1.1                          A bill for an act 
  1.2             relating to retirement; establishing a health care 
  1.3             reimbursement plan for state employees; modifying 
  1.4             correctional plan provisions; modifying the judges 
  1.5             retirement plan; amending Minnesota Statutes 1998, 
  1.6             sections 352.91, subdivisions 3c, 3d, and by adding 
  1.7             subdivisions; 352D.02, subdivision 1; 352D.04, 
  1.8             subdivision 2; 356.30, subdivision 1; 490.121, 
  1.9             subdivision 4, and by adding a subdivision; 490.123, 
  1.10            subdivisions 1a and 1b; and 490.124, subdivision 1; 
  1.11            proposing coding for new law as Minnesota Statutes, 
  1.12            chapter 352G. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14                             ARTICLE 1
  1.15                 RETIREMENT HEALTH CARE PROVISIONS
  1.16     Section 1.  [352G.01] [DEFINITIONS.] 
  1.17     Subdivision 1.  [TERMS.] Unless the language or context 
  1.18  clearly indicates that a different meaning is intended, the 
  1.19  terms defined in this section, for the purposes of this chapter, 
  1.20  have the meanings given them. 
  1.21     Subd. 2.  [INCLUDED PARTICIPANTS.] "Included participants" 
  1.22  means persons contributing to a retirement plan under chapter 
  1.23  3A, 352, 352B, 352D, or 490 on or after July 1, 2000. 
  1.24     Subd. 3.  [ELIGIBLE RETIRED EMPLOYEE.] "Eligible retired 
  1.25  employee" means a former employee who is drawing monthly 
  1.26  retirement benefits under chapter 3A, 352, 352B, 352D, or 490, 
  1.27  and who has at least 15 years of allowable service and was 
  1.28  eligible to draw retirement benefits at the time of separation 
  1.29  from state service. 
  2.1      Subd. 4.  [DISABLED EMPLOYEE.] "Disabled employee" means an 
  2.2   employee who has been determined disabled under chapter 3A, 352, 
  2.3   352B, 352D, or 490. 
  2.4      Subd. 5.  [INELIGIBLE TERMINATED EMPLOYEE.] "Ineligible 
  2.5   terminated employee" means a former state employee who is not 
  2.6   eligible for benefits from the health care reimbursement plan. 
  2.7      Subd. 6.  [ACCUMULATED CONTRIBUTIONS.] "Accumulated 
  2.8   contributions" means the total deductions made from the salary 
  2.9   of an employee into the health care reimbursement plan. 
  2.10     Subd. 7.  [HEALTH CARE REIMBURSEMENT FUND.] The "health 
  2.11  care reimbursement fund" includes the total accumulated 
  2.12  contributions and employer contributions made by or on behalf of 
  2.13  all included participants and any investment return attributable 
  2.14  to the contributions. 
  2.15     Subd. 8.  [ALLOWABLE SERVICE.] "Allowable service" means 
  2.16  allowable service under chapter 3A, 352, 352B, 352D, or 490 
  2.17  except any allowable service reinstated by repaying a refund on 
  2.18  or after July 1, 2000. 
  2.19     Subd. 9.  [SALARY.] "Salary" means wages, or other periodic 
  2.20  compensation paid to an employee before deductions for deferred 
  2.21  compensation, supplemental retirement plans, or other voluntary 
  2.22  salary reduction programs.  Lump sum sick leave payments, 
  2.23  severance payments, lump sum annual leave payments and overtime 
  2.24  payments made at the time of separation from state service, 
  2.25  payments in lieu of any employee-paid group insurance coverage, 
  2.26  including the difference between single and family rates that 
  2.27  may be paid to an employee with single coverage, and payments 
  2.28  made as an employer-paid fringe benefit, workers' compensation 
  2.29  payments, employer contributions to a deferred compensation or 
  2.30  tax-sheltered annuity program, and amounts contributed under a 
  2.31  benevolent vacation and sick leave donation program, are not 
  2.32  salary. 
  2.33     Subd. 10.  [DESIGNATED BENEFICIARY.] "Designated 
  2.34  beneficiary" means the designated beneficiary established by the 
  2.35  included participants or eligible retired employees under the 
  2.36  retirement plan under chapter 3A, 352, 352B, 352D, or 490. 
  3.1      Subd. 11.  [EXECUTIVE DIRECTOR.] "Executive director" means 
  3.2   the executive director of the Minnesota state retirement system 
  3.3   under section 352.03, subdivision 5. 
  3.4      Subd. 12.  [BOARD.] "Board" means the board of directors of 
  3.5   the Minnesota state retirement system established under section 
  3.6   352.03. 
  3.7      Subd. 13.  [EMPLOYEE.] "Employee" means a person 
  3.8   contributing to a retirement plan under chapter 3A, 352, 352B, 
  3.9   352D, or 490. 
  3.10     Sec. 2.  [352G.02] [HEALTH CARE REIMBURSEMENT PLAN.] 
  3.11     Subdivision 1.  [ESTABLISHMENT.] There is established the 
  3.12  health care reimbursement plan for state employees covered under 
  3.13  chapter 3A, 352, 352B, 352D, or 490.  This plan must meet 
  3.14  qualification requirements under the Internal Revenue Code, 
  3.15  section 401(h), to ensure that both contributions and benefit 
  3.16  payments are tax free. 
  3.17     Subd. 2.  [STATE EMPLOYEES COVERED.] Every state employee 
  3.18  contributing to a plan under chapter 3A, 352, 352B, 352D, or 490 
  3.19  on or after July 1, 2000, is covered by the health care 
  3.20  reimbursement plan.  Acceptance of state employment or 
  3.21  continuance in state service in which contributions are made 
  3.22  under chapter 3A, 352, 352B, 352D, or 490 is deemed consent to 
  3.23  have deductions made from salary for deposit to the credit of 
  3.24  the account of the state employee in the health care 
  3.25  reimbursement plan. 
  3.26     Sec. 3.  [352G.03] [COVERAGE TERMINATION.] 
  3.27     Coverage of any person under the health care reimbursement 
  3.28  plan ends when the person ceases to be a state employee or is no 
  3.29  longer covered by a pension plan under chapter 3A, 352, 352B, 
  3.30  352D, or 490. 
