2007 Minnesota Statutes

CHAPTER 424B. VOLUNTEER FIREFIGHTERS, DISSOLUTIONS, AND CONSOLIDATIONS

424B.01 DEFINITIONS.
    Subdivision 1. Generally. Unless the context of the provision indicates that a different
meaning is intended, each of the terms in the following subdivisions has the meaning indicated.
    Subd. 2. Applicable municipality. "Applicable municipality" means the municipality or
municipalities in which a consolidating relief association is located and to which a consolidating
relief association is associated by virtue of the presence of at least one municipal official on the
relief association board of trustees under section 424A.04.
    Subd. 3. Consolidating relief association. "Consolidating relief association" means a
volunteer firefighters relief association organized under chapter 317A and governed by chapter
424A that has initiated or has completed the process of consolidating with one or more other
relief associations under this chapter.
    Subd. 4. Prior relief associations. "Prior relief associations" means the two or more
volunteer firefighters relief associations that have initiated the consolidation process under this
chapter by action of the board of trustees of the relief association.
    Subd. 5. Relief association membership. "Relief association membership" means all active
members of the volunteer firefighters relief association, all deferred retirees and other vested
inactive members of the volunteer firefighters relief association, and any persons regularly
receiving a service pension or other retirement benefit from the volunteer firefighters relief
association.
    Subd. 6. Subsequent relief association. "Subsequent relief association" means the volunteer
firefighters relief association that is designated to be the successor relief association in the
consolidation initiative resolutions of the board of trustees of the prior relief associations or the
volunteer firefighters relief association organized under chapters 317A and 424A for the purpose
of operating as the successor relief association after consolidation under this chapter.
History: 2000 c 461 art 16 s 1

424B.02 CONSOLIDATION AUTHORIZED.
    Subdivision 1. Initiation. (a) With the approval of the governing body of each applicable
municipality, two or more relief associations associated with fire departments serving contiguous
fire districts may initiate the consolidation of the relief associations into a subsequent relief
association.
(b) Initiation of a consolidation action must occur through the proposal of a consolidation
resolution to the board of trustees of each volunteer firefighters relief association notification of
the relief association membership of the potential consolidation and after conducting a public
meeting on the consolidation question.
    Subd. 2. Initiative processing; filing. (a) After a consolidation initiative resolution has been
filed with the relief association board of trustees by one or more members of the board, the relief
association secretary shall provide written notification of the initiative to the relief association
membership. After notification of the relief association membership, the board of trustees must
hold a public hearing on the initiative. After the hearing, the board of trustees shall act on the
consolidation resolution.
(b) If the consolidation resolution is adopted by majority vote of the board of trustees, the
secretary shall file a copy of the resolution with the other relief association or associations also
considering consolidation.
(c) If two or more volunteer firefighters relief associations adopt a consolidation resolution,
those relief associations are consolidated effective the next following January 1.
(d) Within 30 days of the adoption of the consolidation resolution by all prior relief
associations, the secretaries of the applicable prior relief associations shall jointly notify in writing
the state auditor, the commissioner of revenue, and the secretary of state of the consolidation.
History: 2000 c 461 art 16 s 2

424B.03 SUBSEQUENT RELIEF ASSOCIATION.
    Subdivision 1. New relief association. If the subsequent relief association is a new volunteer
firefighters relief association, the consolidated volunteer firefighters relief association must be
incorporated under chapter 317A. The incorporators of the consolidated relief association must
include at least one board member of each of the former volunteer firefighters relief associations.
    Subd. 2. Successor relief association. If the subsequent relief association is one of the
prior relief associations, the articles of incorporation and bylaws must be appropriately revised,
effective on the consolidation effective date, and a revised board of trustees must be elected
before the consolidation effective date.
History: 2000 c 461 art 16 s 3

