           (h) "Survivor benefit" means an entitlement to a future 
        amount payable to a survivor that is not included in the 
        definition of a survivor annuity. 
           Subd. 2.  [ENTITLEMENT; ELIGIBILITY.] Notwithstanding 
        any provision of law to the contrary governing a covered 
        retirement plan, a person who is the survivor of a deceased 
        member of a covered retirement plan may receive a combined 
        service survivor benefit from each covered retirement plan in 
        which the deceased member had credit for at least one-half year 
        of allowable service if the deceased member: 
           (1) had credit for sufficient allowable service in any 
        combination of covered retirement plans to meet any minimum 
        allowable service credit requirement of the covered retirement 
        fund for qualification for a survivor benefit or annuity; 
           (2) had credit for at least one-half year of allowable 
        service with the most recent covered retirement plan before the 
        date of death and was an active member of that covered 
        retirement plan on the date of death; and 
           (3) was not receiving a retirement annuity from any covered 
        retirement plan on the date of death. 
           Subd. 3.  [COMBINED SERVICE SURVIVOR BENEFIT COMPUTATION.] 
        (a) The combined service survivor annuity or survivor benefit 
        from each covered retirement plan must be based on the allowable 
        service in each covered retirement plan, except as provided by 
        paragraphs (b) to (f). 
           (b) The survivor annuity or survivor benefit must be 
        governed by the law in effect for each covered retirement plan 
        on the date of the death of the deceased member. 
           (c) All plans must base the survivor annuity or survivor 
        benefit on the same average salary figure if the annuity or 
        benefit is salary related. 
           (d) If the method of the covered retirement plan used to 
        compute a survivor benefit or annuity varies based on the length 
        of allowable service credit, the benefit accrual formula 
        percentages used by the plan must recognize the allowable 
        service credit in the plan as a continuation of any previous 
        allowable service credit with other covered retirement plans. 
           (e) If the covered retirement plan is a defined benefit or 
        formula plan and the method used to compute a survivor benefit 
        or annuity does not vary based on the length of allowable 
        service credit, the portion of the specified benefit or annuity 
        amount from the covered retirement plan must bear the same 
        proportion to the total specified benefit or annuity amount as 
        the allowable service credit in that plan bears to the total 
        allowable service credit in all covered retirement plans.  If 
        the covered retirement plan is a defined contribution or 
        nonformula plan, the survivor benefit amount for allowable 
        service under the plan is not affected, but the service and 
        covered salary under the plan must be used in calculations by 
        other covered retirement plans. 
           (f) A period for which a person has deceased member had 
        allowable service credit in more than one covered retirement 
        plan must be used only once in determining the total allowable 
        service credit for calculating the combined service survivor 
        annuity or survivor benefit.  A period of duplicated service 
        credit must be handled as provided in section 356.30, 
        subdivision 1, clause (3), items (i) and (j) paragraphs (g) and 
        (h). 
           (g) If a person is entitled to a minimum benefit payable 
        from a public pension plan named in section 356.30, subdivision 
        3, the person may receive additional credit for only those years 
        of service in another covered pension plan that, when added to 
        the years of service in the pension plan that is paying the 
        minimum benefit, exceed the years of service on which the 
        minimum benefit is based. 
           Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
        to the following retirement plans: 
           (1) the legislators retirement plan, established by chapter 
        3A; 
           (2) the general state employees retirement fund plan of the 
        Minnesota state retirement system, established by chapter 352; 
           (3) the correctional state employees retirement plan of the 
        Minnesota state retirement system, established by chapter 352; 
           (4) the state patrol retirement fund plan, established by 
        chapter 352B; 
           (5) the elective state officers retirement plan, 
        established by chapter 352C; 
           (6) the unclassified state employees retirement plan 
        program, established by chapter 352D; 
           (7) the general employees retirement plan of the public 
        employees retirement association, established by chapter 353; 
           (8) the public employees police and fire fund plan of the 
        public employees retirement association, established by chapter 
        353; 
           (9) public employees the local government correctional 
        service retirement plan of the public employees retirement 
        association, established by chapter 353E; 
           (10) the teachers retirement association, established by 
        chapter 354; 
           (11) the Duluth teachers retirement fund association, 
        established by chapter 354A; 
           (12) the Minneapolis teachers retirement fund association, 
        established by chapter 354A; 
           (13) the St. Paul teachers retirement fund association, 
        established by chapter 354A; 
           (14) the Minneapolis employees retirement fund, established 
        by chapter 422A; and 
           (15) the judges' retirement fund, established by sections 
        490.121 to 490.132. 
                              RETIREMENT ANNUITIES 
           Sec. 22.  [356.315] [RETIREMENT BENEFIT FORMULA 
        PERCENTAGES.] 
           Subdivision 1.  [COORDINATED PLAN MEMBERS.] The applicable 
        benefit accrual rate is 1.2 percent. 
           Subd. 2.  [COORDINATED PLAN MEMBERS.] The applicable 
        benefit accrual rate is 1.7 percent. 
           Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
        accrual rate is 2.0 percent. 
           Subd. 3.  [BASIC PLAN MEMBERS.] The applicable benefit 
        accrual rate is 2.2 percent. 
           Subd. 4.  [BASIC PLAN MEMBERS.] The applicable benefit 
        accrual rate is 2.7 percent. 
           Subd. 5.  [CORRECTIONAL PLAN MEMBERS.] The applicable 
        benefit accrual rate is 2.4 percent. 
           Subd. 5a.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE PLAN.] 
        The applicable benefit accrual rate is 1.9 percent.  
           Subd. 6.  [STATE TROOPERS PLAN AND POLICE AND FIRE PLAN 
        MEMBERS.] The applicable benefit accrual rate is 3.0 percent. 
           Subd. 7.  [JUDGES PLAN.] The applicable benefit accrual 
        rate is 2.7 percent. 
           Subd. 8.  [JUDGES PLAN.] The applicable benefit accrual 
        rate is 3.2 percent. 
           Subd. 9.  [FUTURE BENEFIT ACCRUAL RATE INCREASES.] After 
        January 2, 1998, benefit accrual rate increases under this 
        section must apply only to allowable service or formula service 
        rendered after the effective date of the benefit accrual rate 
        increase. 
           Sec. 23.  Minnesota Statutes 2000, section 356.32, is 
        amended to read: 
           356.32 [PROPORTIONATE ANNUITY AT AGE 65.] 
           Subdivision 1.  [PROPORTIONATE RETIREMENT ANNUITY.] (a) 
        Notwithstanding any provision to the contrary of the laws 
        governing any of the retirement funds referred to enumerated in 
        subdivision 2, any person who is an active member of any 
        applicable fund, who has credit for at least one year but less 
        than ten years of allowable service in one or more of 
        the applicable funds covered plans, and who terminates active 
        service pursuant to under a mandatory retirement law or policy 
        or at age 65 or older, or at the normal retirement age if this 
        age is not age 65, for any reason shall be is entitled upon 
        making written application on the form prescribed by executive 
        director or executive secretary the chief administrative officer 
        of the fund plan to a proportionate retirement annuity from each 
        applicable fund covered plan in which the person has allowable 
        service credit.  
           (b) The proportionate annuity shall must be calculated 
        under the applicable laws governing annuities based upon 
        allowable service credit at the time of retirement and the 
        person's average salary for the highest five successive years of 
        allowable service or the average salary for the entire period of 
        allowable service if less than five years.  
           (c) Nothing in this section shall prevent prevents the 
        imposition of the appropriate early retirement reduction of an 
        annuity which commences prior to before the normal retirement 
        age. 
           Subd. 2.  [COVERED FUNDS RETIREMENT PLANS.] The provisions 
        of this section shall apply to the following retirement 
        funds plans: 
           (1) the general state employees retirement fund plan of the 
        Minnesota state retirement system, established pursuant to under 
        chapter 352; 
           (2) the correctional state employees retirement program 
        plan of the Minnesota state retirement system, established 
        pursuant to under chapter 352; 
           (3) the state patrol retirement fund plan, 
        established pursuant to under chapter 352B; 
           (4) the general employees retirement plan of the public 
        employees retirement fund association, established pursuant to 
        under chapter 353; 
           (5) the public employees police and fire fund plan of the 
        public employees retirement association, established pursuant to 
        under chapter 353; 
           (6) the teachers retirement association, established 
        pursuant to under chapter 354; 
           (7) the Minneapolis employees retirement fund, established 
        pursuant to under chapter 422A; 
           (8) the Duluth teachers retirement fund association, 
        established pursuant to under chapter 354A; 
           (9) the Minneapolis teachers retirement fund association, 
        established pursuant to under chapter 354A; and 
           (10) the St. Paul teachers retirement fund association, 
        established pursuant to under chapter 354A.  
           Sec. 24.  Minnesota Statutes 2000, section 356.40, is 
        amended to read: 
           356.40 [DATE FOR PAYMENT OF ANNUITIES AND BENEFITS.] 
           (a) Notwithstanding any law to the contrary, all annuities 
        and benefits payable on and after December 1, 1977 by a covered 
        retirement fund, as defined in section 356.30, subdivision 3, 
        shall must be paid in advance for each month during the first 
        week of that month.  The bylaws of municipal local retirement 
        funds shall must be amended accordingly.  
           (b) In no event, however, shall may this section authorize 
        more than one payment in any one month where the law governing 
        the applicable retirement fund as of June 30, 1977 already 
        provides for the full payment or accrual of annuities and 
        benefits in advance for each month or as of the first day of the 
        month, nor shall it authorize the payment of both a retirement 
        annuity and a surviving spouse's benefit in one month where the 
        law governing the applicable retirement fund provides for the 
        payment of the retired member's retirement annuity to the 
        surviving spouse for the month in which the retired member dies. 
           Sec. 25.  [356.403] [NORMAL RETIREMENT AGE; SAVINGS 
        CLAUSE.] 
           The intent of the legislature in sections 352.01, 
        subdivision 25; 353.01, subdivision 37; 354.05, subdivision 38; 
        and 354A.011, subdivision 15a, is to create a normal retirement 
        age for persons first covered by those sections after May 16, 
        1989, that is the same as the retirement age in the federal 
        Social Security law, including future amendments to that law.  
        If a court determines that the legislature may not incorporate 
        by reference the future changes in federal Social Security law, 
        the legislature reserves the right to amend the appropriate 
        sections to make the normal retirement age conform to the 
        retirement age in the federal Social Security law.  No person 
        first covered by any of those sections after May 16, 1989, has a 
        right to a normal retirement age that is less than the 
        retirement age in the federal Social Security law. 
           Sec. 26.  [356.405] [COMBINED PAYMENT OF RETIREMENT 
        ANNUITIES.] 
           (a) The public employees retirement association and the 
        Minnesota state retirement system are permitted to combine 
        payments to retirees.  The total payment must be equal to the 
        amount that is payable if payments were kept separate.  The 
        retiree must agree, in writing, to have the payment combined. 
           (b) Each plan must calculate the benefit amounts under the 
        laws governing the plan and the required reserves and future 
        mortality losses or gains must be paid or accrued to the plan 
        from which the service was earned.  Each plan must account for 
        its portion of the payment separately, and there may be no 
        additional actuarial liabilities realized by either plan. 
           (c) The plan making the payment would be responsible for 
        issuing one payment and making address changes, tax withholding 
        changes, and other administrative functions needed to process 
        the payment. 
                               SURVIVOR BENEFITS 
           Sec. 27.  [356.406] [LOSS OF ENTITLEMENT TO BENEFITS FOR 
        SURVIVOR CAUSING DEATH OF PENSION PLAN MEMBER.] 
           Subdivision 1.  [DEFINITIONS.] (a) Each of the words or 
        terms defined in this subdivision has the meaning indicated. 
           (b) "Public pension plan" means any retirement plan or fund 
        enumerated in section 356.20, subdivision 2, or 356.30, 
        subdivision 3, any relief association governed by section 69.77 
        or sections 69.771 to 69.775, any retirement plan governed by 
        chapter 354B or 354C, the Hennepin county supplemental 
        retirement plan governed by sections 383B.46 to 383B.52, or any 
        housing and redevelopment authority retirement plan. 
