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

Office of the Revisor of Statutes

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

                              CHAPTER 8-H.F.No. 44 
                  An act relating to retirement; various public pension 
                  plans; clarifying and revising various plan 
                  provisions; eliminating obsolete provisions; defining 
                  average salary; modifying the definition of allowable 
                  service to include time on strike; defining covered 
                  salary to include certain employer contributions to 
                  supplemental retirement plans; specifying itemized 
                  detail of plan administrative expenses in annual 
                  financial reporting; excluding police officers of the 
                  University of Minnesota from the public employees 
                  police and fire fund; clarifying collection procedures 
                  relating to charter schools; adding a uniform 
                  nonassignment and legal process exemption provision; 
                  providing for various member and employer contribution 
                  rate increases; adding employees of Bridges Medical 
                  Services, Hutchinson Area Health Care, and Northfield 
                  Hospital to privatization coverage; extending date for 
                  filing special law approval with the secretary of 
                  state for the RenVilla Nursing Home; requiring the 
                  privatization periodic filing of updated copies of 
                  articles of incorporation and bylaws; modifying a 
                  higher education individual retirement account plan 
                  investment option provision; implementing the 
                  recommendations of the Volunteer Firefighter Relief 
                  Association working group of the state auditor; 
                  modifying the trigger date for filing financial 
                  reports; revising the per firefighter financing 
                  requirements for monthly benefit service pensions; 
                  modifying the options for crediting interest on 
                  deferred service pensions; clarifying the deferred 
                  service pension options available to defined 
                  contribution plans; providing for the crediting of 
                  service during military service leaves; requiring the 
                  amortization of experience losses; clarifying the 
                  compliance requirements for the qualification for fire 
                  state aid; modifying a limit on mutual fund 
                  investments; clarifying corporate stock and exchange 
                  traded funds investment authority; modifying the 
                  municipal representation requirements on relief 
                  association governing boards; clarifying exemptions 
                  from process and taxation; providing that certain laws 
                  do not apply to the consolidation of specified 
                  volunteer firefighter relief associations; providing 
                  an ad hoc postretirement adjustment to Eveleth police 
                  and fire trust fund benefit recipients; authorizing 
                  the Maplewood Firefighters Relief Association to 
                  transfer assets to the Oakdale Firefighters Relief 
                  Association to cover service credits earned by certain 
                  individuals; appropriating money; amending Minnesota 
                  Statutes 2004, sections 3A.13; 69.011, subdivision 2b, 
                  by adding a subdivision; 69.021, subdivisions 5, 11; 
                  69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision 
                  4; 69.771; 69.772, subdivisions 3, 4; 69.773, 
                  subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4, 
                  5, 12, 13, 21, 23, by adding a subdivision; 352.021, 
                  subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12; 
                  352.041, subdivisions 1, 2, 3, 5; 352.115, 
                  subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 
                  352.22, subdivision 10; 352.87, subdivision 3; 352.91, 
                  by adding a subdivision; 352.93, subdivision 1; 
                  352B.01, subdivisions 1, 2, 3, 11; 352B.02, 
                  subdivision 1e; 352B.071; 352C.021, by adding a 
                  subdivision; 352D.01; 352D.015, subdivisions 3, 4; 
                  352D.03; 352D.05, subdivision 4; 352D.085, subdivision 
                  1; 352D.09, subdivision 5; 352D.12; 353.01, 
                  subdivisions 6, 10, 14, 32, 33, by adding a 
                  subdivision; 353.025; 353.026; 353.027; 353.028; 
                  353.14; 353.15, subdivisions 1, 3; 353.27, 
                  subdivisions 2, 3, 3a, 11, by adding a subdivision; 
                  353.271; 353.28, subdivisions 5, 6; 353.29, 
                  subdivision 3; 353.31, subdivision 1c; 353.32, 
                  subdivision 9; 353.33, subdivisions 3, 12; 353.64, by 
                  adding a subdivision; 353.65, subdivisions 2, 3; 
                  353.651, subdivision 3; 353.656, subdivision 1; 
                  353B.02, subdivision 10; 353F.02, subdivision 4; 
                  354.05, subdivisions 7, 35, by adding a subdivision; 
                  354.091; 354.094, subdivision 1; 354.10, subdivisions 
                  1, 3, 4; 354.33, subdivision 5; 354.39; 354.41, 
                  subdivision 2; 354.42, by adding a subdivision; 
                  354.44, subdivisions 2, 6; 354A.011, subdivisions 3a, 
                  24, by adding a subdivision; 354A.021, subdivision 5, 
                  by adding a subdivision; 354A.097, subdivision 1; 
                  354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions 
                  2, 3; 354B.25, subdivision 2; 356.20, subdivision 4; 
                  356.215, subdivision 8; 356.216; 356.47, subdivision 
                  3; 356.551; 356.611, subdivision 1; 356A.06, 
                  subdivision 7; 383B.46, subdivision 2; 383B.47; 
                  383B.48; 383B.49; 422A.01, subdivisions 6, 11, by 
                  adding subdivisions; 422A.06, subdivision 7; 422A.10, 
                  subdivisions 1, 2; 422A.15, subdivision 1; 422A.16, 
                  subdivision 9; 422A.22, subdivisions 1, 3, 4, 6; 
                  422A.231; 422A.24; 423B.01, by adding a subdivision; 
                  423B.05, subdivision 3; 423B.09, subdivision 1, by 
                  adding a subdivision; 423B.10, subdivision 1; 423B.17; 
                  423C.01, by adding a subdivision; 423C.05, subdivision 
                  2; 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04, 
                  subdivision 1; 424B.10, subdivision 1; 471A.10; 
                  490.121, subdivisions 4, 20, 21, by adding a 
                  subdivision; 490.126, subdivision 5; Laws 1999, 
                  chapter 222, article 16, section 16, as amended; Laws 
                  2000, chapter 461, article 4, section 4, as amended; 
                  Laws 2004, chapter 267, article 12, section 4; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 356; 383B; 423C; 424A; repealing Minnesota 
                  Statutes 2004, sections 352.119, subdivision 1; 
                  352.15, subdivision 1a; 352C.031, subdivision 3; 
                  353.15, subdivision 2; 353.29, subdivision 2; 353.34, 
                  subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c; 
                  353.46, subdivision 4; 353.651, subdivision 2; 
                  353.663; 353.74; 353.75; 354.10, subdivision 2; 
                  354.59; 422A.22, subdivisions 2, 5; 422A.221. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                          2005 OMNIBUS RETIREMENT BILL

                                   ARTICLE 1
                         COVERED SALARY; AVERAGE SALARY
           Section 1.  Minnesota Statutes 2004, section 352.01, 
        subdivision 13, is amended to read: 
           Subd. 13.  [SALARY.] (a) Subject to the limitations of 
        section 356.611, "salary" means wages, or other periodic 
        compensation, paid to an employee before deductions for deferred 
        compensation, supplemental retirement plans, or other voluntary 
        salary reduction programs.  
           (b) "Salary" does not include: 
           (1) lump sum sick leave payments; 
           (2) severance payments; 
           (3) lump sum annual leave payments and overtime payments 
        made at the time of separation from state service; 
           (4) payments in lieu of any employer-paid group insurance 
        coverage, including the difference between single and family 
        rates that may be paid to an employee with single coverage; 
           (5) payments made as an employer-paid fringe benefit; 
           (6) workers' compensation payments; 
           (7) employer contributions to a deferred compensation or 
        tax sheltered annuity program; and 
           (8) amounts contributed under a benevolent vacation and 
        sick leave donation program. 
           (c) Amounts provided to an employee by the employer through 
        a grievance proceeding or a legal settlement are salary only if 
        the settlement is reviewed by the executive director and the 
        amounts are determined by the executive director to be 
        consistent with paragraph (a) and prior determinations. 
           Sec. 2.  Minnesota Statutes 2004, section 352.01, is 
        amended by adding a subdivision to read: 
           Subd. 14a.  [AVERAGE SALARY.] (a) "Average salary" means 
        the average of the highest five successive years of salary upon 
        which the employee has made contributions to the retirement fund 
        by payroll deductions.  Average salary must be based upon all 
        allowable service if this service is less than five years. 
           (b) "Average salary" does not include the payment of 
        accrued unused annual leave or overtime paid at time of final 
        separation from state service if paid in a lump sum nor does it 
        include the reduced salary, if any, paid during the period the 
        employee is entitled to workers' compensation benefit payments 
        for temporary disability. 
           (c) For an employee covered by the correctional state 
        employees retirement plan, "average salary" means the average of 
        the monthly salary during the employee's highest five successive 
        years of salary as an employee covered by the general state 
        employees retirement plan, or the correctional state employees 
        retirement plan, or by a combination of the two.  If the total 
        of the covered service is less than five years, the 
        determination of average salary must be based on all allowable 
        service.  
           Sec. 3.  Minnesota Statutes 2004, section 352.115, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AVERAGE SALARY NORMAL RETIREMENT ANNUITY.] The 
        retirement annuity hereunder payable at normal retirement age or 
        thereafter must be computed in accordance with the applicable 
        provisions of the formula stated in subdivision 3, on the basis 
        of the employee's average salary for the period of allowable 
        service.  This retirement annuity is known as the "normal" 
        retirement annuity.  
           For each year of allowable service, "average salary" of an 
        employee in determining a retirement annuity means the average 
        of the highest five successive years of salary upon which the 
        employee has made contributions to the retirement fund by 
        payroll deductions.  Average salary must be based upon all 
        allowable service if this service is less than five years. 
           "Average salary" does not include the payment of accrued 
        unused annual leave or overtime paid at time of final separation 
        from state service if paid in a lump sum nor does it include the 
        reduced salary, if any, paid during the period the employee is 
        entitled to workers' compensation benefit payments for temporary 
        disability. 
           Sec. 4.  Minnesota Statutes 2004, section 352.115, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
        in conjunction with section 352.116, subdivision 1, applies to a 
        person who became a covered employee or a member of a pension 
        fund listed in section 356.30, subdivision 3, before July 1, 
        1989, unless paragraph (b), in conjunction with section 352.116, 
        subdivision 1a, produces a higher annuity amount, in which case 
        paragraph (b) will apply.  The employee's average salary, as 
        defined in section 352.01, subdivision 2 14a, multiplied by the 
        percent specified in section 356.315, subdivision 1, per year of 
        allowable service for the first ten years and the percent 
        specified in section 356.315, subdivision 2, for each later year 
        of allowable service and pro rata for completed months less than 
        a full year shall determine the amount of the retirement annuity 
        to which the employee is entitled. 
           (b) This paragraph applies to a person who has become at 
        least 55 years old and first became a covered employee after 
        June 30, 1989, and to any other covered employee who has become 
        at least 55 years old and whose annuity amount, when calculated 
        under this paragraph and in conjunction with section 352.116, 
        subdivision 1a, is higher than it is when calculated under 
        paragraph (a), in conjunction with section 352.116, subdivision 
        1.  The employee's average salary, as defined in section 352.01, 
        subdivision 2 14a, multiplied by the percent specified in 
        section 356.315, subdivision 2, for each year of allowable 
        service and pro rata for months less than a full year shall 
        determine the amount of the retirement annuity to which the 
        employee is entitled. 
           Sec. 5.  Minnesota Statutes 2004, section 352.87, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
        in subdivision 1 will have is entitled to receive a retirement 
        annuity applicable for allowable service credit under this 
        section calculated by multiplying the employee's average salary, 
        as defined in section 352.115 352.01, subdivision 2 14a, by the 
        percent specified in section 356.315, subdivision 2a, for each 
        year or portions of a year of allowable service credit.  No 
        reduction for retirement prior to before the normal retirement 
        age, as specified in section 352.01, subdivision 25, applies to 
        service to which this section applies. 
           Sec. 6.  Minnesota Statutes 2004, section 352.93, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BASIS OF ANNUITY; WHEN TO APPLY.] After 
        separation from state service, an employee covered under section 
        352.91 who has reached age 55 years and has credit for at least 
        three years of covered correctional service or a combination of 
        covered correctional service and regular Minnesota general 
        employees state retirement System plan service is entitled upon 
        application to a retirement annuity under this section, based 
        only on covered correctional employees' service.  Application 
        may be made no earlier than 60 days before the date the employee 
        is eligible to retire by reason of both age and service 
        requirements.  
           In this section, "average salary" means the average of the 
        monthly salary during the employee's highest five successive 
        years of salary as an employee covered by the Minnesota State 
        Retirement System.  Average salary must be based upon all 
        allowable service if this service is less than five years. 
           Sec. 7.  Minnesota Statutes 2004, section 352B.01, 
        subdivision 11, is amended to read: 
           Subd. 11.  [AVERAGE MONTHLY SALARY.] (a) Subject to the 
        limitations of section 356.611, "average monthly salary" means 
        the average of the highest monthly salaries for five years of 
        service as a member upon which contributions were deducted from 
        pay under section 352B.02, or upon which appropriate 
        contributions or payments were made to the fund to receive 
        allowable service and salary credit as specified under the 
        applicable law.  Average monthly salary must be based upon all 
        allowable service if this service is less than five years.  
           (b) "Average monthly salary" means the salary of the member 
        as defined in section 352.01, subdivision 13.  "Average monthly 
        salary" does not include any lump-sum annual leave payments and 
        overtime payments made at the time of separation from state 
        service, any amounts of severance pay, or any reduced salary 
        paid during the period the person is entitled to workers' 
        compensation benefit payments for temporary disability.  
           (c) A member on leave of absence receiving temporary 
        workers' compensation payments and a reduced salary or no salary 
        from the employer who is entitled to allowable service credit 
        for the period of absence may make payment to the fund for the 
        difference between salary received, if any, and the salary the 
        member would normally receive if not on leave of absence during 
        the period.  The member shall pay an amount equal to the member 
        and employer contribution rate under section 352B.02, 
        subdivisions 1b and 1c, on the differential salary amount for 
        the period of the leave of absence.  The employing department, 
        at its option, may pay the employer amount on behalf of the 
        member.  Payment made under this subdivision must include 
        interest at the rate of 8.5 percent per year, and must be 
        completed within one year of the return from the leave of 
        absence. 
           Sec. 8.  Minnesota Statutes 2004, section 352C.021, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [AVERAGE SALARY.] "Average salary," for purposes 
        of calculating the normal retirement annuity under section 
        352C.031, subdivision 4, means the average of the highest five 
        successive years of salary upon which contributions have been 
        made under section 352C.09.  
           Sec. 9.  Minnesota Statutes 2004, section 353.01, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SALARY.] (a) Subject to the limitations of 
        section 356.611, "salary" means: 
           (1) the periodic compensation of a public employee, before 
        deductions for deferred compensation, supplemental retirement 
        plans, or other voluntary salary reduction programs, and also 
        means "wages" and includes net income from fees; 
           (2) for a public employee who is covered by a supplemental 
        retirement plan under section 356.24, subdivision 1, clause (8), 
        (9), or (10), which require all plan contributions be made by 
        the employer, the contribution to the applicable supplemental 
        retirement plan when the contribution is from mandatory 
        withholdings from employees' wages; and 
           (2) (3) for a public employee who has prior service covered 
        by a local police or firefighters relief association that has 
        consolidated with the Public Employees Retirement Association or 
        to which section 353.665 applies and who has elected coverage 
        either under the public employees police and fire fund benefit 
        plan under section 353A.08 following the consolidation or under 
        section 353.665, subdivision 4, the rate of salary upon which 
        member contributions to the special fund of the relief 
        association were made prior to the effective date of the 
        consolidation as specified by law and by bylaw provisions 
        governing the relief association on the date of the initiation 
        of the consolidation procedure and the actual periodic 
        compensation of the public employee after the effective date of 
        consolidation. 
           (b) Salary does not mean: 
           (1) the fees paid to district court reporters, unused 
        annual vacation or sick leave payments, in lump-sum or periodic 
        payments, severance payments, reimbursement of expenses, 
        lump-sum settlements not attached to a specific earnings period, 
        or workers' compensation payments; 
           (2) employer-paid amounts used by an employee toward the 
        cost of insurance coverage, employer-paid fringe benefits, 
        flexible spending accounts, cafeteria plans, health care expense 
        accounts, day care expenses, or any payments in lieu of any 
        employer-paid group insurance coverage, including the difference 
        between single and family rates that may be paid to a member 
        with single coverage and certain amounts determined by the 
        executive director to be ineligible; 
           (3) the amount equal to that which the employing 
        governmental subdivision would otherwise pay toward single or 
        family insurance coverage for a covered employee when, through a 
        contract or agreement with some but not all employees, the 
        employer: 
           (i) discontinues, or for new hires does not provide, 
        payment toward the cost of the employee's selected insurance 
        coverages under a group plan offered by the employer; 
           (ii) makes the employee solely responsible for all 
        contributions toward the cost of the employee's selected 
        insurance coverages under a group plan offered by the employer, 
        including any amount the employer makes toward other employees' 
        selected insurance coverages under a group plan offered by the 
        employer; and 
           (iii) provides increased salary rates for employees who do 
        not have any employer-paid group insurance coverages; 
           (4) except as provided in section 353.86 or 353.87, 
        compensation of any kind paid to volunteer ambulance service 
        personnel or volunteer firefighters, as defined in subdivision 
        35 or 36; and 
           (5) the amount of compensation that exceeds the limitation 
        provided in section 356.611.  
           (c) Amounts provided to an employee by the employer through 
        a grievance proceeding or a legal settlement are salary only if 
        the settlement is reviewed by the executive director and the 
        amounts are determined by the executive director to be 
        consistent with paragraph (a) and prior determinations. 
           Sec. 10.  Minnesota Statutes 2004, section 353.01, is 
        amended by adding a subdivision to read: 
           Subd. 17a.  [AVERAGE SALARY.] (a) "Average salary," for 
        purposes of calculating a retirement annuity under section 
        353.29, subdivision 3, means an amount equivalent to the average 
        of the highest salary of the member, police officer, or 
        firefighter, whichever applies, upon which employee 
        contributions were paid for any five successive years of 
        allowable service, based on dates of salary periods as listed on 
        salary deduction reports.  Average salary must be based upon all 
        allowable service if this service is less than five years.  
           (b) "Average salary" may not include any reduced salary 
        paid during a period in which the employee is entitled to 
        benefit payments from workers' compensation for temporary 
        disability, unless the average salary is higher, including this 
        period. 
           Sec. 11.  Minnesota Statutes 2004, section 353.29, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
        in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 
        1c, applies to any member who first became a public employee or 
        a member of a pension fund listed in section 356.30, subdivision 
        3, before July 1, 1989, unless paragraph (b), in conjunction 
        with section 353.30, subdivision 5, produces a higher annuity 
        amount, in which case paragraph (b) will apply.  The average 
        salary as defined in section 353.01, subdivision 2 17a, 
        multiplied by the percent specified in section 356.315, 
        subdivision 3, for each year of allowable service for the first 
        ten years and thereafter by the percent specified in section 
        356.315, subdivision 4, per year of allowable service and 
        completed months less than a full year for the "basic member," 
        and the percent specified in section 356.315, subdivision 1, for 
        each year of allowable service for the first ten years and 
        thereafter by the percent specified in section 356.315, 
        subdivision 2, per year of allowable service and completed 
        months less than a full year for the "coordinated member," shall 
        determine the amount of the "normal" retirement annuity. 
           (b) This paragraph applies to a member who has become at 
        least 55 years old and first became a public employee after June 
        30, 1989, and to any other member whose annuity amount, when 
        calculated under this paragraph and in conjunction with section 
        353.30, subdivision 5, is higher than it is when calculated 
        under paragraph (a), in conjunction with section 353.30, 
        subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined 
        in section 353.01, subdivision 2 17a, multiplied by the percent 
        specified in section 356.315, subdivision 4, for each year of 
        allowable service and completed months less than a full year for 
        a basic member and the percent specified in section 356.315, 
        subdivision 2, per year of allowable service and completed 
        months less than a full year for a coordinated member, shall 
        determine the amount of the normal retirement annuity. 
           Sec. 12.  Minnesota Statutes 2004, section 353.33, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMPUTATION OF BENEFITS.] This disability 
        benefit is an amount equal to the normal annuity payable to a 
        member who has reached normal retirement age with the same 
        number of years of allowable service and the same average 
        salary, as provided in section 353.01, subdivision 17a, and 
        section 353.29, subdivisions 2 and subdivision 3. 
           A basic member shall receive a supplementary monthly 
        benefit of $25 to age 65 or the five-year anniversary of the 
        effective date of the disability benefit, whichever is later. 
           If the disability benefits under this subdivision exceed 
        the average salary as defined in section 353.29 353.01, 
        subdivision 2 17a, the disability benefits must be reduced to an 
        amount equal to said the average salary. 
           Sec. 13.  Minnesota Statutes 2004, section 353.651, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIREMENT ANNUITY FORMULA.] The average salary 
        as defined in section 353.01, subdivision 2 17a, multiplied by 
        the percent specified in section 356.315, subdivision 6, per 
        year of allowable service determines the amount of the normal 
        retirement annuity.  If the member has earned allowable service 
        for performing services other than those of a police officer or 
        firefighter, the annuity representing such that service is must 
        be computed under sections 353.29 and 353.30. 
           Sec. 14.  Minnesota Statutes 2004, section 353.656, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
        A member of the police and fire plan who becomes disabled and 
        physically unfit to perform duties as a police officer, 
        firefighter, or paramedic as defined under section 353.64, 
        subdivision 10, as a direct result of an injury, sickness, or 
        other disability incurred in or arising out of any act of duty, 
        which has or is expected to render the member physically or 
        mentally unable to perform the duties as a police officer, 
        firefighter, or paramedic as defined under section 353.64, 
        subdivision 10, for a period of at least one year, shall receive 
        disability benefits during the period of such disability.  The 
        benefits must be in an amount equal to 60 percent of the 
        "average salary" as defined in section 353.651 353.01, 
        subdivision 2 17a, plus an additional percent specified in 
        section 356.315, subdivision 6, of that average salary for each 
        year of service in excess of 20 years.  If the disability under 
        this subdivision occurs before the member has at least five 
        years of allowable service credit in the police and fire plan, 
        the disability benefit must be computed on the "average salary" 
        from which deductions were made for contribution to the police 
        and fire fund. 
           Sec. 15.  Minnesota Statutes 2004, section 353B.02, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SALARY.] (a) "Salary" under this chapter is 
        subject to the limitations of section 356.611.  
           (b) "Salary" for benefit computation and contribution 
        purposes means the salary of a first class or first grade 
        firefighter or patrol officer, whichever applies, for the former 
        members of the following consolidating relief associations:  
           (1) Anoka Police Relief Association; 
           (2) Austin Firefighters Relief Association; 
           (3) Austin Police Relief Association; 
           (4) Columbia Heights Fire Department Relief Association, 
        Paid Division; 
           (5) Fairmont Police Benefit Association; 
           (6) Faribault Fire Department Relief Association; 
           (7) Mankato Fire Department Relief Association; 
           (8) Minneapolis Fire Department Relief Association; 
           (9) Minneapolis Police Relief Association; 
           (10) Richfield Fire Department Relief Association; 
           (11) Rochester Fire Department Relief Association; 
           (12) Rochester Police Relief Association; 
           (13) St. Cloud Fire Department Relief Association; 
           (14) St. Cloud Police Relief Association; 
           (15) St. Paul Fire Department Relief Association; 
           (16) South St. Paul Firefighters Relief Association; 
           (17) West St. Paul Firefighters Relief Association; 
           (18) West St. Paul Police Relief Association; and 
           (19) Winona Fire Department Relief Association. 
           (b) (c) "Salary" for benefit computation purposes means the 
        salary of a first grade patrol officer for the second month of 
        the previous fiscal year and for contribution purposes means the 
        current salary of a first grade patrol officer, for the former 
        members of the following consolidating relief associations:  
           (1) Bloomington Police Relief Association; 
           (2) Crystal Police Relief Association; 
           (3) Fridley Police Pension Association; 
           (4) Richfield Police Relief Association; 
           (5) St. Louis Park Police Relief Association; and 
           (6) Winona Police Relief Association.  
           (c) (d) "Salary" for benefit computation purposes means the 
        final salary and for contribution purposes means the current 
        salary for the former members of the following consolidating 
        relief associations:  
           (1) Albert Lea Firefighters Relief Association; 
           (2) Albert Lea Police Relief Association; 
           (3) Buhl Police Relief Association; 
           (4) Chisholm Firefighters Relief Association; 
           (5) Crookston Fire Department Relief Association; 
           (6) Crookston Police Relief Association; 
           (7) Faribault Police Benefit Association; 
           (8) Red Wing Police Relief Association; and 
           (9) Virginia Fire Department Relief Association.  
           (d) (e) "Salary" for benefit computation purposes means the 
        average earnings or salary for the final six months of 
        employment before retirement and for contribution purposes means 
        the current salary for the former members of the following 
        consolidating relief associations:  
           (1) Chisholm Police Relief Association; 
           (2) Hibbing Firefighters Relief Association; and 
           (3) Hibbing Police Relief Association.  
           (e) (f) "Salary" for benefit computation purposes means the 
        greater of the final salary at retirement or the highest salary 
        of a patrol officer and for contribution purposes means the 
        greater of the current salary or the current highest salary of a 
        patrol officer for the former members of the following 
        consolidating relief associations:  
           (1) Brainerd Police Benefit Association; and 
           (2) New Ulm Police Relief Association.  
           (f) (g) "Salary" for benefit computation and contribution 
        purposes means the following for the former members of the 
        consolidating relief associations as indicated:  
           (1) salary of a top grade patrol officer, including 
        longevity pay and education incentive pay in an amount not to 
        exceed $235 per month, Columbia Heights Police Relief 
        Association; 
           (2) maximum pay of a firefighter, including overtime 
        payments for a regular workweek of a firefighter mandated by the 
        federal Fair Labor Standards Act of 1938, as amended, Duluth 
        Firefighters Relief Association; 
           (3) salary of a first class patrol officer with 16 years of 
        service, Duluth Police Pension Association; 
           (4) base salary for the rank currently held, plus longevity 
        pay, pay for eligibility for next higher rank and pay for first 
        aid care, Mankato Police Benefit Association; 
           (5) average annual salary for highest three paid years for 
        benefit computation purposes and current salary for contribution 
        purposes, Red Wing Fire Department Relief Association; 
           (6) pay of the highest grade full-time firefighter, St. 
        Louis Park Fire Department Relief Association; 
           (7) maximum monthly pay of a patrol officer, St. Paul 
        Police Relief Association; 
           (8) prevailing base pay of rank held at retirement for 
        benefit computation purposes and current salary for contribution 
        purposes, South St. Paul Police Relief Association; and 
           (9) prevailing pay for rank held for at least six months 
        before retirement for benefit computation purposes and current 
        salary for contribution purposes, Virginia Police Relief 
        Association. 
           Sec. 16.  Minnesota Statutes 2004, section 354.05, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [AVERAGE SALARY.] (a) "Average salary," for the 
        purpose of determining the member's retirement annuity, means 
        the average salary upon which contributions were made for the 
        highest five successive years of formula service credit.  
           (b) "Average salary" may not include any more than the 
        equivalent of 60 monthly salary payments.  
           (c) "Average salary" must be based upon all years of 
        formula service credit if this service credit is less than five 
        years.  
           Sec. 17.  Minnesota Statutes 2004, section 354.05, 
        subdivision 35, is amended to read: 
           Subd. 35.  [SALARY.] (a) Subject to the limitations of 
        section 356.611, "salary" means the periodic compensation, upon 
        which member contributions are required before deductions for 
        deferred compensation, supplemental retirement plans, or other 
        voluntary salary reduction programs. 
           (b) "Salary" does not mean: 
           (1) lump sum annual leave payments; 
           (2) lump sum wellness and sick leave payments; 
           (3) employer-paid amounts used by an employee toward the 
        cost of insurance coverage, employer-paid fringe benefits, 
        flexible spending accounts, cafeteria plans, health care expense 
        accounts, day care expenses, or any payments in lieu of any 
        employer-paid group insurance coverage, including the difference 
        between single and family rates that may be paid to a member 
        with single coverage and certain amounts determined by the 
        executive director to be ineligible; 
           (4) any form of payment made in lieu of any other 
        employer-paid fringe benefit or expense; 
           (5) any form of severance payments; 
           (6) workers' compensation payments; 
           (7) disability insurance payments, including self-insured 
        disability payments; 
           (8) payments to school principals and all other 
        administrators for services that are in addition to the normal 
        work year contract if these additional services are performed on 
        an extended duty day, Saturday, Sunday, holiday, annual leave 
        day, sick leave day, or any other nonduty day; 
           (9) payments under section 356.24, subdivision 1, clause 
        (4); and 
           (10) payments made under section 122A.40, subdivision 12, 
        except for payments for sick leave that are accumulated under 
        the provisions of a uniform school district policy that applies 
        equally to all similarly situated persons in the district. 
           (c) Amounts provided to an employee by the employer through 
        a grievance proceeding or a legal settlement are salary only if 
        the settlement is reviewed by the executive director and the 
        amounts are determined by the executive director to be 
        consistent with paragraph (a) and prior determinations. 
           Sec. 18.  Minnesota Statutes 2004, section 354.44, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMPUTATION OF FORMULA PROGRAM RETIREMENT 
        ANNUITY.] (a) The formula retirement annuity must be computed in 
        accordance with the applicable provisions of the formulas stated 
        in paragraph (b) or (d) on the basis of each member's average 
        salary under section 354.05, subdivision 13a, for the period of 
        the member's formula service credit.  
           For all years of formula service credit, "average salary," 
        for the purpose of determining the member's retirement annuity, 
        means the average salary upon which contributions were made and 
        upon which payments were made to increase the salary limitation 
        provided in Minnesota Statutes 1971, section 354.511, for the 
        highest five successive years of formula service credit 
        provided, however, that such "average salary" shall not include 
        any more than the equivalent of 60 monthly salary payments.  
        Average salary must be based upon all years of formula service 
        credit if this service credit is less than five years. 
           (b) This paragraph, in conjunction with paragraph (c), 
        applies to a person who first became a member of the association 
        or a member of a pension fund listed in section 356.30, 
        subdivision 3, before July 1, 1989, unless paragraph (d), in 
        conjunction with paragraph (e), produces a higher annuity 
        amount, in which case paragraph (d) applies.  The average salary 
        as defined in paragraph (a) section 354.05, subdivision 13a, 
        multiplied by the following percentages per year of formula 
        service credit shall determine the amount of the annuity to 
        which the member qualifying therefor is entitled: 
                               Coordinated Member   Basic Member
        Each year of service     the percent        the percent
        during first ten         specified in       specified in
                                 section 356.315,   section 356.315,
                                 subdivision 1,     subdivision 3,
                                 per year           per year
        Each year of service     the percent        the percent
        thereafter               specified in       specified in
                                 section 356.315,   section 356.315,
                                 subdivision 2,     subdivision 4,
                                 per year           per year
           (c)(i) This paragraph applies only to a person who first 
        became a member of the association or a member of a pension fund 
        listed in section 356.30, subdivision 3, before July 1, 1989, 
        and whose annuity is higher when calculated under paragraph (b), 
        in conjunction with this paragraph than when calculated under 
        paragraph (d), in conjunction with paragraph (e). 
           (ii) Where any member retires prior to normal retirement 
        age under a formula annuity, the member shall be paid a 
        retirement annuity in an amount equal to the normal annuity 
        provided in paragraph (b) reduced by one-quarter of one percent 
        for each month that the member is under normal retirement age at 
        the time of retirement except that for any member who has 30 or 
        more years of allowable service credit, the reduction shall be 
        applied only for each month that the member is under age 62. 
           (iii) Any member whose attained age plus credited allowable 
        service totals 90 years is entitled, upon application, to a 
        retirement annuity in an amount equal to the normal annuity 
        provided in paragraph (b), without any reduction by reason of 
        early retirement. 
           (d) This paragraph applies to a member who has become at 
        least 55 years old and first became a member of the association 
        after June 30, 1989, and to any other member who has become at 
        least 55 years old and whose annuity amount when calculated 
        under this paragraph and in conjunction with paragraph (e), is 
        higher than it is when calculated under paragraph (b), in 
        conjunction with paragraph (c).  The average salary, as defined 
        in paragraph (a) section 354.05, subdivision 13a, multiplied by 
        the percent specified by section 356.315, subdivision 4, for 
        each year of service for a basic member and by the percent 
        specified in section 356.315, subdivision 2, for each year of 
        service for a coordinated member shall determine the amount of 
        the retirement annuity to which the member is entitled. 
           (e) This paragraph applies to a person who has become at 
        least 55 years old and first becomes a member of the association 
        after June 30, 1989, and to any other member who has become at 
        least 55 years old and whose annuity is higher when calculated 
        under paragraph (d) in conjunction with this paragraph than when 
        calculated under paragraph (b), in conjunction with paragraph 
        (c).  An employee who retires under the formula annuity before 
        the normal retirement age shall be paid the normal annuity 
        provided in paragraph (d) reduced so that the reduced annuity is 
        the actuarial equivalent of the annuity that would be payable to 
        the employee if the employee deferred receipt of the annuity and 
        the annuity amount were augmented at an annual rate of three 
        percent compounded annually from the day the annuity begins to 
        accrue until the normal retirement age. 
           (f) No retirement annuity is payable to a former employee 
        with a salary that exceeds 95 percent of the governor's salary 
        unless and until the salary figures used in computing the 
        highest five successive years average salary under paragraph (a) 
        have been audited by the Teachers Retirement Association and 
        determined by the executive director to comply with the 
        requirements and limitations of section 354.05, subdivisions 35 
        and 35a. 
           Sec. 19.  Minnesota Statutes 2004, section 354A.011, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [AVERAGE SALARY.] "Average salary," for purposes 
        of computing a normal coordinated program retirement annuity 
        under section 354A.31, subdivision 4 or 4a, means an amount 
        equal to the average salary upon which contributions were made 
        for the highest five successive years of service credit but may 
        not, in any event, include any more than the equivalent of 60 
        monthly salary payments.  Average salary must be based upon all 
        years of service credit if this service credit is less than five 
        years.  
           Sec. 20.  Minnesota Statutes 2004, section 354A.011, 
        subdivision 24, is amended to read: 
           Subd. 24.  [SALARY; COVERED SALARY.] (a) Subject to the 
        limitations of section 356.611, "salary" or "covered salary" 
        means the entire compensation, upon which member contributions 
        are required and made, that is paid to a teacher before 
        deductions for deferred compensation, supplemental retirement 
        plans, or other voluntary salary reduction programs. 
           (b) "Salary" does not mean: 
           (1) lump sum annual leave payments; 
           (2) lump sum wellness and sick leave payments; 
           (3) employer-paid amounts used by an employee toward the 
        cost of insurance coverage, employer-paid fringe benefits, 
        flexible spending accounts, cafeteria plans, health care expense 
        accounts, day care expenses, or any payments in lieu of any 
        employer-paid group insurance coverage, including the difference 
        between single and family rates that may be paid to a member 
        with single coverage, and certain amounts determined by the 
        executive secretary or director to be ineligible; 
           (4) any form of payment that is made in lieu of any other 
        employer-paid fringe benefit or expense; 
           (5) any form of severance payments; 
           (6) workers' compensation payments; 
           (7) disability insurance payments, including self-insured 
        disability payments; 
           (8) payments to school principals and all other 
        administrators for services that are in addition to the normal 
        work year contract if these additional services are performed on 
        an extended duty day, Saturday, Sunday, holiday, annual leave 
        day, sick leave day, or any other nonduty day; 
           (9) payments under section 356.24, subdivision 1, clause 
        (4)(ii); and 
           (10) payments made under section 122A.40, subdivision 12, 
        except for payments for sick leave that are accumulated under 
        the provisions of a uniform school district policy that applies 
        equally to all similarly situated persons in the district. 
           (c) Amounts provided to an employee by the employer through 
        a grievance proceeding or a legal settlement are salary only if 
        the settlement is reviewed by the executive director and the 
        amounts are determined by the executive director to be 
        consistent with paragraph (a) and prior determinations. 
           Sec. 21.  Minnesota Statutes 2004, section 354A.31, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
        ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 
        applies to the coordinated programs of the Minneapolis Teachers 
        Retirement Fund Association and the St. Paul Teachers Retirement 
        Fund Association.  
           (b) The normal coordinated retirement annuity shall be is 
        an amount equal to a retiring coordinated member's average 
        salary under section 354A.011, subdivision 7a, multiplied by the 
        retirement annuity formula percentage.  Average salary for 
        purposes of this section shall mean an amount equal to the 
        average salary upon which contributions were made for the 
        highest five successive years of service credit, but which shall 
        not in any event include any more than the equivalent of 60 
        monthly salary payments.  Average salary must be based upon all 
        years of service credit if this service credit is less than five 
        years. 
           (c) This paragraph, in conjunction with subdivision 6, 
        applies to a person who first became a member or a member in a 
        pension fund listed in section 356.30, subdivision 3, before 
        July 1, 1989, unless paragraph (d), in conjunction with 
        subdivision 7, produces a higher annuity amount, in which case 
        paragraph (d) will apply.  The retirement annuity formula 
        percentage for purposes of this paragraph is the percent 
        specified in section 356.315, subdivision 1, per year for each 
        year of coordinated service for the first ten years and the 
        percent specified in section 356.315, subdivision 2, for each 
        year of coordinated service thereafter.  
           (d) This paragraph applies to a person who has become at 
        least 55 years old and who first becomes a member after June 30, 
        1989, and to any other member who has become at least 55 years 
        old and whose annuity amount, when calculated under this 
        paragraph and in conjunction with subdivision 7 is higher than 
        it is when calculated under paragraph (c), in conjunction with 
        the provisions of subdivision 6.  The retirement annuity formula 
        percentage for purposes of this paragraph is the percent 
        specified in section 356.315, subdivision 2, for each year of 
        coordinated service.  
           Sec. 22.  Minnesota Statutes 2004, section 354A.31, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [COMPUTATION OF THE NORMAL COORDINATED 
        RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 
        to the new law coordinated program of the Duluth Teachers 
        Retirement Fund Association. 
           (b) The normal coordinated retirement annuity is an amount 
        equal to a retiring coordinated member's average salary under 
        section 354A.011, subdivision 7a, multiplied by the retirement 
        annuity formula percentage.  Average salary for purposes of this 
        section means an amount equal to the average salary upon which 
        contributions were made for the highest five successive years of 
        service credit, but may not in any event include any more than 
        the equivalent of 60 monthly salary payments.  Average salary 
        must be based upon all years of service credit if this service 
        credit is less than five years. 
           (c) This paragraph, in conjunction with subdivision 6, 
        applies to a person who first became a member or a member in a 
        pension fund listed in section 356.30, subdivision 3, before 
        July 1, 1989, unless paragraph (d), in conjunction with 
        subdivision 7, produces a higher annuity amount, in which case 
        paragraph (d) applies.  The retirement annuity formula 
        percentage for purposes of this paragraph is the percent 
        specified in section 356.315, subdivision 1, per year for each 
        year of coordinated service for the first ten years and the 
        percent specified in section 356.315, subdivision 2, for each 
        subsequent year of coordinated service. 
           (d) This paragraph applies to a person who is at least 55 
        years old and who first becomes a member after June 30, 1989, 
        and to any other member who is at least 55 years old and whose 
        annuity amount, when calculated under this paragraph and in 
        conjunction with subdivision 7, is higher than it is when 
        calculated under paragraph (c) in conjunction with subdivision 
        6.  The retirement annuity formula percentage for purposes of 
        this paragraph is the percent specified in section 356.315, 
        subdivision 2, for each year of coordinated service. 
           Sec. 23.  Minnesota Statutes 2004, section 356.611, 
        subdivision 1, is amended to read: 
           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 enumerated in section 356.30, 
        subdivision 3, may not exceed 95 110 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 or to a judge; 
           (2) to an employee or an elected official who is not 
        subject to the limit as specified under section 43A.17, 
        subdivision 9; 
           (3) to an employee of a political subdivision in a position 
        that is excluded from the limit as specified under section 
        43A.17, subdivision 9; 
           (3) (4) to a state employee as defined under section 
        43A.02, subdivision 21; 
           (4) (5) to an employee of Gillette Hospital who is covered 
        by the general state employees retirement plan of the Minnesota 
        State Retirement System; 
           (5) (6) to an employee of the Minnesota Crop Improvement 
        Council; or 
           (6) (7) to an employee of the Minnesota Historical Society; 
           (8) to an employee of the Southern Minnesota Municipal 
        Power Association; or 
           (9) to the director of the Duluth Port Authority. 
           (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. 
           Sec. 24.  Minnesota Statutes 2004, section 422A.01, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [AVERAGE SALARY.] (a) "Average salary" means the 
        arithmetic average annual salary, wages, or compensation of the 
        member from the city for any five calendar years out of the last 
        ten calendar years of service, except as provided for in section 
        422A.16, which may include the year in which the employee 
        retires, as selected by the employee.  
           (b) A member with more than five calendar years of service, 
        but less than ten calendar years, may select any five calendar 
        years of service to determine the average salary.  A member with 
        less than five years of service with the city shall use all 
        earnings to determine the average salary.  
           Sec. 25.  Minnesota Statutes 2004, section 422A.01, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [COVERED SALARY.] "Salary" is subject to the 
        limitations of section 356.611. 
           Sec. 26.  Minnesota Statutes 2004, section 422A.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FORMULA PENSION AND ANNUITY.] Except as 
        otherwise provided in subdivision 3, each contributing member 
        who, at the time of retirement, fulfills the conditions 
        necessary to enable the member to retire, shall is entitled to 
        receive what shall be known as a "formula pension and annuity" 
        equal to two percent for each year of allowable service for the 
        first ten years and thereafter 2.5 percent per year of allowable 
        service of the arithmetic average annual salary, wages or 
        compensation of the member from the city for any five calendar 
        years out of the last ten calendar years of service except as 
        provided for in section 422A.16, which may include the year in 
        which the employee retires, as selected by the employee, 
        multiplied by the years of service credited by the retirement 
        fund.  The formula pension and annuity shall must be computed on 
        the single life plan but subject to the option selections 
        provided for in section 422A.17. 
           In order to be entitled to the formula pension and annuity 
        herein provided for, the retiring employee at the time of 
        cessation of employment and of actual retirement shall must have 
        attained the age of 60 years or have been employed by the city 
        not less than 30 years, or meet the qualifications provided for 
        in section 422A.16, and in addition thereto have contributed to 
        the retirement fund at the percentage rate prescribed by the 
        retirement law applicable when the salary, wages or compensation 
        was paid on all salaries, wages, or compensation received from 
        the city or from an applicable employing unit.  The years of 
        service to be applied in the formula pension and annuity shall 
        must be found and determined by the retirement board, except 
        that no credit shall may be allowed for any year in which a back 
        charge is owing at time of retirement and the earnings from any 
        year in which a back charge is owing shall may not be used in 
        determining the average annual salary. 
           Sec. 27.  Minnesota Statutes 2004, section 422A.16, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 
        the contributing class who becomes permanently separated from 
        the service of the city under subdivision 8, may, by an 
        instrument in writing, filed with the municipal employees 
        retirement board within 30 days after such the separation 
        becomes permanent, elect to allow the member contributions 
        to such the fund to the date of separation to remain on deposit 
        in such the fund, and in such the event the member shall be 
        is entitled to receive a retirement allowance at age 65, 
        provided the member, or someone acting in the member's behalf if 
        the member be incompetent, shall must make a written application 
        for such the retirement allowance in the same manner provided 
        for in section 422A.17 and in accordance with the provisions of 
        section 422A.15, subdivision 1, except for determining 
        average annual salary.  A member with more than five calendar 
        years of service but less than ten calendar years may select any 
        five calendar years of service to determine the average annual 
        salary.  A member with less than five years of service with the 
        city shall use all earnings to determine the average annual 
        salary. 
           If the contributing member dies before reaching the age of 
        65 years, or having attained the age of 65 years without having 
        made the election provided for herein, the net accumulated 
        amount of deductions from the member's salary, pay or 
        compensation, plus interest, to the member's credit on date of 
        death shall be paid is payable to such the person or persons as 
        have been nominated by written designation filed with the 
        retirement board, in such the form as that the retirement board 
        shall require requires. 
           If the employee fails to make a designation, or if the 
        person or persons designated by such the employee predeceases 
        such the employee, the net accumulated credit to such the 
        employee's account on date of death shall be paid is payable to 
        such the employee's estate. 
           The provisions of subdivisions 4, 5, and 6 shall also apply 
        to any member qualifying for benefits under this subdivision, 
        except for purposes of this subdivision the age referred to in 
        subdivision 4 shall be is 65 years. 
           Sec. 28.  Minnesota Statutes 2004, section 423B.01, is 
        amended by adding a subdivision to read: 
           Subd. 22.  [COVERED SALARY.] "Salary" is subject to the 
        limitations of section 356.611. 
           Sec. 29.  Minnesota Statutes 2004, section 423C.01, is 
        amended by adding a subdivision to read: 
           Subd. 29.  [COVERED SALARY.] "Salary" is subject to the 
        limitations of section 356.611. 
           Sec. 30.  Minnesota Statutes 2004, section 490.121, 
        subdivision 21, is amended to read: 
           Subd. 21.  [FINAL AVERAGE COMPENSATION.] "Final average 
        compensation" means the total amount of salary payable to a 
        judge in the highest five years out of the last ten years prior 
        to before the event of maturity of benefits termination of 
        judicial service, divided by five; provided, however, that if 
        the number of years of service by the judge equals or exceeds 
        ten.  If the number of years of service by the judge is less 
        than ten, but more than five, the highest five shall years of 
        salary must be counted, and.  If the number of years of service 
        by the judge is less than five, the aggregate salary in such for 
        the period shall of service must be divided by the number of 
        months in such the period and multiplied by 12. 
           Sec. 31.  Minnesota Statutes 2004, section 490.121, is 
        amended by adding a subdivision to read: 
           Subd. 21a.  [COVERED SALARY LIMITATION.] "Final average 
        compensation" is subject to the limitations of section 356.611. 
           Sec. 32.  [REPEALER.] 
           Minnesota Statutes 2004, sections 352C.031, subdivision 3; 
        353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 
           Sec. 33.  [EFFECTIVE DATE.] 
           This article is effective on the day following final 
        enactment except that section 23 applies retroactively from 
        April 28, 1994. 