424B.04 GOVERNANCE OF CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION.
    Subdivision 1. Board of trustees. The consolidated volunteer firefighters relief association is
governed by a board of trustees as provided in section 424A.04, subdivision 1.
    Subd. 2. Composition of board. The board must have three officers, including a president,
a secretary, and a treasurer. The membership of the consolidated volunteer firefighters relief
association must elect the three officers from the board members. A board of trustees member
may not hold more than one officer position at the same time.
    Subd. 3. Board administration. The board of trustees must administer the affairs of the
relief association consistent with this chapter and the applicable provisions of chapters 69, 356A,
and 424A.
History: 2000 c 461 art 16 s 4

424B.05 SPECIAL AND GENERAL FUNDS.
The consolidated volunteer firefighters relief association must establish and maintain a
special fund and a general fund. The special fund must be established and maintained as provided
in section 424A.05. The general fund must be established and maintained as provided in section
424A.06.
History: 2000 c 461 art 16 s 5

424B.06 TRANSFERS.
    Subdivision 1. Generally. On the effective date of consolidation, the records, assets, and
liabilities of the prior volunteer firefighters relief associations are transferred to the consolidated
volunteer firefighters relief association. On the effective date of consolidation, the prior volunteer
firefighters relief associations cease to exist as legal entities, except for the purposes of winding
up association affairs as provided by this chapter.
    Subd. 2. Transfer of administration. On the effective date of consolidation, the
administration of the prior relief associations is transferred to the board of trustees of the
subsequent volunteer firefighters relief association.
    Subd. 3. Transfer of records. On the effective date of consolidation, the secretary and
the treasurer of the prior volunteer firefighters relief associations shall transfer all records and
documents relating to the prior relief associations to the secretary and treasurer of the subsequent
volunteer firefighters relief association.
    Subd. 4. Transfer of special fund assets and liabilities. (a) On the effective date of
consolidation, the secretary and the treasurer of a prior volunteer firefighters relief association
shall transfer the assets of the special fund of the applicable relief association to the special
fund of the subsequent relief association. Unless the appropriate secretary and treasurer decide
otherwise, the assets may be transferred as investment securities rather than cash. The transfer
must include any accounts receivable. The appropriate secretary must settle any accounts payable
from the special fund of the relief association before the effective date of consolidation.
(b) Upon the transfer of the assets of the special fund of a prior relief association, the
pension liabilities of that special fund become the obligation of the special fund of the subsequent
volunteer firefighters relief association.
(c) Upon the transfer of the prior relief association special fund assets, the board of trustees
of the subsequent volunteer firefighters relief association has legal title to and management
responsibility for the transferred assets as trustees for persons having a beneficial interest in those
assets arising out of the benefit coverage provided by the prior relief association.
(d) The subsequent volunteer firefighters relief association is the successor in interest in all
claims for and against the special funds of the prior volunteer firefighters relief associations or the
applicable municipalities with respect to the special funds of the prior relief associations. The
status of successor in interest does not apply to any claim against a prior relief association, the
municipality in which that relief association is located, or any person connected with the prior
relief association or the municipality, based on any act or acts that were not done in good faith and
that constituted a breach of fiduciary responsibility under common law or chapter 356A.
History: 2000 c 461 art 16 s 6

424B.07 DISSOLUTION OF PRIOR GENERAL FUND BALANCES.
Before the effective date of consolidation, the secretaries of the volunteer firefighters relief
associations shall settle any accounts payable from the respective general fund or any other relief
association fund in addition to the relief association special fund. Investments held by a fund of
the prior relief associations in addition to the special fund must be liquidated before the effective
date of consolidation as the bylaws of the relief association provide. Before the effective date of
consolidation, the respective relief associations must pay all applicable general fund expenses
from their respective general funds. Any balance remaining in the general fund or in a fund other
than the relief association special fund as of the effective date of consolidation must be paid to the
new general fund of the subsequent volunteer firefighters relief association.
History: 2000 c 461 art 16 s 7