           (c) "Public pension plan member" means a person who is a 
        participant covered by a public pension plan; a former 
        participant of a public pension plan who has sufficient service 
        to be entitled to receive a future retirement annuity or service 
        pension; a recipient of a retirement annuity, service pension, 
        or disability benefit from a public pension plan; or a former 
        participant of a public pension plan who has member or employee 
        contributions to the person's credit in the public pension plan. 
           (d) "Survivor" means the surviving spouse, a former spouse, 
        a surviving child, a joint annuitant, a designated recipient of 
        a second or remainder portion of an optional annuity form, a 
        beneficiary, or the estate of a deceased public pension plan 
        member, as those terms are commonly understood or defined in the 
        benefit plan document of the public pension plan. 
           (e) "Survivor benefit" means a surviving spouse benefit, 
        surviving child benefit, second or remainder portion of an 
        optional annuity form, a death benefit, a funeral benefit, or a 
        refund of member or employee contributions payable on account of 
        the death of a public pension plan member as provided for in the 
        benefit plan document of the public pension plan. 
           Subd. 2.  [SUSPENSION OF SURVIVOR BENEFITS UPON FELONY 
        CHARGE.] During the pendency of a charge of a survivor of a 
        felony that caused the death of a public pension plan member, of 
        criminal liability for a death by wrongful act felony, or of 
        conspiracy to commit a death by wrongful act felony, the 
        entitlement of that survivor to receive a survivor benefit is 
        suspended. 
           Subd. 3.  [FORFEITURE OF SURVIVOR BENEFITS UPON FELONY 
        CONVICTION.] On final conviction of a survivor of a felony that 
        caused the death of a public pension plan member, of criminal 
        liability for a death by wrongful act felony, or of conspiracy 
        to commit a death by wrongful act felony, the entitlement of 
        that survivor to receive a survivor benefit is forfeited, 
        including entitlement for any previously suspended survivor 
        benefits under subdivision 2. 
           Subd. 4.  [SUSPENSION OR FORFEITURE ACTIONS SEPARATE.] The 
        charge of one survivor under subdivision 2 or the conviction of 
        one survivor under subdivision 3 does not affect the entitlement 
        of another survivor to a survivor benefit. 
           Subd. 5.  [RECOVERY OF CERTAIN BENEFITS.] If monthly 
        benefits or a refund of the balance of a participant or former 
        participant's account have already been paid to an individual 
        who is later charged or convicted as described under this 
        section, the executive director or chief administrative officer 
        of the public pension plan shall attempt to recover the amounts 
        paid.  Payment may be made to the next beneficiary or survivor 
        only in an amount equal to the amount recovered and in the 
        amount of any future payments that would legally accrue to 
        another survivor under the applicable laws of the retirement 
        plan. 
           Subd. 6.  [DISPOSITION OF FORFEITED SURVIVOR BENEFITS.] If 
        the benefit plan document governing the public pension plan does 
        not provide for the disposition of forfeited benefits, survivor 
        benefits forfeited under this section must be deposited in the 
        general fund of the state. 
           Sec. 28.  [356.407] [RESTORATION OF SURVIVOR BENEFITS.] 
           Subdivision 1.  [RESTORATION UPON TERMINATION OF 
        REMARRIAGE.] Notwithstanding any provision to the contrary of 
        the laws governing any of the retirement plans enumerated in 
        subdivision 2, any person who was receiving a surviving spouse's 
        benefit from any of those plans and whose benefit terminated 
        solely because of remarriage is, if the remarriage terminates 
        for any reason, again entitled upon reapplication to a surviving 
        spouse's benefit; provided, however, that the person is not 
        entitled to retroactive payments for the period of remarriage.  
        The benefit resumes at the level which the person would have 
        been receiving if there had been no remarriage.  This section 
        applies prospectively to any person who first becomes entitled 
        to receive a surviving spouse's benefit on or after May 18, 
        1975, and also applies retroactively to any person who first 
        became entitled to receive a surviving spouse's benefit before 
        May 18, 1975; provided, however, that no person is entitled to 
        retroactive payments for any period of time before May 18, 1975. 
           Subd. 2.  [COVERED FUNDS.] The provisions of this section 
        apply to the following retirement funds: 
           (1) the general employees retirement plan of the public 
        employees retirement association established under chapter 353; 
           (2) the public employees police and fire plan of the public 
        employees retirement association established under chapter 353; 
           (3) the state patrol retirement plan established under 
        chapter 352B; 
           (4) the legislators retirement plan established under 
        chapter 3A; 
           (5) the elective state officers retirement plan established 
        under chapter 352C; 
           (6) the teachers retirement association established under 
        chapter 354; and 
           (7) the Minneapolis employees retirement fund established 
        under chapter 422A.  
                            POSTRETIREMENT INCREASES 
           Sec. 29.  Minnesota Statutes 2000, section 356.41, is 
        amended to read: 
           356.41 [BENEFIT ADJUSTMENTS FOR CERTAIN DISABILITY AND 
        SURVIVOR BENEFITS.] 
           Disability benefits payable to a disabilitant, if not 
        otherwise included in the participation in the Minnesota 
        postretirement investment fund, and survivor benefits payable to 
        a survivor from any public pension fund plan which participates 
        in the Minnesota postretirement investment fund shall must be 
        adjusted in the same manner, at the same times and in the same 
        amounts as are benefits payable from the Minnesota 
        postretirement investment fund to eligible benefit recipients of 
        that public pension fund plan.  If a disability benefit is not 
        included in the participation in the Minnesota postretirement 
        investment fund, the disability benefit is recomputed as a 
        retirement annuity and the recipient would have been eligible 
        for an adjustment pursuant to under this section if the 
        disability benefit was not recomputed, the recipient will 
        continue to be remains eligible for the adjustment pursuant to 
        under this section after the recomputation.  For the survivor of 
        a deceased annuitant who receives a survivor benefit 
        calculated pursuant to under a prior law rather than the second 
        portion of a joint and survivor annuity, any period of receipt 
        of a retirement annuity by the annuitant shall must be utilized 
        in determining the period of receipt for eligibility to receive 
        an adjustment pursuant to under this section.  No recipient 
        shall, however, be is entitled to more than one adjustment 
        pursuant to under this section or section 11A.18 applicable to 
        one benefit at one time by reason of this section.  
           Sec. 30.  [356.42] [POSTRETIREMENT ADJUSTMENT; LUMP SUM 
        PAYMENTS.] 
           Subdivision 1.  [ENTITLEMENT.] A person who is receiving a 
        retirement annuity, a disability benefit, or a surviving 
        spouse's annuity or benefit from a retirement fund specified in 
        subdivision 3, clauses (1) to (8), is entitled to receive a 
        postretirement adjustment from the applicable retirement fund in 
        the amount specified in subdivision 2, if the annuity or benefit 
        was computed under: 
           (1) the laws in effect before June 1, 1973, if the person 
        is receiving an annuity or benefit from the retirement fund 
        specified in subdivision 3, clause (4); 
           (2) the laws in effect before July 1, 1973, if the person 
        is receiving an annuity or benefit from a retirement fund 
        specified in subdivision 3, clause (1), (2), (3), or (5); 
           (3) the metropolitan transit commission transit operating 
        division employees retirement fund plan document in effect on or 
        before December 31, 1977, if the person is receiving a 
        retirement annuity, a disability benefit, or a surviving 
        spouse's annuity or benefit from the retirement fund specified 
        in subdivision 3, clause (5); 
           (4) the laws in effect before May 1, 1974, and before any 
        adjustment under Laws 1987, chapter 372, article 3, if the 
        person is receiving an annuity or benefit from the retirement 
        fund specified in subdivision 3, clause (6); 
           (5) the laws in effect before January 1, 1970, if the 
        person is receiving an annuity or benefit from the retirement 
        fund specified in subdivision 3, clause (7); or 
           (6) the laws in effect before June 30, 1971, if the person 
        is receiving an annuity or benefit from the retirement fund 
        specified in subdivision 3, clause (8). 
           Subd. 2.  [AMOUNT OF POSTRETIREMENT ADJUSTMENT; PAYMENT.] 
        (a) For any person receiving an annuity or benefit on November 
        30, 1989, and entitled to receive a postretirement adjustment 
        under subdivision 1, the postretirement adjustment is a lump-sum 
        payment calculated under paragraph (b) or (c). 
           (b) For coordinated plan annuity or benefit recipients, the 
        postretirement adjustment in 1989 is $25 for each full year of 
        allowable service credited to the person by the respective 
        retirement fund.  In 1990 and each following year, the 
        postretirement adjustment is the amount payable in the preceding 
        year increased by the same percentage applied to regular 
        annuities paid from the postretirement fund or, for the 
        retirement funds specified in subdivision 3, clauses (6), (7), 
        and (8), by the same percentage applied under the articles of 
        incorporation and bylaws of these funds. 
           (c) For basic plan annuity or benefit recipients, the 
        postretirement adjustment in 1989 is the greater of: 
           (1) $25 for each full year of allowable service credited to 
        the person by the respective retirement fund; or 
           (2) the difference between: 
           (i) the product of $400 times the number of full years of 
        allowable service credited to the person by the respective 
        retirement fund; and 
           (ii) the sum of the benefits payable to the person from any 
        Minnesota public employee pension plan, and cash benefits 
        payable to the person from the Social Security Administration. 
           In 1990 and each following year, each eligible basic plan 
        annuity or benefit recipient shall receive the amount received 
        in the preceding year increased by the same percentage applied 
        to regular annuities paid from the postretirement fund or, for 
        the retirement funds specified in subdivision 3, clauses (6), 
        (7), and (8), by the same percentage applied under the articles 
        of incorporation and bylaws of these funds. 
           (d) The postretirement adjustment provided for in this 
        section must be paid on December 1 to those persons receiving an 
        annuity or benefit on the preceding November 30.  This section 
        does not authorize the payment of a postretirement adjustment to 
        an estate if the annuity or benefit recipient dies before the 
        November 30 eligibility date.  The postretirement adjustment 
        provided for in this section must be paid automatically unless 
        the intended recipient files a written notice with the 
        retirement fund requesting that the postretirement adjustment 
        not be paid or returns the amount of adjustment to the 
        retirement fund.  Written notice of the waiver of the 
        postretirement adjustment is irrevocable for the year during 
        which it was made. 
           Subd. 3.  [COVERED RETIREMENT PLANS.] The postretirement 
        adjustment provided in this section applies to the following 
        retirement funds: 
           (1) the general employees retirement plans of the public 
        employees retirement association; 
           (2) the public employees police and fire plan of the public 
        employees retirement association; 
           (3) the teachers retirement association; 
           (4) the state patrol retirement plan; 
           (5) the state employees retirement plan of the Minnesota 
        state retirement system; 
           (6) the Minneapolis teachers retirement fund association 
        established under chapter 354A; 
           (7) the St. Paul teachers retirement fund association 
        established under chapter 354A; and 
           (8) the Duluth teachers retirement fund association 
        established under chapter 354A. 
           Sec. 31.  [356.43] [SUPPLEMENTAL BENEFIT; LUMP-SUM 
        PAYMENTS; MINNEAPOLIS EMPLOYEES RETIREMENT FUND.] 
           Subdivision 1.  [ENTITLEMENT.] Any person who is receiving 
        either an annuity that was computed under the laws in effect 
        before March 5, 1974, or a "$2 bill and annuity" annuity from 
        the Minneapolis employees retirement fund is entitled to receive 
        a supplemental benefit lump-sum payment from the retirement fund 
        in the amount specified in subdivision 2.  
           Subd. 2.  [AMOUNT OF PAYMENT.] (a) For any person receiving 
        an annuity or benefit on November 30, 1991, and entitled to 
        receive a supplemental benefit lump-sum payment under 
        subdivision 1, the payment is $28 for each full year of 
        allowable service credited to the person by the retirement fund. 