                                   ARTICLE 2
                            ALLOWABLE SERVICE CREDIT
           Section 1.  [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 
        FOR STRIKE PERIODS.] 
           Subdivision 1.  [COVERED PLANS.] This section applies to 
        all defined benefit plans specified in section 356.30, 
        subdivision 3. 
           Subd. 2.  [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 
        employee covered by a plan specified in subdivision 1 may 
        purchase allowable service credit in the applicable plan for any 
        period of time during which the employee was on a public 
        employee strike without pay, not to exceed a period of one year, 
        if the employee makes a payment in lieu of salary deductions as 
        specified in paragraph (b) or (c), whichever applies.  The 
        employing unit, at its option, may pay the employer portion of 
        the amount specified in paragraph (b) on behalf of its employees.
           (b) If payment is received by the applicable pension plan 
        executive director within one year from the end of the strike, 
        the payment amount is equal to the applicable employee and 
        employer contribution rates specified in law for the applicable 
        plan during the strike period, applied to the employee's rate of 
        salary in effect at 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 period 
        until the date payment is received. 
           (c) If payment is received by the applicable pension fund 
        director after one year and before five years from the end of 
        the strike, the payment amount is the amount determined under 
        section 356.551. 
           (d) Payments may not be made more than five years after the 
        end of the strike. 
           Sec. 2.  Minnesota Statutes 2004, section 490.121, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
        means any calendar month, subject to the service credit limit in 
        subdivision 22, served as a judge at any time, or served as a 
        referee in probate for all referees in probate who were in 
        office prior to January 1, 1974. 
           (b) "Allowable service" also means a period of authorized 
        leave of absence for which the judge has made a payment in lieu 
        of contributions, not in an amount in excess of the service 
        credit limit under subdivision 22.  To obtain the service 
        credit, the judge shall pay an amount equal to the normal cost 
        of the judges retirement plan on the date of return from the 
        leave of absence, as determined in the most recent actuarial 
        report for the plan filed with the Legislative Commission on 
        Pensions and Retirement, multiplied by the judge's average 
        monthly salary rate during the authorized leave of absence and 
        multiplied by the number of months of the authorized leave of 
        absence, plus annual compound interest at the rate of 8.5 
        percent from the date of the termination of the leave to the 
        date on which payment is made.  The payment must be made within 
        one year of the date on which the authorized leave of absence 
        terminated.  Service credit for an authorized leave of absence 
        is in addition to a uniformed service leave under section 
        490.1211. 
           Sec. 3.  Laws 1999, chapter 222, article 16, section 16, as 
        amended by Laws 2002, chapter 392, article 7, section 1, and 
        Laws 2003, First Special Session chapter 12, article 6, section 
        2, and Laws 2004, chapter 267, article 17, section 6, is amended 
        to read:  
           Sec. 16.  [REPEALER.] 
           (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 
        2004.  
           (b) Sections 1 and 7 are repealed on May 16, 2006 2007.  
           Sec. 4.  Laws 2000, chapter 461, article 4, section 4, as 
        amended by Laws 2003, First Special Session chapter 12, article 
        6, section 3, and Laws 2004, chapter 267, article 17, section 7, 
        is amended to read:  
           Sec. 4.  [EFFECTIVE DATE; SUNSET REPEALER.] 
           (a) Sections 1, 2, and 3 are effective on the day following 
        final enactment.  
           (b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.
           Sec. 5.  [METRO TRANSIT STRIKE PROVISION.] 
           Notwithstanding the payment deadline specified in Minnesota 
        Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 
        Transit employee covered by the general state employees 
        retirement plan of the Minnesota State Retirement System who was 
        on strike on or after January 1, 2004, and before the effective 
        date of this section, is authorized to make a payment under that 
        paragraph on or before one year after the effective date of this 
        section. 
           Sec. 6.  [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 
           Notwithstanding the payment deadline specified in Minnesota 
        Statutes, section 356.195, subdivision 2, paragraph (b), a 
        Crosby-Ironton public school teacher covered by the Teachers 
        Retirement Association who was on strike during a period that 
        included April 1, 2005, and before the effective date of this 
        section, is authorized to make a payment under that paragraph on 
        or before one year after the effective date of this section. 
           Sec. 7.  [UNIVERSITY OF MINNESOTA STRIKE PROVISION.] 
           Notwithstanding the payment deadline specified in Minnesota 
        Statutes, section 356.195, subdivision 2, paragraph (b), a 
        University of Minnesota employee covered by the Minnesota State 
        Retirement System who was on strike on or after October 21, 
        2003, and before the effective date of this section, is 
        authorized to make a payment under that paragraph on or before 
        one year after the effective date of this section. 
           Sec. 8.  [EFFECTIVE DATE.] 
           (a) Sections 1 and 3 to 7 are effective the day following 
        final enactment. 
           (b) Section 2 is effective retroactively from January 1, 
        2005, and applies to any person who was in active service as a 
        judge on or after that date and applies to an authorized leave 
        of absence that occurred before or after that date.  For a 
        person for whom section 2 is retroactive, the equivalent 
        contribution payment must be made on or before July 1, 2006. 

                                   ARTICLE 3
                    ACTUARIAL FINANCIAL REPORTING AND OTHER 
                  GENERALLY APPLICABLE ADMINISTRATIVE CHANGES
           Section 1.  Minnesota Statutes 2004, section 352.01, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
        means the condition of one annuity or benefit having an equal 
        actuarial present value as another annuity or benefit, 
        determined as of a given date at a specified age with each 
        actuarial present value based on the appropriate mortality table 
        adopted by the board of directors based on the experience of the 
        fund as recommended by the actuary retained by the Legislative 
        Commission on Pensions and Retirement under section 356.214, and 
        approved under section 356.215, subdivision 18, and using the 
        applicable preretirement or postretirement interest rate 
        assumption specified in section 356.215, subdivision 8. 
           Sec. 2.  Minnesota Statutes 2004, section 353.01, 
        subdivision 14, is amended to read: 
           Subd. 14.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
        means the condition of one annuity or benefit having an equal 
        actuarial present value as another annuity or benefit, 
        determined as of a given date with each actuarial present value 
        based on the appropriate mortality table adopted by the board of 
        trustees based on the experience of the fund as recommended by 
        the actuary retained by the Legislative Commission on Pensions 
        and Retirement under section 356.214, and approved under section 
        356.215, subdivision 18, and using the applicable preretirement 
        or postretirement interest rate assumption specified in section 
        356.215, subdivision 8.  
           Sec. 3.  Minnesota Statutes 2004, section 354.05, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
        means the condition of one annuity or benefit having an equal 
        actuarial present value as another annuity or benefit, 
        determined as of a given date with each actuarial present value 
        based on the appropriate mortality table adopted by the board of 
        trustees based on the experience of the association as 
        recommended by the actuary retained by the Legislative 
        Commission on Pensions and Retirement under section 356.214, and 
        approved under section 356.215, subdivision 18, and using the 
        applicable preretirement or postretirement interest rate 
        assumption specified in section 356.215, subdivision 8. 
           Sec. 4.  Minnesota Statutes 2004, section 354.094, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] (a) Upon 
        granting any extended leave of absence under section 122A.46 or 
        136F.43, the employing unit granting the leave must certify the 
        leave to the association on a form specified by the executive 
        director.  A member granted an extended leave of absence under 
        section 122A.46 or 136F.43 may pay employee contributions and 
        receive allowable service credit toward annuities and other 
        benefits under this chapter, for each year of the leave, 
        provided that the member and the employing board make the 
        required employer contribution in any proportion they may agree 
        upon, during the period of the leave.  The employer may enter 
        into an agreement with the exclusive bargaining representative 
        of the teachers in the district under which, for an individual 
        teacher, all or a portion of the employee's contribution is paid 
        by the employer.  Any such agreement must include a sunset of 
        eligibility to qualify for the payment and must not be a part of 
        the collective bargaining agreement.  The leave period must not 
        exceed five years.  A member may not receive more than five 
        years of allowable service credit under this section.  The 
        employee and employer contributions must be based upon the rates 
        of contribution prescribed by section 354.42 for the salary 
        received during the year immediately preceding the extended 
        leave.  
           (b) Employee contribution payments for the years for which 
        a member is receiving service credit while on extended leave 
        must be made on or before the later of June 30 of each fiscal 
        year for which service credit is to be received or within 30 
        days after first notification of the amount due, if requested by 
        the member, is given by the association.  If payment is to be 
        made by a transfer of pretax assets authorized under section 
        356.441, payment is authorized after June 30 of the fiscal year 
        providing that authorization for the asset transfer has been 
        received by the applicable third party administrator by June 30, 
        and the payment must include interest at a rate of .708 percent 
        per month from June 30 through the end of the month in which 
        payment is received.  No payment is permitted after the 
        following September 30.  Payments received after June 30 must 
        include interest at an annual rate of 8.5 percent from June 30 
        through the end of the month in which payment is received.  
           (c) Notwithstanding the provisions of any agreements to the 
        contrary, employee and employer contributions may not be made to 
        receive allowable service credit if the member does not have 
        full reinstatement rights as provided in section 122A.46 or 
        136F.43, both during and at the end of the extended leave. 
           (d) Any school district paying the employee's retirement 
        contributions under this section shall forward to the applicable 
        retirement association or retirement fund a copy of the 
        agreement executed by the school district and the employee. 
           Sec. 5.  Minnesota Statutes 2004, section 354A.011, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
        means the condition of one annuity or benefit having an equal 
        actuarial present value as another annuity or benefit, 
        determined as of a given date with each actuarial present value 
        based on the appropriate mortality table adopted by the 
        appropriate board of trustees based on the experience of that 
        retirement fund association as recommended by the actuary 
        retained by the Legislative Commission on Pensions and 
        Retirement under section 356.214, and approved under section 
        356.215, subdivision 18, and using the applicable preretirement 
        or postretirement interest rate assumption specified in section 
        356.215, subdivision 8. 
           Sec. 6.  Minnesota Statutes 2004, 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 its footnotes, an actuarial disclosure item based on 
        the actuarial valuation calculations prepared by the 
        commission-retained actuary retained under section 356.214 or by 
        the actuary retained by the retirement fund or plan, if 
        applicable whichever applies, 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 under section 356.214 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 in accordance with the most recent applicable 
        standards for actuarial work adopted by the Legislative 
        Commission on Pensions and Retirement. 
           (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 Participation in the Minnesota 
           postretirement investment
           fund or the retirement
           benefit fund                    .........     ......... 
         Other                             .........     .........  
          
         Total assets 
           Value at cost                                 .........
           Value at market                               ......... 
           Actuarial value of current assets             ......... 
           (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 actuarial value of current assets:  
           (1) the 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) the 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. 
           (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. 
           (e) The report must contain an itemized exhibit describing 
        the administrative expenses of the plan, including, but not 
        limited to, the following items, classified on a consistent 
        basis from year to year, and with any further meaningful detail: 
           (1) personnel expenses; 
           (2) communication-related expenses; 
           (3) office building and maintenance expenses; 
           (4) professional services fees; and 
           (5) other expenses. 
           (f) The report must contain an itemized exhibit describing 
        the investment expenses of the plan, including, but not limited 
        to, the following items, classified on a consistent basis from 
        year to year, and with any further meaningful detail: 
           (1) internal investment-related expenses; and 
           (2) external investment-related expenses. 
           (g) 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. 7.  Minnesota Statutes 2004, section 356.47, 
        subdivision 3, is amended to read: 
           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. 
           (d) In lieu of the direct payment of the person's amount 
        under subdivision 2, on or after the payment date under 
        paragraph (a), if the federal Internal Revenue Code so permits, 
        the retired member may elect to have all or any portion of the 
        payment amount under this section paid in the form of a direct 
        rollover to an eligible retirement plan as defined in section 
        402(c) of the federal Internal Revenue Code that is specified by 
        the retired member.  If the retired member dies with a balance 
        remaining payable under this section, the surviving spouse of 
        the retired member, or if none, the deceased person's designated 
        beneficiary, or if none, the administrator of the deceased 
        person's estate may elect a direct rollover under this paragraph.
           Sec. 8.  Minnesota Statutes 2004, section 422A.01, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 
        or "present value" means that the present amount of money if 
        increased at the applicable postretirement or preretirement 
        interest rate assumption specified in section 356.215, 
        subdivision 8, and based on the mortality table adopted by the 
        board of trustees based on the experience of the fund as 
        recommended by the actuary retained by the Legislative 
        Commission on Pensions and Retirement under section 356.214, and 
        approved under section 356.215, subdivision 18, will at 
        retirement equal the actuarial accrued liability of the annuity 
        already earned. 
           Sec. 9.  Minnesota Statutes 2004, section 490.121, 
        subdivision 20, is amended to read: 
           Subd. 20.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
        means the condition of one annuity or benefit having an equal 
        actuarial present value as another annuity or benefit, 
        determined as of a given date with each actuarial present value 
        based on the appropriate mortality table adopted by the board of 
        trustees directors of the Minnesota State Retirement System 
        based on the experience of the fund as recommended by 
        the commission-retained actuary retained under section 356.214, 
        and approved under section 356.215, subdivision 18, and using 
        the applicable preretirement or postretirement interest rate 
        assumption specified in section 356.215, subdivision 8. 
           Sec. 10.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 5, 8, and 9 are effective July 1, 2005. 
           (b) Section 6 is effective the day following final 
        enactment and applies to annual financial reporting occurring on 
        or after June 30, 2005. 
           (c) Section 4 is effective the day following final 
        enactment.  
           (d) Section 7 is effective July 1, 2005, and applies to 
        retired members with an amount in a reemployed annuitant's 
        account on or after that date. 

