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                            CHAPTER 438-H.F.No. 2417 
                  An act relating to retirement; various Minnesota 
                  public pension plans; making various benefit and 
                  coverage modifications; redirecting various state 
                  pension aids to certain first class city teachers 
                  retirement fund associations; requiring certain school 
                  district employer contribution increases; making 
                  various administrative modifications; establishing a 
                  special task force to evaluate potential modifications 
                  in various investment performance reporting programs; 
                  amending Minnesota Statutes 1994, sections 3A.04, 
                  subdivision 4; 16A.06, by adding a subdivision; 
                  69.021, subdivision 7; 124.916, subdivision 3; 
                  144C.06; 352.04, subdivision 8; 352.95, subdivision 2; 
                  352B.10, subdivision 2; 352B.11, subdivision 1; 
                  352C.09, by adding a subdivision; 353D.01, subdivision 
                  2; 353D.02; 353D.03; 353D.04; 354.44, subdivisions 3 
                  and 4; 354A.12, subdivisions 2 and 3c; 356A.06, 
                  subdivisions 4 and 7; 423A.02, subdivision 1, and by 
                  adding a subdivision; 423B.01, subdivision 9; 423B.15, 
                  subdivision 3; 424A.001, by adding subdivisions; 
                  424A.01, by adding a subdivision; 424A.02, subdivision 
                  1; and 490.124, by adding a subdivision; Minnesota 
                  Statutes 1995 Supplement, sections 144C.07, 
                  subdivision 2; 144C.08; 354D.02, subdivision 2; 
                  354D.03; 354D.04; 354D.06; and 356.219, subdivision 2; 
                  Laws 1989, chapter 319, article 19, section 7, 
                  subdivisions 1, as amended, and 4, as amended; and 
                  Laws 1995, chapter 252, article 1, section 16; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 354A; and 354D; repealing Minnesota Statutes 
                  1994, section 353D.11; Laws 1990, chapter 570, article 
                  13, section 1, subdivision 5. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                DESIGNATION OF BENEFICIARY FOR REFUND UPON DEATH
           Section 1.  Minnesota Statutes 1994, section 3A.04, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEATH REFUNDS TO ESTATE.] Upon the death of a 
        member of the legislature or former legislator who was not 
        receiving a retirement allowance, without either a surviving 
        spouse and without any or dependent children, regardless of when 
        the death occurred, the last designated beneficiary named on a 
        form filed with the director before the death of the legislator, 
        or if no designation is filed, the estate of the member or 
        former legislator, upon application of the representative of the 
        estate, shall be entitled to a refund of contributions of the 
        deceased member of the legislature or former legislator plus 
        interest as provided in section 3A.03, subdivision 2, clause (2).
           Sec. 2.  Minnesota Statutes 1994, section 352B.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REFUND OF PAYMENTS.] A member who has not 
        received other benefits under this chapter is entitled to a 
        refund of payments made by salary deduction, plus interest, if 
        the member is separated, either voluntarily or involuntarily, 
        from state service that entitled the member to membership.  In 
        the event of the member's death, if there are no survivor 
        benefits payable under this chapter, a refund is payable to the 
        last designated beneficiary on a form filed with the director 
        before death, or if no designation is filed, the refund is 
        payable to the member's estate is entitled to the refund.  
        Interest must be computed at the rate of six percent a year, 
        compounded annually.  To receive a refund, the member must apply 
        application must be made on a form prescribed by the executive 
        director. 
           Sec. 3.  Minnesota Statutes 1994, section 352C.09, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [DEATH REFUND.] If a constitutional officer who 
        has not received other benefits under this chapter dies and 
        there are no survivor benefits payable under this chapter, a 
        refund plus interest as provided in section 352C.09, subdivision 
        2, clause (1), is payable to the last designated beneficiary 
        named on a form filed with the director before the death of the 
        constitutional officer, or if no designation is on file, the 
        refund is payable to the estate of the deceased constitutional 
        officer. 
           Sec. 4.  Minnesota Statutes 1994, section 490.124, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [DEATH REFUND.] If a judge who has not received 
        other benefits under this chapter dies and there are no survivor 
        benefits payable under this chapter, a refund plus interest as 
        provided in section 490.124, subdivision 12, is payable to the 
        last designated beneficiary named on a form filed with the 
        director before the death of the judge, or if no designation is 
        on file, the refund is payable to the estate of the deceased 
        judge. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective July 1, 1996. 
                                   ARTICLE 2
                   ADMINISTRATIVE PROVISIONS RELATING TO THE
                       MINNESOTA STATE RETIREMENT SYSTEM
           Section 1.  Minnesota Statutes 1994, section 352.04, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 
        DEDUCTIONS.] (a) If a department fails to take deductions past 
        due for a period of 60 days or less from an employee's salary as 
        provided in this section, those deductions must be taken on 
        later payroll abstracts.  
           (b) If a department fails to take deductions past due for a 
        period in excess of 60 days from an employee's salary as 
        provided in this section, the department, and not the employee, 
        shall must pay on later payroll abstracts the employee and 
        employer contributions and an amount equivalent to 8.5 percent 
        of the total amount due in lieu of interest, or if the delay in 
        payment exceeds one year, 8.5 percent compound annual interest.  
           (c) If a department fails to take deductions past due for a 
        period of 60 days or less and the employee is no longer in state 
        service so that the required deductions cannot be taken from the 
        salary of the employee, the department shall must nevertheless 
        pay the required employer contributions.  If any department 
        fails to take deductions past due for a period in excess of 60 
        days and the employee is no longer in state service, the omitted 
        contributions shall must be recovered under paragraph (b).  
           (d) If an employee from whose salary required deductions 
        were past due for a period of 60 days or less leaves state 
        service before the payment of the omitted deductions and 
        subsequently returns to state service, the unpaid amount is 
        considered the equivalent of a refund.  The employee accrues no 
        right by reason of the unpaid amount, except that the employee 
        may pay the amount of omitted deductions as provided in section 
        352.23. 
           Sec. 2.  Minnesota Statutes 1994, section 352.95, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NON-JOB-RELATED DISABILITY.] Any covered 
        correctional employee who, after at least one year of covered 
        correctional service, becomes disabled and physically or 
        mentally unfit to perform the duties of the position because of 
        sickness or injury occurring while not engaged in covered 
        employment, is entitled to a disability benefit based on covered 
        correctional service only.  The disability benefit must be 
        computed as provided in section 352.93, subdivisions 1 and 2, 
        and computed as though the employee had at least 15 years of 
        covered correctional service. 
           Sec. 3.  Minnesota Statutes 1994, section 352B.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISABLED WHILE NOT ON DUTY.] If a member 
        terminates employment after at least one year of service because 
        of sickness or injury occurring while not on duty and not 
        engaged in state work entitling the member to membership, and 
        the termination is necessary because the member cannot perform 
        duties, the member is entitled to receive a disability 
        benefit member becomes disabled and physically or mentally unfit 
        to perform the duties of the position because of sickness or 
        injury occurring while not engaged in covered employment, the 
        member is entitled to disability benefits.  The benefit must be 
        in the same amount and computed in the same way as if the member 
        were 55 years old at the date of disability and the annuity were 
        paid under section 352B.08.  If disability under this clause 
        occurs after one but before 15 years service, the disability 
        benefit must be computed as though the member had 15 years 
        service. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective July 1, 1996. 
                                   ARTICLE 3
                     ADMINISTRATIVE PROVISIONS RELATING TO
                      THE TEACHERS RETIREMENT ASSOCIATION
           Section 1.  Minnesota Statutes 1994, section 354.44, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATION FOR RETIREMENT.] Application for 
        retirement must be made by the member or by someone authorized 
        to act in the member's behalf.  A member or a person authorized 
        to act on behalf of the member may make application for 
        retirement provided the age and service requirements under 
        subdivision 1 are satisfied on or before the member's retirement 
        annuity accrual date under subdivision 4.  The application may 
        be made no earlier than 120 days before the termination of 
        teaching service.  The application must be made on a form 
        prescribed by the executive director and is not complete until 
        all necessary supporting documents are received by the executive 
        director. 
           Sec. 2.  Minnesota Statutes 1994, section 354.44, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TIME AND MANNER OF PAYMENTS RETIREMENT ANNUITY 
        ACCRUAL DATE.] A member may make application to the board for a 
        retirement annuity any time after the member has satisfied the 
        age and service requirements of this chapter for retirement 
        except that an application for retirement must not be made more 
        than 60 days before termination of teaching service.  The (a) An 
        annuity payment begins to accrue, providing that the age and 
        service requirements under subdivision 1 are satisfied, after 
        the termination of teaching service, or after the application 
        for retirement has been filed with the board, whichever is 
        later, as follows: 
           (a) (1) on the 16th day of the month of termination or 
        filing if the termination or filing occurs on or before the 15th 
        day of the month,; 
           (b) (2) on the first day of the month following the month 
        of termination or filing if the termination or filing occurs on 
        or after the 16th day of the month, or; 
           (c) (3) on July 1 for all school principals and other 
        administrators who receive a full annual contract salary during 
        the fiscal year for performance of a full year's contract 
        duties; or 
           (4) a later date to be the first or 16th day of a month 
        within the six-month period immediately following the 
        termination of teaching service as specified under paragraph (b) 
        by the member. 
           (b) If an application for retirement is filed with the 
        board during the six-month period immediately following the 
        termination of teaching service, the annuity may begin to accrue 
        as if the application for retirement had been filed with the 
        board on the date teaching service terminated or a later date 
        occurring within the six-month period as specified by the member 
        under paragraph (a), clause (4).  An annuity must not begin to 
        accrue more than one month before the date of final salary 
        receipt. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
                                   ARTICLE 4
                   INCREASED FUNDING FOR THE MINNEAPOLIS AND
                 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATIONS
           Section 1.  Minnesota Statutes 1994, section 16A.06, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [FIRST CLASS CITY TEACHER RETIREMENT FUNDS AIDS 
        REPORTING.] Each year, on or before April 15, the commissioner 
        of finance shall report to the chairs of the senate finance 
        committee and the house ways and means committee on expenditures 
        for state aids to the Minneapolis and Saint Paul teacher 
        retirement fund associations under sections 354A.12 and 423A.02, 
        subdivision 3.  This report shall include the amounts expended 
        in the most recent fiscal year and estimates of expected 
        expenditures for the current and next fiscal year. 