  3.31     Sec. 4.  [352G.04] [APPEALS PROCEDURE.] 
  3.32     If someone wishes to appeal a decision made by the 
  3.33  executive director, the appeal procedure established under 
  3.34  section 352.031 must be followed. 
  3.35     Sec. 5.  [352G.05] [STATE EMPLOYEES HEALTH CARE 
  3.36  REIMBURSEMENT FUND, CONTRIBUTIONS BY EMPLOYEE AND EMPLOYER.] 
  4.1      Subdivision 1.  [FUND CREATED.] There is created a special 
  4.2   fund to be known as the state employees health care 
  4.3   reimbursement fund.  Employee contributions, employer 
  4.4   contributions, investment returns, and any other amounts 
  4.5   authorized by law shall be deposited in this account. 
  4.6      Subd. 2.  [EMPLOYEE CONTRIBUTIONS.] The employee 
  4.7   contribution to the fund must be equal to 0.5 percent of salary. 
  4.8   These contributions must be made by deduction from salary as 
  4.9   provided in section 352.04, subdivision 4. 
  4.10     Subd. 3.  [EMPLOYER CONTRIBUTIONS.] The employer 
  4.11  contribution to the fund must be equal to 0.5 percent of salary. 
  4.12  These contributions shall be made under section 352.04, 
  4.13  subdivisions 5 and 6. 
  4.14     Subd. 4.  [OMITTED SALARY DEDUCTIONS.] If a department 
  4.15  fails to take deductions from an employee's salary as provided 
  4.16  in this section, the collection of omitted deduction must be 
  4.17  made in accordance with section 352.04, subdivision 8, 
  4.18  paragraphs (a), (b), and (c). 
  4.19     Subd. 5.  [ERRONEOUS DEDUCTIONS; CANCELED 
  4.20  WARRANTS.] Deductions taken from the salary of an employee for 
  4.21  the health care reimbursement fund in error must, upon discovery 
  4.22  and verification by the department making the deduction, be 
  4.23  refunded to the employee in accordance with section 352.04, 
  4.24  subdivision 9. 
  4.25     Subd. 6.  [FUND DISBURSEMENT RESTRICTED.] The health care 
  4.26  reimbursement fund must be disbursed only for the purposes 
  4.27  provided by law.  The expenses of the health care reimbursement 
  4.28  plan and any benefits provided by law must be paid from the 
  4.29  health care reimbursement fund.  Refunds under section 352G.10, 
  4.30  subdivisions 1 and 2, must be paid from the contributions prior 
  4.31  to being invested in the health care reimbursement fund. 
  4.32     Sec. 6.  [352G.06] [STATE TREASURER TO BE TREASURER OF THE 
  4.33  HEALTH CARE REIMBURSEMENT FUND.] 
  4.34     The state treasurer and the treasurer's successor is ex 
  4.35  officio treasurer of the health care reimbursement fund.  The 
  4.36  general bond to the state shall cover all liability for actions 
  5.1   as treasurer of these funds.  Funds of the system received by 
  5.2   the treasurer must be set aside in the state treasury and 
  5.3   credited to the health care reimbursement fund.  The treasurer 
  5.4   and the treasurer's successor shall deliver to the executive 
  5.5   director copies of all payroll abstracts of the state together 
  5.6   with the commissioner of finance's warrants covering the 
  5.7   deductions made on these payroll abstracts for the health care 
  5.8   reimbursement fund.  The executive director shall have a list 
  5.9   made of the commissioner of finance's warrants.  These warrants 
  5.10  must then be deposited with the state treasurer or the 
  5.11  treasurer's successor to be credited to the health care 
  5.12  reimbursement fund.  The treasurer shall pay out of this fund 
  5.13  only on warrants issued by the commissioner of finance, upon 
  5.14  abstracts signed by the director, or by the finance officer 
  5.15  designated by the director during the disability or the absence 
  5.16  of the director.  Abstracts for investments may be signed by the 
  5.17  executive director of the state board of investment. 
  5.18     Sec. 7.  [352G.07] [INVESTMENT BOARD TO INVEST FUNDS.] 
  5.19     The director shall, from time to time, certify to the state 
  5.20  board of investment any portions of the health care 
  5.21  reimbursement fund that in the judgment of the director are not 
  5.22  required for immediate use.  The state board of investment shall 
  5.23  invest and reinvest sums so transferred, or certified, in 
  5.24  securities that are duly authorized legal investments under 
  5.25  section 11A.24.  Amounts invested in the health care 
  5.26  reimbursement fund must be accounted for separately from the 
  5.27  retirement funds invested by the investment board. 
  5.28     Sec. 8.  [352G.08] [HEALTH CARE REIMBURSEMENT PLAN 
  5.29  BENEFITS.] 
  5.30     Subdivision 1.  [AGE AND SERVICE REQUIREMENTS.] After 
  5.31  separation from state service, an employee who has attained the 
  5.32  age of at least 60, who has at least 15 years of allowable 
  5.33  service, and is immediately eligible for retirement or 
  5.34  disability benefits or an employee who qualifies for the rule of 
  5.35  90 regardless of age, is entitled upon application to benefits 
  5.36  from the health care reimbursement plan as long as the employee 
  6.1   has not accepted a refund under section 352G.10, subdivisions 1 
  6.2   and 2, or has repaid all refunds to the health care 
  6.3   reimbursement plan under section 352G.10, subdivision 4.  
  6.4   Benefits are not payable to an eligible disabled employee who is 
  6.5   no longer collecting disability or retirement benefits. 
