1.1 	A bill for an act
1.2 	relating to retirement; various retirement plans;
1.3 	updating language usage and style in various
1.4 	provisions, clarifying various provisions; correcting
1.5 	cross-references in various provisions; amending
1.6 	Minnesota Statutes 2004, sections 69.011, subdivision
1.7 	2b; 69.021, subdivisions 5, 11; 69.33; 69.773,
1.8 	subdivision 4; 352.01, subdivisions 4, 5, 21, 23;
1.9 	352.021, subdivisions 1, 2, 3, 4; 352.04, subdivisions
1.10 	1, 12; 352.041, subdivisions 1, 2, 3, 5; 352.22,
1.11 	subdivision 10; 352B.01, subdivisions 1, 2, 3;
1.12 	352B.02, subdivision 1e; 352D.01; 352D.015,
1.13 	subdivisions 3, 4; 352D.03; 352D.05, subdivision 4;
1.14 	352D.085, subdivision 1; 352D.09, subdivision 5;
1.15 	352D.12; 353.01, subdivisions 32, 33; 353.025;
1.16 	353.026; 353.027; 353.028; 353.14; 353.27, subdivision
1.17 	11; 353.271; 353.31, subdivision 1c; 353.32,
1.18 	subdivision 9; 353.33, subdivision 12; 354.091;
1.19 	354.33, subdivision 5; 354.39; 354.41, subdivision 2;
1.20 	354.42, by adding a subdivision; 354.44, subdivision
1.21 	2; 354A.021, subdivision 5; 354A.31, subdivision 5;
1.22 	356A.06, subdivision 7; 422A.01, subdivision 11;
1.23 	422A.06, subdivision 7; 422A.10, subdivisions 1, 2;
1.24 	422A.22, subdivisions 1, 3, 4, 6; 422A.231; repealing
1.25 	Minnesota Statutes 2004, sections 352.119, subdivision
1.26 	1; 353.34, subdivision 3b; 353.36, subdivisions 2, 2a,
1.27 	2b, 2c; 353.46, subdivision 4; 353.663; 353.74;
1.28 	353.75; 354.59; 422A.22, subdivisions 2, 5; 422A.221.
1.29 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.30 	Section 1. Minnesota Statutes 2004, section 69.011,
1.31 	subdivision 2b, is amended to read:
1.32 		Subd. 2b.Departments of natural resources and public
1.33 	safety.  (a) ~~On or before July 1, 1997, the commissioner of~~
1.34 	~~natural resources shall certify one-half of the number of peace~~
1.35 	~~officers as defined in subdivision 1, clause (g), employed by~~
1.36 	~~the Enforcement Division during calendar year 1996 and the~~
1.37 	~~commissioner of public safety shall certify one-half of the~~
2.1 	~~number of peace officers as defined in subdivision 1, clause~~
2.2 	~~(g), employed by the Bureau of Criminal Apprehension, the~~
2.3 	~~Gambling Enforcement Division, and the State Patrol Division~~
2.4 	~~during calendar year 1996.~~
2.5 	~~(b) On or before March 15, 1998, the commissioner of~~
2.6 	~~natural resources shall certify seven-tenths of the number of~~
2.7 	~~peace officers as defined in subdivision 1, clause (g), employed~~
2.8 	~~by the Enforcement Division and the commissioner of public~~
2.9 	~~safety shall certify seven-tenths of the number of peace~~
2.10 	~~officers as defined in subdivision 1, clause (g), employed by~~
2.11 	~~the Bureau of Criminal Apprehension, the Gambling Enforcement~~
2.12 	~~Division, and the State Patrol Division.~~
2.13 	~~(c)~~ On or before ~~March 15, 1999, and annually on or before~~ 
2.14 	each March 15 ~~thereafter~~, the commissioner of natural resources
2.15 	shall certify the number of peace officers as defined in
2.16 	subdivision 1, clause (g), employed by the Enforcement Division
2.17 	and the commissioner of public safety shall certify the number
2.18 	of peace officers as defined in subdivision 1, clause (g),
2.19 	employed by the Bureau of Criminal Apprehension, the Gambling
2.20 	Enforcement Division, and the State Patrol Division.
2.21 	~~(d)~~ (b) The certification must be on a form prescribed by
2.22 	the commissioner.  Peace officers certified under this paragraph
2.23 	must be included in the total certifications under subdivision 2.

2.24 	Sec. 2. Minnesota Statutes 2004, section 69.021,
2.25 	subdivision 5, is amended to read:
2.26 		Subd. 5.Calculation of state aid.  (a) The amount of
2.27 	fire state aid available for apportionment, before the addition
2.28 	of the minimum fire state aid allocation amount under
2.29 	subdivision 7, is equal to 107 percent of the amount of premium
2.30 	taxes paid to the state upon the fire, lightning, sprinkler
2.31 	leakage, and extended coverage premiums reported to the
2.32 	commissioner by insurers on the Minnesota Firetown Premium
2.33 	Report.  This amount ~~shall~~ must be reduced by the amount
2.34 	required to pay the state auditor's costs and expenses of the
2.35 	audits or exams of the firefighters relief associations.
2.36 	The total amount for apportionment in respect to fire state
3.1 	aid must not be less than two percent of the premiums reported
3.2 	to the commissioner by insurers on the Minnesota Firetown
3.3 	Premium Report after subtracting the following amounts:
3.4 	(1) the amount required to pay the state auditor's costs
3.5 	and expenses of the audits or exams of the firefighters relief
3.6 	associations; and
3.7 	(2) one percent of the premiums reported by town and
3.8 	farmers' mutual insurance companies and mutual property and
3.9 	casualty companies with total assets of $5,000,000 or less.
3.10 	(b) The total amount for apportionment as police state aid
3.11 	is equal to 104 percent of the amount of premium taxes paid to
3.12 	the state on the premiums reported to the commissioner by
3.13 	insurers on the Minnesota Aid to Police Premium Report, reduced
3.14 	by the amount required to pay the costs and expenses of the
3.15 	state auditor for audits or exams of police relief
3.16 	associations.  The total amount for apportionment in respect to
3.17 	the police state aid program must not be less than two percent
3.18 	of the amount of premiums reported to the commissioner by
3.19 	insurers on the Minnesota Aid to Police Premium Report after
3.20 	subtracting the amount required to pay the state auditor's cost
3.21 	and expenses of the audits or exams of the police relief
3.22 	associations.
3.23 	(c) The commissioner shall calculate the percentage of
3.24 	increase or decrease reflected in the apportionment over or
3.25 	under the previous year's available state aid using the same
3.26 	premiums as a basis for comparison.
3.27 	(d) ~~The amount for apportionment in respect to peace~~
3.28 	~~officer state aid under paragraph (b) must be further reduced by~~
3.29 	~~$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,~~
3.30 	~~and $2,404,000 in fiscal year 2001.  These reductions in this~~
3.31 	~~paragraph cancel to the general fund.~~
3.32 	~~(e)~~ In addition to the amount for apportionment of police
3.33 	state aid under paragraph (b), each year $100,000 ~~shall~~ must be
3.34 	apportioned for police state aid.  An amount sufficient to pay
3.35 	this increase is annually appropriated from the general fund.

3.36 	Sec. 3. Minnesota Statutes 2004, section 69.021,
4.1 	subdivision 11, is amended to read:
4.2 		Subd. 11.Excess police state-aid holding account.  (a)
4.3 	The excess police state-aid holding account is established in
4.4 	the general fund.  The excess police state-aid holding account
4.5 	must be administered by the commissioner.
4.6 	(b) Excess police state aid determined according to
4.7 	subdivision 10, must be deposited in the excess police state-aid
4.8 	holding account.
4.9 	(c) From the balance in the excess police state-aid holding
4.10 	account, $900,000 is appropriated to and must be transferred
4.11 	annually to the ambulance service personnel longevity award and
4.12 	incentive suspense account established by section 144E.42,
4.13 	subdivision 2.
4.14 	(d) If a police officer stress reduction program is created
4.15 	by law and money is appropriated for that program, an amount
4.16 	equal to that appropriation must be transferred to the
4.17 	administrator of that program from the balance in the excess
4.18 	police state-aid holding account.
4.19 	(e) On October 1, ~~1997, and~~ annually ~~on each subsequent~~
4.20 	~~October 1,~~one-half of the balance of the excess police
4.21 	state-aid holding account remaining after the deductions under
4.22 	paragraphs (c) and (d) is appropriated for additional
4.23 	amortization aid under section 423A.02, subdivision 1b.
4.24 	(f) Annually, the remaining balance in the excess police
4.25 	state-aid holding account, after the deductions under paragraphs
4.26 	(c), (d), and (e), cancels to the general fund.

4.27 	Sec. 4. Minnesota Statutes 2004, section 69.33, is amended
4.28 	to read:
4.29 	69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
4.30 	COMPANIES.
4.31 	The commissioner shall enclose in the annual statement
4.32 	blank that is sent to all fire insurance companies doing
4.33 	business in this state a blank form containing the names of ~~all~~
4.34 	~~firefighters' relief associations in~~ all cities of the first
4.35 	class ~~and the names of the cities~~ and require these companies,
4.36 	at the time of making their annual statements to the
5.1 	commissioner, to state on these blanks the amount of premiums
5.2 	received by them upon properties insured within the corporate
5.3 	limits of the cities named thereon during the year ending
5.4 	December 31st last past.  Thereafter, before July first each
5.5 	year, the commissioner shall certify to the commissioner of
5.6 	finance the information thus obtained, together with the amount
5.7 	of the tax for the benefit of the ~~relief association~~ pension
5.8 	plans covering firefighters in cities of the first class paid in
5.9 	such year by these companies upon these insurance premiums.