           Sec. 2.  Minnesota Statutes 1994, section 69.021, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
        MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (1) (a) The 
        commissioner shall apportion the fire state aid relative to the 
        premiums reported on the Minnesota Firetown Premium Reports 
        filed under this chapter to each municipality and/or 
        firefighters' relief association,.  
           (b) The commissioner shall calculate an initial fire state 
        aid allocation amount for each municipality or fire department 
        under paragraph (c) and a minimum fire state aid allocation 
        amount for each municipality or fire department under paragraph 
        (d).  The municipality or fire department must receive the 
        larger fire state aid amount. 
           (c) The initial fire state aid allocation amount is the 
        amount available for apportionment as fire state aid under 
        subdivision 5, without inclusion of any additional funding 
        amount to support a minimum fire state aid amount under section 
        423A.02, subdivision 3, allocated one-half in proportion to the 
        population as shown in the last official statewide federal 
        census for each fire town and one-half in proportion to the 
        market value of each fire town, including the market value of 
        tax exempt property, but excluding the market value of 
        minerals.  In the case of incorporated or municipal fire 
        departments furnishing fire protection to other cities, towns, 
        or townships as evidenced by valid fire service contracts filed 
        with the commissioner, the distribution shall must be adjusted 
        proportionately to take into consideration the crossover fire 
        protection service.  Necessary adjustments shall be made to 
        subsequent apportionments.  In the case of municipalities or 
        independent fire departments qualifying for the aid, the 
        commissioner shall calculate the state aid for the municipality 
        or relief association on the basis of the population and the 
        market value of the area furnished fire protection service by 
        the fire department as evidenced by duly executed and valid fire 
        service agreements filed with the commissioner.  If one or more 
        fire departments are furnishing contracted fire service to a 
        city, town, or township, only the population and market value of 
        the area served by each fire department shall may be considered 
        in calculating the state aid and the fire departments furnishing 
        service shall enter into an agreement apportioning among 
        themselves the percent of the population and the market value of 
        each service area.  The agreement shall must be in writing and 
        must be filed with the commissioner. 
           (d) The minimum fire state aid allocation amount is the 
        amount in addition to the initial fire state allocation amount 
        that is derived from any additional funding amount to support a 
        minimum fire state aid amount under section 423A.02, subdivision 
        3, and allocated to municipalities with volunteer firefighter 
        relief associations based on the number of active volunteer 
        firefighters who are members of the relief association as 
        reported in the annual financial reporting for the calendar year 
        1993 to the office of the state auditor, but not to exceed 30 
        active volunteer firefighters, so that all municipalities or 
        fire departments with volunteer firefighter relief associations 
        receive in total at least a minimum fire state aid amount per 
        1993 active volunteer firefighter to a maximum of 30 
        firefighters. 
           (e) The fire state aid shall must be paid to the treasurer 
        of the municipality where the fire department is located and the 
        treasurer of the municipality shall, within 30 days of receipt 
        of the fire state aid, transmit the aid to the relief 
        association if the relief association has filed a financial 
        report with the treasurer of the municipality and has met all 
        other statutory provisions pertaining to the aid apportionment. 
           (f) The commissioner may make rules to permit the 
        administration of the provisions of this section.  Any 
        adjustments needed to correct prior misallocations must be made 
        to subsequent apportionments. 
           (2) Subd. 7a.  [APPORTIONMENT OF POLICE STATE AID.] (a) The 
        commissioner shall apportion the state peace officer aid to each 
        municipality and to the county in the following manner: 
           (a) (1) For all municipalities maintaining police 
        departments and the county, the state aid shall must be 
        distributed in proportion to the total number of peace officers, 
        as determined under section 69.011, subdivision 1, clause (g), 
        and subdivision 2, clause (b), employed by each municipality and 
        by the county for 12 calendar months and the proportional or 
        fractional number who were employed less than 12 months; 
           (b) (2) For each municipality which contracts with the 
        county for police service, a proportionate amount of the state 
        aid distributed to the county based on the full-time equivalent 
        number of peace officers providing contract service shall must 
        be credited against the municipality's contract obligation; and 
           (c) (3) For each municipality which contracts with another 
        municipality for police service, a proportionate amount of the 
        state aid distributed to the municipality providing contract 
        service based on the full-time equivalent number of peace 
        officers providing contract service on a full-time equivalent 
        basis shall must be credited against the contract obligation of 
        the municipality receiving contract service;. 
           (d) (b) No municipality entitled to receive state peace 
        officer aid shall may be apportioned less state peace officer 
        aid for any year under Laws 1976, chapter 315, than the amount 
        which was apportioned to it for calendar year 1975 based on 
        premiums reported to the commissioner for calendar year 1974; 
        provided, the amount of state peace officer aid to other 
        municipalities within the county and to the county shall must be 
        adjusted in proportion to the total number of peace officers in 
        the municipalities and the county, so that the amount of state 
        peace officer aid apportioned shall does not exceed the amount 
        of state peace officer aid available for apportionment. 
           Sec. 3.  Minnesota Statutes 1994, section 124.916, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIREMENT LEVIES.] (1) In addition to the 
        excess levy authorized in 1976 any district within a city of the 
        first class which was authorized in 1975 to make a retirement 
        levy under Minnesota Statutes 1974, section 275.127 and chapter 
        422A may levy an amount per pupil unit which is equal to the 
        amount levied in 1975 payable 1976, under Minnesota Statutes 
        1974, section 275.127 and chapter 422A, divided by the number of 
        pupil units in the district in 1976-1977. 
           (2) In 1979 and each year thereafter, any district which 
        qualified in 1976 for an extra levy under clause (1) shall be 
        allowed to levy the same amount as levied for retirement in 1978 
        under this clause reduced each year by ten percent of the 
        difference between the amount levied for retirement in 1971 
        under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
        422.54 and the amount levied for retirement in 1975 under 
        Minnesota Statutes 1974, section 275.127 and chapter 422A. 
           (3) In 1991 and each year thereafter, a district to which 
        this subdivision applies may levy an additional amount required 
        for contributions to the Minneapolis employees retirement fund 
        as a result of the maximum dollar amount limitation on state 
        contributions to the fund imposed under section 422A.101, 
        subdivision 3.  The additional levy shall not exceed the most 
        recent amount certified by the board of the Minneapolis 
        employees retirement fund as the district's share of the 
        contribution requirement in excess of the maximum state 
        contribution under section 422A.101, subdivision 3.  
           (4) For taxes payable in 1994 and thereafter, special 
        school district No. 1, Minneapolis, and independent school 
        district No. 625, St. Paul, may levy for the increase in the 
        employer retirement fund contributions, under Laws 1992, chapter 
        598, article 5, section 1.  Notwithstanding section 121.904, the 
        entire amount of this levy may be recognized as revenue for the 
        fiscal year in which the levy is certified.  This levy shall not 
        be considered in computing the aid reduction under section 
        124.155. 
           (5) If the employer retirement fund contributions under 
        section 354A.12, subdivision 2a, are increased for fiscal year 
        1994 or later fiscal years, special school district No. 1, 
        Minneapolis, and independent school district No. 625, St. Paul, 
        may levy in payable 1994 or later an amount equal to the amount 
        derived by applying the net increase in the employer retirement 
        fund contribution rate of the respective teacher retirement fund 
        association between fiscal year 1993 and the fiscal year 
        beginning in the year after the levy is certified to the total 
        covered payroll of the applicable teacher retirement fund 
        association.  Notwithstanding section 121.904, the entire amount 
        of this levy may be recognized as revenue for the fiscal year in 
        which the levy is certified.  This levy shall not be considered 
        in computing the aid reduction under section 124.155.  If an 
        applicable school district levies under this paragraph, they may 
        not levy under paragraph (4). 
           (6) In addition to the levy authorized under paragraph (5), 
        special school district No. 1, Minneapolis, may also levy 
        payable in 1997 or later an amount equal to the contributions 
        under section 423A.02, subdivision 3, and may also levy in 
        payable 1994 or later an amount equal to the state aid 
        contribution under section 354A.12, subdivision 3b.  Independent 
        school district No. 625, St. Paul, may levy payable in 1997 or 
        later an amount equal to the supplemental contributions under 
        section 423A.02, subdivision 3.  Notwithstanding section 
        121.904, the entire amount of this levy these levies may be 
        recognized as revenue for the fiscal year in which the levy is 
        certified.  This levy These levies shall not be considered in 
        computing the aid reduction under section 124.155. 
           Sec. 4.  [354A.105] [MINNEAPOLIS TEACHERS RETIREMENT FUND 
        ASSOCIATION; PURCHASE OF ALLOWABLE SERVICE CREDIT FOR TEACHING 
        SERVICE OUTSIDE MINNESOTA.] 
           (a) Notwithstanding any law, article of incorporation, or 
        bylaw provision of the Minneapolis teachers retirement fund 
        association to the contrary, an active member who has engaged in 
        other elementary or secondary public school teaching employment 
        either outside the state of Minnesota, but rendered in the 
        United States, or for the federal government before first 
        becoming a member of the association and who has met the 
        qualifications of paragraph (b) may elect to purchase and 
        receive allowable service credit in the applicable program of 
        the association for qualified prior service in other elementary 
        or secondary public school teaching employment that satisfies 
        the requirements of paragraph (c) by making the required payment 
        under paragraph (d). 
           (b) A member may elect to purchase allowable service credit 
        for other elementary or secondary public school teaching 
        employment under this subdivision if: 
           (1) the member has at least three years of allowable 
        service credit in the applicable program of the association; and 
           (2) the member did not and could not receive accrued 
        benefits by leaving the person's accumulated member 
        contributions with any other retirement system under the 
        applicable law in effect at the termination of the other public 
        employment. 