  6.6      Subd. 2.  [BENEFIT SCHEDULE.] Those meeting the eligibility 
  6.7   requirements in subdivision 1 will be entitled to the following 
  6.8   monthly benefits: 
  6.9                   Retirement Date           Monthly Benefits
  6.10           July 1, 2000 - June 30, 2002           $55
  6.11           July 1, 2002 - June 30, 2003           $64
  6.12           July 1, 2003 - June 30, 2004           $73
  6.13           July 1, 2004 - June 30, 2005           $82
  6.14           July 1, 2005 - June 30, 2006           $92
  6.15           July 1, 2006 - June 30, 2007           $102
  6.16           July 1, 2007 - June 30, 2008           $113
  6.17           July 1, 2008 - June 30, 2009           $123
  6.18           July 1, 2009 - June 30, 2010           $134
  6.19           July 1, 2010 - June 30, 2011           $146
  6.20           July 1, 2011 - and after               $158
  6.21     Subd. 3.  [PAYMENTS.] The first monthly payment will begin 
  6.22  on July 1, 2002, and will be based on the schedule above.  No 
  6.23  monthly payments will be made prior to July 1, 2002.  Payments 
  6.24  will be paid directly to the eligible retired employee, but only 
  6.25  upon providing documentation that the money is used to offset 
  6.26  health insurance premiums or any other health expenses to meet 
  6.27  the requirements under the Internal Revenue Code, section 401(h).
  6.28  At the discretion of the executive director, payments may be 
  6.29  added to the monthly retirement checks received by the eligible 
  6.30  retired employee. 
  6.31     Subd. 4.  [TERMINATION OF BENEFITS.] Monthly benefits will 
  6.32  terminate upon the death of the member and will not continue to 
  6.33  a survivor or designated beneficiary. 
  6.34     Sec. 9.  [352G.09] [ANNUAL INCREASES, CALCULATION OF HEALTH 
  6.35  INSURANCE PLAN INFLATION ADJUSTMENT.] 
  6.36     (a) Annually, following June 30, the Minnesota state 
  7.1   retirement system shall use the procedures in paragraph (b) to 
  7.2   determine whether an inflation adjustment is payable and to 
  7.3   determine the amount of the adjustment. 
  7.4      (b) If the medical inflation index increases from June 30 
  7.5   of the preceding year to June 30 of the current year, the 
  7.6   Minnesota state retirement system shall certify the percentage 
  7.7   increase.  The amount certified is the lesser of the medical 
  7.8   inflation index or five percent.  The board, at its discretion, 
  7.9   can decrease the adjustment in any year in order to maintain the 
  7.10  financial integrity of the health insurance plan which includes 
  7.11  avoiding projected unfunded liability.  The board will seek 
  7.12  advice from an approved actuary in determining if the inflation 
  7.13  adjustment should be lowered. 
  7.14     (c) If an increase is payable, it will be made the 
  7.15  following January 1.  An eligible retired employee who has been 
  7.16  receiving health insurance reimbursement benefits for at least 
  7.17  12 months as of the current June 30 is eligible to receive a 
  7.18  full insurance plan inflation adjustment.  An eligible retired 
  7.19  employee who has been receiving a health insurance benefit for 
  7.20  at least one full month, but less than 12 full months as of the 
  7.21  current June 30, is eligible to receive a partial inflation 
  7.22  adjustment as follows: 
  7.23            Month Retired     Fraction of the Increase 
  7.24             July                    11/12
  7.25             August                  10/12
  7.26             September               9/12
  7.27             October                 8/12
  7.28             November                7/12
  7.29             December                6/12
  7.30             January                 5/12
  7.31             February                4/12
  7.32             March                   3/12
  7.33             April                   2/12
  7.34             May                     1/12
  7.35     Sec. 10.  [352G.10] [REFUND OF EMPLOYEE CONTRIBUTIONS.] 
  7.36     Subdivision 1.  [REFUND.] An ineligible terminated 
  8.1   employee, an eligible retired employee who has not yet begun 
  8.2   collecting benefits, or an employee who moves to a state 
  8.3   position no longer covered by chapter 3A, 352, 352B, 352D, or 
  8.4   490 may apply for a refund provided in subdivision 2.  
  8.5   Application for a refund may be made after the termination of 
  8.6   state service if the applicant has not again become a state 
  8.7   employee required to be covered by the system. 
  8.8      Subd. 2.  [AMOUNT OF REFUND.] The refund payable to a 
  8.9   person defined in subdivision 1 is an amount equal to employee 
  8.10  contributions plus interest at a rate of five percent per year 
  8.11  compounded annually.  The amount of the refund is paid from 
  8.12  contributions paid under section 352G.05 prior to the money 
  8.13  being invested in the health care reimbursement fund. 
  8.14     Subd. 3.  [TERMINATION OF RIGHTS.] When an ineligible 
  8.15  terminated employee or an eligible retired employee accepts a 
  8.16  refund as provided in subdivision 2, all existing service and 
  8.17  all rights and benefits to which the employee was entitled 
  8.18  before accepting the refund terminate.  Refunds may not be 
  8.19  repaid. 
  8.20     Subd. 4.  [REPAYMENT OF REFUND.] An included participant 
  8.21  may repay a refund paid under subdivision 2 by paying the amount 
  8.22  refunded plus 8.5 percent interest compounded annually.  All 
  8.23  refunds must be paid before termination or within one month 
  8.24  following termination of state service. 
  8.25     Sec. 11.  [352G.11] [PAYMENTS UPON THE DEATH OF AN INCLUDED 
  8.26  PARTICIPANT.] 
  8.27     Upon the death of an included participant or a person not 
  8.28  yet collecting monthly benefits under this section, the 
  8.29  designated beneficiary is entitled to a refund of contributions 
  8.30  plus five percent interest, compounded annually. 
  8.31     Sec. 12.  [352G.12] [PAYMENT UPON THE DEATH OF AN ELIGIBLE 
  8.32  RETIRED EMPLOYEE.] 
  8.33     Upon the death of an eligible retired employee who has 
  8.34  started collecting monthly benefits, the designated beneficiary 
  8.35  is entitled to a refund of the eligible retired employee's 
  8.36  contributions plus five percent interest compounded annually 
  9.1   until the date of termination of state service less the monthly 
  9.2   benefits that have been paid. 
