1.1                          A bill for an act
  1.2             relating to retirement; revising various police state 
  1.3             aid provisions to fully implement intended 1996 
  1.4             modifications; ratifying the calculation of certain 
  1.5             1996 police state aid amounts; modifying various fire 
  1.6             state aid provisions; authorizing the exclusion of 
  1.7             certain pipefitters from public employee retirement 
  1.8             association membership; authorizing benefit increases 
  1.9             for the Richfield fire department relief association; 
  1.10            providing postretirement adjustments for retirees and 
  1.11            benefit recipients of the Nashwauk police pension plan 
  1.12            and the Eveleth police and fire retirement trust fund; 
  1.13            clarifying the benefit floor for certain benefit 
  1.14            recipients of the St. Paul police and fire 
  1.15            consolidation accounts; providing alternative 
  1.16            retirement coverage for transferred employees of the 
  1.17            Jackson medical center, the Melrose hospital, and the 
  1.18            Tracy municipal hospital; creating a trust for the 
  1.19            state deferred compensation program; modifying the 
  1.20            handling of sabbatical leave contributions by the 
  1.21            teachers retirement association; modifying the timing 
  1.22            of higher education supplemental retirement plan 
  1.23            contributions; making administrative changes in the 
  1.24            higher education individual retirement account plan 
  1.25            and supplemental retirement plan; authorizing 
  1.26            additional individual retirement account plans; 
  1.27            modifying various economic actuarial assumptions; 
  1.28            clarifying certain retirement dates; authorizing 
  1.29            certain purchases of prior service credit; extending 
  1.30            the volunteer firefighter flexible service pension 
  1.31            maximums; modifying retirement coverage for 
  1.32            transferred university academic health center 
  1.33            employees; modifying tax-sheltered annuity programs 
  1.34            for university and college employees; including 
  1.35            additional classes of persons in definition of state 
  1.36            employee; providing general statewide and local 
  1.37            employee pension plan modifications; modifying 
  1.38            investment reporting provisions; making miscellaneous 
  1.39            retirement plan modifications; amending Minnesota 
  1.40            Statutes 1996, sections 69.021, subdivisions 4, 5, 6, 
  1.41            7a, 8, 9, 10, and 11; 69.031, subdivisions 1, 3, and 
  1.42            5; 69.051, subdivisions 1, 1a, and 1b; 136F.45, by 
  1.43            adding subdivisions; 352.01, subdivisions 2a and 2b; 
  1.44            352.96, subdivisions 2, 3, and 6; 352F.02, 
  1.45            subdivisions 3, 6, and by adding subdivisions; 
  1.46            352F.03; 352F.04; 352F.05; 352F.06; 352F.07; 352F.08; 
  2.1             353.01, subdivision 2b; 353B.07, subdivision 3; 
  2.2             353B.08, subdivision 6; 353B.11, subdivisions 3, 4, 
  2.3             and 5; 354.092, subdivisions 1, 3, and 4; 354B.21, 
  2.4             subdivision 3; 354B.25, subdivision 5, and by adding a 
  2.5             subdivision; 354C.11; 354C.12, subdivisions 1 and 4; 
  2.6             354D.02, subdivision 2; 354D.06; 354D.07; 354D.08, 
  2.7             subdivisions 1, 2, 3, and 5; 356.215, subdivision 4d; 
  2.8             356.219; 423A.02, subdivision 2; 423B.06, subdivisions 
  2.9             1 and 1a; and 424A.02, subdivisions 3 and 10; Laws 
  2.10            1943, chapter 196, section 4, as amended; Laws 1965, 
  2.11            chapter 705, section 1, subdivision 4; Laws 1967, 
  2.12            chapter 798, sections 2 and 4; Laws 1992, chapter 563, 
  2.13            section 5, as amended; and Laws 1996, chapter 408, 
  2.14            article 8, sections 21, 22, subdivision 1, and 24; 
  2.15            repealing Minnesota Statutes 1996, section 356.218; 
  2.16            Laws 1995, chapter 262, article 1, sections 8, 9, 10, 
  2.17            11, and 12. 
  2.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.19                             ARTICLE 1 
  2.20               POLICE STATE AID AND PAID FIREFIGHTER 
  2.21                     RETIREMENT COVERAGE COSTS 
  2.22     Section 1.  Minnesota Statutes 1996, section 69.021, 
  2.23  subdivision 4, is amended to read: 
  2.24     Subd. 4.  [DETERMINATION OF QUALIFIED STATE AID RECIPIENTS; 
  2.25  CERTIFICATION TO COMMISSIONER OF REVENUE FINANCE.] (a) The 
  2.26  commissioner shall determine which municipalities and 
  2.27  independent nonprofit firefighting corporations are qualified to 
  2.28  receive fire state aid and which municipalities and counties are 
  2.29  qualified to receive police state peace officer aid.  
  2.30     (b) The commissioner shall determine qualification for 
  2.31  state aid upon receipt of: 
  2.32     (1) the fire department personnel and equipment 
  2.33  certification or the police department and qualified peace 
  2.34  officers certificate, whichever is applicable applies, required 
  2.35  under section 69.011,; 
  2.36     (2) the financial compliance report required under section 
  2.37  6.495, subdivision 3, if applicable; and 
  2.38     (3) any other relevant information which comes to the 
  2.39  attention of the commissioner. 
  2.40     (c) Upon completion of the determination, on or before 
  2.41  October 1, the commissioner shall calculate under subdivision 6 
  2.42  the amount of (a) state peace officer: 
  2.43     (1) the police state aid which each county or municipality 
  2.44  is to receive under subdivisions 5, 6, 7a, and 10; and 
  3.1      (b) (2) the fire state aid which each municipality or 
  3.2   nonprofit firefighting corporation is to receive under 
  3.3   subdivisions 5 and 7. 
  3.4      (d) The commissioner shall certify to the commissioner of 
  3.5   finance the name of each county or municipality, and the amount 
  3.6   of state aid which each county or municipality is to receive, in 
  3.7   the case of police state peace officer aid; and.  The 
  3.8   commissioner shall certify to the commissioner of finance the 
  3.9   name of each municipality or independent nonprofit firefighting 
  3.10  corporation and the amount of state aid which each municipality 
  3.11  or independent nonprofit firefighting corporation is to receive, 
  3.12  in the case of fire state aid. 
  3.13     Sec. 2.  Minnesota Statutes 1996, section 69.021, 
  3.14  subdivision 5, is amended to read: 
  3.15     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
  3.16  fire state aid available for apportionment shall be, before the 
  3.17  addition of the minimum fire state aid allocation amount under 
  3.18  subdivision 7, is equal to 107 percent of the amount of premium 
  3.19  taxes paid to the state upon the fire, lightning, sprinkler 
  3.20  leakage, and extended coverage premiums reported to the 
  3.21  commissioner by insurers on the Minnesota Firetown Premium 
  3.22  Report.  This amount shall be reduced by the amount required to 
  3.23  pay the state auditor's costs and expenses of the audits or 
  3.24  exams of the firefighters relief associations. 
  3.25     (b) The total amount for apportionment in respect to peace 
  3.26  officer state aid is equal to 104 percent of the amount of 
  3.27  premium taxes paid to the state upon the premiums reported to 
  3.28  the commissioner by insurers on the Minnesota Aid to Police 
  3.29  Premium Report, plus the payment amounts received under section 
  3.30  60A.152 since the last aid apportionment, and reduced by the 
  3.31  amount required to pay the state auditor's costs and expenses of 
  3.32  the audits or exams of the police relief associations.  The 
  3.33  total amount for apportionment in respect to firefighters fire 
  3.34  state aid shall must not be less than two percent of the 
  3.35  premiums reported to the commissioner by insurers on the 
  3.36  Minnesota Firetown Premium Report after subtracting the 
  4.1   following amounts: 
  4.2      (1) the amount required to pay the state auditor's costs 
  4.3   and expenses of the audits or exams of the firefighters relief 
  4.4   associations,; and 
  4.5      (2) one percent of the premiums reported by town and 
  4.6   farmers' mutual insurance companies and mutual property and 
  4.7   casualty companies with total assets of $5,000,000 or less.  
  4.8      (b) The total amount for apportionment as police state aid 
  4.9   is equal to 104 percent of the amount of premium taxes paid to 
  4.10  the state on the premiums reported to the commissioner by 
  4.11  insurers on the Minnesota Aid to Police Premium Report, plus the 
  4.12  payment amounts received under section 60A.152 since the last 
  4.13  aid apportionment, and reduced by the amount required to pay the 
  4.14  costs and expenses of the state auditor for audits or exams of 
  4.15  police relief associations.  The total amount for apportionment 
  4.16  in respect to the police state aid program shall must not be 
  4.17  less than two percent of the amount of premiums reported to the 
  4.18  commissioner by insurers on the Minnesota Aid to Police Premium 
  4.19  Report after subtracting the amount required to pay the state 
  4.20  auditor's cost and expenses of the audits or exams of the police 
  4.21  relief associations.  
  4.22     (c) The commissioner shall calculate the percentage of 
  4.23  increase or decrease reflected in the apportionment over or 
  4.24  under the previous year's available state aid using the same 
  4.25  premiums as a basis for comparison. 
  4.26     Sec. 3.  Minnesota Statutes 1996, section 69.021, 
  4.27  subdivision 6, is amended to read: 
  4.28     Subd. 6.  [CALCULATION OF APPORTIONMENT OF POLICE STATE 
  4.29  PEACE OFFICERS AID TO COUNTIES.] The peace officers police state 
  4.30  aid available shall must be distributed to the counties in 
  4.31  proportion to the relationship that the total number of active 
  4.32  peace officers, as defined in section 69.011, subdivision 1, 
  4.33  clause (g), in each county who are employed either by 
  4.34  municipalities maintaining police departments or by the county, 
  4.35  bears to the total number of peace officers employed by all 
  4.36  municipalities and counties, subject to any reduction under 
  5.1   subdivision 10.  Any necessary additional adjustments shall be 
  5.2   made to subsequent apportionments. 
  5.3      Sec. 4.  Minnesota Statutes 1996, section 69.021, 
  5.4   subdivision 7a, is amended to read: 
  5.5      Subd. 7a.  [APPORTIONMENT OF POLICE STATE AID.] (a) Subject 
  5.6   to the reduction provided for under subdivision 10, the 
  5.7   commissioner shall apportion the police state peace officer aid 
  5.8   to each municipality and to the county in the following manner: 
  5.9      (1) for all municipalities maintaining police departments 
  5.10  and the county, the state aid must be distributed in proportion 
  5.11  to the relationship that the total number of peace officers, as 
  5.12  determined under section 69.011, subdivision 1, clause (g), and 
  5.13  subdivision 2, clause (b), employed by each that municipality 
  5.14  and by the or county for 12 calendar months and the proportional 
  5.15  or fractional number who were employed less than 12 months bears 
  5.16  to the total number of peace officers employed by all 
  5.17  municipalities and counties subject to any reduction under 
  5.18  subdivision 10; 
  5.19     (2) for each municipality which contracts with the county 
  5.20  for police service, a proportionate amount of the state aid 
  5.21  distributed to the county based on the full-time equivalent 
  5.22  number of peace officers providing contract service to that 
  5.23  municipality must be credited against the municipality's 
  5.24  contract obligation; and 
  5.25     (3) for each municipality which contracts with another 
  5.26  municipality for police service, a proportionate amount of the 
  5.27  state aid distributed to the municipality providing contract 
  5.28  service based on the full-time equivalent number of peace 
  5.29  officers providing contract service to that municipality on a 
  5.30  full-time equivalent basis must be credited against the contract 
  5.31  obligation of the municipality receiving contract service. 
  5.32     (b) No municipality entitled to receive state peace officer 
  5.33  aid may be apportioned less state peace officer aid for any year 
  5.34  under Laws 1976, chapter 315, than the amount which was 
  5.35  apportioned to it for calendar year 1975 based on premiums 
  5.36  reported to the commissioner for calendar year 1974; provided, 
  6.1   the amount of state peace officer aid to other municipalities 
  6.2   within the county and to the county must be adjusted in 
  6.3   proportion to the total number of peace officers in the 
  6.4   municipalities and the county, so that the amount of state peace 
  6.5   officer aid apportioned does not exceed the amount of state 
  6.6   peace officer aid available for apportionment. 
  6.7      Sec. 5.  Minnesota Statutes 1996, section 69.021, 
  6.8   subdivision 8, is amended to read: 
  6.9      Subd. 8.  [POPULATION AND MARKET VALUE.] In 
  6.10  computations relating to fire state aid requiring the use of 
  6.11  population figures, only official statewide federal census 
  6.12  figures are to be used.  Increases or decreases in population 
  6.13  disclosed by reason of any special census shall must not be 
  6.14  taken into consideration. 
  6.15     In calculations relating to fire state aid requiring the 
  6.16  use of market value property figures, only the latest available 
  6.17  market value property figures are to may be used. 
  6.18     Sec. 6.  Minnesota Statutes 1996, section 69.021, 
  6.19  subdivision 9, is amended to read: 
  6.20     Subd. 9.  [APPEAL.] In the event that any municipality, 
  6.21  county, fire relief association or police department relief 
  6.22  association feels itself to be aggrieved, it may request the 
  6.23  commissioner to review and adjust the apportionment of funds 
  6.24  within the county in the case of police state peace officer aid, 
  6.25  and or within the state in the case of fire state aid, and.  The 
  6.26  decision of the commissioner shall be is subject to appeal, 
  6.27  review, and adjustment by the district court in the county in 
  6.28  which the applicable fire or police department is located. 
  6.29     Sec. 7.  Minnesota Statutes 1996, section 69.021, 
  6.30  subdivision 10, is amended to read: 
  6.31     Subd. 10.  [REDUCTION IN POLICE STATE AID 
  6.32  APPORTIONMENT.] (a) The commissioner of revenue shall reduce the 
  6.33  apportionment of police state aid under subdivisions 5, 
  6.34  paragraph (b), 6, and 7 7a, for eligible employer units by 
  6.35  any excess police state aid. 
  6.36     (b) "Excess police state aid" is: 
  7.1      (1) for counties and for municipalities in which police 
  7.2   retirement coverage is provided wholly by the public employees 
  7.3   police and fire fund and all police officers are members of the 
  7.4   plan governed by sections 353.63 to 353.657, the amount in 
  7.5   excess of the employer's total prior calendar year obligation 
  7.6   under section 353.65, as defined in paragraph (c), as certified 
  7.7   by the executive director of the public employees retirement 
  7.8   association.; 
  7.9      (2) for municipalities in which police retirement coverage 
  7.10  is provided in part by the public employees police and fire fund 
  7.11  governed by sections 353.63 to 353.657 and in part by a local 
  7.12  police consolidation account governed by chapter 353A, the 
  7.13  amount in excess of the employer's total prior calendar year 
  7.14  obligation as defined in paragraph (c), as certified by the 
  7.15  executive director of the public employees retirement 
  7.16  association; 
  7.17     (3) for municipalities in which police retirement coverage 
  7.18  is provided in part by the public employees police and fire fund 
  7.19  governed by sections 353.63 to 353.657 and in part by a local 
  7.20  police relief association governed by sections 69.77 and 
  7.21  423A.01, the amount in excess of the employer's total prior 
  7.22  calendar year obligation as defined in paragraph (c), as 
  7.23  certified by the executive director of the public employees 
  7.24  retirement association, plus the amount of the financial 
  7.25  requirements of the relief association certified to the 
  7.26  applicable municipality during the prior calendar year under 
  7.27  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
  7.28  member contributions deducted from the covered salary of the 
  7.29  relief association during the prior calendar year under section 
  7.30  69.77, subdivision 2a, as certified by the chief administrative 
  7.31  officer of the applicable municipality; and 
  7.32     (4) for the metropolitan airports commission, if there are 
  7.33  police officers hired before July 1, 1978, with retirement 
  7.34  coverage by the Minneapolis employees retirement fund remaining, 
  7.35  the amount in excess of the commission's total prior calendar 
  7.36  year obligation as defined in paragraph (c), as certified by the 
  8.1   executive director of the public employees retirement 
  8.2   association, plus the amount determined by expressing the 
  8.3   commission's total prior calendar year contribution to the 
  8.4   Minneapolis employees retirement fund under section 422A.101, 
  8.5   subdivisions 2 and 2a, as a percentage of the commission's total 
  8.6   prior calendar year covered payroll for commission employees 
  8.7   covered by the Minneapolis employees retirement fund and 
  8.8   applying that percentage to the commission's total prior 
  8.9   calendar year covered payroll for commission police officers 
  8.10  covered by the Minneapolis employees retirement fund, as 
  8.11  certified by the chief administrative officer of the 
  8.12  metropolitan airports commission. 
  8.13     (c) The employer's total prior calendar year obligation 
  8.14  with respect to the public employees police and fire plan is the 
  8.15  total prior calendar year obligation under section 353.65, 
  8.16  subdivision 3, for police officers as defined in section 353.64, 
  8.17  subdivision 2, and the actual total prior calendar year 
  8.18  obligation under section 353.65, subdivision 3, for 
  8.19  firefighters, as defined in section 353.64, subdivision 3, but 
  8.20  not to exceed for those firefighters the applicable following 
  8.21  amount: 
  8.22    municipality                       maximum amount 
  8.23    Albert Lea                          $54,157.01
  8.24    Anoka                                10,399.31
  8.25    Apple Valley                          5,442.44 
  8.26    Austin                               49,864.73
  8.27    Bemidji                              27,671.38
  8.28    Brooklyn Center                       6,605.92
  8.29    Brooklyn Park                        24,002.26  
  8.30    Burnsville                           15,956.00 
  8.31    Cloquet                               4,260.49 
  8.32    Coon Rapids                          39,920.00 
  8.33    Cottage Grove                         8,588.48
  8.34    Crystal                               5,855.00
  8.35    East Grand Forks                     51,009.88
  8.36    Edina                                32,251.00
  9.1     Elk River                             5,216.55
  9.2     Ely                                  13,584.16
  9.3     Eveleth                              16,288.27
  9.4     Fergus Falls                          6,742.00
  9.5     Fridley                              33,420.64
  9.6     Golden Valley                        11,744.61 
  9.7     Hastings                             16,561.00 
  9.8     Hopkins                               4,324.23  
  9.9     International Falls                  14,400.69 
  9.10    Lakeville                               782.35 
  9.11    Lino Lakes                            5,324.00 
  9.12    Little Falls                          7,889.41 
  9.13    Maple Grove                           6,707.54 
  9.14    Maplewood                             8,476.69 
  9.15    Minnetonka                           10,403.00 
  9.16    Montevideo                            1,307.66 
  9.17    Moorhead                             68,069.26 
  9.18    New Hope                              6,739.72 
  9.19    North St. Paul                        4,241.14 
  9.20    Northfield                              770.63 
  9.21    Owatonna                             37,292.67 
  9.22    Plymouth                              6,754.71 
  9.23    Red Wing                              3,504.01 
  9.24    Richfield                            53,757.96 
  9.25    Rosemount                             1,712.55 
  9.26    Roseville                             9,854.51 
  9.27    St. Anthony                          33,055.00 
  9.28    St. Louis Park                       53,643.11 
  9.29    Thief River Falls                    28,365.04 
  9.30    Virginia                             31,164.46 
  9.31    Waseca                               11,135.17 
  9.32    West St. Paul                        15,707.20 
  9.33    White Bear Lake                       6,521.04 
  9.34    Woodbury                              3,613.00 
  9.35     (d) The total shall amount of excess police state aid must 
  9.36  be deposited in a separate the excess police state-aid account 
 10.1   in the general fund, administered and distributed as provided in 
 10.2   subdivision 11. 
 10.3      Sec. 8.  Minnesota Statutes 1996, section 69.021, 
 10.4   subdivision 11, is amended to read: 
 10.5      Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] 
 10.6   (a) An The excess police state-aid holding account is 
 10.7   established in the general fund.  The excess police state-aid 
 10.8   holding account must be administered by the commissioner. 
 10.9      (b) Excess police state aid determined according to section 
 10.10  69.021, subdivision 10, must be deposited in the excess police 
 10.11  state-aid holding account. 