5.10 	Sec. 5. Minnesota Statutes 2004, section 69.773,
5.11 	subdivision 4, is amended to read:
5.12 		Subd. 4.Financial requirements of special fund. ~~Prior~~
5.13 	~~to~~ Before August 1 of each year, the officers of the relief
5.14 	association shall determine the financial requirements of the
5.15 	special fund of the relief association in accordance with the
5.16 	requirements of this subdivision.  The financial requirements of
5.17 	the relief association ~~shall~~ must be based on the most recent
5.18 	actuarial valuation of the special fund prepared in accordance
5.19 	with subdivision 2.  If the relief association has an unfunded
5.20 	actuarial accrued liability as reported in the most recent
5.21 	actuarial valuation, the financial requirements ~~shall~~ must be
5.22 	determined by adding the figures calculated ~~pursuant to~~ under 
5.23 	clauses (a), (b), and (c).  If the relief association does not
5.24 	have an unfunded actuarial accrued liability as reported in the
5.25 	most recent actuarial valuation, the financial requirements
5.26 	~~shall~~ must be an amount equal to the figure calculated ~~pursuant~~
5.27 	~~to~~ under clauses (a) and (b), reduced by an amount equal to
5.28 	one-tenth of the amount of any assets in excess of the actuarial
5.29 	accrued liability of the relief association.  The determination
5.30 	of whether or not the relief association has an unfunded
5.31 	actuarial accrued liability ~~shall~~ must be based on the current
5.32 	market value of assets for which a market value is readily
5.33 	ascertainable and the cost or book value, whichever is
5.34 	applicable, for assets for which no market value is readily
5.35 	ascertainable.
5.36 	(a) The normal level cost requirement for the following
6.1 	year, expressed as a dollar amount, ~~shall be~~ is the figure for
6.2 	the normal level cost of the relief association as reported in
6.3 	the actuarial valuation.
6.4 	(b) The amount of anticipated future administrative
6.5 	expenses of the special fund ~~shall~~ must be calculated by
6.6 	multiplying the dollar amount of the administrative expenses of
6.7 	the special fund for the most recent year by the factor of 1.035.
6.8 	(c) The amortization contribution requirement to retire the
6.9 	current unfunded actuarial accrued liability by the established
6.10 	date for full funding ~~shall be~~ is the figure for the
6.11 	amortization contribution as reported in the actuarial
6.12 	valuation. ~~If there has not been a change in the actuarial~~
6.13 	~~assumptions used for calculating the actuarial accrued liability~~
6.14 	~~of the special fund, a change in the bylaws of the relief~~
6.15 	~~association governing the service pensions, retirement benefits,~~
6.16 	~~or both payable from the special fund or a change in the~~
6.17 	~~actuarial cost method used to value all or a portion of the~~
6.18 	~~special fund which change or changes, which by themselves~~
6.19 	~~without inclusion of any other items of increase or decrease,~~
6.20 	~~produce a net increase in the unfunded actuarial accrued~~
6.21 	~~liability of the special fund since December 31, 1970, the~~
6.22 	~~established date for full funding shall be December 31, 1990.~~
6.23 	If there has been a change in the actuarial assumptions used for
6.24 	calculating the actuarial accrued liability of the special fund,
6.25 	a change in the bylaws of the relief association governing the
6.26 	service pensions, retirement benefits, or both payable from the
6.27 	special fund or a change in the actuarial cost method used to
6.28 	value all or a portion of the special fund and the change or
6.29 	changes, by themselves and without inclusion of any other items
6.30 	of increase or decrease, produce a net increase in the unfunded
6.31 	actuarial accrued liability of the special fund ~~since December~~
6.32 	~~31, 1970, but prior to January 1, 1979, the established date for~~
6.33 	~~full funding shall be December 31, 1998, and if there has been a~~
6.34 	~~change since December 31, 1978~~, the established date for full
6.35 	funding ~~shall~~ must be determined using the following procedure:
6.36 	(i) the unfunded actuarial accrued liability of the special
7.1 	fund ~~shall~~ must be determined in accordance with the provisions
7.2 	governing service pensions, retirement benefits, and actuarial
7.3 	assumptions in effect before an applicable change;
7.4 	(ii) the level annual dollar contribution needed to
7.5 	amortize this unfunded actuarial accrued liability amount by the
7.6 	date for full funding in effect ~~prior to~~ before the change ~~shall~~ 
7.7 	must be calculated using the interest assumption specified in
7.8 	section 356.215, subdivision 8, in effect before any applicable
7.9 	change;
7.10 	(iii) the unfunded actuarial accrued liability of the
7.11 	special fund ~~shall~~ must be determined in accordance with any new
7.12 	provisions governing service pensions, retirement benefits, and
7.13 	actuarial assumptions and the remaining provisions governing
7.14 	service pensions, retirement benefits, and actuarial assumptions
7.15 	in effect before an applicable change;
7.16 	(iv) the level annual dollar contribution needed to
7.17 	amortize the difference between the unfunded actuarial accrued
7.18 	liability amount calculated ~~pursuant to~~ under subclause (i) and
7.19 	the unfunded actuarial accrued liability amount
7.20 	calculated ~~pursuant to~~ under subclause (iii) over a period of 20
7.21 	years starting December 31 of the year in which the change is
7.22 	effective ~~shall~~ must be calculated using the interest assumption
7.23 	specified in section 356.215, subdivision 8, in effect after any
7.24 	applicable change;
7.25 	(v) the annual amortization contribution calculated
7.26 	~~pursuant to~~ under subclause (iv) ~~shall~~ must be added to the
7.27 	annual amortization contribution calculated ~~pursuant to~~ under 
7.28 	subclause (ii);
7.29 	(vi) the period in which the unfunded actuarial accrued
7.30 	liability amount determined in subclause (iii) will be amortized
7.31 	by the total annual amortization contribution computed ~~pursuant~~
7.32 	~~to~~ under subclause (v) ~~shall~~ must be calculated using the
7.33 	interest assumption specified in section 356.215, subdivision 8,
7.34 	in effect after any applicable change, rounded to the nearest
7.35 	integral number of years, but which ~~shall~~ does not exceed a
7.36 	period of 20 years from the end of the year in which the
8.1 	determination of the date for full funding using this procedure
8.2 	is made and which ~~shall~~ is not ~~be~~ less than the period of years
8.3 	beginning in the year in which the determination of the date for
8.4 	full funding using this procedure is made and ending by the date
8.5 	for full funding in effect before the change;
8.6 	(vii) the period determined ~~pursuant to~~ under subclause (vi)
8.7 	~~shall~~ must be added to the date as of which the actuarial
8.8 	valuation was prepared and the resulting date ~~shall be~~ is the
8.9 	new date for full funding.

8.10 	Sec. 6. Minnesota Statutes 2004, section 352.01,
8.11 	subdivision 4, is amended to read:
8.12 		Subd. 4.Accumulated contributions.  "Accumulated
8.13 	contributions" means the total, exclusive of interest, of (1)
8.14 	the sums deducted from the salary of an employee, (2) the amount
8.15 	of payments, including assessments, paid by the employee in lieu
8.16 	of salary deductions and all other payments made under ~~Laws~~
8.17 	~~1929, chapter 191, as amended,~~this chapter and credited to the
8.18 	employee's individual account in the retirement fund.

8.19 	Sec. 7. Minnesota Statutes 2004, section 352.01,
8.20 	subdivision 5, is amended to read:
8.21 		Subd. 5.Retirement fund. (a) "Retirement fund" means
8.22 	the general state employees retirement fund created by section
8.23 	352.04, subdivision 1, with respect to the general state
8.24 	employees retirement plan or the correctional state employees
8.25 	retirement fund created by section 352.911, subdivision 1, with
8.26 	respect to the correctional state employees retirement plan.
8.27 	(b) ~~"~~ The retirement fund ~~"~~ includes the aggregate of
8.28 	accumulated contributions of employees covered by the applicable
8.29 	plan, and all other funds paid into the state treasury or
8.30 	received by the director under ~~Laws 1929, chapter 191, as~~
8.31 	~~amended~~ this chapter, together with all income and profits from
8.32 	the money and interest on it, including contributions on the
8.33 	part of the federal government, the state, and state departments.

8.34 	Sec. 8. Minnesota Statutes 2004, section 352.01,
8.35 	subdivision 21, is amended to read:
8.36 		Subd. 21.Accrued annuities. (a) In this chapter and
9.1 	chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an
9.2 	annuity that had become payable to a retired employee in the
9.3 	lifetime of the employee.
9.4 	(b) An annuity or benefit authorized as provided in this
9.5 	chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
9.6 	the first day of each calendar month for that calendar month and
9.7 	~~is to~~ must be paid on the first day of each calendar month
9.8 	~~beginning with benefits payable on and after December 1, 1977~~.
9.9 	(c) Notwithstanding any provision to the contrary in this
9.10 	chapter and chapters 3A, 352B, 352C, and 490, benefit payment
9.11 	authorized as "payable for life" is payable for the entire month
9.12 	in which death occurs, and the benefit payment for the month of
9.13 	death is payable to the surviving spouse or other beneficiary
9.14 	only if the annuitant dies before negotiating the benefit check.

9.15 	Sec. 9. Minnesota Statutes 2004, section 352.01,
9.16 	subdivision 23, is amended to read:
9.17 		Subd. 23.Coverage or covered by the system.  "Coverage"
9.18 	or "covered by the system" means that a state ~~employees~~ employee 
9.19 	who ~~serve~~ serves the state of Minnesota and ~~make~~ makes the
9.20 	required employee contributions to the retirement fund ~~will~~ is,
9.21 	by reason of these contributions ~~become~~ ,entitled to either (1)
9.22 	a retirement annuity, or (2) a disability benefit, or (3) a
9.23 	refund of accumulated contributions, as provided in this chapter.

9.24 	Sec. 10. Minnesota Statutes 2004, section 352.021,
9.25 	subdivision 1, is amended to read:
9.26 		Subdivision 1.Establishment. (a) There is established
9.27 	the general state employees retirement plan of the Minnesota
9.28 	State Retirement System for state employees.
9.29 	(b) The ~~system~~ general state employees retirement plan is a
9.30 	continuation of the State Employees Retirement Association.
9.31 	(c) Any person who was a member of the State Employees
9.32 	Retirement Association on June 30, 1967, is covered by
9.33 	the ~~system~~ general state employees retirement plan and is
9.34 	entitled to all benefits provided by the ~~system~~ plan upon
9.35 	fulfilling the age, service, contribution, and other
9.36 	requirements of this chapter.

10.1 	Sec. 11. Minnesota Statutes 2004, section 352.021,
10.2 	subdivision 2, is amended to read:
10.3 		Subd. 2.State employees covered.  Every person who ~~is a~~
10.4 	~~state employee, as defined in section 352.01, on July 1, 1967,~~
10.5 	~~or~~ becomes a state employee ~~after that date~~ as defined in
10.6 	section 352.01is covered by the ~~system~~ general state employees
10.7 	retirement plan.  Acceptance of state employment or continuance
10.8 	in state service is deemed to be consent to have deductions made
10.9 	from salary for deposit to the credit of the account of the
10.10 	state employee in the retirement fund.

10.11 	Sec. 12. Minnesota Statutes 2004, section 352.021,
10.12 	subdivision 3, is amended to read:
10.13 		Subd. 3.Optional exemptions.  Any person who is
10.14 	appointed by the governor or lieutenant governor may request
10.15 	exemption from coverage by the general state employees
10.16 	retirement plan under this chapter if the appointee is not ~~so~~ 
10.17 	covered ~~at~~ by the plan on the date of appointment.  To qualify
10.18 	for this exemption, a written request must be made within 90
10.19 	days from the date of entering upon the duties of the position
10.20 	to which the person is appointed.  After making the request, a
10.21 	person requesting the exemption is not entitled to coverage by
10.22 	the general state employees retirement plan while employed in
10.23 	the position that entitled that person to an exemption from
10.24 	coverage.

10.25 	Sec. 13. Minnesota Statutes 2004, section 352.021,
10.26 	subdivision 4, is amended to read:
10.27 		Subd. 4.Reentering service after refund.  When a former
10.28 	employee who has withdrawn accumulated contributions reenters
10.29 	employment in a position entitled to coverage under the
10.30 	~~system~~ general state employees retirement plan, the employee
10.31 	~~shall~~ must be covered by the ~~system~~ plan on the same basis as a
10.32 	new employee and is not entitled to credit for any former
10.33 	service.  The annuity rights forfeited when taking a refund can
10.34 	only be restored as provided in this chapter.