  9.3      Sec. 13.  [CURRENT RETIREES AND DISABLED EMPLOYEES.] 
  9.4      Any current retiree or disabled employee receiving monthly 
  9.5   benefits under Minnesota Statutes, chapter 3A, 352, 352B, 352D, 
  9.6   or 490 who have 15 or more years of service and are age 60 or 
  9.7   who qualified for the rule of 90 at the time of termination of 
  9.8   public employment, would be eligible to receive an additional 
  9.9   $55 per month.  This additional payment will be added to the 
  9.10  retired or disabled employees monthly retirement check and will 
  9.11  be eligible for future postretirement adjustments under 
  9.12  Minnesota Statutes, section 11A.18, subdivision 9.  The present 
  9.13  value necessary to provide this benefit increase to retired and 
  9.14  disabled employees must be transferred to the postretirement 
  9.15  fund under Minnesota Statutes, section 11A.18, subdivision 6, 
  9.16  from the retirement fund the person is currently receiving the 
  9.17  benefits.  If the retired or disabled employee is receiving 
  9.18  payments from more than one retirement plan meeting 
  9.19  qualifications under this subdivision, the required reserves 
  9.20  will be transferred from the plan with the most service credit. 
  9.21     Sec. 14.  [RETIREES AND DISABLED EMPLOYEES UNDER AGE 60.] 
  9.22     A retired or disabled employee who has 15 or more years of 
  9.23  service, but has not yet reached age 60, will be entitled to an 
  9.24  additional $55 per month upon attainment of age 60.  The present 
  9.25  value necessary to provide the benefit increase to those who 
  9.26  become eligible later must be transferred to the postretirement 
  9.27  fund when they reach age 60. 
  9.28     Sec. 15.  [FIRST INCREASE.] 
  9.29     An eligible or retired eligible employee would first be 
  9.30  eligible for an increase on January 1, 2003.  The required 
  9.31  reserves to support the payment must be transferred on July 1, 
  9.32  2001. 
  9.33     Sec. 16.  [UNLIMITED RIGHT TO AMEND.] 
  9.34     Notwithstanding any other provision of the health benefit 
  9.35  fund and provisions of the Internal Revenue Code, the provisions 
  9.36  governing the health care reimbursement plan may be amended at 
 10.1   any time and in any manner for any reason whatsoever.  This 
 10.2   right to amend includes, but is not limited to, the right to 
 10.3   reduce or eliminate prospectively or retroactively any or all 
 10.4   health benefits under the health care reimbursement plan for any 
 10.5   or all persons who may be members, retirees, and other 
 10.6   recipients, or otherwise may be entitled to health benefits 
 10.7   under this plan.  Benefits may be reduced or eliminated for any 
 10.8   or all persons including members, retirees, and other 
 10.9   recipients, even if they are then entitled to or are receiving 
 10.10  health benefits. 
 10.11     Sec. 17.  [EFFECTIVE DATE.] 
 10.12     Sections 1 to 16 are effective July 1, 2000. 
 10.13                             ARTICLE 2
 10.14                 MSRS-CORRECTIONAL PLAN MEMBERSHIP
 10.15                             INCLUSIONS 
 10.16     Section 1.  Minnesota Statutes 1998, section 352.91, 
 10.17  subdivision 3c, is amended to read: 
 10.18     Subd. 3c.  [NURSING PERSONNEL.] (a) "Covered correctional 
 10.19  service" means service by a state employee in one of the 
 10.20  employment positions at a correctional facility or at the 
 10.21  Minnesota security hospital specified in paragraph (b), provided 
 10.22  that at least 75 percent of the employee's working time is spent 
 10.23  in direct contact with inmates or patients and the fact of this 
 10.24  direct contact is certified to the executive director by the 
 10.25  appropriate commissioner, unless the person elects to retain the 
 10.26  current retirement coverage under Laws 1996, chapter 408, 
 10.27  article 8, section 21. 
 10.28     (b) The employment positions are as follows: 
 10.29     (1) registered nurse - senior; 
 10.30     (2) registered nurse; 
 10.31     (3) registered nurse - principal; ~~and~~ 
 10.32     (4) licensed practical nurse 2; and 
 10.33     (5) registered nurse practitioner. 
 10.34     Sec. 2.  Minnesota Statutes 1998, section 352.91, 
 10.35  subdivision 3d, is amended to read: 
 10.36     Subd. 3d.  [OTHER CORRECTIONAL PERSONNEL.] (a) "Covered 
 11.1   correctional service" means service by a state employee in one 
 11.2   of the employment positions at a correctional facility or at the 
 11.3   Minnesota security hospital specified in paragraph (b), provided 
 11.4   that at least 75 percent of the employee's working time is spent 
 11.5   in direct contact with inmates or patients and the fact of this 
 11.6   direct contact is certified to the executive director by the 
 11.7   appropriate commissioner, unless the person elects to retain the 
 11.8   current retirement coverage under Laws 1996, chapter 408, 
 11.9   article 8, section 21. 
 11.10     (b) The employment positions are as follows:  baker, 
 11.11  chemical dependency counselor supervisor, chief cook, cook, cook 
 11.12  coordinator, corrections behavior therapist, corrections 
 11.13  behavior therapist specialist, corrections parent education 
 11.14  coordinator, corrections security caseworker, corrections 
 11.15  security caseworker career, corrections teaching assistant, 
 11.16  dentist, electrician supervisor, general repair worker, 
 11.17  library/information research services specialist, 
 11.18  library/information research services specialist senior, plumber 
 11.19  supervisor, psychologist 3, recreation therapist, recreation 
 11.20  therapist coordinator, recreation program assistant, recreation 
 11.21  therapist senior, stores clerk senior, water treatment plant 
 11.22  operator, work therapy technician, work therapy assistant, work 
 11.23  therapy program coordinator. 
 11.24     (c) "Covered correctional service" also means service as 
 11.25  the director of the Phoenix/Pomiga treatment/behavior change 
 11.26  program of the department of corrections and the Phoenix/Pomiga 
 11.27  assistant group supervisors. 
 11.28     Sec. 3.  Minnesota Statutes 1998, section 352.91, is 
 11.29  amended by adding a subdivision to read: 
 11.30     Subd. 3f.  [ADDITIONAL DEPARTMENT OF HUMAN SERVICES 
 11.31  PERSONNEL.] (a) "Covered correctional service" means service by 
 11.32  a state employee in one of the employment positions specified in 
 11.33  paragraph (b) at the Minnesota security hospital or the 
 11.34  Minnesota sexual psychopathic personality treatment center, 
 11.35  provided that at least 75 percent of the employee's working time 
 11.36  is spent in direct contact with patients and the fact of this 
 12.1   direct contact is certified to the executive director by the 
 12.2   commissioner of human services. 