           In 1992 and each following year, each eligible benefit 
        recipient is entitled to receive the amount received in the 
        preceding year increased by the same percentage applied on the 
        most recent January 1 to regular annuities paid from the 
        Minneapolis employees retirement fund. 
           (b) The payment provided for in this section is payable on 
        December 1, 1991, to those persons receiving an annuity or 
        benefit on November 30, 1991.  In subsequent years, the payment 
        must be made on December 1 to those persons receiving an annuity 
        or benefit on the preceding November 30.  This section does not 
        authorize payment to an estate if the annuity or benefit 
        recipient dies before the November 30 eligibility date.  The 
        payment provided for in this section must be paid automatically 
        unless the intended recipient files a written notice with the 
        retirement fund requesting that it not be paid. 
           Subd. 3.  [STATE APPROPRIATION.] Payments under this 
        section are the responsibility of the Minneapolis employees 
        retirement fund.  A separate state aid is provided toward the 
        level dollar amortized cost of the payments.  For state fiscal 
        years 1992 to 2001 inclusive, there is appropriated annually 
        $550,000 from the general fund to the commissioner of finance to 
        be added, in quarterly installments, to the annual state 
        contribution amount determined under section 422A.101, 
        subdivision 3.  After fiscal year 2001, any difference between 
        the cumulative benefit amounts actually paid under this section 
        after fiscal year 1991 and the amounts paid to the retirement 
        fund by the state under this subdivision, plus investment 
        earnings on the aid, shall be included by the retirement fund 
        board and the actuary retained by the legislative commission on 
        pensions and retirement in determining the financial 
        requirements of the fund and contributions under section 
        422A.101. 
           Sec. 32.  [356.431] [CONVERSION OF LUMP-SUM POSTRETIREMENT 
        AND SUPPLEMENTAL PAYMENT TO AN INCREASED MONTHLY ANNUITY.] 
           Subdivision 1.  [LUMP-SUM POSTRETIREMENT PAYMENT 
        CONVERSION.] For benefits paid after December 31, 2001, to 
        eligible persons under sections 356.42 and 356.43, the amount of 
        the most recent lump-sum benefit payable to an eligible 
        recipient under sections 356.86 and 356.865 must be divided by 
        12.  The result must be added to the monthly annuity or benefit 
        otherwise payable to an eligible recipient, must become a 
        permanent part of the benefit recipient's pension, and must be 
        included in any pension benefit subject to future increases. 
           Subd. 2.  [TRANSFER OF REQUIRED RESERVES TO MINNESOTA 
        POSTRETIREMENT INVESTMENT FUND.] Public employee retirement 
        funds participating in the state board of investment 
        postretirement investment fund shall transfer the required 
        reserves for the postretirement conversion under subdivision 1 
        to the postretirement investment fund by January 31, 2002. 
                                    REFUNDS 
           Sec. 33.  [356.44] [PARTIAL PAYMENT OF PENSION PLAN 
        REFUND.] 
           (a) Notwithstanding any provision of law to the contrary, a 
        member of a pension plan listed in section 356.30, subdivision 
        3, with at least two years of forfeited service taken from a 
        single pension plan, may repay a portion of all refunds.  A 
        partial refund repayment must comply with this section. 
           (b) The minimum portion of a refund repayment is one-third 
        of the total service credit period of all refunds taken from a 
        single plan.  
           (c) The cost of the partial refund repayment is the product 
        of the cost of the total repayment multiplied by the ratio of 
        the restored service credit to the total forfeited service 
        credit.  The total repayment amount includes interest at the 
        annual rate of 8.5 percent, compounded annually, from the refund 
        date to the date repayment is received.  
           (d) The restored service credit must be allocated based on 
        the relationship the restored service bears to the total service 
        credit period for all refunds taken from a single pension plan. 
           (e) This section does not authorize a public pension plan 
        member to repay a refund if the law governing the plan does not 
        authorize the repayment of a refund of member contributions. 
           Sec. 34.  [356.441] [REPAYMENT OF REFUNDS.] 
           Repayment of a refund and interest on that refund permitted 
        under laws governing any public pension plan in Minnesota may be 
        made with funds distributed from a plan qualified under the 
        federal Internal Revenue Code of 1986, section 401(a), as 
        amended through December 31, 1988, or an annuity qualified under 
        the federal Internal Revenue Code of 1986, section 403(a).  
        Repayment may also be made with funds distributed from an 
        individual retirement account used solely to receive a 
        nontaxable rollover from that type of a plan or annuity.  The 
        repaid refund must be separately accounted for as member 
        contributions not previously taxed.  Before accepting any 
        transfers to which this section applies, the executive director 
        must require the member to provide written documentation to 
        demonstrate that the amounts to be transferred are eligible for 
        a tax-free rollover and qualify for that treatment under the 
        federal Internal Revenue Code of 1986.  
                             OPTIONAL ANNUITY FORMS
           Sec. 35.  [356.46] [APPLICATION FOR RETIREMENT ANNUITY; 
        PROCEDURE FOR ELECTING ANNUITY FORM.] 
           Subdivision 1.  [DEFINITIONS.] As used in this section, 
        each of the following terms shall have the meaning given. 
           (a) "Annuity form" means the payment procedure and duration 
        of a retirement annuity or disability benefit available to a 
        member of a public pension fund, based on the period over which 
        a retirement annuity or disability benefit is payable, 
        determined by the number of persons to whom the retirement 
        annuity or disability benefit is payable, and the amount of the 
        retirement annuity or disability benefit which is payable to 
        each person. 
           (b) "Joint and survivor optional annuity" means an optional 
        annuity form which provides a retirement annuity or disability 
        benefit to a retired member and the spouse of the member on a 
        joint basis during the lifetime of the retired member and all or 
        a portion of the original retirement annuity or disability 
        benefit amount to the surviving spouse in the event of the death 
        of the retired member. 
           (c) "Optional annuity form" means an annuity form which is 
        elected by a member and is not provided automatically as the 
        standard annuity form of the public pension plan. 
           (d) "Public pension plan" means a public pension plan as 
        defined under section 356.615, paragraph (b). 
           (e) "Retirement annuity" means a series of monthly payments 
        to which a former or retired member of a public pension fund is 
        entitled due to attaining a specified age and acquiring credit 
        for a specified period of service, which includes a retirement 
        annuity, retirement allowance, or service pension.  
           (f) "Disability benefit" means a series of monthly payments 
        to which a former or disabled member of a public pension fund is 
        entitled due to a physical or mental inability to engage in 
        specified employment. 
           Subd. 2.  [PROVISION OF INFORMATION ON ANNUITY FORMS.] 
        Every public pension plan which provides for an annuity form 
        other than a single life retirement annuity as an option which 
        can be elected by an active, disabled, or retiring member shall 
        provide as a part of, or accompanying the annuity application 
        form, a written statement summarizing the optional annuity forms 
        which are available, a general indication of the consequences of 
        selecting one annuity form over another, a calculation of the 
        actuarial reduction in the amount of the retirement annuity 
        which would be required for each optional annuity form, and the 
        procedure to be followed to obtain more information from the 
        public pension fund concerning the optional annuity forms 
        provided by the plan. 
           Subd. 3.  [REQUIREMENT OF NOTICE TO MEMBER'S SPOUSE.] (a) 
        If a public pension plan provides optional retirement annuity 
        forms which include a joint and survivor optional retirement 
        annuity form potentially applicable to the surviving spouse of a 
        member, the executive director of the public pension plan shall 
        send a copy of the written statement required by subdivision 2 
        to the spouse of the member before the member's election of an 
        optional retirement annuity.  
           (b) Following the election of a retirement annuity by the 
        member, a copy of the completed retirement annuity application 
        and retirement annuity beneficiary form, if applicable, must be 
        sent by the public pension plan to the spouse of the retiring 
        member.  A signed acknowledgment must be required from the 
        spouse confirming receipt of a copy of the completed retirement 
        annuity application and retirement annuity beneficiary form, 
        unless the spouse's signature confirming the receipt is on the 
        annuity application form.  If the required signed acknowledgment 
        is not received from the spouse within 30 days, the public 
        pension plan must send another copy of the completed retirement 
        annuity application and retirement annuity beneficiary form, if 
        applicable, to the spouse by certified mail with restricted 
        delivery. 
           Sec. 36.  [356.465] [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.  [DEFINITION OF 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 PLANS.] The provisions of 
        this section apply to the following retirement plans: 
           (1) the general state employees retirement plan of the 
        Minnesota state retirement system established under chapter 352; 
           (2) the correctional state employees retirement plan of the 
        Minnesota state retirement system established under chapter 352; 
           (3) the state patrol retirement plan established under 
        chapter 352B; 
           (4) the legislators retirement plan established under 
        chapter 3A; 
           (5) the judges retirement plan established under chapter 
        490; 
           (6) the general employees retirement plan of the public 
        employees retirement association established under chapter 353; 
           (7) the public employees police and fire plan of the public 
        employees retirement association established under chapter 353; 
           (8) the teachers retirement plan established under chapter 
        354; 
           (9) the Duluth teachers retirement fund association 
        established under chapter 354A; 
           (10) the St. Paul teachers retirement fund association 
        established under chapter 354A; 
           (11) the Minneapolis teachers retirement fund association 
        established under chapter 354A; 
           (12) the Minneapolis employees retirement plan established 
        under chapter 422A; 
           (13) the Minneapolis firefighters relief association 
        established under chapter 423C; 
           (14) the Minneapolis police relief association established 
        under chapter 423B; and 
           (15) the local government correctional service retirement 
        plan of the public employees retirement association established 
        under chapter 353E. 
                   REEMPLOYED ANNUITANT EARNINGS DISPOSITION 
           Sec. 37.  [356.47] [DISPOSITION OF AMOUNT IN EXCESS OF 
        REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.] 
           Subdivision 1.  [APPLICATION.] This section applies to the 
        balance of annual retirement annuities on the amount of 
        retirement annuity reductions after reemployed annuitant 
        earnings limitations for retirement plans governed by section 
        352.115, subdivision 10; 353.37; 354.44, subdivision 5; or 
        354A.31, subdivision 3. 
           Subd. 2.  [RECORDKEEPING; REPORTING.] The chief 
        administrative officer of each retirement plan shall keep 
        records for each reemployed annuitant of the amount of the 
        annuity reduction.  This amount must be reported to each member 
        at least once each year. 
           Subd. 3.  [PAYMENT.] (a) Upon the retired member attaining 
        the age of 65 years or upon the first day of the month next 
        following the month occurring one year after the termination of 
        the reemployment that gave rise to the limitation, whichever is 
        later, and the filing of a written application, the retired 
        member is entitled to the payment, in a lump sum, of the value 
        of the person's amount under subdivision 2, plus interest at the 
        compound annual rate of six percent from the date that the 
        amount was deducted from the retirement annuity to the date of 
        payment. 
           (b) The written application must be on a form prescribed by 
        the chief administrative officer of the applicable retirement 
        plan. 
           (c) If the retired member dies before the payment provided 
        for in paragraph (a) is made, the amount is payable, upon 
        written application, to the deceased person's surviving spouse, 
        or if none, to the deceased person's designated beneficiary, or 
        if none, to the deceased person's estate. 
                        MARRIAGE DISSOLUTION RETIREMENT 
                              COVERAGE INFORMATION 
           Sec. 38.  [356.49] [PROVISION OF INFORMATION IN THE EVENT 
        OF MARRIAGE DISSOLUTION.] 
           Subdivision 1.  [INFORMATION FOR A PENDING MARRIAGE 
        DISSOLUTION.] (a) Upon receipt of a written request by a person 
        with access to the data under subdivision 3 who cites this 
        statute, a public or private pension plan administrator must 
        provide the court and the parties to a marriage dissolution 
        action involving a plan member or former plan member with 
        information regarding pension benefits or rights of the plan 
        member or former plan member.  The pension plan shall provide 
        this information upon the request of the court or a party to the 
        action without requiring a signed authorization from the plan 
        member or former plan member. 