                                   ARTICLE 4
                             MEMBERSHIP INCLUSIONS
                                 AND EXCLUSIONS
           Section 1.  Minnesota Statutes 2004, section 69.011, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 
        police officer employed by the University of Minnesota who is 
        required by the Board of Regents to be a member of the 
        University of Minnesota faculty retirement plan is not eligible 
        to be included in any police state-aid certification under this 
        section. 
           Sec. 2.  Minnesota Statutes 2004, section 352.01, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
        includes: 
           (1) employees of the Minnesota Historical Society; 
           (2) employees of the State Horticultural Society; 
           (3) employees of the Disabled American Veterans, Department 
        of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
        if employed before July 1, 1963; 
           (4) employees of the Minnesota Crop Improvement 
        Association; 
           (5) employees of the adjutant general who are paid from 
        federal funds and who are not covered by any federal civilian 
        employees retirement system; 
           (6) employees of the Minnesota State Colleges and 
        Universities employed under the university or college activities 
        program; 
           (7) currently contributing employees covered by the system 
        who are temporarily employed by the legislature during a 
        legislative session or any currently contributing employee 
        employed for any special service as defined in subdivision 2b, 
        clause (8); 
           (8) employees of the Armory Building Commission; 
           (9) employees of the legislature appointed without a limit 
        on the duration of their employment and persons employed or 
        designated by the legislature or by a legislative committee or 
        commission or other competent authority to conduct a special 
        inquiry, investigation, examination, or installation; 
           (10) trainees who are employed on a full-time established 
        training program performing the duties of the classified 
        position for which they will be eligible to receive immediate 
        appointment at the completion of the training period; 
           (11) employees of the Minnesota Safety Council; 
           (12) any employees on authorized leave of absence from the 
        Transit Operating Division of the former Metropolitan Transit 
        Commission who are employed by the labor organization which is 
        the exclusive bargaining agent representing employees of the 
        Transit Operating Division; 
           (13) employees of the Metropolitan Council, Metropolitan 
        Parks and Open Space Commission, Metropolitan Sports Facilities 
        Commission, Metropolitan Mosquito Control Commission, or 
        Metropolitan Radio Board unless excluded or covered by another 
        public pension fund or plan under section 473.415, subdivision 
        3; 
           (14) judges of the Tax Court; 
           (15) personnel employed on June 30, 1992, by the University 
        of Minnesota in the management, operation, or maintenance of its 
        heating plant facilities, whose employment transfers to an 
        employer assuming operation of the heating plant facilities, so 
        long as the person is employed at the University of Minnesota 
        heating plant by that employer or by its successor organization; 
        and 
           (16) seasonal help in the classified service employed by 
        the Department of Revenue; and 
           (17) persons employed by the Department of Commerce as a 
        peace officer in the Insurance Fraud Prevention Division under 
        section 45.0135 who have attained the mandatory retirement age 
        specified in section 43A.34, subdivision 4.  
           (b) Employees specified in paragraph (a), clause (15), are 
        included employees under paragraph (a) if employer and employee 
        contributions are made in a timely manner in the amounts 
        required by section 352.04.  Employee contributions must be 
        deducted from salary.  Employer contributions are the sole 
        obligation of the employer assuming operation of the University 
        of Minnesota heating plant facilities or any successor 
        organizations to that employer. 
           Sec. 3.  Minnesota Statutes 2004, section 352.91, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [PROCESS FOR EVALUATING AND RECOMMENDING 
        POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 
        The Department of Corrections and the Department of Human 
        Services must establish a procedure for evaluating periodic 
        requests by department employees for qualification for 
        recommendation by the commissioner for inclusion of the 
        employment position in the correctional facility or human 
        services facility in the correctional retirement plan and for 
        periodically determining employment positions that no longer 
        qualify for continued correctional retirement plan coverage.  
           (b) The procedure must provide for an evaluation of the 
        extent of the employee's working time spent in direct contact 
        with patients or inmates, the extent of the physical hazard that 
        the employee is routinely subjected to in the course of 
        employment, and the extent of intervention routinely expected of 
        the employee in the event of a facility incident.  The 
        percentage of routine direct contact with inmates or patients 
        may not be less than 75 percent.  
           (c) The applicable commissioner shall notify the employee 
        of the determination of the appropriateness of recommending the 
        employment position for inclusion in the correctional retirement 
        plan, if the evaluation procedure results in a finding that the 
        employee: 
           (1) routinely spends 75 percent of the employee's time in 
        direct contact with inmates or patients; and 
           (2) is regularly engaged in the rehabilitation, treatment, 
        custody, or supervision of inmates or patients.  
           (d) After providing the affected employee an opportunity to 
        dispute or clarify any evaluation determinations, if the 
        commissioner determines that the employment position is 
        appropriate for inclusion in the correctional retirement plan, 
        the commissioner shall forward that recommendation and 
        supporting documentation to the chair of the Legislative 
        Commission on Pensions and Retirement, the chair of the State 
        and Local Governmental Operations Committee of the senate, the 
        chair of the Governmental Operations and Veterans Affairs Policy 
        Committee of the house of representatives, and the executive 
        director of the Legislative Commission on Pensions and 
        Retirement in the form of the appropriate proposed legislation.  
        The recommendation must be forwarded to the legislature before 
        January 15 for the recommendation to be considered in that 
        year's legislative session.  
           Sec. 4.  Minnesota Statutes 2004, section 352B.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEMBER.] "Member" means: 
           (1) a State Patrol member currently employed after June 30, 
        1943, under section 299D.03 by the state, who is a peace officer 
        under section 626.84, and whose salary or compensation is paid 
        out of state funds; 
           (2) a conservation officer employed under section 97A.201, 
        currently employed by the state, whose salary or compensation is 
        paid out of state funds; 
           (3) a crime bureau officer who was employed by the crime 
        bureau and was a member of the Highway Patrolmen's retirement 
        fund on July 1, 1978, whether or not that person has the power 
        of arrest by warrant after that date, or who is employed as 
        police personnel, with powers of arrest by warrant under section 
        299C.04, and who is currently employed by the state, and whose 
        salary or compensation is paid out of state funds; 
           (4) a person who is employed by the state in the Department 
        of Public Safety in a data processing management position with 
        salary or compensation paid from state funds, who was a crime 
        bureau officer covered by the State Patrol retirement plan on 
        August 15, 1987, and who was initially hired in the data 
        processing management position within the department during 
        September 1987, or January 1988, with membership continuing for 
        the duration of the person's employment in that position, 
        whether or not the person has the power of arrest by warrant 
        after August 15, 1987; 
           (5) a public safety employee defined as a peace officer in 
        section 626.84, subdivision 1, paragraph (c), and employed with 
        the Division of Alcohol and Gambling Enforcement under section 
        299L.01; and 
           (6) a Fugitive Apprehension Unit officer after October 31, 
        2000, employed by the Office of Special Investigations of the 
        Department of Corrections who is a peace officer under section 
        626.84; and 
           (7) an employee of the Department of Commerce defined as a 
        peace officer in section 626.84, subdivision 1, paragraph (c), 
        who is employed by the Division of Insurance Fraud Prevention 
        under section 45.0135 after January 1, 2005, and who has not 
        attained the mandatory retirement age specified in section 
        43A.34, subdivision 4.  
           Sec. 5.  Minnesota Statutes 2004, section 353.01, 
        subdivision 6, is amended to read: 
           Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
        subdivision" means a county, city, town, school district within 
        this state, or a department or unit of state government, or any 
        public body whose revenues are derived from taxation, fees, 
        assessments or from other sources. 
           (b) Governmental subdivision also means the Public 
        Employees Retirement Association, the League of Minnesota 
        Cities, the Association of Metropolitan Municipalities, public 
        hospitals owned or operated by, or an integral part of, a 
        governmental subdivision or governmental subdivisions, the 
        Association of Minnesota Counties, the Metropolitan Intercounty 
        Association, the Minnesota Municipal Utilities Association, the 
        Metropolitan Airports Commission, the University of Minnesota 
        with respect to police officers covered by the public employees 
        police and fire retirement plan, the Minneapolis Employees 
        Retirement Fund for employment initially commenced after June 
        30, 1979, the Range Association of Municipalities and Schools, 
        soil and water conservation districts, economic development 
        authorities created or operating under sections 469.090 to 
        469.108, the Port Authority of the city of St. Paul, the Spring 
        Lake Park Fire Department, incorporated, the Lake Johanna 
        Volunteer Fire Department, incorporated, the Red Wing 
        Environmental Learning Center, and the Dakota County 
        Agricultural Society. 
           (c) Governmental subdivision does not mean any municipal 
        housing and redevelopment authority organized under the 
        provisions of sections 469.001 to 469.047; or any port authority 
        organized under sections 469.048 to 469.089 other than the Port 
        Authority of the city of St. Paul; or any hospital district 
        organized or reorganized prior to July 1, 1975, under sections 
        447.31 to 447.37 or the successor of the district, nor the 
        Minneapolis Community Development Agency. 
           Sec. 6.  Minnesota Statutes 2004, section 353.64, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 
        INCLUSIONS AND EXCLUSIONS.] (a) Unless paragraph (b) applies, a 
        person who is employed as a peace officer by the University of 
        Minnesota at any campus or facility of the university, who is 
        required by the university to be and is licensed as a peace 
        officer by the Minnesota Peace Officer Standards and Training 
        Board under sections 626.84 to 626.863, and who has the full 
        power of arrest is a member of the public employees police and 
        fire retirement plan. 
           (b) A police officer employed by the University of 
        Minnesota who is required by the Board of Regents to contribute 
        to the University of Minnesota faculty retirement plan is not 
        eligible to be a member of the public employees police and fire 
        retirement plan. 
           Sec. 7.  Minnesota Statutes 2004, section 354B.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COVERAGE; ELECTION.] (a) An eligible person is 
        entitled to elect coverage by the plan.  If the eligible person 
        does not make a timely election of coverage by the plan, the 
        person has the coverage specified in subdivision 3. 
           (b) For eligible persons who were employed by the former 
        state university system or the former community college system 
        before May 1, 1995, the person has the retirement coverage that 
        the person had for employment immediately before May 1, 1995. 
           (c) (b) For all other eligible persons, the election of 
        coverage must be made within 90 days of May 10, 1995, or 90 days 
        of receiving notice from the employer of the options available 
        under this section, whichever occurs later unless otherwise 
        specified in this section, the eligible person is authorized to 
        elect prospective Teachers Retirement Association plan coverage 
        rather than coverage by the plan established by this chapter.  
        The election of prospective Teachers Retirement Association plan 
        coverage shall be made within one year of commencing eligible 
        Minnesota State Colleges and Universities system employment.  If 
        an election is not made within the specified election period due 
        to a termination of Minnesota State Colleges and Universities 
        system employment, an election may be made within 90 days of 
        returning to eligible Minnesota State Colleges and Universities 
        system employment.  All elections are irrevocable.  Prior to 
        making an election the eligible person shall be covered by the 
        plan indicated as default coverage under subdivision 3.  
           (c) A purchase of service credit in the Teachers Retirement 
        Association plan for any period or periods of Minnesota State 
        Colleges and Universities system employment occurring prior to 
        the election under paragraph (b) is prohibited.  
           Sec. 8.  Minnesota Statutes 2004, section 354B.21, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFAULT COVERAGE.] (a) Prior to making an 
        election under subdivision 2, or if an eligible person fails to 
        elect coverage by the plan under subdivision 2 or if the person 
        fails to make a timely election, the following retirement 
        coverage applies: 
           (1) for employees of the board who are employed in faculty 
        positions in the technical colleges, in the state universities 
        or in the community colleges, the retirement coverage is by the 
        plan established by this chapter; 
           (2) for employees of the board who are employed in faculty 
        positions in the technical colleges, the retirement coverage is 
        by the plan established by this chapter unless on June 30, 1997, 
        the employee was a member of the Teachers Retirement Association 
        established under chapter 354 and then the retirement coverage 
        is by the Teachers Retirement Association, or, unless the 
        employee was a member of a first class city teacher retirement 
        fund established under chapter 354A on June 30, 1995, and then 
        the retirement coverage is by the Duluth Teachers Retirement 
        Fund Association if the person was a member of that plan on June 
        30, 1995, or the Minneapolis Teachers Retirement Fund 
        Association if the person was a member of that plan on June 30, 
        1995, or the St. Paul Teachers Retirement Fund Association if 
        the person was a member of that plan on June 30, 1995; and 
           (3) for employees of the board who are employed in eligible 
        unclassified administrative positions, the retirement coverage 
        is by the plan established by this chapter. 
           (b) If an employee fails to correctly certify prior 
        membership in the Teachers Retirement Association to the 
        Minnesota State colleges and Universities system, the system 
        shall not pay interest on employee contributions, employer 
        contributions, and additional employer contributions to the 
        Teachers Retirement Association under section 354.52, 
        subdivision 4. 
           Sec. 9.  [EFFECTIVE DATE.] 
           (a) Sections 1, 3, 5, and 6 are effective July 1, 2005.  
           (b) Sections 2 and 4 are effective retroactively from 
        January 1, 2005. 
           (c) Sections 7 and 8 are effective the day following final 
        enactment. 

                                   ARTICLE 5
                            RETIREMENT CONTRIBUTIONS
           Section 1.  Minnesota Statutes 2004, section 353.27, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) The employee 
        contribution is the following applicable percentage of the total 
        salary amount for a "basic member" and for a "coordinated 
        member": 
                                            Basic    Coordinated
                                           Program     Program
        Before January 1, 2002              8.75         4.75  
        Effective January 1, 2002 
        Effective before January 1, 2006    9.10         5.10
        Effective January 1, 2006           9.10         5.50 
        Effective January 1, 2007           9.10         5.75 
        Effective January 1, 2008           9.10         6.00 plus any
                                                         contribution
                                                         rate adjustment
                                                         under
                                                         subdivision 3b
           (b) These contributions must be made by deduction from 
        salary as defined in section 353.01, subdivision 10, in the 
        manner provided in subdivision 4.  Where If any portion of a 
        member's salary is paid from other than public funds, such the 
        member's employee contribution must be based on the total salary 
        received by the member from all sources. 
           Sec. 2.  Minnesota Statutes 2004, section 353.27, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) The employer 
        contribution is the following applicable percentage of the total 
        salary amount for "basic members" and for "coordinated members": 
                                          Basic     Coordinated  
                                         Program      Program
        Before January 1, 2002            8.75          4.75 
        Effective January 1, 2002 
        Effective before January 1, 2006  9.10          5.10
        Effective January 1, 2006         9.10          5.50 
        Effective January 1, 2007         9.10          5.75 
        Effective January 1, 2008         9.10          6.00 plus any
                                                        contribution
                                                        rate adjustment
                                                        under
                                                        subdivision 3b
           (b) This contribution must be made from funds available to 
        the employing subdivision by the means and in the manner 
        provided in section 353.28. 
           Sec. 3.  Minnesota Statutes 2004, section 353.27, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An 
        additional employer contribution must be made equal to (1) 2.68 
        percent of the following applicable percentage of the total 
        salary of each amount for "basic member members"; and (2) 
        .43 percent of the total salary of each for "coordinated member. 
        members": 
                                             Basic         Coordinated
                                            Program          Program
        Effective before January 1, 2006     2.68              .43
        Effective January 1, 2006            2.68              .50
        Effective January 1, 2009            2.68              .75
        Effective January 1, 2010            2.68             1.00
           These contributions must be made from funds available to 
        the employing subdivision by the means and in the manner 
        provided in section 353.28.  
           (b) The coordinated program contribution rates set forth in 
        paragraph (a) effective for January 1, 2009, or January 1, 2010, 
        must not be implemented if, following receipt of the July 1, 
        2008, or July 1, 2009, annual actuarial valuation reports under 
        section 356.215, respectively, the actuarially required 
        contributions are equal to or less than the total rates under 
        this section in effect as of January 1, 2008. 
           (c) This subdivision is repealed once the actuarial value 
        of the assets of the plan equal or exceed the actuarial accrued 
        liability of the plan as determined by the actuary retained by 
        the Legislative Commission on Pensions and Retirement under 
        section 356.215.  The repeal is effective on the first day of 
        the first full pay period occurring after March 31 of the 
        calendar year following the issuance of the actuarial valuation 
        upon which the repeal is based. 
           Sec. 4.  Minnesota Statutes 2004, section 353.27, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 
        IN CERTAIN INSTANCES.] (a) For purposes of this section, a 
        contribution sufficiency exists if the total of the employee 
        contribution under subdivision 2, the employer contribution 
        under subdivision 3, the additional employer contribution under 
        subdivision 3a, and any additional contribution previously 
        imposed under this subdivision exceeds the total of the normal 
        cost, the administrative expenses, and the amortization 
        contribution of the retirement plan as reported in the most 
        recent actuarial valuation of the retirement plan prepared by 
        the actuary retained under section 356.214 and prepared under 
        section 356.215 and the standards for actuarial work of the 
        Legislative Commission on Pensions and Retirement.  For purposes 
        of this section, a contribution deficiency exists if the total 
        of the employee contributions under subdivision 2, the employer 
        contributions under subdivision 3, the additional employer 
        contribution under subdivision 3a, and any additional 
        contribution previously imposed under this subdivision is less 
        than the total of the normal cost, the administrative expenses, 
        and the amortization contribution of the retirement plan as 
        reported in the most recent actuarial valuation of the 
        retirement plan prepared by the actuary retained under section 
        356.214 and prepared under section 356.215 and the standards for 
        actuarial work of the Legislative Commission on Pensions and 
        Retirement. 
           (b) Employee and employer contributions under subdivisions 
        2 and 3 must be adjusted: 
           (1) if, after July 1, 2010, the regular actuarial 
        valuations of the general employees retirement plan of the 
        Public Employees Retirement Association under section 356.215 
        indicate that there is a contribution sufficiency under 
        paragraph (a) equal to or greater than 0.5 percent of covered 
        payroll for two consecutive years, the coordinated program 
        employee and employer contribution rates must be decreased as 
        determined under paragraph (c) to a level such that the 
        sufficiency equals no more than 0.25 percent of covered payroll 
        based on the most recent actuarial valuation; or 
           (2) if, after July 1, 2010, the regular actuarial 
        valuations of the general employees retirement plan of the 
        Public Employees Retirement Association under section 356.215 
        indicate that there is a deficiency equal to or greater than 0.5 
        percent of covered payroll for two consecutive years, the 
        coordinated program employee and employer contribution rates 
        must be increased as determined under paragraph (c) to a level 
        such that no deficiency exists based on the most recent 
        actuarial valuation. 
           (c) The contribution rate increase or decrease must be 
        determined by the executive director of the Public Employees 
        Retirement Association, must be reported to the chair and the 
        executive director of the Legislative Commission on Pensions and 
        Retirement on or before the next February 1, and, if the 
        Legislative Commission on Pensions and Retirement does not 
        recommend against the rate change or does not recommend a 
        modification in the rate change, is effective on the next July 1 
        following the determination by the executive director that a 
        contribution deficiency or sufficiency has existed for two 
        consecutive fiscal years based on the most recent actuarial 
        valuations under section 356.215.  If the actuarially required 
        contribution exceeds or is less than the total support provided 
        by the combined employee and employer contribution rates by more 
        than 0.5 percent of covered payroll, the coordinated program 
        employee and employer contribution rates must be adjusted 
        incrementally over one or more years to a level such that there 
        remains a contribution sufficiency of no more than 0.25 percent 
        of covered payroll.  
           (d) No incremental adjustment may exceed 0.25 percent for 
        either the coordinated program employee and employer 
        contribution rates per year in which any adjustment is 
        implemented.  A contribution rate adjustment under this 
        subdivision must not be made until at least two years have 
        passed since fully implementing a previous adjustment under this 
        subdivision. 
           Sec. 5.  Minnesota Statutes 2004, section 353.28, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INTEREST CHARGES CHARGEABLE ON AMOUNTS DUE.] Any 
        amount due under this section or section 353.27, subdivision 4, 
        is payable with interest at an annual compound rate of 8.5 
        percent compounded annually from the date due until the date 
        payment is received by the association, with a minimum interest 
        charge of $10.  Interest for past due payments of excess police 
        state aid under section 69.031, subdivision 5, must be charged 
        at an annual rate of 8.5 percent compounded annually. 
           Sec. 6.  Minnesota Statutes 2004, section 353.28, 
        subdivision 6, is amended to read: 
           Subd. 6.  [FAILURE TO PAY COLLECTION OF UNPAID AMOUNTS.] (a)
        If the a governmental subdivision which receives the direct 
        proceeds of property taxation fails to pay amounts an amount due 
        under chapters chapter 353, 353A, 353B, 353C, and or 353D or 
        fails to make payments of excess police state aid to the public 
        employees police and fire fund under section 69.031, subdivision 
        5, the executive director shall certify those amounts the amount 
        to the governmental subdivision for payment.  If the 
        governmental subdivision fails to remit the sum so due in a 
        timely fashion, the executive director shall certify amounts the 
        amount to the applicable county auditor for collection.  The 
        county auditor shall collect such amounts the amount out of the 
        revenue of the governmental subdivision, or shall add them the 
        amount to the levy of the governmental subdivision and make 
        payment directly to the association.  This tax shall must be 
        levied, collected, and apportioned in the manner that other 
        taxes are levied, collected, and apportioned. 
           (b) If a governmental subdivision which is not funded 
        directly from the proceeds of property taxation fails to pay an 
        amount due under this chapter, the executive director shall 
        certify the amount to the governmental subdivision for payment.  
        If the governmental subdivision fails to pay the amount for a 
        period of 60 days after certification, the executive director 
        shall certify the amount to the commissioner of finance, who 
        shall deduct the amount from any subsequent state-aid payment or 
        state appropriation amount applicable to the governmental 
        subdivision. 
           Sec. 7.  Minnesota Statutes 2004, section 353.65, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] (a) The employee 
        contribution is an amount equal to 6.2 the percent of the total 
        salary of the member specified in paragraph (b).  This 
        contribution must be made by deduction from salary in the manner 
        provided in subdivision 4.  Where any portion of a member's 
        salary is paid from other than public funds, the member's 
        employee contribution is based on the total salary received from 
        all sources.  
           (b) For calendar year 2006, the employee contribution rate 
        is 7.0 percent.  For calendar year 2007, the employee 
        contribution rate is 7.8 percent.  For calendar year 2008, the 
        employee contribution rate is 8.6 percent.  For calendar year 
        2009 and thereafter, the employee contribution rate is 9.4 
        percent. 
           Sec. 8.  Minnesota Statutes 2004, section 353.65, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] (a) The employer 
        contribution shall be an amount equal to 9.3 the percent of the 
        total salary of every member as specified in paragraph (b).  
        This contribution shall be made from funds available to the 
        employing subdivision by the means and in the manner provided in 
        section 353.28. 
           (b) For calendar year 2006, the employer contribution rate 
        is 10.5 percent.  For calendar year 2007, the employer 
        contribution rate is 11.7 percent.  For calendar year 2008, the 
        employer contribution rate is 12.9 percent.  For calendar year 
        2009 and thereafter, the employer contribution rate is 14.1 
        percent. 
           Sec. 9.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST 
        ON SERVICE CREDIT PURCHASE PAYMENT RETURN.] 
           If a former employee of the Minneapolis Community 
        Development Agency made a prior service credit purchase payment 
        under Minnesota Statutes 2002, section 356.55, in an amount that 
        is greater than the actually required payment amount because of 
        the use of an inaccurate salary figure or other similar 
        reporting or clerical error, the general employees retirement 
        plan of the Public Employees Retirement Association may pay 
        interest on the overage amount at an annual compound rate of six 
        percent per year. 
           Sec. 10.  [RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT 
        FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.] 
           (a) An eligible person, upon written application, may 
        receive a return of a prior service credit purchase payment 
        under Minnesota Statutes 2002, section 356.55, plus interest on 
        the amount at an annual compound rate of six percent per year.  
        The return amount and interest must be made in an 
        institution-to-institution transfer to a federal tax qualified 
        retirement plan or account and may not be paid directly to an 
        individual.  
           (b) An eligible person is a person who was an employee of 
        the Minneapolis Community Development Agency and made a payment 
        for the purchase of prior service credit under Laws 2003, 
        chapter 127, article 12, section 31, subdivision 4, and 
        Minnesota Statutes 2002, section 356.55, in an erroneous amount 
        because of an inaccurate salary figure supplied by the employing 
        agency. 
           Sec. 11.  [EFFECTIVE DATE.] 
           (a) Sections 5 and 6 are effective retroactive to July 1, 
        2005. 
           (b) Sections 9 and 10 are effective the day following final 
        enactment. 
           (c) Section 10 expires June 30, 2005. 

                                   ARTICLE 6
                      PENSION BENEFITS UPON PRIVATIZATION
           Section 1.  Minnesota Statutes 2004, section 353F.02, 
        subdivision 4, is amended to read: 
           Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
           (1) Bridges Medical Services; 
           (2) the Fair Oaks Lodge, Wadena; 
           (2) (3) the Glencoe Area Health Center; 
           (3) (4) the Hutchinson Area Health Care; 
           (5) the Kanabec Hospital; 
           (4) (6) the Luverne Public Hospital; 
           (7) the Northfield Hospital; 
           (5) (8) the RenVilla Nursing Home; 
           (6) (9) the Renville County Hospital in Olivia; 
           (7) (10) the St. Peter Community Healthcare Center; and 
           (8) (11) the Waconia-Ridgeview Medical Center. 
           Sec. 2.  Minnesota Statutes 2004, section 471A.10, is 
        amended to read: 
           471A.10 [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING 
        FACILITY.] 
           (a) Unless expressly provided therein, and except as 
        provided in this section, no state law, charter provision, or 
        ordinance of a municipality relating to public employees shall 
        apply to a person solely by reason of that person's employment 
        by a private vendor in connection with services rendered under a 
        service contract. 
           (b) A private vendor purchasing or leasing existing related 
        facilities from a municipality or operating or maintaining the 
        facility shall recognize all exclusive bargaining 
        representatives and existing labor agreements and those 
        agreements shall remain in force until they expire by their 
        terms.  Persons who are not who were employed by a municipality 
        in a related facility at the time of and who were members of the 
        Public Employees Retirement Association general plan due to that 
        employment are not permitted to remain as active members of the 
        plan following a lease or purchase of the facility by the a 
        private vendor are not "public employees" within the meaning of 
        the Public Employees Retirement Act, chapter 353.  Persons 
        employed by a municipality in a related facility at the time of 
        a lease or purchase of the facility by a private vendor shall 
        continue to be considered to be "public employees" within the 
        meaning of the Public Employees Retirement Act, chapter 353, but 
        may elect to terminate their participation in the Public 
        Employees Retirement Association as provided in this section.  
        Each such employee may exercise the election annually on the 
        anniversary of the person's initial employment by the 
        municipality.  An employee electing to terminate participation 
        in the association is entitled to benefits that the employee 
        would be entitled to if terminating public employment and may 
        participate in a retirement program established by the private 
        vendor. 
           Sec. 3.  Laws 2004, chapter 267, article 12, section 4, is 
        amended to read:  
           Sec. 4.  [EFFECTIVE DATE.] 
           (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 
        effective upon the latter of: 
           (1) the day after the governing body of Todd County and its 
        chief clerical officer timely complete their compliance with 
        Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
           (2) the day after the governing body of Wadena County and 
        its chief clerical officer timely complete their compliance with 
        Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
           (b) Section 1, relating to the RenVilla Nursing Home, is 
        effective upon the latter of: 
           (1) the day after the governing body of the city of 
        Renville and its chief clerical officer timely complete their 
        compliance with Minnesota Statutes, section 645.021, 
        subdivisions 2 and 3, except that the certificate of approval 
        must be filed before January 1, 2006; and 
           (2) the first day of the month next following certification 
        to the governing body of the city of Renville 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 RenVilla Nursing Home 
        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, or the 
        actuary retained under Minnesota Statutes, section 356.214, 
        whichever is applicable. 
           (c) The cost of the actuarial calculations must be borne by 
        the city of Renville or the purchaser of the RenVilla Nursing 
        Home. 
           (d) Section 1, relating to the St. Peter Community 
        Healthcare Center, is effective upon the latter of: 
           (1) the day after the governing body of the city of St. 
        Peter 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 governing body of the city of St. Peter 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 St. Peter Community 
        Healthcare Center 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, or the actuary retained under Minnesota Statutes, 
        section 356.214, whichever is applicable. 
           (e) The cost of the actuarial calculations must be borne by 
        the city of St. Peter or the purchaser of the St. Peter 
        Community Healthcare Center. 
           (f) If the required actions under paragraphs (b) and (c) 
        occur, section 1 applies retroactively to the RenVilla Nursing 
        Home as of the date of privatization. 
           (g) If the required actions under paragraph (a) occur, 
        section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 
        of January 1, 2004. 
           (h) Sections 2 and 3 are effective on the day following 
        final enactment. 
           Sec. 4.  [EFFECTIVE DATE.] 
           (a) Section 1, relating to Bridges Medical Services, is 
        effective upon the later of: 
           (1) the day after the governing body of the city of Ada 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 governing body of the city of Ada 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 Bridges Medical 
        Services 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 
        under Minnesota Statutes, section 356.214. 
           (b) Section 1, relating to the Hutchinson Area Health Care, 
        is effective upon the later of: 
           (1) the day after the governing body of the city of 
        Hutchinson 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 governing body of the city of Hutchinson 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 Hutchinson Area Health 
        Care 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. 
           (c) Section 1, relating to the Northfield Hospital, is 
        effective upon the later of: 
           (1) the day after the governing body of the city of 
        Northfield 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 governing body of the city of Northfield 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 Northfield 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. 
           (d) The cost of the actuarial calculations must be borne by 
        the facility, the city in which the facility is located, or the 
        purchaser of the facility. 
           (e) If the required actions in paragraphs (a), (b), or (c) 
        and (d) occur, section 1 applies retroactively to the date of 
        privatization. 
           (f) Section 3 is effective the day following final 
        enactment. 
           (g) Section 2 is effective the day following final 
        enactment and applies to privatizations occurring on or after 
        the effective date. 

                                   ARTICLE 7
                            FIRST CLASS CITY TEACHER
                          RETIREMENT FUND ASSOCIATIONS
           Section 1.  Minnesota Statutes 2004, section 354A.021, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 
        FILING.] (a) On or before July 1, 2006, and within six months of 
        the date of the approval of any amendment to the articles of 
        incorporation or bylaws, the chief administrative officer of 
        each first class city teacher retirement fund association shall 
        prepare and publish an updated compilation of the articles of 
        incorporation and the bylaws of the association. 
           (b) The chief administrative officer of the first class 
        city teacher retirement fund association must certify the 
        accuracy and the completeness of the compilation. 
           (c) The compilation of the articles of incorporation and 
        bylaws of a first class city teacher retirement fund association 
        must contain an index. 
           (d) The compilation must be made available to association 
        members and other interested parties.  The association may 
        charge a fee for a copy that reflects the price of printing or 
        otherwise producing the copy.  Two copies of the compilation 
        must be filed, without charge, by each retirement fund 
        association with the Legislation Commission on Pensions and 
        Retirement, the Legislative Reference Library, the state 
        auditor, the commissioner of education, the chancellor of the 
        Minnesota State Colleges and Universities system, and the 
        superintendent of the applicable school district. 
           (e) A first class city teacher retirement fund association 
        may contract with the revisor of statutes for the preparation of 
        the compilation. 
           (f) If a first class city teacher retirement fund 
        association makes an updated copy of its articles of 
        incorporation and bylaws available on its Web site, the 
        retirement fund association is not obligated to file a hard copy 
        of the documents under paragraph (d) for the applicable filing 
        period. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 2005. 

                                   ARTICLE 8
                   MINNESOTA STATE COLLEGES AND UNIVERSITIES 
                   INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES 
           Section 1.  Minnesota Statutes 2004, section 354B.25, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INVESTMENT OPTIONS.] (a) The plan administrator 
        shall arrange for the purchase of investment products. 
           (b) The investment products must be purchased with 
        contributions under section 354B.23 or with money or assets 
        otherwise provided by law by authority of the board.  
           (c) Various investment accounts offered through the 
        Minnesota supplemental investment fund established under section 
        11A.17 and administered by the State Board of Investment is one 
        of the may be included as investment products for the individual 
        retirement account plan.  Direct access must also be provided to 
        lower expense and no-load mutual funds, as those terms are 
        defined by the federal Securities and Exchange Commission, 
        including stock funds, bond funds, and balanced funds.  Other 
        investment products or combination of investment products which 
        may be included are: 
           (1) savings accounts at federally insured financial 
        institutions; 
           (2) life insurance contracts, fixed and variable annuity 
        contracts from companies that are subject to regulation by the 
        commerce commissioner; 
           (3) investment options from open-ended investment companies 
        registered under the federal Investment Company Act of 1940, 
        United States Code, title 15, sections 80a-1 to 80a-64; 
           (4) investment options from a firm that is a registered 
        investment advisor under the federal Investment Advisers Act of 
        1940, United States Code, title 15, sections 80b-1 to 80b-21; 
        and 
           (5) investment options of a bank as defined in United 
        States Code, title 15, section 80b-2, subsection (a), paragraph 
        2, or a bank holding company as defined in the Bank Holding 
        Company Act of 1956, United States Code, title 12, section 1841, 
        subsection (a), paragraph (1). 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 