 10.12     (c) From the balance in the excess police state-aid holding 
 10.13  account, $1,000,000 is appropriated to and must be transferred 
 10.14  annually to the ambulance service personnel longevity award and 
 10.15  incentive suspense account established by section 144C.03, 
 10.16  subdivision 2. 
 10.17     (d) If a police officer stress reduction program is created 
 10.18  by law and money is appropriated for that program, an amount 
 10.19  equal to that appropriation must be transferred from the balance 
 10.20  in the excess police state-aid holding account. 
 10.21     (e) On October 1, 1997, and annually on each subsequent 
 10.22  October 1, one-half of the balance of the excess police 
 10.23  state-aid holding account remaining after the deductions under 
 10.24  paragraphs (c) and (d) is appropriated for additional 
 10.25  amortization aid under section 423A.02, subdivision 1b. 
 10.26     (f) Annually, the remaining balance in the excess police 
 10.27  state-aid holding account, after the deductions under paragraphs 
 10.28  (c), (d), and (e), cancels to the general fund. 
 10.29     Sec. 9.  Minnesota Statutes 1996, section 69.031, 
 10.30  subdivision 1, is amended to read: 
 10.31     Subdivision 1.  [COMMISSIONER OF FINANCE'S WARRANT.] The 
 10.32  commissioner of finance shall issue to the county, municipality, 
 10.33  or independent nonprofit firefighting corporation certified to 
 10.34  the commissioner of finance by the commissioner a warrant for an 
 10.35  amount equal to the amount of fire state aid or police state 
 10.36  aid, whichever applies, certified to for the applicable state 
 11.1   aid recipient by the commissioner pursuant to under section 
 11.2   69.021.  The amount of state aid due and not paid by October 1 
 11.3   accrues interest at the rate of one percent for each month or 
 11.4   part of a month the amount remains unpaid, beginning the 
 11.5   preceding July 1. 
 11.6      Sec. 10.  Minnesota Statutes 1996, section 69.031, 
 11.7   subdivision 3, is amended to read: 
 11.8      Subd. 3.  [APPROPRIATIONS.] There is hereby appropriated 
 11.9   annually from the state general fund to the commissioner 
 11.10  of revenue finance an amount sufficient to make the police and 
 11.11  fire state aid payments specified in this section and section 
 11.12  69.021. 
 11.13     Sec. 11.  Minnesota Statutes 1996, section 69.031, 
 11.14  subdivision 5, is amended to read: 
 11.15     Subd. 5.  [DEPOSIT OF STATE AID.] (1) (a) The municipal 
 11.16  treasurer, on receiving the fire state aid, shall, within 30 
 11.17  days after receipt, transmit it the fire state aid to the 
 11.18  treasurer of the duly incorporated firefighters' relief 
 11.19  association if there is one organized and the association has 
 11.20  filed a financial report with the municipality; but.  If the 
 11.21  relief association has not filed a financial report with the 
 11.22  municipality, the municipal treasurer shall delay transmission 
 11.23  of the fire state aid to the relief association until the 
 11.24  complete financial report is filed.  If there is no relief 
 11.25  association organized, or if any the association dissolve, be 
 11.26  removed, or has heretofore dissolved, or has been removed as 
 11.27  trustees of state aid, then the treasurer of the municipality 
 11.28  shall keep deposit the money in the municipal treasury as 
 11.29  provided for in section 424A.08 and shall the money may be 
 11.30  disbursed only for the purposes and in the manner set forth in 
 11.31  that section. 
 11.32     (2) (b) The municipal treasurer, upon receipt of the police 
 11.33  state aid, shall disburse the police state aid in the following 
 11.34  manner: 
 11.35     (a) (1) For a municipality in which a local police relief 
 11.36  association exists and all peace officers are members of the 
 12.1   association, the total state aid shall must be transmitted to 
 12.2   the treasurer of the relief association within 30 days of the 
 12.3   date of receipt, and the treasurer of the relief association 
 12.4   shall immediately deposit the total state aid in the special 
 12.5   fund of the relief association; 
 12.6      (b) (2) For a municipality in which police retirement 
 12.7   coverage is provided by the public employees police and fire 
 12.8   fund and all peace officers are members of the fund, the total 
 12.9   state aid shall must be applied toward the municipality's 
 12.10  employer contribution to the public employees police and fire 
 12.11  fund pursuant under to section 353.65, subdivision 3; or 
 12.12     (c) (3) For a municipality other than a city of the first 
 12.13  class with a population of more than 300,000 in which both a 
 12.14  police relief association exists and police retirement coverage 
 12.15  is provided in part by the public employees police and fire 
 12.16  fund, the municipality may elect at its option to transmit the 
 12.17  total state aid to the treasurer of the relief association as 
 12.18  provided in clause (a) (1), to use the total state aid to apply 
 12.19  toward the municipality's employer contribution to the public 
 12.20  employees police and fire fund subject to all the provisions set 
 12.21  forth in clause (b) (2), or to allot the total state aid 
 12.22  proportionately to be transmitted to the police relief 
 12.23  association as provided in this subdivision and to apply toward 
 12.24  the municipality's employer contribution to the public employees 
 12.25  police and fire fund subject to the provisions of clause (b) (2) 
 12.26  on the basis of the respective number of active full-time peace 
 12.27  officers, as defined in section 69.011, subdivision 1, clause 
 12.28  (g). 
 12.29     For a city of the first class with a population of more 
 12.30  than 300,000, in addition, the city may elect to allot the 
 12.31  appropriate portion of the total police state aid to apply 
 12.32  toward the employer contribution of the city to the public 
 12.33  employees police and fire fund based on the covered salary of 
 12.34  police officers covered by the fund each payroll period and to 
 12.35  transmit the balance to the police relief association.; or 
 12.36     (4) For a municipality in which police retirement coverage 
 13.1   is provided in part by the public employees police and fire fund 
 13.2   and in part by a local police consolidation account governed by 
 13.3   chapter 353A, the total police state aid must be applied towards 
 13.4   the municipality's total employer contribution to the public 
 13.5   employees police and fire fund and to the local police 
 13.6   consolidation account under sections 353.65, subdivision 3, and 
 13.7   353A.09, subdivision 5. 
 13.8      (3) (c) The county treasurer, upon receipt of the police 
 13.9   state aid for the county, shall apply the total state aid toward 
 13.10  the county's employer contribution to the public employees 
 13.11  police and fire fund pursuant to under section 353.65, 
 13.12  subdivision 3. 
 13.13     (4) (d) The designated metropolitan airports commission 
 13.14  official, upon receipt of the police state aid for the 
 13.15  metropolitan airports commission, shall apply the total police 
 13.16  state aid first toward the commission's employer contribution 
 13.17  for police officers to the Minneapolis employees retirement fund 
 13.18  under section 422A.101, subdivision 2a, and, if there is any 
 13.19  amount of police state aid remaining, shall apply that remainder 
 13.20  toward the commission's employer contribution for police 
 13.21  officers to the public employees police and fire plan under 
 13.22  section 353.65, subdivision 3. 
 13.23     Sec. 12.  [EFFECTIVE DATE.] 
 13.24     Sections 1 to 11 are effective on the day following final 
 13.25  enactment. 
 13.26                             ARTICLE 2 
 13.27                VARIOUS LOCAL PENSION MODIFICATIONS 
 13.28     Section 1.  Minnesota Statutes 1996, section 353.01, 
 13.29  subdivision 2b, is amended to read: 
 13.30     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 13.31  employees shall not participate as members of the 
 13.32  association with retirement coverage by the public employees 
 13.33  retirement plan or the public employees police and fire 
 13.34  retirement plan: 
 13.35     (1) elected public officers, or persons appointed to fill a 
 13.36  vacancy in an elective office, who do not elect to participate 
 14.1   in the association by filing an application for membership; 
 14.2      (2) election officers; 
 14.3      (3) patient and inmate personnel who perform services in 
 14.4   charitable, penal, or correctional institutions of a 
 14.5   governmental subdivision; 
 14.6      (4) employees who are hired for a temporary position under 
 14.7   subdivision 12a, and employees who resign from a nontemporary 
 14.8   position and accept a temporary position within 30 days in the 
 14.9   same governmental subdivision, but not those employees who are 
 14.10  hired for an unlimited period but are serving a probationary 
 14.11  period.  If the period of employment extends beyond six 
 14.12  consecutive months and the employee earns more than $425 from 
 14.13  one governmental subdivision in any one calendar month, the 
 14.14  department head shall report the employee for membership and 
 14.15  require employee deductions be made on behalf of the employee 
 14.16  under section 353.27, subdivision 4. 
 14.17     Membership eligibility of an employee who resigns or is 
 14.18  dismissed from a temporary position and within 30 days accepts 
 14.19  another temporary position in the same governmental subdivision 
 14.20  is determined on the total length of employment rather than on 
 14.21  each separate position.  Membership eligibility of an employee 
 14.22  who holds concurrent temporary and nontemporary positions in one 
 14.23  governmental subdivision is determined by the length of 
 14.24  employment and salary of each separate position; 
 14.25     (5) employees whose actual salary from one governmental 
 14.26  subdivision does not exceed $425 per month, or whose annual 
 14.27  salary from one governmental subdivision does not exceed a 
 14.28  stipulation prepared in advance, in writing, that the salary 
 14.29  must not exceed $5,100 per calendar year or per school year for 
 14.30  school employees for employment expected to be of a full year's 
 14.31  duration or more than the prorated portion of $5,100 per 
 14.32  employment period for employment expected to be of less than a 
 14.33  full year's duration; 
 14.34     (6) employees who are employed by reason of work emergency 
 14.35  caused by fire, flood, storm, or similar disaster; 
 14.36     (7) employees who by virtue of their employment in one 
 15.1   governmental subdivision are required by law to be a member of 
 15.2   and to contribute to any of the plans or funds administered by 
 15.3   the Minnesota state retirement system, the teachers retirement 
 15.4   association, the Duluth teachers retirement fund association, 
 15.5   the Minneapolis teachers retirement association, the St. Paul 
 15.6   teachers retirement fund association, the Minneapolis employees 
 15.7   retirement fund, or any police or firefighters relief 
 15.8   association governed by section 69.77 that has not consolidated 
 15.9   with the public employees retirement association, or any police 
 15.10  or firefighters relief association that has consolidated with 
 15.11  the public employees retirement association but whose members 
 15.12  have not elected the type of benefit coverage provided by the 
 15.13  public employees police and fire fund under sections 353A.01 to 
 15.14  353A.10.  This clause must not be construed to prevent a person 
 15.15  from being a member of and contributing to the public employees 
 15.16  retirement association and also belonging to and contributing to 
 15.17  another public pension fund for other service occurring during 
 15.18  the same period of time.  A person who meets the definition of 
 15.19  "public employee" in subdivision 2 by virtue of other service 
 15.20  occurring during the same period of time becomes a member of the 
 15.21  association unless contributions are made to another public 
 15.22  retirement fund on the salary based on the other service or to 
 15.23  the teachers retirement association by a teacher as defined in 
 15.24  section 354.05, subdivision 2; 
 15.25     (8) persons who are excluded from coverage under the 
 15.26  federal Old Age, Survivors, Disability, and Health Insurance 
 15.27  Program for the performance of service as specified in United 
 15.28  States Code, title 42, section 410(a)(8)(A), as amended through 
 15.29  January 1, 1987, if no irrevocable election of coverage has been 
 15.30  made under section 3121(r) of the Internal Revenue Code of 1954, 
 15.31  as amended; 
 15.32     (9) full-time students who are enrolled and are regularly 
 15.33  attending classes at an accredited school, college, or 
 15.34  university and who are part-time employees as defined by a 
 15.35  governmental subdivision; 
 15.36     (10) resident physicians, medical interns, and pharmacist 
 16.1   residents and pharmacist interns who are serving in a degree or 
 16.2   residency program in public hospitals; 
 16.3      (11) students who are serving in an internship or residency 
 16.4   program sponsored by an accredited educational institution; 
 16.5      (12) persons who hold a part-time adult supplementary 
 16.6   technical college license who render part-time teaching service 
 16.7   in a technical college; 
 16.8      (13) foreign citizens working for a governmental 
 16.9   subdivision with a work permit of less than three years, or an 
 16.10  H-1b visa valid for less than three years of employment.  Upon 
 16.11  notice to the association that the work permit or visa extends 
 16.12  beyond the three-year period, the foreign citizens are eligible 
 16.13  for membership from the date of the extension; 
 16.14     (14) public hospital employees who elected not to 
 16.15  participate as members of the association before 1972 and who 
 16.16  did not elect to participate from July 1, 1988 to October 1, 
 16.17  1988; 
 16.18     (15) except as provided in section 353.86, volunteer 
 16.19  ambulance service personnel, as defined in subdivision 35, but 
 16.20  persons who serve as volunteer ambulance service personnel may 
 16.21  still qualify as public employees under subdivision 2 and may be 
 16.22  members of the public employees retirement association and 
 16.23  participants in the public employees retirement fund or the 
 16.24  public employees police and fire fund on the basis of 
 16.25  compensation received from public employment service other than 
 16.26  service as volunteer ambulance service personnel; and 
 16.27     (16) except as provided in section 353.87, volunteer 
 16.28  firefighters, as defined in subdivision 36, engaging in 
 16.29  activities undertaken as part of volunteer firefighter duties; 
 16.30  provided that a person who is a volunteer firefighter may still 
 16.31  qualify as a public employee under subdivision 2 and may be a 
 16.32  member of the public employees retirement association and a 
 16.33  participant in the public employees retirement fund or the 
 16.34  public employees police and fire fund on the basis of 
 16.35  compensation received from public employment activities other 
 16.36  than those as a volunteer firefighter; and 
 17.1      (17) pipefitters and associated trades personnel employed 
 17.2   by independent school district No. 625 (St. Paul) with coverage 
 17.3   by the pipefitters local 455 pension plan under a collective 
 17.4   bargaining agreement who were either first employed after May 1, 
 17.5   1997, or, if first employed before May 2, 1997, elected to be 
 17.6   excluded under section 12. 
 17.7      Sec. 2.  Minnesota Statutes 1996, section 353B.07, 
 17.8   subdivision 3, is amended to read: 
 17.9      Subd. 3.  [FORMULA PERCENTAGE RATE.] (a) The formula 
 17.10  percentage rate shall be 2.333 percent per year of allowable 
 17.11  service for each of the first 20 years of allowable service, 
 17.12  1.333 percent per year of allowable service for each year of 
 17.13  allowable service in excess of 20 years but not in excess of 27 
 17.14  years, and .5 percent for each year of allowable service in 
 17.15  excess of 25 years for the former members of the following 
 17.16  consolidating relief associations: 
 17.17     (1) Rochester fire department relief association; 
 17.18     (2) Rochester police relief association; 
 17.19     (3) St. Cloud fire department relief association; 
 17.20     (4) St. Cloud police relief association; 
 17.21     (5) St. Louis Park police relief association; and 
 17.22     (6) Winona police relief association. 
 17.23     (b) The formula percentage rate shall be 2.5 percent per 
 17.24  year of allowable service for each of the first 20 years of 
 17.25  allowable service for the former members of the following 
 17.26  consolidating relief associations: 
 17.27     (1) Albert Lea police relief association; 
 17.28     (2) Anoka police relief association; 
 17.29     (3) Faribault fire department relief association; 
 17.30     (4) Faribault police benefit association; 
 17.31     (5) Mankato police benefit association; 
 17.32     (6) Red Wing police relief association; and 
 17.33     (7) West St. Paul police relief association.  
 17.34     (c) The formula percentage rate shall be 2.5 percent per 
 17.35  year of allowable service for each of the first 20 years of 
 17.36  allowable service and .5 percent per year of allowable service 
 18.1   for each year of service in excess of 25 years of allowable 
 18.2   service for the former members of the following consolidating 
 18.3   relief associations:  
 18.4      (1) Austin firefighters relief association; 
 18.5      (2) Austin police relief association; 
 18.6      (3) South St. Paul firefighters relief association; 
 18.7      (4) South St. Paul police relief association; and 
 18.8      (5) Virginia police relief association. 
 18.9      (d) The formula percentage rate shall be 2.1875 percent per 
 18.10  year of allowable service for each of the first 20 years of 
 18.11  allowable service and 1.25 percent per year of allowable service 
 18.12  for each year of allowable service in excess of 20 years of 
 18.13  allowable service but not in excess of 27 years of allowable 
 18.14  service for the former members of the Columbia Heights police 
 18.15  relief association.  
 18.16     (e) The formula percentage rate shall be 2.65 percent per 
 18.17  year of allowable service for each of the first 20 years of 
 18.18  allowable service and an additional annual benefit of $120 per 
 18.19  year of allowable service in excess of 20 years of allowable 
 18.20  service but not in excess of 25 years of allowable service for 
 18.21  the former members of the following consolidating relief 
 18.22  associations:  
 18.23     (1) Hibbing firefighters relief association; and 
 18.24     (2) Hibbing police relief association. 