           (b) The information must include the pension benefits or 
        rights of the plan member or former plan member as of the first 
        day of the month following the date of the request, or as of the 
        end of the previous fiscal year for the plan, and as of the date 
        of valuation of marital assets under section 518.58, if the 
        person requesting the information specifies that date.  The 
        information must include the accrued service credit of the 
        person, the credited salary of the person for the most current 
        five-year period, a summary of the benefit plan, and any other 
        information relevant to the calculation of the present value of 
        the benefits or rights. 
           Subd. 2.  [INFORMATION FOR AN EXISTING DISSOLUTION DECREE.] 
        If a marriage dissolution decree rendered by a court of 
        competent jurisdiction prior to August 1, 1987, provided a 
        procedure for the distribution of future pension plan payments, 
        upon request the applicable pension plan administrator shall 
        provide on a timely basis to the court and the parties to the 
        action, the required information to implement that procedure 
        without requiring a signed authorization from the plan member or 
        former plan member. 
           Subd. 3.  [ACCESS TO DATA.] Notwithstanding any provision 
        of chapter 13 to the contrary, an administrator may release 
        private or confidential data on individuals to the court, the 
        parties to a marriage dissolution, their attorneys, and an 
        actuary appointed under section 518.582, to the extent necessary 
        to comply with this section, but only if the administrator has 
        received a copy of the legal petition showing that an action for 
        marriage dissolution has commenced and a copy of the affidavit 
        of service showing that the petition has been served on the 
        responding party to the action. 
                         SERVICE AND SALARY CREDIT UPON 
                               WRONGFUL DISCHARGE 
           Sec. 39.  Minnesota Statutes 2000, section 356.50, is 
        amended to read: 
           356.50 [SERVICE AND SALARY CREDIT FROM BACK PAY AWARDS IN 
        THE EVENT OF WRONGFUL DISCHARGE.] 
           (a) A person who is wrongfully discharged from public 
        employment that gave rise to coverage by a public employee 
        pension plan listed enumerated in section 356.30, subdivision 3, 
        is entitled to obtain allowable service credit from the 
        applicable public employee pension plan for the applicable 
        period caused by the wrongful discharge.  
           (b) A person is wrongfully discharged for purposes of this 
        section if: 
           (1) the person has been determined by a court of competent 
        jurisdiction or by an arbitrator in binding arbitration, 
        whichever applies, to have been wrongfully discharged from 
        public employment; 
           (2) the person received an award of back pay with respect 
        to that discharge; and 
           (3) the award does not include any amount for any lost or 
        interrupted public pension plan coverage. 
           (b) (c) To obtain the public pension plan allowable service 
        credit, the person shall pay the required member contribution 
        amount.  The required member contribution amount is the member 
        contribution rate or rates in effect for the pension plan during 
        the period of service covered by the back pay award, applied to 
        the unpaid gross salary amounts of the back pay award including 
        reemployment insurance, workers' compensation or wages from 
        other sources which reduced the back award.  No contributions 
        shall be made under this clause for compensation covered by a 
        public pension plan listed in section 356.30, subdivision 3, for 
        employment during the removal period.  The person shall pay the 
        required member contribution amount within 60 days of the date 
        of receipt of the back pay award, within 60 days of April 14, 
        1992, or within 60 days of a billing from the retirement fund, 
        whichever is later. 
           (c) (d) The public employer who wrongfully discharged the 
        public employee must pay an employer contribution on the back 
        pay award.  The employer contribution must be based on the 
        employer contribution rate or rates in effect for the pension 
        plan during the period of service covered by the back pay award, 
        applied to the salary amount on which the member contribution 
        amount was determined under paragraph (b) (c).  Interest on both 
        the required member and employer contribution amount must be 
        paid by the employer at the annual compound rate of 8.5 percent 
        per year, expressed monthly, between the date the contribution 
        amount would have been paid to the date of actual payment.  The 
        employer payment must be made within 30 days of the payment 
        under paragraph (b) (c). 
           Sec. 40.  Minnesota Statutes 2000, section 356.55, as 
        amended by Laws 2001, First Special Session chapter 10, article 
        6, section 16, is amended to read: 
           356.55 [PRIOR SERVICE CREDIT PURCHASE PAYMENT AMOUNT 
        DETERMINATION PROCEDURE.] 
           Subdivision 1.  [APPLICATION.] (a) 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.  
           (b) The purchase payment amount determination procedure 
        must recognize any service credit accrued to the purchaser in a 
        pension plan listed enumerated in section 356.30, subdivision 3. 
           (c) 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. 
           Subd. 2.  [DETERMINATION.] (a) Unless the prior service 
        credit purchase minimum purchase payment amount determined under 
        paragraph (d) is greater, the prior service credit purchase 
        amount is the result obtained by subtracting the amount 
        determined under paragraph (c) from the amount determined under 
        paragraph (b). 
           (b) The present value of the unreduced single life 
        retirement annuity, with the purchase of the additional service 
        credit included, must be calculated as follows: 
           (1) the age at first eligibility for an unreduced single 
        life retirement annuity, including the purchase of the 
        additional service credit, must be determined; 
           (2) the length of total service credit, including the 
        period of the purchase of the additional service credit, at the 
        age determined under clause (1) must be determined; 
           (3) the highest five successive years average salary at the 
        age determined under clause (1), assuming five percent annual 
        compounding salary increases from the most current annual salary 
        amount at the age determined under clause (1), must be 
        determined; 
           (4) using the benefit accrual rate or rates applicable to 
        the prospective purchaser of the service credit based on the 
        prospective purchaser's actual date of entry into covered 
        service, the length of service determined under clause (2), and 
        the final average salary determined under clause (3), the annual 
        unreduced single life retirement annuity amount must be 
        determined; 
           (5) the actuarial present value of the projected annual 
        unreduced single life retirement annuity amount determined under 
        clause (4) at the age determined under clause (1), using the 
        same actuarial factor that the plan would use to determine 
        actuarial equivalence for optional annuity forms and related 
        purposes, must be determined; and 
           (6) the discounted value of the amount determined under 
        clause (5) to the date of the prospective purchase, using an 
        interest rate of 8.5 percent and no mortality probability 
        decrement, must be determined. 
           (c) The present value of the unreduced single life 
        retirement annuity, without the purchase of the additional 
        service credit included, must be calculated as follows:  
           (1) the age at first eligibility for an unreduced single 
        life retirement annuity, not including the purchase of 
        additional service credit, must be determined; 
           (2) the length of accrued service credit, without the 
        period of the purchase of the additional service credit, at the 
        age determined under clause (1), must be determined; 
           (3) the highest five successive years average salary at the 
        age determined under clause (1), assuming five percent annual 
        compounding salary increases from the most current annual salary 
        amount to the age determined under clause (1), must be 
        determined; 
           (4) using the benefit accrual rate or rates applicable to 
        the prospective purchaser of the service credit based on the 
        prospective purchaser's actual date of entry into covered 
        service the length of service credit determined under clause 
        (2), and the final average salary determined under clause (3), 
        the annual unreduced single life retirement annuity amount must 
        be determined; 
           (5) the actuarial present value of the projected annual 
        unreduced single life retirement annuity amount determined under 
        clause (4) at the age determined under clause (1), using the 
        same actuarial factor that the plan would use to determine 
        actuarial equivalence for optional annuity forms and related 
        purposes, must be determined; 
           (6) the discounted value of the amount determined under 
        clause (5) to the date of the prospective purchase, using an 
        interest rate of 8.5 percent and no mortality probability 
        decrement, must be determined; and 
           (7) the net value of the discounted value determined under 
        clause (6), must be determined by applying a service ratio, 
        where the numerator is the total length of credited service 
        determined under paragraph (b), clause (2), reduced by the 
        period of the additional service credit proposed to be 
        purchased, and where the denominator is the total length of 
        service credit determined under clause (2). 
           (d) The minimum prior service credit purchase payment 
        amount is the amount determined by multiplying the most current 
        annual salary of the prospective purchaser by the combined 
        current employee, employer, and any additional employer 
        contribution rates for the applicable pension plan and by 
        multiplying that result by the number of years of service or 
        fractions of years of service of the potential service credit 
        purchase. 
           Subd. 3.  [SOURCE OF DETERMINATION.] The prior service 
        credit purchase payment amounts under subdivision 2 must be 
        calculated by the chief administrative officer of the public 
        pension plan using a prior service credit purchase payment 
        amount determination process that has been verified for accuracy 
        and consistency under this section by the commission-retained 
        actuary.  That verification must be in writing and must occur 
        before the first prior service credit purchase for the plan 
        under this section is accepted and every five years thereafter 
        or whenever the preretirement interest rate, postretirement 
        interest rate, payroll growth, or mortality actuarial assumption 
        for the applicable pension plan is modified under section 
        356.215, whichever occurs first. 
           Subd. 4.  [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 
        public pension plan may establish a fee to be charged to the 
        prospective purchaser for processing a prior service credit 
        purchase application and the prior service credit purchase 
        payment amount calculation.  The fee must be established by the 
        governing board of the pension plan and must be uniform for 
        comparable service credit purchase situations or actuarial 
        calculation requests.  The prior service credit purchase 
        processing fee structure must be published by the chief 
        administrative officer of the applicable retirement plan in the 
        State Register. 
           Subd. 5.  [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 
        the prior service credit purchase authorization special law or 
        general statute provision explicitly specifies otherwise, the 
        prior service credit purchase payment amount determined under 
        subdivision 2 is payable by the purchaser, but.  However, the 
        former employer of the purchaser or the current employer of the 
        purchaser may, at its discretion, pay all or a portion of the 
        purchase payment amount in excess of an amount equal to the 
        employee contribution rate or rates in effect during the prior 
        service period applied to the actual salary rates in effect 
        during the prior service period, plus annual compound interest 
        at the rate of 8.5 percent from the date on which the 
        contributions would have been made if made contemporaneous with 
        the service period to the date on which the payment is actually 
        made. 
           Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
        As part of the regular data reporting provided 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 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 the actuary 
        shall provide 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. 
           Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
        PROCEDURE.] (a) This section expires and is repealed on July 1, 
        2003. 
           (b) Authority for any public pension plan to accept a prior 
        service credit payment that is calculated in a timely fashion 
        under this section expires on October 1, 2003. 
           Sec. 41.  Minnesota Statutes 2000, section 356.551, is 
        amended to read: 
           356.551 [POST JULY 1, 2001 2003, PRIOR SERVICE CREDIT 
        PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
           (a) 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, and if section 356.55 has 
        expired, this section governs the determination of the prior 
        service credit purchase payment amount of any prior service 
        credit purchase. 
           (b) Subd. 2.  [DETERMINATION.] The prior service credit 
        purchase amount is an amount equal to the actuarial present 
        value, on the date of payment, as calculated by the chief 
        administrative officer of the pension plan and reviewed by the 
        actuary retained by the legislative commission on pensions and 
        retirement, of the amount of the additional retirement annuity 
        obtained by the acquisition of the additional service credit in 
        this section.  Calculation of this amount must be made using the 
        preretirement interest rate applicable to the public pension 
        plan specified in section 356.215, subdivision 4d, and the 
        mortality table adopted for the public pension plan.  The 
        calculation must assume continuous future service in the public 
        pension plan until, and retirement at, the age at which the 
        minimum requirements of the fund for normal retirement or 
        retirement with an annuity unreduced for retirement at an early 
        age, including section 356.30, are met with the additional 
        service credit purchased.  The calculation must also assume a 
        full-time equivalent salary, or actual salary, whichever is 
        greater, and a future salary history that includes annual salary 
        increases at the applicable salary increase rate for the plan 
        specified in section 356.215, subdivision 4d.  Payment must be 
        made in one lump sum within one year of the prior service credit 
        authorization.  Payment of the amount calculated under this 
        section must be made by the applicable eligible person.  