424B.08 TERMINATION OF PRIOR RELIEF ASSOCIATIONS.
Following the transfer of administration, records, special fund assets, and special fund
liabilities from the prior relief associations to the subsequent volunteer firefighters relief
association, the prior volunteer firefighters relief associations cease to exist as legal entities for
any purpose. The subsequent relief association secretary shall notify the following governmental
officials of the termination of the respective volunteer firefighters relief associations and of the
establishment of the subsequent volunteer firefighters relief association:
(1) Minnesota secretary of state;
(2) Minnesota state auditor;
(3) Minnesota commissioner of revenue; and
(4) commissioner of the federal Internal Revenue Service.
History: 2000 c 461 art 16 s 8

424B.09 ADMINISTRATIVE EXPENSES.
The payment of authorized administrative expenses of the subsequent volunteer firefighters
relief association must be from the special fund of the subsequent volunteer firefighters relief
association in accordance with section 69.80, and as provided for in the bylaws of the subsequent
volunteer firefighters relief association and approved by the board of trustees of the subsequent
volunteer firefighters relief association. The payment of any other expenses of the subsequent
volunteer firefighters relief association must be from the general fund of the subsequent volunteer
firefighters relief association in accordance with section 69.80 and as provided for in the bylaws
of the subsequent volunteer firefighters relief association and approved by the board of trustees of
the subsequent volunteer firefighters relief association.
History: 2000 c 461 art 16 s 9

424B.10 BENEFITS; FUNDING.
    Subdivision 1. Benefits. (a) Notwithstanding any provision of section 424A.02, subdivision
3 , to the contrary, the service pension of the subsequent relief association as of the effective
date of consolidation is either the service pension amount specified in clause (1) or the service
pension amounts specified in clause (2), as provided for in the consolidated relief association's
articles of incorporation or bylaws:
(1) the highest dollar amount service pension amount of any prior volunteer firefighters relief
association in effect immediately before the consolidation initiation if the pension amount was
implemented consistent with section 424A.02; or
(2) for service rendered by each individual volunteer firefighter before consolidation, the
service pension amount under the consolidating volunteer firefighters relief association that
the firefighter belonged to immediately before the consolidation if the pension amount was
implemented consistent with section 424A.02 and for service rendered after the effective date of
the consolidation, the highest dollar amount service pension of any of the consolidating volunteer
firefighters relief associations in effect immediately before the consolidation if the pension amount
was implemented consistent with section 424A.02.
(b) Any increase in the service pension amount beyond the amount implemented under
paragraph (a) must conform with the requirements and limitations of sections 69.771 to 69.775
and 424A.02.
    Subd. 2. Funding. (a) Unless the applicable municipalities agree in writing to allocate
the minimum municipal obligation in a different manner, the minimum municipal obligation
under section 69.772 or 69.773, whichever applies, must be allocated between the applicable
municipalities in proportion to their fire state aid.
(b) If any applicable municipality fails to meet its portion of the minimum municipal
obligation to the subsequent relief association, all other applicable municipalities are jointly
obligated to provide the required funding upon certification by the relief association secretary.
An applicable municipality that pays the minimum municipal obligation for another applicable
municipality, the municipality may collect the payment amount, plus a 25 percent surcharge, from
the responsible applicable municipality by any available means, including deduction from any
state aid or payment amount payable to the responsible municipality upon certification of the
necessary information to the commissioner of finance.
History: 2000 c 461 art 16 s 10; 1Sp2005 c 8 art 9 s 15