 18.25     (f) The formula percentage rate or rates shall be the 
 18.26  following for the former members of the consolidating relief 
 18.27  associations as indicated: 
 18.28     (1) 2.5 percent per year of allowable service for each of 
 18.29  the first 20 years of allowable service, one percent per year of 
 18.30  allowable service in excess of 20 years of allowable service but 
 18.31  not more than 25 years of allowable service, and 1.5 percent per 
 18.32  year of allowable service in excess of 25 years of allowable 
 18.33  service, Albert Lea firefighters relief association; 
 18.34     (2) 2.5333 percent per year of allowable service for each 
 18.35  of the first 20 years of allowable service and 1.3333 percent 
 18.36  per year of allowable service in excess of 20 years of allowable 
 19.1   service, but not in excess of 27 years of allowable service, if 
 19.2   service as an active member terminated before January 31, 1994, 
 19.3   and 2.3333 percent per year of allowable service for each of the 
 19.4   first 20 years of allowable service and 1.3333 percent per year 
 19.5   of allowable service for each year of allowable service in 
 19.6   excess of 20 years of allowable service, but not in excess of 27 
 19.7   years of allowable service if service as an active member 
 19.8   terminated on or after January 31, 1994, Bloomington police 
 19.9   relief association; 
 19.10     (3) the greater of 2.5 percent per year of allowable 
 19.11  service for each of the first 20 years of allowable service 
 19.12  applied to the final salary base, or two percent per year of 
 19.13  allowable service for each of the first 20 years of allowable 
 19.14  service applied to top grade patrol officer's salary base, 
 19.15  Brainerd police relief association; 
 19.16     (4) 4.25 percent per year of allowable service for each of 
 19.17  the first 20 years of allowable service and an additional 
 19.18  benefit of $10 per month per year of allowable service in excess 
 19.19  of 20 years of allowable service but not more than 25 years of 
 19.20  allowable service, Buhl police relief association; 
 19.21     (5) 2.5 percent per year of allowable service for each of 
 19.22  the first 20 years of allowable service and an additional 
 19.23  benefit of $5 per month per year of allowable service in excess 
 19.24  of 20 years of allowable service but not more than 25 years of 
 19.25  allowable service, Chisholm firefighters relief association; 
 19.26     (6) 2.5 percent per year of allowable service for each of 
 19.27  the first 20 years of allowable service and an additional 
 19.28  benefit of $5 per month per year of allowable service in excess 
 19.29  of 20 years of allowable service but not more than 25 years of 
 19.30  allowable service and .5 percent per year of allowable service 
 19.31  in excess of 25 years of allowable service, Chisholm police 
 19.32  relief association; 
 19.33     (7) 2.1875 percent per year of allowable service for each 
 19.34  year of the first 20 years of allowable service, 1.25 percent 
 19.35  per year of allowable service in excess of 20 years of allowable 
 19.36  service but not more than 25 years of allowable service and 1.75 
 20.1   percent per year of allowable service in excess of 25 years of 
 20.2   allowable service, Columbia Heights fire department relief 
 20.3   association, paid division; 
 20.4      (8) 2.5 percent per year of allowable service for each year 
 20.5   of the first 20 years of allowable service and 1.5 percent per 
 20.6   year of allowable service rendered after attaining the age of 60 
 20.7   years, Crookston fire department relief association; 
 20.8      (9) 2.5 percent per year of allowable service for each year 
 20.9   of the first 30 years of allowable service, Crookston police 
 20.10  relief association; 
 20.11     (10) 2.25 percent per year of allowable service for each 
 20.12  year of the first 20 years of allowable service and 1.25 percent 
 20.13  per year of allowable service in excess of 20 years of allowable 
 20.14  service, but not more than 27 years of service, Crystal police 
 20.15  relief association; 
 20.16     (11) 1.99063 percent per year of allowable service for each 
 20.17  year of the first 20 years of allowable service, 1.25 percent 
 20.18  for the 21st year of allowable service, and 2.5 percent per year 
 20.19  of allowable service in excess of 21 years of allowable service 
 20.20  but not more than 25 years of allowable service, Duluth 
 20.21  firefighters relief association; 
 20.22     (12) 1.9875 percent per year of allowable service for each 
 20.23  year of the first 20 years of allowable service, 1.25 percent 
 20.24  for the 21st year of allowable service, and 2.5 percent per year 
 20.25  of allowable service in excess of 21 years of allowable service 
 20.26  but not more than 25 years of allowable service, Duluth police 
 20.27  relief association; 
 20.28     (13) 2.5 percent per year of allowable service for each 
 20.29  year of the first 20 years of allowable service, and two percent 
 20.30  per year of allowable service in excess of 20 years but not more 
 20.31  than 25 years of allowable service and not to include any year 
 20.32  of allowable service rendered after attaining the age of 55 
 20.33  years, Fairmont police benefit association; 
 20.34     (14) two percent per year of allowable service for each 
 20.35  year of the first ten years of allowable service, 2.67 percent 
 20.36  per year of allowable service in excess of ten years of 
 21.1   allowable service but not more than 20 years of allowable 
 21.2   service and 1.3333 percent per year of allowable service in 
 21.3   excess of 20 years of service but not more than 27 years of 
 21.4   allowable service, Fridley police pension association; 
 21.5      (15) 2.5 percent per year of allowable service for each 
 21.6   year of the first 20 years of allowable service and an 
 21.7   additional annual amount of $30 per year of allowable service in 
 21.8   excess of 20 years of allowable service but not more than 30 
 21.9   years of allowable service, Mankato fire department relief 
 21.10  association; 
 21.11     (16) for members who terminated active service as a 
 21.12  Minneapolis firefighter before June 1, 1993, 2.0625 percent per 
 21.13  year of allowable service for each year of the first 20 years of 
 21.14  allowable service, 1.25 percent per year of allowable service in 
 21.15  excess of 20 years of allowable service but not more than 24 
 21.16  years of allowable service and five percent for the 25th year of 
 21.17  allowable service, and for members who terminated active service 
 21.18  as a Minneapolis firefighter after May 31, 1993, two percent for 
 21.19  each year of the first 19 years of allowable service, 3.25 
 21.20  percent for the 20th year of allowable service, and two percent 
 21.21  per year of allowable service in excess of 20 years of service, 
 21.22  but not more than 25 years of allowable service, Minneapolis 
 21.23  fire department relief association; 
 21.24     (17) two percent per year of allowable service for each 
 21.25  year of the first 25 years of allowable service, Minneapolis 
 21.26  police relief association; 
 21.27     (18) the greater of 2.5 percent per year of allowable 
 21.28  service for each of the first 20 years of allowable service 
 21.29  applied to the final salary base, or two percent per year of 
 21.30  allowable service for each of the first 20 years of allowable 
 21.31  service applied to highest patrol officer's salary base plus .5 
 21.32  percent of the final salary base per year of allowable service 
 21.33  for each of the first three years of allowable service in excess 
 21.34  of 20 years of allowable service, New Ulm police relief 
 21.35  association; 
 21.36     (19) two percent per year of allowable service for each of 
 22.1   the first 25 years of allowable service and 1.5 percent per year 
 22.2   of allowable service in excess of 25 years of allowable service, 
 22.3   Red Wing fire department relief association; 
 22.4      (20) 2.55 2.75 percent per year of allowable service for 
 22.5   each of the first 20 years of allowable service, Richfield fire 
 22.6   department relief association; 
 22.7      (21) 2.4 percent per year of allowable service for each of 
 22.8   the first 20 years of allowable service and 1.3333 percent per 
 22.9   year of allowable service in excess of 20 years of allowable 
 22.10  service but not more than 27 years of allowable service, 
 22.11  Richfield police relief association; 
 22.12     (22) for a former member with less than 20 years of 
 22.13  allowable service on June 16, 1985, 2.6 percent, and for a 
 22.14  former member with 20 or more years of allowable service on June 
 22.15  16, 1985, 2.6175 percent for each of the first 20 years of 
 22.16  allowable service and, for each former member, one percent for 
 22.17  each year of allowable service in excess of 20 years, but no 
 22.18  more than 30 years, St. Louis Park fire department relief 
 22.19  association; 
 22.20     (23) 1.9375 percent per year of allowable service for each 
 22.21  of the first 20 years of allowable service, 2.25 percent per 
 22.22  year of allowable service in excess of 20 years of allowable 
 22.23  service but not more than 25 years of allowable service, and .5 
 22.24  percent per year of allowable service in excess of 25 years of 
 22.25  allowable service, St. Paul fire department relief association; 
 22.26     (24) two percent per year of allowable service for each of 
 22.27  the first 25 years of allowable service and .5 percent per year 
 22.28  of allowable service in excess of 25 years of allowable service, 
 22.29  St. Paul police relief association; 
 22.30     (25) 2.25 percent per year of allowable service for each of 
 22.31  the first 20 years of allowable service and one percent per year 
 22.32  of allowable service in excess of 20 years but not more than 25 
 22.33  years of allowable service and .5 percent per year of allowable 
 22.34  service in excess of 25 years, Virginia fire department relief 
 22.35  association; 
 22.36     (26) two percent per year of allowable service for each of 
 23.1   the first 20 years of allowable service, one percent per year of 
 23.2   allowable service in excess of 20 years but not more than 24 
 23.3   years of allowable service, three percent for the 25th year of 
 23.4   allowable service and one percent per year of allowable service 
 23.5   in excess of 25 years of allowable service but not more than 30 
 23.6   years of allowable service, West St. Paul firefighters relief 
 23.7   association; and 
 23.8      (27) 2.333 percent for each of the first 20 years of 
 23.9   allowable service, 1.333 percent for each year of allowable 
 23.10  service in excess of 20 years but no more than 28 years, and .5 
 23.11  percent for each year of allowable service in excess of 25 
 23.12  years, Winona fire department relief association. 
 23.13     Sec. 3.  Minnesota Statutes 1996, section 353B.08, 
 23.14  subdivision 6, is amended to read: 
 23.15     Subd. 6.  [DUTY DISABILITY BENEFIT AMOUNT.] (a) The duty 
 23.16  disability benefit shall be an amount equal to the service 
 23.17  pension amount to which the person would have been entitled if 
 23.18  the person had credit for the greater of actual years of 
 23.19  allowable service or 20 years of allowable service, had attained 
 23.20  the minimum age for the receipt of a service pension, and had 
 23.21  applied for a service pension rather than a disability benefit 
 23.22  for the former members of the following consolidating relief 
 23.23  associations: 
 23.24     (1) Albert Lea firefighters relief association; 
 23.25     (2) Albert Lea police relief association; 
 23.26     (3) Anoka police relief association; 
 23.27     (4) Austin police relief association; 
 23.28     (5) Buhl police relief association; 
 23.29     (6) Chisholm police relief association; 
 23.30     (7) Duluth police relief association; 
 23.31     (8) Faribault fire department relief association; 
 23.32     (9) Mankato police benefit association; 
 23.33     (10) Minneapolis police relief association; 
 23.34     (11) New Ulm police relief association; 
 23.35     (12) Red Wing police relief association; 
 23.36     (13) St. Paul police relief association; 
 24.1      (14) South St. Paul police relief association; and 
 24.2      (15) Virginia police relief association. 
 24.3      (b) The duty disability benefit shall be an amount equal to 
 24.4   48 percent of the salary base for the former members of the 
 24.5   following consolidating relief associations: 
 24.6      (1) Fridley police pension association; 
 24.7      (2) Richfield police relief association; 
 24.8      (3) Rochester fire department relief association; 
 24.9      (4) Rochester police relief association; 
 24.10     (5) St. Cloud fire department relief association; 
 24.11     (6) St. Cloud police relief association; 
 24.12     (7) St. Louis Park police relief association; and 
 24.13     (8) Winona police relief association. 
 24.14     (c) The duty disability benefit shall be an amount equal to 
 24.15  50 percent of the salary base for the former members of the 
 24.16  following consolidating relief associations: 
 24.17     (1) Austin firefighters relief association; 
 24.18     (2) Crookston fire department relief association; 
 24.19     (3) Fairmont police benefit association; 
 24.20     (4) Mankato fire department relief association; 
 24.21     (5) Richfield fire department relief association; 
 24.22     (6) South St. Paul firefighters relief association; and 
 24.23     (7) (6) Virginia fire department relief association.  
 24.24     (d) The duty disability benefit shall be an amount equal to 
 24.25  45 percent of the salary base for the former members of the 
 24.26  Crystal police relief association. 
 24.27     (e) The duty disability benefit shall be an amount equal to 
 24.28  40 percent of the salary base for the former members of the 
 24.29  following consolidating relief associations: 
 24.30     (1) West St. Paul firefighters relief association; and 
 24.31     (2) West St. Paul police relief association.  
 24.32     (f) The duty disability benefit shall be the following for 
 24.33  the former members of the consolidating relief associations as 
 24.34  indicated: 
 24.35     (1) 52 percent of the salary base for former members who 
 24.36  were disabled before January 31, 1994, and 48 percent of the 
 25.1   salary base for former members who become disabled after January 
 25.2   31, 1994, Bloomington police relief association; 
 25.3      (2) 40 percent of the top salary for a patrol officer, 
 25.4   Brainerd police relief association; 
 25.5      (3) $100 per month, Chisholm firefighters relief 
 25.6   association; 
 25.7      (4) 37.5 percent of the salary base if the person has 
 25.8   credit for less than ten years of allowable service, 43.75 
 25.9   percent of the salary base if the person has credit for more 
 25.10  than nine years but less than 15 years of allowable service and 
 25.11  50 percent of the salary base if the person has credit for more 
 25.12  than 14 years of allowable service credit, Columbia Heights fire 
 25.13  department relief association, paid division; 
 25.14     (5) 43.75 percent of the salary base, Columbia Heights 
 25.15  police relief association; 
 25.16     (6) 25 percent of the salary base if the person has credit 
 25.17  for less than 12 years of allowable service and an additional 
 25.18  amount equal to 2.5 percent of the salary base per year if 
 25.19  allowable service for each year of allowable service in excess 
 25.20  of 11 years of allowable service, not more than 50 percent, 
 25.21  Crookston police relief association; 
 25.22     (7) 51.0625 percent of the salary base, Duluth firefighters 
 25.23  relief association; 
 25.24     (8) 12.5 percent of the salary base if the person has 
 25.25  credit for less than six years of allowable service, 2.5 percent 
 25.26  of the salary base per year of allowable service if the person 
 25.27  has more than five years of allowable service, but not more than 
 25.28  50 percent of the salary base, Faribault police benefit 
 25.29  association; 
 25.30     (9) the dollar amount which equals the benefit which would 
 25.31  be payable under chapter 176 for a comparable benefit which 
 25.32  qualifies for a workers' compensation benefit for a first class 
 25.33  disability, 75 percent of the amount payable in the event of a 
 25.34  first class disability for a second class disability and 50 
 25.35  percent of the amount payable in the event of a first class 
 25.36  disability for a third class disability, Hibbing firefighters 
 26.1   relief association; 
 26.2      (10) $120 per month, Hibbing police relief association; 
 26.3      (11) 51.25 percent of the salary base for a first class 
 26.4   disability, 41.25 percent of the salary base for a second class 
 26.5   disability, and 31.25 percent of the salary base for a third 
 26.6   class disability, Minneapolis fire department relief 
 26.7   association; 
 26.8      (12) 40 percent of the salary base if the person has credit 
 26.9   for less than 20 years of allowable service and two percent of 
 26.10  the salary base per year of allowable service if the person has 
 26.11  more than 19 years of allowable service, but not more than 50 
 26.12  percent, Red Wing fire department relief association; 
 26.13     (13) 54 percent of the salary base, Richfield fire 
 26.14  department relief association; 
 26.15     (14) 50 percent of the salary base if the person has credit 
 26.16  for less than 20 years of allowable service and an amount equal 
 26.17  to the service pension amount to which the person would have 
 26.18  been entitled based on the applicable amount of allowable 
 26.19  service if the person had attained the minimum age for the 
 26.20  receipt of a service pension and had applied for a service 
 26.21  pension rather than a disability benefit and if the person has 
 26.22  credit for at least 20 years of allowable service, St. Louis 
 26.23  Park fire department relief association; 
 26.24     (14) (15) 50 percent of the salary base if the person is 
 26.25  not able to perform the duties of any other gainful employment, 
 26.26  39.375 percent of the salary base if the person is only able to 
 26.27  perform the duties of light manual labor or office employment 
 26.28  and 33.75 percent of the salary base if the person is able to 
 26.29  perform the duties of other manual labor, St. Paul fire 
 26.30  department relief association; and 
 26.31     (15) (16) 42.667 percent of the salary base, Winona fire 
 26.32  department relief association. 
 26.33     Sec. 4.  Minnesota Statutes 1996, section 353B.11, 
 26.34  subdivision 3, is amended to read: 
 26.35     Subd. 3.  [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 
 26.36  surviving spouse benefit shall be 30 percent of the salary base 
 27.1   for the former members of the following consolidating relief 
 27.2   associations:  
 27.3      (1) Albert Lea firefighters relief association; 
 27.4      (2) Albert Lea police relief association; 
 27.5      (3) Anoka police relief association; 
 27.6      (4) Austin police relief association; 
 27.7      (5) Brainerd police benefit association; 
 27.8      (6) Crookston police relief association; 
 27.9      (7) Faribault fire department relief association; and 
 27.10     (8) West St. Paul firefighters relief association.  
 27.11     (b) The surviving spouse benefit shall be 25 percent of the 
 27.12  salary base for the former members of the following 
 27.13  consolidating relief associations:  
 27.14     (1) Chisholm police relief association; 
 27.15     (2) Duluth firefighters relief association; 
 27.16     (3) Duluth police pension association; 
 27.17     (4) Fairmont police benefit association; 
 27.18     (5) Red Wing fire department relief association; 
 27.19     (6) South St. Paul police relief association; and 
 27.20     (7) West St. Paul police relief association. 
 27.21     (c) The surviving spouse benefit shall be 24 percent of the 
 27.22  salary base for the former members of the following 
 27.23  consolidating relief associations: 
 27.24     (1) Fridley police pension association; 
 27.25     (2) Richfield police relief association; 
 27.26     (3) Rochester fire department relief association; 
 27.27     (4) Rochester police relief association; 
 27.28     (5) Winona fire department relief association; and 
 27.29     (6) Winona police relief association. 
 27.30     (d) The surviving spouse benefit shall be 40 percent of the 
 27.31  salary base for the former members of the following 
 27.32  consolidating relief associations: 
 27.33     (1) Columbia Heights fire department relief association, 
 27.34  paid division; and 
 27.35     (2) New Ulm police relief association; and 
 27.36     (3) Richfield fire department relief association.  
 28.1      (e) The surviving spouse benefit shall be $250 per month 
 28.2   for the former members of the following consolidating relief 
 28.3   associations: 
 28.4      (1) Hibbing firefighters relief association; and 
 28.5      (2) Hibbing police relief association. 
 28.6      (f) The surviving spouse benefit shall be 23.75 percent of 
 28.7   the salary base for the former members of the following 
 28.8   consolidating relief associations: 
 28.9      (1) Crystal police relief associations; and 
 28.10     (2) Minneapolis police relief association.  
 28.11     (g) The surviving spouse benefit shall be 32 percent of the 
 28.12  salary base for the former members of the following 
 28.13  consolidating relief associations: 
 28.14     (1) St. Cloud fire department relief association; and 
 28.15     (2) St. Cloud police relief association. 
 28.16     (h) The surviving spouse benefit shall be one-half of the 
 28.17  service pension or disability benefit which the deceased member 
 28.18  was receiving as of the date of death, or of the service pension 
 28.19  which the deferred member would have been receiving if the 
 28.20  service pension had commenced as of the date of death or of the 
 28.21  service pension which the active member would have received 
 28.22  based on the greater of the allowable service credit of the 
 28.23  person as of the date of death or 20 years of allowable service 
 28.24  credit if the person would have been eligible as of the date of 
 28.25  death, for the former members of the following consolidating 
 28.26  relief associations: 
 28.27     (1) Virginia fire department relief association; and 
 28.28     (2) Virginia police relief association. 
 28.29     (i) The surviving spouse benefit shall be the following for 
 28.30  the former members of the consolidating relief associations as 
 28.31  indicated: 
 28.32     (1) 30 percent of the salary base, reduced by any amount 
 28.33  awarded or payable from the service pension or disability 
 28.34  benefit of the deceased former firefighter to a former spouse of 
 28.35  the member by virtue of the legal dissolution of the member's 
 28.36  marriage to the former spouse if the surviving spouse married 
 29.1   the member after the time of separation from active service, 
 29.2   Austin firefighters relief association; 
 29.3      (2) 27.333 percent of the salary base, or one-half of the 
 29.4   service pension payable to or accrued by the deceased former 
 29.5   member, whichever is greater, Bloomington police relief 
 29.6   association; 
 29.7      (3) 72.25 percent of the salary base, Buhl police relief 
 29.8   association; 
 29.9      (4) 50 percent of the service pension which the active 
 29.10  member would have received based on allowable service credit to 
 29.11  the date of death and prospective service from the date of death 
 29.12  until the date on which the person would have attained the 
 29.13  normal retirement age, 50 percent of the service pension which 
 29.14  the deferred member would have been receiving if the service 
 29.15  pension had commenced as of the date of death or $175 per month 
 29.16  if the deceased member was receiving a service pension or 
 29.17  disability benefit as of the date of death, Chisholm 
 29.18  firefighters relief association; 
 29.19     (5) two-thirds of the service pension or disability benefit 
 29.20  which the deceased member was receiving as of the date of death, 
 29.21  or of the service pension which the deferred member would have 
 29.22  been receiving if the service pension had commenced as of the 
 29.23  date of death or of the service pension which the active member 
 29.24  would have received based on the greater of the allowable 
 29.25  service credit of the person as of the date of death or 20 years 
 29.26  of allowable service credit if the person would have been 
 29.27  eligible as of the date of death, Columbia Heights police relief 
 29.28  association; 
 29.29     (6) the greater of $300 per month or one-half of the 
 29.30  service pension or disability benefit which the deceased member 
 29.31  was receiving as of the date of death, or of the service pension 
 29.32  which the deferred member would have been receiving if the 
 29.33  service pension had commenced as of the date of death or of the 
 29.34  service pension which the active member would have received 
 29.35  based on the allowable service credit of the person as of the 
 29.36  date of death if the person would have been eligible as of the 
 30.1   date of death, Crookston fire department relief association; 
 30.2      (7) $100 per month, Faribault police benefit association; 
 30.3      (8) 60 percent of the service pension or disability benefit 
 30.4   which the deceased member was receiving as of the date of death, 
 30.5   or of the service pension which the deferred member would have 
 30.6   been receiving if the service pension had commenced as of the 
 30.7   date of death or of the service pension which the active member 
 30.8   would have received based on the allowable service credit of the 
 30.9   person as of the date of death if the person would have been 
 30.10  eligible as of the date of death, Mankato fire department relief 
 30.11  association; 
 30.12     (9) $175 per month, Mankato police benefit association; 
 30.13     (10) 26.25 percent of the salary base, Minneapolis fire 
 30.14  department relief association; 
 30.15     (11) equal to the service pension or disability benefit 
 30.16  which the deceased member was receiving as of the date of death, 
 30.17  or of the service pension which the deferred member would have 
 30.18  been receiving if the service pension had commenced as of the 
 30.19  date of death or of the service pension which the active member 
 30.20  would have received based on the allowable service credit of the 
 30.21  person as of the date of death if the person would have been 
 30.22  eligible as of the date of death, Red Wing police relief 
 30.23  association; 
 30.24     (12) 78.545 percent of the benefit amount payable prior to 
 30.25  the death of the deceased active, disabled, deferred, or retired 
 30.26  firefighter if that firefighter's benefit was 55 percent of 
 30.27  salary or would have been 55 percent of salary if the 
 30.28  firefighter had survived to begin benefit receipt; or 80 percent 
 30.29  of the benefit amount payable prior to the death of the deceased 
 30.30  active, disabled, deferred, or retired firefighter if that 
 30.31  firefighter's benefit was 54 percent of salary or would have 
 30.32  been 54 percent of salary if the firefighter had survived to 
 30.33  begin benefit receipt, Richfield fire department relief 
 30.34  association; 
 30.35     (13) 40 percent of the salary base for a surviving spouse 
 30.36  of a deceased active member, disabled member, or retired or 
 31.1   deferred member with at least 20 years of allowable service, or 
 31.2   the prorated portion of 40 percent of the salary base that bears 
 31.3   the same relationship to 40 percent that the deceased member's 
 31.4   years of allowable service bear to 20 years of allowable service 
 31.5   for the surviving spouse of a deceased retired or deferred 
 31.6   member with at least ten but less than 20 years of allowable 
 31.7   service, St. Louis Park fire department relief association; 
 31.8      (13) (14) 26.6667 percent of the salary base, St. Louis 
 31.9   Park police relief association; 
 31.10     (14) (15) 27.5 percent of the salary base, St. Paul fire 
 31.11  department relief association; 
 31.12     (15) (16) 20 percent of the salary base, St. Paul police 
 31.13  relief association; and 
 31.14     (16) (17) 27 percent of the salary base, South St. Paul 
 31.15  firefighters relief association. 