        However, the current employer or the prior employer may, at its 
        discretion, pay all or any portion of the payment amount that 
        exceeds an amount equal to the employee contribution rates in 
        effect during the period or periods of prior service applied to 
        the actual salary rates in effect during the period or periods 
        of prior service, plus interest at the rate of 8.5 percent a 
        year compounded annually from the date on which the 
        contributions would otherwise have been made to the date on 
        which the payment is made.  If the employer agrees to payments 
        under this paragraph subdivision, the purchaser must make the 
        employee payments required under this paragraph subdivision 
        within 290 days of the prior service credit authorization.  If 
        that employee payment is made, the employer payment under 
        this paragraph subdivision must be remitted to the chief 
        administrative officer of the public pension plan within 60 days 
        of receipt by the chief administrative officer of the employee 
        payments specified under this paragraph subdivision. 
           (c) Subd. 3.  [DOCUMENTATION.] The prospective purchaser 
        must provide any relevant documentation required by the chief 
        administrative officer of the public pension plan to determine 
        eligibility for the prior service credit under this section. 
           (d) Subd. 4.  [PAYMENT PRECONDITION FOR CREDIT GRANT.] 
        Service credit for the purchase period must be granted by the 
        public pension plan to the purchaser upon receipt of the 
        purchase payment amount specified in paragraph (b) subdivision 2.
           Sec. 42.  Minnesota Statutes 2001 Supplement, section 
        356.555, is amended to read: 
           356.555 [PARENTAL OR FAMILY LEAVE SERVICE CREDIT PURCHASE.] 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZATION.] 
        (a) Notwithstanding any provision to the contrary of the laws 
        governing a covered pension plan enumerated in subdivision 4, a 
        member of the pension plan who has at least three years of 
        allowable service covered by the applicable pension plan and who 
        was granted by the employer a parental leave of absence as 
        defined in paragraph (b), or who was granted by the employer a 
        family leave of absence as defined in paragraph (c), or who had 
        a parental or family-related break in employment, as defined in 
        paragraph (d), for which the person did not previously receive 
        service credit or for which the person 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 service, up to five years, of 
        allowable service credit in the applicable retirement plan.  The 
        purchase payment amount is governed by section 356.55. 
           (b) For purposes of this section, a parental leave of 
        absence is a temporary period of interruption of or separation 
        from active employment for the purposes of handling maternity or 
        paternity duties that has been approved by the employing unit 
        and that includes the right of reinstatement to employment. 
           (c) For purposes of this section, a family leave of absence 
        is a family leave under United States Code, title 42, section 
        12631, as amended. 
           (d) For purposes of this section, a parental or 
        family-related break in employment is a period following a 
        termination of active employment primarily for the purpose of 
        the birth of a child, the adoption of a child, or the provision 
        of care to a near relative or in-law, after which the person 
        returned to the prior employing unit or to an employing unit 
        covered by the same pension plan that provided retirement 
        coverage immediately prior to the termination of employment. 
           Subd. 2.  [APPLICATION AND DOCUMENTATION.] (a) A person who 
        desires to purchase service credit under subdivision 1 must 
        apply for the service credit purchase with the chief 
        administrative officer of the enumerated pension plan.  
           (b) The application must include all necessary 
        documentation of the qualifications of the person to make the 
        purchase, signed written permission to allow the chief 
        administrative officer to request and receive necessary 
        verification of all applicable facts and eligibility 
        requirements, and any other relevant information that the chief 
        administrative officer may require. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
        service credit in the applicable enumerated pension plan for the 
        purchase period must be granted to the purchaser upon receipt of 
        the purchase payment amount calculated under section 356.55.  
        Payment of the purchase amount must be made before the person 
        retires. 
           Subd. 4.  [COVERED PENSION PLANS.] This section applies to 
        the following pension plans: 
           (1) the general state employees retirement plan governed by 
        chapter 352; 
           (2) the correctional state employees retirement plan 
        governed by chapter 352; 
           (3) the general public employees retirement plan of the 
        public employees retirement association governed by chapter 353; 
           (4) the public employees police and fire plan governed by 
        chapter 353; 
           (5) the teachers retirement plan governed by chapter 354; 
           (6) the Minneapolis teachers retirement fund association 
        governed by chapter 354A; 
           (7) the Saint Paul teachers retirement fund association 
        governed by chapter 354A; 
           (8) the Duluth teachers retirement fund association 
        governed by chapter 354A; 
           (9) the Minneapolis employees retirement plan governed by 
        chapter 422A; 
           (10) the Minneapolis police relief association governed by 
        chapter 423B; and 
           (11) the Minneapolis fire department relief association 
        governed by sections 69.25 to 69.53 and augmented by Laws 1959, 
        chapters 213, 491, and 568, and other special local legislation 
        chapter 423C. 
                           COVERED SALARY LIMITATION 
           Sec. 43.  Minnesota Statutes 2000, section 356.611, is 
        amended to read: 
           356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 
        PURPOSES.] 
           Subdivision 1.  [STATE SALARY LIMITATIONS.] (a) 
        Notwithstanding any provision of law, bylaws, articles of 
        incorporation, retirement and disability allowance plan 
        agreements, or retirement plan contracts to the contrary, the 
        covered salary for pension purposes for a plan participant of a 
        covered retirement fund under enumerated in section 356.30, 
        subdivision 3, may not exceed 95 percent of the salary 
        established for the governor under section 15A.082 at the time 
        the person received the salary. 
           (b) This section does not apply to a salary paid: 
           (1) to the governor; 
           (2) to an employee of a political subdivision in a position 
        that is excluded from the limit as specified under section 
        43A.17, subdivision 9; or 
           (3) to a state employee in a position for which the 
        commissioner of employee relations has approved a salary rate 
        that exceeds 95 percent of the governor's salary. 
           (c) The limited covered salary determined under this 
        section must be used in determining employee and employer 
        contributions and in determining retirement annuities and other 
        benefits under the respective covered retirement fund and under 
        this chapter. 
           Subd. 2.  [FEDERAL COMPENSATION LIMITS.] For members first 
        contributing to a covered pension plan covered under enumerated 
        in section 356.30, subdivision 3, on or after July 1, 1995, 
        compensation in excess of the limitation set forth in Internal 
        Revenue Code 401(a)(17) shall may not be included for 
        contribution and benefit computation purposes.  The compensation 
        limit set forth in Internal Revenue Code 401(a)(17) on June 30, 
        1993, shall apply applies to members first contributing before 
        July 1, 1995. 
                      MEMBER CONTRIBUTION EMPLOYER PICK UP 
           Sec. 44.  Minnesota Statutes 2001 Supplement, section 
        356.62, is amended to read: 
           356.62 [PAYMENT OF EMPLOYEE CONTRIBUTION.] 
           (a) For purposes of any public pension plan, as defined in 
        section 365.615, paragraph (b), each employer shall pick up the 
        employee contributions required pursuant to law or the pension 
        plan for all salary payable after December 31, 1982.  If the 
        United States Treasury department rules that pursuant to under 
        section 414(h) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1992, that these picked up contributions 
        are not includable in the employee's adjusted gross income until 
        they are distributed or made available, then these picked up 
        contributions shall must be treated as employer contributions in 
        determining tax treatment pursuant to under the Internal Revenue 
        Code of 1986, as amended through December 31, 1992, and the 
        employer shall discontinue withholding federal income taxes on 
        the amount of these contributions.  The employer shall pay these 
        picked up contributions from the same source of funds as is used 
        to pay the salary of the employee.  The employer shall pick up 
        these employee contributions by a reduction in the cash salary 
        of the employee. 
           (b) Employee contributions that are picked up shall must be 
        treated for all purposes of the public pension plan in the same 
        manner and to the same extent as employee contributions that 
        were made prior to the date on which the employee contributions 
        pick up began.  The amount of the employee contributions that 
        are picked up shall must be included in the salary upon which 
        retirement coverage is credited and retirement and survivor's 
        benefits are determined.  For purposes of this section, 
        "employee" means any person covered by a public pension plan.  
        For purposes of this section, "employee contributions" include 
        any sums deducted from the employee's salary or wages or 
        otherwise paid in lieu thereof, regardless of whether they are 
        denominated contributions by the public pension plan. 
           (c) For any calendar year in which withholding has been 
        reduced pursuant to under this section, the employing unit shall 
        supply each employee and the commissioner of revenue with an 
        information return indicating the amount of the employer's 
        picked-up contributions for the calendar year that were not 
        subject to withholding.  This return shall must be provided to 
        the employee not later than January 31 of the succeeding 
        calendar year.  The commissioner of revenue shall prescribe the 
        form of the return and the provisions of section 289A.12 shall 
        must apply to the extent not inconsistent with the provisions of 
        this section. 
                          PENSION ASSET AND INVESTMENT 
                                  LIMITATIONS 
           Sec. 45.  [356.63] [LIMITATION ON USE OF PUBLIC PENSION 
        PLAN ASSETS.] 
           (a) Money held by or credited to a public pension plan as 
        assets, including employer and employee contributions, state 
        aid, appropriations from the state or a governmental 
        subdivision, and accrued earnings on investments, constitutes a 
        dedicated fund.  The dedicated fund may be used exclusively to 
        pay retirement annuities, service pensions, disability benefits, 
        survivor benefits, refunds of contributions, or other benefits 
        provided under the benefit plan document or documents governing 
        the public pension plan, and to pay reasonable administrative 
        expenses approved by the governing board of the public pension 
        plan or by another appropriate authority.  No assets of a public 
        pension plan may be loaned or transferred to the state or a 
        governmental subdivision or be used to amortize an unfunded 
        actuarial accrued liability in another public pension plan or 
        fund, whether or not the plan providing the assets consolidates 
        or has consolidated with the plan receiving the assets.  Nothing 
        in this section prohibits a public pension plan or the state 
        board of investment from investing the assets of a plan as 
        authorized by law, including the investment of the assets of 
        public pension plans by the state board of investment in a 
        commingled investment fund. 
           (b) A public pension plan for purposes of this section 
        means a pension plan or fund specified in section 356.20, 
        subdivision 2, or 356.30, subdivision 3, or a retirement or 
        pension plan or fund, including a supplemental retirement plan 
        or fund, established, maintained, or supported by a governmental 
        subdivision or public body whose revenues are derived from 
        taxation, fees, assessments, or other public sources. 
           Sec. 46.  [356.64] [REAL ESTATE INVESTMENTS.] 
           (a) Notwithstanding any law to the contrary, any public 
        pension plan whose assets are not invested by the state board of 
        investment may invest its funds in Minnesota situs nonfarm real 
        estate ownership interests or loans secured by mortgages or 
        deeds of trust if the investment is consistent with section 
        356A.04. 
           (b) Except to the extent authorized in the case of the 
        Minneapolis employees retirement fund under section 422A.05, 
        subdivision 2c, paragraph (a), an investment otherwise 
        authorized by this section must also comply with the 
        requirements and limitations of section 11A.24, subdivision 6. 
                         ABANDONED PENSION FUND AMOUNTS 
           Sec. 47.  Minnesota Statutes 2001 Supplement, section 
        356.65, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, unless the context clearly indicates otherwise, each of 
        the following terms shall have has the meanings meaning given to 
        them it:  
           (a) "Public pension fund" means any public pension plan as 
        defined in section 356.615 356.63, paragraph (b), and any 
        Minnesota volunteer firefighters relief association which is 
        established pursuant to under chapter 424A and governed pursuant 
        to under sections 69.771 to 69.776. 
           (b) "Unclaimed public pension fund amounts" means any 
        amounts representing accumulated member contributions, any 
        outstanding unpaid annuity, service pension or other retirement 
        benefit payments, including those made on warrants issued by the 
        commissioner of finance, which have been issued and delivered 
        for more than six months prior to the date of the end of the 
        fiscal year applicable to the public pension fund, and any 
        applicable interest to the credit of:  
           (1) an inactive or former member of a public pension fund 
        who is not entitled to a defined retirement annuity and who has 
        not applied for a refund of those amounts within five years 
        after the last member contribution was made; or 
           (2) a deceased inactive or former member of a public 
        pension fund if no survivor is entitled to a survivor benefit 
        and no survivor, designated beneficiary or legal representative 
        of the estate has applied for a refund of those amounts within 
        five years after the date of death of the inactive or former 
        member. 