 12.3      (b) The employment positions are: 
 12.4      (1) behavior analyst 2; 
 12.5      (2) licensed practical nurse 1; 
 12.6      (3) office and administrative specialist senior; 
 12.7      (4) psychologist 2; 
 12.8      (5) social worker specialist; 
 12.9      (6) behavior analyst 3; and 
 12.10     (7) social worker senior. 
 12.11     Sec. 4.  Minnesota Statutes 1998, section 352.91, is 
 12.12  amended by adding a subdivision to read: 
 12.13     Subd. 3g.  [ADDITIONAL CORRECTIONS DEPARTMENT PERSONNEL.] 
 12.14  "Covered correctional service" means service by a state employee 
 12.15  in one of the employment positions at the designated Minnesota 
 12.16  correctional facility specified in paragraph (b), provided that 
 12.17  at least 75 percent of the employee's working time is spent in 
 12.18  direct contact with inmates and the fact of this direct contact 
 12.19  is certified to the executive director by the commissioner of 
 12.20  corrections. 
 12.21     (b) The employment positions and correctional facilities 
 12.22  are: 
 12.23     (1) corrections discipline unit supervisor, at the 
 12.24  Minnesota correctional facility-Faribault, the Minnesota 
 12.25  correctional facility-Lino Lakes, the Minnesota correctional 
 12.26  facility-Oak Park Heights, and the Minnesota correctional 
 12.27  facility-St. Cloud; 
 12.28     (2) dental assistant registered, at the Minnesota 
 12.29  correctional facility-Faribault, the Minnesota correctional 
 12.30  facility-Lino Lakes, the Minnesota correctional facility-Moose 
 12.31  Lake, the Minnesota correctional facility-Oak Park Heights, and 
 12.32  the Minnesota correctional facility-Red Wing; 
 12.33     (3) dental hygienist, at the Minnesota correctional 
 12.34  facility-Shakopee; 
 12.35     (4) psychologist 2, at the Minnesota correctional facility- 
 12.36  Faribault, the Minnesota correctional facility-Lino Lakes, the 
 13.1   Minnesota correctional facility-Moose Lake, the Minnesota 
 13.2   correctional facility-Oak Park Heights, the Minnesota 
 13.3   correctional facility-Red Wing, the Minnesota correctional 
 13.4   facility-St. Cloud, the Minnesota correctional 
 13.5   facility-Shakopee, and the Minnesota correctional 
 13.6   facility-Stillwater; and 
 13.7      (5) sentencing to service crew leader involved with the 
 13.8   inmate community work crew program, at the Minnesota 
 13.9   correctional facility-Faribault and the Minnesota correctional 
 13.10  facility-Lino Lakes. 
 13.11     Sec. 5.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 13.12  PERSONS.] 
 13.13     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE 
 13.14  COVERAGE.] (a) An employee who has future retirement coverage 
 13.15  transferred to the correctional employees retirement plan under 
 13.16  section 1, 2, or 3, or an employee who has retirement coverage 
 13.17  for past correctional service transferred to the correctional 
 13.18  employees retirement plan under section 2, is entitled to elect 
 13.19  to obtain prior service credit for eligible state service 
 13.20  performed after June 30, 1975, and before the first day of the 
 13.21  first full pay period beginning after June 30, 2000, with the 
 13.22  department of corrections or the department of human services at 
 13.23  the Minnesota security hospital or the Minnesota sexual 
 13.24  psychopathic personality treatment center.  All eligible prior 
 13.25  service credit must be purchased. 
 13.26     (b) For purposes of section 1, 3, or 4, eligible state 
 13.27  service with the department of corrections or the department of 
 13.28  human services is any prior period of continuous service after 
 13.29  June 30, 1975, performed as an employee of the department of 
 13.30  corrections or the department of human services that would have 
 13.31  been eligible for the correctional employees retirement plan 
 13.32  coverage under section 1, 3, or 4 if that prior service had been 
 13.33  performed after the first day of the first full pay period 
 13.34  beginning after June 30, 2000, rather than before that date.  
 13.35  Service is continuous if there has been no period of 
 13.36  discontinuation of eligible state service for a period greater 
 14.1   than 180 calendar days.  For purposes of section 2, paragraph 
 14.2   (c), eligible state service is any period of service on or after 
 14.3   the date which the employee started employment with the Phoenix 
 14.4   treatment/behavior change program in a position specified in 
 14.5   Minnesota Statutes, section 352.91, subdivision 3d, paragraph 
 14.6   (c), in which at least 75 percent of the employee's working time 
 14.7   is determined to have been spent in direct contact with program 
 14.8   participants, and the date the employee joined the correctional 
 14.9   employees plan. 
 14.10     (c) The commissioner of corrections or the commissioner of 
 14.11  human services shall certify eligible state service to the 
 14.12  executive director of the Minnesota state retirement system. 
 14.13     (d) A covered correctional plan employee employed on July 
 14.14  1, 2000, who has past service in a job classification covered 
 14.15  under section 1, 3, or 4 on July 1, 2000, is entitled to 
 14.16  purchase the past service if the applicable department certifies 
 14.17  that the employee met the eligibility requirements for 
 14.18  coverage.  The employee shall pay the difference between the 
 14.19  employee contributions actually paid during the period and what 
 14.20  should have been paid under the correctional employees 
 14.21  retirement plan.  Payment for past service must be completed by 
 14.22  June 30, 2002. 
 14.23     Subd. 2.  [PAYMENT FOR PAST SERVICE.] (a) An employee 
 14.24  electing to obtain prior service credit under subdivision 1 must 
 14.25  pay an additional employee contribution for that prior service.  
 14.26  The additional member contribution is the contribution 
 14.27  differential percentage applied to the actual salary paid to the 
 14.28  employee during the period of the prior eligible state service, 
 14.29  plus interest at the rate of six percent per annum, compounded 
 14.30  annually.  The contribution differential percentage is the 
 14.31  difference between 4.9 percent of salary and the applicable 
 14.32  employee contribution rate of the general state employees 
 14.33  retirement plan during the prior eligible state service. 