424B.20 DISSOLUTION WITHOUT CONSOLIDATION.
    Subdivision 1. Applicable dissolutions. This section applies if the fire department
associated with a volunteer firefighters relief association is dissolved or eliminated by action
of the governing body of the municipality in which the fire department was located or by the
independent nonprofit firefighting corporation, whichever applies, and no consolidation with
another volunteer firefighters relief association under sections 424B.01 to 424B.10 is sought, or if
a volunteer firefighters relief association is dissolved or eliminated with municipal approval, but
the fire department associated with the volunteer firefighters relief association is not dissolved
or eliminated, and no consolidation with another volunteer firefighters relief association under
sections 424B.01 to 424B.10 is applicable.
    Subd. 2. Procedures. As part of the dissolution process, all legal obligations of the relief
association other than service pensions and benefits must be settled under subdivision 3, a benefit
trust must be established under subdivision 4, and the affairs of the relief association must be
concluded under subdivision 5.
    Subd. 3. Settlement of nonbenefit legal obligations. (a) Prior to the effective date of the
dissolution of the volunteer firefighters relief association established by the relief association
board of trustees, the board shall determine the following:
(1) the fair market value of the assets of the special fund;
(2) the total amount of the accounts payable and other legal obligations of the special fund,
excluding the accrued liability of the special fund for service pensions and other benefits; and
(3) the accrued liability of the special fund for service pensions and other benefits payable or
accrued under the applicable bylaws of the relief association and chapter 424A.
(b) On or before the effective date of the dissolution of the volunteer firefighters relief
association, the board shall liquidate sufficient special fund assets to pay the legal obligations of
the special fund and must settle those legal obligations.
(c) On or before the effective date of the dissolution of the volunteer firefighters relief
association, the board shall settle the legal obligations of the general fund of the relief association.
    Subd. 4. Benefit trust fund establishment. (a) After the settlement of nonbenefit legal
obligations of the special fund of the volunteer firefighters relief association under subdivision
3, the board of the relief association shall transfer the remaining assets of the special fund, as
securities or in cash, as applicable, to the chief financial official of the municipality in which the
associated fire department was located if the fire department was a municipal fire department or
to the chief financial official of the municipality with the largest population served by the fire
department if the fire department was an independent nonprofit firefighting corporation. The board
shall also compile a schedule of the relief association members to whom a service pension is or
will be owed, any beneficiary to whom a benefit is owed, the amount of the service pension or
benefit payable based on the applicable bylaws and state law and the service rendered to the date
of the dissolution, and the date on which the pension or benefit would first be payable under the
bylaws of the relief association and state law.
(b) The municipality in which is located a volunteer firefighters relief association that is
dissolving under this section shall establish a separate account in the municipal treasury which
must function as a trust fund for members of the volunteer firefighters relief association and their
beneficiaries to whom the volunteer firefighters relief association owes a service pension or other
benefit under the bylaws of the relief association and state law. Upon proper application, on or
after the initial date on which the service pension or benefit is payable, the municipal treasurer
shall pay the pension or benefit due, based on the schedule prepared under paragraph (a) and
the other records of the dissolved relief association. The trust fund under this section must be
invested and managed consistent with section 69.775 and chapter 356A. Upon payment of the last
service pension or benefit due and owing, any remaining assets in the trust fund cancel to the
general fund of the municipality. If the special fund of the volunteer firefighters relief association
had an unfunded actuarial accrued liability upon dissolution, the municipality is liable for that
unfunded actuarial accrued liability.
    Subd. 5. Relief association affairs wind-up. Upon dissolution, the board of trustees of
the volunteer firefighters relief association shall transfer the records of the relief association to
the chief administrative officer of the applicable municipality. The board shall also notify the
commissioner of revenue, the state auditor, and the secretary of state of the dissolution within 30
days of the effective date of the dissolution.
History: 2000 c 461 art 16 s 11

424B.21 ANNUITY PURCHASES UPON DISSOLUTION.
The board of trustees of a volunteer firefighters relief association that is scheduled for
dissolution may purchase annuity contracts under section 424A.02, subdivision 8a, instead of
transferring special fund assets to a municipal trust fund under section 424B.20, subdivision 4.
Payment of an annuity for which a contract is purchased may not commence before the retirement
age specified in the relief association bylaws and in compliance with section 424A.02, subdivision
1 . Legal title to the annuity contract transfers to the municipal trust fund under section 424B.20,
subdivision 4 .
History: 2000 c 461 art 16 s 12