           (c) Service in other elementary or secondary public school 
        teaching employment rendered in the United States qualifies for 
        purchase under this subdivision if the service to be credited: 
           (1) does not exceed the lesser of ten years or the member's 
        total years of allowable teaching service in the Minneapolis 
        public schools at the time of the purchase; 
           (2) is equivalent to full-time allowable service as 
        determined in accordance with the statutes and rules applicable 
        to the association at the time of the purchase; 
           (3) is purchased in full year increments; 
           (4) is not for a period of service that has been used by 
        the member to qualify for an annuity from any other public 
        school retirement fund or system, as certified by the chief 
        administrative officer of the applicable retirement system; and 
           (5) is not available to be used for the purpose of 
        qualifying the member for a disability benefit from the 
        association. 
           (d) For a person eligible to purchase credit for qualifying 
        service under this subdivision, there must be paid to the 
        association an amount equal to the present value, on the date of 
        payment, of the amount of the additional retirement annuity that 
        would be obtained by virtue of the purchase of the additional 
        service credit, using the applicable preretirement interest rate 
        specified in section 356.215, subdivision 4d, and the mortality 
        table adopted for the retirement fund association and assuming 
        continuous future service in the retirement fund association 
        until the age at which the minimum requirements are met for 
        normal retirement with an annuity unreduced for retirement 
        before the normal retirement age, including the provisions of 
        section 356.30, and also assuming a future salary history that 
        includes increases at the applicable rate assumed under section 
        356.215, subdivision 4d. 
           (e) Payments under this section must be made only by the 
        member.  The employer unit may not make any payment to or on 
        behalf of any member for the purpose of purchasing service 
        credit under this section. 
           (f) This section is repealed effective July 1, 2005.  On or 
        before January 1, 2006, special school district No. 1 and the 
        Minneapolis teachers retirement fund association shall jointly 
        report to the legislature and the governor on the effects of the 
        provisions under this section on the district, fund, and 
        members.  The report shall include information on use of the 
        service credit purchase provisions, the usefulness of this 
        section in promoting the recruitment and retention objectives of 
        the district, and the portability of pension benefits for 
        teachers and school administrative personnel. 
           Sec. 5.  Minnesota Statutes 1994, section 354A.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except 
        as provided in subdivision 3b, paragraph (d) and in section 
        423A.02, subdivision 3, with respect to the city of Minneapolis 
        and special school district No. 1 and in section 423A.02, 
        subdivision 3, with respect to independent school district No. 
        625, notwithstanding any law to the contrary, levies for 
        teachers retirement fund associations in cities of the first 
        class, including levies for any employer social security taxes 
        for teachers covered by the Duluth teachers retirement fund 
        association or the Minneapolis teachers retirement fund 
        association or the St. Paul teachers retirement fund 
        association, are disallowed. 
           Sec. 6.  Minnesota Statutes 1994, section 354A.12, 
        subdivision 3c, is amended to read: 
           Subd. 3c.  [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND 
        DIRECT STATE MATCHING AND STATE AID.] (a) The supplemental 
        contributions payable to the Minneapolis teachers retirement 
        fund association by special school district No. 1 and the city 
        of Minneapolis under section 423A.02, subdivision 3, or to the 
        St. Paul teachers retirement fund association by independent 
        school district No. 625 under section 423A.02, subdivision 3, 
        the direct state aid under subdivision 3a to the St. Paul 
        teachers retirement association, and the direct matching and 
        state aid under subdivision 3b to the Minneapolis teachers 
        retirement fund association terminates for the respective fund 
        at the end of the fiscal year in which the accrued liability 
        funding ratio for that fund, as determined in the most recent 
        actuarial report for that fund by the actuary retained by the 
        legislative commission on pensions and retirement, equals or 
        exceeds the accrued liability funding ratio for the teachers 
        retirement association, as determined in the most recent 
        actuarial report for the teachers retirement association by the 
        actuary retained by the legislative commission on pensions and 
        retirement. 
           (b) If the direct matching, supplemental, or state aid is 
        terminated for the St. Paul teachers retirement fund association 
        or the Minneapolis teachers retirement fund association under 
        paragraph (a), it may not again be received by that fund. 
           (c) If either the Minneapolis teachers retirement fund 
        association or the St. Paul teachers retirement fund association 
        remain funded at less than the funding ratio applicable to the 
        teachers retirement association when the provisions of paragraph 
        (b) become effective, then any state aid not distributed to that 
        association must be immediately transferred to the other 
        association. 
           Sec. 7.  Minnesota Statutes 1994, 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; and 
           (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 and 16B.06 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; 
           (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 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. 8.  Minnesota Statutes 1994, section 423A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMORTIZATION STATE AID.] (a) A 
        municipality in which is located a local police or salaried 
        firefighters' relief association to which the provisions of 
        section 69.77, apply, that had an unfunded actuarial accrued 
        liability in the most recent relief association actuarial 
        valuation, is entitled, upon application as required by the 
        commissioner of revenue, to receive local police and salaried 
        firefighters' relief association amortization state aid if the 
        municipality and the appropriate relief association both comply 
        with the applicable provisions of sections 69.031, subdivision 
        5, 69.051, subdivisions 1 and 3, and 69.77.  If a municipality 
        loses entitlement for amortization state aid in any year because 
        its local relief association no longer has an unfunded actuarial 
        accrued liability, the municipality is not entitled to 
        amortization state aid in any subsequent year.  
           (b) The total amount of amortization state aid to all 
        entitled municipalities must not exceed $5,055,000. 
           (c) Subject to the adjustment for the city of Minneapolis 
        provided in this paragraph, the amount of amortization state aid 
        to which a municipality is entitled annually is an amount equal 
        to the level annual dollar amount required to amortize, by 
        December 31, 2010, the unfunded actuarial accrued liability of 
        the special fund of the appropriate relief association as 
        reported in the December 31, 1978, actuarial valuation of the 
        relief association prepared under sections 356.215 and 356.216, 
        reduced by the dollar amount required to pay the interest on the 
        unfunded actuarial accrued liability of the special fund of the 
        relief association for calendar year 1981 set at the rate 
        specified in Minnesota Statutes 1978, section 356.215, 
        subdivision 4, clause (4).  For the city of Minneapolis, the 
        amortization state aid amount thus determined must be reduced by 
        $747,232 on account of the Minneapolis police relief association 
        and by $772,768 on account of the Minneapolis fire department 
        relief association.  If the amortization state aid amounts 
        determined under this paragraph exceed the amount appropriated 
        for this purpose, the amortization state aid for actual 
        allocation must be reduced pro rata. 
           (d) Payment of amortization state aid to municipalities 
        must be made directly to the municipalities involved in four 
        three equal installments on March 15, July 15, September 15, and 
        November 15 annually.  Upon receipt of amortization state aid, 
        the municipal treasurer shall transmit the aid amount to the 
        treasurer of the local relief association for immediate deposit 
        in the special fund of the relief association. 
           (e) The commissioner of revenue shall prescribe and 
        periodically revise the form for and content of the application 
        for the amortization state aid. 
           Sec. 9.  Minnesota Statutes 1994, section 423A.02, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [REALLOCATION OF AMORTIZATION OR SUPPLEMENTARY 
        AMORTIZATION STATE AID.] (a) Seventy percent of the difference 
        between $5,720,000 and the current year amortization aid or 
        supplemental amortization aid distributed under subdivisions 1 
        and 1a that is not distributed for any reason to a municipality 
        for use by a local police or salaried fire relief association 
        must be distributed by the commissioner of revenue according to 
        this paragraph.  The commissioner shall distribute 70 percent of 
        the amounts derived under this paragraph to the Minneapolis 
        teachers retirement fund association and 30 percent to the St. 
        Paul teachers retirement fund association to fund the unfunded 
        actuarial accrued liabilities of the respective funds.  These 
        payments shall be made on or before June 30 each fiscal year.  
        The amount required under this paragraph is appropriated 
        annually from the general fund to the commissioner of revenue.  
        If either the Minneapolis teachers retirement fund association 
        or the St. Paul teachers retirement fund association becomes 
        funded at the funding ratio applicable to the teachers 
        retirement association based on the actuarial reports prepared 
        by the actuary for the legislative commission on pensions and 
        retirement, then the commissioner shall distribute that fund's 
        share under this paragraph to the other fund.  The appropriation 
        under this paragraph terminates when both funds become fully 
        funded.  Amounts remaining in the undistributed balance account 
        at the end of the biennium cancel to the general fund. 
           (b) In order to receive amortization and supplementary 
        amortization aid under paragraph (a), independent school 
        district No. 625, St. Paul, must make contributions to the St. 
        Paul teachers retirement fund association in accordance with the 
        following schedule: 
                   Fiscal Year                Amount 
                     1996                       $0 
                     1997                       $0 
                     1998                    $200,000 
                     1999                    $400,000 
                     2000                    $600,000 
                     2001 and thereafter     $800,000 
           (c) In order to receive amortization and supplementary 
        amortization aid under paragraph (a), special school district No.
        1, Minneapolis, and the city of Minneapolis must each make 
        contributions to the Minneapolis teachers retirement fund 
        association in accordance with the following schedule: 
             Fiscal Year       City           School district 
                              amount              amount
                 1996           $0                  $0
                 1997           $0                  $0 
                 1998        $250,000            $250,000 
                 1999        $400,000            $400,000 
                 2000        $550,000            $550,000 
                 2001        $700,000            $700,000 
                 2002        $850,000            $850,000 
                 2003 and  $1,000,000          $1,000,000 
                 thereafter                                
           (d) Money contributed under paragraph (a) and either 
        paragraph (b) or (c), as applicable, must be credited to a 
        separate account in the applicable teachers retirement fund and 
        may not be used in determining any benefit increases.  The 
        separate account terminates for a fund when the aid payments to 
        the fund under paragraph (a) cease. 
           (e) Thirty percent of the difference between $5,720,000 and 
        the current year amortization aid or supplemental amortization 
        aid under subdivisions 1 and 1a that is not distributed for any 
        reason to a municipality for use by a local police or salaried 
        firefighter relief association must be distributed under section 
        69.021, subdivision 7, paragraph (d), as additional funding to 
        support a minimum fire state aid amount for volunteer 
        firefighter relief associations.  The amount required under this 
        paragraph is appropriated annually to the commissioner of 
        revenue. 