10.35 	Sec. 14. Minnesota Statutes 2004, section 352.04,
10.36 	subdivision 1, is amended to read:
11.1 		Subdivision 1.Fund created.  (a) There is created a
11.2 	special fund to be known as the general state employees
11.3 	retirement fund.  In that fund ~~there shall be deposited~~
11.4 	~~employees~~ , employee contributions, ~~employers~~ employer 
11.5 	contributions, and other amounts authorized by law must be
11.6 	deposited.
11.7 	(b) ~~Effective July 1, 1969,~~The general state employees
11.8 	retirement plan of the Minnesota State Retirement System ~~shall~~ 
11.9 	must participate in the Minnesota postretirement investment fund.
11.10 	~~In that fund there shall be deposited~~ The amounts provided in
11.11 	section 352.119must be deposited in the Minnesota
11.12 	postretirement investment fund.

11.13 	Sec. 15. Minnesota Statutes 2004, section 352.04,
11.14 	subdivision 12, is amended to read:
11.15 		Subd. 12.Fund disbursement restricted.  The general 
11.16 	state employees retirement fund and the participation in the
11.17 	Minnesota postretirement investment fund must be disbursed only
11.18 	for the purposes provided by law.  The expenses of the system
11.19 	and any benefits provided by law, other than benefits payable
11.20 	from the Minnesota postretirement investment fund, must be paid
11.21 	from the general state employees retirement fund.  The
11.22 	retirement allowances, retirement annuities, and disability
11.23 	benefits, as well as refunds of any sum remaining to the credit
11.24 	of a deceased retired employee or a disabled employee must be
11.25 	paid only from the general state employees retirement fund after
11.26 	the needs have been certified and the amounts withdrawn from the
11.27 	participation in the Minnesota postretirement investment fund
11.28 	under section 11A.18.  The amounts necessary to make the
11.29 	payments from the general state employees retirement fund and
11.30 	the participation in the Minnesota postretirement investment
11.31 	fund are annually appropriated from these funds for those
11.32 	purposes.

11.33 	Sec. 16. Minnesota Statutes 2004, section 352.041,
11.34 	subdivision 1, is amended to read:
11.35 		Subdivision 1.Allowable service credit. ~~Any~~ (a) An 
11.36 	employee covered by the ~~system~~ general state employees
12.1 	retirement plan who is given a leave of absence for employment
12.2 	by a political subdivision of the state ~~shall~~ remains a member
12.3 	of the plan and must continue to pay member contributions into
12.4 	the general state employees retirement fund for the period of
12.5 	leave.
12.6 	(b) Upon payment of member contributions,the employee must
12.7 	be given allowable service credit as a state employee on the
12.8 	records of the ~~system~~ retirement plan as though the employee had
12.9 	received salary from the state during the leave.  Payments into
12.10 	the retirement fund ~~shall~~ must be at the rate required in
12.11 	section 352.04, subdivision 2, and must be based upon the salary
12.12 	received from the political subdivision ~~subject to the maximum~~
12.13 	~~amount, if any~~.

12.14 	Sec. 17. Minnesota Statutes 2004, section 352.041,
12.15 	subdivision 2, is amended to read:
12.16 		Subd. 2.Employee contributions, procedure.  The officer
12.17 	or employee who is authorized by law to pay salaries to
12.18 	employees of the political subdivision which is employing a
12.19 	state employee ~~shall have~~ must deduct employee contributions
12.20 	~~deducted~~ for the general state employees retirement plan under
12.21 	section 352.04, subdivision 2,from the salary of each employee
12.22 	who is on leave of absence from state service on each payroll
12.23 	abstract and ~~shall~~ must pay the sum to the director following
12.24 	the conclusion of each pay period.

12.25 	Sec. 18. Minnesota Statutes 2004, section 352.041,
12.26 	subdivision 3, is amended to read:
12.27 		Subd. 3.Employer contributions, procedure.  The officer
12.28 	or employee who is authorized by law to pay salaries to
12.29 	employees of the political subdivision which is employing a
12.30 	state employee covered by the ~~system shall~~ general state
12.31 	employees retirement plan also must have employer contributions
12.32 	made to the general state employees retirement fund ~~on~~ following
12.33 	the conclusion of each payroll abstract in the amount required
12.34 	by section 352.04, subdivision 3.  These contributions ~~are to~~ 
12.35 	must be charged to the political subdivision as an
12.36 	administrative cost.

13.1 	Sec. 19. Minnesota Statutes 2004, section 352.041,
13.2 	subdivision 5, is amended to read:
13.3 		Subd. 5.Employer contributions, leaves of absence; tax
13.4 	levies. (a) Every political subdivision which is employing a
13.5 	state employee covered by the system on leave of absence from
13.6 	state service for employment by a political subdivision of the
13.7 	state shall pay into the state employees retirement fund the
13.8 	amount of the employer contribution required by law for state
13.9 	employees covered by the system under section 352.04,
13.10 	subdivision 3.
13.11 	(b) Employing political subdivisions~~, except~~ other than 
13.12 	school districts~~,~~may levy taxes necessary for the payment of
13.13 	employer contributions without limitation as to rate or amount.
13.14 	The levy of the taxes does not reduce the amount of other
13.15 	taxes ~~to~~ that may be levied by political subdivisions~~,~~
13.16 	~~except~~ other than school districts~~,~~which are subject to any
13.17 	limitation.

13.18 	Sec. 20. Minnesota Statutes 2004, section 352.22,
13.19 	subdivision 10, is amended to read:
13.20 		Subd. 10.Other refunds.  Former employees covered by the
13.21 	system are entitled to apply for refunds if they are or become
13.22 	members of the State Patrol retirement fund, the state Teachers
13.23 	Retirement Association, or employees of the University of
13.24 	Minnesota excluded from coverage under the system by action of
13.25 	the Board of Regents; ~~or labor service employees, excluded from~~
13.26 	~~coverage under section 352.01, subdivision 2b, clause (25);~~or
13.27 	employees of the adjutant general who under federal law
13.28 	effectually elect membership in a federal retirement system; or
13.29 	officers or employees of the senate or house of representatives,
13.30 	excluded from coverage under section 352.01, subdivision 2b,
13.31 	clause ~~(8)~~ (7).  The refunds must include accumulated
13.32 	contributions plus interest as provided in subdivision 2.  These
13.33 	employees may apply for a refund once 30 days or more have
13.34 	elapsed after their coverage ceases, even if they continue in
13.35 	state service but in positions not covered by this chapter.

13.36 	Sec. 21. Minnesota Statutes 2004, section 352B.01,
14.1 	subdivision 1, is amended to read:
14.2 		Subdivision 1.Scope.  In this chapter, each of the terms
14.3 	defined in this section ~~have~~ has the ~~meanings~~ meaning given
14.4 	~~them~~ to it.

14.5 	Sec. 22. Minnesota Statutes 2004, section 352B.01,
14.6 	subdivision 2, is amended to read:
14.7 		Subd. 2.Member.  "Member" means:
14.8 	(1) a State Patrol member currently employed ~~after June 30,~~
14.9 	~~1943,~~under section 299D.03 by the state, who is a peace officer
14.10 	under section 626.84, and whose salary or compensation is paid
14.11 	out of state funds;
14.12 	(2) a conservation officer employed under section 97A.201,
14.13 	currently employed by the state, whose salary or compensation is
14.14 	paid out of state funds;
14.15 	(3) a crime bureau officer who was employed by the crime
14.16 	bureau and was a member of the Highway Patrolmen's retirement
14.17 	fund on July 1, 1978, whether or not that person has the power
14.18 	of arrest by warrant after that date, or who is employed as
14.19 	police personnel, with powers of arrest by warrant under section
14.20 	299C.04, and who is currently employed by the state, and whose
14.21 	salary or compensation is paid out of state funds;
14.22 	(4) a person who is employed by the state in the Department
14.23 	of Public Safety in a data processing management position with
14.24 	salary or compensation paid from state funds, who was a crime
14.25 	bureau officer covered by the State Patrol retirement plan on
14.26 	August 15, 1987, and who was initially hired in the data
14.27 	processing management position within the department during
14.28 	September 1987, or January 1988, with membership continuing for
14.29 	the duration of the person's employment in that position,
14.30 	whether or not the person has the power of arrest by warrant
14.31 	after August 15, 1987;
14.32 	(5) a public safety employee ~~defined as~~ who is a peace
14.33 	officer ~~in~~ under section 626.84, subdivision 1, paragraph (c),
14.34 	and who is employed ~~with~~ by the Division of Alcohol and Gambling
14.35 	Enforcement under section 299L.01; and
14.36 	(6) a Fugitive Apprehension Unit officer after October 31,
15.1 	2000, who is employed by the Office of Special Investigations of
15.2 	the Department of Corrections and who is a peace officer under
15.3 	section 626.84.

15.4 	Sec. 23. Minnesota Statutes 2004, section 352B.01,
15.5 	subdivision 3, is amended to read:
15.6 		Subd. 3.Allowable service.  (a) "Allowable service"
15.7 	means:
15.8 	(1) for members defined in subdivision 2, clause ~~(a)~~ (1),
15.9 	~~monthly~~ service ~~is granted for~~ in any month for which payments
15.10 	have been made to the State Patrol retirement fund, and
15.11 	(2) for members defined in subdivision 2, clauses ~~(b)~~ (2) 
15.12 	and ~~(c)~~ (3), service for which payments have been made to the
15.13 	State Patrol retirement fund, service for which payments were
15.14 	made to the State Police officers retirement fund after June 30,
15.15 	1961, and all prior service which was credited to a member for
15.16 	service on or before June 30, 1961.
15.17 	(b) Allowable service also includes any period of absence
15.18 	from duty by a member who, by reason of injury incurred in the
15.19 	performance of duty, is temporarily disabled and for which
15.20 	disability the state is liable under the workers' compensation
15.21 	law, until the date authorized by the executive director for
15.22 	commencement of payment of a disability benefit or return to
15.23 	employment.
15.24 	(c) MS 2002 (Expired)
15.25 	(c) Allowable service means service in a month during which
15.26 	a member is paid a salary from which a member contribution is
15.27 	deducted, deposited, and credited in the State Patrol retirement
15.28 	plan.

15.29 	Sec. 24. Minnesota Statutes 2004, section 352B.02,
15.30 	subdivision 1e, is amended to read:
15.31 		Subd. 1e.Audit; actuarial valuation.  The legislative
15.32 	auditor shall audit the fund.  Any actuarial valuation of the
15.33 	fund required under section 356.215 must be prepared by the
15.34 	actuary retained under section 356.214.  Any approved actuary
15.35 	retained by the executive director under section 352.03,
15.36 	subdivision 6, may perform actuarial valuations and experience
16.1 	studies to supplement those performed by the ~~commission-retained~~ 
16.2 	actuary retained under section 356.214.  Any supplemental
16.3 	actuarial valuation or experience studies shall be filed with
16.4 	the executive director of the Legislative Commission on Pensions
16.5 	and Retirement.

16.6 	Sec. 25. Minnesota Statutes 2004, section 352D.01, is
16.7 	amended to read:
16.8 	352D.01 ESTABLISHMENT.
16.9 	There is hereby established within the Minnesota State
16.10 	Retirement System a retirement program for certain public
16.11 	employees to be known as the Minnesota unclassified employees
16.12 	retirement program~~, which shall be~~ .  The program must be 
16.13 	administered by the Minnesota State Retirement System.