                                   ARTICLE 9
                          VOLUNTEER FIREFIGHTER RELIEF
                              ASSOCIATION CHANGES
           Section 1.  Minnesota Statutes 2004, section 69.051, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
        each salaried firefighters relief association, police relief 
        association, and volunteer firefighters relief association as 
        defined in section 424A.001, subdivision 4, with assets of at 
        least $200,000 or liabilities of at least $200,000 in the prior 
        year or in any previous year, according to the most recent 
        applicable actuarial valuation or financial report if no 
        valuation is required, shall:  
           (1) prepare a financial report covering the special and 
        general funds of the relief association for the preceding fiscal 
        year on a form prescribed by the state auditor.  The financial 
        report shall must contain financial statements and disclosures 
        which present the true financial condition of the relief 
        association and the results of relief association operations in 
        conformity with generally accepted accounting principles and in 
        compliance with the regulatory, financing and funding provisions 
        of this chapter and any other applicable laws.  The financial 
        report shall must be countersigned by the municipal clerk or 
        clerk-treasurer of the municipality in which the relief 
        association is located if the relief association is a 
        firefighters relief association which is directly associated 
        with a municipal fire department or is a police relief 
        association, or countersigned by the secretary of the 
        independent nonprofit firefighting corporation and by the 
        municipal clerk or clerk-treasurer of the largest municipality 
        in population which contracts with the independent nonprofit 
        firefighting corporation if the volunteer firefighter relief 
        association is a subsidiary of an independent nonprofit 
        firefighting corporation; 
           (2) file the financial report in its office for public 
        inspection and present it to the city council after the close of 
        the fiscal year.  One copy of the financial report shall must be 
        furnished to the state auditor after the close of the fiscal 
        year; and 
           (3) submit to the state auditor audited financial 
        statements which have been attested to by a certified public 
        accountant, public accountant, or the state auditor within 180 
        days after the close of the fiscal year.  The state auditor may 
        accept this report in lieu of the report required in clause (2). 
           Sec. 2.  Minnesota Statutes 2004, section 69.051, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
        volunteer firefighters relief association, as defined in section 
        424A.001, subdivision 4, with assets of less than $200,000 and 
        liabilities less than $200,000, according to the most recent 
        financial report, shall that is not required to file a financial 
        report and audit under subdivision 1 must prepare a detailed 
        statement of the financial affairs for the preceding fiscal year 
        of the relief association's special and general funds in the 
        style and form prescribed by the state auditor.  The detailed 
        statement must show the sources and amounts of all money 
        received; all disbursements, accounts payable and accounts 
        receivable; the amount of money remaining in the treasury; total 
        assets including a listing of all investments; the accrued 
        liabilities; and all items necessary to show accurately the 
        revenues and expenditures and financial position of the relief 
        association. 
           (b) The detailed financial statement required under 
        paragraph (a) must be certified by an independent public 
        accountant or auditor or by the auditor or accountant who 
        regularly examines or audits the financial transactions of the 
        municipality.  In addition to certifying the financial condition 
        of the special and general funds of the relief association, the 
        accountant or auditor conducting the examination shall give an 
        opinion as to the condition of the special and general funds of 
        the relief association, and shall comment upon any exceptions to 
        the report.  The independent accountant or auditor shall must 
        have at least five years of public accounting, auditing, or 
        similar experience, and shall must not be an active, inactive, 
        or retired member of the relief association or the fire or 
        police department. 
           (c) The detailed statement required under paragraph (a) 
        must be countersigned by the municipal clerk or clerk-treasurer 
        of the municipality, or, where applicable, by the secretary of 
        the independent nonprofit firefighting corporation and by the 
        municipal clerk or clerk-treasurer of the largest municipality 
        in population which contracts with the independent nonprofit 
        firefighting corporation if the relief association is a 
        subsidiary of an independent nonprofit firefighting corporation. 
           (d) The volunteer firefighters' relief association board 
        must file the detailed statement required under paragraph (a) in 
        the relief association office for public inspection and present 
        it to the city council within 45 days after the close of the 
        fiscal year, and must submit a copy of the detailed statement to 
        the state auditor within 90 days of the close of the fiscal year.
           Sec. 3.  Minnesota Statutes 2004, section 69.771, is 
        amended to read: 
           69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 
        FINANCING GUIDELINES ACT; APPLICATION.] 
           Subdivision 1.  [COVERED RELIEF ASSOCIATIONS.] The 
        applicable provisions of sections 69.771 to 69.776 shall apply 
        to any firefighters' relief association other than a relief 
        association enumerated in section 69.77, subdivision 1a, which 
        is organized under any laws of this state, which is composed of 
        volunteer firefighters or is composed partially of volunteer 
        firefighters and partially of salaried firefighters with 
        retirement coverage provided by the public employees police and 
        fire fund and which, in either case, operates subject to the 
        service pension minimum requirements for entitlement and 
        maximums contained in section 424A.02, or subject to a special 
        law modifying those requirements or maximums. 
           Subd. 2.  [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 
        ASSOCIATION.] Notwithstanding any law to the contrary, a 
        municipality may lawfully contribute public funds, including the 
        transfer of any applicable fire state aid, or may levy property 
        taxes for the support of a firefighters' relief association 
        specified in subdivision 1, however organized, which provides 
        retirement coverage or pays a service pension to retired 
        firefighter or a retirement benefit to a disabled firefighter or 
        a surviving dependent of either an active or retired firefighter 
        for the operation and maintenance of the relief association only 
        if the municipality and the relief association both comply with 
        the applicable provisions of sections 69.771 to 69.776. 
           Subd. 3.  [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 
        Any (a) A municipality in which there exists a firefighters' 
        relief association as specified in subdivision 1 which does not 
        comply with the applicable provisions of sections 69.771 to 
        69.776 or the provisions of any applicable special law relating 
        to the funding or financing of the association shall does not 
        qualify initially to receive, or be and is not entitled 
        subsequently to retain, fire state aid pursuant to under 
        sections 69.011 to 69.051 until the reason for the 
        disqualification specified by the state auditor is remedied, 
        whereupon the municipality or relief association, if otherwise 
        qualified, shall be is entitled to again receive fire state aid 
        for the year occurring immediately subsequent to the year in 
        which the disqualification is remedied.  
           (b) The state auditor shall determine if a municipality to 
        which a firefighters' relief association is directly associated 
        or a firefighters' relief association fails to comply with the 
        provisions of sections 69.771 to 69.776 or the funding or 
        financing provisions of any applicable special law based upon 
        the information contained in the annual financial report of the 
        firefighters' relief association required pursuant to under 
        section 69.051., the actuarial valuation of the relief 
        association, if applicable, the relief association officers' 
        financial requirements of the relief association and minimum 
        municipal obligation determination documentation under section 
        69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 
        69.774, subdivision 2, if requested to be filed by the state 
        auditor, the applicable municipal or nonprofit firefighting 
        corporation budget, if requested to be filed by the state 
        auditor, and any other relevant documents or reports obtained by 
        the state auditor. 
           (c) The municipality or nonprofit firefighting corporation 
        and the associated relief association are not eligible to 
        receive or to retain fire state aid if: 
           (1) the relief association fails to prepare or to file the 
        financial report or financial statement under section 69.051; 
           (2) the relief association treasurer is not bonded in the 
        manner and in the amount required by section 69.051, subdivision 
        2; 
           (3) the relief association officers fail to determine or 
        improperly determine the accrued liability and the annual 
        accruing liability of the relief association under section 
        69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 
        applicable; 
           (4) if applicable, the relief association officers fail to 
        obtain and file a required actuarial valuation or the officers 
        file an actuarial valuation that does not contain the special 
        fund actuarial liability calculated under the entry age normal 
        actuarial cost method, the special fund current assets, the 
        special fund unfunded actuarial accrued liability, the special 
        fund normal cost under the entry age normal actuarial cost 
        method, the amortization requirement for the special fund 
        unfunded actuarial accrued liability by the applicable target 
        date, a summary of the applicable benefit plan, a summary of the 
        membership of the relief association, a summary of the actuarial 
        assumptions used in preparing the valuation, and a signed 
        statement by the actuary attesting to its results and certifying 
        to the qualifications of the actuary as an approved actuary 
        under section 356.215, subdivision 1, paragraph (c); 
           (5) the municipality failed to provide a municipal 
        contribution, or the nonprofit firefighting corporation failed 
        to provide a corporate contribution, in the amount equal to the 
        minimum municipal obligation if the relief association is 
        governed under section 69.772, or the amount necessary, when 
        added to the fire state aid actually received in the plan year 
        in question, to at least equal in total the calculated annual 
        financial requirements of the special fund of the relief 
        association if the relief association is governed under section 
        69.773, and, if the municipal or corporate contribution is 
        deficient, the municipality failed to include the minimum 
        municipal obligation certified under section 69.772, subdivision 
        3, or 69.773, subdivision 5, in its budget and tax levy or the 
        nonprofit firefighting corporation failed to include the minimum 
        corporate obligation certified under section 69.774, subdivision 
        2, in the corporate budget; 
           (6) the relief association did not receive municipal 
        ratification for the most recent plan amendment when municipal 
        ratification was required under section 69.772, subdivision 6; 
        69.773, subdivision 6; or 424A.02, subdivision 10; 
           (7) the relief association invested special fund assets in 
        an investment security that is not authorized under section 
        69.775; 
           (8) the relief association had an administrative expense 
        that is not authorized under section 69.80 or 424A.05, 
        subdivision 3, or the municipality had an expenditure that is 
        not authorized under section 424A.08; 
           (9) the relief association officers fail to provide a 
        complete and accurate public pension plan investment portfolio 
        and performance disclosure under section 356.219; 
           (10) the relief association fails to obtain the 
        acknowledgment from a broker of the statement of investment 
        restrictions under section 356A.06, subdivision 8b; 
           (11) the relief association officers permitted to occur a 
        prohibited transaction under section 356A.06, subdivision 9, or 
        424A.001, subdivision 7, or failed to undertake correction of a 
        prohibited transaction that did occur; or 
           (12) the relief association pays a defined benefit service 
        pension in an amount that is in excess of the applicable service 
        pension maximum under section 424A.02, subdivision 3. 
           Sec. 4.  Minnesota Statutes 2004, section 69.772, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 
        MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 
        July, the officers of the relief association shall determine the 
        overall funding balance of the special fund for the current 
        calendar year, the financial requirements of the special fund 
        for the following calendar year and the minimum obligation of 
        the municipality with respect to the special fund for the 
        following calendar year in accordance with the requirements of 
        this subdivision.  
           (1) (b) The overall funding balance of the special fund for 
        the current calendar year shall must be determined in the 
        following manner: 
           (a) (1) The total accrued liability of the special fund for 
        all active and deferred members of the relief association as of 
        December 31 of the current year shall must be calculated 
        pursuant to under subdivisions 2 and 2a, if applicable. 
           (b) (2) The total present assets of the special fund 
        projected to December 31 of the current year, including receipts 
        by and disbursements from the special fund anticipated to occur 
        on or before December 31 shall, must be calculated.  To the 
        extent possible, for those assets for which a market value is 
        readily ascertainable, the current market value as of the date 
        of the calculation for those assets shall must be utilized in 
        making this calculation.  For any asset for which no market 
        value is readily ascertainable, the cost value or the book 
        value, whichever is applicable, shall must be utilized in making 
        this calculation. 
           (c) (3) The amount of the total present assets of the 
        special fund calculated pursuant to under clause (b) shall (2) 
        must be subtracted from the amount of the total accrued 
        liability of the special fund calculated pursuant to under 
        clause (a) (1).  If the amount of total present assets exceeds 
        the amount of the total accrued liability, then the special fund 
        shall be is considered to have a surplus over full funding.  If 
        the amount of the total present assets is less than the amount 
        of the total accrued liability, then the special fund shall be 
        is considered to have a deficit from full funding.  If the 
        amount of total present assets is equal to the amount of the 
        total accrued liability, then the special fund shall be is 
        considered to be fully funded. 
           (2) (c) The financial requirements of the special fund for 
        the following calendar year shall must be determined in the 
        following manner: 
           (a) (1) The total accrued liability of the special fund for 
        all active and deferred members of the relief association as of 
        December 31 of the calendar year next following the current 
        calendar year shall must be calculated pursuant to under 
        subdivisions 2 and 2a, if applicable. 
           (b) (2) The increase in the total accrued liability of the 
        special fund for the following calendar year over the total 
        accrued liability of the special fund for the current year shall 
        must be calculated. 
           (c) (3) The amount of anticipated future administrative 
        expenses of the special fund shall must be calculated by 
        multiplying the dollar amount of the administrative expenses of 
        the special fund for the most recent prior calendar year by the 
        factor of 1.035. 
           (d) (4) If the special fund is fully funded, the financial 
        requirement requirements of the special fund for the following 
        calendar year shall be are the figure which represents the 
        increase in the total accrued liability of the special fund as 
        amounts calculated pursuant to subclause (b) under clauses (2) 
        and (3).  
           (e) (5) If the special fund has a deficit from full 
        funding, the financial requirements of the special fund for the 
        following calendar year shall be are the financial requirements 
        of the special fund calculated as though the special fund were 
        fully funded pursuant to subclause (d) under clause (4) plus an 
        amount equal to one-tenth of the original amount of the deficit 
        from full funding of the special fund as determined pursuant to 
        this section for the calendar year 1971 until that deficit from 
        full funding is fully retired, and plus an amount equal to 
        one-tenth of the increase in the deficit from full funding of 
        the special fund under clause (2) resulting either from an 
        increase in the amount of the service pension accruing after 
        December 31, 1971 occurring in the last ten years or from a net 
        annual investment loss occurring during the last ten years until 
        each increase in the deficit from full funding is fully 
        retired.  The annual amortization contribution under this clause 
        may not exceed the amount of the deficit from full funding. 
           (f) (6) If the special fund has a surplus over full 
        funding, the financial requirements of the special fund for the 
        following calendar year shall be are the financial requirements 
        of the special fund calculated as though the special fund were 
        fully funded pursuant to subclause (d) under clause (4) reduced 
        by an amount equal to one-tenth of the amount of the surplus 
        over full funding of the special fund. 
           (3) (d) The minimum obligation of the municipality with 
        respect to the special fund shall be is the financial 
        requirements of the special fund reduced by the amount of any 
        fire state aid payable pursuant to under sections 69.011 to 
        69.051 reasonably anticipated to be received by the municipality 
        for transmittal to the special fund during the following 
        calendar year, an amount of interest on the assets of the 
        special fund projected to the beginning of the following 
        calendar year calculated at the rate of five percent per annum, 
        and the amount of any anticipated contributions to the special 
        fund required by the relief association bylaws from the active 
        members of the relief association reasonably anticipated to be 
        received during the following calendar year.  A reasonable 
        amount of anticipated fire state aid is an amount that does not 
        exceed the fire state aid actually received in the prior year 
        multiplied by the factor 1.035.  
           Sec. 5.  Minnesota Statutes 2004, section 69.772, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 
        MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 
        relief association shall certify the financial requirements of 
        the special fund of the relief association and the minimum 
        obligation of the municipality with respect to the special fund 
        of the relief association as determined pursuant to under 
        subdivision 3 to the governing body of the municipality on or 
        before August 1 of each year.  The financial requirements of the 
        relief association and the minimum municipal obligation must be 
        included in the financial report or financial statement under 
        section 69.051.  
           (b) The municipality shall provide for at least the minimum 
        obligation of the municipality with respect to the special fund 
        of the relief association by tax levy or from any other source 
        of public revenue.  
           (c) The municipality may levy taxes for the payment of the 
        minimum municipal obligation without any limitation as to rate 
        or amount and irrespective of any limitations imposed by other 
        provisions of law upon the rate or amount of taxation until the 
        balance of the special fund or any fund of the relief 
        association has attained a specified level.  In addition, any 
        taxes levied pursuant to under this section shall must not cause 
        the amount or rate of any 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.  
           (d) If the municipality does not include the full amount of 
        the minimum municipal obligations in its levy for any year, the 
        officers of the relief association shall certify that amount to 
        the county auditor, who shall spread a levy in the amount of the 
        certified minimum municipal obligation on the taxable property 
        of the municipality. 
           (e) If the state auditor determines that a municipal 
        contribution actually made in a plan year was insufficient under 
        section 69.771, subdivision 3, paragraph (c), clause (5), the 
        state auditor may request a copy of the certifications under 
        this subdivision from the relief association or from the city.  
        The relief association or the city, whichever applies, must 
        provide the certifications within 14 days of the date of the 
        request from the state auditor. 
           Sec. 6.  Minnesota Statutes 2004, section 69.773, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
        to (a) On or before August 1 of each year, the officers of the 
        relief association shall determine the financial requirements of 
        the special fund of the relief association in accordance with 
        the requirements of this subdivision.  
           (b) The financial requirements of the relief 
        association shall must be based on the most recent actuarial 
        valuation of the special fund prepared in accordance with 
        subdivision 2.  If the relief association has an unfunded 
        actuarial accrued liability as reported in the most recent 
        actuarial valuation, the financial requirements shall must be 
        determined by adding the figures calculated pursuant to under 
        paragraph (d), clauses (a) (1), (b) (2), and (c) (3).  If 
        the relief association does not have an unfunded actuarial 
        accrued liability as reported in the most recent actuarial 
        valuation, the financial requirements shall must be an amount 
        equal to the figure calculated pursuant to under paragraph (d), 
        clauses (a) (1) and (b) (2), reduced by an amount equal to 
        one-tenth of the amount of any assets in excess of the actuarial 
        accrued liability of the relief association.  
           (c) The determination of whether or not the relief 
        association has an unfunded actuarial accrued liability 
        shall must be based on the current market value of assets for 
        which a market value is readily ascertainable and the cost or 
        book value, whichever is applicable, for assets for which no 
        market value is readily ascertainable. 
           (a) (d) The components of the financial requirements of the 
        relief association are the following: 
           (1) The normal level cost requirement for the following 
        year, expressed as a dollar amount, shall be is the figure for 
        the normal level cost of the relief association as reported in 
        the actuarial valuation. 
           (b) (2) The amount of anticipated future administrative 
        expenses of the special fund shall must be calculated by 
        multiplying the dollar amount of the administrative expenses of 
        the special fund for the most recent prior calendar year by the 
        factor of 1.035. 
           (c) (3) The amortization contribution requirement to retire 
        the current unfunded actuarial accrued liability by the 
        established date for full funding shall be is the figure for the 
        amortization contribution as reported in the actuarial 
        valuation.  If there has not been a change in the actuarial 
        assumptions used for calculating the actuarial accrued liability 
        of the special fund, a change in the bylaws of the relief 
        association governing the service pensions, retirement benefits, 
        or both, payable from the special fund, or a change in the 
        actuarial cost method used to value all or a portion of the 
        special fund which change or changes, which by themselves, 
        without inclusion of any other items of increase or decrease, 
        produce a net increase in the unfunded actuarial accrued 
        liability of the special fund since December 31, 1970, the 
        established date for full funding shall be is the December 31, 
        1990 occurring ten years later.  If there has been a change in 
        the actuarial assumptions used for calculating the actuarial 
        accrued liability of the special fund, a change in the bylaws of 
        the relief association governing the service pensions, 
        retirement benefits, or both payable from the special fund or a 
        change in the actuarial cost method used to value all or a 
        portion of the special fund and the change or changes, by 
        themselves and without inclusion of any other items of increase 
        or decrease, produce a net increase in the unfunded actuarial 
        accrued liability of the special fund since December 31, 1970, 
        but prior to January 1, 1979 within the past 20 years, the 
        established date for full funding shall be December 31, 1998, 
        and if there has been a change since December 31, 1978, the 
        established date for full funding shall must be determined using 
        the following procedure:  
           (i) the unfunded actuarial accrued liability of the special 
        fund attributable to experience losses that have occurred since 
        the most recent prior actuarial valuation must be determined and 
        the level annual dollar contribution needed to amortize the 
        experience loss over a period of ten years ending on the 
        December 31 occurring ten years later must be calculated; 
           (ii) the unfunded actuarial accrued liability of the 
        special fund shall must be determined in accordance with the 
        provisions governing service pensions, retirement benefits, and 
        actuarial assumptions in effect before an applicable change; 
           (ii) (iii) the level annual dollar contribution needed to 
        amortize this unfunded actuarial accrued liability amount by the 
        date for full funding in effect prior to before the change shall 
        must be calculated using the interest assumption specified in 
        section 356.215, subdivision 8, in effect before any applicable 
        change; 
           (iii) (iv) the unfunded actuarial accrued liability of the 
        special fund shall must be determined in accordance with any new 
        provisions governing service pensions, retirement benefits, and 
        actuarial assumptions and the remaining provisions governing 
        service pensions, retirement benefits, and actuarial assumptions 
        in effect before an applicable change; 
           (iv) (v) the level annual dollar contribution needed to 
        amortize the difference between the unfunded actuarial accrued 
        liability amount calculated pursuant to subclause (i) under item 
        (ii) and the unfunded actuarial accrued liability amount 
        calculated pursuant to subclause (iii) under item (iv) over a 
        period of 20 years starting December 31 of the year in which the 
        change is effective shall must be calculated using the interest 
        assumption specified in section 356.215, subdivision 8, in 
        effect after any applicable change; 
           (v) (vi) the annual amortization contribution calculated 
        pursuant to subclause (iv) shall under item (v) must be added to 
        the annual amortization contribution calculated pursuant to 
        subclause (ii) under items (i) and (iii); 
           (vi) (vii) the period in which the unfunded actuarial 
        accrued liability amount determined in subclause (iii) item (iv) 
        will be amortized by the total annual amortization contribution 
        computed pursuant to subclause (v) shall under item (vi) must be 
        calculated using the interest assumption specified in section 
        356.215, subdivision 8, in effect after any applicable change, 
        rounded to the nearest integral number of years, but which shall 
        must not exceed a period of 20 years from the end of the year in 
        which the determination of the date for full funding using this 
        procedure is made and which shall must not be less than the 
        period of years beginning in the year in which the determination 
        of the date for full funding using this procedure is made and 
        ending by the date for full funding in effect before the change; 
           (vii) (viii) the period determined pursuant to subclause 
        (vi) shall under item (vii) must be added to the date as of 
        which the actuarial valuation was prepared and the resulting 
        date shall be is the new date for full funding. 
           Sec. 7.  Minnesota Statutes 2004, section 69.773, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 
        of the relief association shall determine the minimum obligation 
        of the municipality with respect to the special fund of the 
        relief association for the following calendar year prior to on 
        or before August 1 of each year in accordance with the 
        requirements of this subdivision.  
           (b) The minimum obligation of the municipality with respect 
        to the special fund shall be is an amount equal to the financial 
        requirements of the special fund of the relief association 
        determined pursuant to under subdivision 4, reduced by the 
        estimated amount of any fire state aid payable pursuant to under 
        sections 69.011 to 69.051 reasonably anticipated to be received 
        by the municipality for transmittal to the special fund of the 
        relief association during the following year and the amount of 
        any anticipated contributions to the special fund required by 
        the relief association bylaws from the active members of the 
        relief association reasonably anticipated to be received during 
        the following calendar year.  A reasonable amount of anticipated 
        fire state aid is an amount that does not exceed the fire state 
        aid actually received in the prior year multiplied by the factor 
        1.035. 
           (c) The officers of the relief association shall certify 
        the financial requirements of the special fund of the relief 
        association and the minimum obligation of the municipality with 
        respect to the special fund of the relief association as 
        determined pursuant to under subdivision 4 and this subdivision 
        to the governing body of the municipality by August 1 of each 
        year.  The financial requirements of the relief association and 
        the minimum municipal obligation must be included in the 
        financial report or financial statement under section 69.051.  
           (d) The municipality shall provide for at least the minimum 
        obligation of the municipality with respect to the special fund 
        of the relief association by tax levy or from any other source 
        of public revenue.  The municipality may levy taxes for the 
        payment of the minimum municipal obligation without any 
        limitation as to rate or amount and irrespective of any 
        limitations imposed by other provisions of law or charter upon 
        the rate or amount of taxation until the balance of the special 
        fund or any fund of the relief association has attained a 
        specified level.  In addition, any taxes levied pursuant to 
        under this section shall must not cause the amount or rate of 
        any 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.  
           (e) If the municipality does not include the full amount of 
        the minimum municipal obligation in its levy for any year, the 
        officers of the relief association shall certify that amount to 
        the county auditor, who shall spread a levy in the amount of the 
        minimum municipal obligation on the taxable property of the 
        municipality. 
           (f) If the state auditor determines that a municipal 
        contribution actually made in a plan year was insufficient under 
        section 69.771, subdivision 3, paragraph (c), clause (5), the 
        state auditor may request from the relief association or from 
        the city a copy of the certifications under this subdivision.  
        The relief association or the city, whichever applies, must 
        provide the certifications within 14 days of the date of the 
        request from the state auditor. 
           Sec. 8.  Minnesota Statutes 2004, section 69.775, is 
        amended to read: 
           69.775 [INVESTMENTS.] 
           (a) The special fund assets of the a relief associations 
        association governed by sections 69.771 to 69.776 must be 
        invested in securities that are authorized investments under 
        section 356A.06, subdivision 6 or 7.  
           (b) Notwithstanding the foregoing, up to 75 percent of the 
        market value of the assets of the special fund, not including 
        any money market mutual funds, 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.  
           (c) Securities held by the associations before June 2, 
        1989, that do not meet the requirements of this section may be 
        retained after that date if they were proper investments for the 
        association on that date.  
           (d) 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.  
           (e) 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.  
           (f) 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). 
           Sec. 9.  Minnesota Statutes 2004, section 356A.06, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
        SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
        authorized by law or bylaws, a covered pension plan not 
        described by subdivision 6, paragraph (a), may invest its assets 
        only in accordance with this subdivision. 
           (b)  [SECURITIES GENERALLY.] The covered pension plan has 
        the authority to purchase, sell, lend, or exchange the 
        securities specified in paragraphs (c) to (g) (h), including 
        puts and call options and future contracts traded on a contract 
        market regulated by a governmental agency or by a financial 
        institution regulated by a governmental agency.  These 
        securities may be owned as units in commingled trusts that own 
        the securities described in paragraphs (c) to (g) (h).  
           (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
        invest funds in governmental bonds, notes, bills, mortgages, and 
        other evidences of indebtedness provided the issue is backed by 
        the full faith and credit of the issuer or the issue is rated 
        among the top four quality rating categories by a nationally 
        recognized rating agency.  The obligations in which funds may be 
        invested under this paragraph include guaranteed or insured 
        issues of (1) the United States, its agencies, its 
        instrumentalities, or organizations created and regulated by an 
        act of Congress; (2) Canada and its provinces, provided the 
        principal and interest is payable in United States dollars; (3) 
        the states and their municipalities, political subdivisions, 
        agencies, or instrumentalities; (4) the International Bank for 
        Reconstruction and Development, the Inter-American Development 
        Bank, the Asian Development Bank, the African Development Bank, 
        or any other United States government sponsored organization of 
        which the United States is a member, provided the principal and 
        interest is payable in United States dollars. 
           (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
        invest funds in bonds, notes, debentures, transportation 
        equipment obligations, or any other longer term evidences of 
        indebtedness issued or guaranteed by a corporation organized 
        under the laws of the United States or any state thereof, or the 
        Dominion of Canada or any province thereof if they conform to 
        the following provisions: 
           (1) the principal and interest of obligations of 
        corporations incorporated or organized under the laws of the 
        Dominion of Canada or any province thereof must be payable in 
        United States dollars; and 
           (2) obligations must be rated among the top four quality 
        categories by a nationally recognized rating agency. 
           (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
        invest funds in bankers acceptances, certificates of deposit, 
        deposit notes, commercial paper, mortgage participation 
        certificates and pools, asset backed securities, repurchase 
        agreements and reverse repurchase agreements, guaranteed 
        investment contracts, savings accounts, and guaranty fund 
        certificates, surplus notes, or debentures of domestic mutual 
        insurance companies if they conform to the following provisions: 
           (i) bankers acceptances and deposit notes of United States 
        banks are limited to those issued by banks rated in the highest 
        four quality categories by a nationally recognized rating 
        agency; 
           (ii) certificates of deposit are limited to those issued by 
        (A) United States banks and savings institutions that are rated 
        in the highest four quality categories by a nationally 
        recognized rating agency or whose certificates of deposit are 
        fully insured by federal agencies; or (B) credit unions in 
        amounts up to the limit of insurance coverage provided by the 
        National Credit Union Administration; 
           (iii) commercial paper is limited to those issued by United 
        States corporations or their Canadian subsidiaries and rated in 
        the highest two quality categories by a nationally recognized 
        rating agency; 
           (iv) mortgage participation or pass through certificates 
        evidencing interests in pools of first mortgages or trust deeds 
        on improved real estate located in the United States where the 
        loan to value ratio for each loan as calculated in accordance 
        with section 61A.28, subdivision 3, does not exceed 80 percent 
        for fully amortizable residential properties and in all other 
        respects meets the requirements of section 61A.28, subdivision 
        3; 
           (v) collateral for repurchase agreements and reverse 
        repurchase agreements is limited to letters of credit and 
        securities authorized in this section; 
           (vi) guaranteed investment contracts are limited to those 
        issued by insurance companies or banks rated in the top four 
        quality categories by a nationally recognized rating agency or 
        to alternative guaranteed investment contracts where the 
        underlying assets comply with the requirements of this 
        subdivision; 
           (vii) savings accounts are limited to those fully insured 
        by federal agencies; and 
           (viii) asset backed securities must be rated in the top 
        four quality categories by a nationally recognized rating agency.
           (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
        not apply to certificates of deposit and collateralization 
        agreements executed by the covered pension plan under clause 
        (1), item (ii). 
           (3) In addition to investments authorized by clause (1), 
        item (iv), the covered pension plan may purchase from the 
        Minnesota Housing Finance Agency all or any part of a pool of 
        residential mortgages, not in default, that has previously been 
        financed by the issuance of bonds or notes of the agency.  The 
        covered pension plan may also enter into a commitment with the 
        agency, at the time of any issue of bonds or notes, to purchase 
        at a specified future date, not exceeding 12 years from the date 
        of the issue, the amount of mortgage loans then outstanding and 
        not in default that have been made or purchased from the 
        proceeds of the bonds or notes.  The covered pension plan may 
        charge reasonable fees for any such commitment and may agree to 
        purchase the mortgage loans at a price sufficient to produce a 
        yield to the covered pension plan comparable, in its judgment, 
        to the yield available on similar mortgage loans at the date of 
        the bonds or notes.  The covered pension plan may also enter 
        into agreements with the agency for the investment of any 
        portion of the funds of the agency.  The agreement must cover 
        the period of the investment, withdrawal privileges, and any 
        guaranteed rate of return. 
           (f)  [CORPORATE STOCKS.] The covered pension plan may 
        invest funds in stocks or convertible issues of any corporation 
        organized under the laws of the United States or the states 
        thereof, any corporation organized under the laws of the 
        Dominion of Canada or its provinces, or any corporation listed 
        on the New York Stock Exchange or the American Stock Exchange an 
        exchange regulated by an agency of the United States or of the 
        Canadian national government, if they conform to the following 
        provisions: 
           (1) the aggregate value of corporate stock investments, as 
        adjusted for realized profits and losses, must not exceed 85 
        percent of the market or book value, whichever is less, of a 
        fund, less the aggregate value of investments according to 
        subdivision 6 paragraph (h); 
           (2) investments must not exceed five percent of the total 
        outstanding shares of any one corporation. 
           (g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may 
        invest funds in exchange traded funds, subject to the maximums, 
        the requirements, and the limitations set forth in paragraph 
        (d), (e), (f), or (h), whichever applies. 
           (h)  [OTHER INVESTMENTS.] (1) In addition to the 
        investments authorized in paragraphs (b) to (f) (g), and subject 
        to the provisions in clause (2), the covered pension plan may 
        invest funds in:  
           (i) venture capital investment businesses through 
        participation in limited partnerships and corporations; 
           (ii) real estate ownership interests or loans secured by 
        mortgages or deeds of trust through investment in limited 
        partnerships, bank sponsored collective funds, trusts, and 
        insurance company commingled accounts, including separate 
        accounts; 
           (iii) regional and mutual funds through bank sponsored 
        collective funds and open-end investment companies registered 
        under the Federal Investment Company Act of 1940; 
           (iv) resource investments through limited partnerships, 
        private placements, and corporations; and 
           (v) international securities. 
           (2) The investments authorized in clause (1) must conform 
        to the following provisions:  
           (i) the aggregate value of all investments made according 
        to clause (1) may not exceed 35 percent of the market value of 
        the fund for which the covered pension plan is investing; 
           (ii) there must be at least four unrelated owners of the 
        investment other than the state board covered pension plan for 
        investments made under clause (1), item (i), (ii), (iii), or 
        (iv); 
           (iii) covered pension plan participation in an investment 
        vehicle is limited to 20 percent thereof for investments made 
        under clause (1), item (i), (ii), (iii), or (iv); and 
           (iv) covered pension plan participation in a limited 
        partnership does not include a general partnership interest or 
        other interest involving general liability.  The covered pension 
        plan may not engage in any activity as a limited partner which 
        creates general liability. 
           Sec. 10.  Minnesota Statutes 2004, section 424A.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 
        on or before August 1 as part of the certification of the 
        financial requirements and minimum municipal obligation 
        determined under section 69.772, subdivision 4, or 69.773, 
        subdivision 5, as applicable, the secretary or some other 
        official of the relief association designated in the bylaws of 
        each relief association shall calculate and certify to the 
        governing body of the applicable qualified municipality the 
        average amount of available financing per active covered 
        firefighter for the most recent three-year period.  The amount 
        of available financing shall include any amounts of fire state 
        aid received or receivable by the relief association, any 
        amounts of municipal contributions to the relief association 
        raised from levies on real estate or from other available 
        revenue sources exclusive of fire state aid, and one-tenth of 
        the amount of assets in excess of the accrued liabilities of the 
        relief association calculated under section 69.772, subdivision 
        2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 
        any.  
           (b) The maximum service pension which the relief 
        association has authority to provide for in its bylaws for 
        payment to a member retiring after the calculation date when the 
        minimum age and service requirements specified in subdivision 1 
        are met must be determined using the table in paragraph (c) or 
        (d), whichever applies. 
           (c) For a relief association where the governing bylaws 
        provide for a monthly service pension to a retiring member, the 
        maximum monthly service pension amount per month for each year 
        of service credited that may be provided for in the bylaws is 
        the greater of the service pension amount provided for in the 
        bylaws on the date of the calculation of the average amount of 
        the available financing per active covered firefighter or the 
        maximum service pension figure corresponding to the average 
        amount of available financing per active covered firefighter: 
          Minimum Average Amount of      Maximum Service Pension
          Available Financing per        Amount Payable per Month
               Firefighter               for Each Year of Service
                 $...                            $  .25
                   42   41                          .50
                   84   81                         1.00
                  126  122                         1.50
                  168  162                         2.00
                  209  203                         2.50
                  252  243                         3.00
                  294  284                         3.50
                  335  324                         4.00
                  378  365                         4.50
                  420  405                         5.00
                  503  486                         6.00
                  587  567                         7.00
                  672  648                         8.00
                  755  729                         9.00
                  839  810                        10.00
                  923  891                        11.00
                 1007  972                        12.00
                 1090 1053                        13.00
                 1175 1134                        14.00
                 1259 1215                        15.00
                 1342 1296                        16.00
                 1427 1377                        17.00
                 1510 1458                        18.00
                 1594 1539                        19.00
                 1677 1620                        20.00
                 1762 1701                        21.00
                 1845 1782                        22.00
                 1888 1823                        22.50
                 1929 1863                        23.00
                 2014 1944                        24.00
                 2098 2025                        25.00
                 2183 2106                        26.00
                 2267 2187                        27.00
                 2351 2268                        28.00
                 2436 2349                        29.00
                 2520 2430                        30.00
                 2604 2511                        31.00
                 2689 2592                        32.00
                 2773 2673                        33.00
                 2857 2754                        34.00
                 2942 2834                        35.00
                 3026 2916                        36.00
                 3110 2997                        37.00
                 3194 3078                        38.00
                 3278 3159                        39.00
                 3362 3240                        40.00
                 3446 3321                        41.00
                 3530 3402                        42.00
                 3614 3483                        43.00
                 3698 3564                        44.00
                 3782 3645                        45.00
                 3866 3726                        46.00
                 3950 3807                        47.00
                 4034 3888                        48.00
                 4118 3969                        49.00
                 4202 4050                        50.00
                 4286 4131                        51.00
                 4370 4212                        52.00
           Effective beginning December 31, 2003: 
                 4454 4293                        53.00
                 4538 4374                        54.00
                 4622 4455                        55.00
                 4706 4536                        56.00
           (d) For a relief association in which the governing bylaws 
        provide for a lump sum service pension to a retiring member, the 
        maximum lump sum service pension amount for each year of service 
        credited that may be provided for in the bylaws is the greater 
        of the service pension amount provided for in the bylaws on the 
        date of the calculation of the average amount of the available 
        financing per active covered firefighter or the maximum service 
        pension figure corresponding to the average amount of available 
        financing per active covered firefighter for the applicable 
        specified period: 
         Minimum Average Amount         Maximum Lump Sum Service
         of Available Financing         Pension Amount Payable
            per Firefighter             for Each Year of Service
                $..                              $10
                 11                               20
                 16                               30
                 23                               40
                 27                               50
                 32                               60
                 43                               80
                 54                              100
                 65                              120
                 77                              140
                 86                              160
                 97                              180
                108                              200
                131                              240
                151                              280
                173                              320
                194                              360
                216                              400
                239                              440
                259                              480
                281                              520
                302                              560
                324                              600
                347                              640
                367                              680
                389                              720
                410                              760
                432                              800
                486                              900
                540                             1000
                594                             1100
                648                             1200
                702                             1300
                756                             1400
                810                             1500
                864                             1600
                918                             1700
                972                             1800
               1026                             1900
               1080                             2000
               1134                             2100
               1188                             2200
               1242                             2300
               1296                             2400
               1350                             2500
               1404                             2600
               1458                             2700
               1512                             2800
               1566                             2900
               1620                             3000
               1672                             3100
               1726                             3200
               1753                             3250
               1780                             3300
               1820                             3375
               1834                             3400
               1888                             3500
               1942                             3600
               1996                             3700
               2023                             3750
               2050                             3800
               2104                             3900
               2158                             4000
               2212                             4100
               2265                             4200
               2319                             4300
               2373                             4400
               2427                             4500
               2481                             4600
               2535                             4700
               2589                             4800
               2643                             4900
               2697                             5000
               2751                             5100
               2805                             5200
               2859                             5300
               2913                             5400
               2967                             5500
               3021                             5600
               3075                             5700
               3129                             5800
               3183                             5900
               3237                             6000
               3291                             6100
               3345                             6200
               3399                             6300
               3453                             6400
               3507                             6500
               3561                             6600
               3615                             6700
               3669                             6800
               3723                             6900
               3777                             7000
           Effective beginning December 31, 2003: 
               3831                             7100
               3885                             7200
               3939                             7300
               3993                             7400
               4047                             7500
           (e) For a relief association in which the governing bylaws 
        provide for a monthly benefit service pension as an alternative 
        form of service pension payment to a lump sum service pension, 
        the maximum service pension amount for each pension payment type 
        must be determined using the applicable table contained in this 
        subdivision. 
           (f) If a relief association establishes a service pension 
        in compliance with the applicable maximum contained in paragraph 
        (c) or (d) and the minimum average amount of available financing 
        per active covered firefighter is subsequently reduced because 
        of a reduction in fire state aid or because of an increase in 
        the number of active firefighters, the relief association may 
        continue to provide the prior service pension amount specified 
        in its bylaws, but may not increase the service pension amount 
        until the minimum average amount of available financing per 
        firefighter under the table in paragraph (c) or (d), whichever 
        applies, permits. 
           (g) No relief association is authorized to provide a 
        service pension in an amount greater than the largest applicable 
        flexible service pension maximum amount even if the amount of 
        available financing per firefighter is greater than the 
        financing amount associated with the largest applicable flexible 
        service pension maximum. 
           Sec. 11.  Minnesota Statutes 2004, section 424A.02, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEFINED CONTRIBUTION LUMP SUM SERVICE 
        PENSIONS.] (a) If the bylaws governing the relief association so 
        provide exclusively, the relief association may pay a defined 
        contribution lump sum service pension in lieu of any defined 
        benefit service pension governed by subdivision 2.  
           (b) An individual account for each firefighter who is a 
        member of the relief association shall must be established.  To 
        each individual active member account shall must be credited a 
        right to an equal share of:  (a) (1) any amounts of fire state 
        aid received by the relief association; (b) (2) any amounts of 
        municipal contributions to the relief association raised from 
        levies on real estate or from other available revenue sources 
        exclusive of fire state aid; and (c) (3) any amounts equal to 
        the share of the assets of the special fund to the credit 
        of:  (1) (i) any former member who terminated active service 
        with the fire department to which the relief association is 
        associated prior to before meeting the minimum service 
        requirement provided for in subdivision 1 and has not returned 
        to active service with the fire department for a period no 
        shorter than five years; or (2) (ii) any retired member who 
        retired prior to before obtaining a full nonforfeitable interest 
        in the amounts credited to the individual member 
        account pursuant to under subdivision 2 and any applicable 
        provision of the bylaws of the relief association.  In addition, 
        any interest or investment income earned return on the assets of 
        the special fund shall must be credited in proportion to the 
        share of the assets of the special fund to the credit of each 
        individual active member account through the date on which the 
        investment return is recognized by and credited to the special 
        fund.  
           (c) At the time of retirement pursuant to under subdivision 
        1 and any applicable provision of the bylaws of the relief 
        association, a retiring member shall be is entitled to that 
        portion of the assets of the special fund to the credit of the 
        member in the individual member account which is 
        nonforfeitable pursuant to under subdivision 2 and any 
        applicable provision of the bylaws of the relief association 
        based on the number of years of service to the credit of the 
        retiring member.  
           Sec. 12.  Minnesota Statutes 2004, section 424A.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
        relief association to which this section applies is entitled to 
        a deferred service pension if the member: 
           (1) has completed the lesser of the minimum period of 
        active service with the fire department specified in the bylaws 
        or 20 years of active service with the fire department; 
           (2) has completed at least five years of active membership 
        in the relief association; and 
           (3) separates from active service and membership before 
        reaching age 50 or the minimum age for retirement and 
        commencement of a service pension specified in the bylaws 
        governing the relief association if that age is greater than age 
        50.  
           (b) The deferred service pension starts is payable when the 
        former member reaches age 50, or the minimum age specified in 
        the bylaws governing the relief association if that age is 
        greater than age 50, and when the former member makes a valid 
        written application. 
           (c) A relief association that provides a lump sum service 
        pension governed by subdivision 3 may, when its governing bylaws 
        so provide, pay interest on the deferred lump sum service 
        pension during the period of deferral.  If provided for in the 
        bylaws, interest must be paid in one of the following manners: 
           (1) at the investment performance rate actually earned on 
        that portion of the assets if the deferred benefit amount is 
        invested by the relief association in a separate account 
        established and maintained by the relief association or if the 
        deferred benefit amount is invested in a separate investment 
        vehicle held by the relief association; 
           (2) at the an interest rate of up to five percent, 
        compounded annually, as set by the board of directors and 
        approved as provided in subdivision 10; or 
           (3) at a rate equal to the actual time weighted total rate 
        of return investment performance of the special fund as reported 
        by the Office of the State Auditor under section 356.219, up to 
        five percent, compounded annually, and applied consistently for 
        all deferred service pensioners. 
           (d) A relief association may not use the method provided 
        for in paragraph (c), clause (3), until it has modified its 
        bylaws to be consistent with that clause. 
           (d) Interest under paragraph (c), clause (2) or (3), is 
        payable from the first day of the month next following the date 
        on which the municipality has approved the deferred service 
        pension interest rate established by the board of trustees or 
        from the first day of the month next following the date on which 
        the member separated from active fire department service and 
        relief association membership, whichever is later, to the last 
        day of the month immediately before the month in which the 
        deferred member becomes eligible to begin receipt of the service 
        pension and applies for the deferred service pension.  
           (e) A relief association that provides a defined 
        contribution service pension may, if its governing bylaws so 
        provide, credit interest or additional investment performance on 
        the deferred lump sum service pension during the period of 
        deferral.  If provided for in the bylaws, the interest must be 
        paid in one of the manners specified in paragraph (c) or 
        alternatively the relief association may credit any investment 
        return on the assets of the special fund of the defined 
        contribution volunteer firefighter relief association in 
        proportion to the share of the assets of the special fund to the 
        credit of each individual deferred member account through the 
        date on which the investment return is recognized by and 
        credited to the special fund.  
           (f) For a deferred service pension that is transferred to a 
        separate account established and maintained by the relief 
        association or separate investment vehicle held by the relief 
        association, the deferred member bears the full investment risk 
        subsequent to transfer and in calculating the accrued liability 
        of the volunteer firefighters relief association that pays a 
        lump sum service pension, the accrued liability for deferred 
        service pensions is equal to the separate relief association 
        account balance or the fair market value of the separate 
        investment vehicle held by the relief association. 
           (f) (g) The deferred service pension is governed by and 
        must be calculated under the general statute, special law, 
        relief association articles of incorporation, and relief 
        association bylaw provisions applicable on the date on which the 
        member separated from active service with the fire department 
        and active membership in the relief association. 
           Sec. 13.  [424A.021] [CREDIT FOR BREAK IN SERVICE TO 
        PROVIDE UNIFORMED SERVICE.] 
           Subdivision 1.  [AUTHORIZATION.] Subject to restrictions 
        stated in this section, a volunteer firefighter who is absent 
        from firefighting service due to service in the uniformed 
        services, as defined in United States Code, title 38, section 
        4303(13), may obtain service credit if the relief association is 
        a defined benefit plan or an allocation of any fire state aid, 
        any municipal contributions, and any investment return received 
        by the relief association if the relief association is a defined 
        contribution plan for the period of the uniformed service, not 
        to exceed five years, unless a longer period is required under 
        United States Code, title 38, section 4312.  
           Subd. 2.  [LIMITATIONS.] (a) To be eligible for service 
        credit or an investment return allocation under this section, 
        the volunteer firefighter must return to firefighting service 
        with coverage by the same relief association or by the successor 
        to that relief association upon discharge from service in the 
        uniformed service within the time frame required in United 
        States Code, title 38, section 4312(e). 
           (b) Service credit or an investment return allocation is 
        not authorized if the firefighter separates from uniformed 
        service with a dishonorable or bad conduct discharge or under 
        other than honorable conditions. 
           (c) Service credit or an investment return allocation is 
        not authorized if the firefighter fails to provide notice to the 
        fire department that the individual is leaving to provide 
        service in the uniformed service, unless it is not feasible to 
        provide that notice due to the emergency nature of the situation.
           Sec. 14.  Minnesota Statutes 2004, section 424A.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] (a) Every A relief 
        association that is directly associated with a municipal fire 
        department shall must be managed by a board of trustees 
        consisting of nine members.  Six trustees shall must be elected 
        from the membership of the relief association and three trustees 
        shall must be drawn from the officials of the municipalities 
        served by the fire department to which the relief association is 
        directly associated.  The bylaws of a relief association which 
        provides a monthly benefit service pension may provide that one 
        of the six trustees elected from the relief 
        association membership may be a retired member receiving a 
        monthly pension who is elected by the membership of the relief 
        association.  The three ex officio municipal trustees shall be 
        the mayor, the clerk, clerk-treasurer or finance director, must 
        be one elected municipal official and one elected or appointed 
        municipal official who are designated as municipal 
        representatives by the municipal governing board annually and 
        the chief of the municipal fire department. 
           (b) Every A relief association that is a subsidiary of an 
        independent nonprofit firefighting corporation shall must be 
        managed by a board of trustees consisting of ten nine members.  
        Six trustees shall must be elected from the membership of the 
        relief association, three two trustees shall must be drawn from 
        the officials of the municipalities served by the fire 
        department to which the relief association is directly 
        associated, and one trustee shall be the fire chief serving with 
        the independent nonprofit firefighting corporation.  The bylaws 
        of a relief association may provide that one of the six trustees 
        elected from the relief association membership may be a retired 
        member receiving a monthly pension who is elected by the 
        membership of the relief association.  The three ex officio two 
        municipal trustees who are the elected officials shall must 
        be elected or appointed municipal officials, selected as follows:
           (1) if only one municipality contracts with the independent 
        nonprofit firefighting corporation, the ex officio municipal 
        trustees shall must be three elected two officials of the 
        contracting municipality who are designated annually by the 
        governing body of the municipality; 
           (2) if two municipalities contract with the independent 
        nonprofit firefighting corporation, the ex officio trustees 
        shall be two elected officials of the largest municipality in 
        population and one elected official of the next largest 
        municipality in population who are designated by the governing 
        bodies of the applicable municipalities; or 
           (3) (2) if three two or more municipalities contract with 
        the independent nonprofit corporation, the ex officio municipal 
        trustees shall must be one elected official of from each of 
        the three two largest municipalities in population who are 
        designated annually by the governing bodies of the applicable 
        municipalities. 
           (c) The municipal trustees for a relief association that is 
        directly associated with a fire department operated as or by a 
        joint powers entity must be designated annually by the joint 
        powers board.  The municipal trustees for a relief association 
        that is directly associated with a fire department service area 
        township must be designated by the township board. 
           (d) If a relief association lacks the ex officio municipal 
        board members provided for in paragraph (a), (b), or (b) (c) 
        because the fire department is not located in or associated with 
        an organized municipality, joint powers entity, or township, the 
        ex officio municipal board members must be appointed from the 
        fire department service area by the board of commissioners of 
        the applicable county.  
           (e) The term of these appointed ex officio municipal board 
        members is three years one year or until the person's successor 
        is qualified, whichever is later. 
           (d) An ex officio (f) A municipal trustee under paragraph 
        (a), (b), or (c) shall have, or (d) has all the rights and 
        duties accorded to any other trustee, except the right to be an 
        officer of the relief association board of trustees.  
           (e) (g) A board shall must have at least three officers, 
        which shall be who are a president, a secretary and a treasurer. 
        These officers shall must be elected from among the elected 
        trustees by either the full board of trustees or by the 
        membership, as specified in the bylaws, and.  In no event shall 
        may any trustee hold more than one officer position at any one 
        time.  The terms of the elected trustees and of the officers of 
        the board shall must be specified in the bylaws of the relief 
        association, but shall may not exceed three years.  If the term 
        of the elected trustees exceeds one year, the election of the 
        various trustees elected from the membership shall initially and 
        shall thereafter continue to must be staggered on as equal a 
        basis as is practicable. 
           Sec. 15.  Minnesota Statutes 2004, section 424B.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BENEFITS.] (a) Notwithstanding any 
        provision of section 424A.02, subdivision 3, to the contrary, 
        the service pension of the subsequent relief association as of 
        the effective date of consolidation is either the service 
        pension amount specified in clause (1) or the service pension 
        amounts specified in clause (2), as provided for in the 
        consolidated relief association's articles of incorporation or 
        bylaws: 
           (1) the highest dollar amount service pension amount of any 
        prior volunteer firefighters relief association in effect 
        immediately before the consolidation initiation if the pension 
        amount was implemented consistent with section 424A.02; or 
           (2) for service rendered by each individual volunteer 
        firefighter before consolidation, the service pension amount 
        under the consolidating volunteer firefighters relief 
        association that the firefighter belonged to immediately before 
        the consolidation if the pension amount was implemented 
        consistent with section 424A.02 and for service rendered after 
        the effective date of the consolidation, the highest dollar 
        amount service pension of any of the consolidating volunteer 
        firefighters relief associations in effect immediately before 
        the consolidation if the pension amount was implemented 
        consistent with section 424A.02. 
           (b) Any increase in the service pension amount beyond the 
        amount implemented under paragraph (a) must conform with the 
        requirements and limitations of sections 69.771 to 69.775 and 
        424A.02. 
           Sec. 16.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
           (b) Section 13 is effective July 1, 2005, and applies to 
        breaks in service that end on or after that date. 