           Sec. 10.  Minnesota Statutes 1994, section 423B.01, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EXCESS INVESTMENT INCOME.] "Excess investment 
        income" means the amount, if any, by which the average time 
        weighted total rate of return earned by the fund in the most 
        recent prior five fiscal year years has exceeded the actual 
        average percentage increase in the current monthly salary of a 
        first grade patrol officer in the most recent prior five fiscal 
        year years plus two percent, and must be expressed as a dollar 
        amount and may not exceed one percent of the total assets of the 
        fund and does not exist unless the yearly average percentage 
        increase of the time weighted total rate of return of the fund 
        for the previous five years exceeds by two percent the yearly 
        average percentage increase in monthly salary of a first grade 
        patrol officer during the previous five calendar years. 
           Sec. 11.  Minnesota Statutes 1994, section 423B.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The 
        amount determined under subdivision 2 must be applied in 
        accordance with this subdivision.  The relief association shall 
        apply the first one-half of excess investment income to the 
        payment of an annual postretirement payment as specified in this 
        subdivision.  The second one-half of excess investment income 
        must be applied to reduce the state amortization state aid or 
        supplementary amortization state aid payments otherwise due to 
        the relief association under section 423A.02 for the current 
        calendar year.  The relief association shall pay an annual 
        postretirement payment to all eligible members in an amount not 
        to exceed one-half of one percent of the assets of the fund.  
        Payment of the annual postretirement payment must be in a lump 
        sum amount on June 1 following the determination date in any 
        year.  Payment of the annual postretirement payment may be made 
        only if the average time weighted total rate of return for the 
        most recent prior five years exceeds by two percent the actual 
        average percentage increase in the current monthly salary of a 
        top grade patrol officer in the most recent prior five fiscal 
        year and the yearly average percentage increase of the time 
        weighted total rate of return of the fund for the previous five 
        years exceeds by two percent the yearly average percentage 
        increase in monthly salary of a top grade patrol officer of the 
        previous five years.  The total amount of all payments to 
        members may not exceed the amount determined under this 
        subdivision.  Payment to each eligible member must be calculated 
        by dividing the total number of pension units to which eligible 
        members are entitled into the excess investment income available 
        for distribution to members, and then multiplying that result by 
        the number of units to which each eligible member is entitled to 
        determine each eligible member's annual postretirement payment.  
        Payment to each eligible member may not exceed an amount equal 
        to the total monthly benefit that the eligible member was 
        entitled to in the prior year under the terms of the benefit 
        plan of the relief association or each eligible member's 
        proportionate share of the excess investment income, whichever 
        is less. 
           A person who received a pension or benefit for the entire 
        12 months before the determination date is eligible for a full 
        annual postretirement payment.  A person who received a pension 
        or benefit for less than 12 months before the determination date 
        is eligible for a prorated annual postretirement payment. 
           Sec. 12.  Laws 1989, chapter 319, article 19, section 7, 
        subdivision 1, as amended by Laws 1992, chapter 471, article 2, 
        section 5, is amended to read: 
           Subdivision 1.  [MINNEAPOLIS FIRE DEPARTMENT RELIEF 
        ASSOCIATION; DEFINITIONS.] For the purposes of this section, 
        each of the terms in this subdivision have the meanings given 
        them in paragraphs (a) to (h). 
           (a) "Annual postretirement payment" means the payment of a 
        lump sum postretirement benefit to an eligible member on June 1 
        following the determination date in any year. 
           (b) "City" means the city of Minneapolis. 
           (c) "Determination date" means December 31 of each year. 
           (d) "Eligible member" means a person, including a service 
        pensioner, a disability pensioner, a survivor, or dependent of a 
        deceased active member, service pensioner, or disability 
        pensioner, who received a pension or benefit from the relief 
        association during the 12 months before the determination date.  
        A person who received a pension or benefit for the entire 12 
        months before the determination date is eligible for a full 
        annual postretirement payment.  A person who received a pension 
        or benefit for less than 12 months before the determination date 
        is eligible for a prorated annual postretirement payment. 
           (e) "Excess investment income" means the amount by which 
        the average time weighted total rate of return earned by the 
        fund in the most recent prior five fiscal year years has 
        exceeded the actual average percentage increase in the current 
        monthly salary of a top grade firefighter in the most 
        recent prior five fiscal year years plus two percent.  The 
        excess investment income must be expressed as a dollar amount 
        and may not exceed one percent of the total assets of the 
        fund and does not exist unless the yearly average percentage 
        increase of the time weighted total rate of return of the fund 
        for the previous five years exceeds by two percent the yearly 
        average percentage increase in monthly salary of a top grade 
        firefighter during the previous five calendar years. 
           (f) "Fund" means the Minneapolis fire department relief 
        association. 
           (g) "Relief association" means the Minneapolis fire 
        department relief association.  
           (h) "Time weighted total rate of return" means the 
        percentage amount determined by using the formula or formulas 
        established by the state board of investment under Minnesota 
        Statutes, section 11A.04, clause (11), and in effect on January 
        1, 1987. 
           Sec. 13.  Laws 1989, chapter 319, article 19, section 7, 
        subdivision 4, as amended by Laws 1990, chapter 570, article 12, 
        section 63, and Laws 1992, chapter 471, article 2, section 6, is 
        amended to read: 
           Subd. 4.  [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The 
        amount determined under subdivision 3 must be applied in 
        accordance with this subdivision.  The relief association shall 
        apply the first one-half of one percent of assets which 
        constitute excess investment income to the payment of an annual 
        postretirement payment as specified in this subdivision.  The 
        second one-half of one percent of assets which constitute excess 
        investment income shall be applied to reduce the state 
        amortization state aid or supplementary amortization state aid 
        payments otherwise due to the relief association under section 
        423A.02 for the current calendar year.  The relief association 
        shall pay an annual postretirement payment to all eligible 
        members in an amount not to exceed one-half of one percent of 
        the assets of the fund.  Payment of the annual postretirement 
        payment must be in a lump sum amount on June 1 following the 
        determination date in any year.  Payment of the annual 
        postretirement payment may be made only if the average time 
        weighted total rate of return in the most recent prior five 
        fiscal years exceeds by two percent the actual average 
        percentage increase in the current monthly salary of a top grade 
        firefighter in the most recent prior five fiscal year and the 
        yearly average percentage increase of the time weighted total 
        rate of return of the fund for the previous five years exceeds 
        by two percent the yearly average percentage increase in monthly 
        salary of a top grade firefighter of the previous five years.  
        The total amount of all payments to members may not exceed the 
        amount determined under subdivision 3.  Payment to each eligible 
        member must be calculated by dividing the total number of 
        pension units to which eligible members are entitled into the 
        excess investment income available for distribution to members, 
        and then multiplying that result by the number of units to which 
        each eligible member is entitled to determine each eligible 
        member's annual postretirement payment.  Payment to each 
        eligible member may not exceed an amount equal to the total 
        monthly benefit that the eligible member was entitled to in the 
        prior year under the terms of the benefit plan of the relief 
        association or each eligible member's proportionate share of the 
        excess investment income, whichever is less. 
           Sec. 14.  [EFFECTIVE DATE.] 
           Sections 1 to 13 are effective the day following final 
        enactment and apply to aid payments beginning in calendar year 
        1996. 
                                   ARTICLE 5
                   ADMINISTRATIVE PROVISIONS RELATING TO THE
                     AMBULANCE SERVICE PERSONNEL LONGEVITY
                                 AWARD PROGRAM
           Section 1.  Minnesota Statutes 1994, section 144C.06, is 
        amended to read: 
           144C.06 [TRUST ACCOUNT INVESTMENT.] 
           The trust account must be invested by the state board of 
        investment in nonretirement funds established under the 
        provisions of section 11A.14.  The trust account must be 
        invested in investment accounts so that the asset allocation is 
        similar to the asset allocation of the income share account of 
        the Minnesota supplemental investment fund, as provided in 
        governed by section 11A.20 11A.17. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        144C.07, subdivision 2, is amended to read: 
           Subd. 2.  [POTENTIAL ALLOCATIONS.] (a) On September 
        November 1, annually, the board or the board's designee under 
        section 144C.01, subdivision 2, shall determine the amount of 
        the allocation of the prior year's accumulation to each 
        qualified ambulance service person.  The prior year's net 
        investment gain or loss under paragraph (b) must be allocated 
        and that year's general fund appropriation, plus any transfer 
        from the suspense account under section 144C.03, subdivision 2, 
        and after deduction of administrative expenses, also must be 
        allocated.  
           (b) The difference in the market value of the assets of the 
        ambulance service personnel longevity award and incentive trust 
        account as of the immediately previous June 30 and the June 30 
        occurring 12 months earlier must be reported on or before August 
        15 by the state board of investment.  The market value gain or 
        loss must be expressed as a percentage of the total potential 
        award accumulations as of the immediately previous June 30, and 
        that positive or negative percentage must be applied to increase 
        or decrease the recorded potential award accumulation of each 
        qualified ambulance service person. 
           (c) The appropriation for this purpose, after deduction of 
        administrative expenses, must be divided by the total number of 
        additional ambulance service personnel years of service 
        recognized since the last allocation or 1,000 years of service, 
        whichever is greater.  If the allocation is based on the 1,000 
        years of service, any allocation not made for a qualified 
        ambulance service person must be credited to the suspense 
        account under section 144C.03, subdivision 2.  A qualified 
        ambulance service person must be credited with a year of service 
        if the person is certified by the chief administrative officer 
        of the ambulance service as having rendered active ambulance 
        service during the 12 months ending as of the immediately 
        previous June 30.  If the person has rendered prior active 
        ambulance service, the person must be additionally credited with 
        one-fifth of a year of service for each year of active ambulance 
        service rendered before June 30, 1993, but not to exceed in any 
        year one additional year of service or to exceed in total five 
        years of prior service.  Prior active ambulance service means 
        employment by or the provision of service to a licensed 
        ambulance service before June 30, 1993, as determined by the 
        person's current ambulance service based on records provided by 
        the person that were contemporaneous to the service.  The prior 
        ambulance service must be reported on or before August 15 1 to 
        the board in an affidavit from the chief administrative officer 
        of the ambulance service. 