16.14 	Sec. 26. Minnesota Statutes 2004, section 352D.015,
16.15 	subdivision 3, is amended to read:
16.16 		Subd. 3.Supplemental investment fund.  "Supplemental
16.17 	investment fund" means the fund established and governed by
16.18 	section 11A.17.

16.19 	Sec. 27. Minnesota Statutes 2004, section 352D.015,
16.20 	subdivision 4, is amended to read:
16.21 		Subd. 4.General fund.  "General fund" means the general 
16.22 	state employees retirement fund except the moneys for the
16.23 	unclassified program.

16.24 	Sec. 28. Minnesota Statutes 2004, section 352D.03, is
16.25 	amended to read:
16.26 	352D.03 TRANSFER OF ASSETS.
16.27 	Unless an eligible employee enumerated in section 352D.02,
16.28 	subdivision 1 ~~or 1a~~, has elected coverage under the individual
16.29 	retirement account plan under chapter 354B, a sum of money
16.30 	representing the assets credited to each employee exercising the
16.31 	option contained in section 352D.02, plus an equal employer
16.32 	contribution together with interest for the employment period at
16.33 	the ~~actuarially assumed rates~~ rate of 8.5 percent during this
16.34 	period, compounded annually, ~~shall~~ must be used for the purchase
16.35 	of shares on behalf of each employee in the accounts of the
16.36 	supplemental retirement fund established by section 11A.17. ~~Any~~
17.1 	~~employer's contribution to amortize the deficit in the state~~
17.2 	~~employee's retirement fund shall not, however, be used for the~~
17.3 	~~purchase of shares.~~

17.4 	Sec. 29. Minnesota Statutes 2004, section 352D.05,
17.5 	subdivision 4, is amended to read:
17.6 		Subd. 4.Repayment of refund. (a) A participant in the
17.7 	unclassified program may repay regular refunds taken ~~pursuant to~~ 
17.8 	under section 352.22, as provided in section 352.23.
17.9 	(b) A participant in the unclassified program or an
17.10 	employee covered by the general plan who has withdrawn the value
17.11 	of the total shares may repay the refund taken and thereupon
17.12 	restore the service credit, rights and benefits forfeited by
17.13 	paying into the fund the amount refunded plus interest at an
17.14 	annual rate of 8.5 percent compounded annually from the date
17.15 	that the refund was taken until the date that the refund is
17.16 	repaid.  If the participant had withdrawn only the employee
17.17 	shares as permitted under prior laws, repayment ~~shall~~ must be
17.18 	pro rata. ~~Payment shall~~ 
17.19 	(c) Except as provided in section 356.441, the repayment of
17.20 	a refund under this section must be made in a lump sum.

17.21 	Sec. 30. Minnesota Statutes 2004, section 352D.085,
17.22 	subdivision 1, is amended to read:
17.23 		Subdivision 1.Combined service. Except as provided in
17.24 	section 356.30, 356.302, or 356.303,service under the
17.25 	unclassified program for which the employee has been credited
17.26 	with employee shares may be used for the limited purpose of
17.27 	qualifying for benefits under sections 352.115, 352.72,
17.28 	subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60~~;~~
17.29 	~~provided such~~ .  The service also may not be used to qualify for
17.30 	a disability benefit under section 352.113 or 354.48 if a
17.31 	participant was under the unclassified program at the time of
17.32 	the disability~~, and provided further that~~ .  Also,the years of
17.33 	service and salary paid while the participant was in the
17.34 	unclassified program ~~shall~~ may not be used in determining the
17.35 	amount of benefits.

17.36 	Sec. 31. Minnesota Statutes 2004, section 352D.09,
18.1 	subdivision 5, is amended to read:
18.2 		Subd. 5.Unclaimed benefits.  If the beneficiary,
18.3 	surviving spouse or estate has not made application for benefits
18.4 	within ten years after the date of the death of a participant,
18.5 	the value of the shares ~~shall be~~ is appropriated to the ~~regular~~ 
18.6 	general state employees retirement fund and the provisions of
18.7 	section 352.12, subdivision 12~~shall~~ ,govern.  If a former
18.8 	participant fails to make a claim for benefits within five years
18.9 	after the termination of covered service or by age 70, whichever
18.10 	is later, the value of the shares ~~shall be~~ is appropriated to
18.11 	the general state employees retirement fund and the provisions
18.12 	of section 352.22, subdivision 8, ~~shall~~ apply.

18.13 	Sec. 32. Minnesota Statutes 2004, section 352D.12, is
18.14 	amended to read:
18.15 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
18.16 	(a) An employee who is a participant in the unclassified
18.17 	program and who has prior service credit in a covered plan under
18.18 	~~chapters 3A,~~chapter 352, ~~352C,~~353, 354, 354A, ~~and~~ or 422A
18.19 	may, within the time limits specified in this section, elect to
18.20 	transfer to the unclassified program prior service contributions
18.21 	to one or more of those plans. ~~Participants with six or more~~
18.22 	~~years of prior service credit in a plan governed by chapter 3A~~
18.23 	~~or 352C on July 1, 1998, may not transfer prior service~~
18.24 	~~contributions.  Participants with less than six years of prior~~
18.25 	~~service credit in a plan governed by chapter 3A or 352C on July~~
18.26 	~~1, 1998, must be contributing to the unclassified plan on or~~
18.27 	~~after January 5, 1999, in order to transfer prior contributions.~~
18.28 	(b) For participants with prior service credit in a plan
18.29 	governed by chapter 352, 353, 354, 354A, or 422A, "prior service
18.30 	contributions" means the accumulated employee and equal employer
18.31 	contributions with interest at an annual rate of 8.5 percent
18.32 	compounded annually, based on fiscal year balances. ~~For~~
18.33 	~~participants with less than six years of service credit as of~~
18.34 	~~July 1, 1998, and with prior service credit in a plan governed~~
18.35 	~~by chapter 3A or 352C, "prior service contributions" means an~~
18.36 	~~amount equal to twice the amount of the accumulated member~~
19.1 	~~contributions plus annual compound interest at the rate of 8.5~~
19.2 	~~percent, computed on fiscal year balances.~~
19.3 	(c) If a participant has taken a refund from a retirement
19.4 	plan listed in this section, the participant may repay the
19.5 	refund to that plan, notwithstanding any restrictions on
19.6 	repayment to that plan, plus 8.5 percent interest compounded
19.7 	annually and have the accumulated employee and equal employer
19.8 	contributions transferred to the unclassified program with
19.9 	interest at an annual rate of 8.5 percent compounded annually
19.10 	based on fiscal year balances.  If a person repays a refund and
19.11 	subsequently elects to have the money transferred to the
19.12 	unclassified program, the repayment amount, including interest,
19.13 	is added to the fiscal year balance in the year which the
19.14 	repayment was made.
19.15 	(d) A participant electing to transfer prior service
19.16 	contributions credited to a retirement plan governed by chapter
19.17 	352, 353, 354, 354A, or 422A as provided under this section must
19.18 	complete ~~the~~ a written application for the transfer and repay
19.19 	any refund within one year of the commencement of the employee's
19.20 	participation in the unclassified program. ~~A participant~~
19.21 	~~electing to transfer prior service contributions credited to a~~
19.22 	~~retirement plan governed by chapter 3A or 352C as provided under~~
19.23 	~~this section must complete the application for the transfer and~~
19.24 	~~repay any refund between January 5, 1999, and June 1, 1999, if~~
19.25 	~~the employee commenced participation in the unclassified program~~
19.26 	~~before January 5, 1999, or within one year of the commencement~~
19.27 	~~of the employee's participation in the unclassified program if~~
19.28 	~~the employee commenced participation in the unclassified program~~
19.29 	~~after January 4, 1999.~~

19.30 	Sec. 33. Minnesota Statutes 2004, section 353.01,
19.31 	subdivision 32, is amended to read:
19.32 		Subd. 32.Coordinated member.  "Coordinated member" means
19.33 	~~any~~ a public employee, including ~~any~~ a public hospital employee,
19.34 	who is covered by ~~any~~ an agreement or modification made between
19.35 	the state and the Secretary of Health~~, Education~~ and ~~Welfare~~ 
19.36 	Human Services, making the provisions of the federal Old Age,
20.1 	Survivors and Disability Insurance Act applicable to the member
20.2 	if the membership eligibility criteria are met under this
20.3 	chapter.  A coordinated member also is a former basic member who
20.4 	has a complete and continuous separation for at least 30 days
20.5 	from employment as a public employee meeting the requirements
20.6 	specified in subdivision 28, paragraphs (a) and (b), and who
20.7 	reenters public service as a public employee and meets the
20.8 	membership eligibility criteria under this chapter.

20.9 	Sec. 34. Minnesota Statutes 2004, section 353.01,
20.10 	subdivision 33, is amended to read:
20.11 		Subd. 33.Basic member.  "Basic member" means ~~any~~ a 
20.12 	public employee, including ~~any~~ a public hospital employee, who
20.13 	is not covered by any agreement or modification made between the
20.14 	state and the Secretary of Health~~, Education~~ and ~~Welfare~~ Human
20.15 	Services.

20.16 	Sec. 35. Minnesota Statutes 2004, section 353.025, is
20.17 	amended to read:
20.18 	353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.
20.19 	~~From and after January 1, 1982,~~Employees of the Range
20.20 	Association of Municipalities and Schools ~~hereinafter referred~~
20.21 	~~to as the association, shall become~~ are coordinated members of
20.22 	the general employees retirement plan of the Public Employees
20.23 	Retirement Association unless specifically exempt under section
20.24 	353.01, subdivision 2b~~, and~~ .The Range Association ~~shall be~~
20.25 	~~deemed to be~~ of Municipalities and Schools is a governmental
20.26 	subdivision for the purposes of this chapter.

20.27 	Sec. 36. Minnesota Statutes 2004, section 353.026, is
20.28 	amended to read:
20.29 	353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
20.30 	EMPLOYEES.
20.31 	Any person who was employed by the city of Minneapolis,
20.32 	Special School District No. 1, or public corporation as defined
20.33 	in section 422A.01, subdivision 9, on or after July 1, 1978,and
20.34 	~~prior to~~ before July 1, 1979, and who was excluded from
20.35 	retirement coverage by the coordinated program of the
20.36 	Minneapolis municipal employees retirement fund ~~pursuant to~~ 
21.1 	under section 422A.09, subdivision 3, ~~shall be~~ is entitled to
21.2 	retirement coverage by the general employees retirement plan of
21.3 	the Public Employees Retirement Association unless specifically
21.4 	excluded ~~pursuant to~~ under section 353.01, subdivision 2b, from
21.5 	and after May 19, 1981.

21.6 	Sec. 37. Minnesota Statutes 2004, section 353.027, is
21.7 	amended to read:
21.8 	353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
21.9 	EMPLOYEES.
21.10 	Any person employed on January 1, 1975, by a municipal
21.11 	court established ~~pursuant to~~ under Minnesota Statutes 1957,
21.12 	section 488.03,and located in the cities of New Brighton,
21.13 	Roseville, Maplewood, North Saint Paul, White Bear Lake,or St.
21.14 	Paul ~~shall be~~ is eligible for membership in the general
21.15 	employees retirement plan of the Public Employees Retirement
21.16 	Association and ~~shall retain~~ retains any rights or benefits the
21.17 	person had attained as a member of the general employees
21.18 	retirement plan of the association on January 1, 1975, so long
21.19 	as the person remains an employee of the municipal court of
21.20 	Ramsey County.