 31.16     Sec. 5.  Minnesota Statutes 1996, section 353B.11, 
 31.17  subdivision 4, is amended to read: 
 31.18     Subd. 4.  [AMOUNT; SURVIVING CHILD BENEFIT.] (a) The 
 31.19  surviving child benefit shall be eight percent of the salary 
 31.20  base for the former members of the following consolidating 
 31.21  relief associations:  
 31.22     (1) Fridley police pension association; 
 31.23     (2) Red Wing fire department relief association; 
 31.24     (3) Richfield police relief association; 
 31.25     (4) Rochester fire department relief association; 
 31.26     (5) Rochester police relief association; 
 31.27     (6) St. Cloud police relief association; 
 31.28     (7) St. Louis Park police relief association; 
 31.29     (8) South St. Paul firefighters relief association; 
 31.30     (9) Winona fire department relief association; and 
 31.31     (10) Winona police relief association. 
 31.32     (b) The surviving child benefit shall be $25 per month for 
 31.33  the former members of the following consolidating relief 
 31.34  associations:  
 31.35     (1) Anoka police relief association; 
 31.36     (2) Austin firefighters relief association; 
 32.1      (3) Austin police relief association; 
 32.2      (4) Faribault police benefit association; 
 32.3      (5) Hibbing firefighters relief association; 
 32.4      (6) Mankato police benefit association; 
 32.5      (7) South St. Paul police relief association; and 
 32.6      (8) Virginia fire department relief association. 
 32.7      (c) The surviving child benefit shall be ten percent of the 
 32.8   salary base for the former members of the following 
 32.9   consolidating relief associations:  
 32.10     (1) Albert Lea police relief association; 
 32.11     (2) Crookston police relief association; 
 32.12     (3) Duluth firefighters relief association; 
 32.13     (4) Duluth police pension association; 
 32.14     (5) Faribault fire department relief association; and 
 32.15     (6) Minneapolis fire department relief association.  
 32.16     (d) The surviving child benefit shall be five percent of 
 32.17  the salary base for the former members of the following 
 32.18  consolidating relief associations:  
 32.19     (1) Columbia Heights fire department relief association, 
 32.20  paid division; 
 32.21     (2) St. Paul police relief association; and 
 32.22     (3) West St. Paul firefighters relief associations.  
 32.23     (e) The surviving child benefit shall be $15 per month for 
 32.24  the former members of the following consolidating relief 
 32.25  associations:  
 32.26     (1) Crookston fire department relief association; 
 32.27     (2) Hibbing police relief association; and 
 32.28     (3) West St. Paul police relief association. 
 32.29     (f) The surviving child benefit shall be 7.5 percent of the 
 32.30  salary base for the former members of the following 
 32.31  consolidating relief associations:  
 32.32     (1) Bloomington police relief association; and 
 32.33     (2) Crystal police relief association. 
 32.34     (g) The surviving child benefit shall be the following for 
 32.35  the former members of the consolidating relief associations as 
 32.36  indicated:  
 33.1      (1) ten percent of the salary base if a surviving spouse 
 33.2   benefit is also payable, that amount between ten percent of the 
 33.3   salary base and 50 percent of the salary base as determined by 
 33.4   the executive director of the public employees retirement 
 33.5   association, based on the financial circumstances and need of 
 33.6   the surviving child or surviving children, applied in a uniform 
 33.7   manner, reflective to the extent practicable or determinable to 
 33.8   the past administrative practices of the board of the 
 33.9   consolidating relief association before the effective date of 
 33.10  the consolidation if there is a surviving spouse but no 
 33.11  surviving spouse benefit is also payable on account of the 
 33.12  remarriage of the surviving spouse, or 50 percent of the salary 
 33.13  base, payable in equal shares for more than one surviving child, 
 33.14  if there is no surviving spouse, Albert Lea firefighters relief 
 33.15  association; 
 33.16     (2) four percent of the salary base, Brainerd police 
 33.17  benefit association; 
 33.18     (3) $125 per month if a surviving spouse benefit is also 
 33.19  payable or an amount equal to the surviving spouse benefit, 
 33.20  payable in equal shares if there is more than one surviving 
 33.21  child, if no surviving spouse benefit is payable, Buhl police 
 33.22  relief association; 
 33.23     (4) $15 per month, Chisholm firefighters relief 
 33.24  association; 
 33.25     (5) $125 per month, Chisholm police relief association; 
 33.26     (6) $50 per month, Columbia Heights police relief 
 33.27  association; 
 33.28     (7) 6.25 percent of the salary base, Fairmont police 
 33.29  benefit association; 
 33.30     (8) 12.5 percent of the service pension or disability 
 33.31  benefit which the deceased member was receiving as of the date 
 33.32  of death, or of the service pension which the deferred member 
 33.33  would have been receiving if the service pension had commenced 
 33.34  as of the date of death or of the service pension which the 
 33.35  active member would have received based on the allowable service 
 33.36  credit of the person as of the date of death if the person would 
 34.1   have been eligible as of the date of death, Mankato fire 
 34.2   department relief association; 
 34.3      (9) ten percent of the salary base if a surviving spouse 
 34.4   benefit is also payable or an amount determined by the executive 
 34.5   director of the public employees retirement association based on 
 34.6   the financial circumstances and need of the surviving child or 
 34.7   surviving children, applied in a uniform manner, and subject to 
 34.8   the largest applicable amount surviving child benefit maximum if 
 34.9   no surviving spouse benefit is also payable, Minneapolis police 
 34.10  relief association; 
 34.11     (10) $25 per month if a surviving spouse benefit is also 
 34.12  payable or an amount equal to the surviving spouse benefit, 
 34.13  payable in equal shares if there is more than one surviving 
 34.14  child, New Ulm police relief association; 
 34.15     (11) in an amount determined by the executive director of 
 34.16  the public employees retirement association based on the 
 34.17  financial circumstances and need of the surviving child or 
 34.18  surviving children, applied in a uniform manner, reflective to 
 34.19  the extent practicable or determinable to the past 
 34.20  administrative practices of the board of the consolidating 
 34.21  relief association before the effective date of the 
 34.22  consolidation and not more than the largest surviving child 
 34.23  benefit amount prescribed for any other actual or potential 
 34.24  consolidating relief association as provided in this section, 
 34.25  Red Wing police relief association; 
 34.26     (12) five percent of the salary base if a surviving spouse 
 34.27  benefit is also payable or 15 percent of the salary base if no 
 34.28  surviving spouse benefit is payable, 9.818 percent of the 
 34.29  benefit payable to the firefighter or to which the firefighter 
 34.30  would have been eligible at the time of death if that 
 34.31  firefighter's benefit was or would have been 55 percent of 
 34.32  salary and if a surviving spouse benefit is also payable or 
 34.33  29.454 percent if a surviving spouse benefit is not payable; or 
 34.34  ten percent of the benefit payable to the firefighter or to 
 34.35  which the firefighter would have been eligible at the time of 
 34.36  death if that firefighter's benefit was or would have been 54 
 35.1   percent of salary and if a surviving spouse benefit is also 
 35.2   payable or 30 percent if a surviving spouse benefit is not 
 35.3   payable, Richfield fire department relief association; 
 35.4      (13) 5.3334 percent of the salary base, St. Cloud fire 
 35.5   department relief association; 
 35.6      (14) five percent of the salary base if a surviving spouse 
 35.7   benefit is also payable or 15 percent of the salary base if no 
 35.8   surviving spouse benefit is also payable for the surviving child 
 35.9   or children of a deceased active member, disabled member, or 
 35.10  retired or deferred member with at least 20 years of active 
 35.11  service, or the prorated portion of five percent of the salary 
 35.12  base if a surviving spouse benefit is also payable or 15 percent 
 35.13  of the salary base if no surviving spouse benefit is also 
 35.14  payable that bears the same relationship to five or 15 percent 
 35.15  that the deceased member's years of allowable service bear to 20 
 35.16  years of allowable service for the surviving child or children 
 35.17  of a deceased retired or deferred member with at least ten but 
 35.18  less than 20 years of allowable service, St. Louis Park fire 
 35.19  department relief association; 
 35.20     (15) ten percent of the salary base, St. Paul fire 
 35.21  department relief association; and 
 35.22     (16) $50 per month, Virginia police relief association. 
 35.23     Sec. 6.  Minnesota Statutes 1996, section 353B.11, 
 35.24  subdivision 5, is amended to read: 
 35.25     Subd. 5.  [SURVIVOR BENEFIT MAXIMUM.] (a) No surviving 
 35.26  children or surviving family maximum shall be applicable to 
 35.27  former members of the following consolidating relief 
 35.28  associations:  
 35.29     (1) Buhl police relief association; 
 35.30     (2) Chisholm firefighters relief association; 
 35.31     (3) Chisholm police relief association; 
 35.32     (4) Hibbing firefighters relief association; 
 35.33     (5) Mankato police benefit association; 
 35.34     (6) New Ulm police relief association; 
 35.35     (7) Red Wing fire department relief association; 
 35.36     (8) Red Wing police relief association; 
 36.1      (9) St. Paul police relief association; and 
 36.2      (10) South St. Paul police relief association.  
 36.3      (b) The surviving children maximum shall be 24 percent of 
 36.4   the salary base, if a surviving spouse benefit is also payable 
 36.5   or 48 percent of the salary base, if no surviving spouse benefit 
 36.6   is also payable, for the former members of the following 
 36.7   consolidating relief associations:  
 36.8      (1) Fridley police pension association; 
 36.9      (2) Richfield police relief association; 
 36.10     (3) Rochester fire department relief association; 
 36.11     (4) Rochester police relief association; 
 36.12     (5) Winona fire department relief association; and 
 36.13     (6) Winona police relief association.  
 36.14     (c) The surviving family maximum shall be 50 percent of the 
 36.15  salary base for the former members of the following 
 36.16  consolidating relief associations:  
 36.17     (1) Anoka police relief association; 
 36.18     (2) Austin firefighters relief association; 
 36.19     (3) Austin police relief association; 
 36.20     (4) Duluth firefighters relief association; and 
 36.21     (5) Richfield fire department relief association; and 
 36.22     (6) St. Louis Park fire department relief association. 
 36.23     (d) The surviving family maximum shall be an amount equal 
 36.24  to the service pension which a retiring member would have 
 36.25  received based on 20 years of allowable service credit if the 
 36.26  member had attained the age of at least 50 years in the case of 
 36.27  an active member, or of the service pension which the deferred 
 36.28  member would have been receiving if the service pension had 
 36.29  commenced as of the date of death in the case of a deferred 
 36.30  member, or of the service pension or disability benefit which 
 36.31  the deceased member was receiving as of the date of death, for 
 36.32  the former members of the following consolidating relief 
 36.33  associations:  
 36.34     (1) Columbia Heights police relief association; 
 36.35     (2) Virginia fire department relief association; and 
 36.36     (3) Virginia police relief association. 
 37.1      (e) The surviving children maximum shall be 25 percent of 
 37.2   the salary base, if a surviving spouse benefit is also payable 
 37.3   or 50 percent of the salary base, if no surviving spouse benefit 
 37.4   is also payable, for the former members of the following 
 37.5   consolidating relief associations:  
 37.6      (1) Duluth police pension association; and 
 37.7      (2) Fairmont police benefit association.  
 37.8      (f) The surviving children maximum shall be 22.5 percent of 
 37.9   the salary base, if a surviving spouse benefit is also payable 
 37.10  or 45 percent of the salary base, if no surviving spouse benefit 
 37.11  is also payable, for the former members of the Crystal police 
 37.12  relief association.  
 37.13     (g) The surviving children maximum shall be 16 percent of 
 37.14  the salary base, if a surviving spouse benefit is also payable 
 37.15  or 48 percent of the salary base, if no surviving spouse benefit 
 37.16  is also payable, for the former members of the following 
 37.17  consolidating relief associations:  
 37.18     (1) St. Cloud fire department relief association; and 
 37.19     (2) St. Cloud police relief association.  
 37.20     (h) The surviving children maximum shall be 20 percent of 
 37.21  the salary base, if a surviving spouse benefit is also payable 
 37.22  or 50 percent of the salary base, if no surviving spouse benefit 
 37.23  is also payable, for the former members of the following 
 37.24  consolidating relief associations:  
 37.25     (1) Albert Lea firefighters relief association; 
 37.26     (2) Albert Lea police relief association; and 
 37.27     (3) Faribault fire department relief association.  
 37.28     (i) The surviving family maximum shall be the following for 
 37.29  the former members of the consolidating relief associations:  
 37.30     (1) 60 percent of the salary base, Bloomington police 
 37.31  relief association; 
 37.32     (2) $450 per month, Crookston police relief association; 
 37.33     (3) 80 percent of the service pension or disability benefit 
 37.34  which the deceased member was receiving as of the date of death, 
 37.35  or of the service pension which the deferred member would have 
 37.36  been receiving if the service pension had commenced as of the 
 38.1   date of death or of the service pension which the active member 
 38.2   would have received based on the greater of the allowable 
 38.3   service credit of the person as of the date of death or 20 years 
 38.4   of allowable service credit if the person would have been 
 38.5   eligible as of the date of death, Mankato fire department relief 
 38.6   association; and 
 38.7      (4) 98.182 percent of the benefit amount payable or to 
 38.8   which the firefighter was eligible prior to the death of the 
 38.9   firefighter if that firefighter's benefit was or would have been 
 38.10  55 percent of salary, or 100 percent of the benefit amount 
 38.11  payable or to which the firefighter was eligible prior to the 
 38.12  death of the firefighter if that firefighter's benefit was or 
 38.13  would have been 54 percent of salary, Richfield fire department 
 38.14  relief association; and 
 38.15     (5) 57.5 percent of the salary base, St. Paul fire 
 38.16  department relief association.  
 38.17     (j) The surviving child maximum shall be the following for 
 38.18  the former members of the consolidating relief associations:  
 38.19     (1) 20 percent of the top salary payable to a patrol 
 38.20  officer, Brainerd police benefit association; 
 38.21     (2) ten percent of the salary base, if a surviving spouse 
 38.22  benefit is also payable or 15 percent of the salary base, if no 
 38.23  surviving spouse benefit is also payable, Columbia Heights fire 
 38.24  department relief association, paid division; 
 38.25     (3) $105 per month if a surviving spouse benefit is also 
 38.26  payable or $90 per month if no surviving spouse benefit is also 
 38.27  payable, Crookston fire department relief association; 
 38.28     (4) $125 per month, Faribault police benefit association; 
 38.29     (5) $30 per month if a surviving spouse benefit is also 
 38.30  payable or $180 per month if no surviving spouse benefit is also 
 38.31  payable, Hibbing police relief association; 
 38.32     (6) 25 percent of the salary base, if a surviving spouse 
 38.33  benefit is also payable or 51.25 percent of the salary base, if 
 38.34  no surviving spouse benefit is also payable, Minneapolis fire 
 38.35  department relief association; 
 38.36     (7) 17.5 percent of the salary base, if a surviving spouse 
 39.1   benefit is also payable or 50 percent of the salary base, if no 
 39.2   surviving spouse benefit is also payable, Minneapolis police 
 39.3   relief association; 
 39.4      (8) 24 percent of the salary base, St. Louis Park police 
 39.5   relief association; 
 39.6      (9) 23 percent of the salary base, if a surviving spouse 
 39.7   benefit is also payable or 50 percent of the salary base, if no 
 39.8   surviving spouse benefit is also payable, South St. Paul 
 39.9   firefighters relief association; 
 39.10     (10) ten percent of the salary base, West St. Paul 
 39.11  firefighters relief association; and 
 39.12     (11) $30 per month if a surviving spouse benefit is also 
 39.13  payable or $75 per month if no surviving spouse benefit is also 
 39.14  payable, West St. Paul police relief association. 
 39.15     Sec. 7.  Laws 1943, chapter 196, section 4, as amended by 
 39.16  Laws 1951, chapter 44, section 1, Laws 1955, chapter 88, section 
 39.17  1, Laws 1978, chapter 675, section 1, Laws 1991, chapter 28, 
 39.18  section 1, and Laws 1992, chapter 428, section 1, is amended to 
 39.19  read: 
 39.20     Sec. 4.  [RETIREMENT AGE, PENSION.] When any member of the 
 39.21  association reaches the age of 55 years, he may retire and then 
 39.22  shall receive a pension as long as he lives, at the following 
 39.23  rates:  
 39.24     (a) When he has served as a member of the police department 
 39.25  for a period of 20 years or more, excluding temporary employment 
 39.26  or probationary periods.  Such retired member shall be paid each 
 39.27  month a pension equal to one-half of his average monthly 
 39.28  earnings during the last preceding three years of his service 
 39.29  with said police department, plus an additional $3 per month for 
 39.30  each year of service not to exceed 20 years.  
 39.31     (b) An additional $8 per month for each year of service 
 39.32  over 20 that he has served as a member of such police department 
 39.33  after the age of 55 years, not to exceed five years for purposes 
 39.34  of pension computation, 
 39.35     (c) In the event he retires after reaching the age of 55 or 
 39.36  more and after having been a member of the department for at 
 40.1   least 15 years, but before having served 20 years in the 
 40.2   department, the amount of pension which he received shall be 
 40.3   that proportion of, pension equal to one-half of his average 
 40.4   monthly earnings during the last preceding three years of his 
 40.5   service with said police department, plus an additional $3 per 
 40.6   month for each year of service.  Major fractions of years of 
 40.7   service to be treated as one year and minor fractions 
 40.8   disregarded, 
 40.9      (d) In no event shall temporary employment or employment 
 40.10  for probationary period be considered in computing pension 
 40.11  allowances hereunder, 
 40.12     (e) When a service pensioner or an active member of the 
 40.13  police department who has 20 years or more of service, dies, 
 40.14  leaving a surviving spouse or children, a pension shall be paid 
 40.15  as follows:  
 40.16     1.  To the surviving spouse a pension of $375 a month for 
 40.17  life, 
 40.18     2.  To the child or children, if their surviving parent is 
 40.19  living, a pension of $10 per month for each child not over 
 40.20  sixteen years of age, provided, the total pension hereunder for 
 40.21  surviving spouse and children of the deceased member, shall not 
 40.22  exceed the sum of $395 per month, 
 40.23     3.  A child or children of a deceased member, or after the 
 40.24  death or remarriage of their surviving parent, be entitled to 
 40.25  receive a pension or pensions of $10 per month until they have 
 40.26  reached the age of 16 years. 