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 
        144C.08, is amended to read: 
           144C.08 [AMBULANCE SERVICE PERSONNEL LONGEVITY AWARD.] 
           (a) A qualified ambulance service person who has terminated 
        active ambulance service, who has at least five years of 
        credited ambulance service, who is at least 50 years old, and 
        who is among the 400 persons with the greatest amount of 
        credited ambulance service applying for a longevity award during 
        that year, is entitled, upon application, to an ambulance 
        service personnel longevity award.  An applicant whose 
        application is not approved because of the limit on the number 
        of annual awards may apply in a subsequent year. 
           (b) If a qualified ambulance service person who meets the 
        age and service requirements specified in paragraph (a) dies 
        before applying for a longevity award, the estate of the 
        decedent is entitled, upon application, to the decedent's 
        ambulance service personnel longevity award, without reference 
        to the limit on the number of annual awards. 
           (c) An ambulance service personnel longevity award is the 
        total amount of the person's accumulations indicated in the 
        person's separate record under section 144C.07 as of the August 
        15 preceding the application November 1 in the calendar year in 
        which application is made.  The amount is payable only in a lump 
        sum. 
           (d) Applications for an ambulance service personnel 
        longevity award must be received by the board or the board's 
        designee under section 144C.01, subdivision 2, by August 15 
        October 1, annually.  Ambulance service personnel longevity 
        awards are payable only as of the last business day in October 
        December annually. 
           Sec. 4.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 3 are effective July 1, 1996. 
           (b) Any investments of the ambulance service personnel 
        longevity award and incentive trust account made before July 1, 
        1996, may be retained in the trust account after June 30, 1996, 
        until, in its judgment, the state board of investment determines 
        that it is appropriate to liquidate those prior holdings. 
                                   ARTICLE 6
                   PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN
                COVERAGE OPTION FOR LOCAL GOVERNMENT PHYSICIANS
           Section 1.  Minnesota Statutes 1994, section 353D.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] Except as provided in section 
        353D.11, (a) Eligibility to participate in the defined 
        contribution plan is open available to an: 
           (1) elected local government official officials of a 
        governmental subdivision who elects elect to participate in the 
        plan under section 353D.02, subdivision 1, and who, for the 
        elected service rendered to a governmental subdivision, is are 
        not a member members of the public employees retirement 
        association within the meaning of section 353.01, subdivision 
        7,; 
           (2) physicians who, if they did not elect to participate in 
        the plan under section 353D.02, subdivision 2, would meet the 
        definition of member under section 353.01, subdivision 7; and to 
           (3) basic and advanced life support emergency medical 
        service personnel employed by or providing services for any 
        public ambulance service or privately operated ambulance service 
        that receives an operating subsidy from a governmental entity 
        that elects to participate under section 353D.02, subdivision 3. 
           (b) For purposes of this chapter, an elected local 
        government official includes a person appointed to fill a 
        vacancy in an elective office.  Service as an elected local 
        government official only includes service for the governmental 
        subdivision for which the official was elected by the 
        public-at-large.  Service as an elected local government 
        official ceases and eligibility to participate terminates when 
        the person ceases to be an elected official.  An elected local 
        government official does not include an elected county sheriff.  
           Except as provided in section 353D.11, (c) Elected local 
        government officials, physicians, and first response personnel 
        and emergency medical service personnel who are currently 
        covered by a public or private pension plan because of their 
        employment or provision of services are not eligible to 
        participate in the public employees defined contribution plan.  
           (d) A former participant is a person who has ceased to be 
        an elected local government official or an emergency medical 
        service employee and who terminated eligible employment or 
        service and has not withdrawn the value of an the person's 
        individual account. 
           Sec. 2.  Minnesota Statutes 1994, section 353D.02, is 
        amended to read: 
           353D.02 [ELECTION OF COVERAGE.] 
           Subdivision 1.  [ELECTED LOCAL GOVERNMENT OFFICIALS.] 
        Eligible elected local government officials may elect to 
        participate in the defined contribution plan after being elected 
        or appointed to elective public office by filing a membership 
        application on a form prescribed by the executive director of 
        the association authorizing contributions to be deducted from 
        the elected official's salary.  Participation begins on the 
        first day of the pay period for which the contributions were 
        deducted or, if pay period coverage dates are not provided, the 
        date on which the membership application or contributions are 
        received in the office of the association, whichever is received 
        first, provided further that the membership application is 
        received by the association within 60 days of the receipt of the 
        contributions.  An election to participate in the plan is 
        revocable during incumbency.  
           Subd. 2.  [ELIGIBLE PHYSICIAN.] Eligible physicians may 
        elect to participate in the defined contribution plan within 90 
        days of commencing employment with a government subdivision 
        under section 353.01, subdivision 6, by filing a membership 
        application on a form prescribed by the executive director of 
        the association authorizing contributions to be deducted from 
        the physician's salary.  Participation begins on the first day 
        of the pay period for which the contributions were deducted.  An 
        election to participate in the defined contribution plan is 
        irrevocable. 
           Subd. 3.  [ELIGIBLE AMBULANCE SERVICE PERSONNEL.] Each 
        public ambulance service or privately operated ambulance service 
        with eligible personnel that receives an operating subsidy from 
        a governmental entity may elect to participate in the plan.  If 
        a service elects to participate, its eligible personnel may 
        elect to participate or to decline to participate.  An 
        individual's election must be made within 30 days of the 
        service's election to participate or 30 days of the date on 
        which the individual was employed by the service or began to 
        provide service for it, whichever date is later.  An election by 
        a service or an individual is revocable. 
           Sec. 3.  Minnesota Statutes 1994, section 353D.03, is 
        amended to read: 
           353D.03 [FUNDING OF PLAN.] 
           (a) Subdivision 1.  [LOCAL GOVERNMENT OFFICIAL 
        CONTRIBUTION.] An eligible elected local government official who 
        elects to participate in the public employees defined 
        contribution plan shall contribute an amount equal to five 
        percent of salary as defined in section 353.01, subdivision 10.  
        A participating elected local government official's governmental 
        subdivision shall contribute a matching amount. 
           (b) Subd. 2.  [PHYSICIAN CONTRIBUTION.] An eligible 
        physician who elects to participate in the plan shall contribute 
        an amount equal to five percent of salary as defined in section 
        353.01, subdivision 10.  The employer shall contribute a 
        matching amount. 
           Subd. 3.  [AMBULANCE SERVICE PERSONNEL CONTRIBUTION.] A 
        public ambulance service or privately operated ambulance service 
        that receives an operating subsidy from a governmental entity 
        that elects to participate in the plan shall fund benefits for 
        its qualified personnel who individually elect to participate.  
        Personnel who are paid for their services may elect to make 
        member contributions in an amount not to exceed the service's 
        contribution on their behalf.  Ambulance service contributions 
        on behalf of salaried employees must be a fixed percentage of 
        salary.  An ambulance service making contributions for volunteer 
        or largely uncompensated personnel may assign a unit value for 
        each call or each period of alert duty for the purpose of 
        calculating ambulance service contributions. 
           (c) Subd. 4.  [PAYMENTS BY FORMER ELIGIBLE ELECTED 
        OFFICIALS.] Former participants eligible elected local 
        government officials in the defined contribution plan under this 
        chapter shall not contribute to the plan except under section 
        353D.12. 
           Sec. 4.  Minnesota Statutes 1994, section 353D.04, is 
        amended to read: 
           353D.04 [CONTRIBUTIONS AND DEDUCTIONS IN ERROR.] 
           (a) Subdivision 1.  [CREDITING OF ACCOUNT.] Contributions 
        made by or on behalf of a participating elected local government 
        official or physician must be remitted to the public employees 
        retirement association and credited to the individual account 
        established for the participant.  (b) Ambulance service 
        contributions must be remitted on a regular basis to the 
        association together with any member contributions paid or 
        withheld.  Those contributions must be credited to the 
        individual account of each participating member. 
           Subd. 2.  [AUTHORITY TO ADOPT POLICIES.] The executive 
        director may adopt policies and procedures regarding deductions 
        taken totally or partially in error by the employer from the 
        salary of an elected official. 
           Sec. 5.  [CURRENT ELIGIBLE PHYSICIANS.] 
           Subdivision 1.  [EXERCISE OF OPTION.] As of the effective 
        date of this section, an eligible physician, who with respect to 
        current service is participating in the general employees 
        defined benefit plan administered by the public employees 
        retirement association, may elect to participate in the public 
        employees defined contribution plan and terminate further 
        participation in the general employees defined benefit plan.  
        The necessary election must be made within six months after the 
        effective date of this section. 
           Subd. 2.  [REFUND OR DEFERRED ANNUITY.] An eligible 
        physician, who elects to transfer coverage under subdivision 1, 
        is deemed to have terminated public service for purposes of 
        Minnesota Statutes, section 353.34.  The termination of public 
        service is deemed to occur as of the first day of the month 
        following the month in which the election is made to participate 
        in the public employees defined contribution plan and any refund 
        of accumulated employee deductions, with interest, or future 
        deferred annuity is governed by the law in effect on that day.  
        A refund paid to an eligible physician under this section must 
        include employee contributions withheld from salary and omitted 
        employee contributions paid by the employee or employer under 
        Minnesota Statutes, section 353.27, subdivision 12. 
           Sec. 6.  [DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN 
        STUDY.] 
           The legislative commission on pensions and retirement shall 
        report to the legislature by February 15, 1997, on the relative 
        advantages and disadvantages, including any federal taxation 
        considerations, of defined benefit pension plans and of defined 
        contribution pension plans. 
           Sec. 7.  [REPEALER.] 
           Minnesota Statutes 1994, section 353D.11, is repealed. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 to 7 are effective the day following final 
        enactment. 