21.21 	Sec. 38. Minnesota Statutes 2004, section 353.028, is
21.22 	amended to read:
21.23 	353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.
21.24 		Subdivision 1.Definitions. (a) For purposes of this
21.25 	section, each of the terms in this subdivision has the meaning
21.26 	indicated.
21.27 	(b) "City manager" means (1) a person who is duly appointed
21.28 	to and is holding the position of city manager in a Plan B
21.29 	statutory city or in a home rule city operating under the
21.30 	"council-manager" form of government, or (2) a person who is 
21.31 	appointed to and is holding the position of chief administrative
21.32 	officer of a home rule charter city or a statutory city ~~pursuant~~
21.33 	~~to~~ under a charter provision, ordinance, or resolution
21.34 	establishing such a position and prescribing its duties and
21.35 	responsibilities.
21.36 	(c) "Governing body" means the city council of the city
22.1 	employing the city manager.
22.2 	(d) "Election" means the election described in subdivision
22.3 	2.
22.4 		Subd. 2.Election. (a) A city manager may elect to be
22.5 	excluded from membership in the general employees retirement
22.6 	plan of the Public Employees Retirement Association.  The
22.7 	election of exclusion must be made within six months following
22.8 	the commencement of employment, must be made in writing on a
22.9 	form prescribed by the executive director, and must be approved
22.10 	by a resolution ~~of~~ adopted by the governing body of the city.
22.11 	The election of exclusion is not effective until it is filed
22.12 	with the executive director.  Membership of a city manager in
22.13 	the ~~association~~ general employees retirement plan ceases on the
22.14 	date the written election is received by the executive director
22.15 	or upon a later date specified.  Employee and employer
22.16 	contributions made on behalf of a person exercising the option
22.17 	to be excluded from membership under this section must be
22.18 	refunded in accordance with section 353.27, subdivision 7.
22.19 	(b) A city manager who has elected exclusion under this
22.20 	subdivision may elect to revoke that action by filing a written
22.21 	notice with the executive director.  The notice must be on a
22.22 	form prescribed by the executive director and must be approved
22.23 	by a resolution of the governing body of the city.  Membership
22.24 	of the city manager in the association resumes prospectively
22.25 	from the date of the first day of the pay period for which
22.26 	contributions were deducted or, if pay period coverage dates are
22.27 	not provided, the date on which the notice of revocation or
22.28 	contributions are received in the office of the association,
22.29 	provided that the notice of revocation is received by the
22.30 	association within 60 days of the receipt of contributions.
22.31 	(c) An election under paragraph (b) is irrevocable.  Any
22.32 	election under paragraph (a) or (b) must include a statement
22.33 	that the individual will not seek authorization to purchase
22.34 	service credit for any period of excluded service.
22.35 		Subd. 3.Deferred compensation; city contribution. If an
22.36 	election of exclusion is made, and if the city manager and the
23.1 	governing body of the city additionally agree in writing that
23.2 	the additional compensation is to be deferred and ~~shall~~ is to be
23.3 	contributed on behalf of the city manager to a deferred
23.4 	compensation program which meets the requirements of section 457
23.5 	of the Internal Revenue Code of ~~1954~~ 1986, as amended ~~through~~
23.6 	~~December 31, 1980~~, the governing body may compensate the city
23.7 	manager, in addition to the salary allowed under any limitation
23.8 	imposed on salaries by law or charter, in an amount equal to the
23.9 	employer contribution which would be required by section 353.27,
23.10 	subdivision 3, if the city manager were a member of the
23.11 	~~association~~ general employees retirement plan.
23.12 		Subd. 4.Refunds; deferred annuity. A city manager who
23.13 	makes an election to be excluded from membership is entitled to
23.14 	a refund of accumulated deductions or, if otherwise qualified, a
23.15 	deferred annuity ~~in the manner provided by~~ under section 353.34,
23.16 	at the option of the manager.
23.17 		Subd. 5.Election; other employment. If a city manager
23.18 	who has made an election to be excluded subsequently accepts
23.19 	employment in another governmental subdivision or subsequently 
23.20 	accepts employment other than as a city manager in the same
23.21 	city, the election ~~shall be deemed to have been~~ is rescinded on
23.22 	the effective date of employment.

23.23 	Sec. 39. Minnesota Statutes 2004, section 353.14, is
23.24 	amended to read:
23.25 	353.14 BENEFITS FROM OTHER FUNDS.
23.26 	No annuity or benefit provided by this chapter ~~shall~~ may be
23.27 	affected, diminished, or impaired by any pension, benefit, or
23.28 	annuity which any member or survivor is entitled to receive from
23.29 	a tax supported public retirement plan or system authorized by
23.30 	any other law~~, for~~ based on service that is different service
23.31 	than the service for which the member or survivor is entitled to
23.32 	receive benefit or annuity from a retirement plan administered
23.33 	by the Public Employees Retirement Association.

23.34 	Sec. 40. Minnesota Statutes 2004, section 353.27,
23.35 	subdivision 11, is amended to read:
23.36 		Subd. 11.Employers; required to furnish requested
24.1 	information. (a) All governmental subdivisions shall furnish
24.2 	promptly such other information relative to the employment
24.3 	status of all employees or former employees, including,but not
24.4 	limited to,payroll abstracts pertaining to all past and present
24.5 	employees, as may be requested by the ~~association or its~~ 
24.6 	executive director, including schedules of salaries applicable
24.7 	to various categories of employment.
24.8 	(b) In the event payroll abstract records have been lost or
24.9 	destroyed, for whatever reason or in whatever manner, so that
24.10 	such schedules of salaries cannot be furnished therefrom, the
24.11 	employing governmental subdivision, in lieu thereof, shall
24.12 	furnish to the association an estimate of the earnings of any
24.13 	employee or former employee for any period as may be requested
24.14 	by the ~~association or its~~ executive director. ~~Should~~ If the
24.15 	association ~~receive such schedules~~ is provided a schedule of
24.16 	estimated earnings, the executive director is ~~hereby~~ authorized
24.17 	to use the same as a basis for making whatever computations
24.18 	might be necessary for determining obligations of the employee
24.19 	and employer to the retirement fund.  If estimates are not
24.20 	furnished by the employer ~~pursuant to~~ at the request of the
24.21 	~~association or its~~ executive director, the ~~association~~ executive
24.22 	director may estimate the obligations of the employee and
24.23 	employer to the retirement fund based upon ~~such~~ those records ~~as~~ 
24.24 	that are in its possession. ~~Where payroll abstracts have been~~
24.25 	~~lost or destroyed, the governmental agency need not furnish any~~
24.26 	~~information pertaining to employment prior to July 1, 1963.  The~~
24.27 	~~association shall make no estimate of any obligation of any~~
24.28 	~~employee, former employee, or employer covering employment prior~~
24.29 	~~to July 1, 1963.~~

24.30 	Sec. 41. Minnesota Statutes 2004, section 353.271, is
24.31 	amended to read:
24.32 	353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
24.33 	INVESTMENT FUND.
24.34 		Subdivision 1.Authorization. The general employees
24.35 	retirement plan of the Public Employees Retirement Association,
24.36 	~~including~~ the public employees police and fire ~~fund but~~
25.1 	~~excluding the various local relief association consolidation~~
25.2 	~~accounts, is~~ retirement plan, and the local government
25.3 	correctional service retirement plan are authorized to
25.4 	participate in the Minnesota postretirement investment fund.
25.5 	There ~~shall be~~ is one general participation in the Minnesota
25.6 	postretirement investment fund for ~~all purposes by~~ each plan of 
25.7 	the Public Employees Retirement ~~fund and one general~~
25.8 	~~participation in the Minnesota postretirement investment fund~~
25.9 	~~for all purposes by the public employees police and fire~~
25.10 	~~fund~~ Association.
25.11 		Subd. 2.Valuation of assets; adjustment of benefits.
 25.12 	~~(1)~~ (a) The required reserves for retirement annuities payable
25.13 	as provided in this chapter other than those payable from the
25.14 	various local relief association consolidation accounts, as
25.15 	determined in accordance with the appropriate mortality table
25.16 	adopted by the board of trustees based on the experience of the
25.17 	fund as recommended by the actuary retained ~~by the Legislative~~
25.18 	~~Commission on Pensions and Retirement~~ under section 356.214, and
25.19 	approved under section 356.215, subdivision 18, and using the
25.20 	postretirement interest assumption specified in section 356.215,
25.21 	subdivision 8, ~~shall~~ must be transferred to the Minnesota
25.22 	postretirement investment fund as of the last business day of
25.23 	the month in which the retirement annuity begins.
25.24 	~~(2)~~ (b) Annuity payments ~~other than those payable from the~~
25.25 	~~various local relief association consolidation accounts~~
25.26 	~~shall~~ must be adjusted in accordance with the provisions of
25.27 	section 11A.18.
25.28 	~~(3)~~ (c) Increases in payments ~~pursuant to~~ under this
25.29 	section ~~or from the various local relief association~~
25.30 	~~consolidation accounts, if applicable, will~~ must be made
25.31 	automatically unless the intended recipient files written notice
25.32 	with the executive director of the Public Employees Retirement
25.33 	Association requesting that the increase ~~shall~~ not be made.

25.34 	Sec. 42. Minnesota Statutes 2004, section 353.31,
25.35 	subdivision 1c, is amended to read:
25.36 		Subd. 1c.Coordinated members.  Except for benefits
26.1 	provided under section 353.32, ~~subdivisions 1 and 1a,~~no
26.2 	survivor benefits are payable to the surviving spouse or
26.3 	dependent children of a deceased coordinated member.

26.4 	Sec. 43. Minnesota Statutes 2004, section 353.32,
26.5 	subdivision 9, is amended to read:
26.6 		Subd. 9.Payment to a minor.  If a member or former
26.7 	member dies having named as beneficiary a person who is a minor
26.8 	at the time of the application for refund, the board may make
26.9 	the payment ~~(a)~~ (1) directly to the minor, ~~(b)~~ (2) to ~~any~~ 
26.10 	a person who has legally qualified and is acting as guardian of
26.11 	the minor's person or property in any jurisdiction, or ~~(c)~~ (3) 
26.12 	to either parent of the minor or to ~~any~~ an adult person with
26.13 	whom the minor may at the time be living~~, provided only that~~ .
26.14 	The parent or other person to whom any amount is to be
26.15 	paid ~~shall have advised~~ must advise the board in writing that
26.16 	the amount will be held or used in trust for the benefit of such
26.17 	minor.  Any annuity or disability benefit payable at the time of
26.18 	death of an annuitant or recipient of a disability benefit,
26.19 	which is payable to a beneficiary who is a minor, may be paid in
26.20 	the same manner. ~~Such~~ The payment ~~shall be~~ is a bar to recovery
26.21 	by any other person or persons.