 40.27     (f) The city council may, by resolution, increase the 
 40.28  pension payable to a surviving spouse by an amount equal to any 
 40.29  increase in the revised consumer price index for all urban 
 40.30  consumers for the Minneapolis-St.Paul metropolitan area prepared 
 40.31  by the United States Department of Labor, provided that no 
 40.32  increase may exceed five percent a year. 
 40.33     Sec. 8.  Laws 1965, chapter 705, section 1, subdivision 4, 
 40.34  is amended to read: 
 40.35     Subd. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 625; 
 40.36  APPLICABILITY OF CERTAIN LAWS.] (a) As of July 1, 1965, the 
 41.1   organization, operation, maintenance and conduct of the affairs 
 41.2   of the converted district shall be governed by general laws 
 41.3   relating to independent districts, except as otherwise provided 
 41.4   in Extra Session Laws 1959, Chapter 71, as amended, and all 
 41.5   special laws and charter provisions relating only to the 
 41.6   converted district are repealed. 
 41.7      (b) Where an existing pension law is applicable to 
 41.8   employees of the special district, such law shall continue to be 
 41.9   applicable in the same manner and to the same extent to 
 41.10  employees of the converted district.  Notwithstanding this 
 41.11  requirement, pipefitters and associated trades personnel with 
 41.12  coverage by the pipefitters local 455 pension plan under a 
 41.13  collective bargaining agreement who either were first employed 
 41.14  after May 1, 1997, or, if first employed before May 2, 1997, 
 41.15  elected exclusion from coverage under section 12 are not covered 
 41.16  by the public employees retirement association. 
 41.17     (c) General laws applicable to independent school districts 
 41.18  wholly or partly within cities of the first class shall not be 
 41.19  applicable to the converted district. 
 41.20     (d) The provision of the statutes applicable only to 
 41.21  teachers retirement fund associations in cities of the first 
 41.22  class, limiting the amount of annuity to be paid from public 
 41.23  funds, limiting the taxes to be levied to carry out the plan of 
 41.24  such associations, and limiting the amount of annuities to be 
 41.25  paid to beneficiaries, all as contained in Minnesota Statutes, 
 41.26  Section 135.24, shall not be applicable to such converted 
 41.27  district, but the statutes applicable to such special district 
 41.28  prior to the conversion shall continue to be applicable and the 
 41.29  pension plan in operation prior to the conversion shall continue 
 41.30  in operation until changed in accordance with law, and the 
 41.31  teacher tenure law applicable to the special district shall 
 41.32  continue to apply to the converted district in the same manner 
 41.33  and to the same extent to teachers in the converted district; 
 41.34  provided further, where existing civil service provisions of any 
 41.35  law or charter are applicable to special district employees, 
 41.36  such provision shall continue to be applicable in the same 
 42.1   manner and to the same extent to employees of the converted 
 42.2   district.  Notwithstanding any contrary provision of Extra 
 42.3   Session Laws 1959, Chapter 71, as amended, if there was in the 
 42.4   special district a teachers retirement fund association 
 42.5   operating and existing under the provisions of Laws 1909, 
 42.6   Chapter 343, and all acts amendatory thereof, then such teachers 
 42.7   retirement fund association shall continue to exist and operate 
 42.8   in the converted district under and to be subject to the 
 42.9   provisions of Laws 1909, Chapter 343, and all acts amendatory 
 42.10  thereof, to the same extent and in the same manner as before the 
 42.11  conversion, and, without limiting the generality of the 
 42.12  foregoing, such teachers retirement fund association shall 
 42.13  continue, after the conversion as before the conversion, to 
 42.14  certify to the same authorities the amount necessary to raise by 
 42.15  taxation in order to carry out its retirement plan, and it shall 
 42.16  continue, after the conversion as before the conversion, to be 
 42.17  the duty of said authorities to include in the tax levy for the 
 42.18  ensuing year a tax in addition to all other taxes sufficient to 
 42.19  produce so much of the sums so certified as said authorities 
 42.20  shall approve, and such teachers retirement fund association 
 42.21  shall not be subject after the conversion to any limitation on 
 42.22  payments to any beneficiary from public funds or on taxes to be 
 42.23  levied to carry out the plan of such association to which it was 
 42.24  not subject before the conversion. 
 42.25     Sec. 9.  Laws 1967, chapter 798, section 2, is amended to 
 42.26  read: 
 42.27     Sec. 2.  [RICHFIELD FIRE DEPARTMENT RELIEF ASSOCIATION; 
 42.28  DISABILITY PENSION AMOUNT.] In lieu of the disability pension 
 42.29  and limitation as provided for in Minnesota Statutes, Section 
 42.30  424.20, the firemen's fire department relief association in the 
 42.31  city of Richfield may provide for disability benefits, as 
 42.32  defined in Minnesota Statutes, Section 424.19, of not more than 
 42.33  a sum equal to one-half 54 percent of the salary, as payable 
 42.34  from time to time during the period of pension payment 
 42.35  to firemen firefighters of the highest grade, not including 
 42.36  officers of the department, in the employ of the city of 
 43.1   Richfield, such.  The disability pension to be is payable as the 
 43.2   bylaws of the association provide. 
 43.3      Sec. 10.  Laws 1967, chapter 798, section 4, is amended to 
 43.4   read: 
 43.5      Sec. 4.  [SERVICE PENSION.] 
 43.6      Subdivision 1.  [AGE AT WHICH SERVICE PENSION IS PAYABLE.] 
 43.7   A member of the fire department, who enters the employment of 
 43.8   the department on or after January 1, 1968, shall not be 
 43.9   eligible to receive a service pension until he the person 
 43.10  reaches the age of 55 years, in lieu of the eligibility 
 43.11  requirement pertaining to age provided in Minnesota Statutes, 
 43.12  Sections 424.21 and 424.22. 
 43.13     Subd. 2.  [SERVICE PENSION AMOUNT.] (a) If its bylaws so 
 43.14  provide, in lieu of the service pension amount set forth in 
 43.15  Minnesota Statutes, section 424.21, the Richfield fire 
 43.16  department relief association may provide a service pension, as 
 43.17  specified in paragraph (b) or (c), as applicable, to a retiring 
 43.18  firefighter with at least 20 years of service, based on a 
 43.19  percentage of the salary as payable from time to time during the 
 43.20  period of pension payment to firefighters of the highest grade, 
 43.21  not including officers of the department, in the employ of the 
 43.22  city of Richfield. 
 43.23     (b) If the eligible firefighter terminated service before 
 43.24  the effective date of the alternative benefit improvement 
 43.25  authorized by Minnesota Statutes, section 423A.04, the service 
 43.26  pension is 54 percent of salary as defined in paragraph (a). 
 43.27     (c) If the eligible firefighter terminates service on or 
 43.28  after the effective date of the alternative benefit improvement 
 43.29  authorized by Minnesota Statutes, section 423A.04, the service 
 43.30  pension is 55 percent of salary as defined in paragraph (a). 
 43.31     Sec. 11.  Laws 1992, chapter 563, section 5, as amended by 
 43.32  Laws 1996, chapter 448, article 2, section 1, is amended to read:
 43.33     Sec. 5.  [ST. PAUL POLICE AND FIRE CONSOLIDATION ACCOUNTS; 
 43.34  LIMITATION ON POSTRETIREMENT BENEFIT REDUCTIONS.] 
 43.35     (a) A monthly service pension or retirement benefit payment 
 43.36  from the St. Paul fire department consolidation account or the 
 44.1   St. Paul police consolidation account may not be reduced in 
 44.2   amount to an amount that is less than that received by the 
 44.3   person for the immediately previous month.  
 44.4      (b) The service pension or retirement benefit payable from 
 44.5   the St. Paul fire department consolidation account or from the 
 44.6   St. Paul police consolidation account to a person who becomes 
 44.7   newly entitled to that service pension or retirement benefit may 
 44.8   not be an amount that is less than the service pension or 
 44.9   retirement benefit then payable to a comparably situated 
 44.10  pensioner or benefit recipient of that consolidation account. 
 44.11     (c) The limitation in paragraph (a) or (b) may not be 
 44.12  construed to limit the power of the executive director of the 
 44.13  public employees retirement association to require proof of 
 44.14  continuing eligibility for receipt of a disability benefit or a 
 44.15  survivor benefit, or to require the reduction in amount or 
 44.16  elimination of a disability benefit in the event of changed 
 44.17  medical circumstances, or to require the reduction in amount or 
 44.18  elimination of a survivor benefit in the event of changes in 
 44.19  eligibility. 
 44.20     Sec. 12.  [PUBLIC PENSION COVERAGE EXCLUSION FOR CERTAIN 
 44.21  TRADES PERSONNEL.] 
 44.22     Subdivision 1.  [EXCLUSION ELECTION.] (a) A pipefitter or 
 44.23  an associated tradesperson who is employed by independent school 
 44.24  district No. 625 (St. Paul) on the effective date of this 
 44.25  section and who has pension coverage by the pipefitters local 
 44.26  455 pension plan under a collective bargaining agreement may 
 44.27  elect to be excluded from pension coverage by the public 
 44.28  employees retirement association. 
 44.29     (b) The exclusion election under this section must be in 
 44.30  writing on a form prescribed by the executive director of the 
 44.31  public employees retirement association and filed with the 
 44.32  executive director.  The exclusion election is irrevocable.  
 44.33  Authority to make the coverage exclusion election expires on 
 44.34  January 1, 1998. 
 44.35     Subd. 2.  [ELIGIBILITY FOR MEMBER CONTRIBUTION REFUND.] A 
 44.36  person who has less than three years of allowable service in the 
 45.1   public employees retirement association and who elects the 
 45.2   pension coverage exclusion under subdivision 1 is entitled to 
 45.3   immediately apply for a refund under Minnesota Statutes, section 
 45.4   353.34, subdivisions 1 and 2, following the effective date of 
 45.5   the exclusion election. 
 45.6      Subd. 3.  [DEFERRED ANNUITY ELIGIBILITY.] In lieu of the 
 45.7   refund under subdivision 2, a person who elects the pension 
 45.8   coverage exclusion under subdivision 1 is entitled to a deferred 
 45.9   retirement annuity under Minnesota Statutes, sections 353.34, 
 45.10  subdivision 3, and 353.71, subdivision 2, based on any length of 
 45.11  allowable service credit under Minnesota Statutes, section 
 45.12  353.01, subdivision 16, to the credit of the person as of the 
 45.13  date of the coverage exclusion election. 
 45.14     Sec. 13.  [RICHFIELD FIRE DEPARTMENT RELIEF ASSOCIATION; 
 45.15  SURVIVOR BENEFIT AMOUNTS.] 
 45.16     Subdivision 1.  [ELIGIBILITY.] The Richfield fire 
 45.17  department relief association, if its bylaws so provide, may 
 45.18  provide surviving spouse and surviving child benefits as 
 45.19  specified in subdivisions 2 and 3.  For purposes of this 
 45.20  section, the definitions of surviving spouse and surviving child 
 45.21  as defined in Minnesota Statutes, section 424.24, subdivision 2, 
 45.22  apply.  The benefits set forth in subdivisions 2 and 3 are in 
 45.23  lieu of the survivor benefits set forth in Minnesota Statutes, 
 45.24  section 424.24, subdivision 1. 
 45.25     Subd. 2.  [SURVIVING SPOUSE BENEFIT AMOUNT.] (a) If the 
 45.26  retirement benefit amount for the firefighter was computed under 
 45.27  section 2, subdivision 2, paragraph (c), the surviving spouse 
 45.28  benefit amount is 78.545 percent of the benefit amount payable 
 45.29  prior to the death of the primary annuitant. 
 45.30     (b) If the firefighter was receiving a disability benefit 
 45.31  under section 1, or a retirement benefit under section 2, 
 45.32  subdivision 2, paragraph (b), the surviving spouse benefit 
 45.33  amount is 80 percent of the benefit amount payable prior to the 
 45.34  death of the primary annuitant. 
 45.35     (c) If the death of the active, disabled, deferred, or 
 45.36  retired firefighter occurs prior to the commencement of benefit 
 46.1   payments, the surviving spouse benefit amount is to be computed 
 46.2   under paragraph (a) if the firefighter would have been eligible 
 46.3   for an annuity under section 2, subdivision 2, paragraph (c), at 
 46.4   the time of death, based on the benefit the firefighter would 
 46.5   have received if benefits had commenced prior to death. 
 46.6      (d) If the death of the active, disabled, deferred, or 
 46.7   retired firefighter occurs prior to the commencement of benefit 
 46.8   payments, the surviving spouse benefit amount is to be computed 
 46.9   under paragraph (b) if the firefighter would have been eligible 
 46.10  for an annuity under section 1 or section 2, subdivision 2, 
 46.11  paragraph (b), at the time of death, based on the benefit the 
 46.12  firefighter would have received if benefits had commenced prior 
 46.13  to death. 
 46.14     Subd. 3.  [SURVIVING CHILD BENEFIT AMOUNT.] (a) If a 
 46.15  surviving spouse benefit is payable under subdivision 2, 
 46.16  paragraph (a) or (c), each surviving child may also receive a 
 46.17  benefit equal to 9.818 percent of the benefit payable to the 
 46.18  firefighter or to which the firefighter would have been eligible 
 46.19  at the time of death.  If there is no surviving spouse, but 
 46.20  benefits would be payable under subdivision 2, paragraph (a) or 
 46.21  (c), if there was, each surviving child may receive a benefit of 
 46.22  29.454 percent of the benefit payable to the firefighter or to 
 46.23  which the firefighter would have been eligible at the time of 
 46.24  death.  If a surviving child benefit or benefits are paid under 
 46.25  this paragraph, the maximum of the combination of survivor 
 46.26  benefits under this subdivision and subdivision 2 when these 
 46.27  benefits commence is 98.182 percent of the benefit amount 
 46.28  payable or to which the firefighter was eligible prior to the 
 46.29  death of the firefighter. 
 46.30     (b) If a surviving spouse benefit is payable under 
 46.31  subdivision 2, paragraph (b) or (d), each surviving child may 
 46.32  also receive a benefit equal to ten percent of the benefit 
 46.33  payable to the firefighter or to which the firefighter would 
 46.34  have been eligible at the time of death.  If there is no 
 46.35  surviving spouse, but benefits would be payable under 
 46.36  subdivision 2, paragraph (b) or (d), if there was, each 
 47.1   surviving child may receive a benefit of 30 percent of the 
 47.2   benefit payable to the firefighter or to which the firefighter 
 47.3   would have been eligible at the time of death.  If a surviving 
 47.4   child benefit or benefits are paid under this paragraph, the 
 47.5   maximum of the combination of survivor benefits under this 
 47.6   subdivision and subdivision 2 when these benefits commence is 
 47.7   100 percent of the benefit amount payable or to which the 
 47.8   firefighter was eligible prior to the death of the firefighter. 
 47.9      Sec. 14.  [SURVIVOR BENEFIT DURATION.] 
 47.10     Subdivision 1.  [DURATION OF SURVIVING SPOUSE BENEFITS.] A 
 47.11  surviving spouse benefit under section 3 is payable to a 
 47.12  surviving spouse of a deceased active, disabled, deferred, or 
 47.13  retired Richfield firefighter meeting the definition set forth 
 47.14  in Minnesota Statutes, section 424.24, subdivision 2, paragraph 
 47.15  (a), for the life of that person. 
 47.16     Subd. 2.  [DURATION OF SURVIVING CHILD BENEFIT.] A 
 47.17  surviving child benefit under section 3 is payable to a 
 47.18  surviving child of a deceased active, disabled, deferred, or 
 47.19  retired Richfield firefighter meeting the definition set forth 
 47.20  in Minnesota Statutes, section 424.24, subdivision 2, paragraph 
 47.21  (b), until the person reaches the age of 18. 
 47.22     Sec. 15.  [ST. PAUL POLICE AND FIRE CONSOLIDATION ACCOUNTS; 
 47.23  BENEFIT FLOOR FOR CERTAIN LOCAL RELIEF ASSOCIATION BENEFIT 
 47.24  RECIPIENTS.] 
 47.25     (a) Notwithstanding Minnesota Statutes, chapter 353A, the 
 47.26  benefit floor provided in paragraph (c) applies to the eligible 
 47.27  benefit recipients specified in paragraph (b).  An eligible 
 47.28  benefit recipient is entitled to a service pension or survivor 
 47.29  benefit, whichever applies, as calculated under the applicable 
 47.30  relief association benefit plan provisions and the applicable 
 47.31  provisions of Minnesota Statutes, chapter 353A, or the benefit 
 47.32  floor amount, whichever is greater. 
 47.33     (b) An eligible benefit recipient is a person who is either:
 47.34     (1) a vested former active member of the former St. Paul 
 47.35  fire department relief association or the former St. Paul police 
 47.36  relief association who terminated active service prior to the 
 48.1   date of the consolidation of the relief association with the 
 48.2   public employees police and fire plan; or 
 48.3      (2) the survivor of a vested former active member of the 
 48.4   former St. Paul fire department relief association or the former 
 48.5   St. Paul police relief association who terminated active service 
 48.6   prior to the date of the consolidation of the relief association 
 48.7   with the public employees police and fire plan. 
 48.8      (c) The benefit floor amount is an amount equal to the 
 48.9   highest service pension, surviving spouse benefit, or surviving 
 48.10  child benefit, whichever applies, then currently payable to any 
 48.11  comparable eligible benefit recipient. 
 48.12     Sec. 16.  [JACKSON MEDICAL CENTER; PENSION COVERAGE FOR 
 48.13  TRANSFERRED EMPLOYEES.] 
 48.14     Subdivision 1.  [AUTHORIZATION.] This section applies if 
 48.15  the Jackson medical center is sold, leased, or transferred to a 
 48.16  private entity, nonprofit corporation, or public corporation.  
 48.17  Notwithstanding any provision of Minnesota Statutes, sections 
 48.18  356.24 and 356.25 to the contrary, to facilitate the orderly 
 48.19  transition of employees affected by the sale, lease, or 
 48.20  transfer, the city may, at its discretion, make, from assets to 
 48.21  be transferred to the private entity, nonprofit corporation, or 
 48.22  public corporation, payments to a qualified pension plan 
 48.23  established for the transferred employees by the private entity, 
 48.24  nonprofit corporation, or public corporation, to provide 
 48.25  benefits substantially similar to those the employees would have 
 48.26  been entitled to under the provisions of the public employees 
 48.27  retirement association, Minnesota Statutes 1996, sections 353.01 
 48.28  to 353.46. 
 48.29     Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
 48.30  ELIGIBILITY.] (a) An eligible individual is an individual who: 
 48.31     (1) is an employee of the Jackson medical center 
 48.32  immediately prior to the sale, lease, or transfer of that 
 48.33  facility to a private entity, nonprofit corporation, or public 
 48.34  corporation; 
 48.35     (2) is terminated at the time of the sale, lease, or 
 48.36  transfer; and 
 49.1      (3) had less than three years of service credit in the 
 49.2   public employees retirement association plan at the date of 
 49.3   termination. 
 49.4      (b) For an eligible individual under paragraph (a), the 
 49.5   city may make a member contribution equivalent payment under 
 49.6   subdivision 3. 
 49.7      Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
 49.8   member contribution equivalent payment is an amount equal to the 
 49.9   total refund provided by Minnesota Statutes, section 353.34, 
 49.10  subdivisions 1 and 2.  To be eligible for the member 
 49.11  contribution equivalent payment, the individual in subdivision 
 49.12  2, paragraph (a), must apply for a refund under Minnesota 
 49.13  Statutes, section 353.34, subdivisions 1 and 2, within one year 
 49.14  of termination.  A member contribution equivalent amount 
 49.15  exceeding $200 must be made directly to an individual retirement 
 49.16  account under section 408(a) of the federal Internal Revenue 
 49.17  Code, as amended, or to another qualified plan.  A member 
 49.18  contribution equivalent amount of $200 or less may, at the 
 49.19  preference of the individual, be made to the individual or to an 
 49.20  individual retirement account under section 408(a) of the 
 49.21  federal Internal Revenue Code, as amended, or to another 
 49.22  qualified plan. 