           Sec. 48.  Minnesota Statutes 2000, section 356.65, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISPOSITION OF ABANDONED AMOUNTS.] Any unclaimed 
        public pension fund amounts existing in any public pension 
        fund shall be are presumed to be abandoned, but shall are not 
        be subject to the provisions of sections 345.31 to 345.60.  
        Unless the benefit plan of the public pension fund specifically 
        provides for a different disposition of unclaimed or abandoned 
        funds or amounts, any unclaimed public pension fund 
        amounts shall cancel and shall must be credited to the public 
        pension fund.  If the unclaimed public pension fund amount 
        exceeds $25 and the inactive or former member again becomes a 
        member of the applicable public pension fund plan or applies for 
        a retirement annuity pursuant to under section 3A.12, 352.72, 
        352B.30, 352C.051, 353.71, 354.60, 356.30, or 422A.16, 
        subdivision 8, whichever is applicable, applies, the canceled 
        amount shall must be restored to the credit of the person.  
                          HEALTH INSURANCE WITHHOLDING
           Sec. 49.  Minnesota Statutes 2000, section 356.87, is 
        amended to read: 
           356.87 [HEALTH INSURANCE WITHHOLDING.] 
           (a) Upon authorization of a person entitled to receive a 
        retirement annuity, disability benefit or survivor benefit, the 
        executive director of a public pension fund listed enumerated in 
        section 356.20, subdivision 2, shall withhold health insurance 
        premium amounts from the retirement annuity, disability benefit 
        or survivor benefit, and shall pay the premium amounts to the 
        public employees insurance program.  
           (b) The public employees insurance program shall reimburse 
        a public pension fund for the administrative expense of 
        withholding the premium amounts and shall assume liability for 
        the failure of a public pension fund to properly withhold the 
        premium amounts. 
                                RETIREMENT PLAN 
                                 ADMINISTRATION 
           Sec. 50.  [356B.05] [PUBLIC PENSION ADMINISTRATION 
        LEGISLATION.] 
           (a) Proposed administrative legislation recommended by or 
        on behalf of the Minnesota state retirement system, the public 
        employees retirement association, the teachers retirement 
        association, the Minneapolis employees retirement fund, or a 
        first class city teachers retirement fund association must be 
        presented to the legislative commission on pensions and 
        retirement, the state and local governmental operations 
        committee of the senate, and the governmental operations and 
        veterans affairs policy committee of the house of 
        representatives on or before October 1 of each year in order for 
        the proposed administrative legislation to be acted upon during 
        the upcoming legislative session.  The executive director or the 
        deputy executive director of the legislative commission on 
        pensions and retirement shall provide written comments on the 
        proposed administrative provisions to the public pension plans 
        by November 15 of each year. 
           (b) Proposed administrative legislation recommended by or 
        on behalf of a public employee pension plan or system under 
        paragraph (a) must address provisions: 
           (1) authorizing allowable service credit for leaves of 
        absence and related circumstances; 
           (2) governing offsets or deductions from the amount of 
        disability benefits; 
           (3) authorizing the purchase of allowable service credit 
        for prior uncredited periods; 
           (4) governing subsequent employment earnings by reemployed 
        annuitants; and 
           (5) authorizing retroactive effect for retirement annuity 
        or benefit applications. 
           (c) Where possible and desirable, taking into account the 
        differences among the public pension plans in existing law and 
        the unique characteristics of the individual public pension fund 
        memberships, uniform provisions relating to paragraph (b) for 
        all applicable public pension plans must be presented for 
        consideration during the legislative session.  Supporting 
        documentation setting forth the policy rationale for each set of 
        uniform provisions must accompany the proposed administrative 
        legislation. 
           Sec. 51.  [356B.10] [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, to a private company under contract with the state 
        board of investment, or with the board of directors of the 
        Minnesota state retirement system, whichever applies, to provide 
        deferred compensation services under section 352.96, 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 on the fund 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 on it 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 on them, 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. 52.  [CROSS-REFERENCE CHANGES.] 
           In the next and subsequent editions of Minnesota Statutes, 
        the revisor of statutes shall, in each section indicated in 
        column A, replace the cross-reference specified in column B with 
        the cross-reference set forth in column C: 
           column A            column B             column C
        3.751, subd. 1       356.89              356B.10
        3A.02, subd. 1       356.215, subd. 4d   356.215, subd. 8
        3A.02, subd. 4       356.215, subd. 4d   356.215, subd. 8
        3A.11, subd. 1       356.215, subd. 4d   356.215, subd. 8
        11A.18, subd. 6      356.215, subd. 4d   356.215, subd. 8
        11A.18, subd. 9      356.215, subd. 4d   356.215, subd. 8
        11A.18, subd. 11     356.215, subd. 4d   356.215, subd. 8
        13.631, subd. 2      356.80              356.49
        69.77, subd. 2b      356.215, subds. 4   356.215, subds. 4 to 15
                               to 4k
        69.77, subd. 2b      356.215, subd. 4d   356.215, subd. 8
        69.773, subd. 2      356.215, subd. 4d   356.215, subd. 8
        69.773, subd. 4      356.215, subd. 4d   356.215, subd. 8
        352.01, subd. 12     356.215, subd. 4d   356.215, subd. 8
        352.115, subd. 3     356.119, subd. 1    356.315, subd. 1
        352.115, subd. 3     356.119, subd. 2    356.315, subd. 2
        352.115, subd. 10    356.58              356.47
        352.119, subd. 2     356.215, subd. 4d   356.215, subd. 8
        352.72, subd. 2      356.215, subd. 4d   356.215, subd. 8
        352.87, subd. 3      356.119, subd. 2a   356.315, subd. 2a
        352.91, subd. 5      356.215, subd. 4d   356.215, subd. 8
        352.93, subd. 2      356.119, subd. 5    356.315, subd. 5
        352.95, subd. 1      356.119, subd. 5    356.315, subd. 5
        352B.08, subd. 2     356.119, subd. 6    356.315, subd. 6
        352B.08, subd. 3     356.215, subd. 4d   356.215, subd. 8
        352B.10, subd. 1     356.119, subd. 6    356.315, subd. 6
        352B.26, subd. 3     356.215, subd. 4d   356.215, subd. 8
        352B.30, subd. 4     356.215, subd. 4d   356.215, subd. 8
        352C.031, subd. 4    356.215, subd. 4d   356.215, subd. 8
        352C.033             356.215, subd. 4d   356.215, subd. 8
        353.01, subd. 14     356.215, subd. 4d   356.215, subd. 8
        353.03, subd. 3      356.215, subd. 4,   356.215, subd. 8
                               clause (4)
        353.271, subd. 2     356.215, subd. 4d   356.215, subd. 8
        353.29, subd. 3      356.119, subd. 3    356.315, subd. 3
        353.29, subd. 3      356.119, subd. 4    356.315, subd. 4
        353.29, subd. 3      356.119, subd. 1    356.315, subd. 1
        353.29, subd. 3      356.119, subd. 2    356.315, subd. 2
        353.29, subd. 4      356.371, subd. 3    356.46, subd. 3
        353.37, subd. 3a     356.58              356.47
        353.651, subd. 3     356.119, subd. 6    356.315, subd. 6
        353.656, subd. 1     356.119, subd. 6    356.315, subd. 6
        353.665, subd. 8     356.215, subd. 4d   356.215, subd. 8
        353.71, subd. 2      356.215, subd. 4d   356.215, subd. 8
        353A.08, subd. 1     356.215, subd. 4d   356.215, subd. 8
        353A.08, subd. 2     356.215, subd. 4d   356.215, subd. 8
        353A.09, subd. 2     356.215, subd. 4d   356.215, subd. 8
        353A.09, subd. 5     356.215, subd. 4d   356.215, subd. 8
        353E.04, subd. 3     356.119, subd. 5a   356.315, subd. 5a
        353E.06, subd. 1     356.119, subd. 5a   356.315, subd. 5a
        354.05, subd. 7      356.215, subd. 4d   356.215, subd. 8
        354.07, subd. 1      356.215, subd. 4d   356.215, subd. 8
        354.44, subd. 2      356.215, subd. 4d   356.215, subd. 8
        354.44, subd. 5      356.58              356.47
        354.44, subd. 6      356.119, subd. 1    356.315, subd. 1
        354.44, subd. 6      356.119, subd. 2    356.315, subd. 2
        354.44, subd. 6      356.119, subd. 3    356.315, subd. 3
        354.44               356.119             356.315
        354.45, subd. 2      356.215, subd. 4d   356.215, subd. 8
        354.48, subd. 3      356.215, subd. 4d   356.215, subd. 8
        354.55, subd. 11     356.215, subd. 4d   356.215, subd. 8
        354.63, subd. 2      356.215, subd. 4d   356.215, subd. 8
        354A.011, subd. 3    356.215, subd. 4d   356.215, subd. 8
        354A.026             356.215, subd. 4g   356.215, subd. 11
        354A.105             356.215, subd. 4d   356.215, subd. 8
        354A.12, subd. 1a    356.215, subd. 4d   356.215, subd. 8
        354A.31, subd. 1a    356.371, subd. 3    356.46, subd. 3
        354A.31, subd. 3     356.58              356.47
        354A.31, subd. 4     356.119, subd. 1    356.315, subd. 1
        354A.31, subd. 4     356.119, subd. 2    356.315, subd. 2
        354A.31, subd. 4a    356.119, subd. 1    356.315, subd. 1
        354A.31, subd. 4a    356.119, subd. 2    356.315, subd. 2
        354A.34              356.215, subd. 4d   356.215, subd. 8
        422A.01, subd. 6     356.215, subd. 4d   356.215, subd. 8
        422A.06, subd. 5     356.215, subd. 4d   356.215, subd. 8
        422A.08, subd. 5a    356.215, subd. 4d   356.215, subd. 8
        422A.101, subd. 3    356.865             356.43
        422A.15, subd. 2     356.215, subd. 4d   356.215, subd. 8
        422A.15, subd. 3     356.215, subd. 4d   356.215, subd. 8
        422A.16, subd. 2     356.215, subd. 4d   356.215, subd. 8
        422A.17              356.215, subd. 4d   356.215, subd. 8
        422A.23, subd. 12    356.215, subd. 4d   356.215, subd. 8
        423A.02, subd. 1     356.215, subd. 4,   356.215, subd. 8
                               clause (4)
        490.121, subd. 20    356.215, subd. 4d   356.215, subd. 8
        490.121, subd. 22    356.119, subd. 7    356.315, subd. 7
        490.124, subd. 1     356.119, subd. 7    356.315, subd. 7
        490.124, subd. 1     356.119, subd. 8    356.315, subd. 8
        490.124, subd. 5     356.215, subd. 4d   356.215, subd. 8
           Sec. 53.  [REPEALER.] 
           Subdivision 1.  [REPEALER OF OBSOLETE 
        PROVISIONS.] Minnesota Statutes 2000, sections 356.325; 356.35; 
        356.36; 356.37; 356.38; 356.39; 356.45; 356.451; 356.452; 
        356.453; 356.454; and 356.455, are repealed.  
           Subd. 2.  [REPEALER OF PROVISIONS REORGANIZED.] (a) 
        Minnesota Statutes 2000, sections 356.19; 356.305; 356.306; 
        356.31; 356.371, subdivisions 2 and 3; 356.372; 356.615; 356.71; 
        356.80; 356.81; 356.86; 356.865; 356.88; and 356.89, are 
        repealed. 
           (b) Minnesota Statutes 2001 Supplement, sections 356.371, 
        subdivision 1; and 356.866, are repealed. 
           Subd. 3.  [REPEALER TO RESOLVE REVISOR NOTE.] Laws 1997, 
        chapter 233, article 1, section 58, is repealed. 
           Sec. 54.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 53 are effective July 1, 2002. 
           (b) Section 51 is the continuation of the public pension 
        facility authority previously contained in Minnesota Statutes 
        2000, section 356.89, and may not be considered a grant of 
        authority to build or bond for a second building. 