26.22 	Sec. 44. Minnesota Statutes 2004, section 353.33,
26.23 	subdivision 12, is amended to read:
26.24 		Subd. 12.Basic disability survivor benefits.  If a basic
26.25 	member who is receiving a disability benefit under subdivision 3:
26.26 	~~(a)~~ (1) dies before attaining age 65 or within five years
26.27 	of the effective date of the disability, whichever is later, the
26.28 	surviving spouse ~~shall~~ is entitled to receive a survivor benefit
26.29 	under section 353.31, unless the surviving spouse elected to
26.30 	receive a refund under section 353.32, subdivision 1~~.~~;
26.31 	~~(b)~~ (2) is living at age 65 or five years after the
26.32 	effective date of the disability, whichever is later, the basic
26.33 	member may continue to receive a normal disability benefit, or
26.34 	elect a joint and survivor optional annuity under section
26.35 	353.31, subdivision 1b.  The election of the joint and survivor
26.36 	optional annuity must occur within 90 days of attaining age 65
27.1 	or of reaching the five-year anniversary of the effective date
27.2 	of the disability benefit, whichever is later.  The optional
27.3 	annuity takes effect on the first day of the month following the
27.4 	month in which the person attains age 65 or reaches the
27.5 	five-year anniversary of the effective date of the disability
27.6 	benefit, whichever is later~~.~~; or 
27.7 	~~(c)~~ (3) if there is a dependent child or children under
27.8 	~~paragraph (a) or (b)~~ clause (1) or (2), the ~~association shall~~
27.9 	~~grant~~ dependent child is entitled to a dependent child benefit
27.10 	under section 353.31, subdivision 1b, paragraph (b).

27.11 	Sec. 45. Minnesota Statutes 2004, section 354.091, is
27.12 	amended to read:
27.13 	354.091 SERVICE CREDIT.
27.14 	(a) In computing service credit, no teacher ~~shall~~ may 
27.15 	receive credit for more than one year of teaching service for
27.16 	any fiscal year. ~~Commencing July 1, 1961~~ Additionally, in
27.17 	crediting allowable service:
27.18 	(1) if a teacher teaches less than five hours in a day,
27.19 	service credit must be given for the fractional part of the day
27.20 	as the term of service performed bears to five hours;
27.21 	(2) if a teacher teaches five or more hours in a day,
27.22 	service credit must be given for only one day;
27.23 	(3) if a teacher teaches at least 170 full days in any
27.24 	fiscal year, service credit must be given for a full year of
27.25 	teaching service; and
27.26 	(4) if a teacher teaches for only a fractional part of the
27.27 	year, service credit must be given for such fractional part of
27.28 	the year in the same relationship as the period of service
27.29 	performed bears to 170 days.
27.30 	(b) A teacher ~~shall~~ must receive a full year of service
27.31 	credit based on the number of days in the employer's full school
27.32 	year if ~~it~~ that school year is less than 170 days.  Teaching
27.33 	service performed before July 1, 1961, must be computed under
27.34 	the law in effect at the time it was performed.
27.35 	(c) A teacher must not lose or gain retirement service
27.36 	credit as a result of the employer converting to a flexible or
28.1 	alternate work schedule.  If the employer converts to a flexible
28.2 	or alternate work schedule, the forms for reporting teaching
28.3 	service and the procedures for determining service credit must
28.4 	be determined by the executive director with the approval of the
28.5 	board of trustees.
28.6 	(d) For all services rendered on or after July 1, 2003,
28.7 	service credit for all members employed by the Minnesota State
28.8 	Colleges and Universities system must be determined:
28.9 	(1) for full-time employees, by the definition of full-time
28.10 	employment contained in the collective bargaining agreement for
28.11 	those units listed in section 179A.10, subdivision 2, or
28.12 	contained in the applicable personnel or salary plan for those
28.13 	positions designated in section 179A.10, subdivision 1;
28.14 	(2) for part-time employees, by the appropriate proration
28.15 	of full-time equivalency based on the provisions contained in
28.16 	the collective bargaining agreement for those units listed in
28.17 	section 179A.10, subdivision 2, or contained in the applicable
28.18 	personnel or salary plan for those positions designated in
28.19 	section 179A.10, subdivision 1, and the applicable procedures of
28.20 	the Minnesota State Colleges and Universities system; and
28.21 	(3) in no case may a member receive more than one year of
28.22 	service credit for any fiscal year.

28.23 	Sec. 46. Minnesota Statutes 2004, section 354.33,
28.24 	subdivision 5, is amended to read:
28.25 		Subd. 5.Retirees not eligible for federal benefits.
 28.26 	Notwithstanding the provisions of section 354.55, subdivision 3,
28.27 	when any person retires after July 1, 1973,who ~~(a)~~ (1) has ten
28.28 	or more years of allowable service, and ~~(b)~~ (2) does not have
28.29 	any retroactive Social Security coverage by reason of the
28.30 	person's position in the retirement system, and ~~(c)~~ (3) does not
28.31 	qualify for federal old age and survivor primary benefits at the
28.32 	time of retirement, the annuity ~~shall~~ must be computed under
28.33 	section 354.44, subdivision 2,of the law in effect on June 30,
28.34 	1969, except that accumulations after June 30, 1957, ~~shall~~ must 
28.35 	be calculated using the same mortality table and interest
28.36 	assumption as are used to transfer the required reserves to the
29.1 	Minnesota postretirement investment fund.

29.2 	Sec. 47. Minnesota Statutes 2004, section 354.39, is
29.3 	amended to read:
29.4 	354.39 EFFECTIVE DATE; APPLICATION.
29.5 	~~After July 1, 1971, any~~ A member of the Teachers Retirement
29.6 	Association who is employed in a new state university ~~and~~ or any 
29.7 	other new ~~institutions~~ institution of higher learning not
29.8 	included in any agreement or modification made between the state
29.9 	and the federal Secretary of Health~~, Education~~ and ~~Welfare~~ Human
29.10 	Services, making the provisions of the federal Old Age ~~and~~ ,
29.11 	Survivors and Disability Insurance Act applicable to such
29.12 	members, ~~shall~~ must be covered under the provisions of this
29.13 	chapter applicable to coordinated members.

29.14 	Sec. 48. Minnesota Statutes 2004, section 354.41,
29.15 	subdivision 2, is amended to read:
29.16 		Subd. 2.Teachers.  Every teacher ~~after June 30, 1957,~~in
29.17 	~~the service or entering~~ the service of the state or one of its
29.18 	governmental ~~subdivision~~ subdivisions as a teacher, except
29.19 	persons ~~specially~~ specifically excluded, ~~shall~~ must become a
29.20 	member of the association by the acceptance of such employment.

29.21 	Sec. 49. Minnesota Statutes 2004, section 354.42, is
29.22 	amended by adding a subdivision to read:
29.23 		Subd. 1a.Teachers retirement fund. (a) Within the
29.24 	Teachers Retirement Association and the state treasury is
29.25 	created a special retirement fund, which must include all the
29.26 	assets of the Teachers Retirement Association and all revenue of
29.27 	the association.  The fund is the continuation of the fund
29.28 	established under Laws 1931, chapter 406, section 2,
29.29 	notwithstanding the repeal of Minnesota Statutes 1973, section
29.30 	354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
29.31 	(b) The teachers retirement fund must be credited with all
29.32 	employee and employer contributions, all investment revenue and
29.33 	gains, and all other income authorized by law.
29.34 	(c) From the teachers retirement fund is appropriated the
29.35 	payments of annuities and benefits authorized by this chapter,
29.36 	the transfers to the Minnesota postretirement investment fund,
30.1 	and the reasonable and necessary expenses of administering the
30.2 	fund and the association.

30.3 	Sec. 50. Minnesota Statutes 2004, section 354.44,
30.4 	subdivision 2, is amended to read:
30.5 		Subd. 2.Computation of money purchase annuity. (a) The
30.6 	amount of retirement annuity is an amount equal to double the
30.7 	annuity which could be purchased by the member's accumulated
30.8 	deductions plus interest thereon.  The annuity ~~shall~~ must be
30.9 	determined by the member's age, sex, double the amount of
30.10 	accumulated deductions, double the amount of interest earned on
30.11 	the accumulated deductions, and the appropriate mortality tables
30.12 	and interest rates.  To determine the amount of the annuity for
30.13 	a basic member, the accumulated deductions ~~prior to~~ before July
30.14 	1, 1957, and the accumulated deductions ~~subsequent to~~ after July
30.15 	1, 1957, ~~shall~~ must be considered separately.
30.16 	~~(1)~~ (b) For service rendered ~~prior to~~ before July 1, 1957,
30.17 	the accumulated deductions for ~~any~~ a member ~~shall~~ must be
30.18 	carried forward at a fixed amount which is shown credited to the
30.19 	member's account as of that date.  That fixed amount ~~shall~~ must 
30.20 	also include any payments in lieu of salary deductions which ~~are~~
30.21 	~~to be made in the future and are~~ were actually so made ~~pursuant~~
30.22 	~~to~~ under an agreement executed between the member and the board
30.23 	as authorized by section 354.50 or any other authorized payments
30.24 	made by the member to the fund.  The annuity granted with
30.25 	respect to the period ~~shall~~ must be determined as follows:
30.26 	~~(a)~~ (1) the fixed amount of the accumulated deductions for
30.27 	the period including the interest credited on the amount as
30.28 	earned up to July 1, 1957~~.~~; and 
30.29 	~~(b)~~ (2) annuity purchase rates based on the applicable
30.30 	mortality table established by the board and the interest rate
30.31 	assumption in effect ~~prior to~~ before July 1, 1957, in the case
30.32 	of basic members and an annuity purchase rate based on an
30.33 	appropriate annuity table of mortality established by the board
30.34 	as provided in section 354.07, subdivision 1, and using the
30.35 	applicable postretirement interest rate assumption specified in
30.36 	section 356.215, subdivision 8, in the case of coordinated
31.1 	members.
31.2 	~~(2)~~ (c) For service rendered ~~subsequent to~~ after July 1,
31.3 	1957, the accumulated deductions for ~~any~~ a member ~~shall~~ must 
31.4 	consist of the amounts actually credited to the member's account
31.5 	by reason of salary deductions.  The annuity granted with
31.6 	respect to the period ~~shall~~ must be determined by the following:
31.7 	~~(a)~~ (1) accumulated deductions for the period;
31.8 	~~(b)~~ (2) interest credited on these accumulated deductions
31.9 	from July 1, 1957, to the date of retirement;
31.10 	~~(c)~~ (3) interest credited on accumulated deductions
31.11 	including prior credited interest provided in paragraph ~~(1)~~ (b) 
31.12 	from July 1, 1957, to the date of retirement;
31.13 	~~(d)~~ (4) after the amount available for an annuity granted
31.14 	with respect to the person is determined in accordance with the
31.15 	provisions of this subdivision, an additional amount equal to 20
31.16 	percent of the sum of clause ~~(2)(a)~~ (1) plus interest credited
31.17 	to ~~members~~ a member's account from July 1, 1957, to date of
31.18 	retirement is to be added.  This added amount is not to be
31.19 	doubled as provided for other amounts determined in this
31.20 	subdivision; and 
31.21 	~~(e)~~ (5) the annuity purchase rate based on an appropriate
31.22 	annuity table of mortality established by the board as provided
31.23 	in section 354.07, subdivision 1, and using the applicable
31.24 	postretirement interest rate assumption specified in section
31.25 	356.215, subdivision 8.