                                   ARTICLE 7
                  INDIVIDUAL RETIREMENT ACCOUNT PLANS DEFINED
                   CONTRIBUTION PLAN COVERAGE FOR HISTORICAL
                               SOCIETY EMPLOYEES
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        354D.02, subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] Eligible employees are: 
           (1) any supervisory or professional employee of the state 
        arts board; and 
           (2) any supervisory or professional employee of the 
        Minnesota humanities commission; or 
           (3) any employee of the Minnesota historical society. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        354D.03, is amended to read: 
           354D.03 [SOCIAL SECURITY COVERAGE.] 
           Plan participants remain are members of the general state 
        retirement plan for purposes of social security coverage only 
        remain, and are covered by the applicable agreement entered into 
        under section 355.02 but are not members of the general state 
        retirement plan for any other purpose while employed in covered 
        employment. 
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 
        354D.04, is amended to read: 
           354D.04 [PLAN COVERAGE.] 
           An election made under this section is irrevocable.  
        Eligible employees under section 354D.02, subdivision 2, shall 
        elect to participate in either the individual retirement account 
        plan or their respective retirement plan as follows: 
           (1) An eligible employee first employed after the effective 
        date of Laws 1994, chapter 508, in covered employment with no 
        prior allowable service as a member of the Minnesota state 
        retirement system, the public employees retirement association, 
        or the teachers retirement association may elect retirement 
        coverage under either their respective state retirement plan or 
        the individual retirement account plan within 60 days of the 
        start of covered employment.  An election made under this 
        subdivision is irrevocable. 
           (2) An eligible employee with prior allowable service as a 
        member of the Minnesota state retirement system, the public 
        employees retirement association, or the teachers retirement 
        association may elect prospective coverage by the individual 
        retirement account plan.  If individual retirement account plan 
        coverage is elected, accumulated employer and employee 
        contributions and allowable service credit shall remain with the 
        applicable retirement association or system.  Notwithstanding 
        any provision of law to the contrary, an individual who has 
        transferred coverage for the same employment to the individual 
        retirement account plan is entitled to an augmented deferred 
        retirement annuity from the prior plan based on the amount 
        representing the employer and employee contributions made on the 
        individual's behalf in the retirement association or system in 
        which the individual was formerly enrolled without regard to 
        whether or not the individual meets the service credit vesting 
        requirements of the applicable retirement association or 
        system.  An election made under this subdivision clause must be 
        made within 120 days and is irrevocable following the date the 
        eligible employee first becomes eligible to make the election.  
           Sec. 4.  Minnesota Statutes 1995 Supplement, section 
        354D.06, is amended to read: 
           354D.06 [ADMINISTRATION.] 
           (a) The Minnesota state university system or its successor 
        shall administer the individual retirement account plan for 
        eligible employees listed in section 354D.02, subdivision 2, 
        clauses (1) and (2), in accordance with sections 354B.01 to 
        354B.05. 
           (b) The Minnesota historical society or its successor shall 
        administer the individual retirement account plan for eligible 
        employees listed in section 354D.02, subdivision 2, clause (3), 
        in accordance with section 354D.08. 
           Sec. 5.  [354D.08] [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
        ADMINISTRATION; MINNESOTA HISTORICAL SOCIETY.] 
           Subdivision 1.  [GENERAL GOVERNANCE.] The Minnesota 
        historical society is the plan administrator and has the 
        administrative responsibility for the individual retirement 
        account plan for those eligible employees listed in section 
        354D.02, subdivision 2, clause (3).  
           Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) 
        The plan administrator shall arrange for the purchase of fixed 
        annuity contracts, variable annuity contracts, a combination of 
        fixed and variable annuity contracts, or custodial accounts from 
        financial institutions which have been selected by the state 
        board of investment and approved by the plan administrator under 
        subdivision 3, as the investment vehicle for the retirement 
        coverage of plan participants and to provide retirement benefits 
        to plan participants.  Custodial accounts from financial 
        institutions shall include open-end investment companies 
        registered under the federal Investment Company Act of 1940, as 
        amended. 
           (b) The annuity contracts or accounts must be purchased 
        with contributions under section 354D.05, or with money or 
        assets otherwise provided by law by authority of the Minnesota 
        historical society and deemed acceptable by the applicable 
        financial institution. 
           Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] The plan 
        administrator may approve up to two financial institutions 
        selected by the state board of investment under section 354B.25, 
        subdivision 3, to provide annuity products and custodial 
        accounts for those employees listed in section 354D.02, 
        subdivision 2, clause (3).  Only those financial institutions 
        selected by the state board of investment and approved by the 
        plan administrator may provide annuity products and custodial 
        accounts for those employees listed in section 354D.02, 
        subdivision 2, clause (3). 
           The state board of investment must periodically review at 
        least every three years each financial institution selected.  
        The state board of investment may retain consulting services to 
        assist in the periodic review, may establish a budget for its 
        costs in the periodic review process, and may charge a 
        proportional share of those costs to each financial institution 
        selected.  All contracts must be approved by the state board of 
        investment before execution by the Minnesota historical 
        society.  The state board of investment shall also establish 
        policies and procedures under section 11A.04, clause (2), to 
        carry out this subdivision. 
           Subd. 4.  [BENEFIT OWNERSHIP.] The retirement benefits 
        provided by the annuity contracts and custodial accounts of the 
        individual retirement account plan are held for the benefit of 
        plan participants and must be paid according to this chapter and 
        the plan document. 
           Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
        ADMINISTRATIVE EXPENSES; MINNESOTA HISTORICAL SOCIETY.] (a) The 
        reasonable and necessary administrative expenses of the 
        individual retirement account plan for those employees 
        enumerated in section 354D.02, subdivision 2, clause (3), must 
        be paid by plan participants.  The plan administrator may charge 
        to plan participants purchasing annuity contracts and custodial 
        accounts pursuant to subdivision 2, paragraph (a), an 
        administrative expenses assessment of a designated amount, not 
        to exceed two percent of member and employer contributions, as 
        those contributions are made.  
           (b) Any administrative expense charge that is not actually 
        needed for the administrative expenses of the individual 
        retirement account plan must be refunded to member accounts. 
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 1 to 5 are effective the day following final 
        enactment. 
                                   ARTICLE 8
                 VOLUNTEER FIREFIGHTER FIRE PREVENTION SERVICE
           Section 1.  Minnesota Statutes 1994, section 424A.001, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [FIREFIGHTING SERVICE.] "Firefighting service," 
        if the applicable municipality approves for a fire department 
        that is a municipal department, or if the contracting 
        municipality or municipalities approve for a fire department 
        that is an independent nonprofit firefighting corporation, 
        includes service rendered by fire prevention personnel. 
           Sec. 2.  Minnesota Statutes 1994, section 424A.001, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [SEPARATE FROM ACTIVE SERVICE.] "Separate from 
        active service" means to cease to perform fire suppression 
        duties, to cease to perform fire prevention duties, to cease to 
        supervise fire suppression duties, and to cease to supervise 
        fire prevention duties. 
           Sec. 3.  Minnesota Statutes 1994, section 424A.01, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [FIRE PREVENTION PERSONNEL.] (a) If the fire 
        department is a municipal department and the applicable 
        municipality approves, or if the fire department is an 
        independent nonprofit firefighting corporation and the 
        contracting municipality or municipalities approve, the fire 
        department may employ or otherwise utilize the services of 
        persons as volunteer firefighters to perform fire prevention 
        duties and to supervise fire prevention activities. 
           (b) Personnel serving in fire prevention positions are 
        eligible to be members of the applicable volunteer firefighter 
        relief association and to qualify for service pension or other 
        benefit coverage of the relief association on the same basis as 
        fire department personnel who perform fire suppression duties. 
           (c) Personnel serving in fire prevention positions also are 
        eligible to receive any other benefits under the applicable law 
        or practice for services on the same basis as personnel employed 
        to perform fire suppression duties. 
           Sec. 4.  Minnesota Statutes 1994, section 424A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] (a) A relief association, 
        when its articles of incorporation or bylaws so provide, may pay 
        out of the assets of its special fund a service pension to each 
        of its members who:  (1) separates from active service with the 
        fire department; (2) reaches age 50; (3) completes at least five 
        years of active service as an active member of the municipal 
        fire department to which the relief association is associated; 
        (4) completes at least five years of active membership with the 
        relief association before separation from active service; and 
        (5) complies with any additional conditions as to age, service, 
        and membership that are prescribed by the bylaws of the relief 
        association.  A service pension computed under this section may 
        be prorated monthly for fractional years of service, if the 
        bylaws or articles of incorporation of the relief association so 
        provide.  The service pension may be paid whether or not the 
        municipality or nonprofit firefighting corporation to which the 
        relief association is associated qualifies for fire state aid 
        under chapter 69.  
           (b) In the case of a member who has completed at least five 
        years of active service as an active member of the fire 
        department to which the relief association is associated on the 
        date that the relief association is established and 
        incorporated, the requirement that the member complete at least 
        five years of active membership with the relief association 
        before separation from active service may be waived by the board 
        of trustees of the relief association if the member completes at 
        least five years of inactive membership with the relief 
        association before the payment of the service pension.  During 
        the period of inactive membership, the member is not entitled to 
        receive disability benefit coverage, is not entitled to receive 
        additional service credit towards computation of a service 
        pension, and is considered to have the status of a person 
        entitled to a deferred service pension under subdivision 7. 
           (c) No municipality or nonprofit firefighting corporation 
        may delegate the power to take final action in setting a service 
        pension or ancillary benefit amount or level to the board of 
        trustees of the relief association or to approve in advance a 
        service pension or ancillary benefit amount or level equal to 
        the maximum amount or level that this chapter would allow rather 
        than a specific dollar amount or level.  
           (d) No relief association as defined in section 424A.001, 
        subdivision 4, may pay a service pension or disability benefit 
        to a former member of the relief association if that person has 
        not separated from active service with the fire department to 
        which the relief association is directly associated.  
           For the purposes of this chapter, "to separate from active 
        service" means to cease to perform fire suppression duties and 
        to cease to supervise fire suppression duties. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective the day following final 
        enactment. 
                                   ARTICLE 9
                       SERVICE CREDIT DEADLINE EXTENSIONS
                                 AND PURCHASES
           Section 1.  Laws 1995, chapter 252, article 1, section 16, 
        is amended to read: 
           Sec. 16.  [RETROACTIVE PROVISIONS.] 