                                   ARTICLE 12
                             JOINT RETIREMENT PLAN
                            BUILDING LEASE AUTHORITY
           Section 1.  Minnesota Statutes 2000, section 356.89, 
        subdivision 3, is amended to read: 
           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, or to a private company under contract with the 
        state board of investment or with the board of directors of the 
        Minnesota state retirement system, whichever applies, to provide 
        deferred compensation services under section 352.96, 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. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 2002. 

                                   ARTICLE 13
                          VOLUNTEER FIREFIGHTER RELIEF
                    ASSOCIATIONS SERVICE PENSION ELIGIBILITY
           Section 1.  Minnesota Statutes 2000, section 424A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] (a) A relief association, 
        when its articles of incorporation or bylaws so provide, may pay 
        out of the assets of its special fund a service pension to each 
        of its members who:  (1) separates from active service with the 
        fire department; (2) reaches age 50; (3) completes at least five 
        years of active service as an active member of the municipal 
        fire department to which the relief association is associated; 
        (4) completes at least five years of active membership with the 
        relief association before separation from active service; and 
        (5) complies with any additional conditions as to age, service, 
        and membership that are prescribed by the bylaws of the relief 
        association.  A service pension computed under this section may 
        be prorated monthly for fractional years of service, if the 
        bylaws or articles of incorporation of the relief association so 
        provide.  The service pension may be paid whether or not the 
        municipality or nonprofit firefighting corporation to which the 
        relief association is associated qualifies for fire state aid 
        under chapter 69.  
           (b) In the case of a member who has completed at least five 
        years of active service as an active member of the fire 
        department to which the relief association is associated on the 
        date that the relief association is established and 
        incorporated, the requirement that the member complete at least 
        five years of active membership with the relief association 
        before separation from active service may be waived by the board 
        of trustees of the relief association if the member completes at 
        least five years of inactive membership with the relief 
        association before the payment of the service pension.  During 
        the period of inactive membership, the member is not entitled to 
        receive disability benefit coverage, is not entitled to receive 
        additional service credit towards computation of a service 
        pension, and is considered to have the status of a person 
        entitled to a deferred service pension under subdivision 7. 
           (c) No municipality or nonprofit firefighting corporation 
        may delegate the power to take final action in setting a service 
        pension or ancillary benefit amount or level to the board of 
        trustees of the relief association or to approve in advance a 
        service pension or ancillary benefit amount or level equal to 
        the maximum amount or level that this chapter would allow rather 
        than a specific dollar amount or level.  
           (d) No relief association as defined in section 424A.001, 
        subdivision 4, may pay a service pension or disability benefit 
        to a former member of the relief association if that person has 
        not separated from active service with the fire department to 
        which the relief association is directly associated, unless: 
           (1) the person is employed subsequent to retirement by the 
        municipality or the independent nonprofit firefighting 
        corporation, whichever applies, to perform duties within the 
        municipal fire department or corporation on a full-time basis; 
           (2) the governing body of the municipality or of the 
        corporation has filed its determination with the board of 
        trustees of the relief association that the person's experience 
        with and service to the fire department in that person's 
        full-time capacity would be difficult to replace; and 
           (3) the bylaws of the relief association were amended to 
        provide for the payment of a service pension or disability 
        benefit for such full-time employees. 

                                   ARTICLE 14
                             ADDITIONAL PROVISIONS
           Section 1.  Laws 1997, chapter 202, article 2, section 61, 
        as amended by Laws 1999, chapter 250, article 1, section 106, 
        and Laws 2001, First Special Session chapter 10, article 2, 
        section 85, is amended to read: 
           Sec. 61.  [VOLUNTARY UNPAID LEAVE OF ABSENCE.] 
           Appointing authorities in state government may allow each 
        employee to take an unpaid leave of absence for up to 320 hours 
        during the period ending June 30, 2003, and an additional 160 
        hours during the period beginning July 1, 2003, and ending June 
        30, 2005.  Each appointing authority approving such a leave 
        shall allow the employee to continue accruing vacation and sick 
        leave, be eligible for paid holidays and insurance benefits, 
        accrue seniority, and accrue service credit in state retirement 
        plans permitting service credits for authorized leaves of 
        absence as if the employee had actually been employed during the 
        time of the leave.  If the leave of absence is for one full pay 
        period or longer, any holiday pay shall be included in the first 
        payroll warrant after return from the leave of absence.  The 
        appointing authority shall attempt to grant requests for unpaid 
        leaves of absence consistent with the need to continue efficient 
        operation of the agency.  However, each appointing authority 
        shall retain discretion to grant or refuse to grant requests for 
        leaves of absence and to schedule and cancel leaves, subject to 
        applicable provisions of collective bargaining agreements and 
        compensation plans. 
           Sec. 2.  [CLARIFICATION OF APPROPRIATION.] 
           Subdivision 1.  [PURPOSE.] This section clarifies treatment 
        extended to an individual specified in Laws 2001, chapter 169, 
        section 5, and is intended to eliminate any potential windfall 
        to the public employees retirement association police and fire 
        plan fund and the public employees retirement association 
        general employees plan fund that may result from that session 
        law. 
           Subd. 2.  [ELIGIBILITY.] The eligible individual is an 
        individual specified in Laws 2001, chapter 169, section 5, who 
        was an assistant commissioner in the department of public safety 
        from April 30, 1994, through May 31, 1998, while on an 
        intergovernmental mobility assignment or assignments to the 
        state from the city of St. Paul police department. 
           Subd. 3.  [SALARY INCREMENT.] The salary increment in any 
        applicable year or portion of a year is the difference between 
        the salary the eligible individual in subdivision 2 received as 
        assistant commissioner and the salary upon which pension 
        contributions were made for that year or portion of a year. 
           Subd. 4.  [BENEFIT COMPUTATIONS.] The retirement benefits, 
        or disability benefits, if applicable, under the public 
        employees retirement association police and fire plan and the 
        public employees retirement association general plan are to be 
        computed based on plan law applicable to the eligible individual 
        under subdivision 2 given the eligible individual's termination 
        of service date or dates, or the disability benefit accrual date 
        or dates as applicable, except for inclusion of salary 
        increments under subdivision 3 for purposes of determining 
        average salary under sections 353.29, subdivision 2, and 
        353.651, subdivision 2. 
           Subd. 5.  [ANNUITY RESERVE COMPARISONS.] The executive 
        director of the public employees retirement association is to 
        determine the increased actuarial reserves, if any, needed to 
        support the annuities from the two applicable public employees 
        retirement association retirement funds on the effective date of 
        retirement or disability from the applicable plans due to this 
        section. 
           Subd. 6.  [COMPARISON TO APPROPRIATION AMOUNTS.] The total 
        amount determined under subdivision 5, if zero or positive, is 
        to be subtracted from the total value of any appropriation 
        received by the public employees retirement association under 
        Laws 2001, chapter 169, section 5, on the date computations 
        under subdivision 5 occur assuming 8.5 percent interest 
        compounded annually from the date the appropriation is received 
        until the computation date under subdivision 5. 
           Subd. 7.  [DISPOSITION OF EXCESS.] The amount determined 
        under subdivision 6, net of the value of any foregone employer 
        contributions, including 8.5 percent interest compounded 
        annually relating to the salary increments under subdivision 3, 
        if any, is to be redeposited within 30 days following the date 
        of that determination in the state's general fund. 
           Subd. 8.  [INTERNAL ALLOCATIONS.] Notwithstanding any law 
        to the contrary, the executive director is authorized to place 
        amounts received, if any, due to Laws 2001, chapter 169, section 
        5, in the public employees retirement association general plan 
        fund or the public employees retirement association police and 
        fire plan fund, or to allocate amounts between these funds as 
        deemed appropriate.  Following the determinations required by 
        this section, the executive director may again reallocate 
        amounts between the two funds to reflect a reasonable allocation 
        of the remaining net appropriation amount. 
           Subd. 9.  [CONTRIBUTION RATIFICATION.] Contributions and 
        interest paid to the association relating to the salary 
        increments referred to in subdivision 3 are authorized for 
        deposit in the public employees retirement association police 
        and fire plan fund and are ratified. 
           Sec. 3.  [PUBLIC EMPLOYEES POLICE AND FIRE PLAN; RECISION 
        OF ANNUITY APPLICATION IN FAVOR OF DISABILITY BENEFIT 
        APPLICATION.] 
           (a) Notwithstanding Minnesota Statutes, section 353.29, 
        subdivision 7, or any other law to the contrary, an eligible 
        person described in paragraph (b) may revoke an application for 
        a retirement annuity from the public employees police and fire 
        plan and may file an application for a disability benefit from 
        the public employees police and fire plan, effective the first 
        day of the month following the approval of the disability 
        application under Minnesota Statutes, section 353.33, 
        subdivisions 2 and 4. 
           (b) An eligible person is a person who: 
           (1) was born on August 6, 1949; 
           (2) was employed for 27 years with the city of West St. 
        Paul fire department; 
           (3) terminated employment with the city of West St. Paul on 
        January 31, 2001; 
           (4) filed six "first report of injury" documents for back 
        injuries with the city of West St. Paul between June 1984 and 
        December 2000; 
           (5) requested recision of his public employees police and 
        fire plan retirement annuity on February 16, 2001, and tendered 
        a personal check repaying the initial annuity amount; and 
           (6) unsuccessfully appealed to the public employees 
        retirement association board of trustees on May 10, 2001, for 
        authority to rescind a retirement annuity application and to 
        apply for a disability benefit. 
           Sec. 4.  [MSRS-GENERAL; ACCELERATED OPTIONAL ANNUITY FORM.] 
           (a) An eligible person described in paragraph (b) is 
        entitled to elect from the general state employees retirement 
        plan of the Minnesota state retirement system the actuarial 
        equivalent accelerated optional annuity form specified in 
        paragraph (c). 
           (b) An eligible person is a person who:  
           (1) was born on October 13, 1943; 
           (2) was employed as a teacher by the Benson public schools 
        from August 1967 to June 1969; 
           (3) was employed as a teacher by the Richfield public 
        schools from January 1, 1971, to June 1973; and 
           (4) was initially employed by the office of the legislative 
        auditor on October 14, 1985, and remains an employee of the 
        office of the legislative auditor. 
           (c) The board of directors of the Minnesota state 
        retirement system shall establish an accelerated optional 
        retirement annuity for the eligible person.  The accelerated 
        optional retirement annuity form must replicate to the extent 
        practicable the accelerated optional retirement annuity form 
        that would apply to the eligible person by the teachers 
        retirement association.  The optional annuity form must be the 
        actuarial equivalent of the eligible person's single life 
        annuity.  The accelerated optional retirement annuity form must 
        be established prior to October 1, 2002.  The cost of the 
        actuarial calculations of the consulting actuary retained by the 
        legislative commission on pensions and retirement is payable by 
        the general state employees retirement plan and the plan must be 
        reimbursed by the eligible person for those costs upon 
        notification by the executive director of the Minnesota state 
        retirement system. 
           Sec. 5.  [PRIOR OUT-OF-STATE TEACHING SERVICE CREDIT 
        PURCHASE BY PUBLIC EMPLOYEES RETIREMENT ASSOCIATION MEMBER.] 
           Subdivision 1.  [ELIGIBILITY.] An eligible member is a 
        current active member of the public employees retirement 
        association general plan who became a member of that plan on 
        August 1, 1973, and who was born on December 16, 1944.  An 
        eligible member may purchase allowable service credit in the 
        public employees retirement association general plan as 
        specified in this section. 
           Subd. 2.  [SERVICE CREDIT PURCHASE AUTHORIZED.] (a) An 
        eligible member specified in subdivision 1 is eligible to 
        purchase up to four years of allowable service credit from the 
        general employees retirement plan of the public employees 
        retirement association for out-of-state teaching service by 
        making payment under Minnesota Statutes, section 356.55 or 
        356.551, whichever is applicable, provided that the out-of-state 
        teaching service was performed for an educational institution 
        that was established and operated by another governmental 
        jurisdiction and that the eligible member 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. 