31.26 	Sec. 51. Minnesota Statutes 2004, section 354A.021,
31.27 	subdivision 5, is amended to read:
31.28 		Subd. 5.Tax sheltered annuity program and fund. ~~Any~~ A 
31.29 	teachers retirement fund association may establish a tax
31.30 	sheltered annuity program and fund meeting the requirements of
31.31 	section 403(b) of the Internal Revenue Code of 1986, as amended
31.32 	~~through December 31, 1992~~, which ~~shall~~ must include all assets
31.33 	which were acquired for the specific purpose of being credited
31.34 	to the program and fund and to which ~~shall~~ must be credited all
31.35 	employee contributions~~,~~and employer contributions,if
31.36 	negotiated under a collective bargaining agreement, designated
32.1 	for this purpose and all interest income attributable to the
32.2 	assets of the program and fund.

32.3 	Sec. 52. Minnesota Statutes 2004, section 354A.31,
32.4 	subdivision 5, is amended to read:
32.5 		Subd. 5.Unreduced normal retirement annuity.  Upon
32.6 	retirement at normal retirement age with at least three years of
32.7 	service credit, a coordinated member ~~shall be~~ is entitled to a
32.8 	normal retirement annuity calculated ~~pursuant to~~ under 
32.9 	subdivision 4 or 4a, whichever applies.

32.10 	Sec. 53. Minnesota Statutes 2004, section 356A.06,
32.11 	subdivision 7, is amended to read:
32.12 		Subd. 7.Expanded list of authorized investment
32.13 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
32.14 	authorized by law or bylaws, a covered pension plan not
32.15 	described by subdivision 6, paragraph (a), may invest its assets
32.16 	only in accordance with this subdivision.
32.17 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
32.18 	the authority to purchase, sell, lend, or exchange the
32.19 	securities specified in paragraphs (c) to (g), including puts
32.20 	and call options and future contracts traded on a contract
32.21 	market regulated by a governmental agency or by a financial
32.22 	institution regulated by a governmental agency.  These
32.23 	securities may be owned as units in commingled trusts that own
32.24 	the securities described in paragraphs (c) to (g).
32.25 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
32.26 	invest funds in governmental bonds, notes, bills, mortgages, and
32.27 	other evidences of indebtedness provided the issue is backed by
32.28 	the full faith and credit of the issuer or the issue is rated
32.29 	among the top four quality rating categories by a nationally
32.30 	recognized rating agency.  The obligations in which funds may be
32.31 	invested under this paragraph include guaranteed or insured
32.32 	issues of (1) the United States, its agencies, its
32.33 	instrumentalities, or organizations created and regulated by an
32.34 	act of Congress; (2) Canada and its provinces, provided the
32.35 	principal and interest is payable in United States dollars; (3)
32.36 	the states and their municipalities, political subdivisions,
33.1 	agencies, or instrumentalities; (4) the International Bank for
33.2 	Reconstruction and Development, the Inter-American Development
33.3 	Bank, the Asian Development Bank, the African Development Bank,
33.4 	or any other United States government sponsored organization of
33.5 	which the United States is a member, provided the principal and
33.6 	interest is payable in United States dollars.
33.7 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
33.8 	invest funds in bonds, notes, debentures, transportation
33.9 	equipment obligations, or any other longer term evidences of
33.10 	indebtedness issued or guaranteed by a corporation organized
33.11 	under the laws of the United States or any state thereof, or the
33.12 	Dominion of Canada or any province thereof if they conform to
33.13 	the following provisions:
33.14 	(1) the principal and interest of obligations of
33.15 	corporations incorporated or organized under the laws of the
33.16 	Dominion of Canada or any province thereof must be payable in
33.17 	United States dollars; and
33.18 	(2) obligations must be rated among the top four quality
33.19 	categories by a nationally recognized rating agency.
33.20 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
33.21 	invest funds in bankers acceptances, certificates of deposit,
33.22 	deposit notes, commercial paper, mortgage participation
33.23 	certificates and pools, asset backed securities, repurchase
33.24 	agreements and reverse repurchase agreements, guaranteed
33.25 	investment contracts, savings accounts, and guaranty fund
33.26 	certificates, surplus notes, or debentures of domestic mutual
33.27 	insurance companies if they conform to the following provisions:
33.28 	(i) bankers acceptances and deposit notes of United States
33.29 	banks are limited to those issued by banks rated in the highest
33.30 	four quality categories by a nationally recognized rating
33.31 	agency;
33.32 	(ii) certificates of deposit are limited to those issued by
33.33 	(A) United States banks and savings institutions that are rated
33.34 	in the highest four quality categories by a nationally
33.35 	recognized rating agency or whose certificates of deposit are
33.36 	fully insured by federal agencies; or (B) credit unions in
34.1 	amounts up to the limit of insurance coverage provided by the
34.2 	National Credit Union Administration;
34.3 	(iii) commercial paper is limited to those issued by United
34.4 	States corporations or their Canadian subsidiaries and rated in
34.5 	the highest two quality categories by a nationally recognized
34.6 	rating agency;
34.7 	(iv) mortgage participation or pass through certificates
34.8 	evidencing interests in pools of first mortgages or trust deeds
34.9 	on improved real estate located in the United States where the
34.10 	loan to value ratio for each loan as calculated in accordance
34.11 	with section 61A.28, subdivision 3, does not exceed 80 percent
34.12 	for fully amortizable residential properties and in all other
34.13 	respects meets the requirements of section 61A.28, subdivision
34.14 	3;
34.15 	(v) collateral for repurchase agreements and reverse
34.16 	repurchase agreements is limited to letters of credit and
34.17 	securities authorized in this section;
34.18 	(vi) guaranteed investment contracts are limited to those
34.19 	issued by insurance companies or banks rated in the top four
34.20 	quality categories by a nationally recognized rating agency or
34.21 	to alternative guaranteed investment contracts where the
34.22 	underlying assets comply with the requirements of this
34.23 	subdivision;
34.24 	(vii) savings accounts are limited to those fully insured
34.25 	by federal agencies; and
34.26 	(viii) asset backed securities must be rated in the top
34.27 	four quality categories by a nationally recognized rating agency.
34.28 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
34.29 	not apply to certificates of deposit and collateralization
34.30 	agreements executed by the covered pension plan under clause
34.31 	(1), item (ii).
34.32 	(3) In addition to investments authorized by clause (1),
34.33 	item (iv), the covered pension plan may purchase from the
34.34 	Minnesota Housing Finance Agency all or any part of a pool of
34.35 	residential mortgages, not in default, that has previously been
34.36 	financed by the issuance of bonds or notes of the agency.  The
35.1 	covered pension plan may also enter into a commitment with the
35.2 	agency, at the time of any issue of bonds or notes, to purchase
35.3 	at a specified future date, not exceeding 12 years from the date
35.4 	of the issue, the amount of mortgage loans then outstanding and
35.5 	not in default that have been made or purchased from the
35.6 	proceeds of the bonds or notes.  The covered pension plan may
35.7 	charge reasonable fees for any such commitment and may agree to
35.8 	purchase the mortgage loans at a price sufficient to produce a
35.9 	yield to the covered pension plan comparable, in its judgment,
35.10 	to the yield available on similar mortgage loans at the date of
35.11 	the bonds or notes.  The covered pension plan may also enter
35.12 	into agreements with the agency for the investment of any
35.13 	portion of the funds of the agency.  The agreement must cover
35.14 	the period of the investment, withdrawal privileges, and any
35.15 	guaranteed rate of return.
35.16 	(f)  [CORPORATE STOCKS.] The covered pension plan may
35.17 	invest funds in stocks or convertible issues of any corporation
35.18 	organized under the laws of the United States or the states
35.19 	thereof, the Dominion of Canada or its provinces, or any
35.20 	corporation listed on the New York Stock Exchange or the
35.21 	American Stock Exchange, if they conform to the following
35.22 	provisions:
35.23 	(1) the aggregate value of corporate stock investments, as
35.24 	adjusted for realized profits and losses, must not exceed 85
35.25 	percent of the market or book value, whichever is less, of a
35.26 	fund, less the aggregate value of investments according to
35.27 	~~subdivision 6~~ paragraph (g);
35.28 	(2) investments must not exceed five percent of the total
35.29 	outstanding shares of any one corporation.
35.30 	(g)  [OTHER INVESTMENTS.] (1) In addition to the
35.31 	investments authorized in paragraphs (b) to (f), and subject to
35.32 	the provisions in clause (2), the covered pension plan may
35.33 	invest funds in:
35.34 	(i) venture capital investment businesses through
35.35 	participation in limited partnerships and corporations;
35.36 	(ii) real estate ownership interests or loans secured by
36.1 	mortgages or deeds of trust through investment in limited
36.2 	partnerships, bank sponsored collective funds, trusts, and
36.3 	insurance company commingled accounts, including separate
36.4 	accounts;
36.5 	(iii) regional and mutual funds through bank sponsored
36.6 	collective funds and open-end investment companies registered
36.7 	under the Federal Investment Company Act of 1940;
36.8 	(iv) resource investments through limited partnerships,
36.9 	private placements, and corporations; and
36.10 	(v) international securities.
36.11 	(2) The investments authorized in clause (1) must conform
36.12 	to the following provisions:
36.13 	(i) the aggregate value of all investments made according
36.14 	to clause (1) may not exceed 35 percent of the market value of
36.15 	the fund for which the covered pension plan is investing;
36.16 	(ii) there must be at least four unrelated owners of the
36.17 	investment other than the state board for investments made under
36.18 	clause (1), item (i), (ii), (iii), or (iv);
36.19 	(iii) covered pension plan participation in an investment
36.20 	vehicle is limited to 20 percent thereof for investments made
36.21 	under clause (1), item (i), (ii), (iii), or (iv); and
36.22 	(iv) covered pension plan participation in a limited
36.23 	partnership does not include a general partnership interest or
36.24 	other interest involving general liability.  The covered pension
36.25 	plan may not engage in any activity as a limited partner which
36.26 	creates general liability.

36.27 	Sec. 54. Minnesota Statutes 2004, section 422A.01,
36.28 	subdivision 11, is amended to read:
36.29 		Subd. 11.Employee.  "Employee" means ~~any~~ a person who is 
36.30 	not exempted from the contributing class ~~pursuant to~~ under 
36.31 	section 422A.09, subdivision 3, who ~~is~~ was employed before July
36.32 	1, 1979,by and paid, in whole or in part, by the city or any of
36.33 	its boards, departments, or commissions, operated as a
36.34 	department of city government or independently if financed in
36.35 	whole or in part by city funds, including ~~any~~ a person who was 
36.36 	employed by a public corporation as herein defined, ~~and~~
37.1 	~~including any~~ a person who was employed before July 1, 1979,by
37.2 	Special School District No. 1, and who is not a member of any
37.3 	other retirement system, and ~~also including any~~ a person who is
37.4 	employed before July 1, 1973,by the county of Hennepin, who was
37.5 	entitled by law to elect and has elected to retain membership in
37.6 	the ~~municipal~~ Minneapolis Employees Retirement Fund and who
37.7 	makes any required member contributions to the fund and who
37.8 	remains so employed.