                                   ARTICLE 10
                              VARIOUS CORRECTIONS
                               AND CLARIFICATIONS
           Section 1.  Minnesota Statutes 2004, section 3A.13, is 
        amended to read: 
           3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
        DEDUCTION.] 
           (a) The provisions of section 352.15 shall 356.401 apply to 
        the legislators retirement plan, chapter 3A. 
           (b) The executive director of the Minnesota State 
        Retirement System must, at the request of a retired legislator 
        who is enrolled in a health insurance plan covering state 
        employees, deduct the person's health insurance premiums from 
        the person's annuity and transfer the amount of the premium to a 
        health insurance carrier covering state employees. 
           Sec. 2.  Minnesota Statutes 2004, section 69.011, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 
        SAFETY.] (a) On or before July 1, 1997, the commissioner of 
        natural resources shall certify one-half of the number of peace 
        officers as defined in subdivision 1, clause (g), employed by 
        the Enforcement Division during calendar year 1996 and the 
        commissioner of public safety shall certify one-half of the 
        number of peace officers as defined in subdivision 1, clause 
        (g), employed by the Bureau of Criminal Apprehension, the 
        Gambling Enforcement Division, and the State Patrol Division 
        during calendar year 1996. 
           (b) On or before March 15, 1998, the commissioner of 
        natural resources shall certify seven-tenths of the number of 
        peace officers as defined in subdivision 1, clause (g), employed 
        by the Enforcement Division and the commissioner of public 
        safety shall certify seven-tenths of the number of peace 
        officers as defined in subdivision 1, clause (g), employed by 
        the Bureau of Criminal Apprehension, the Gambling Enforcement 
        Division, and the State Patrol Division. 
           (c) On or before March 15, 1999, and annually on or before 
        each March 15 thereafter, the commissioner of natural resources 
        shall certify the number of peace officers as defined in 
        subdivision 1, clause (g), employed by the Enforcement Division 
        and the commissioner of public safety shall certify the number 
        of peace officers as defined in subdivision 1, clause (g), 
        employed by the Bureau of Criminal Apprehension, the Gambling 
        Enforcement Division, and the State Patrol Division. 
           (d) (b) The certification must be on a form prescribed by 
        the commissioner.  Peace officers certified under this paragraph 
        must be included in the total certifications under subdivision 2.
           Sec. 3.  Minnesota Statutes 2004, section 69.021, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
        fire state aid available for apportionment, before the addition 
        of the minimum fire state aid allocation amount under 
        subdivision 7, is equal to 107 percent of the amount of premium 
        taxes paid to the state upon the fire, lightning, sprinkler 
        leakage, and extended coverage premiums reported to the 
        commissioner by insurers on the Minnesota Firetown Premium 
        Report.  This amount shall must be reduced by the amount 
        required to pay the state auditor's costs and expenses of the 
        audits or exams of the firefighters relief associations. 
           The total amount for apportionment in respect to fire state 
        aid must not be less than two percent of the premiums reported 
        to the commissioner by insurers on the Minnesota Firetown 
        Premium Report after subtracting the following amounts: 
           (1) the amount required to pay the state auditor's costs 
        and expenses of the audits or exams of the firefighters relief 
        associations; and 
           (2) one percent of the premiums reported by town and 
        farmers' mutual insurance companies and mutual property and 
        casualty companies with total assets of $5,000,000 or less.  
           (b) The total amount for apportionment as police state aid 
        is equal to 104 percent of the amount of premium taxes paid to 
        the state on the premiums reported to the commissioner by 
        insurers on the Minnesota Aid to Police Premium Report, reduced 
        by the amount required to pay the costs and expenses of the 
        state auditor for audits or exams of police relief 
        associations.  The total amount for apportionment in respect to 
        the police state aid program must not be less than two percent 
        of the amount of premiums reported to the commissioner by 
        insurers on the Minnesota Aid to Police Premium Report after 
        subtracting the amount required to pay the state auditor's cost 
        and expenses of the audits or exams of the police relief 
        associations.  
           (c) The commissioner shall calculate the percentage of 
        increase or decrease reflected in the apportionment over or 
        under the previous year's available state aid using the same 
        premiums as a basis for comparison. 
           (d) The amount for apportionment in respect to peace 
        officer state aid under paragraph (b) must be further reduced by 
        $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 
        and $2,404,000 in fiscal year 2001.  These reductions in this 
        paragraph cancel to the general fund. 
           (e) In addition to the amount for apportionment of police 
        state aid under paragraph (b), each year $100,000 shall must be 
        apportioned for police state aid.  An amount sufficient to pay 
        this increase is annually appropriated from the general fund. 
           Sec. 4.  Minnesota Statutes 2004, section 69.021, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 
        The excess police state-aid holding account is established in 
        the general fund.  The excess police state-aid holding account 
        must be administered by the commissioner. 
           (b) Excess police state aid determined according to 
        subdivision 10, must be deposited in the excess police state-aid 
        holding account. 
           (c) From the balance in the excess police state-aid holding 
        account, $900,000 is appropriated to and must be transferred 
        annually to the ambulance service personnel longevity award and 
        incentive suspense account established by section 144E.42, 
        subdivision 2. 
           (d) If a police officer stress reduction program is created 
        by law and money is appropriated for that program, an amount 
        equal to that appropriation must be transferred to the 
        administrator of that program from the balance in the excess 
        police state-aid holding account. 
           (e) On October 1, 1997, and annually on each subsequent 
        October 1 of each year, one-half of the balance of the excess 
        police state-aid holding account remaining after the deductions 
        under paragraphs (c) and (d) is appropriated for additional 
        amortization aid under section 423A.02, subdivision 1b. 
           (f) Annually, the remaining balance in the excess police 
        state-aid holding account, after the deductions under paragraphs 
        (c), (d), and (e), cancels to the general fund. 
           Sec. 5.  Minnesota Statutes 2004, section 69.33, is amended 
        to read: 
           69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 
        COMPANIES.] 
           The commissioner shall enclose in the annual statement 
        blank that is sent to all fire insurance companies doing 
        business in this state a blank form containing the names of all 
        firefighters' relief associations in all cities of the first 
        class and the names of the cities and require these companies, 
        at the time of making their annual statements to the 
        commissioner, to state on these blanks the amount of premiums 
        received by them upon properties insured within the corporate 
        limits of the cities named thereon during the year ending 
        December 31st last past.  Thereafter, before July first each 
        year, the commissioner shall certify to the commissioner of 
        finance the information thus obtained, together with the amount 
        of the tax for the benefit of the relief association pension 
        plans covering firefighters in cities of the first class paid in 
        such year by these companies upon these insurance premiums. 
           Sec. 6.  Minnesota Statutes 2004, section 69.773, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
        to Before August 1 of each year, the officers of the relief 
        association shall determine the financial requirements of the 
        special fund of the relief association in accordance with the 
        requirements of this subdivision.  The financial requirements of 
        the relief association shall must be based on the most recent 
        actuarial valuation of the special fund prepared in accordance 
        with subdivision 2.  If the relief association has an unfunded 
        actuarial accrued liability as reported in the most recent 
        actuarial valuation, the financial requirements shall must be 
        determined by adding the figures calculated pursuant to under 
        clauses (a), (b), and (c).  If the relief association does not 
        have an unfunded actuarial accrued liability as reported in the 
        most recent actuarial valuation, the financial requirements 
        shall must be an amount equal to the figure calculated pursuant 
        to under clauses (a) and (b), reduced by an amount equal to 
        one-tenth of the amount of any assets in excess of the actuarial 
        accrued liability of the relief association.  The determination 
        of whether or not the relief association has an unfunded 
        actuarial accrued liability shall must be based on the current 
        market value of assets for which a market value is readily 
        ascertainable and the cost or book value, whichever is 
        applicable, for assets for which no market value is readily 
        ascertainable. 
           (a) The normal level cost requirement for the following 
        year, expressed as a dollar amount, shall be is the figure for 
        the normal level cost of the relief association as reported in 
        the actuarial valuation. 
           (b) The amount of anticipated future administrative 
        expenses of the special fund shall must be calculated by 
        multiplying the dollar amount of the administrative expenses of 
        the special fund for the most recent year by the factor of 1.035.
           (c) The amortization contribution requirement to retire the 
        current unfunded actuarial accrued liability by the established 
        date for full funding shall be is the figure for the 
        amortization contribution as reported in the actuarial 
        valuation.  If there has not been a change in the actuarial 
        assumptions used for calculating the actuarial accrued liability 
        of the special fund, a change in the bylaws of the relief 
        association governing the service pensions, retirement benefits, 
        or both payable from the special fund or a change in the 
        actuarial cost method used to value all or a portion of the 
        special fund which change or changes, which by themselves 
        without inclusion of any other items of increase or decrease, 
        produce a net increase in the unfunded actuarial accrued 
        liability of the special fund since December 31, 1970, the 
        established date for full funding shall be December 31, 1990.  
        If there has been a change in the actuarial assumptions used for 
        calculating the actuarial accrued liability of the special fund, 
        a change in the bylaws of the relief association governing the 
        service pensions, retirement benefits, or both payable from the 
        special fund or a change in the actuarial cost method used to 
        value all or a portion of the special fund and the change or 
        changes, by themselves and without inclusion of any other items 
        of increase or decrease, produce a net increase in the unfunded 
        actuarial accrued liability of the special fund since December 
        31, 1970, but prior to January 1, 1979, the established date for 
        full funding shall be December 31, 1998, and if there has been a 
        change since December 31, 1978, the established date for full 
        funding shall must be determined using the following procedure:  
           (i) the unfunded actuarial accrued liability of the special 
        fund shall must be determined in accordance with the provisions 
        governing service pensions, retirement benefits, and actuarial 
        assumptions in effect before an applicable change; 
           (ii) the level annual dollar contribution needed to 
        amortize this unfunded actuarial accrued liability amount by the 
        date for full funding in effect prior to before the change shall 
        must be calculated using the interest assumption specified in 
        section 356.215, subdivision 8, in effect before any applicable 
        change; 
           (iii) the unfunded actuarial accrued liability of the 
        special fund shall must be determined in accordance with any new 
        provisions governing service pensions, retirement benefits, and 
        actuarial assumptions and the remaining provisions governing 
        service pensions, retirement benefits, and actuarial assumptions 
        in effect before an applicable change; 
           (iv) the level annual dollar contribution needed to 
        amortize the difference between the unfunded actuarial accrued 
        liability amount calculated pursuant to under subclause (i) and 
        the unfunded actuarial accrued liability amount 
        calculated pursuant to under subclause (iii) over a period of 20 
        years starting December 31 of the year in which the change is 
        effective shall must be calculated using the interest assumption 
        specified in section 356.215, subdivision 8, in effect after any 
        applicable change; 
           (v) the annual amortization contribution calculated 
        pursuant to under subclause (iv) shall must be added to the 
        annual amortization contribution calculated pursuant to under 
        subclause (ii); 
           (vi) the period in which the unfunded actuarial accrued 
        liability amount determined in subclause (iii) will be amortized 
        by the total annual amortization contribution computed pursuant 
        to under subclause (v) shall must be calculated using the 
        interest assumption specified in section 356.215, subdivision 8, 
        in effect after any applicable change, rounded to the nearest 
        integral number of years, but which shall does not exceed a 
        period of 20 years from the end of the year in which the 
        determination of the date for full funding using this procedure 
        is made and which shall is not be less than the period of years 
        beginning in the year in which the determination of the date for 
        full funding using this procedure is made and ending by the date 
        for full funding in effect before the change; 
           (vii) the period determined pursuant to under subclause (vi)
        shall must be added to the date as of which the actuarial 
        valuation was prepared and the resulting date shall be is the 
        new date for full funding. 
           Sec. 7.  Minnesota Statutes 2004, section 352.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ACCUMULATED CONTRIBUTIONS.] "Accumulated 
        contributions" means the total, exclusive of interest, of (1) 
        the sums deducted from the salary of an employee, (2) the amount 
        of payments, including assessments, paid by the employee in lieu 
        of salary deductions and all other payments made under Laws 
        1929, chapter 191, as amended, this chapter and credited to the 
        employee's individual account in the retirement fund. 
           Sec. 8.  Minnesota Statutes 2004, section 352.01, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RETIREMENT FUND.] (a) "Retirement fund" means 
        the general state employees retirement fund created by section 
        352.04, subdivision 1, with respect to the general state 
        employees retirement plan or the correctional state employees 
        retirement fund created by section 352.911, subdivision 1, with 
        respect to the correctional state employees retirement plan. 
           (b) "The retirement fund" includes the aggregate of 
        accumulated contributions of employees covered by the applicable 
        plan, and all other funds paid into the state treasury or 
        received by the director under Laws 1929, chapter 191, as 
        amended this chapter, together with all income and profits from 
        the money and interest on it, including contributions on the 
        part of the federal government, the state, and state departments.
           Sec. 9.  Minnesota Statutes 2004, section 352.01, 
        subdivision 21, is amended to read: 
           Subd. 21.  [ACCRUED ANNUITIES.] (a) In this chapter and 
        chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an 
        annuity that had become payable to a retired employee in the 
        lifetime of the employee.  
           (b) An annuity or benefit authorized as provided in this 
        chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 
        the first day of each calendar month for that calendar month and 
        is to must be paid on the first day of each calendar month 
        beginning with benefits payable on and after December 1, 1977. 
           (c) Notwithstanding any provision to the contrary in this 
        chapter and chapters 3A, 352B, 352C, and 490, benefit payment 
        authorized as "payable for life" is payable for the entire month 
        in which death occurs, and the benefit payment for the month of 
        death is payable to the surviving spouse or other beneficiary 
        only if the annuitant dies before negotiating the benefit check. 
           Sec. 10.  Minnesota Statutes 2004, section 352.01, 
        subdivision 23, is amended to read: 
           Subd. 23.  [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage"  
        or "covered by the system" means that a state employees employee 
        who serve serves the state of Minnesota and make makes the 
        required employee contributions to the retirement fund will is, 
        by reason of these contributions become, entitled to either (1) 
        a retirement annuity, or (2) a disability benefit, or (3) a 
        refund of accumulated contributions, as provided in this chapter.
           Sec. 11.  Minnesota Statutes 2004, section 352.021, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] (a) There is established 
        the general state employees retirement plan of the Minnesota 
        State Retirement System for state employees.  
           (b) The system general state employees retirement plan is a 
        continuation of the State Employees Retirement Association.  
           (c) Any person who was a member of the State Employees 
        Retirement Association on June 30, 1967, is covered by 
        the system general state employees retirement plan and is 
        entitled to all benefits provided by the system plan upon 
        fulfilling the age, service, contribution, and other 
        requirements of this chapter.  
           Sec. 12.  Minnesota Statutes 2004, section 352.021, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATE EMPLOYEES COVERED.] Every person who is a 
        state employee, as defined in section 352.01, on July 1, 1967, 
        or becomes a state employee after that date as defined in 
        section 352.01 is covered by the system general state employees 
        retirement plan.  Acceptance of state employment or continuance 
        in state service is deemed to be consent to have deductions made 
        from salary for deposit to the credit of the account of the 
        state employee in the retirement fund.  
           Sec. 13.  Minnesota Statutes 2004, section 352.021, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OPTIONAL EXEMPTIONS.] Any person who is 
        appointed by the governor or lieutenant governor may request 
        exemption from coverage by the general state employees 
        retirement plan under this chapter if the appointee is not so 
        covered at by the plan on the date of appointment.  To qualify 
        for this exemption, a written request must be made within 90 
        days from the date of entering upon the duties of the position 
        to which the person is appointed.  After making the request, a 
        person requesting the exemption is not entitled to coverage by 
        the general state employees retirement plan while employed in 
        the position that entitled that person to an exemption from 
        coverage.  
           Sec. 14.  Minnesota Statutes 2004, section 352.021, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REENTERING SERVICE AFTER REFUND.] When a former 
        employee who has withdrawn accumulated contributions reenters 
        employment in a position entitled to coverage under the 
        system general state employees retirement plan, the employee 
        shall must be covered by the system plan on the same basis as a 
        new employee and is not entitled to credit for any former 
        service.  The annuity rights forfeited when taking a refund can 
        only be restored as provided in this chapter.  
           Sec. 15.  Minnesota Statutes 2004, section 352.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FUND CREATED.] (a) There is created a 
        special fund to be known as the general state employees 
        retirement fund.  In that fund there shall be deposited 
        employees, employee contributions, employers employer 
        contributions, and other amounts authorized by law must be 
        deposited.  
           (b) Effective July 1, 1969, The general state employees 
        retirement plan of the Minnesota State Retirement System shall 
        must participate in the Minnesota postretirement investment fund.
        In that fund there shall be deposited The amounts provided in 
        section 352.119 must be deposited in the Minnesota 
        postretirement investment fund.  
           Sec. 16.  Minnesota Statutes 2004, section 352.04, 
        subdivision 12, is amended to read: 
           Subd. 12.  [FUND DISBURSEMENT RESTRICTED.] The general 
        state employees retirement fund and the participation in the 
        Minnesota postretirement investment fund must be disbursed only 
        for the purposes provided by law.  The expenses of the system 
        and any benefits provided by law, other than benefits payable 
        from the Minnesota postretirement investment fund, must be paid 
        from the general state employees retirement fund.  The 
        retirement allowances, retirement annuities, and disability 
        benefits, as well as refunds of any sum remaining to the credit 
        of a deceased retired employee or a disabled employee must be 
        paid only from the general state employees retirement fund after 
        the needs have been certified and the amounts withdrawn from the 
        participation in the Minnesota postretirement investment fund 
        under section 11A.18.  The amounts necessary to make the 
        payments from the general state employees retirement fund and 
        the participation in the Minnesota postretirement investment 
        fund are annually appropriated from these funds for those 
        purposes.  
           Sec. 17.  Minnesota Statutes 2004, section 352.041, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ALLOWABLE SERVICE CREDIT.] Any (a) An 
        employee covered by the system general state employees 
        retirement plan who is given a leave of absence for employment 
        by a political subdivision of the state shall remains a member 
        of the plan and must continue to pay member contributions into 
        the general state employees retirement fund for the period of 
        leave.  
           (b) Upon payment of member contributions, the employee must 
        be given allowable service credit as a state employee on the 
        records of the system retirement plan as though the employee had 
        received salary from the state during the leave.  Payments into 
        the retirement fund shall must be at the rate required in 
        section 352.04, subdivision 2, and must be based upon the salary 
        received from the political subdivision subject to the maximum 
        amount, if any. 
           Sec. 18.  Minnesota Statutes 2004, section 352.041, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 
        or employee who is authorized by law to pay salaries to 
        employees of the political subdivision which is employing a 
        state employee shall have must deduct employee contributions 
        deducted for the general state employees retirement plan under 
        section 352.04, subdivision 2, from the salary of each employee 
        who is on leave of absence from state service on each payroll 
        abstract and shall must pay the sum to the director following 
        the conclusion of each pay period. 
           Sec. 19.  Minnesota Statutes 2004, section 352.041, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 
        or employee who is authorized by law to pay salaries to 
        employees of the political subdivision which is employing a 
        state employee covered by the system shall general state 
        employees retirement plan also must have employer contributions 
        made to the general state employees retirement fund on following 
        the conclusion of each payroll abstract in the amount required 
        by section 352.04, subdivision 3.  These contributions are to 
        must be charged to the political subdivision as an 
        administrative cost.  
           Sec. 20.  Minnesota Statutes 2004, section 352.041, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 
        LEVIES.] (a) Every political subdivision which is employing a 
        state employee covered by the system on leave of absence from 
        state service for employment by a political subdivision of the 
        state shall must pay into the general state employees retirement 
        fund the amount of the employer contribution required by law for 
        state employees covered by the system under section 352.04, 
        subdivision 3.  
           (b) Employing political subdivisions, except other than 
        school districts, may levy taxes necessary for the payment of 
        employer contributions without limitation as to rate or amount.  
        The levy of the taxes does not reduce the amount of other 
        taxes to that may be levied by political subdivisions, 
        except other than school districts, which are subject to any 
        limitation.  
           Sec. 21.  Minnesota Statutes 2004, section 352.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
        annuities, or other benefits mentioned in this chapter is 
        assignable either in law or in equity or subject to execution, 
        levy, attachment, garnishment, or other legal process, except as 
        provided in subdivision 1a or section 518.58, 518.581, or 
        518.6111. The provisions of section 356.401 apply to the general 
        state employees retirement plan and to the correctional state 
        employees retirement plan.  
           Sec. 22.  Minnesota Statutes 2004, section 352.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 
        The board may direct authorize, at its discretion, the deduction 
        of a retiree's health or dental insurance premiums and transfer 
        of the amounts to a health or dental insurance carrier covering 
        state employees.  The insurance carrier must certify that the 
        retired employee has signed an authorization for the deduction 
        and provide a computer readable roster of covered retirees and 
        amounts.  The health or dental insurance carrier must refund 
        deductions withheld from a retiree's check in error directly to 
        the retiree.  The board shall require that the insurance carrier 
        to reimburse the fund for the administrative expense of 
        withholding the premium amounts.  The insurance carrier shall 
        assume liability for any failure of the system to properly 
        withhold the premium amounts. 
           Sec. 23.  Minnesota Statutes 2004, section 352.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DIRECT TRANSFER OF REFUNDS.] A direct transfer 
        of account refunds under this chapter may be made to an 
        individual retirement savings accounts account or a qualified 
        retirement plans plan of the person upon the receipt of an 
        application for transfer by a former employee, on forms 
        acceptable to the executive director. 
           Sec. 24.  Minnesota Statutes 2004, section 352.22, 
        subdivision 10, is amended to read: 
           Subd. 10.  [OTHER REFUNDS.] Former employees covered by the 
        system are entitled to apply for refunds if they are or become 
        members of the State Patrol retirement fund, the state Teachers 
        Retirement Association, or employees of the University of 
        Minnesota excluded from coverage under the system by action of 
        the Board of Regents; or labor service employees, excluded from 
        coverage under section 352.01, subdivision 2b, clause (25); or 
        employees of the adjutant general who under federal law 
        effectually elect membership in a federal retirement system; or 
        officers or employees of the senate or house of representatives, 
        excluded from coverage under section 352.01, subdivision 2b, 
        clause (8) (7).  The refunds must include accumulated 
        contributions plus interest as provided in subdivision 2.  These 
        employees may apply for a refund once 30 days or more have 
        elapsed after their coverage ceases, even if they continue in 
        state service but in positions not covered by this chapter. 
           Sec. 25.  Minnesota Statutes 2004, section 352B.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] In this chapter, each of the terms 
        defined in this section have has the meanings meaning given 
        them to it. 
           Sec. 26.  Minnesota Statutes 2004, section 352B.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEMBER.] "Member" means: 
           (1) a State Patrol member currently employed after June 30, 
        1943, under section 299D.03 by the state, who is a peace officer 
        under section 626.84, and whose salary or compensation is paid 
        out of state funds; 
           (2) a conservation officer employed under section 97A.201, 
        currently employed by the state, whose salary or compensation is 
        paid out of state funds; 
           (3) a crime bureau officer who was employed by the crime 
        bureau and was a member of the Highway Patrolmen's retirement 
        fund on July 1, 1978, whether or not that person has the power 
        of arrest by warrant after that date, or who is employed as 
        police personnel, with powers of arrest by warrant under section 
        299C.04, and who is currently employed by the state, and whose 
        salary or compensation is paid out of state funds; 
           (4) a person who is employed by the state in the Department 
        of Public Safety in a data processing management position with 
        salary or compensation paid from state funds, who was a crime 
        bureau officer covered by the State Patrol retirement plan on 
        August 15, 1987, and who was initially hired in the data 
        processing management position within the department during 
        September 1987, or January 1988, with membership continuing for 
        the duration of the person's employment in that position, 
        whether or not the person has the power of arrest by warrant 
        after August 15, 1987; 
           (5) a public safety employee defined as who is a peace 
        officer in under section 626.84, subdivision 1, paragraph (c), 
        and who is employed with by the Division of Alcohol and Gambling 
        Enforcement under section 299L.01; and 
           (6) a Fugitive Apprehension Unit officer after October 31, 
        2000, who is employed by the Office of Special Investigations of 
        the Department of Corrections and who is a peace officer under 
        section 626.84.  
           Sec. 27.  Minnesota Statutes 2004, section 352B.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
        means:  
           (1) for members defined in subdivision 2, clause (a) (1), 
        monthly service is granted for in any month for which payments 
        have been made to the State Patrol retirement fund, and 
           (2) for members defined in subdivision 2, clauses (b) (2) 
        and (c) (3), service for which payments have been made to the 
        State Patrol retirement fund, service for which payments were 
        made to the State Police officers retirement fund after June 30, 
        1961, and all prior service which was credited to a member for 
        service on or before June 30, 1961.  
           (b) Allowable service also includes any period of absence 
        from duty by a member who, by reason of injury incurred in the 
        performance of duty, is temporarily disabled and for which 
        disability the state is liable under the workers' compensation 
        law, until the date authorized by the executive director for 
        commencement of payment of a disability benefit or return to 
        employment.  
           (c) MS 2002 (Expired) 
           (d) Allowable service means service in a month during which 
        a member is paid a salary from which a member contribution is 
        deducted, deposited, and credited in the State Patrol retirement 
        plan. 
           Sec. 28.  Minnesota Statutes 2004, section 352B.02, 
        subdivision 1e, is amended to read: 
           Subd. 1e.  [AUDIT; ACTUARIAL VALUATION.] The legislative 
        auditor shall audit the fund.  Any actuarial valuation of the 
        fund required under section 356.215 must be prepared by the 
        actuary retained under section 356.214.  Any approved actuary 
        retained by the executive director under section 352.03, 
        subdivision 6, may perform actuarial valuations and experience 
        studies to supplement those performed by the commission-retained 
        actuary retained under section 356.214.  Any supplemental 
        actuarial valuation or experience studies shall must be filed 
        with the executive director of the Legislative Commission on 
        Pensions and Retirement.  
           Sec. 29.  Minnesota Statutes 2004, section 352B.071, is 
        amended to read: 
           352B.071 [EXEMPTION FROM PROCESS.] 
           None of the money, annuities, or other benefits provided 
        for in this chapter is assignable either in law or in equity or 
        be subject to execution, levy, attachment, garnishment, or other 
        legal process, except as provided in section 518.58, 518.581, or 
        518.6111. The provisions of section 356.401 apply to the State 
        Patrol retirement plan. 
           Sec. 30.  Minnesota Statutes 2004, section 352D.01, is 
        amended to read: 
           352D.01 [ESTABLISHMENT.] 
           There is hereby established within the Minnesota State 
        Retirement System a retirement program for certain public 
        employees to be known as the Minnesota unclassified employees 
        retirement program, which shall be.  The program must be 
        administered by the Minnesota State Retirement System.  
           Sec. 31.  Minnesota Statutes 2004, section 352D.015, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 
        investment fund" means the fund established and governed by 
        section 11A.17.  
           Sec. 32.  Minnesota Statutes 2004, section 352D.015, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL FUND.] "General fund" means the general 
        state employees retirement fund except the moneys for the 
        unclassified program.  
           Sec. 33.  Minnesota Statutes 2004, section 352D.03, is 
        amended to read: 
           352D.03 [TRANSFER OF ASSETS.] 
           Unless an eligible employee enumerated in section 352D.02, 
        subdivision 1 or 1a, has elected coverage under the individual 
        retirement account plan under chapter 354B, a sum of money 
        representing the assets credited to each employee exercising the 
        option contained in section 352D.02, plus an equal employer 
        contribution together with interest for the employment period at 
        the actuarially assumed rates applicable preretirement interest 
        actuarial assumption rate during this period, compounded 
        annually, shall must be used for the purchase of shares on 
        behalf of each employee in the accounts of the supplemental 
        retirement fund established by section 11A.17.  Any employer's 
        contribution to amortize the deficit in the state employee's 
        retirement fund shall not, however, be used for the purchase of 
        shares.  
           Sec. 34.  Minnesota Statutes 2004, section 352D.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPAYMENT OF REFUND.] (a) A participant in the 
        unclassified program may repay regular refunds taken pursuant to 
        under section 352.22, as provided in section 352.23.  
           (b) A participant in the unclassified program or an 
        employee covered by the general plan who has withdrawn the value 
        of the total shares may repay the refund taken and thereupon 
        restore the service credit, rights and benefits forfeited by 
        paying into the fund the amount refunded plus interest at an 
        annual rate of 8.5 percent compounded annually from the date 
        that the refund was taken until the date that the refund is 
        repaid.  If the participant had withdrawn only the employee 
        shares as permitted under prior laws, repayment shall must be 
        pro rata.  Payment shall 
           (c) Except as provided in section 356.441, the repayment of 
        a refund under this section must be made in a lump sum.  
           Sec. 35.  Minnesota Statutes 2004, section 352D.085, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMBINED SERVICE.] Except as provided in 
        section 356.30, 356.302, or 356.303, service under the 
        unclassified program for which the employee has been credited 
        with employee shares may be used for the limited purpose of 
        qualifying for benefits under sections 352.115, 352.72, 
        subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60; 
        provided such.  The service also may not be used to qualify for 
        a disability benefit under section 352.113 or 354.48 if a 
        participant was under the unclassified program at the time of 
        the disability, and provided further that.  Also, the years of 
        service and salary paid while the participant was in the 
        unclassified program shall may not be used in determining the 
        amount of benefits. 
           Sec. 36.  Minnesota Statutes 2004, section 352D.09, 
        subdivision 5, is amended to read: 
           Subd. 5.  [UNCLAIMED BENEFITS.] If the beneficiary, 
        surviving spouse or estate has not made application for benefits 
        within ten years after the date of the death of a participant, 
        the value of the shares shall be is appropriated to the regular 
        general state employees retirement fund and the provisions of 
        section 352.12, subdivision 12 shall, govern.  If a former 
        participant fails to make a claim for benefits within five years 
        after the termination of covered service or by age 70, whichever 
        is later, the value of the shares shall be is appropriated to 
        the general state employees retirement fund and the provisions 
        of section 352.22, subdivision 8, shall apply.  
           Sec. 37.  Minnesota Statutes 2004, section 352D.12, is 
        amended to read: 
           352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
           (a) An employee who is a participant in the unclassified 
        program and who has prior service credit in a covered plan under 
        chapters 3A, chapter 352, 352C, 353, 354, 354A, and or 422A 
        may, within the time limits specified in this section, elect to 
        transfer to the unclassified program prior service contributions 
        to one or more of those plans.  Participants with six or more 
        years of prior service credit in a plan governed by chapter 3A 
        or 352C on July 1, 1998, may not transfer prior service 
        contributions.  Participants with less than six years of prior 
        service credit in a plan governed by chapter 3A or 352C on July 
        1, 1998, must be contributing to the unclassified plan on or 
        after January 5, 1999, in order to transfer prior contributions. 
           (b) For participants with prior service credit in a plan 
        governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
        contributions" means the accumulated employee and equal employer 
        contributions with interest at an annual rate of 8.5 percent 
        compounded annually, based on fiscal year balances.  For 
        participants with less than six years of service credit as of 
        July 1, 1998, and with prior service credit in a plan governed 
        by chapter 3A or 352C, "prior service contributions" means an 
        amount equal to twice the amount of the accumulated member 
        contributions plus annual compound interest at the rate of 8.5 
        percent, computed on fiscal year balances.  
           (c) If a participant has taken a refund from a retirement 
        plan listed in this section, the participant may repay the 
        refund to that plan, notwithstanding any restrictions on 
        repayment to that plan, plus 8.5 percent interest compounded 
        annually and have the accumulated employee and equal employer 
        contributions transferred to the unclassified program with 
        interest at an annual rate of 8.5 percent compounded annually 
        based on fiscal year balances.  If a person repays a refund and 
        subsequently elects to have the money transferred to the 
        unclassified program, the repayment amount, including interest, 
        is added to the fiscal year balance in the year which the 
        repayment was made. 
           (d) A participant electing to transfer prior service 
        contributions credited to a retirement plan governed by chapter 
        352, 353, 354, 354A, or 422A as provided under this section must 
        complete the a written application for the transfer and repay 
        any refund within one year of the commencement of the employee's 
        participation in the unclassified program.  A participant 
        electing to transfer prior service contributions credited to a 
        retirement plan governed by chapter 3A or 352C as provided under 
        this section must complete the application for the transfer and 
        repay any refund between January 5, 1999, and June 1, 1999, if 
        the employee commenced participation in the unclassified program 
        before January 5, 1999, or within one year of the commencement 
        of the employee's participation in the unclassified program if 
        the employee commenced participation in the unclassified program 
        after January 4, 1999. 
           Sec. 38.  Minnesota Statutes 2004, section 353.01, 
        subdivision 32, is amended to read: 
           Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
        any a public employee, including any a public hospital employee, 
        who is covered by any an agreement or modification made between 
        the state and the Secretary of Health, Education and Welfare 
        Human Services, making the provisions of the federal Old Age, 
        Survivors and Disability Insurance Act applicable to the member 
        if the membership eligibility criteria are met under this 
        chapter.  A coordinated member also is a former basic member who 
        has a complete and continuous separation for at least 30 days 
        from employment as a public employee meeting the requirements 
        specified in subdivision 28, paragraphs (a) and (b), and who 
        reenters public service as a public employee and meets the 
        membership eligibility criteria under this chapter. 
           Sec. 39.  Minnesota Statutes 2004, section 353.01, 
        subdivision 33, is amended to read: 
           Subd. 33.  [BASIC MEMBER.] "Basic member" means any a 
        public employee, including any a public hospital employee, who 
        is not covered by any agreement or modification made between the 
        state and the Secretary of Health, Education and Welfare Human 
        Services. 
           Sec. 40.  Minnesota Statutes 2004, section 353.025, is 
        amended to read: 
           353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 
           From and after January 1, 1982, Employees of the Range 
        Association of Municipalities and Schools hereinafter referred 
        to as the association, shall become are coordinated members of 
        the general employees retirement plan of the Public Employees 
        Retirement Association unless specifically exempt under section 
        353.01, subdivision 2b, and.  The Range Association shall be 
        deemed to be of Municipalities and Schools is a governmental 
        subdivision for the purposes of this chapter.  
           Sec. 41.  Minnesota Statutes 2004, section 353.026, is 
        amended to read: 
           353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 
        EMPLOYEES.] 
           Any person who was employed by the city of Minneapolis, 
        Special School District No. 1, or public corporation as defined 
        in section 422A.01, subdivision 9, on or after July 1, 1978, and 
        prior to before July 1, 1979, and who was excluded from 
        retirement coverage by the coordinated program of the 
        Minneapolis municipal employees retirement fund pursuant to 
        under section 422A.09, subdivision 3, shall be is entitled to 
        retirement coverage by the general employees retirement plan of 
        the Public Employees Retirement Association unless specifically 
        excluded pursuant to under section 353.01, subdivision 2b, from 
        and after May 19, 1981.  
           Sec. 42.  Minnesota Statutes 2004, section 353.027, is 
        amended to read: 
           353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 
        EMPLOYEES.] 
           Any person employed on January 1, 1975, by a municipal 
        court established pursuant to under Minnesota Statutes 1957, 
        section 488.03, and located in the cities of New Brighton, 
        Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 
        Paul shall be is eligible for membership in the general 
        employees retirement plan of the Public Employees Retirement 
        Association and shall retain retains any rights or benefits the 
        person had attained as a member of the general employees 
        retirement plan of the association on January 1, 1975, so long 
        as the person remains an employee of the municipal court of 
        Ramsey County.  
           Sec. 43.  Minnesota Statutes 2004, section 353.028, is 
        amended to read: 
           353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, each of the terms in this subdivision has the meaning 
        indicated. 
           (b) "City manager" means (1) a person who is duly appointed 
        to and is holding the position of city manager in a Plan B 
        statutory city or in a home rule city operating under the 
        "council-manager" form of government, or (2) a person who is 
        appointed to and is holding the position of chief administrative 
        officer of a home rule charter city or a statutory city pursuant 
        to under a charter provision, ordinance, or resolution 
        establishing such a position and prescribing its duties and 
        responsibilities.  
           (c) "Governing body" means the city council of the city 
        employing the city manager.  
           (d) "Election" means the election described in subdivision 
        2.  
           Subd. 2.  [ELECTION.] (a) A city manager may elect to be 
        excluded from membership in the general employees retirement 
        plan of the Public Employees Retirement Association.  The 
        election of exclusion must be made within six months following 
        the commencement of employment, must be made in writing on a 
        form prescribed by the executive director, and must be approved 
        by a resolution of adopted by the governing body of the city.  
        The election of exclusion is not effective until it is filed 
        with the executive director.  Membership of a city manager in 
        the association general employees retirement plan ceases on the 
        date the written election is received by the executive director 
        or upon a later date specified.  Employee and employer 
        contributions made on behalf of a person exercising the option 
        to be excluded from membership under this section must be 
        refunded in accordance with section 353.27, subdivision 7. 
           (b) A city manager who has elected exclusion under this 
        subdivision may elect to revoke that action by filing a written 
        notice with the executive director.  The notice must be on a 
        form prescribed by the executive director and must be approved 
        by a resolution of the governing body of the city.  Membership 
        of the city manager in the association resumes prospectively 
        from the date of the first day of the pay period for which 
        contributions were deducted or, if pay period coverage dates are 
        not provided, the date on which the notice of revocation or 
        contributions are received in the office of the association, 
        provided that the notice of revocation is received by the 
        association within 60 days of the receipt of contributions. 
           (c) An election under paragraph (b) is irrevocable.  Any 
        election under paragraph (a) or (b) must include a statement 
        that the individual will not seek authorization to purchase 
        service credit for any period of excluded service. 
           Subd. 3.  [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 
        election of exclusion is made, and if the city manager and the 
        governing body of the city additionally agree in writing that 
        the additional compensation is to be deferred and shall is to be 
        contributed on behalf of the city manager to a deferred 
        compensation program which meets the requirements of section 457 
        of the Internal Revenue Code of 1954 1986, as amended through 
        December 31, 1980, the governing body may compensate the city 
        manager, in addition to the salary allowed under any limitation 
        imposed on salaries by law or charter, in an amount equal to the 
        employer contribution which would be required by section 353.27, 
        subdivision 3, if the city manager were a member of the 
        association general employees retirement plan.  
           Subd. 4.  [REFUNDS; DEFERRED ANNUITY.] A city manager who 
        makes an election to be excluded from membership is entitled to 
        a refund of accumulated deductions or, if otherwise qualified, a 
        deferred annuity in the manner provided by under section 353.34, 
        at the option of the manager.  
           Subd. 5.  [ELECTION; OTHER EMPLOYMENT.] If a city manager 
        who has made an election to be excluded subsequently accepts 
        employment in another governmental subdivision or subsequently 
        accepts employment other than as a city manager in the same 
        city, the election shall be deemed to have been is rescinded on 
        the effective date of employment.  
           Sec. 44.  Minnesota Statutes 2004, section 353.14, is 
        amended to read: 
           353.14 [BENEFITS FROM OTHER FUNDS.] 
           No annuity or benefit provided by this chapter shall may be 
        affected, diminished, or impaired by any pension, benefit, or 
        annuity which any member or survivor is entitled to receive from 
        a tax supported public retirement plan or system authorized by 
        any other law, for based on service that is different service 
        than the service for which the member or survivor is entitled to 
        receive benefit or annuity from a retirement plan administered 
        by the Public Employees Retirement Association. 
           Sec. 45.  Minnesota Statutes 2004, section 353.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
        or benefit provided for in this chapter is assignable or subject 
        to execution, levy, attachment, garnishment, or legal process, 
        except as provided in subdivision 2 or section 518.58, 518.581, 