 49.23     Sec. 17.  [MELROSE HOSPITAL AND PINE VILLA; RETIREMENT.] 
 49.24     Subdivision 1.  [TRANSFERRED EMPLOYEES.] This section 
 49.25  applies if the Melrose hospital and Pine Villa are sold, leased, 
 49.26  or transferred to a private entity or public corporation.  
 49.27  Notwithstanding any provision of Minnesota Statutes, sections 
 49.28  356.24 and 356.25, to the contrary, to facilitate the orderly 
 49.29  transition of employees affected by the sale, lease, or 
 49.30  transfer, the Melrose hospital and Pine Villa may, in their 
 49.31  discretion, make, from assets to be transferred to the private 
 49.32  entity or public corporation, payments to a qualified pension 
 49.33  plan established for the transferred employees by the private 
 49.34  entity or public corporation, to provide benefits substantially 
 49.35  similar to those the employees would have been entitled to under 
 49.36  the provisions of the public employees retirement association, 
 50.1   Minnesota Statutes 1996, sections 353.01 to 353.46. 
 50.2      Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES.] 
 50.3   (a) An eligible individual is an individual who: 
 50.4      (1) is an employee of the Melrose hospital and Pine Villa 
 50.5   immediately prior to the sale, lease, or transfer of that 
 50.6   facility to a private entity or public corporation; 
 50.7      (2) is terminated at the time of the sale, lease, or 
 50.8   transfer; and 
 50.9      (3) had less than three years of service credit in the 
 50.10  public employees retirement association plan at the date of 
 50.11  termination. 
 50.12     (b) For an eligible individual under paragraph (a), the 
 50.13  Melrose hospital and Pine Villa may make a member contribution 
 50.14  equivalent payment under paragraph (c). 
 50.15     (c) The member contribution equivalent payment is an amount 
 50.16  equal to the total refund provided by Minnesota Statutes, 
 50.17  section 353.34, subdivisions 1 and 2.  To be eligible for the 
 50.18  member contribution equivalent payment, the individual in 
 50.19  paragraph (a) must apply for a refund under Minnesota Statutes, 
 50.20  section 353.34, subdivisions 1 and 2, within one year of 
 50.21  termination.  A member contribution equivalent amount exceeding 
 50.22  $200 must be made directly to an individual retirement account 
 50.23  under section 408(a) of the federal Internal Revenue Code, as 
 50.24  amended, or to another qualified plan.  A member contribution 
 50.25  equivalent amount of $200 or less may, at the preference of the 
 50.26  individual, be made to the individual or to an individual 
 50.27  retirement account under section 408(a) of the federal Internal 
 50.28  Revenue Code, as amended, or to another qualified plan. 
 50.29     Sec. 18.  [TRACY MUNICIPAL HOSPITAL AND CLINIC; PENSION 
 50.30  COVERAGE FOR TRANSFERRED EMPLOYEES.] 
 50.31     Subdivision 1.  [AUTHORIZATION.] This section applies if 
 50.32  the Tracy municipal hospital and clinic is sold, leased, or 
 50.33  transferred to a private entity, nonprofit corporation, or 
 50.34  public corporation.  Notwithstanding any provision of Minnesota 
 50.35  Statutes, sections 356.24 and 356.25 to the contrary, to 
 50.36  facilitate the orderly transition of employees affected by the 
 51.1   sale, lease, or transfer, the city may, at its discretion, make, 
 51.2   from assets to be transferred to the private entity, nonprofit 
 51.3   corporation, or public corporation, payments to a qualified 
 51.4   pension plan established for the transferred employees by the 
 51.5   private entity, nonprofit corporation, or public corporation, to 
 51.6   provide benefits substantially similar to those the employees 
 51.7   would have been entitled to under the provisions of the public 
 51.8   employees retirement association, Minnesota Statutes 1996, 
 51.9   sections 353.01 to 353.46. 
 51.10     Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
 51.11  ELIGIBILITY.] (a) An eligible individual is an individual who: 
 51.12     (1) is an employee of the Tracy municipal hospital and 
 51.13  clinic immediately prior to the sale, lease, or transfer of that 
 51.14  facility to a private entity, nonprofit corporation, or public 
 51.15  corporation; 
 51.16     (2) is terminated at the time of the sale, lease, or 
 51.17  transfer; and 
 51.18     (3) had less than three years of service credit in the 
 51.19  public employees retirement association plan at the date of 
 51.20  termination. 
 51.21     (b) For an eligible individual under paragraph (a), the 
 51.22  city may make a member contribution equivalent payment under 
 51.23  subdivision 3. 
 51.24     Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
 51.25  member contribution equivalent payment is an amount equal to the 
 51.26  total refund provided by Minnesota Statutes, section 353.34, 
 51.27  subdivisions 1 and 2.  To be eligible for the member 
 51.28  contribution equivalent payment, the individual in subdivision 
 51.29  2, paragraph (a), must apply for a refund under Minnesota 
 51.30  Statutes, section 353.34, subdivisions 1 and 2, within one year 
 51.31  of termination.  A member contribution equivalent amount 
 51.32  exceeding $200 must be made directly to an individual retirement 
 51.33  account under section 408(a) of the federal Internal Revenue 
 51.34  Code, as amended, or to another qualified plan.  A member 
 51.35  contribution equivalent amount of $200 or less may, the 
 51.36  preference of the individual, be made to the individual or to an 
 52.1   individual retirement account under section 408(a) of the 
 52.2   federal Internal Revenue Code, as amended, or to another 
 52.3   qualified plan. 
 52.4      Sec. 19.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
 52.5   INCREASE.] 
 52.6      Notwithstanding any general or special law to the contrary, 
 52.7   in addition to the current pensions and other retirement 
 52.8   benefits payable, the pensions and retirement benefits payable 
 52.9   to retired police officers and firefighters and their surviving 
 52.10  spouses by the Eveleth police and fire trust fund are increased 
 52.11  by $100 a month.  Increases are retroactive to January 1, 1997. 
 52.12     Sec. 20.  [LEGISLATIVE INTENT.] 
 52.13     The revisions to the Richfield fire department relief 
 52.14  association benefit plan in sections 2 to 6, 9, 10, 13, and 14 
 52.15  and the retroactive application of sections 9, 10, 13, and 14, 
 52.16  as indicated in section 21, paragraph (b), are intended to 
 52.17  encourage the consolidation of this relief association with the 
 52.18  public employees retirement association, in recognition of the 
 52.19  administrative efficiencies and potential cost savings expected 
 52.20  to occur, and in recognition of characteristics unique to this 
 52.21  association at no expense to the State or the public employees 
 52.22  retirement association. 
 52.23     Sec. 21.  [EFFECTIVE DATE.] 
 52.24     (a) Sections 1, 8, and 12 are effective on the day 
 52.25  following approval by majority vote of the board of independent 
 52.26  school district No. 625 (St. Paul) and compliance with Minnesota 
 52.27  Statutes, section 645.021. 
 52.28     (b) Sections 2 to 6, 9, 10, 13, 14 and 20 are effective on 
 52.29  the day following approval by the Richfield city council and 
 52.30  compliance with Minnesota Statutes, section 645.021.  Sections 
 52.31  9, 10, 13, and 14 apply to individuals who become service 
 52.32  pensioners, disabilitants, or survivors of firefighters who 
 52.33  terminated service on or after the effective date of Laws 1967, 
 52.34  chapter 798.  Retroactive payments and payments to an estate are 
 52.35  not authorized. 
 52.36     (c) Section 7 is effective on approval by the Nashwauk city 
 53.1   council and compliance with Minnesota Statutes, section 645.021. 
 53.2      (d) Sections 11 and 15 are effective on the day following 
 53.3   approval by the city council of the city of St. Paul and 
 53.4   compliance with Minnesota Statutes, section 645.021, subdivision 
 53.5   3.  Sections 11 and 15 must both be approved if either section 
 53.6   is to be effective.  Sections 11 and 15 are not intended to 
 53.7   result in a reduction in the benefit or pension paid to any 
 53.8   benefit recipient or service pensioner. 
 53.9      (e) Section 16 is effective on the day following approval 
 53.10  by the Jackson city council and compliance with Minnesota 
 53.11  Statutes, section 645.021. 
 53.12     (f) Section 17 is effective on the day following approval 
 53.13  by the Melrose city council and compliance with Minnesota 
 53.14  Statutes, section 645.021. 
 53.15     (g) Section 18 is effective on the day following approval 
 53.16  by the Tracy city council and compliance with Minnesota 
 53.17  Statutes, section 645.021. 
 53.18     (h) Section 19 is effective on the day following approval 
 53.19  by the Eveleth city council and compliance with Minnesota 
 53.20  Statutes, section 645.021. 
 53.21                             ARTICLE 3 
 53.22                    GENERAL EMPLOYEE RETIREMENT  
 53.23                           MODIFICATIONS 
 53.24     Section 1.  Minnesota Statutes 1996, section 352.96, 
 53.25  subdivision 2, is amended to read: 
 53.26     Subd. 2.  [PURCHASE OF SHARES.] The amount of compensation 
 53.27  so deferred may be used to purchase: 
 53.28     (1) shares in the Minnesota supplemental investment fund 
 53.29  established in section 11A.17; 
 53.30     (2) saving accounts in federally insured financial 
 53.31  institutions; 
 53.32     (3) life insurance contracts, fixed annuity and variable 
 53.33  annuity contracts from companies that are subject to regulation 
 53.34  by the commissioner of commerce; or 
 53.35     (4) investment options from open-end investment companies 
 53.36  registered under the federal Investment Company Act of 1940, 
 54.1   United States Code, title 15, sections 80a-1 to 80a-64; 
 54.2      (5) investment options from a firm that is a registered 
 54.3   investment advisor under the Investment Advisors Act of 1940, 
 54.4   United States Code, title 15, section 80b-1 to 80b-21; 
 54.5      (6) investment options of a bank as defined in United 
 54.6   States Code, title 15, section 80b-2, subsection (a), paragraph 
 54.7   (2), or a bank holding company as defined in the Bank Holding 
 54.8   Company Act of 1956, United States Code, title 12, section 1841, 
 54.9   subsection (a), paragraph (1); or 
 54.10     (7) a combination of clause (1), (2), or (3), (4), (5), or 
 54.11  (6), as provided by the plan as specified by the participant. 
 54.12     The shares accounts or contracts purchased shall stand in 
 54.13  the name of the state or other employing unit, for the officer 
 54.14  or employee whose deferred compensation purchased the shares, 
 54.15  until distributed to the officer or employee in a manner agreed 
 54.16  upon by the employee and the executive director of the Minnesota 
 54.17  state retirement system, acting for the employer.  All amounts 
 54.18  contributed to the deferred compensation plan and all earnings 
 54.19  on those amounts will be held for the exclusive benefit of the 
 54.20  plan participants and beneficiaries.  These amounts will be held 
 54.21  in trust, in custodial accounts, or in qualifying annuity 
 54.22  contracts as required by federal law and in accordance with 
 54.23  section 356A.06, subdivision 1.  This subdivision does not 
 54.24  authorize an employer contribution, except as authorized in 
 54.25  section 356.24, paragraph (a), clause (4).  The state, political 
 54.26  subdivision, or other employing unit is not responsible for any 
 54.27  loss that may result from investment of the deferred 
 54.28  compensation. 
 54.29     Sec. 2.  Minnesota Statutes 1996, section 352.96, 
 54.30  subdivision 3, is amended to read: 
 54.31     Subd. 3.  [EXECUTIVE DIRECTOR TO ADMINISTER SECTION.] This 
 54.32  section must be administered by the executive director of the 
 54.33  system with the advice and consent of the board of directors 
 54.34  under subdivision 4.  Fiduciary activities of the deferred 
 54.35  compensation plan must be undertaken in a manner consistent with 
 54.36  chapter 356A.  If the state board of investment so elects, it 
 55.1   may solicit bids for options under subdivision 2, clauses 
 55.2   (2) and, (3), (4), (5), and (6).  The state board of investment 
 55.3   may retain consulting services to assist it in soliciting and 
 55.4   evaluating bids and in the periodic review of companies offering 
 55.5   options under subdivision 2, clause clauses (3), (4), (5), and 
 55.6   (6).  The periodic review must occur at least every two years.  
 55.7   The state board of investment may annually establish a budget 
 55.8   for its costs in the soliciting, evaluating, and periodic review 
 55.9   processes.  The state board of investment may charge a 
 55.10  proportional share of all costs related to the periodic review 
 55.11  to each company currently under contract and may charge a 
 55.12  proportional share of all costs related to soliciting and 
 55.13  evaluating bids to each company selected by the state board.  
 55.14  All contracts must be approved before execution by the state 
 55.15  board of investment.  Contracts must provide that all options in 
 55.16  subdivision 2 must:  be presented in an unbiased manner and in a 
 55.17  manner that conforms to rules adopted by the executive director, 
 55.18  be reported on a periodic basis to all employees participating 
 55.19  in the deferred compensation program, and not be the subject of 
 55.20  unreasonable solicitation of state employees to participate in 
 55.21  the program.  The contract may not call for any person to 
 55.22  jeopardize the tax-deferred status of money invested by state 
 55.23  employees under this section.  All costs or fees in relation to 
 55.24  the options provided under subdivision 2, clause 
 55.25  clauses (3), (4), (5), and (6), must be paid by the underwriting 
 55.26  companies ultimately selected by the state board of investment. 
 55.27     Sec. 3.  Minnesota Statutes 1996, section 352.96, 
 55.28  subdivision 6, is amended to read: 
 55.29     Subd. 6.  [EXEMPTION FROM PROCESS.] As money to which legal 
 55.30  title is vested in the state of Minnesota, No amount of deferred 
 55.31  compensation is assignable or subject to execution, levy, 
 55.32  attachment, garnishment, or other legal process, except as 
 55.33  provided in section 518.58, 518.581, or 518.611. 
 55.34     Sec. 4.  Minnesota Statutes 1996, section 354.092, 
 55.35  subdivision 1, is amended to read: 
 55.36     Subdivision 1.  [DEFINITION.] A sabbatical leave for the 
 56.1   purpose of this section means a sabbatical leave as defined in 
 56.2   section 125.18 or the applicable personnel policy of 
 56.3   the Minnesota state university and community college boards 
 56.4   colleges and universities. 
 56.5      Sec. 5.  Minnesota Statutes 1996, section 354.092, 
 56.6   subdivision 3, is amended to read: 
 56.7      Subd. 3.  [EMPLOYER AND EMPLOYEE CONTRIBUTIONS.] Employer 
 56.8   contributions and deductions for employee contributions at the 
 56.9   applicable rate specified in section 354.42 must be made by the 
 56.10  employing unit from based on the full normal base contract 
 56.11  salary that would have been paid to the member for a if the 
 56.12  member were not on sabbatical leave.  The member may also make 
 56.13  direct payment of employee contributions at the appropriate 
 56.14  rates specified in section 354.42 based upon the difference 
 56.15  between the salary received for the sabbatical leave and the 
 56.16  salary received for a comparable period during the year 
 56.17  immediately preceding the leave.  This direct payment must be 
 56.18  made by the end of the fiscal year following the fiscal year in 
 56.19  which the leave of absence terminated and must be without 
 56.20  interest.  The employer must meet the reporting and remittance 
 56.21  requirements under section 354.52. 
 56.22     Sec. 6.  Minnesota Statutes 1996, section 354.092, 
 56.23  subdivision 4, is amended to read: 
 56.24     Subd. 4.  [SERVICE CREDIT.] If the employee contributions 
 56.25  made under this section are less than the employee contributions 
 56.26  made for a comparable period during the year immediately 
 56.27  preceding the leave, the allowable and formula service credit of 
 56.28  the member shall be prorated according to section 354.05, 
 56.29  subdivision 25, clause (3), except that if the member is paid 
 56.30  full salary for any sabbatical leave of absence, either past or 
 56.31  prospective, the allowable and formula service credit shall not 
 56.32  be prorated.  A member may not receive more than three years of 
 56.33  allowable service credit in any ten consecutive years under this 
 56.34  section unless the allowable service credit was paid for by the 
 56.35  member before July 1, 1962.  For sabbatical leaves that begin 
 56.36  after June 30, 1986, the required employer contributions 
 57.1   specified in section 354.42 must be paid by the employing unit 
 57.2   within 30 days after the association's written notification to 
 57.3   the employing unit of the amount due.  Notwithstanding the 
 57.4   provisions of any agreements to the contrary, employee and 
 57.5   employer contributions may not be made to receive allowable 
 57.6   service credit under this section if the member does not retain 
 57.7   the right to full reinstatement both during and at the end of 
 57.8   the sabbatical leave. 
 57.9      Sec. 7.  Minnesota Statutes 1996, section 354B.25, is 
 57.10  amended by adding a subdivision to read: 
 57.11     Subd. 1a.  [ADVISORY COMMITTEE.] (a) A committee is created 
 57.12  to advise the state board of investment and the board of 
 57.13  trustees of the Minnesota state colleges and universities 
 57.14  concerning administration of the individual retirement account 
 57.15  plan and the supplemental retirement plan established in chapter 
 57.16  354C.  The exclusive representatives of the state university 
 57.17  instructional unit, the community college instructional unit, 
 57.18  and the technical college instructional unit shall each appoint 
 57.19  two members to the committee.  The exclusive representatives of 
 57.20  the general professional unit, the supervisory employees unit 
 57.21  and the state university administrative unit shall each appoint 
 57.22  one member to the committee.  The chancellor of the Minnesota 
 57.23  state colleges and universities shall appoint three members, at 
 57.24  least one of whom shall be a personnel administrator.  No member 
 57.25  of the committee shall be retired.  Members serve at the 
 57.26  pleasure of the applicable appointing authority, but no member 
 57.27  shall serve for more than a total of five years.  Members shall 
 57.28  be reimbursed from the administrative expense account of the 
 57.29  individual retirement account plan for expenses as provided in 
 57.30  section 15.059, subdivision 3. 
 57.31     (b) The committee shall: 
 57.32     (1) advise the board of trustees of the Minnesota state 
 57.33  colleges and universities on the structure and operation of the 
 57.34  individual retirement account plan and the supplemental 
 57.35  retirement plan; 
 57.36     (2) along with any other consultants selected by the board, 
 58.1   advise the state board of investment on selection of financial 
 58.2   institutions and on the type of investment products to be 
 58.3   offered by these institutions for the plans; 
 58.4      (3) advise the board of trustees of the Minnesota state 
 58.5   colleges and universities on administration of the plans, 
 58.6   including selection of a third-party plan administrator, if any, 
 58.7   for the individual retirement account plan. 
 58.8      (c) The board of trustees of the Minnesota state colleges 
 58.9   and universities shall provide the advisory committee with 
 58.10  meeting space and other administrative support.  
 58.11     (d) Expenses of the advisory committee are considered 
 58.12  administrative expenses of the plans under subdivision 5 and 
 58.13  section 354C.12, subdivision 4, and must be allocated between 
 58.14  the two plans in proportion to the market value of the total 
 58.15  assets of the plans as of the most recent prior audited annual 
 58.16  financial report. 
 58.17     Sec. 8.  Minnesota Statutes 1996, section 354B.25, 
 58.18  subdivision 5, is amended to read: 
 58.19     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 58.20  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 58.21  administrative expenses of the individual retirement account 
 58.22  plan must be paid by plan participants in the following manner: 
 58.23     (1) from plan participants with amounts invested in the 
 58.24  Minnesota supplemental investment fund, the plan administrator 
 58.25  may charge an administrative expense assessment as provided in 
 58.26  section 11A.17, subdivisions 10a and 14; and 
 58.27     (2) from plan participants with amounts through annuity 
 58.28  contracts and custodial accounts purchased under subdivision 2, 
 58.29  paragraph (a), the plan administrator may charge an 
 58.30  administrative expense assessment of a designated amount, not to 
 58.31  exceed two percent of member and employer contributions, as 
 58.32  those contributions are made. 