 14.34     (b) The additional member contribution must be paid only in 
 14.35  a lump sum.  Payment must accompany the election to obtain prior 
 14.36  service credit.  No election of payment may be made by the 
 15.1   person or accepted by the executive director after June 30, 2002.
 15.2      Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 15.3   from the general state employees retirement plan to the 
 15.4   correctional employees retirement plan, in an amount equal to 
 15.5   the present value of benefits earned under the general employees 
 15.6   retirement plan for each employee transferring to the 
 15.7   correctional employees retirement plan, as determined by the 
 15.8   actuary retained by the legislative commission on pensions and 
 15.9   retirement in accordance with Minnesota Statutes, section 
 15.10  356.215.  The transfer of assets must be made within 45 days 
 15.11  after the employee elects to transfer coverage to the 
 15.12  correctional employees retirement plan. 
 15.13     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon transfer of 
 15.14  assets in subdivision 3, service credit in the general state 
 15.15  employees plan of the Minnesota state retirement system is 
 15.16  forfeited and may not be reinstated.  The service credit and 
 15.17  transferred assets must be credited to the correctional 
 15.18  employees retirement plan. 
 15.19     Subd. 5.  [PAYMENT OF ACTUARIAL CALCULATION COSTS.] (a) The 
 15.20  expense of the legislative commission on pensions and retirement 
 15.21  attributable to the calculations of its consulting actuary under 
 15.22  subdivision 3 must be reimbursed by the department of 
 15.23  corrections and the department of human services. 
 15.24     (b) The expense reimbursement under paragraph (a) must be 
 15.25  allocated between the two departments in a manner that is 
 15.26  jointly agreeable.  If no allocation procedure is developed by 
 15.27  the commissioner of corrections and the commissioner of human 
 15.28  services, the cost must be allocated on an equally shared basis. 
 15.29     (c) Payment of the expense reimbursement to the legislative 
 15.30  commission on pensions and retirement is due 30 days after the 
 15.31  receipt of the reimbursement request from the executive director 
 15.32  of the legislative commission on pensions and retirement. 
 15.33     Sec. 6.  [EFFECTIVE DATE.] 
 15.34     Sections 1 to 5 are effective July 1, 2000. 
 15.35                             ARTICLE 3
 15.36                       JUDGES RETIREMENT PLAN
 16.1                            MODIFICATIONS
 16.2      Section 1.  Minnesota Statutes 1998, section 352D.02, 
 16.3   subdivision 1, is amended to read: 
 16.4      Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
 16.5   paragraph (c), clauses (2), (3), (4), and (6) to (15), if they 
 16.6   are in the unclassified service of the state or metropolitan 
 16.7   council and are eligible for coverage under the general state 
 16.8   employees retirement plan under chapter 352, are participants in 
 16.9   the unclassified program under this chapter unless the employee 
 16.10  gives notice to the executive director of the Minnesota state 
 16.11  retirement system within one year following the commencement of 
 16.12  employment in the unclassified service that the employee desires 
 16.13  coverage under the general state employees retirement plan.  For 
 16.14  the purposes of this chapter, an employee who does not file 
 16.15  notice with the executive director is deemed to have exercised 
 16.16  the option to participate in the unclassified plan. 
 16.17     (b) Persons referenced in paragraph (c), clauses (1) and 
 16.18  (5), are participants in the unclassified program under this 
 16.19  chapter unless the person is eligible to elect different 
 16.20  coverage under section 3A.07 or 352C.011 and, after July 1, 
 16.21  1998, elects retirement coverage by the applicable alternative 
 16.22  retirement plan.  Persons referenced in paragraph (c), clause 
 16.23  (16), are participants in the unclassified program under this 
 16.24  chapter for judicial employment in excess of the service credit 
 16.25  limit in section 490.121, subdivision 22. 
 16.26     (c) Enumerated employees and referenced persons are: 
 16.27     (1) the governor, the lieutenant governor, the secretary of 
 16.28  state, the state auditor, the state treasurer, and the attorney 
 16.29  general; 
 16.30     (2) an employee in the office of the governor, lieutenant 
 16.31  governor, secretary of state, state auditor, state treasurer, 
 16.32  attorney general; 
 16.33     (3) an employee of the state board of investment; 
 16.34     (4) the head of a department, division, or agency created 
 16.35  by statute in the unclassified service, an acting department 
 16.36  head subsequently appointed to the position, or an employee 
 17.1   enumerated in section 15A.0815 or 15A.083, subdivision 4; 
 17.2      (5) a member of the legislature; 
 17.3      (6) a permanent, full-time unclassified employee of the 
 17.4   legislature or a commission or agency of the legislature or a 
 17.5   temporary legislative employee having shares in the supplemental 
 17.6   retirement fund as a result of former employment covered by this 
 17.7   chapter, whether or not eligible for coverage under the 
 17.8   Minnesota state retirement system; 
 17.9      (7) a person who is employed in a position established 
 17.10  under section 43A.08, subdivision 1, clause (3), or in a 
 17.11  position authorized under a statute creating or establishing a 
 17.12  department or agency of the state, which is at the deputy or 
 17.13  assistant head of department or agency or director level; 
 17.14     (8) the regional administrator, or executive director of 
 17.15  the metropolitan council, general counsel, division directors, 
 17.16  operations managers, and other positions as designated by the 
 17.17  council, all of which may not exceed 27 positions at the council 
 17.18  and the chair, provided that upon initial designation of all 
 17.19  positions provided for in this clause, no further designations 
 17.20  or redesignations may be made without approval of the board of 
 17.21  directors of the Minnesota state retirement system; 
 17.22     (9) the executive director, associate executive director, 
 17.23  and not to exceed nine positions of the higher education 
 17.24  services office in the unclassified service, as designated by 
 17.25  the higher education services office before January 1, 1992, or 
 17.26  subsequently redesignated with the approval of the board of 
 17.27  directors of the Minnesota state retirement system, unless the 
 17.28  person has elected coverage by the individual retirement account 
 17.29  plan under chapter 354B; 
 17.30     (10) the clerk of the appellate courts appointed under 
 17.31  article VI, section 2, of the Constitution of the state of 
 17.32  Minnesota; 
 17.33     (11) the chief executive officers of correctional 
 17.34  facilities operated by the department of corrections and of 
 17.35  hospitals and nursing homes operated by the department of human 
 17.36  services; 
 18.1      (12) an employee whose principal employment is at the state 
 18.2   ceremonial house; 
 18.3      (13) an employee of the Minnesota educational computing 
 18.4   corporation; 
 18.5      (14) an employee of the world trade center board; ~~and~~ 
 18.6      (15) an employee of the state lottery board who is covered 
 18.7   by the managerial plan established under section 43A.18, 
 18.8   subdivision 3; and 
 18.9      (16) a judge who has exceeded the service credit limit in 
 18.10  section 490.121, subdivision 22. 