        or 518.6111. The provisions of section 356.401 apply to the 
        general employees retirement plan, to the public employees 
        police and fire retirement plan, and to the local government 
        correctional service retirement plan.  
           Sec. 46.  Minnesota Statutes 2004, section 353.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
        of the executive director, conditions so warrant, payment of an 
        annuity, a retirement benefit, or a refund may be made to a 
        public body in behalf of an annuitant, disabilitant, or survivor 
        upon such terms as the executive director may prescribe. 
           Sec. 47.  Minnesota Statutes 2004, section 353.27, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 
        INFORMATION.] (a) 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.  
           (b) 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 If the 
        association receive such schedules is provided a schedule 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 at the request of the 
        association or its executive director, the association executive 
        director may estimate the obligations of the employee and 
        employer to the retirement fund based upon such those records as 
        that 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. 48.  Minnesota Statutes 2004, section 353.271, is 
        amended to read: 
           353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 
        INVESTMENT FUND.] 
           Subdivision 1.  [AUTHORIZATION.] The general employees 
        retirement plan of the Public Employees Retirement Association, 
        including the public employees police and fire fund but 
        excluding the various local relief association consolidation 
        accounts, is retirement plan, and the local government 
        correctional service retirement plan are authorized to 
        participate in the Minnesota postretirement investment fund.  
        There shall be is one general participation in the Minnesota 
        postretirement investment fund for all purposes by each plan of 
        the Public Employees Retirement fund and one general 
        participation in the Minnesota postretirement investment fund 
        for all purposes by the public employees police and fire 
        fund Association. 
           Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
        (1) (a) The required reserves for retirement annuities payable 
        as provided in this chapter other than those payable from the 
        various local relief association consolidation accounts, as 
        determined in accordance with the appropriate mortality table 
        adopted by the board of trustees based on the experience of the 
        fund as recommended by the actuary retained by the Legislative 
        Commission on Pensions and Retirement under section 356.214, and 
        approved under section 356.215, subdivision 18, and using the 
        postretirement interest assumption specified in section 356.215, 
        subdivision 8, shall must be transferred to the Minnesota 
        postretirement investment fund as of the last business day of 
        the month in which the retirement annuity begins.  
           (2) (b) Annuity payments other than those payable from the 
        various local relief association consolidation accounts 
        shall must be adjusted in accordance with the provisions of 
        section 11A.18.  
           (3) (c) Increases in payments pursuant to under this 
        section or from the various local relief association 
        consolidation accounts, if applicable, will must be made 
        automatically unless the intended recipient files written notice 
        with the executive director of the Public Employees Retirement 
        Association requesting that the increase shall not be made. 
           Sec. 49.  Minnesota Statutes 2004, section 353.31, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [COORDINATED MEMBERS.] Except for benefits 
        provided under section 353.32, subdivisions 1 and 1a, no 
        survivor benefits are payable to the surviving spouse or 
        dependent children of a deceased coordinated member. 
           Sec. 50.  Minnesota Statutes 2004, section 353.32, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PAYMENT TO A MINOR.] If a member or former 
        member dies having named as beneficiary a person who is a minor 
        at the time of the application for refund, the board may make 
        the payment (a) (1) directly to the minor, (b) (2) to any 
        a person who has legally qualified and is acting as guardian of 
        the minor's person or property in any jurisdiction, or (c) (3) 
        to either parent of the minor or to any an adult person with 
        whom the minor may at the time be living, provided only that.  
        The parent or other person to whom any amount is to be 
        paid shall have advised must advise the board in writing that 
        the amount will be held or used in trust for the benefit of such 
        minor.  Any annuity or disability benefit payable at the time of 
        death of an annuitant or recipient of a disability benefit, 
        which is payable to a beneficiary who is a minor, may be paid in 
        the same manner.  Such The payment shall be is a bar to recovery 
        by any other person or persons. 
           Sec. 51.  Minnesota Statutes 2004, section 353.33, 
        subdivision 12, is amended to read: 
           Subd. 12.  [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 
        member who is receiving a disability benefit under subdivision 3:
           (a) (1) dies before attaining age 65 or within five years 
        of the effective date of the disability, whichever is later, the 
        surviving spouse shall is entitled to receive a survivor benefit 
        under section 353.31, unless the surviving spouse elected to 
        receive a refund under section 353.32, subdivision 1.; 
           (b) (2) is living at age 65 or five years after the 
        effective date of the disability, whichever is later, the basic 
        member may continue to receive a normal disability benefit, or 
        elect a joint and survivor optional annuity under section 
        353.31, subdivision 1b.  The election of the joint and survivor 
        optional annuity must occur within 90 days of attaining age 65 
        or of reaching the five-year anniversary of the effective date 
        of the disability benefit, whichever is later.  The optional 
        annuity takes effect on the first day of the month following the 
        month in which the person attains age 65 or reaches the 
        five-year anniversary of the effective date of the disability 
        benefit, whichever is later.; or 
           (c) (3) if there is a dependent child or children under 
        paragraph (a) or (b) clause (1) or (2), the association shall 
        grant dependent child is entitled to a dependent child benefit 
        under section 353.31, subdivision 1b, paragraph (b). 
           Sec. 52.  Minnesota Statutes 2004, section 354.091, is 
        amended to read: 
           354.091 [SERVICE CREDIT.] 
           (a) In computing service credit, no teacher shall may 
        receive credit for more than one year of teaching service for 
        any fiscal year.  Commencing July 1, 1961 Additionally, in 
        crediting allowable service: 
           (1) if a teacher teaches less than five hours in a day, 
        service credit must be given for the fractional part of the day 
        as the term of service performed bears to five hours; 
           (2) if a teacher teaches five or more hours in a day, 
        service credit must be given for only one day; 
           (3) if a teacher teaches at least 170 full days in any 
        fiscal year, service credit must be given for a full year of 
        teaching service; and 
           (4) if a teacher teaches for only a fractional part of the 
        year, service credit must be given for such fractional part of 
        the year in the same relationship as the period of service 
        performed bears to 170 days. 
           (b) A teacher shall must receive a full year of service 
        credit based on the number of days in the employer's full school 
        year if it that school year is less than 170 days.  Teaching 
        service performed before July 1, 1961, must be computed under 
        the law in effect at the time it was performed. 
           (c) A teacher must not lose or gain retirement service 
        credit as a result of the employer converting to a flexible or 
        alternate work schedule.  If the employer converts to a flexible 
        or alternate work schedule, the forms for reporting teaching 
        service and the procedures for determining service credit must 
        be determined by the executive director with the approval of the 
        board of trustees.  
           (d) For all services rendered on or after July 1, 2003, 
        service credit for all members employed by the Minnesota State 
        Colleges and Universities system must be determined: 
           (1) for full-time employees, by the definition of full-time 
        employment contained in the collective bargaining agreement for 
        those units listed in section 179A.10, subdivision 2, or 
        contained in the applicable personnel or salary plan for those 
        positions designated in section 179A.10, subdivision 1; 
           (2) for part-time employees, by the appropriate proration 
        of full-time equivalency based on the provisions contained in 
        the collective bargaining agreement for those units listed in 
        section 179A.10, subdivision 2, or contained in the applicable 
        personnel or salary plan for those positions designated in 
        section 179A.10, subdivision 1, and the applicable procedures of 
        the Minnesota State Colleges and Universities system; and 
           (3) in no case may a member receive more than one year of 
        service credit for any fiscal year. 
           Sec. 53.  Minnesota Statutes 2004, section 354.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION; EXCEPTIONS.] (a) The provisions 
        of section 356.401 apply to the teachers retirement plan.  
           (b) The right of a teacher to take advantage of the 
        benefits provided by this chapter, is a personal right only and 
        is not assignable.  All money to the credit of a teacher's 
        account in the fund or any money payable to the teacher from the 
        fund belongs to the state of Minnesota until actually paid to 
        the teacher or a beneficiary under this chapter.  
           (c) The association may acknowledge a properly completed 
        power of attorney form.  An assignment or attempted assignment 
        of a teacher's interest in the fund, or of the beneficiary's 
        interest in the fund, by a teacher or a beneficiary is void and 
        exempt from garnishment or levy under attachment or execution, 
        except as provided in subdivision 2 or 3, or section 518.58, 
        518.581, or 518.6111.  
           Sec. 54.  Minnesota Statutes 2004, section 354.10, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
        of the executive director, conditions so warrant, payment of an 
        annuity, a retirement benefit, or a refund may be made to a 
        public body in behalf of an annuitant, disabilitant, or survivor 
        upon such terms as the executive director may prescribe.  
           Sec. 55.  Minnesota Statutes 2004, section 354.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any (a) A 
        beneficiary designated by a retiree or member under section 
        354.05, subdivision 22, may be changed or revoked by the retiree 
        or member on a form provided by the executive director.  
           (b) A change or revocation made under this subdivision is 
        valid only if the properly completed form is received by the 
        association on or before the date of death of the retiree or the 
        member.  
           (c) If a designated beneficiary dies before the retiree or 
        member designating the beneficiary, and a new beneficiary is not 
        designated, the retiree's or member's estate is the beneficiary. 
           Sec. 56.  Minnesota Statutes 2004, section 354.33, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 
        Notwithstanding the provisions of section 354.55, subdivision 3, 
        when any person retires after July 1, 1973, who (a) (1) has ten 
        or more years of allowable service, and (b) (2) does not have 
        any retroactive Social Security coverage by reason of the 
        person's position in the retirement system, and (c) (3) does not 
        qualify for federal old age and survivor primary benefits at the 
        time of retirement, the annuity shall must be computed under 
        section 354.44, subdivision 2, of the law in effect on June 30, 
        1969, except that accumulations after June 30, 1957, shall must 
        be calculated using the same mortality table and interest 
        assumption as are used to transfer the required reserves to the 
        Minnesota postretirement investment fund. 
           Sec. 57.  Minnesota Statutes 2004, section 354.39, is 
        amended to read: 
           354.39 [EFFECTIVE DATE; APPLICATION.] 
           After July 1, 1971, any A member of the Teachers Retirement 
        Association who is employed in a new state university and or any 
        other new institutions institution of higher learning not 
        included in any agreement or modification made between the state 
        and the federal Secretary of Health, Education and Welfare Human 
        Services, making the provisions of the federal Old Age and, 
        Survivors and Disability Insurance Act applicable to such 
        members, shall must be covered under the provisions of this 
        chapter applicable to coordinated members. 
           Sec. 58.  Minnesota Statutes 2004, section 354.41, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEACHERS.] Every teacher after June 30, 1957, in 
        the service or entering the service of the state or one of its 
        governmental subdivision subdivisions as a teacher, except 
        persons specially specifically excluded, shall must become a 
        member of the association by the acceptance of such employment. 
           Sec. 59.  Minnesota Statutes 2004, section 354.42, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [TEACHERS RETIREMENT FUND.] (a) Within the 
        Teachers Retirement Association and the state treasury is 
        created a special retirement fund, which must include all the 
        assets of the Teachers Retirement Association and all revenue of 
        the association.  The fund is the continuation of the fund 
        established under Laws 1931, chapter 406, section 2, 
        notwithstanding the repeal of Minnesota Statutes 1973, section 
        354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 
           (b) The teachers retirement fund must be credited with all 
        employee and employer contributions, all investment revenue and 
        gains, and all other income authorized by law. 
           (c) From the teachers retirement fund is appropriated the 
        payments of annuities and benefits authorized by this chapter, 
        the transfers to the Minnesota postretirement investment fund, 
        and the reasonable and necessary expenses of administering the 
        fund and the association. 
           Sec. 60.  Minnesota Statutes 2004, section 354.44, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 
        amount of retirement annuity is an amount equal to double the 
        annuity which could be purchased by the member's accumulated 
        deductions plus interest thereon.  The annuity shall must be 
        determined by the member's age, sex, double the amount of 
        accumulated deductions, double the amount of interest earned on 
        the accumulated deductions, and the appropriate mortality tables 
        and interest rates.  To determine the amount of the annuity for 
        a basic member, the accumulated deductions prior to before July 
        1, 1957, and the accumulated deductions subsequent to after July 
        1, 1957, shall must be considered separately. 
           (1) (b) For service rendered prior to before July 1, 1957, 
        the accumulated deductions for any a member shall must be 
        carried forward at a fixed amount which is shown credited to the 
        member's account as of that date.  That fixed amount shall must 
        also include any payments in lieu of salary deductions which are 
        to be made in the future and are were actually so made pursuant 
        to under an agreement executed between the member and the board 
        as authorized by section 354.50 or any other authorized payments 
        made by the member to the fund.  The annuity granted with 
        respect to the period shall must be determined as follows: 
           (a) (1) the fixed amount of the accumulated deductions for 
        the period including the interest credited on the amount as 
        earned up to July 1, 1957.; and 
           (b) (2) annuity purchase rates based on the applicable 
        mortality table established by the board and the interest rate 
        assumption in effect prior to before July 1, 1957, in the case 
        of basic members and an annuity purchase rate based on an 
        appropriate annuity table of mortality established by the board 
        as provided in section 354.07, subdivision 1, and using the 
        applicable postretirement interest rate assumption specified in 
        section 356.215, subdivision 8, in the case of coordinated 
        members. 
           (2) (c) For service rendered subsequent to after July 1, 
        1957, the accumulated deductions for any a member shall must 
        consist of the amounts actually credited to the member's account 
        by reason of salary deductions.  The annuity granted with 
        respect to the period shall must be determined by the following: 
           (a) (1) accumulated deductions for the period; 
           (b) (2) interest credited on these accumulated deductions 
        from July 1, 1957, to the date of retirement; 
           (c) (3) interest credited on accumulated deductions 
        including prior credited interest provided in paragraph (1) (b) 
        from July 1, 1957, to the date of retirement; 
           (d) (4) after the amount available for an annuity granted 
        with respect to the person is determined in accordance with the 
        provisions of this subdivision, an additional amount equal to 20 
        percent of the sum of clause (2)(a) (1) plus interest credited 
        to members a member's account from July 1, 1957, to date of 
        retirement is to be added.  This added amount is not to be 
        doubled as provided for other amounts determined in this 
        subdivision; and 
           (e) (5) the annuity purchase rate based on an appropriate 
        annuity table of mortality established by the board as provided 
        in section 354.07, subdivision 1, and using the applicable 
        postretirement interest rate assumption specified in section 
        356.215, subdivision 8. 
           Sec. 61.  Minnesota Statutes 2004, section 354A.021, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TAX SHELTERED ANNUITY PROGRAM AND FUND.] Any A 
        teachers retirement fund association may establish a tax 
        sheltered annuity program and fund meeting the requirements of 
        section 403(b) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1992, which shall must include all assets 
        which were acquired for the specific purpose of being credited 
        to the program and fund and to which shall must be credited all 
        employee contributions, and employer contributions, if 
        negotiated under a collective bargaining agreement, designated 
        for this purpose and all interest income attributable to the 
        assets of the program and fund.  
           Sec. 62.  Minnesota Statutes 2004, section 354A.097, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
        teacher who has at least three years of allowable service credit 
        with the teachers retirement fund association and who performed 
        service in the United States armed forces before becoming a 
        teacher as defined in section 354A.011, subdivision 27, or who 
        failed to obtain service credit for a military leave of absence 
        period under section 354A.093, is entitled to purchase allowable 
        service credit for the initial period of enlistment, induction, 
        or call to active duty without any voluntary extension by making 
        payment under section 356.55 provided 356.551 if the teacher has 
        not purchased service credit from another Minnesota defined 
        benefit public employee pension plan for the same period of 
        service. 
           Sec. 63.  Minnesota Statutes 2004, section 354A.31, 
        subdivision 5, is amended to read: 
           Subd. 5.  [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 
        retirement at normal retirement age with at least three years of 
        service credit, a coordinated member shall be is entitled to a 
        normal retirement annuity calculated pursuant to under 
        subdivision 4 or 4a, whichever applies.  
           Sec. 64.  [356.401] [EXEMPTION FROM PROCESS.] 
           Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
        annuities, or other benefits provided for in the governing law 
        of a covered retirement plan is assignable either in law or in 
        equity or subject to state estate tax, or to execution, levy, 
        attachment, garnishment, or other legal process, except as 
        provided in subdivision 2 or section 518.58, 518.581, or 
        518.6111.  
           Subd. 2.  [AUTOMATIC DEPOSITS.] (a) The chief 
        administrative officer of a covered retirement plan may remit, 
        through an automatic deposit system, annuity, benefit, or refund 
        payments only to a financial institution associated with the 
        National Automated Clearinghouse Association or a comparable 
        successor organization that is trustee for a person who is 
        eligible to receive the annuity, benefit, or refund.  
           (b) Upon the request of a retiree, disabilitant, survivor, 
        or former member, the chief administrative officer of a covered 
        retirement plan may remit the annuity, benefit, or refund check 
        to the applicable financial institution for deposit in the 
        person's individual account or the person's joint account.  An 
        overpayment to a joint account after the death of the annuitant 
        or benefit recipient must be repaid to the fund of the 
        applicable covered retirement plan by the joint tenant if the 
        overpayment is not repaid to that fund by the financial 
        institution associated with the National Automated Clearinghouse 
        Association or its successor.  The governing board of the 
        covered retirement plan may prescribe the conditions under which 
        these payments may be made.  
           Subd. 3.  [COVERED RETIREMENT PLANS.] The provisions of 
        this section apply to the following retirement plans: 
           (1) the legislators retirement plan, established by chapter 
        3A; 
           (2) the general state employees retirement 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 plan, established by 
        chapter 352B; 
           (5) the elective state officers retirement plan, 
        established by chapter 352C; 
           (6) the unclassified state employees retirement 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 plan of the Public 
        Employees Retirement Association, established by chapter 353; 
           (9) the public employees defined contribution plan, 
        established by chapter 353D; 
           (10) the local government correctional service retirement 
        plan of the Public Employees Retirement Association, established 
        by chapter 353E; 
           (11) the Teachers Retirement Association, established by 
        chapter 354; 
           (12) the Duluth Teachers Retirement Fund Association, 
        established by chapter 354A; 
           (13) the Minneapolis Teachers Retirement Fund Association, 
        established by chapter 354A; 
           (14) the St. Paul Teachers Retirement Fund Association, 
        established by chapter 354A; 
           (15) the individual retirement account plan, established by 
        chapter 354B; 
           (16) the higher education supplemental retirement plan, 
        established by chapter 354C; 
           (17) the Minneapolis employees retirement fund, established 
        by chapter 422A; 
           (18) the Minneapolis Police Relief Association, established 
        by chapter 423B; 
           (19) the Minneapolis Firefighters Relief Association, 
        established by chapter 423C; and 
           (20) the judges retirement fund, established by sections 
        490.121 to 490.132.  
           Sec. 65.  Minnesota Statutes 2004, section 356.551, is 
        amended to read: 
           356.551 [POST JULY 1, 2003 2004, 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, and if section 356.55 has 
        expired, this section governs the determination of the prior 
        service credit purchase payment amount of any prior service 
        credit purchase. 
           (b) The purchase payment amount determination procedure 
        must recognize any service credit accrued to the purchaser in a 
        pension plan 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 minimum purchase 
        amount set forth in paragraph (c) applies, 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 under section 356.214, of the amount of the 
        additional retirement annuity obtained by the acquisition of the 
        additional service credit in this section.  
           (b) 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 8, 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.  
           (c) The prior service credit purchase amount may not be 
        less than the amount determined by applying the current employee 
        or member contribution rate, the employer contribution rate, and 
        the additional employer contribution rate, if any, to the 
        person's current annual salary and multiplying that result by 
        the number of whole and fraction years of service to be 
        purchased. 
           (d) 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.  
           (e) 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 subdivision, the purchaser must make the employee 
        payments required under this subdivision within 290 90 days of 
        the prior service credit authorization.  If that employee 
        payment is made, the employer payment under this 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 subdivision. 
           Subd. 3.  [DOCUMENTATION.] The prospective prior service 
        credit purchaser must provide any relevant documentation 
        required by the chief administrative officer of the applicable 
        public pension plan to determine eligibility for the prior 
        service credit under this section. 
           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 full purchase 
        payment amount specified in subdivision 2. 
           Sec. 66.  Minnesota Statutes 2004, section 356A.06, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
        SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
        authorized by law or bylaws, a covered pension plan not 
        described by subdivision 6, paragraph (a), may invest its assets 
        only in accordance with this subdivision. 
           (b)  [SECURITIES GENERALLY.] The covered pension plan has 
        the authority to purchase, sell, lend, or exchange the 
        securities specified in paragraphs (c) to (g), including puts 
        and call options and future contracts traded on a contract 
        market regulated by a governmental agency or by a financial 
        institution regulated by a governmental agency.  These 
        securities may be owned as units in commingled trusts that own 
        the securities described in paragraphs (c) to (g).  
           (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
        invest funds in governmental bonds, notes, bills, mortgages, and 
        other evidences of indebtedness provided the issue is backed by 
        the full faith and credit of the issuer or the issue is rated 
        among the top four quality rating categories by a nationally 
        recognized rating agency.  The obligations in which funds may be 
        invested under this paragraph include guaranteed or insured 
        issues of (1) the United States, its agencies, its 
        instrumentalities, or organizations created and regulated by an 
        act of Congress; (2) Canada and its provinces, provided the 
        principal and interest is payable in United States dollars; (3) 
        the states and their municipalities, political subdivisions, 
        agencies, or instrumentalities; (4) the International Bank for 
        Reconstruction and Development, the Inter-American Development 
        Bank, the Asian Development Bank, the African Development Bank, 
        or any other United States government sponsored organization of 
        which the United States is a member, provided the principal and 
        interest is payable in United States dollars. 
           (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
        invest funds in bonds, notes, debentures, transportation 
        equipment obligations, or any other longer term evidences of 
        indebtedness issued or guaranteed by a corporation organized 
        under the laws of the United States or any state thereof, or the 
        Dominion of Canada or any province thereof if they conform to 
        the following provisions: 
           (1) the principal and interest of obligations of 
        corporations incorporated or organized under the laws of the 
        Dominion of Canada or any province thereof must be payable in 
        United States dollars; and 
           (2) obligations must be rated among the top four quality 
        categories by a nationally recognized rating agency. 
           (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
        invest funds in bankers acceptances, certificates of deposit, 
        deposit notes, commercial paper, mortgage participation 
        certificates and pools, asset backed securities, repurchase 
        agreements and reverse repurchase agreements, guaranteed 
        investment contracts, savings accounts, and guaranty fund 
        certificates, surplus notes, or debentures of domestic mutual 
        insurance companies if they conform to the following provisions: 
           (i) bankers acceptances and deposit notes of United States 
        banks are limited to those issued by banks rated in the highest 
        four quality categories by a nationally recognized rating 
        agency; 
           (ii) certificates of deposit are limited to those issued by 
        (A) United States banks and savings institutions that are rated 
        in the highest four quality categories by a nationally 
        recognized rating agency or whose certificates of deposit are 
        fully insured by federal agencies; or (B) credit unions in 
        amounts up to the limit of insurance coverage provided by the 
        National Credit Union Administration; 
           (iii) commercial paper is limited to those issued by United 
        States corporations or their Canadian subsidiaries and rated in 
        the highest two quality categories by a nationally recognized 
        rating agency; 
           (iv) mortgage participation or pass through certificates 
        evidencing interests in pools of first mortgages or trust deeds 
        on improved real estate located in the United States where the 
        loan to value ratio for each loan as calculated in accordance 
        with section 61A.28, subdivision 3, does not exceed 80 percent 
        for fully amortizable residential properties and in all other 
        respects meets the requirements of section 61A.28, subdivision 
        3; 
           (v) collateral for repurchase agreements and reverse 
        repurchase agreements is limited to letters of credit and 
        securities authorized in this section; 
           (vi) guaranteed investment contracts are limited to those 
        issued by insurance companies or banks rated in the top four 
        quality categories by a nationally recognized rating agency or 
        to alternative guaranteed investment contracts where the 
        underlying assets comply with the requirements of this 
        subdivision; 
           (vii) savings accounts are limited to those fully insured 
        by federal agencies; and 
           (viii) asset backed securities must be rated in the top 
        four quality categories by a nationally recognized rating agency.
           (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
        not apply to certificates of deposit and collateralization 
        agreements executed by the covered pension plan under clause 
        (1), item (ii). 
           (3) In addition to investments authorized by clause (1), 
        item (iv), the covered pension plan may purchase from the 
        Minnesota Housing Finance Agency all or any part of a pool of 
        residential mortgages, not in default, that has previously been 
        financed by the issuance of bonds or notes of the agency.  The 
        covered pension plan may also enter into a commitment with the 
        agency, at the time of any issue of bonds or notes, to purchase 
        at a specified future date, not exceeding 12 years from the date 
        of the issue, the amount of mortgage loans then outstanding and 
        not in default that have been made or purchased from the 
        proceeds of the bonds or notes.  The covered pension plan may 
        charge reasonable fees for any such commitment and may agree to 
        purchase the mortgage loans at a price sufficient to produce a 
        yield to the covered pension plan comparable, in its judgment, 
        to the yield available on similar mortgage loans at the date of 
        the bonds or notes.  The covered pension plan may also enter 
        into agreements with the agency for the investment of any 
        portion of the funds of the agency.  The agreement must cover 
        the period of the investment, withdrawal privileges, and any 
        guaranteed rate of return. 
           (f)  [CORPORATE STOCKS.] The covered pension plan may 
        invest funds in stocks or convertible issues of any corporation 
        organized under the laws of the United States or the states 
        thereof, the Dominion of Canada or its provinces, or any 
        corporation listed on the New York Stock Exchange or the 
        American Stock Exchange, if they conform to the following 
        provisions: 
           (1) the aggregate value of corporate stock investments, as 
        adjusted for realized profits and losses, must not exceed 85 
        percent of the market or book value, whichever is less, of a 
        fund, less the aggregate value of investments according to 
        subdivision 6 paragraph (g); 
           (2) investments must not exceed five percent of the total 
        outstanding shares of any one corporation. 
           (g)  [OTHER INVESTMENTS.] (1) In addition to the 
        investments authorized in paragraphs (b) to (f), and subject to 
        the provisions in clause (2), the covered pension plan may 
        invest funds in:  
           (i) venture capital investment businesses through 
        participation in limited partnerships and corporations; 
           (ii) real estate ownership interests or loans secured by 
        mortgages or deeds of trust through investment in limited 
        partnerships, bank sponsored collective funds, trusts, and 
        insurance company commingled accounts, including separate 
        accounts; 
           (iii) regional and mutual funds through bank sponsored 
        collective funds and open-end investment companies registered 
        under the Federal Investment Company Act of 1940; 
           (iv) resource investments through limited partnerships, 
        private placements, and corporations; and 
           (v) international securities. 
           (2) The investments authorized in clause (1) must conform 
        to the following provisions:  
           (i) the aggregate value of all investments made according 
        to clause (1) may not exceed 35 percent of the market value of 
        the fund for which the covered pension plan is investing; 
           (ii) there must be at least four unrelated owners of the 
        investment other than the state board covered pension plan for 
        investments made under clause (1), item (i), (ii), (iii), or 
        (iv); 
           (iii) covered pension plan participation in an investment 
        vehicle is limited to 20 percent thereof for investments made 
        under clause (1), item (i), (ii), (iii), or (iv); and 
           (iv) covered pension plan participation in a limited 
        partnership does not include a general partnership interest or 
        other interest involving general liability.  The covered pension 
        plan may not engage in any activity as a limited partner which 
        creates general liability. 
           Sec. 67.  Minnesota Statutes 2004, section 422A.01, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EMPLOYEE.] "Employee" means any a person who is 
        not exempted from the contributing class pursuant to under 
        section 422A.09, subdivision 3, who is was employed before July 
        1, 1979, by and paid, in whole or in part, by the city or any of 
        its boards, departments, or commissions, operated as a 
        department of city government or independently if financed in 
        whole or in part by city funds, including any a person who was 
        employed by a public corporation as herein defined, and 
        including any a person who was employed before July 1, 1979, by 
        Special School District No. 1, and who is not a member of any 
        other retirement system, and also including any a person who is 
        was employed before July 1, 1973, by the county of Hennepin, who 
        was entitled by law to elect and has elected to retain 
        membership in the municipal Minneapolis Employees Retirement 
        Fund and who makes any required member contributions to the fund 
        and who remains so employed. 
           Sec. 68.  Minnesota Statutes 2004, section 422A.06, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DISABILITY BENEFIT FUND.] (a) The required 
        reserves for disability allowances which become effective after 
        December 31, 1973, shall be transferred from the deposit 
        accumulation fund to the A disability benefit fund is 
        established, containing the required reserves for disability 
        allowances under this chapter.  A proportionate share of income 
        from investments shall must be allocated to this fund.  
        There shall must be paid from this fund the disability 
        allowances which become effective after December 31, 1973 
        payable under this chapter. 
           (b) In the event of the termination of any disability 
        allowance for any reason other than the death of the recipient, 
        the balance of the required reserves for the disability 
        allowance as of the date of the termination shall must be 
        transferred from the disability benefit fund to the deposit 
        accumulation fund. 
           (c) At the end of each fiscal year, as part of the annual 
        actuarial valuation, a determination shall must be made of the 
        required reserves for all disability allowances being paid from 
        the disability benefit fund.  Any excess of assets over 
        actuarial required reserves in the disability benefit fund shall 
        must be transferred to the deposit accumulation fund.  Any 
        excess of actuarial reserves over assets in the disability 
        benefit fund shall must be funded by a transfer of the 
        appropriate amount of assets from the deposit accumulation fund. 
           Sec. 69.  Minnesota Statutes 2004, section 422A.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBER CONTRIBUTION RATE; DEDUCTIONS.] (a) 
        There shall must be deducted and withheld from the basic salary, 
        pay or compensation of each employee in the contributing class, 
        prior to January 1, 1980 an amount equal to 7-1/4 percent, after 
        December 31, 1979 but prior to January 1, 1981 an amount equal 
        to 8-1/4 percent and after December 31, 1980 an amount equal to 
        9-1/4 percent of such salary, pay or compensation, except as 
        hereinafter provided.  
           (b) The retirement board may increase the percentage rate 
        of contribution to the retirement fund of any employee or 
        employees for the purpose of establishing and maintaining on an 
        actuarial basis a plan of insurance, survivors' benefits, or 
        other type of benefit or benefits, the cost of which shall must 
        be paid out of such extra percentage so authorized and deducted 
        from the employee's compensation, except as hereinafter 
        provided.  Any plan or plans so established and placed in 
        operation may be amended from time to time, or may be abandoned, 
        but if abandoned, any surplus remaining from the operation of a 
        plan shall must be the property of the fund, and shall must be 
        credited to the reserve for loss in investment account. 
           Sec. 70.  Minnesota Statutes 2004, section 422A.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONSENT TO DEDUCTIONS MANDATORY MEMBER 
        CONTRIBUTIONS.] Every employee to whom sections 422A.01 to 
        422A.25 this chapter applies who shall continue in the service 
        after the passage of Laws 1919, chapter 522, as well as every 
        person to whom sections 422A.01 to 422A.25 applies who may 
        hereafter be appointed to a position or place, shall be is 
        deemed to consent and agree to the deductions made and provided 
        for herein, and payment with such reductions, for service, shall 
        be are a full and complete discharge and acquittance of all 
        claims and demands for all services rendered by such person 
        during the period covered by such payment; except the person's 
        claim to the benefits to which the person may be entitled under 
        the provisions of sections 422A.01 to 422A.25 this chapter.  
           Sec. 71.  Minnesota Statutes 2004, section 422A.22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RETENTION; TRANSFER.] (a) If an employee 
        to whom sections 422A.01 to 422A.25 this chapter applies becomes 
        absolutely separated from the active service prior to before 
        attaining the minimum retirement age established in section 
        422A.13, the employee is entitled to a refund of the net 
        accumulated amount of deduction from salary, pay, or 
        compensation, made for the purpose of accumulating a fund from 
        which to pay retirement allowances, shall be returned to such 
        employee, with interest at the annual compound rate of six 
        percent.  
           (b) Any contributing employee who separates from a 
        department, board or commission of the city whose employees are 
        covered by a fund organized under sections 422A.01 to 422A.25 
        this chapter, and becomes an employee of a department or board 
        of the same city, whose employees are covered by a retirement 
        fund or relief association by whatever name known, organized 
        under any other law and supported in whole or in part by taxes 
        on the same city, shall have has the option of: 
           (1) retaining their membership in the fund organized under 
        sections 422A.01 to 422A.25 this chapter, regardless of the 
        provisions of any law, rule, bylaw or other action requiring 
        membership in any other retirement fund or relief association 
        however organized.; or 
           (2) transferring to the fund or association covering the 
        employees of the department or board to which they are 
        transferring, providing they are eligible for membership therein.
           (c) Any contributing employee who elects to transfer to 
        another fund or association as herein provided in paragraph (b), 
        clause (2), shall must make such election within one year from 
        the date of separation from the city service covered by this 
        fund.  If the contributing employee elects to transfer to 
        another fund as herein provided, the employee is entitled to a 
        refund of the net accumulated contributions made by such 
        employee to the fund organized under sections 422A.01 to 
        422A.25, shall be returned to the employee this chapter with 
        interest at the annual compound rate of six percent.  
           Sec. 72.  Minnesota Statutes 2004, section 422A.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LIMITATION ON ELIGIBILITY.] No employee of the 
        city shall be is eligible to be a member of, or receive benefits 
        from, more than one retirement plan or fund of the city for the 
        same period of service.  
           Sec. 73.  Minnesota Statutes 2004, section 422A.22, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
        of an active member prior to before the employee's termination 
        of active service, there shall be paid to the beneficiary or 
        beneficiaries designated by the member on a form specified by 
        the executive director and filed with the retirement board, are 
        entitled to receive the net accumulated employee deductions from 
        salary, pay, or compensation, including interest under 
        subdivision 1, paragraph (a), compounded annually to the date of 
        the member's death.  The amount must not include any 
        contributions made by the employee or on the employee's behalf, 
        or any interest or investment earnings on those contributions, 
        which were allocated to the survivor benefit fund under section 
        422A.06, subdivision 6. 
           (b) If the employee fails to make a designation, or if the 
        beneficiary or beneficiaries designated by the employee 
        predeceases the employee, the benefit specified in paragraph (a) 
        must be paid to the deceased employee's estate is entitled to 
        the benefit specified in paragraph (a). 
           (c) A benefit payable under this subdivision is in addition 
        to any applicable survivor benefit under section 422A.23. 
           Sec. 74.  Minnesota Statutes 2004, section 422A.22, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 
        Any A person who has received a refund from the municipal 
        Minneapolis Employees Retirement Fund, and who is a member of a 
        public retirement system included in section 422A.16, 
        subdivision 8, may repay such refund with interest at a compound 
        annual rate of 8.5 percent to the municipal Minneapolis 
        Employees Retirement Fund.  If a refund is repaid to the fund 
        and if more than one refund has been received from the fund, all 
        refunds must be repaid.  Repayment shall must be made as 
        provided in sections 422A.01 to 422A.25 this chapter.  
           Sec. 75.  Minnesota Statutes 2004, section 422A.231, is 
        amended to read: 
           422A.231 [COST ALLOCATION.] 
           (a) Notwithstanding any law to the contrary, all current 
        and future contribution requirements due to this article are 
        payable by the participating contributing employing units other 
        than the state of Minnesota. 
           (b) In each actuarial valuation of the retirement fund, the 
        actuary retained by the Legislative Commission on Pensions and 
        Retirement under section 356.214 shall include an exhibit on the 
        impact of the benefit increases contained in this article on the 
        survivor benefit fund.  The actuary shall calculate the expected 
        change in the present value of the future benefits payable from 
        the survivor benefit fund attributable to this article, using 
        the actuarial method and assumptions applicable to the 
        Minneapolis Employees Retirement Fund, from the prior actuarial 
        valuation and shall compare that result with the actual change 
        in the present value of future benefits payable from the 
        survivor benefit fund attributable to this article from the 
        prior actuarial valuation. 
           (c) The executive director shall assess each participating 
        employer, other than the state of Minnesota, its proportional 
        share of the net increase amount calculated under paragraph 
        (b).  The assessment must be made on the first business day of 
        the following February, plus compound interest at an annual rate 
        of six percent on the amount from the actuarial valuation date 
        to the date of payment. 
           Sec. 76.  Minnesota Statutes 2004, section 422A.24, is 
        amended to read: 
           422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 
           No money payable pursuant to this chapter shall be 
        assignable either in law or equity or be subject to execution, 
        levy, attachment, garnishment, or other legal process, except as 
        provided in section 518.58, 518.581, or 518.6111, nor shall any 
        of the proceeds of payments due pursuant to this chapter be 
        subject to the inheritance tax provisions of this state upon 
        transfer to a surviving spouse or minor or dependent child of 
        the decedent or a trust for their benefit. The provisions of 
        section 356.401 apply to the Minneapolis employees retirement 
        plan.  
           Sec. 77.  Minnesota Statutes 2004, section 423B.17, is 
        amended to read: 
           423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 
           A payment made by the association under a provision of 
        sections 423B.01 to 423B.18, as amended, is exempt from legal 
        process except as provided in section 518.58, 518.581, or 
        518.6111.  No person entitled to a payment may assign the same.  
        The association may not recognize an assignment or pay a sum on 
        account of an assignment. The provisions of section 356.401 
        apply to the Minneapolis Police Relief Association.  
           Sec. 78.  Minnesota Statutes 2004, section 423C.09, is 
        amended to read: 
           423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 
           All payments made, or to be made, by the association under 
        this chapter shall be totally exempt from garnishment, 
        execution, or other legal process, except as provided in section 
        518.58, 518.581, or 518.6111.  No person entitled to a payment 
        shall have the right to assign the name, nor shall the 
        association have authority to recognize any assignment or to pay 
        any sum on account thereof.  Any attempt to transfer any right 
        or claim, or any part thereof, shall be void. The provisions of 
        section 356.401 apply to the Minneapolis Firefighters Relief 
        Association.  
           Sec. 79.  Minnesota Statutes 2004, section 490.126, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 
        the money, annuities, or other benefits provided in this chapter 
        is assignable either in law or equity or is subject to 
        execution, levy, attachment, garnishment, or other legal 
        process, except as provided in section 518.58, 518.581, or 
        518.6111. The provisions of section 356.401 apply to the judges 
        retirement plan.  
           Sec. 80.  [REVISOR'S INSTRUCTION.] 
           In the next edition and subsequent editions of Minnesota 
        Statutes, the revisor of statutes shall replace the reference to 
        "sections 422A.01 to 422A.25" with the reference to "this 
        chapter" wherever the reference appears in Minnesota Statutes, 
        chapter 422A. 
           Sec. 81.  [REPEALER.] 
           (a) Minnesota Statutes 2004, section 352.119, subdivision 
        1, is repealed. 
           (b) Minnesota Statutes 2004, sections 353.34, subdivision 
        3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 
        4; 353.663; 353.74; and 353.75, are repealed. 
           (c) Minnesota Statutes 2004, section 354.59, is repealed. 
           (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 
        2 and 5; and 422A.221, are repealed. 
           (e) Minnesota Statutes 2004, sections 352.15, subdivision 
        1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 
        repealed.  
           Sec. 82.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 73 and 75 to 81 are effective July 1, 
        2005. 
           (b) Section 74 is effective January 1, 2006. 
           (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 
        79, and 81, paragraph (e), do not apply to any cause of action 
        that is proceeding on the date of enactment or to any cause of 
        action for which the applicable statute of limitations has not 
        expired as of the date of enactment. 