           (a) A teacher who had at least three years of allowable 
        service credit under Minnesota Statutes, chapter 354 or 354A, on 
        July 1, 1994, and who worked part-time between July 1, 1994, and 
        June 30, 1995, may be allowed to make contributions to and 
        accrue allowable service credit in the applicable retirement 
        fund, as if the teacher had been working full time, as provided 
        in Minnesota Statutes, sections 354.66, subdivision 4, and 
        354A.094, subdivision 4, for service after July 1, 1994, and 
        before June 30, 1995.  If a teacher described in this paragraph 
        wishes to obtain allowable service credit as if the teacher had 
        been working full time for the period from July 1, 1994, to June 
        30, 1995, the teacher must: 
           (1) make a lump sum payment to the applicable pension fund 
        within 60 days after the effective date of this section before 
        August 2, 1996, with respect to the St. Paul teachers retirement 
        fund association, or before August 2, 1995, with respect to any 
        other teacher retirement plan, of the difference between the 
        amount of the employer and employee contributions to the pension 
        fund that would have been paid if the teacher had been working 
        full time, and that amount that was actually paid for part-time 
        service during that period; and 
           (2) submit to the association a letter or other document 
        from the board of the teacher's employing district stating that 
        the board would have agreed to the teacher's participation in 
        the part-time mobility program during the 1994-1995 school year 
        but for the requirement then in effect that the district make 
        the full employer contribution to the retirement fund for 
        teachers with 20 or more years of service, based on the 
        compensation that would have been paid if the teacher had been 
        employed on a full-time basis. 
           (b) An employer of a teacher covered by paragraph (a) must 
        notify the teacher of the option available under paragraph (a) 
        in writing within 30 days of the effective date of this 
        section before July 3, 1996, with respect to the St. Paul 
        teachers retirement fund association, or before July 3, 1995, 
        with respect to any other teacher retirement plan. 
           (c) With respect to the St. Paul teachers retirement fund 
        association, any payment must include compound interest at an 
        annual rate of 8.5 percent from August 3, 1995, to the date on 
        which payment is made. 
           Sec. 2.  [STUDY OF REGIONAL TREATMENT CENTER AND RELATED 
        GOVERNMENTAL ENTITY EDUCATIONAL BREAKS-IN-SERVICE.] 
           The legislative commission on pensions and retirement shall 
        study the topic of the appropriate retirement coverage for 
        educational breaks-in-service to be accorded to state employees 
        who are employed by a regional treatment center, who terminated 
        state employment to undertake additional education with a 
        documented mutual expectation of rehiring upon completion of the 
        educational period, and who received a state stipend during the 
        educational period and to other comparably situated public 
        employees.  The commission shall attempt to identify the 
        actuarial accrued liability associated with granting public 
        pension plan allowable service credit for these educational 
        break-in-service periods and shall determine the appropriate 
        manner of funding that liability.  The commission shall report 
        the results of its study, including any recommendations in the 
        form of draft legislation, by March 1, 1997, to the chair of the 
        committee on governmental operations of the house of 
        representatives, the chair of the committee on governmental 
        operations and veterans of the senate, the chair of the 
        committee on ways and means of the house of representatives, and 
        the chair of the committee on finance of the senate. 
           Sec. 3.  [INDEPENDENT SCHOOL DISTRICT NO. 553, NEW YORK 
        MILLS; PART-TIME TEACHER RETIREMENT COVERAGE PROGRAM DEADLINE 
        EXTENSION.] 
           (a) Notwithstanding any provision of Minnesota Statutes, 
        section 354.66, to the contrary, the teachers retirement 
        association must accept the application for full-time retirement 
        coverage filed by independent school district No. 553, New York 
        Mills, on or about October 13, 1995, for a person who: 
           (1) was born on May 16, 1945; 
           (2) was initially hired by the school district in 1968; 
           (3) served in the military from school years 1969-1970 to 
        1972-1973; and 
           (4) began work as a part-time computer technology teacher 
        on July 1, 1995.  
           A person who meets the requirements of clauses (1) to (4) 
        is entitled to full-time teacher retirement association coverage 
        under Minnesota Statutes, section 354.66, for the 1995-1996 
        school year if all other conditions of that section are met 
        beyond the failure of the school district to timely file the 
        application. 
           (b) A person who meets the requirements of paragraph (a), 
        clauses (1) to (4), for teaching services shall pay the 
        applicable employee contribution under Minnesota Statutes, 
        section 354.42, subdivision 2, on the difference between the 
        amount of the person's compensation from which employee 
        contributions were actually deducted and the amount of the 
        person's full-time equivalent salary under Minnesota Statutes, 
        section 354.66, subdivision 4. 
           (c) Independent school district No. 553, New York Mills, 
        shall pay the applicable employer and additional employer 
        contributions under Minnesota Statutes, section 354.42, 
        subdivisions 3 and 5, on the person's full-time equivalent 
        salary, plus interest at the rate of 8.5 percent.  The school 
        district shall also pay interest at the rate of 8.5 percent on 
        the difference between the employee contributions actually 
        deducted from compensation and the amount of the person's 
        full-time equivalent salary under paragraph (b). 
           (d) The payments under paragraphs (b) and (c) must each be 
        made in a lump sum to the teachers retirement association before 
        June 30, 1996.  If payment is made earlier than June 30, 1996, 
        interest must be calculated to the end of the month in which 
        payment is made. 
           Sec. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 200, HASTINGS; 
        PART-TIME TEACHER RETIREMENT COVERAGE PROGRAM DEADLINE 
        EXTENSION.] 
           (a) Notwithstanding any provision of Minnesota Statutes, 
        section 354.66, to the contrary, the teachers retirement 
        association must accept the application or applications for 
        full-time retirement coverage filed by independent school 
        district No. 200, Hastings, on or about February 5, 1996, for a 
        person who: 
           (1) was born on January 11, 1940; 
           (2) was initially hired by the school district on August 
        26, 1968; and 
           (3) was initially accepted by the school board for 
        participation in the qualified part-time teacher program under 
        Minnesota Statutes, section 354.66, on November 5, 1991. 
           A person who meets the requirements of clauses (1) to (3) 
        is entitled to full-time teacher retirement association coverage 
        under Minnesota Statutes, section 354.66, for the 1992-1993 
        through 1995-1996 school years if all other conditions of that 
        section are met beyond the failure of the school district to 
        timely file the applications. 
           (b) If full-time equivalent employee contributions have not 
        been received by the teachers retirement association, a person 
        who meets the requirements of paragraph (a), clauses (1) to (3), 
        for teaching services shall pay the applicable employee 
        contribution under Minnesota Statutes, section 354.42, 
        subdivision 2, on the difference between the amount of the 
        person's compensation from which employee contributions were 
        actually deducted and the amount of the person's full-time 
        equivalent salary under Minnesota Statutes, section 354.66, 
        subdivision 4. 
           (c) If full-time equivalent employer and additional 
        employer contributions have not been received previously by the 
        teachers retirement association, independent school district No. 
        200, Hastings, shall pay the applicable employer and additional 
        employer contributions under Minnesota Statutes, section 354.42, 
        subdivisions 3 and 5, on the difference, if any, between the 
        person's full-time equivalent salary and the salary upon which 
        contributions were made, plus interest at the rate of 8.5 
        percent compounded annually.  The school district shall also pay 
        interest at the rate of 8.5 percent compounded annually on the 
        difference, if any, between the employee contributions actually 
        deducted from compensation and the employee contributions based 
        on the person's full-time equivalent salary under paragraph (b). 
           (d) The payments under paragraphs (b) and (c) must each be 
        made in a lump sum to the teachers retirement association before 
        June 30, 1996, or before the retirement of a person meeting the 
        requirements of paragraph (a), clauses (1) to (3), whichever is 
        earlier.  If payment is made earlier than June 30, 1996, 
        interest must be calculated to the end of the month in which 
        payment is made. 
           Sec. 5.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
        ELIGIBILITY IN PART-TIME TEACHING PROGRAM FOR CERTAIN PART-TIME 
        TEACHERS.] 
           Notwithstanding any provision of Minnesota Statutes 1994, 
        section 354A.094, to the contrary, teachers in special school 
        district No. 1, Minneapolis, who were granted a part-time 
        position under Minnesota Statutes, section 354A.094, after June 
        30, 1994, but who were compensated in an amount that exceeded 67 
        percent of the compensation rate established by the board for a 
        full-time teacher with identical education and experience within 
        the district and who applied for and were approved by special 
        school district No. 1, Minneapolis, for the 1994-1995 school 
        year to participate in the qualified part-time teacher program 
        must be allowed to make, by June 30, 1996, the full-time 
        employee and employer contribution for the 1994-1995 school year 
        and receive service credit from the Minneapolis teachers 
        retirement fund association in amounts according to those 
        prescribed in Minnesota Statutes, sections 354A.094 and 354A.12. 
           Sec. 6.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
        PURCHASE OF PRIOR SERVICE CREDIT.] 
           Subdivision 1.  [ELIGIBILITY; FORMER MINNEAPOLIS 
        TEACHER.] (a) Notwithstanding Laws 1992, chapter 598, article 6, 
        section 19, an eligible person who was: 
           (1) born on January 4, 1930; 
           (2) employed as a typing teacher in the adult education 
        program at Bryant junior high school in Minneapolis in September 
        1969; 
           (3) employed as a reserve teacher in special school 
        district No. 1 from January 1, 1970, until May 30, 1970; and 
           (4) employed from June 1, 1970, to 1978, as a business 
        education teacher at the occupational skills training center in 
        Minneapolis; 
        may purchase allowable service credit in the basic program of 
        the Minneapolis teachers retirement fund association for the 
        period described in paragraph (b) by paying the amount specified 
        in subdivision 3. 
           (b) The service credit purchase is for the period or 
        periods of uncovered eligible service from September 1969 until 
        the commencement of Minneapolis teachers retirement association 
        fund coverage in 1974 for which membership was mandatory, or for 
        which coverage was at the employee's option, unless it can be 
        demonstrated that the person described in paragraph (a) waived 
        that coverage. 