 18.11     Sec. 2.  Minnesota Statutes 1998, section 352D.04, 
 18.12  subdivision 2, is amended to read: 
 18.13     Subd. 2.  [CONTRIBUTION RATES.] (a) The money used to 
 18.14  purchase shares under this section is the employee and employer 
 18.15  contributions provided in this subdivision. 
 18.16     (b) The employee contribution is an amount equal to the 
 18.17  employee contribution specified in section 352.04, subdivision 2.
 18.18     (c) The employer contribution is an amount equal to six 
 18.19  percent of salary.  
 18.20     (d) These contributions must be made in the manner provided 
 18.21  in section 352.04, subdivisions 4, 5, and 6.  
 18.22     (e) For members of the legislature, the contributions under 
 18.23  this subdivision also must be made on per diem payments received 
 18.24  during a regular or special legislative session, but may not be 
 18.25  made on per diem payments received outside of a regular or 
 18.26  special legislative session, on the additional compensation 
 18.27  attributable to a leadership position under section 3.099, 
 18.28  subdivision 3, living expense payments under section 3.101, or 
 18.29  special session living expense payments under section 3.103. 
 18.30     (f) For a judge who is a member of the unclassified plan 
 18.31  under section 352D.02, subdivision 1, paragraph (c), clause 
 18.32  (16), the employee contribution rate is eight percent of salary, 
 18.33  and there is no employer contribution. 
 18.34     Sec. 3.  Minnesota Statutes 1998, section 356.30, 
 18.35  subdivision 1, is amended to read: 
 18.36     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
 19.1   Notwithstanding any provisions to the contrary of the laws 
 19.2   governing the funds enumerated in subdivision 3, a person who 
 19.3   has met the qualifications of clause (2) may elect to receive a 
 19.4   retirement annuity from each fund in which the person has at 
 19.5   least six months allowable service, based on the allowable 
 19.6   service in each fund, subject to the provisions of clause (3).  
 19.7      (2) A person may receive upon retirement a retirement 
 19.8   annuity from each fund in which the person has at least six 
 19.9   months allowable service, and augmentation of a deferred annuity 
 19.10  calculated under the laws governing each public pension plan or 
 19.11  fund named in subdivision 3, from the date the person terminated 
 19.12  all public service if: 
 19.13     (a) the person has allowable service totaling an amount 
 19.14  that allows the person to receive an annuity in any two or more 
 19.15  of the enumerated funds; and 
 19.16     (b) the person has not begun to receive an annuity from any 
 19.17  enumerated fund or the person has made application for benefits 
 19.18  from all funds and the effective dates of the retirement annuity 
 19.19  with each fund under which the person chooses to receive an 
 19.20  annuity are within a one-year period.  
 19.21     (3) The retirement annuity from each fund must be based 
 19.22  upon the allowable service in each fund, except that:  
 19.23     (a) The laws governing annuities must be the law in effect 
 19.24  on the date of termination from the last period of public 
 19.25  service under a covered fund with which the person earned a 
 19.26  minimum of one-half year of allowable service credit during that 
 19.27  employment.  
 19.28     (b) The "average salary" on which the annuity from each 
 19.29  covered fund in which the employee has credit in a formula plan 
 19.30  shall be based on the employee's highest five successive years 
 19.31  of covered salary during the entire service in covered funds.  
 19.32     (c) The formula percentages to be used by each fund must be 
 19.33  those percentages prescribed by each fund's formula as continued 
 19.34  for the respective years of allowable service from one fund to 
 19.35  the next, recognizing all previous allowable service with the 
 19.36  other covered funds.  
 20.1      (d) Allowable service in all the funds must be combined in 
 20.2   determining eligibility for and the application of each fund's 
 20.3   provisions in respect to actuarial reduction in the annuity 
 20.4   amount for retirement prior to normal retirement.  
 20.5      (e) The annuity amount payable for any allowable service 
 20.6   under a nonformula plan of a covered fund must not be affected 
 20.7   but such service and covered salary must be used in the above 
 20.8   calculation.  
 20.9      (f) This section shall not apply to any person whose final 
 20.10  termination from the last public service under a covered fund is 
 20.11  prior to May 1, 1975.  
 20.12     (g) For the purpose of computing annuities under this 
 20.13  section the formula percentages used by any covered fund, except 
 20.14  the public employees police and fire fund, the judges retirement 
 20.15  fund, and the state patrol retirement fund, must not exceed the 
 20.16  percent specified in section 356.19, subdivision 4, per year of 
 20.17  service for any year of service or fraction thereof.  The 
 20.18  formula percentage used by the public employees police and fire 
 20.19  fund and the state patrol retirement fund must not exceed the 
 20.20  percent specified in section 356.19, subdivision 6, per year of 
 20.21  service for any year of service or fraction thereof.  The 
 20.22  formula percentage used by the judges retirement fund must not 
 20.23  exceed the percent specified in section 356.19, subdivision 8, 
 20.24  per year of service for any year of service or fraction 
 20.25  thereof.  The formula percentage used by the legislators 
 20.26  retirement plan and the elective state officers retirement must 
 20.27  not exceed 2.5 percent, but this limit does not apply to the 
 20.28  adjustment provided under section 3A.02, subdivision 1, 
 20.29  paragraph (c), or 352C.031, paragraph (b). 