 58.33     (b) Any administrative expense charge that is not actually 
 58.34  needed for the administrative expenses of the individual 
 58.35  retirement account plan must be refunded to member accounts. 
 58.36     (c) The board of trustees shall report annually, before 
 59.1   October 1, to the advisory committee created in subdivision 1a 
 59.2   on administrative expenses of the plan.  The report must include 
 59.3   a detailed accounting of charges for administrative expenses 
 59.4   collected from plan participants and expenditure of the 
 59.5   administrative expense charges.  The administrative expense 
 59.6   charges collected from plan participants must be kept in a 
 59.7   separate account from any other funds under control of the board 
 59.8   of trustees and may be used only for the necessary and 
 59.9   reasonable administrative expenses of the plan. 
 59.10     Sec. 9.  Minnesota Statutes 1996, section 354C.12, 
 59.11  subdivision 1, is amended to read: 
 59.12     Subdivision 1.  [BASIC CONTRIBUTIONS AND DEDUCTIONS.] (a) 
 59.13  The employer of personnel covered by the supplemental retirement 
 59.14  plan as provided in section 354C.11 shall deduct a sum equal to 
 59.15  five percent of the annual salary of the person between $6,000 
 59.16  and $15,000.  The employer may accomplish this deduction by 
 59.17  making equal deductions each payroll period, based on 
 59.18  anticipated annual salary.  The employer may adjust these 
 59.19  deductions as necessary to deduct the correct amount annually.  
 59.20  Deductions cease upon termination of employment covered by the 
 59.21  supplemental retirement plan.  
 59.22     (b) The basic contribution deduction must be made in the 
 59.23  same manner as other retirement deductions are made from the 
 59.24  salary of the person under section 352.04, subdivision 4; 
 59.25  352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12, 
 59.26  whichever applies. 
 59.27     (c) The employer shall also make a contribution to the 
 59.28  supplemental retirement plan on behalf of covered personnel 
 59.29  equal to the salary deduction made under paragraph (a). 
 59.30     Sec. 10.  Minnesota Statutes 1996, section 354C.12, 
 59.31  subdivision 4, is amended to read: 
 59.32     Subd. 4.  [ADMINISTRATIVE EXPENSES.] The board of trustees 
 59.33  of the Minnesota state colleges and universities is authorized 
 59.34  to pay the necessary and reasonable administrative expenses of 
 59.35  the supplemental retirement plan.  The administrative fees or 
 59.36  charges must be paid by participants in the following manner: 
 60.1      (1) from participants whose contributions are invested with 
 60.2   the state board of investment, the plan administrator may 
 60.3   recover administrative expenses in the manner provided by 
 60.4   section 11A.17, subdivisions 10a and 14; or 
 60.5      (2) from participants where contributions are invested 
 60.6   through contracts purchased from any other authorized source, 
 60.7   the plan administrator may assess an amount of up to two percent 
 60.8   of the employee and employer contributions. 
 60.9      Any recovered or assessed amounts that are not needed for 
 60.10  the necessary and reasonable administrative expenses of the plan 
 60.11  must be refunded to member accounts. 
 60.12     The board of trustees shall report annually, before October 
 60.13  1, to the advisory committee created in section 354B.25, 
 60.14  subdivision 1a, on administrative expenses of the plan.  The 
 60.15  report must include a detailed accounting of charges for 
 60.16  administrative expenses collected from plan participants and 
 60.17  expenditure of the administrative expense charges.  The 
 60.18  administrative expense charges collected from plan participants 
 60.19  must be kept in a separate account from any other funds under 
 60.20  control of the board of trustees and may be used only for the 
 60.21  necessary and reasonable administrative expenses of the plan.  
 60.22     Sec. 11.  Minnesota Statutes 1996, section 354D.02, 
 60.23  subdivision 2, is amended to read: 
 60.24     Subd. 2.  [ELIGIBILITY.] Eligible employees are: 
 60.25     (1) any supervisory or professional employee of the state 
 60.26  arts board; 
 60.27     (2) any supervisory or professional employee of the 
 60.28  Minnesota humanities commission; or 
 60.29     (3) any employee of the Minnesota historical society.; 
 60.30     (4) any employee of the Minnesota state academy for the 
 60.31  deaf; 
 60.32     (5) any employee of the Minnesota state academy for the 
 60.33  blind; 
 60.34     (6) any employee of the Minnesota zoological garden; or 
 60.35     (7) any employee of the Lola and Rudy Perpich Minnesota 
 60.36  center for arts education. 
 61.1      Sec. 12.  Minnesota Statutes 1996, section 354D.06, is 
 61.2   amended to read: 
 61.3      354D.06 [ADMINISTRATION.] 
 61.4      (a) The Minnesota state university system or its successor 
 61.5   shall administer the individual retirement account plan for 
 61.6   eligible employees listed in section 354D.02, subdivision 2, 
 61.7   clauses (1) and (2), in accordance with sections 354B.20 to 
 61.8   354B.30. 
 61.9      (b) The Minnesota historical society or its successor shall 
 61.10  administer the individual retirement account plan for eligible 
 61.11  employees listed in section 354D.02, subdivision 2, clause (3), 
 61.12  in accordance with section 354D.08. 
 61.13     (c) The Minnesota state academy for the deaf or its 
 61.14  successor shall administer the individual retirement account 
 61.15  plan for eligible employees listed in section 354D.02, 
 61.16  subdivision 2, clause (4), in accordance with section 354D.08. 
 61.17     (d) The Minnesota state academy for the blind or its 
 61.18  successor shall administer the individual retirement account 
 61.19  plan for eligible employees listed in section 354D.02, 
 61.20  subdivision 2, clause (5), in accordance with section 354D.08. 
 61.21     (e) The Minnesota zoological board or its successor shall 
 61.22  administer the individual retirement account plan for eligible 
 61.23  employees listed in section 354D.02, subdivision 2, clause (6), 
 61.24  in accordance with section 354D.08. 
 61.25     (f) The Lola and Rudy Perpich Minnesota center for arts 
 61.26  education or its successor shall administer the individual 
 61.27  retirement account plan for eligible employees listed in section 
 61.28  354D.02, subdivision 2, clause (7), in accordance with section 
 61.29  354D.08. 
 61.30     Sec. 13.  Minnesota Statutes 1996, section 354D.07, is 
 61.31  amended to read: 
 61.32     354D.07 [TRANSFER OF CERTAIN MSRS MEMBER CONTRIBUTION 
 61.33  REFUND AMOUNTS TO PLAN.] 
 61.34     (a) Notwithstanding any provision of law to the contrary, a 
 61.35  former member of the general state employees retirement plan of 
 61.36  the Minnesota state retirement system or of the teachers 
 62.1   retirement association, who has less than three years of 
 62.2   allowable service credit as of the election date, and who is a 
 62.3   member of the individual retirement account plan under this 
 62.4   chapter may elect to transfer to the individual retirement 
 62.5   account plan an amount equal to the refund under section 352.22, 
 62.6   subdivision 2, or 354.49, subdivisions 1 and 2, whichever 
 62.7   applies, that the member could otherwise receive.  The transfer 
 62.8   must be made from the general state employees retirement fund or 
 62.9   the teachers retirement association directly to the individual 
 62.10  retirement account plan and credited by the plan appropriately.  
 62.11  No amount under this section is payable directly to any 
 62.12  individual. 
 62.13     (b) The election must be made on a form prescribed by the 
 62.14  executive director of the Minnesota state retirement system or 
 62.15  the teachers retirement association, whichever applies, after 
 62.16  consultation with the administrators of the plan. 
 62.17     Sec. 14.  Minnesota Statutes 1996, section 354D.08, 
 62.18  subdivision 1, is amended to read: 
 62.19     Subdivision 1.  [GENERAL GOVERNANCE.] (a) The Minnesota 
 62.20  historical society is the plan administrator and has the 
 62.21  administrative responsibility for the individual retirement 
 62.22  account plan for those eligible employees listed in section 
 62.23  354D.02, subdivision 2, clause (3). 
 62.24     (b) The Minnesota state academy for the deaf is the plan 
 62.25  administrator and has the administrative responsibility for the 
 62.26  individual retirement account plan for those eligible employees 
 62.27  listed in section 354D.02, subdivision 2, clause (4). 
 62.28     (c) The Minnesota state academy for the blind is the plan 
 62.29  administrator and has the administrative responsibility for the 
 62.30  individual retirement account plan for those eligible employees 
 62.31  listed in section 354D.02, subdivision 2, clause (5). 
 62.32     (d) The Minnesota zoological board is the plan 
 62.33  administrator and has the administrative responsibility for the 
 62.34  individual retirement account plan for those eligible employees 
 62.35  listed in section 354D.02, subdivision 2, clause (6). 
 62.36     (e) The Lola and Rudy Perpich Minnesota center for arts 
 63.1   education is the plan administrator and has the administrative 
 63.2   responsibility for the individual retirement account plan for 
 63.3   those eligible employees listed in section 354D.02, subdivision 
 63.4   2, clause (7). 
 63.5      Sec. 15.  Minnesota Statutes 1996, section 354D.08, 
 63.6   subdivision 2, is amended to read: 
 63.7      Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) 
 63.8   The plan administrator shall arrange for the purchase of fixed 
 63.9   annuity contracts, variable annuity contracts, a combination of 
 63.10  fixed and variable annuity contracts, or custodial accounts from 
 63.11  financial institutions which have been selected by the state 
 63.12  board of investment and approved by the plan administrator under 
 63.13  subdivision 3, as the investment vehicle for the retirement 
 63.14  coverage of plan participants and to provide retirement benefits 
 63.15  to plan participants.  Custodial accounts from financial 
 63.16  institutions shall include open-end investment companies 
 63.17  registered under the federal Investment Company Act of 1940, as 
 63.18  amended. 
 63.19     (b) The annuity contracts or accounts must be purchased 
 63.20  with contributions under section 354D.05, or with money or 
 63.21  assets otherwise provided by law by authority of the Minnesota 
 63.22  historical society, the Minnesota state academy for the deaf, 
 63.23  the Minnesota state academy for the blind, the Minnesota 
 63.24  zoological board, or the Lola and Rudy Perpich Minnesota center 
 63.25  for arts education, and deemed acceptable by the applicable 
 63.26  financial institution. 
 63.27     Sec. 16.  Minnesota Statutes 1996, section 354D.08, 
 63.28  subdivision 3, is amended to read: 
 63.29     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] The 
 63.30  applicable plan administrator may approve up to two financial 
 63.31  institutions selected by the state board of investment under 
 63.32  section 354B.25, subdivision 3, to provide annuity products and 
 63.33  custodial accounts for those employees listed in section 
 63.34  354D.02, subdivision 2, clause clauses (3), (4), (5), (6), and 
 63.35  (7).  Only those financial institutions selected by the state 
 63.36  board of investment and approved by the applicable plan 
 64.1   administrator may provide annuity products and custodial 
 64.2   accounts for those employees listed in section 354D.02, 
 64.3   subdivision 2, clause clauses (3), (4), (5), (6), and (7). 
 64.4      The state board of investment must periodically review at 
 64.5   least every three years each financial institution selected.  
 64.6   The state board of investment may retain consulting services to 
 64.7   assist in the periodic review, may establish a budget for its 
 64.8   costs in the periodic review process, and may charge a 
 64.9   proportional share of those costs to each financial institution 
 64.10  selected.  All contracts must be approved by the state board of 
 64.11  investment before execution by the Minnesota historical society, 
 64.12  the Minnesota state academy for the deaf, the Minnesota state 
 64.13  academy for the blind, the Minnesota zoological board, or the 
 64.14  Lola and Rudy Perpich Minnesota center for arts education, as 
 64.15  applicable.  The state board of investment shall also establish 
 64.16  policies and procedures under section 11A.04, clause (2), to 
 64.17  carry out this subdivision. 
 64.18     Sec. 17.  Minnesota Statutes 1996, section 354D.08, 
 64.19  subdivision 5, is amended to read: 
 64.20     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 64.21  ADMINISTRATIVE EXPENSES; MINNESOTA HISTORICAL SOCIETY.] (a) The 
 64.22  reasonable and necessary administrative expenses of 
 64.23  the applicable individual retirement account plan for those 
 64.24  employees enumerated in section 354D.02, subdivision 2, clause 
 64.25  clauses (3), (4), (5), (6), and (7), must be paid by plan 
 64.26  participants.  The plan administrator may charge to plan 
 64.27  participants purchasing annuity contracts and custodial accounts 
 64.28  pursuant to subdivision 2, paragraph (a), an administrative 
 64.29  expenses assessment of a designated amount, not to exceed two 
 64.30  percent of member and employer contributions, as those 
 64.31  contributions are made.  
 64.32     (b) Any administrative expense charge that is not actually 
 64.33  needed for the administrative expenses of the applicable 
 64.34  individual retirement account plan must be refunded to member 
 64.35  accounts. 
 64.36     Sec. 18.  [EFFECTIVE DATE.] 
 65.1      (a) Sections 1, 2, 3, 11, 12, 13, 14, 15, 16, and 17 are 
 65.2   effective on the day following enactment. 
 65.3      (b) Sections 4, 5, and 6 are effective on July 1, 1997, and 
 65.4   apply to sabbatical leaves that begin on or after that date. 
 65.5      (c) Sections 7, 8, 9, and 10 are effective on July 1, 1997. 
 65.6                              ARTICLE 4 
 65.7                  ACTUARIAL ASSUMPTION MODIFICATIONS 
 65.8      Section 1.  Minnesota Statutes 1996, section 356.215, 
 65.9   subdivision 4d, is amended to read: 
 65.10     Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds 
 65.11  governed by chapters 352B, 353C, and by sections 352.90 through 
 65.12  352.951 and 353.63 through 353.68, The actuarial valuation must 
 65.13  use a the applicable following preretirement interest assumption 
 65.14  of 8.5 percent, a and the applicable following postretirement 
 65.15  interest assumption of five percent, and a future salary 
 65.16  increase assumption of 6.5 percent.: 
 65.17                                    preretirement   postretirement 
 65.18                                    interest rate   interest rate 
 65.19             plan                    assumption       assumption 
 65.20   general state employees 
 65.21     retirement plan                    8.5%             5.0% 
 65.22   correctional state employees 
 65.23     retirement plan                    8.5              5.0 
 65.24   state patrol retirement plan         8.5              5.0 
 65.25   legislators retirement plan          8.5              5.0 
 65.26   elective state officers
 65.27     retirement plan                    8.5              5.0 
 65.28   judges retirement plan               8.5              5.0 
 65.29   general public employees 
 65.30     retirement plan                    8.5              5.0 
 65.31   public employees police and fire 
 65.32     retirement plan                    8.5              5.0 
 65.33   local government correctional 
 65.34     service retirement plan            8.5              5.0 
 65.35   teachers retirement plan             8.5              5.0 
 65.36   Minneapolis employees 
 66.1      retirement plan                    6.0              5.0 
 66.2    Duluth teachers retirement plan      8.5              8.5 
 66.3    Minneapolis teachers retirement
 66.4      plan                               8.5              8.5 
 66.5    St. Paul teachers retirement 
 66.6      plan                               8.5              7.5 
 66.7    Minneapolis police relief 
 66.8      association                        6.0              6.0 
 66.9    other local police relief 
 66.10     associations                       5.0              5.0 
 66.11   Minneapolis fire department 
 66.12     relief association                 6.0              6.0 
 66.13   other local salaried firefighter 
 66.14     relief associations                5.0              5.0 
 66.15   local monthly benefit volunteer 
 66.16     firefighter relief associations    5.0              5.0 
 66.17     (b) For funds governed by chapter 354A, The actuarial 
 66.18  valuation must use preretirement and postretirement assumptions 
 66.19  of 8.5 percent and a the applicable following single rate future 
 66.20  salary increase assumption of 6.5 percent, but the actuarial 
 66.21  valuation must reflect the payment of postretirement adjustments 
 66.22  to retirees, based on the methods specified in the bylaws of the 
 66.23  fund as approved by the legislature.  For a fund governed by 
 66.24  chapter 422A, the actuarial valuation shall use a preretirement 
 66.25  interest assumption of six percent, a postretirement interest 
 66.26  assumption of five percent, and an assumption that in each 
 66.27  future year the salary on which a retirement or other benefit is 
 66.28  based is 1.04 multiplied by the salary for the preceding year.  
 66.29     (c) For all other funds not specified in paragraph (a), 
 66.30  (b), (d), or (e), the actuarial valuation must use a 
 66.31  preretirement interest assumption of five percent, a 
 66.32  postretirement interest assumption of five percent, and a future 
 66.33  salary increase assumption of 3.5 percent. 
 66.34     (d) For funds governed by chapters 3A, 352C, and 490, the 
 66.35  actuarial valuation must use a preretirement interest assumption 
 66.36  of 8.5 percent, a postretirement interest assumption of five 
 67.1   percent, and a future salary increase assumption of 6.5 percent 
 67.2   in each future year in which the salary amount payable is not 
 67.3   determinable from section 3.099, 15A.081, subdivision 6, or 
 67.4   15A.083, subdivision 1, whichever applies, or from applicable 
 67.5   compensation council recommendations under section 15A.082. 
 67.6      (e) For funds governed by sections 352.01 through 352.86, 
 67.7   353.01 through 353.46, and chapter 354, the actuarial valuation 
 67.8   must use a preretirement interest assumption of 8.5, a 
 67.9   postretirement interest assumption of five percent, and a or the 
 67.10  applicable following graded rate future salary increase 
 67.11  assumption as follows: 
 67.12          General state   General public   
 67.13            employees       employees         Teachers  
 67.14           retirement      retirement        retirement 
 67.15   Age        plan            plan              plan 
 67.16     (1) single rate future salary increase assumption 
 67.17                                            future salary 
 67.18             plan                        increase assumption 
 67.19   legislators retirement plan                  5.0% 
 67.20   elective state officers retirement 
 67.21     plan                                       5.0 
 67.22   judges retirement plan                       5.0 
 67.23   Minneapolis employees retirement plan        4.0 
 67.24   Minneapolis police relief association        4.0 
 67.25   other local police relief associations       3.5 
 67.26   Minneapolis fire department relief 
 67.27     association                                4.0 
 67.28   other local salaried firefighter relief 
 67.29     associations                               3.5 
 67.30     (2) graded rate future salary increase assumption 
 67.31                                            future salary 
 67.32             plan                        increase assumption 
 67.33   general state employees retirement 
 67.34     plan                                   assumption A 
 67.35   correctional state employees 
 67.36     retirement plan                        assumption A 
 68.1    state patrol retirement plan             assumption A 
 68.2    general public employees retirement 
 68.3      plan                                   assumption B 
 68.4    public employees police and fire 
 68.5      fund retirement plan                   assumption C 
 68.6    local government correctional service 
 68.7      retirement plan                        assumption C 
 68.8    teachers retirement plan                 assumption D 
 68.9    Duluth teachers retirement plan          assumption E 
 68.10   Minneapolis teachers retirement plan     assumption F 
 68.11   St. Paul teachers retirement plan        assumption G 
 68.12   age    A      B      C      D      E      F      G 
 68.13   16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 
 68.14   17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 
 68.15   18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 68.16   19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 
 68.17   20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 
 68.18   21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 
 68.19   22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 
 68.20   23  7.0725   7.70  10.50   7.20   7.90   7.40   7.25 
 68.21   24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 
 68.22   25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 
 68.23   26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 
 68.24   27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 
 68.25   28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 
 68.26   29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 
 68.27   30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 
 68.28   31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 
 68.29   32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 
 68.30   33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 
 68.31   34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 
 68.32   35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 
 68.33   36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 
 68.34   37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 
 68.35   38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 
 68.36   39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 
 69.1    40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 
 69.2    41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 
 69.3    42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 
 69.4    43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 
 69.5    44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 
 69.6    45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 
 69.7    46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 
 69.8    47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 
 69.9    48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 
 69.10   49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 
 69.11   50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 
 69.12   51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 
 69.13   52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 
 69.14   53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 
 69.15   54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 
 69.16   55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 
 69.17   56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 
 69.18   57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 69.19   58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 69.20   59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 
 69.21   60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.22   61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.23   62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.24   63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.25   64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.26   65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.27   66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.28   67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.29   68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.30   69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.31   70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 
 69.32     (c) The actuarial valuation must use the applicable 
 69.33  following payroll growth assumption for calculating the 
 69.34  amortization requirement for the unfunded actuarial accrued 
 69.35  liability where the amortization retirement is calculated as a 
 69.36  level percentage of an increasing payroll: 
 70.1                                                payroll growth
 70.2                 plan                             assumption 
 70.3    general state employees retirement plan          5.00% 
 70.4    correctional state employees retirement plan     5.00 
 70.5    state patrol retirement plan                     5.00 
 70.6    legislators retirement plan                      5.00 
 70.7    elective state officers retirement plan          5.00 
 70.8    judges retirement plan                           5.00 
 70.9    general public employees retirement plan         6.00 
 70.10   public employees police and fire 
 70.11     retirement plan                                6.00 
 70.12   local government correctional service 
 70.13     retirement plan                                6.00 
 70.14   teachers retirement plan                         5.00 
 70.15   Duluth teachers retirement plan                  5.00 
 70.16   Minneapolis teachers retirement plan             5.00 
 70.17   St. Paul teachers retirement plan                5.00 
 70.18     Sec. 2.  [EFFECTIVE DATE.] 
 70.19     Section 1 is effective July 1, 1997, and applies to 
 70.20  actuarial valuations prepared on or after that date. 