37.9 	Sec. 55. Minnesota Statutes 2004, section 422A.06,
37.10 	subdivision 7, is amended to read:
37.11 		Subd. 7.Disability benefit fund.  (a) ~~The required~~
37.12 	~~reserves for disability allowances which become effective after~~
37.13 	~~December 31, 1973, shall be transferred from the deposit~~
37.14 	~~accumulation fund to the~~ A disability benefit fund is
37.15 	established, containing the required reserves for disability
37.16 	allowances under this chapter.  A proportionate share of income
37.17 	from investments ~~shall~~ must be allocated to this fund.
37.18 	There ~~shall~~ must be paid from this fund the disability
37.19 	allowances ~~which become effective after December 31, 1973~~ 
37.20 	payable under this chapter.
37.21 	(b) In the event of the termination of any disability
37.22 	allowance for any reason other than the death of the recipient,
37.23 	the balance of the required reserves for the disability
37.24 	allowance as of the date of the termination ~~shall~~ must be
37.25 	transferred from the disability benefit fund to the deposit
37.26 	accumulation fund.
37.27 	(c) At the end of each fiscal year, as part of the annual
37.28 	actuarial valuation, a determination ~~shall~~ must be made of the
37.29 	required reserves for all disability allowances being paid from
37.30 	the disability benefit fund.  Any excess of assets over
37.31 	actuarial required reserves in the disability benefit fund ~~shall~~ 
37.32 	must be transferred to the deposit accumulation fund.  Any
37.33 	excess of actuarial reserves over assets in the disability
37.34 	benefit fund ~~shall~~ must be funded by a transfer of the
37.35 	appropriate amount of assets from the deposit accumulation fund.

37.36 	Sec. 56. Minnesota Statutes 2004, section 422A.10,
38.1 	subdivision 1, is amended to read:
38.2 		Subdivision 1.member contribution ~~rate~~ ; deductions. (a) 
38.3 	There ~~shall~~ must be deducted and withheld from the basic salary,
38.4 	pay or compensation of each employee in the contributing class~~,~~
38.5 	~~prior to January 1, 1980 an amount equal to 7-1/4 percent, after~~
38.6 	~~December 31, 1979 but prior to January 1, 1981 an amount equal~~
38.7 	~~to 8-1/4 percent and after December 31, 1980~~ an amount equal to
38.8 	9-1/4 percent of such salary, pay or compensation, except as
38.9 	hereinafter provided.
38.10 	(b) The retirement board may increase the percentage rate
38.11 	of contribution to the retirement fund of any employee or
38.12 	employees for the purpose of establishing and maintaining on an
38.13 	actuarial basis a plan of insurance, survivors' benefits, or
38.14 	other type of benefit or benefits, the cost of which ~~shall~~ must 
38.15 	be paid out of such extra percentage so authorized and deducted
38.16 	from the employee's compensation, except as hereinafter
38.17 	provided.  Any plan or plans so established and placed in
38.18 	operation may be amended from time to time, or may be abandoned,
38.19 	but if abandoned, any surplus remaining from the operation of a
38.20 	plan ~~shall~~ must be the property of the fund, and ~~shall~~ must be
38.21 	credited to the reserve for loss in investment account.

38.22 	Sec. 57. Minnesota Statutes 2004, section 422A.10,
38.23 	subdivision 2, is amended to read:
38.24 		Subd. 2.~~consent to deductions~~ mandatory member
38.25 	contributions.  Every employee to whom ~~sections 422A.01 to~~
38.26 	~~422A.25~~ this chapter applies ~~who shall continue in the service~~
38.27 	~~after the passage of Laws 1919, chapter 522, as well as every~~
38.28 	~~person to whom sections 422A.01 to 422A.25 applies who may~~
38.29 	~~hereafter be appointed to a position or place, shall be~~ is 
38.30 	deemed to consent and agree to the deductions made and provided
38.31 	for herein, and payment with such reductions, for service, ~~shall~~
38.32 	~~be~~ are a full and complete discharge and acquittance of all
38.33 	claims and demands for all services rendered by such person
38.34 	during the period covered by such payment; except the person's
38.35 	claim to the benefits to which the person may be entitled under
38.36 	the provisions of ~~sections 422A.01 to 422A.25~~this chapter.

39.1 	Sec. 58. Minnesota Statutes 2004, section 422A.22,
39.2 	subdivision 1, is amended to read:
39.3 		Subdivision 1.Retention; transfer. (a) If an employee
39.4 	to whom ~~sections 422A.01 to 422A.25~~this chapter applies becomes
39.5 	absolutely separated from ~~the~~ active service ~~prior to~~ before 
39.6 	attaining the minimum retirement age established in section
39.7 	422A.13, the employee is entitled to a refund of the net
39.8 	accumulated amount of deduction from salary, pay, or
39.9 	compensation, made for the purpose of accumulating a fund from
39.10 	which to pay retirement allowances, ~~shall be returned to such~~
39.11 	~~employee,~~with interest at the annual compound rate of six
39.12 	percent.
39.13 	(b) Any contributing employee who separates from a
39.14 	department, board or commission of the city whose employees are
39.15 	covered by a fund organized under ~~sections 422A.01 to 422A.25~~
39.16 	this chapter, and becomes an employee of a department or board
39.17 	of the same city, whose employees are covered by a retirement
39.18 	fund or relief association by whatever name known, organized
39.19 	under any other law and supported in whole or in part by taxes
39.20 	on the same city, ~~shall have~~ has the option of:
39.21 	(1) retaining their membership in the fund organized under
39.22 	~~sections 422A.01 to 422A.25~~this chapter, regardless of the
39.23 	provisions of any law, rule, bylaw or other action requiring
39.24 	membership in any other retirement fund or relief association
39.25 	however organized~~.~~; or 
39.26 	(2) transferring to the fund or association covering the
39.27 	employees of the department or board to which they are
39.28 	transferring, providing they are eligible for membership therein.
39.29 	(c) Any contributing employee who elects to transfer to
39.30 	another fund or association as ~~herein~~ provided in paragraph (b),
39.31 	clause (2), ~~shall~~ must make such election within one year from
39.32 	the date of separation from the city service covered by this
39.33 	fund.  If the contributing employee elects to transfer to
39.34 	another fund ~~as herein provided~~, the employee is entitled to a
39.35 	refund of the net accumulated contributions made by such
39.36 	employee to the fund organized under ~~sections 422A.01 to~~
40.1 	~~422A.25, shall be returned to the employee~~ this chapter with
40.2 	interest at the annual compound rate of six percent.

40.3 	Sec. 59. Minnesota Statutes 2004, section 422A.22,
40.4 	subdivision 3, is amended to read:
40.5 		Subd. 3.Limitation on eligibility.  No employee of the
40.6 	city ~~shall be~~ is eligible to be a member of,or receive benefits
40.7 	from,more than one retirement plan or fund of the city for the
40.8 	same period of service.

40.9 	Sec. 60. Minnesota Statutes 2004, section 422A.22,
40.10 	subdivision 4, is amended to read:
40.11 		Subd. 4.Death-while-active refund.  (a) Upon the death
40.12 	of an active member ~~prior to~~ before the employee's termination
40.13 	of active service, ~~there shall be paid to~~ the beneficiary or
40.14 	beneficiaries designated by the member on a form specified by
40.15 	the executive director and filed with the retirement board~~,~~are
40.16 	entitled to receive the net accumulated employee deductions from
40.17 	salary, pay, or compensation, including interest under
40.18 	subdivision 1, paragraph (a),compounded annually to the date of
40.19 	the member's death.  The amount must not include any
40.20 	contributions made by the employee or on the employee's behalf,
40.21 	or any interest or investment earnings on those contributions,
40.22 	which were allocated to the survivor benefit fund under section
40.23 	422A.06, subdivision 6.
40.24 	(b) If the employee fails to make a designation, or if the
40.25 	beneficiary or beneficiaries designated by the employee
40.26 	predeceases the employee, ~~the benefit specified in paragraph (a)~~
40.27 	~~must be paid to~~ the deceased employee's estate is entitled to
40.28 	the benefit specified in paragraph (a).
40.29 	(c) A benefit payable under this subdivision is in addition
40.30 	to any applicable survivor benefit under section 422A.23.

40.31 	Sec. 61. Minnesota Statutes 2004, section 422A.22,
40.32 	subdivision 6, is amended to read:
40.33 		Subd. 6.Refund; municipal employees retirement fund.
 40.34 	~~Any~~ A person who has received a refund from the ~~municipal~~ 
40.35 	Minneapolis Employees Retirement Fund, and who is a member of a
40.36 	public retirement system included in section 422A.16,
41.1 	subdivision 8, may repay such refund with interest at a compound
41.2 	annual rate of 8.5 percent to the ~~municipal~~ Minneapolis 
41.3 	Employees Retirement Fund.  If a refund is repaid to the fund
41.4 	and if more than one refund has been received from the fund, all
41.5 	refunds must be repaid.  Repayment ~~shall~~ must be made as
41.6 	provided in ~~sections 422A.01 to 422A.25~~this chapter.

41.7 	Sec. 62. Minnesota Statutes 2004, section 422A.231, is
41.8 	amended to read:
41.9 	422A.231 COST ALLOCATION.
41.10 	(a) Notwithstanding any law to the contrary, all current
41.11 	and future contribution requirements due to this article are
41.12 	payable by the participating contributing employing units other
41.13 	than the state of Minnesota.
41.14 	(b) In each actuarial valuation of the retirement fund, the
41.15 	actuary retained ~~by the Legislative Commission on Pensions and~~
41.16 	~~Retirement~~ under section 356.214shall include an exhibit on the
41.17 	impact of the benefit increases contained in this article on the
41.18 	survivor benefit fund.  The actuary shall calculate the expected
41.19 	change in the present value of the future benefits payable from
41.20 	the survivor benefit fund attributable to this article, using
41.21 	the actuarial method and assumptions applicable to the
41.22 	Minneapolis Employees Retirement Fund, from the prior actuarial
41.23 	valuation and shall compare that result with the actual change
41.24 	in the present value of future benefits payable from the
41.25 	survivor benefit fund attributable to this article from the
41.26 	prior actuarial valuation.
41.27 	(c) The executive director shall assess each participating
41.28 	employer, other than the state of Minnesota, its proportional
41.29 	share of the net increase amount calculated under paragraph
41.30 	(b).  The assessment must be made on the first business day of
41.31 	the following February, plus compound interest at an annual rate
41.32 	of six percent on the amount from the actuarial valuation date
41.33 	to the date of payment.

41.34 	Sec. 63. REVISOR'S INSTRUCTION.
 41.35 	In the next edition and subsequent editions of Minnesota
41.36 	Statutes, the revisor of statutes shall replace the reference to
42.1 	"sections 422A.01 to 422A.25" with the reference to "this
42.2 	chapter" wherever the reference appears in Minnesota Statutes,
42.3 	chapter 422A.

42.4 	Sec. 64. REPEALER.
 42.5 	(a) Minnesota Statutes 2004, section 352.119, subdivision
42.6 	1, is repealed.
42.7 	(b) Minnesota Statutes 2004, sections 353.34, subdivision
42.8 	3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
42.9 	4; 353.663; 353.74; and 353.75, are repealed.
42.10 	(c) Minnesota Statutes 2004, section 354.59, is repealed.
42.11 	(d) Minnesota Statutes 2004, sections 422A.22, subdivisions
42.12 	2 and 5; and 422A.221, are repealed.

42.13 	Sec. 65. EFFECTIVE DATE.
 42.14 	Sections 1 to 64 are effective July 1, 2005.