                                   ARTICLE 11
                             LOCAL RETIREMENT PLANS
           Section 1.  Minnesota Statutes 2004, section 69.77, 
        subdivision 4, is amended to read: 
           Subd. 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 must be determined on or before the submission date 
        established by the municipality under subdivision 5. 
           (b) The financial requirements of the relief association 
        for the following calendar year 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 15, and 356.216, as required under subdivision 
        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 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 under 
        clauses (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 under clauses (1) and (2) 
        constitute the financial requirements of the relief association 
        for the following year.  The financial requirement elements are: 
           (1) the normal level cost requirement for the following 
        year, expressed as a dollar amount, which 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 change in the active membership, for the following 
        year; 
           (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 determined 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.  The administrative expenses are those 
        authorized under section 69.80.  No amount of administrative 
        expenses under this clause are to be included in the financial 
        requirements of the Minneapolis Firefighters Relief Association 
        or the Minneapolis Police Relief Association; and 
           (3) to the dollar amount of normal cost and expenses 
        determined under clauses (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, the Fairmont Police Relief Association, the 
        Minneapolis Firefighters Relief Association, and the Virginia 
        Fire Department Relief Association, by the date determined under 
        section 356.216, paragraph (a), clause (2), for the Bloomington 
        Fire Department Relief Association, and by December 31, 2020, 
        for the Minneapolis Police Relief Association, 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 8.  The amortization date specified 
        in this clause applies to all local police or salaried 
        firefighters' relief associations and that date supersedes any 
        amortization date specified in any applicable special law. 
           (d) The minimum obligation of the municipality 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 under 
        sections 69.011 to 69.051 receivable by the relief association 
        after any allocation made under section 69.031, subdivision 5, 
        paragraph (b), clause (2), or 423A.01, subdivision 2, clause 
        (6), from the local police and salaried firefighters' relief 
        association amortization aid program established under section 
        423A.02, subdivision 1, from the supplementary amortization 
        state-aid program established under section 423A.02, subdivision 
        1a, and from the additional amortization state aid under section 
        423A.02, subdivision 1b. 
           Sec. 2.  Minnesota Statutes 2004, section 356.215, 
        subdivision 8, is amended to read: 
           Subd. 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 
             Fairmont Police Relief 
                 Association                      5.0           5.0 
             Minneapolis Fire Department 
                 Relief Association               6.0           6.0 
             Virginia Fire Department
                 Relief Association               5.0           5.0 
             Bloomington Fire Department
                 Relief Association               6.0           6.0
             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 
             Fairmont Police Relief 
                 Association                              3.5 
             Minneapolis Fire Department Relief 
                 Association                              4.0 
             Virginia Fire Department
                 Relief Association                       3.5 
             Bloomington Fire Department Relief 
                 Association                              4.0
           (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, 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% 6.50% 6.90% 7.7500
             17  6.90  6.90  11.50  8.15  8.00  6.50  6.90  7.7500
             18  6.85  6.85  11.50  8.10  8.00  6.50  6.90  7.7500
             19  6.80  6.80  11.50  8.05  8.00  6.50  6.90  7.7500
             20  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.7500
             21  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.1454
             22  6.75  6.40  11.00  6.00  6.90  6.50  6.90  7.0725
             23  6.75  6.40  10.50  6.00  6.85  6.50  6.85  7.0544
             24  6.75  6.40  10.00  6.00  6.80  6.50  6.80  7.0363
             25  6.75  6.40   9.50  6.00  6.75  6.50  6.75  7.0000 
             26  6.75  6.36   9.20  6.00  6.70  6.50  6.70  7.0000
             27  6.75  6.32   8.90  6.00  6.65  6.50  6.65  7.0000 
             28  6.75  6.28   8.60  6.00  6.60  6.50  6.60  7.0000
             29  6.75  6.24   8.30  6.00  6.55  6.50  6.55  7.0000
             30  6.75  6.20   8.00  6.00  6.50  6.50  6.50  7.0000
             31  6.75  6.16   7.80  6.00  6.45  6.50  6.45  7.0000
             32  6.75  6.12   7.60  6.00  6.40  6.50  6.40  7.0000
             33  6.75  6.08   7.40  6.00  6.35  6.50  6.35  7.0000
             34  6.75  6.04   7.20  6.00  6.30  6.50  6.30  7.0000
             35  6.75  6.00   7.00  6.00  6.25  6.50  6.25  7.0000
             36  6.75  5.96   6.80  6.00  6.20  6.50  6.20  6.9019
             37  6.75  5.92   6.60  6.00  6.15  6.50  6.15  6.8074
             38  6.75  5.88   6.40  5.90  6.10  6.50  6.10  6.7125
             39  6.75  5.84   6.20  5.80  6.05  6.50  6.05  6.6054
             40  6.75  5.80   6.00  5.70  6.00  6.50  6.00  6.5000
             41  6.75  5.76   5.90  5.60  5.90  6.50  5.95  6.3540
             42  6.75  5.72   5.80  5.50  5.80  6.50  5.90  6.2087
             43  6.65  5.68   5.70  5.40  5.70  6.50  5.85  6.0622
             44  6.55  5.64   5.60  5.30  5.60  6.50  5.80  5.9048
             45  6.45  5.60   5.50  5.20  5.50  6.50  5.75  5.7500
             46  6.35  5.56   5.45  5.10  5.40  6.40  5.70  5.6940
             47  6.25  5.52   5.40  5.00  5.30  6.30  5.65  5.6375
             48  6.15  5.48   5.35  5.00  5.20  6.20  5.60  5.5822
             49  6.05  5.44   5.30  5.00  5.10  6.10  5.55  5.5404
             50  5.95  5.40   5.25  5.00  5.00  6.00  5.50  5.5000
             51  5.85  5.36   5.25  5.00  5.00  5.90  5.45  5.4384
             52  5.75  5.32   5.25  5.00  5.00  5.80  5.40  5.3776
             53  5.65  5.28   5.25  5.00  5.00  5.70  5.35  5.3167
             54  5.55  5.24   5.25  5.00  5.00  5.60  5.30  5.2826
             55  5.45  5.20   5.25  5.00  5.00  5.50  5.25  5.2500 
             56  5.35  5.16   5.25  5.00  5.00  5.40  5.20  5.2500
             57  5.25  5.12   5.25  5.00  5.00  5.30  5.15  5.2500
             58  5.25  5.08   5.25  5.10  5.00  5.20  5.10  5.2500
             59  5.25  5.04   5.25  5.20  5.00  5.10  5.05  5.2500
             60  5.25  5.00   5.25  5.30  5.00  5.00  5.00  5.2500
             61  5.25  5.00   5.25  5.40  5.00  5.00  5.00  5.2500
             62  5.25  5.00   5.25  5.50  5.00  5.00  5.00  5.2500
             63  5.25  5.00   5.25  5.60  5.00  5.00  5.00  5.2500
             64  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             65  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             66  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             67  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             68  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             69  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             70  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
             71  5.25  5.00         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. 3.  Minnesota Statutes 2004, 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 that govern the 
        contents of actuarial valuations 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 must be 
        the maximum rate of salary 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 11, the appropriate amortization target 
        date specified in section 69.77, subdivision 4, or 69.773, 
        subdivision 4, clause (c), must be used in calculating any 
        required amortization contribution, except that if the actuarial 
        report for the Bloomington Fire Department Relief Association 
        indicates an unfunded actuarial accrued liability, the unfunded 
        obligation is to be amortized on a level dollar basis by 
        December 31 of the year occurring 20 years later, and if 
        subsequent actuarial valuations for the Bloomington Fire 
        Department Relief Association determine a net actuarial 
        experience loss incurred during the year which ended as of the 
        day before the most recent actuarial valuation date, any 
        unfunded liability due to that loss is to be amortized on a 
        level dollar basis by December 31 of the year occurring 20 years 
        later and except that the amortization date for the Minneapolis 
        Police Relief Association is December 31, 2020; 
           (3) in addition to the tabulation of active members and 
        annuitants provided for in section 356.215, subdivision 13, the 
        member contributions for active members for the calendar year 
        and the prospective annual retirement annuities under the 
        benefit plan for active members must be reported; 
           (4) actuarial valuations required under section 69.773, 
        subdivision 2, must be made at least every four years and 
        actuarial valuations required under section 69.77 shall be made 
        annually; 
           (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 must include the 
        following required reserves: 
                 (i) For active members 
              1.  Retirement benefits 
              2.  Disability benefits 
              3.  Refund liability due to death or withdrawal 
              4.  Survivors' benefits 
                 (ii) For deferred annuitants' benefits 
                 (iii) For former members without vested rights 
                 (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 must 
        be shown for additional benefits, if any, which may not be 
        appropriately included in the reserves listed above; and 
           (6) actuarial valuations are due by the first day of the 
        seventh month after the end of the fiscal year which the 
        actuarial valuation covers. 
           (b) For the Minneapolis Firefighters Relief Association or 
        the Minneapolis Police Relief Association, 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. 4.  Minnesota Statutes 2004, section 383B.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ESTABLISHMENT OF ACCOUNT; CONTRIBUTIONS.] The 
        county of Hennepin shall deduct from the salary of every person 
        who is eligible for coverage and who elected to retain or obtain 
        coverage by the Hennepin County supplemental retirement program 
        a sum equal to one percent of the total salary of the person.  
        Any classified or unclassified employee who is employed in 
        subsidized on-the-job training, work experience or public 
        service employment as an enrollee under the federal 
        Comprehensive Employment and Training Act shall not be included 
        in the supplemental retirement account from and after March 30, 
        1978 unless the employee has as of the later of March 30, 1978 
        or the date of employment sufficient service credit in the 
        public employees retirement fund or the Minneapolis municipal 
        employees retirement fund, whichever is applicable, to meet the 
        minimum vesting requirements for a deferred retirement annuity, 
        or the county agrees in writing to make the required employer 
        contributions on account of the individual from revenue sources 
        other than funds provided under the federal Comprehensive 
        Employment and Training Act, or the employee agrees in writing 
        to make the required employer contribution in addition to the 
        employee contribution.  The deduction shall be made in the same 
        manner as other retirement deductions are made from the salary 
        of the person.  An amount equal to the amounts deducted during 
        each payroll period shall be contributed by the county of 
        Hennepin.  The total amount deducted and contributed shall be 
        deposited to the credit of the supplemental retirement account 
        in the treasury of the county of Hennepin a separate account 
        administered by the Minnesota State Retirement System on behalf 
        of Hennepin County.  The Hennepin County supplemental retirement 
        account is hereby established as an account separate and 
        distinct from other funds, accounts, or assets of the county of 
        Hennepin. 
           Sec. 5.  Minnesota Statutes 2004, section 383B.47, is 
        amended to read: 
           383B.47 [PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT 
        FUND.] 
           With the moneys deposited to the credit of the supplemental 
        retirement account in the treasury of the county of Hennepin, 
        the county of Hennepin, the Minnesota State Retirement System 
        shall purchase shares on behalf of Hennepin County in the 
        accounts of the Minnesota supplemental investment fund as 
        provided in section 383B.48. 
           Sec. 6.  Minnesota Statutes 2004, section 383B.48, is 
        amended to read: 
           383B.48 [BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.] 
           At the time a person becomes eligible for coverage and 
        elects to obtain coverage by the Hennepin County supplemental 
        retirement program and before November 1 of each subsequent 
        year, A participant in the Hennepin County supplemental 
        retirement program shall indicate in writing on a form provided 
        by the county of Hennepin the account of the Minnesota 
        supplemental investment fund in which the participant wishes 
        salary deductions and county matching contributions attributable 
        to salary deductions to be invested for the subsequent 12-month 
        period such time as allowed by the Minnesota State Retirement 
        System.  For that 12-month period, The county of Hennepin 
        Minnesota State Retirement System shall purchase with the salary 
        deductions and county matching funds attributable to the salary 
        deductions shares in the appropriate account of the Minnesota 
        supplemental investment fund in accordance with the indicated 
        preferences of the participant.  However, the county of Hennepin 
        has the authority to determine which accounts of the Minnesota 
        supplemental investment fund will be available for participant 
        investment.  The shares purchased must stand in the name of the 
        county of Hennepin.  A record must be kept by the county of 
        Hennepin Minnesota State Retirement System indicating the number 
        of shares in each account of the Minnesota supplemental 
        investment fund purchased with the salary deductions and county 
        matching funds attributable to the salary deductions of each 
        participant.  The record must be known as the "participant's 
        share account record."  The participant's share account record 
        must show, in addition to the number of shares in the account, 
        any cash balance of salary deductions or county matching funds 
        attributable to those deductions which stand uninvested in 
        shares.  At the option of the county of Hennepin, and subject to 
        any terms and conditions established and communicated in writing 
        by the county to a participant, the participant may designate no 
        more often than once each calendar quarter month that prior 
        salary deductions and county matching contributions attributable 
        to the salary deductions, together with any interest earned, be 
        reinvested in another account of the Minnesota supplemental 
        investment fund made available by the county of Hennepin. 
           Sec. 7.  Minnesota Statutes 2004, section 383B.49, is 
        amended to read: 
           383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF 
        SHARES.] 
           When requested to do so, in writing, on forms provided by 
        the county Minnesota State Retirement System, by a participant, 
        surviving spouse, a guardian of a surviving child or a personal 
        representative, whichever is applicable, the county of Hennepin 
        Minnesota State Retirement System shall on behalf of Hennepin 
        County redeem shares in the accounts of the Minnesota 
        supplemental investment fund standing in a participant's share 
        account record under the following circumstances and in 
        accordance with the laws and regulations governing the Minnesota 
        supplemental investment fund: 
           (1) A participant who is no longer employed by the county 
        of Hennepin is entitled to receive the cash realized on the 
        redemption of the shares to the credit of the participant's 
        share account record of the person.  The participant may request 
        the redemption of all or a portion of the shares in the 
        participant's share account record of the person, but may not 
        request more than one redemption in any one calendar year.  If 
        only a portion of the shares in the participant's share account 
        record is requested to be redeemed the person may request to 
        redeem not less than 20 percent of the shares in any one 
        calendar year and the redemption must be completed in no more 
        than five years.  The person may select annual redemption in a 
        single lump sum or in monthly payments.  An election is 
        irrevocable except that a participant may request an amendment 
        of the election to redeem all of the person's remaining shares.  
        All requests under this paragraph are subject to application to 
        and approval of the Hennepin County administrator, in the sole 
        discretion of the administrator Minnesota State Retirement 
        System upon verification by Hennepin County through the county 
        administrator of the recipient's eligibility to redeem funds.  
           (2) In the event of the death of a participant leaving a 
        surviving spouse, the surviving spouse is entitled to receive 
        the cash realized on the redemption of all or a portion of the 
        shares in the participant's share account record of the deceased 
        spouse, but in no event may the spouse request more than one 
        redemption in each calendar year.  If only a portion of the 
        shares in the participant's share account record is requested to 
        be redeemed, the surviving spouse may request the redemption of 
        not less than 20 percent of the shares in any one calendar year. 
        The surviving spouse may elect annual redemption in a single 
        lump sum payment or in monthly payments.  Redemption must be 
        completed in no more than five years.  An election is 
        irrevocable except that the surviving spouse may request an 
        amendment of the election to redeem all of the participant's 
        remaining shares.  All requests under this paragraph are subject 
        to application to and approval of the Hennepin County 
        administrator, in the sole discretion of the 
        administrator Minnesota State Retirement System upon 
        verification by Hennepin County through the county administrator 
        of the recipient's eligibility to redeem funds.  Upon the death 
        of the surviving spouse, any shares remaining in the 
        participant's share account record must be redeemed on behalf of 
        Hennepin County by the county of Hennepin Minnesota State 
        Retirement System and the cash realized from the redemption 
        distributed to the estate of the surviving spouse. 
           (3) In the event of the death of a participant leaving no 
        surviving spouse, but leaving a minor surviving child or minor 
        surviving children, the guardianship estate of the minor child 
        is, or the guardianship estates of the minor children are, 
        entitled to receive the cash realized on the redemption of all 
        shares to the credit of the participant's share account record 
        of the deceased participant.  In the event of minor surviving 
        children, the cash realized must be paid in equal shares to the 
        guardianship estates of the minor surviving children. 
           (4) In the event of the death of a participant leaving no 
        surviving spouse and no minor surviving children, the estate of 
        the deceased participant is entitled to receive the cash 
        realized on the redemption of all shares to the credit of the 
        participant's share account record of the deceased participant. 
           Sec. 8.  [383B.491] [MINNESOTA STATE RETIREMENT SYSTEM 
        BILLING AUTHORITY.] 
           The Minnesota State Retirement System executive director is 
        authorized to enter into an interagency agreement with Hennepin 
        County under which the Minnesota State Retirement System would 
        directly bill the county for the cost of the Minnesota State 
        Retirement System's administration of the Hennepin County 
        Supplemental Retirement Plan.  
           Sec. 9.  Minnesota Statutes 2004, section 423B.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTINUATION OF BOARD.] Notwithstanding the 
        provisions of section 423A.01, subdivision 2, or any other law, 
        the board of trustees and its successors established under 
        subdivision 1 shall continue to govern the association until 
        there are no more than 100 225 members of the police pension 
        fund.  The fund thereafter must become a trust fund in 
        accordance with section 423A.01, subdivision 2. 
           Sec. 10.  Minnesota Statutes 2004, section 423B.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MINNEAPOLIS POLICE; PERSONS ENTITLED TO 
        RECEIVE PENSIONS.] The association shall grant pensions payable 
        from the police pension fund in monthly installments to persons 
        entitled to pensions in the manner and for the following 
        purposes. 
           (a) When the actuarial value of assets of the fund 
        according to the most recent annual actuarial valuation 
        performed in accordance with sections 356.215 and 356.216 is 
        less than 90 percent of the actuarial accrued liabilities, An 
        active member or a deferred pensioner who has performed duty as 
        a member of the police department of the city for five years or 
        more, upon written application after retiring from duty and 
        reaching at least age 50, is entitled to be paid monthly for 
        life a service pension equal to eight units.  For full years of 
        service beyond five years, the service pension increases by 1.6 
        units for each full year, to a maximum of 40 units.  When the 
        actuarial value of assets of the fund according to the most 
        recent annual actuarial valuation prepared in accordance with 
        sections 356.215 and 356.216 is greater than 90 percent of 
        actuarial accrued liabilities,.  Active members, deferred 
        members, and service pensioners are entitled to a service 
        pension according to the following schedule: 
                       5 years           8.0 units
                       6 years           9.6 units
                       7 years          11.2 units
                       8 years          12.8 units
                       9 years          14.4 units
                      10 years          16.0 units
                      11 years          17.6 units
                      12 years          19.2 units
                      13 years          20.8 units
                      14 years          22.4 units
                      15 years          24.0 units
                      16 years          25.6 units
                      17 years          27.2 units
                      18 years          28.8 units
                      19 years          30.4 units
                                               A           B 
                      20 years          34.0 34.5 units  35.0 units
                      21 years          35.6 36.1 units  36.6 units
                      22 years          37.2 37.7 units  38.2 units
                      23 years          38.8 39.3 units  39.8 units
                      24 years          40.4 40.9 units  41.4 units
                      25 years          42.0 42.5 units  43.0 units
           Column A is applicable until December 31, 2005, and applies 
        retroactively to January 1, 2005, for a service pensioner who 
        retired before January 1, 2005.  Column B applies on and after 
        January 1, 2006. 
           Fractional years of service may not be used in computing 
        pensions. 
           (b) An active member who after five years' service but less 
        than 20 years' service with the police department of the city, 
        becomes superannuated so as to be permanently unable to perform 
        the person's assigned duties, is entitled to be paid monthly for 
        life a superannuation pension equal to four units for five years 
        of service and an additional two units for each full year of 
        service over five years and less than 20 years. 
           (c) An active member who is not eligible for a service 
        pension and who, while a member of the police department of the 
        city, becomes diseased or sustains an injury while in the 
        service that permanently unfits the member for the performance 
        of police duties is entitled to be paid monthly for life a 
        pension equal to 34 units while so disabled.  
           Sec. 11.  Minnesota Statutes 2004, section 423B.09, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [ADDITIONAL UNIT.] The additional half units 
        provided to members by subdivision 1 must also be provided under 
        the same terms and at the same time as applicable under 
        subdivision 1 to members who selected a joint annuity option 
        under subdivision 6 and must be in an amount that is actuarially 
        equivalent to the service pension and the automatic survivor 
        coverage for that additional unit. 
           Sec. 12.  Minnesota Statutes 2004, section 423B.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ENTITLEMENT; BENEFIT AMOUNT.] (a) The 
        surviving spouse of a deceased service pensioner, disability 
        pensioner, deferred pensioner, superannuation pensioner, or 
        active member, who was the legally married spouse of the 
        decedent, residing with the decedent, and who was married while 
        or before the time the decedent was on the payroll of the police 
        department, and who, if the deceased member was a service or 
        deferred pensioner, was legally married to the member for a 
        period of at least one year before retirement from the police 
        department, is entitled to a surviving spouse benefit.  The 
        surviving spouse benefit is equal to 22 22.5 units per month 
        until December 31, 2005, and 23 units per month beginning on 
        January 1, 2006, if the person is the surviving spouse of a 
        deceased active member or disabilitant.  The surviving spouse 
        benefit is equal to six units per month, plus an additional one 
        unit for each year of service to the credit of the decedent in 
        excess of five years, to a maximum of 22 22.5 units per month 
        until December 31, 2005, and 23 units per month beginning on 
        January 1, 2006, if the person is the surviving spouse of a 
        deceased service pensioner, deferred pensioner, or 
        superannuation pensioner.  The surviving spouse benefit is 
        payable for the life of the surviving spouse. 
           (b) A surviving child of a deceased service pensioner, 
        disability pensioner, deferred pensioner, superannuation 
        pensioner, or active member, who was living while the decedent 
        was an active member of the police department or was born within 
        nine months after the decedent terminated active service in the 
        police department, is entitled to a surviving child benefit.  
        The surviving child benefit is equal to eight units per month if 
        the person is the surviving child of a deceased active member or 
        disabilitant.  The surviving child benefit is equal to two units 
        per month, plus an additional four-tenths of one unit per month 
        for each year of service to the credit of the decedent in excess 
        of five years, to a maximum of eight units, if the person is the 
        surviving child of a deceased service pensioner, deferred 
        pensioner, or superannuation pensioner.  The surviving child 
        benefit is payable until the person attains age 18, or, if in 
        full-time attendance during the normal school year, in a school 
        approved by the board of directors, until the person receives a 
        bachelor's degree or attains the age of 22 years, whichever 
        occurs first.  In the event of the death of both parents leaving 
        a surviving child or children entitled to a surviving child 
        benefit as determined in this paragraph, the surviving child is, 
        or the surviving children are, entitled to a surviving child 
        benefit in such sums as determined by the board of directors to 
        be necessary for the care and education of such surviving child 
        or children, but not to exceed the family maximum benefit per 
        month, to the children of any one family.  
           (c) The surviving spouse and surviving child benefits are 
        subject to a family maximum benefit.  The family maximum benefit 
        is 41 units per month. 
           (d) A surviving spouse who is otherwise not qualified may 
        receive a benefit if the surviving spouse was married to the 
        decedent for a period of five years and was residing with the 
        decedent at the time of death.  The surviving spouse benefit is 
        the same as that provided in paragraph (a), except that if the 
        surviving spouse is younger than the decedent, the surviving 
        spouse benefit must be actuarially equivalent to a surviving 
        spouse benefit that would have been paid to the member's spouse 
        had the member been married to a person of the same age or a 
        greater age than the member's age before retirement. 
           (e) For any surviving spouse who began receiving survivor 
        benefits before January 1, 2005, the half-unit increase under 
        paragraph (a) is effective retroactive to January 1, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 423C.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SERVICE PENSION.] (a) An active A member who has 
        performed duty for the fire department for five years or more, 
        upon written application after retiring from duty and reaching 
        at least age 50, is entitled to be paid monthly for life a 
        service pension under paragraph (b). 
           (b) Based on the percentage that the actuarial value of 
        assets of the special fund equal to the actuarial accrued 
        liabilities of the special fund according to the most recent 
        annual actuarial valuation of the relief association prepared in 
        accordance with sections 356.215 and 356.216, The amount of the 
        service pension is as follows: 
        Length of    Service        Service          Service
        allowable    pension        pension          pension
        service      payable if     payable          payable if  
        credit       under 90       if greater       greater
                     percent        than 89.99       than 92.49  
                                    percent and      percent  
                                    less than        Number of   
                                    92.5 percent     units    
         5 years         -            8.0 units       8.0 units 
         6 years         -            9.6 units       9.6 units 
         7 years         -           11.2 units      11.2 units 
         8 years         -           12.8 units      12.8 units 
         9 years         -           14.4 units      14.4 units 
        10 years    16.0 units       16.0 units      16.0 units
        11 years    17.6 units       17.6 units      17.6 units 
        12 years    19.2 units       19.2 units      19.2 units  
        13 years    20.8 units       20.8 units      20.8 units  
        14 years    22.4 units       22.4 units      22.4 units  
        15 years    24.0 units       24.0 units      24.0 units 
        16 years    25.6 units       25.6 units      25.6 units 
        17 years    27.2 units       27.2 units      27.2 units 
        18 years    28.8 units       28.8 units      28.8 units 
        19 years    30.4 units       30.4 units      30.4 units 
        20 years    33.0 units       33.5 units      34.0 units 
        21 years    34.6 units       35.1 units      35.6 units 
        22 years    36.2 units       37.7 units      37.2 units 
        23 years    37.8 units       38.3 units      38.8 units 
        24 years    39.4 units       39.9 units      40.4 units 
        25 years 
         or more    41.0 units       41.5 units      42.0 units
           (c) A member entitled to a benefit under this subdivision 
        may elect to have it paid as an optional retirement annuity 
        pursuant to the conditions set forth in subdivision 8.  A member 
        receiving a benefit pursuant to subdivision 5 or 6 shall not 
        simultaneously be entitled to a benefit under this subdivision. 
           Sec. 14.  [423C.16] [RECOMPUTATION OF DISABLED BENEFIT 
        PROHIBITED.] 
           Notwithstanding section 423A.11, the Board of Trustees of 
        the Minneapolis Firefighters Relief Association shall not 
        recompute the disability benefit of a member who became 
        permanently disabled as the result of a service-related disease 
        or injury.  Any prior recomputation of a disabled member's 
        service-related disability pension shall be revoked upon the 
        member's request and upon the member's signed and sworn 
        agreement to waive any right to a recomputation of the benefit 
        in the future.  Non-service-related disability pension benefits 
        that were recomputed at full 25-year service pensions shall 
        remain in effect.  
           Sec. 15.  [NO REDUCTION OF BENEFITS.] 
           When a pension benefit is properly paid in accordance with 
        the laws governing the Minneapolis Police Relief Association or 
        the Minneapolis Firefighters Relief Association, whichever 
        apply, to any member, the dollar amount of the pension a member 
        received may not be reduced if the city of Minneapolis and the 
        collective bargaining agent representing active police officers 
        or firefighters enter into or are required to abide by an 
        agreement that would otherwise require the association to reduce 
        the dollar amount of a pension that had properly been paid to 
        any member. 
           Sec. 16.  [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 
        VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 
           (a) This section applies to consolidation of any 
        combination of two or more of the following volunteer 
        firefighter relief associations:  Aurora, Biwabik City, Hoyt 
        Lakes, and Palo. 
           (b) Notwithstanding Minnesota Statutes, section 424B.10, 
        subdivision 1, paragraph (a), the service pension to be paid by 
        the relief association existing after the consolidation is as 
        follows: 
           (1) for the service rendered by each individual volunteer 
        firefighter before the effective date of the consolidation, the 
        service pension amount is the amount payable to that volunteer 
        firefighter under the articles of incorporation or bylaws of the 
        consolidating volunteer firefighters relief association that the 
        firefighter was a member of immediately before the 
        consolidation; 
           (2) for the service rendered after the effective date of 
        the consolidation, the service pension amount is the highest 
        dollar amount service pension of any of the consolidating 
        volunteer firefighters relief associations under the articles of 
        incorporation or bylaws in effect immediately before the 
        consolidation; and 
           (3) after consolidation, increases in the amounts 
        established in clauses (1) and (2) may be implemented if 
        consistent with applicable requirements of Minnesota Statutes, 
        chapters 69 and 424A. 
           Sec. 17.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
        HOC POSTRETIREMENT ADJUSTMENT.] 
           (a) In addition to the current pensions and other 
        retirement benefits payable, the pensions and retirement 
        benefits payable to retired police officers and firefighters and 
        their surviving spouses by the Eveleth police and fire trust 
        fund are increased by $100 per month.  Increases are retroactive 
        from January 1, 2005. 
           (b) Following the January 1, 2005, effective date of the 
        benefit increase provided under paragraph (a), every two years 
        thereafter, to be effective no earlier than the applicable 
        January 1, the city council of the city of Eveleth is authorized 
        to provide permanent, uniform benefit increases, not less than 
        $10 per month nor to exceed $100 per month, to any remaining 
        retirees and survivors receiving benefits from the Eveleth 
        police and fire trust fund.  Any given benefit improvement under 
        this paragraph is not effective unless the city council passes a 
        resolution approving the increase. 
           (c) Within 30 days following the approval of a resolution 
        under paragraph (b), the chief administrative officer of the 
        city of Eveleth shall file a copy of the resolution with the 
        executive director of the Legislative Commission on Pensions and 
        Retirement, with the chair of the house Governmental Operations 
        and Veterans Affairs Committee, and with the chair of the senate 
        State and Local Government Operations Committee.  Along with a 
        copy of the resolution, the city's chief administrative officer 
        must send a statement indicating the age of each benefit 
        recipient and the retirement benefit or survivor benefit being 
        received before and after the benefit increase. 
           Sec. 18.  [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 
        RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 
           Notwithstanding any limitations in Minnesota Statutes, 
        section 424A.02, subdivision 13, or any other provision of law 
        to the contrary, if an agreement between the affected relief 
        associations and cities is reached as provided in this section, 
        the Maplewood Firefighters Relief Association may transfer 
        assets from its special fund to the Oakdale Fire Department 
        Relief Association representing the value of the accumulated 
        service credit for the current members of the Oakdale Fire 
        Department Relief Association who are currently eligible to 
        receive a combined service pension for firefighter service in 
        both associations.  The transfer of the assets from the 
        Maplewood Firefighters Relief Association to the Oakdale Fire 
        Department Relief Association must be in an amount representing 
        the cumulative value of the service credit earned by the members 
        of the Oakdale Fire Department Relief Association who are 
        currently eligible to receive a combined service pension for 
        firefighting service in both associations for the service credit 
        that they accrued while working for the Maplewood Fire 
        Department.  The amount of the assets, liabilities, and service 
        credit to be transferred must be specified in a joint agreement 
        negotiated by the secretaries of the two relief associations and 
        ratified by the boards of trustees of both relief associations 
        and of the cities of Maplewood and Oakdale.  The agreement must 
        specify by name or other appropriate means the firefighters 
        affected by the liability, asset, and service credit transfer.  
        The ratification must be expressed in the form of resolutions 
        adopted by each entity.  The agreements must specify the amount 
        of assets to be transferred, the amount of liabilities to be 
        transferred, and the amount of service credit each of the 
        applicable individuals will receive in the Oakdale Fire 
        Department Relief Association.  Upon the ratification of the 
        agreement by both relief associations and both cities, the 
        assets, liabilities, and service credit of the applicable 
        individuals must be transferred to the Oakdale Fire Department 
        Relief Association, and the Maplewood Firefighters Relief 
        Association is relieved of any obligation to the individuals.  A 
        certified copy of the ratified agreement must be filed with the 
        state auditor and with the secretary of state. 
           Sec. 19.  [EFFECTIVE DATE; LOCAL APPROVAL.] 
           (a) Sections 2 and 3 with respect to the Bloomington Fire 
        Department Relief Association are effective the day after the 
        date on which the city council of the city of Bloomington and 
        its chief clerical officer timely complete their compliance with 
        Minnesota Statutes, section 645.021, subdivisions 2 and 4. 
           (b) Sections 1, 3, with respect to the Minneapolis Police 
        Relief Association, 9, 10, 11, 12, 13, and 15 are not severable 
        and are effective the day after the date of the approval by the 
        city council of the city of Minneapolis and the timely 
        completion by the chief clerical officer of the city of 
        Minneapolis of compliance with Minnesota Statutes, section 
        645.021, subdivisions 2 and 3. 
           (c) Sections 4, 5, 6, 7, and 8 are effective the day after 
        the board of Hennepin County and its chief clerical officer 
        complete in a timely manner their compliance with Minnesota 
        Statutes, section 645.021, subdivisions 2 and 3.  
           (d) Sections 14 and 15 are effective the day after the 
        governing body of the city of Minneapolis and its chief clerical 
        officer timely complete their compliance with Minnesota 
        Statutes, section 645.021, subdivisions 2 and 3. 
           (e) Section 17 is effective the day after the date on which 
        the city council of the city of Eveleth and its chief clerical 
        officer timely complete their compliance with Minnesota 
        Statutes, section 645.021, subdivisions 2 and 3. 
           (f) Section 16 is effective with respect to a volunteer 
        firefighters relief association listed in column A the day after 
        the governing body of the municipality listed in column B and 
        its chief clerical officer timely complete compliance with 
        Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
                         A                      B       
                      Aurora              city of Aurora
                      Biwabik             city of Biwabik
                      Hoyt Lakes          city of Hoyt Lakes
                      Palo                town of White
           (g) Section 18 is effective the day after the governing 
        body of the city of Maplewood, the governing body of the city of 
        Oakdale, the Maplewood chief clerical officer, and the Oakdale 
        chief clerical officer complete their compliance with Minnesota 
        Statutes, section 645.021, subdivisions 2 and 3. 