           (b) For purposes of paragraph (a), "another governmental 
        jurisdiction" means another state of the United States or a 
        governmental subdivision of another state of the United States. 
           Subd. 3.  [APPLICATION AND DOCUMENTATION.] An eligible 
        member under subdivision 1 who desires to purchase service 
        credit under this section must apply with the executive director 
        of the public employees retirement association to make the 
        purchase.  The application must include all necessary 
        documentation of the eligible member'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 eligible member's effective date 
        of retirement or before January 1, 2003, whichever is earlier. 
           Subd. 4.  [SERVICE CREDIT GRANT.] Allowable service credit 
        for the purchase period must be granted by the public employees 
        retirement association to the purchasing eligible member on 
        receipt of the required purchase payment amount. 
           Sec. 6.  [LUMP SUM PRE-1973 RETIREE POSTRETIREMENT 
        ADJUSTMENT IN CERTAIN INSTANCES.] 
           (a) Notwithstanding any provision of Minnesota Statutes 
        2001 Supplement, section 356.866, or Minnesota Statutes, section 
        356.431, to the contrary, an eligible person described in 
        paragraph (b) may elect to receive the pre-1973 postretirement 
        adjustment in a lump sum payment rather than as an annuity 
        increase.  The election must be made before September 1, 2002, 
        and is irrevocable by the annuitant or benefit recipient.  For 
        the December 2002 lump sum payment, the amount must be the total 
        of the monthly amounts remaining unpaid to the annuitant or the 
        benefit recipient after the election. 
           (b) An eligible person is a person who: 
           (1) was born on December 5, 1908; 
           (2) is the survivor of a deceased annuitant of the general 
        employees retirement plan of the public employees retirement 
        association who was born on March 22, 1904, who retired on May 
        1, 1969, and who died on April 9, 1980; and 
           (3) waived an annuity from the general employees retirement 
        plan of the public employees retirement association in favor of 
        a surviving spouse benefit on May 1, 1980. 
           Sec. 7.  [PERA AND MSRS; SERVICE CREDIT PURCHASE.] 
           Subdivision 1.  [ELIGIBILITY.] An eligible person is a 
        person who: 
           (1) served as a legislator representing Hubbard county 
        during the 1961-1963 legislative session; 
           (2) was employed by the department of natural resources or 
        its predecessor at Itasca state park from 1964 to 1980; and 
           (3) retired from the general state employees retirement 
        plan of the Minnesota state retirement system on July 1, 1980, 
        with ten years, six months, and nine days of service credit. 
           Subd. 2.  [PERA SERVICE CREDIT PURCHASE.] Upon the receipt 
        of an amount equal to the member contribution that the eligible 
        person would have otherwise made in 1961 and 1962, plus annual 
        compound interest on the total equivalent member contribution 
        amount at the rate of 8.5 percent from January 1, 1962, to the 
        date of payment, an eligible person is entitled to receive two 
        years of service credit from the general employees retirement 
        plan of the public employees retirement association for prior 
        uncredited service as a member of the legislature. 
           Subd. 3.  [MSRS SERVICE CREDIT PURCHASE.] Upon the receipt 
        of an amount equal to the balance of the employee contribution 
        that the eligible person would have otherwise made during the 
        period 1964 to 1980 if the eligible person was employed on a 
        full-time basis, plus annual compound interest on the total 
        equivalent employee contribution amount at the rate of 8.5 
        percent from January 1, 1972, to the date of payment, an 
        eligible person is entitled to receive 5.48 years of service 
        credit from the general state employees retirement plan of the 
        Minnesota state retirement system for uncredited periods from 
        1964 to 1980 between seasonal Itasca state park employment. 
           Subd. 4.  [COMBINED SERVICE ANNUITY 
        APPLICATION.] Notwithstanding the time that has elapsed since 
        initial retirement, an eligible person may apply for a 
        retirement annuity from the general employees retirement plan of 
        the public employees retirement association and may apply for a 
        recomputed retirement annuity from the general state employees 
        retirement plan of the Minnesota state retirement system under 
        Minnesota Statutes, section 356.30. 
           Subd. 5.  [PAYMENT.] (a) The house of representatives shall 
        pay the executive director of the public employees retirement 
        association an amount equal to the required reserves needed to 
        support the retirement annuity of an eligible person under 
        subdivisions 2 and 4, reduced by the amount of the equivalent 
        member contribution, plus required interest, under subdivision 
        2.  Payment must be made within ten days of notification by the 
        executive director that the equivalent member contribution 
        amount, plus required interest, has been received and of the 
        amount due.  The payment and the equivalent member contribution 
        amount, plus interest, must be deposited in the public employees 
        retirement fund and transferred to the Minnesota postretirement 
        investment fund. 
           (b) The department of natural resources shall pay the 
        executive director of the Minnesota state retirement system an 
        amount equal to the required reserves needed to support the 
        retirement annuity of an eligible person under subdivisions 3 
        and 4, reduced by the amount of the equivalent employee 
        contribution, plus required interest, under subdivision 3.  
        Payment must be made within ten days of notification by the 
        executive director that the equivalent employee contribution 
        amount, plus required interest, has been received and of the 
        amount due.  The payment and the equivalent member contribution 
        amount, plus interest, must be deposited in the state employees 
        retirement fund and transferred to the Minnesota postretirement 
        investment fund. 
           Subd. 6.  [RETIREMENT ANNUITY ACCRUAL.] The retirement 
        annuities payable under this section accrue on the first day of 
        the month next following final enactment. 
           Sec. 8.  [PRIOR SERVICE CREDIT PURCHASE REFUND.] 
           (a) An eligible person may receive a refund of any prior 
        military service credit purchase payment amount paid prior to 
        the applicable effective date of the federal Economic Growth and 
        Tax Reconciliation Act of 2001 if the eligible person transfers 
        pretax funds to the teachers retirement association under 
        Minnesota Statutes, section 356.55 or 356.551, whichever 
        applies, sufficient to purchase the identical period of prior 
        military service credit. 
           (b) An eligible person is a person who: 
           (1) was born on February 6, 1947; 
           (2) served in the United States armed forces from March 19, 
        1969, to October 22, 1970; 
           (3) had credit for 27 years of service from the teachers 
        retirement association as of June 30, 2000; and 
           (4) purchased 1.58 years of prior military service credit 
        from the teachers retirement association with the payment of 
        $23,958.18 on or before April 30, 2001. 
           (c) This section is contingent on the teachers retirement 
        association applying for and receiving a favorable ruling from 
        the federal Internal Revenue Service regarding the payment of 
        this refund. 
           Sec. 9.  [PERA-P&F; EXCEPTION TO DISABILITY APPLICATION 
        DEADLINE.] 
           (a) Notwithstanding any provision of Minnesota Statutes, 
        section 353.33, subdivision 2, to the contrary, an eligible 
        person described in paragraph (b) is entitled to file a 
        disability benefit application with the general employees 
        retirement plan of the public employees retirement association 
        or with the public employees police and fire retirement plan 
        and, if otherwise qualified, to receive a disability benefit 
        from one or both of those retirement plans.  
           (b) An eligible person is a person who: 
           (1) was born on February 8, 1970; 
           (2) was an employee of the city of Bagley from May 1, 1991, 
        to May 31, 1992, and was covered by the coordinated program of 
        the general employees retirement plan of the public employees 
        retirement system; 
           (3) was employed as a police officer by the police 
        department of the city of Blooming Prairie from January 9, 1995, 
        to May 31, 1997, and was covered by the public employees police 
        and fire retirement plan; 
           (4) was struck by a motor vehicle while assisting with 
        traffic management at an accident site on interstate highway 35 
        in January 1997 resulting in various broken bones and other 
        injuries, necessitating at least eight surgeries; 
           (5) was placed on medical leave by the city of Blooming 
        Prairie on September 1, 1997, until January 1, 1998, upon 
        termination of employment; and 
           (6) failed to timely apply for disability benefits due to 
        the injuries which were diagnosed to have caused significant 
        depression and posttraumatic stress disorder. 
           (c) This section expires one year after the date of final 
        enactment. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1 to 9 are effective on the day following final 
        enactment. 

                                   ARTICLE 15 
              COORDINATED PROGRAM OF LEGISLATORS RETIREMENT PLAN; 
                           SOCIAL SECURITY REFERENDUM 
           Section 1.  [3A.15] [COORDINATED PROGRAM OF LEGISLATORS 
        RETIREMENT PLAN.] 
           The coordinated program of the legislators retirement plan 
        is created.  The provisions of sections 3A.01 to 3A.13 apply to 
        the coordinated program. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  [355.629] [SECOND SOCIAL SECURITY REFERENDUM.] 
           Subdivision 1.  [ELECTION OF SOCIAL SECURITY COVERAGE.] Any 
        member of the legislators retirement plan established under 
        chapter 3A who did not elect coverage under an agreement under 
        section 218(d) of the Social Security Act as provided for in 
        section 355.624 is entitled to elect future social security 
        coverage and retroactive coverage for the period consistent with 
        applicable federal law, in a second social security referendum.  
        Any member who so elects shall become a member of the 
        coordinated program of the legislators retirement plan under 
        section 3A.15.  The governor shall set a date for the referendum 
        and shall undertake any duties to amend the state's Social 
        Security Act, section 218 agreement, with the secretary of 
        health and human services. 
           Subd. 2.  [PAYMENT OF RETROACTIVE SOCIAL SECURITY 
        TAXES.] For any service by a legislator who is in office on the 
        date of the agreement or modification of the agreement with the 
        secretary of health and human services, the executive director 
        of the Minnesota state retirement system shall cause to be paid 
        an amount for each legislator, including an amount for 
        retroactive coverage, equal to the taxes which would have been 
        imposed on the legislator and state of Minnesota by the Federal 
        Insurance Contributions Act had the service been covered at the 
        time performed.  This payment shall be computed from the date of 
        retroactive coverage to the date that deductions are first taken 
        from the wages of each legislator for social security coverage.  
        Before making a payment on behalf of a legislator, the executive 
        director must receive from the legislator the funds necessary to 
        make the payment.  Nothing in this section shall require a 
        legislator to elect retroactive social security coverage. 
           Subd. 3.  [DEDUCTION FROM WAGES.] A legislator who elects 
        social security coverage under this section shall have a 
        deduction taken from wages in an amount equal to the employer 
        and employee contributions required by either subdivision 1 or 
        subdivision 2. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 

                                   ARTICLE 16 
                     MINNEAPOLIS POLICE OPTIONAL ANNUITIES 
           Section 1.  Minnesota Statutes 2000, section 423B.09, 
        subdivision 6, is amended to read: 
           Subd. 6.  [OPTIONAL ANNUITIES.] A member who is retired or 
        disabled on the effective date of Laws 1997, chapter 233, 
        article 4, section 6, may elect an optional retirement annuity 
        within 60 days of the effective date of Laws 1997, chapter 233, 
        article 4, section 6, instead of the normal retirement annuity.  
        A member who retires or becomes disabled after the effective 
        date of Laws 1997, chapter 233, article 4, section 6, may elect 
        an optional retirement annuity prior to the receipt of any 
        benefits.  The optional retirement annuity may be a 50 percent, 
        a 75 percent, or a 100 percent joint and survivor annuity 
        without reinstatement in the event of the designated beneficiary 
        predeceasing the member or a 50 percent, a 75 percent, or a 100 
        percent joint and survivor annuity with reinstatement in the 
        event of the designated beneficiary predeceasing the member.  
        Optional retirement annuity forms must be actuarially equivalent 
        to the service pension and automatic survivor coverage otherwise 
        payable to the retiring member and the member's 
        beneficiaries.  A member may only designate the member's spouse 
        as the recipient of a joint and survivor annuity and no benefit 
        or annuity may be paid to a person who does not meet the 
        definition of a surviving spouse member under section 423B.01, 
        subdivision 17.  Once selected, the optional annuity is 
        irrevocable. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment 
        and applies to all joint annuity options selected by members of 
        the Minneapolis police relief association. 
           Presented to the governor May 20, 2002 
           Signed by the governor May 22, 2002, 1:17 p.m.