           Subd. 2.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit 
        for prior eligible service under subdivision 1, there must be 
        paid to the Minneapolis teachers retirement fund association an 
        amount equal to the present value of the amount of the 
        additional retirement annuity obtained by purchase of the 
        additional service credit. 
           (b) Calculation of this amount must be made by the 
        executive director of the Minneapolis teachers retirement fund 
        association using the applicable preretirement interest rate 
        specified in Minnesota Statutes, section 356.215, subdivision 
        4d, and the mortality table adopted for the retirement 
        association.  The calculation must assume retirement at the age 
        at which the minimum requirements of the retirement association 
        for normal retirement, or retirement with an annuity unreduced 
        for retirement at an early age, including Minnesota Statutes, 
        section 356.30, are met with the additional service credit 
        purchased. 
           (c) The person making the purchase must establish in the 
        records of the association proof of the service for which the 
        purchase of prior service is requested.  The manner of the proof 
        of service must be in accordance with procedures prescribed by 
        the executive director of the retirement association. 
           (d) Payment of the amount calculated under this subdivision 
        is the obligation of the eligible individual in subdivision 1 
        and must be made prior to July 1, 1996, in a lump sum.  However, 
        the current or former employer of the eligible individual may, 
        at its discretion, pay all or any portion of the payment amount 
        that exceeds an amount equal to the employee contribution 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 per year compounded annually from the date on which the 
        contributions would otherwise have been made to the date on 
        which the payment is made.  If the employer agrees to payments 
        under this paragraph, the employee must make the employee 
        payments required under this paragraph prior to July 1, 1996.  
        If that employee payment is made, the employing unit payment 
        under this paragraph must be remitted to the executive director 
        of the retirement association within 60 days of receipt by the 
        executive director of the employee payments specified under this 
        paragraph. 
           Subd. 3.  [SERVICE CREDIT GRANT.] Service credit for the 
        purchase period or periods must be granted to the account of the 
        eligible person upon receipt of the purchase payment amount 
        specified in subdivision 2. 
           Sec. 7.  [ELECTION OF PUBLIC EMPLOYEE RETIREMENT 
        ASSOCIATION COVERAGE.] 
           Subdivision 1.  Notwithstanding Minnesota Statutes, section 
        353.01, subdivision 2b, clause (14), to the contrary, a Kanabec 
        hospital employee born on December 6, 1940, employed by the 
        hospital from January 4, 1965, to the present, and a Kanabec 
        hospital employee born on October 6, 1942, employed by the 
        hospital from September, 1964, to August 1, 1966, and from May, 
        1967, to the present, is eligible to make the election under 
        subdivision 2. 
           Subd. 2.  [ELECTION OF COVERAGE.] An eligible employee 
        under subdivision 1 is entitled to elect retirement coverage by 
        the public employees retirement association general plan.  
        Service credit will begin to accrue at the beginning of the pay 
        period following the election of plan coverage by the eligible 
        employee.  The election of coverage must be made on a form 
        prescribed by the executive director of the association.  The 
        election must be made within 60 days after the effective date of 
        this section. 
           Sec. 8.  [REPEALER.] 
           Laws 1990, chapter 570, article 13, section 1, subdivision 
        5, is repealed. 
           Sec. 9.  [EFFECTIVE DATE.] 
           Sections 1 to 6 and 8 are effective the day following final 
        enactment.  Section 7 is effective upon approval by the Kanabec 
        county board and upon compliance with Minnesota Statutes, 
        section 645.021. 
                                   ARTICLE 10 
                    VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION 
                        INVESTMENT PERFORMANCE REPORTING 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        356.219, subdivision 2, is amended to read: 
           Subd. 2.  [CONTENT AND TIMING OF REPORTS.] (a) The 
        following information shall be included in the report required 
        by subdivision 1: 
           (1) the market value of all investments at the close of the 
        reporting period; 
           (2) regular payroll-based contributions to the fund; 
           (3) other contributions and revenue paid into the fund, 
        including, but not limited to, state or local non-payroll-based 
        contributions, repaid refunds, and buybacks; 
           (4) total benefits paid to members; 
           (5) fees paid for investment management services; 
           (6) salaries and other administrative expenses paid; and 
           (7) total return on investment. 
           The report must also include a written statement of the 
        investment policy in effect on June 30, 1988, and any investment 
        policy changes made subsequently and shall include the effective 
        date of each policy change.  The information required under this 
        subdivision must be reported separately for each investment 
        account or investment portfolio included in the pension fund. 
           (b) For public pension plans other than volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately for each quarter for the fiscal 
        years of the pension fund ending during calendar years 1989 
        through 1991 and on a monthly basis thereafter.  For volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately each quarter. 
           (c) Firefighters' relief associations that have assets with 
        a market value of less than $300,000 must submit a written 
        statement of their current investment policy on or before 
        October 1, 1996, must report any subsequent investment policy 
        changes, including the effective date of the change, within 90 
        days of the change, must begin collecting the required 
        information under paragraph (a), clauses (1) to (7), on January 
        1, 1996 1997, and must submit the required information to the 
        state auditor on or before October 1, 1997 1998, and 
        subsequently within six months of the end of each fiscal year.  
        Other associations must submit the required information through 
        fiscal year 1993 to the state auditor on or before October 1, 
        1994, and subsequently within six months of the end of each 
        fiscal year. 
           Sec. 2.  Minnesota Statutes 1994, section 356A.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ECONOMIC INTEREST STATEMENT.] (a) Each member of 
        the governing board of a covered pension plan and the chief 
        administrative officer of the plan shall file with the plan a 
        statement of economic interest.  
           (b) For a covered pension plan other than a plan specified 
        in paragraph (c), the statement must contain the information 
        required by section 10A.09, subdivision 5, and any other 
        information that the fiduciary or the governing board of the 
        plan determines is necessary to disclose a reasonably 
        foreseeable potential or actual conflict of interest.  
           (c) For a covered pension plan governed by sections 69.771 
        to 69.776 or a covered pension plan governed by section 69.77 
        with assets under $8,000,000, the statement must contain the 
        following: 
           (1) the person's principal occupation and principal place 
        of business; 
           (2) whether or not the person has an ownership of or 
        interest of ten percent or greater in an investment security 
        brokerage business, a real estate sales business, an insurance 
        agency, a bank, a savings and loan, or another financial 
        institution; and 
           (3) any relationship or financial arrangement that can 
        reasonably be expected to give rise to a conflict of interest. 
           (d) The statement must be filed annually with the chief 
        administrative officer of the plan and be available for public 
        inspection during regular office hours at the office of the 
        pension plan.  
           (e) A disclosure form meeting the requirements of the 
        federal Investment Advisers Act of 1940, United States Code, 
        title 15, sections 80b-1 to 80b-21 as amended, and filed with 
        the state board of investment or the pension plan meets the 
        requirements of this subdivision. 
           (f) The chief administrative officer of each covered 
        pension plan, by January 15, annually, shall transmit a copy of 
        all statements of economic interest received by the plan under 
        this subdivision during the preceding 12 months to the ethical 
        practices board. 
           Sec. 3.  [REVIEW OF INVESTMENT PERFORMANCE ATTRIBUTION 
        REPORTING FORMS AND REPORTING PROCESS.] 
           (a) On or before February 15, 1997, the special task force 
        established in paragraph (b) shall report to the legislature on 
        its review of the investment performance attribution reporting 
        forms and reporting process as provided in paragraph (d). 
           (b) The special task force consists of: 
           (1) the chair of the legislative commission on pensions and 
        retirement or the chair's designee; 
           (2) the vice-chair of the legislative commission on 
        pensions and retirement or the vice-chair's designee; 
           (3) the chair of the committee on governmental operations 
        of the house of representatives or the chair's designee; 
           (4) the chair of the committee on governmental operations 
        and veterans of the senate or the chair's designee; 
           (5) the executive director of the state board of investment 
        or the director's designee; 
           (6) the state auditor or the auditor's designee; 
           (7) two persons who are each a volunteer firefighter member 
        of the board of trustees of a volunteer firefighter relief 
        association deemed representative of its membership and 
        designated by the governing board of the Minnesota area relief 
        association coalition; 
           (8) two persons who are each a volunteer firefighter member 
        of the board of trustees of a volunteer firefighter relief 
        association deemed representative of its membership and 
        designated by the governing board of the Minnesota state fire 
        chiefs association; 
           (9) two persons who are each a volunteer firefighter member 
        of the board of trustees of a volunteer firefighter relief 
        association deemed representative of its membership and 
        designated by the governing board of the Minnesota state fire 
        department association; 
           (10) a person who is a municipal representative on a board 
        of trustees of a volunteer firefighters relief association with 
        assets under $300,000 as designated by the executive director of 
        the league of Minnesota cities; 
           (11) a representative of a first class city teacher 
        retirement fund association as designated by the chair of the 
        legislative commission on pensions and retirement; and 
           (12) a representative of a local police or salaried 
        firefighter relief association governed by Minnesota Statutes, 
        section 69.77 as designated by the chair of the legislative 
        commission on pensions and retirement. 
           (c) The chair of the special task force is the chair of the 
        legislative commission on pensions and retirement or the chair's 
        designee and the chair shall establish the meeting schedule and 
        topic agenda for the special task force. 
           (d) The special task force, at a minimum, shall consider 
        the following topics and issues: 
           (1) the changes required to simplify the investment 
        performance attribution reporting under Minnesota Statutes, 
        section 356.219, for smaller local pension plans; 
           (2) the changes required to include the investment 
        performance attribution reporting in the annual financial 
        reporting under Minnesota Statutes, section 69.051; 
           (3) the changes required to combine the investment 
        performance reporting under Minnesota Statutes, section 356.218, 
        with the investment performance attribution reporting under 
        Minnesota Statutes, section 356.219, and the appropriate entity 
        to administer any combined reporting program; and 
           (4) any other topics relevant to the investment reporting 
        programs under Minnesota Statutes, section 356.218 or 356.219. 
           Sec. 4.  [EFFECTIVE DATE.] 
           This article is effective the day following final enactment.
           Presented to the governor April 2, 1996 
           Signed by the governor April 3, 1996, 3:57 p.m.

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