 20.30     (h) Any period of time for which a person has credit in 
 20.31  more than one of the covered funds must be used only once for 
 20.32  the purpose of determining total allowable service.  
 20.33     (i) If the period of duplicated service credit is more than 
 20.34  six months, or the person has credit for more than six months 
 20.35  with each of the funds, each fund shall apply its formula to a 
 20.36  prorated service credit for the period of duplicated service 
 21.1   based on a fraction of the salary on which deductions were paid 
 21.2   to that fund for the period divided by the total salary on which 
 21.3   deductions were paid to all funds for the period.  
 21.4      (j) If the period of duplicated service credit is less than 
 21.5   six months, or when added to other service credit with that fund 
 21.6   is less than six months, the service credit must be ignored and 
 21.7   a refund of contributions made to the person in accord with that 
 21.8   fund's refund provisions.  
 21.9      Sec. 4.  Minnesota Statutes 1998, section 490.121, 
 21.10  subdivision 4, is amended to read: 
 21.11     Subd. 4.  [ALLOWABLE SERVICE.] "Allowable service" means a 
 21.12  whole year, or any fraction thereof, subject to the service 
 21.13  credit limit in subdivision 22, served as a judge at any time, 
 21.14  or served as a referee in probate for all referees in probate 
 21.15  who were in office prior to January 1, 1974. 
 21.16     Sec. 5.  Minnesota Statutes 1998, section 490.121, is 
 21.17  amended by adding a subdivision to read: 
 21.18     Subd. 22.  [SERVICE CREDIT LIMIT.] "Service credit limit" 
 21.19  means the greater of:  (1) 24 years of allowable service under 
 21.20  chapter 490; or (2) for judges with allowable service rendered 
 21.21  prior to July 1, 1980, the number of years of allowable service 
 21.22  under chapter 490, which, when multiplied by the percentage 
 21.23  listed in section 356.19, subdivision 7 or 8, whichever is 
 21.24  applicable to each year of service, equals 76.8. 
 21.25     Sec. 6.  Minnesota Statutes 1998, section 490.123, 
 21.26  subdivision 1a, is amended to read: 
 21.27     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 21.28  covered by the federal old age, survivors, disability, and 
 21.29  health insurance program whose service does not exceed the 
 21.30  service credit limit in section 490.121, subdivision 22, shall 
 21.31  contribute to the fund from each salary payment a sum equal to 
 21.32  8.00 percent of salary.  
 21.33     (b) A judge not so covered whose service does not exceed 
 21.34  the service credit limit in section 490.121, subdivision 22, 
 21.35  shall contribute to the fund from each salary payment a sum 
 21.36  equal to 8.15 percent of salary. 
 22.1      (c) The contribution under this subdivision is payable by 
 22.2   salary deduction. 
 22.3      Sec. 7.  Minnesota Statutes 1998, section 490.123, 
 22.4   subdivision 1b, is amended to read: 
 22.5      Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 22.6   contribution rate to the fund on behalf of a judge is 20.5 
 22.7   percent of salary and continues after a judge exceeds the 
 22.8   service credit limit in section 490.121, subdivision 22. 
 22.9      The employer contribution must be paid by the state court 
 22.10  administrator and is payable at the same time as member 
 22.11  contributions under subdivision 1a, or employee contributions to 
 22.12  the unclassified plan in chapter 352D for judges whose service 
 22.13  exceeds the limit in section 490.121, subdivision 22, are 
 22.14  remitted. 
 22.15     Sec. 8.  Minnesota Statutes 1998, section 490.124, 
 22.16  subdivision 1, is amended to read: 
 22.17     Subdivision 1.  [BASIC RETIREMENT ANNUITY.] Except as 
 22.18  qualified hereinafter from and after mandatory retirement date, 
 22.19  normal retirement date, early retirement date, or one year from 
 22.20  the disability retirement date, as the case may be, a retirement 
 22.21  annuity shall be payable to a retiring judge from the judges' 
 22.22  retirement fund in an amount equal to:  (1) the percent 
 22.23  specified in section 356.19, subdivision 7, multiplied by the 
 22.24  judge's final average compensation multiplied by the number of 
 22.25  years and fractions of years of allowable service rendered prior 
 22.26  to July 1, 1980; plus (2) the percent specified in section 
 22.27  356.19, subdivision 8, multiplied by the judge's final average 
 22.28  compensation multiplied by the number of years and fractions of 
 22.29  years of allowable service rendered after June 30, 1980~~;~~ 
 22.30  ~~provided that the annuity must not exceed 70 percent of the~~ 
 22.31  ~~judge's annual salary for the 12 months immediately preceding~~ 
 22.32  ~~retirement~~.  Service that exceeds the service credit limit in 
 22.33  section 490.121, subdivision 22, must be excluded in calculating 
 22.34  the retirement annuity, but compensation earned during this 
 22.35  service must be used in determining a judge's final average 
 22.36  compensation and calculating the retirement annuity.  
 23.1      Sec. 9.  [PRIOR SERVICE.] 
 23.2      This section applies to a person who is a judge on July 1, 
 23.3   2000, and whose service under chapter 490 on that date exceeds 
 23.4   the service credit limit in Minnesota Statutes, section 490.121, 
 23.5   subdivision 22.  A judge to whom this section applies may elect 
 23.6   to have money transferred from the judges' plan to the judge's 
 23.7   account in the unclassified employees plan in Minnesota 
 23.8   Statutes, chapter 352D.  The amount to be transferred is eight 
 23.9   percent of the salary the judge earned after reaching the 
 23.10  service credit limit defined in Minnesota Statutes, section 
 23.11  490.121, subdivision 22.  A judge electing this transfer 
 23.12  forfeits all service credit under Minnesota Statutes, chapter 
 23.13  490, that exceeds the limit in Minnesota Statutes, section 
 23.14  490.121, subdivision 22.  An election under this section must be 
 23.15  made before retirement as a judge, and within 120 days of the 
 23.16  effective date of this section.  The election must be made on a 
 23.17  form and in a manner specified by the executive director of the 
 23.18  Minnesota state retirement system. 
 23.19     Sec. 10.  [EFFECTIVE DATE.] 
 23.20     Sections 1 to 9 are effective July 1, 2000.