                                   ARTICLE 12 
                           ONE PERSON AND SMALL GROUP 
                               RETIREMENT CHANGES 
           Section 1.  [PURCHASE OF PRIOR SERVICE CREDIT.] 
           (a) An eligible person described in paragraph (b) is 
        entitled to purchase up to one year of allowable service credit 
        from the Teachers Retirement Association for the 2003-2004 
        school year.  The service credit purchase under this section 
        must be made in accordance with Minnesota Statutes, section 
        356.551, except as otherwise stated in this section. 
           (b) An eligible person is a person who: 
           (1) is currently a member of the Teachers Retirement 
        Association; 
           (2) was born on April 2, 1949; 
           (3) has been employed by Independent School District No. 
        11, Anoka-Hennepin, since the 1971-1972 school year; 
           (4) applied for and was granted an extended leave of 
        absence from Independent School District No. 11, Anoka-Hennepin, 
        for the 2002-2003, 2003-2004, and 2004-2005 school years under 
        Minnesota Statutes, section 122A.46; 
           (5) was unable to make timely payment for the 2003-2004 
        school year under Minnesota Statutes, section 354.094, because 
        of a problem in transferring funds from the individual's 
        tax-sheltered annuity account; and 
           (6) was not permitted by the Teachers Retirement 
        Association to make payment after June 30, 2004, with interest. 
           (c) Notwithstanding Minnesota Statutes, section 356.551, 
        payment must be made by September 1, 2005, or prior to 
        termination of service, whichever is earlier, and the employee 
        payment amount is an amount equal to the employee contribution 
        rate in effect during the 2003-2004 school year applied to the 
        eligible individual's salary in the year prior to the leave, 
        plus .708 percent monthly interest from June 30, 2004, until the 
        end of the month in which payment is made.  If the full payment 
        required under this paragraph is made, then notwithstanding 
        Minnesota Statutes, section 354.094, the individual is 
        authorized under Minnesota Statutes, section 354.094, to make 
        the required contribution for the 2004-2005 school year, and any 
        subsequent years of the leave.  Notwithstanding payment 
        deadlines in Minnesota Statutes, section 354.094, the employee 
        contribution for the 2004-2005 school year must be made on or 
        before September 30, 2005, with .708 percent monthly interest 
        from June 30, 2005, until paid.  
           (d) If payment is received under paragraph (c), the 
        executive director of the Teachers Retirement Association shall 
        bill Independent School District No. 11, Anoka-Hennepin, for the 
        employer contribution that would have been made on behalf of the 
        eligible person for the 2003-2004 fiscal year under Minnesota 
        Statutes, section 354.094.  The remainder of the full actuarial 
        value payment under Minnesota Statutes, section 356.551, is 
        waived.  If the school district fails to make payment under this 
        paragraph within 30 days of notification of the amount due, the 
        executive director shall notify the commissioner of the 
        Department of Finance of that fact and the employer payment 
        amount shall be deducted from any subsequent state aid to the 
        school district.  
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
           Presented to the governor July 15, 2005 
           Signed by the governor July 25, 2005, 2:05 p.m.