 70.21                             ARTICLE 5  
 70.22                      MISCELLANEOUS PROVISIONS 
 70.23     Section 1.  [CLARIFICATION OF RETIREMENT ELIGIBILITY FOR 
 70.24  CERTAIN PERA-P&F RETIREE.] 
 70.25     (a) Notwithstanding any provision of Minnesota Statutes 
 70.26  1996, section 353.01, subdivision 28, to the contrary, a person 
 70.27  described in paragraph (b) must be considered by the public 
 70.28  employees police and fire plan to have retired on October 31, 
 70.29  1996, even though the person may have rendered occasional 
 70.30  employment services during November and December, 1996, for a 
 70.31  governmental subdivision other than the governmental subdivision 
 70.32  that employed the person immediately before October 31, 1996.  
 70.33     (b) A person to whom paragraph (a) applies is a person who: 
 70.34     (1) was born on October 11, 1943; 
 70.35     (2) was hired as a police officer by the city of Rochester 
 70.36  on February 16, 1971; and 
 71.1      (3) terminated employment as a Rochester police officer on 
 71.2   October 31, 1996. 
 71.3      (c) A person described in paragraph (b) must not be 
 71.4   required to repay any public employees police and fire plan 
 71.5   retirement annuity amount received before the date of enactment, 
 71.6   but the amount of the employment earnings paid to the person by 
 71.7   the applicable governmental unit for November and December, 
 71.8   1996, must be deducted by the public employees retirement 
 71.9   association from a subsequent retirement annuity payment. 
 71.10     Sec. 2.  [RETIREMENT COVERAGE FOR CERTAIN PART-TIME 
 71.11  TEACHERS.] 
 71.12     Subdivision 1.  [ELIGIBLE PART-TIME TEACHER.] (a) A 
 71.13  part-time teacher described in paragraph (b) is eligible for the 
 71.14  retirement coverage specified in subdivision 2. 
 71.15     (b) An eligible part-time teacher is a person who: 
 71.16     (1) was a part-time hourly teacher of nursing employed by 
 71.17  special school district No. 1 at the Minneapolis area 
 71.18  vocational-technical institute and the Minneapolis technical 
 71.19  college during the period April 7, 1975, to June 23, 1990; 
 71.20     (2) was not provided Minnesota public employee retirement 
 71.21  plan pension coverage under Minnesota Statutes, chapter 354A for 
 71.22  the employment period April 7, 1975, to March 7, 1986; 
 71.23     (3) was not included in coverage by the federal old age, 
 71.24  survivors, disability and health insurance program (social 
 71.25  security) for the employment period July 1, 1978, to March 7, 
 71.26  1986; and 
 71.27     (4) was a member of the Minneapolis teachers retirement 
 71.28  fund association for the employment period March 7, 1986, to 
 71.29  June 28, 1991. 
 71.30     Subd. 2.  [RETIREMENT COVERAGE.] An eligible part-time 
 71.31  teacher under subdivision 1 is entitled to service credit in the 
 71.32  applicable program of the Minneapolis teachers retirement fund 
 71.33  association for the person's period of part-time teaching 
 71.34  employment by special school district No. 1, April 7, 1975, to 
 71.35  March 7, 1986, upon the payment of the amount specified in 
 71.36  subdivision 3, paragraph (a). 
 72.1      Subd. 3.  [AMOUNT.] (a) The payment amount is an amount 
 72.2   equal to the actuarial present value, on the date of payment, as 
 72.3   calculated by the actuary retained by the legislative commission 
 72.4   on pensions and retirement, of the amount of the additional 
 72.5   retirement annuity obtained by the acquisition of the additional 
 72.6   service credit in this section.  Calculation of this amount must 
 72.7   be made using the preretirement interest rate applicable to the 
 72.8   Minneapolis teachers retirement fund association specified in 
 72.9   Minnesota Statutes, section 356.215, subdivision 4d, and the 
 72.10  mortality table adopted for the pension plan. 
 72.11     The calculation must assume continuous future service in 
 72.12  the association until, and retirement at, the age at which the 
 72.13  minimum requirements of the fund for normal retirement or 
 72.14  retirement with an annuity unreduced for retirement at an early 
 72.15  age, including Minnesota Statutes, section 356.30, are met with 
 72.16  the additional service credit purchased.  The calculation must 
 72.17  also assume a full-time equivalent salary, or actual salary, 
 72.18  whichever is greater, and a future salary history that includes 
 72.19  annual salary increases at the applicable salary increase rate 
 72.20  for the plan specified in Minnesota Statutes, section 356.215, 
 72.21  subdivision 4d. 
 72.22     (b) Payment must be made in one lump sum before July 1, 
 72.23  1998. 
 72.24     (c) Payment of the amount calculated under this subdivision 
 72.25  must be made by the eligible teacher.  However, special school 
 72.26  district No. 1, Minneapolis, may, at its discretion, pay all or 
 72.27  any portion of the payment amount that exceeds an amount equal 
 72.28  to the employee contribution rates in effect during the period 
 72.29  or periods of prior service applied to the actual salary rates 
 72.30  in effect during the period or periods of prior service, plus 
 72.31  interest at the rate of 8-1/2 percent a year compounded annually 
 72.32  from the date on which the contributions would otherwise have 
 72.33  been made to the date on which the payment is made.  If the 
 72.34  school district agrees to payments under this paragraph, the 
 72.35  eligible teacher must make the employee payments required under 
 72.36  this paragraph before July 1, 1998.  If that employee payment is 
 73.1   made, the school district payment under this paragraph must be 
 73.2   remitted to the executive secretary of the Minneapolis teachers 
 73.3   retirement fund association within 60 days of receipt by the 
 73.4   executive secretary of the employee payments specified under 
 73.5   this paragraph. 
 73.6      Subd. 4.  [SERVICE CREDIT GRANT.] Service credit for the 
 73.7   purchase period must be granted by the Minneapolis teachers 
 73.8   retirement fund association to the account of the eligible 
 73.9   teacher upon receipt of the purchase payment amount specified in 
 73.10  subdivision 3. 
 73.11     Sec. 3.  [EFFECTIVE DATE.] 
 73.12     Sections 1 and 2 are effective on the day following final 
 73.13  enactment. 
 73.14                             ARTICLE 6 
 73.15                   VOLUNTEER FIREFIGHTER SERVICE 
 73.16                          PENSION MAXIMUMS
 73.17     Section 1.  Minnesota Statutes 1996, section 424A.02, 
 73.18  subdivision 3, is amended to read: 
 73.19     Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) On or 
 73.20  before August 1 of each year as part of the certification of the 
 73.21  financial requirements and minimum municipal obligation made 
 73.22  pursuant to section 69.772, subdivision 4, or 69.773, 
 73.23  subdivision 5, the secretary or some other official of the 
 73.24  relief association designated in the bylaws of each relief 
 73.25  association shall calculate and certify to the governing body of 
 73.26  the applicable qualified municipality the average amount of 
 73.27  available financing per active covered firefighter for the most 
 73.28  recent three-year period.  The amount of available financing 
 73.29  shall include any amounts of fire state aid received or 
 73.30  receivable by the relief association, any amounts of municipal 
 73.31  contributions to the relief association raised from levies on 
 73.32  real estate or from other available revenue sources exclusive of 
 73.33  fire state aid, and one-tenth of the amount of assets in excess 
 73.34  of the accrued liabilities of the relief association calculated 
 73.35  pursuant to sections 69.772, subdivision 2; 69.773, subdivisions 
 73.36  2 and 4; or 69.774, subdivision 2, if any.  
 74.1      (b) The maximum service pension which the relief 
 74.2   association has authority to provide for in its bylaws for 
 74.3   payment to a member retiring after the calculation date when the 
 74.4   minimum age and service requirements specified in subdivision 1 
 74.5   are met must be determined using the table in paragraph (c) or 
 74.6   (d), whichever applies. 
 74.7      (c) For a relief association where the governing bylaws 
 74.8   provide for a monthly service pension to a retiring member, the 
 74.9   maximum monthly service pension amount per month for each year 
 74.10  of service credited that may be provided for in the bylaws is 
 74.11  the maximum service pension figure corresponding to the average 
 74.12  amount of available financing per active covered firefighter: 
 74.13    Minimum Average Amount of      Maximum Service Pension
 74.14    Available Financing per        Amount Payable per Month
 74.15         Firefighter               for Each Year of Service
 74.16           $...                             $ .25
 74.17             42                               .50
 74.18             84                              1.00
 74.19            126                              1.50
 74.20            168                              2.00
 74.21            209                              2.50
 74.22            252                              3.00
 74.23            294                              3.50
 74.24            335                              4.00
 74.25            378                              4.50
 74.26            420                              5.00
 74.27            503                              6.00
 74.28            587                              7.00
 74.29            672                              8.00
 74.30            755                              9.00
 74.31            839                             10.00
 74.32            923                             11.00
 74.33           1007                             12.00
 74.34           1090                             13.00
 74.35           1175                             14.00
 74.36           1259                             15.00
 75.1            1342                             16.00
 75.2            1427                             17.00
 75.3            1510                             18.00
 75.4            1594                             19.00
 75.5            1677                             20.00
 75.6            1762                             21.00
 75.7            1845                             22.00
 75.8            1888                             22.50
 75.9            1929                             23.00
 75.10           2014                             24.00
 75.11           2098                             25.00
 75.12           2183                             26.00
 75.13           2267                             27.00
 75.14           2351                             28.00
 75.15           2436                             29.00
 75.16           2520                             30.00
 75.17           any amount more than 2520        30.00
 75.18           2604                             31.00
 75.19           2689                             32.00
 75.20           2773                             33.00
 75.21           2857                             34.00
 75.22           2942                             35.00
 75.23           3026                             36.00
 75.24           3110                             37.00
 75.25           3963                             38.00
 75.26           4047                             39.00
 75.27           4137                             40.00
 75.28           any amount more than 4137        40.00
 75.29     (d) For a relief association in which the governing bylaws 
 75.30  provide for a lump sum service pension to a retiring member, the 
 75.31  maximum lump sum service pension amount for each year of service 
 75.32  credited that may be provided for in the bylaws is the maximum 
 75.33  service pension figure corresponding to the average amount of 
 75.34  available financing per active covered firefighter for the 
 75.35  applicable specified period: 
 75.36   Minimum Average Amount         Maximum Lump Sum Service
 76.1    of Available Financing         Pension Amount Payable
 76.2       per Firefighter             for Each Year of Service
 76.3    (1) for service pensions payable before January 1, 1994 
 76.4           $..                              $10
 76.5            11                               20
 76.6            16                               30
 76.7            23                               40
 76.8            27                               50
 76.9            32                               60
 76.10           43                               80
 76.11           54                              100
 76.12           65                              120
 76.13           77                              140
 76.14           86                              160
 76.15           97                              180
 76.16          108                              200
 76.17          131                              240
 76.18          151                              280
 76.19          173                              320
 76.20          194                              360
 76.21          216                              400
 76.22          239                              440
 76.23          259                              480
 76.24          281                              520
 76.25          302                              560
 76.26          324                              600
 76.27          347                              640
 76.28          367                              680
 76.29          389                              720
 76.30          410                              760
 76.31          432                              800
 76.32          486                              900
 76.33          540                             1000
 76.34          594                             1100
 76.35          648                             1200
 76.36          702                             1300
 77.1           756                             1400
 77.2           810                             1500
 77.3           864                             1600
 77.4           918                             1700
 77.5           972                             1800
 77.6          1026                             1900
 77.7          1080                             2000
 77.8          1134                             2100
 77.9          1188                             2200
 77.10         1242                             2300
 77.11         1296                             2400
 77.12         1350                             2500
 77.13         1404                             2600
 77.14         1458                             2700
 77.15         1512                             2800
 77.16         1566                             2900
 77.17         1620                             3000
 77.18         1672                             3100
 77.19         1726                             3200
 77.20         1753                             3250
 77.21         1780                             3300
 77.22         1820                             3375
 77.23         any amount more than 1820        3375
 77.24     (2) in addition to the service pension maximum under clause 
 77.25  (1), for service pensions payable after December 31, 1993, and 
 77.26  before January 1, 1995 
 77.27         1834                             3400
 77.28         1888                             3500
 77.29         any amount more than 1888        3500
 77.30     (3) in addition to the service pension maximum under 
 77.31  clauses (1) and (2), for service pensions payable after December 
 77.32  31, 1994, and before January 1, 1996 
 77.33         1942                             3600
 77.34         1996                             3700
 77.35         2023                             3750
 77.36         any amount more than 2023        3750
 78.1      (4) in addition to the service pension maximum under 
 78.2   clauses (1) to (3), for service pensions payable after December 
 78.3   31, 1995 
 78.4          2050                             3800
 78.5          2104                             3900
 78.6          2158                             4000
 78.7          any amount more than 2158        4000
 78.8          2212                             4100
 78.9          2265                             4200
 78.10         2319                             4300
 78.11         2373                             4400
 78.12         2427                             4500
 78.13         2481                             4600
 78.14         2535                             4700
 78.15         2589                             4800
 78.16         2643                             4900
 78.17         2697                             5000
 78.18         2751                             5100
 78.19         2805                             5200
 78.20         2859                             5300
 78.21         2913                             5400
 78.22         2967                             5500
 78.23         any amount more than 2967        5500
 78.24     (e) For a relief association in which the governing bylaws 
 78.25  provide for a monthly benefit service pension as an alternative 
 78.26  form of service pension payment to a lump sum service pension, 
 78.27  the maximum service pension amount for each pension payment type 
 78.28  must be determined using the applicable table contained in this 
 78.29  subdivision. 
 78.30     (f) If a relief association establishes a service pension 
 78.31  in compliance with the applicable maximum contained in paragraph 
 78.32  (c) or (d) and the minimum average amount of available financing 
 78.33  per active covered firefighter is subsequently reduced because 
 78.34  of a reduction in fire state aid or because of an increase in 
 78.35  the number of active firefighters, the relief association may 
 78.36  continue to provide the prior service pension amount specified 
 79.1   in its bylaws, but may not increase the service pension amount 
 79.2   until the minimum average amount of available financing per 
 79.3   firefighter under the table in paragraph (c) or (d), whichever 
 79.4   applies, permits. 
 79.5      (g) No relief association is authorized to provide a 
 79.6   service pension in an amount greater than $30 $40 per month per 
 79.7   year of service credit or in an amount greater 
 79.8   than $3,375 $5,500 lump sum per year of service credit before 
 79.9   January 1, 1994, $3,500 lump sum per year of service credit 
 79.10  before January 1, 1995, $3,750 lump sum per year of service 
 79.11  credit before January 1, 1996, and $4,000 lump sum per year of 
 79.12  service credit after December 31, 1995, even if the minimum 
 79.13  average amount of available financing per firefighter for a 
 79.14  relief association providing a monthly benefit service pension 
 79.15  is greater than $2,240 $4,137, or, for a relief association 
 79.16  providing a lump sum service pension, is greater than $1,753 
 79.17  before January 1, 1994, $1,888 before January 1, 1995, $2,023 
 79.18  before January 1, 1996, or $2,158 after December 31, 1995 $2,967.
 79.19     Sec. 2.  [EFFECTIVE DATE.] 
 79.20     Section 1 is effective for pensions payable after December 
 79.21  31, 1997. 
 79.22                             ARTICLE 7 
 79.23         RETIREMENT COVERAGE MODIFICATIONS FOR TRANSFERRED 
 79.24      UNIVERSITY OF MINNESOTA ACADEMIC HEALTH CENTER EMPLOYEES 
 79.25     Section 1.  Minnesota Statutes 1996, section 352F.02, 
 79.26  subdivision 3, is amended to read: 
 79.27     Subd. 3.  [EFFECTIVE DATE.] "Effective date" is the date 
 79.28  terminated hospital employees transfer employment to Fairview 
 79.29  under a definitive integration agreement between the University 
 79.30  of Minnesota and Fairview or the date terminated academic health 
 79.31  center employees are transferred to the University of Minnesota 
 79.32  Physicians or University Affiliated Family Physicians, whichever 
 79.33  is applicable. 
 79.34     Sec. 2.  Minnesota Statutes 1996, section 352F.02, 
 79.35  subdivision 6, is amended to read: 
 79.36     Subd. 6.  [TERMINATED HOSPITAL EMPLOYEE.] "Terminated 
 80.1   hospital employee" means a person who: 
 80.2      (1) was employed on the day before the effective date by 
 80.3   the University of Minnesota at the University of Minnesota 
 80.4   hospital and clinics or the academic health center and was paid 
 80.5   on a biweekly payroll; 
 80.6      (2) terminated employment with the University of Minnesota 
 80.7   on the day before the effective date or in the case of employees 
 80.8   of the academic health center, terminated employment with the 
 80.9   University of Minnesota after the effective date but immediately 
 80.10  transferred employment to the University of Minnesota Physicians 
 80.11  or University Affiliated Family Physicians; and 
 80.12     (3) was a participant in the general state employees 
 80.13  retirement plan of the Minnesota state retirement system at the 
 80.14  time of termination of employment with the University of 
 80.15  Minnesota. 
 80.16     Sec. 3.  Minnesota Statutes 1996, section 352F.02, is 
 80.17  amended by adding a subdivision to read: 
 80.18     Subd. 9.  [ACADEMIC HEALTH CENTER.] "Academic health center"
 80.19  means the seven professional schools in health care related 
 80.20  disciplines at the University of Minnesota. 
 80.21     Sec. 4.  Minnesota Statutes 1996, section 352F.02, is 
 80.22  amended by adding a subdivision to read: 
 80.23     Subd. 10.  [UNIVERSITY OF MINNESOTA 
 80.24  PHYSICIANS.] "University of Minnesota Physicians" means the 
 80.25  multi-specialty single group medical practice group in which 
 80.26  medical school faculty will practice medicine beginning in 1997. 
 80.27     Sec. 5.  Minnesota Statutes 1996, section 352F.02, is 
 80.28  amended by adding a subdivision to read: 
 80.29     Subd. 11.  [UNIVERSITY AFFILIATED FAMILY PHYSICIANS.] 
 80.30  "University affiliated family physicians" means the private 
 80.31  practice group of the department of family practice in the 
 80.32  university's medical school. 
 80.33     Sec. 6.  Minnesota Statutes 1996, section 352F.03, is 
 80.34  amended to read: 
 80.35     352F.03 [VESTING RULE FOR CERTAIN EMPLOYEES.] 
 80.36     Notwithstanding any provision of chapter 352 to the 
 81.1   contrary, a terminated hospital employee or academic health 
 81.2   center employee is eligible to receive a retirement annuity 
 81.3   under Minnesota Statutes 1994, section 352.115, without regard 
 81.4   to the requirement for three years of allowable service. 
 81.5      Sec. 7.  Minnesota Statutes 1996, section 352F.04, is 
 81.6   amended to read: 
 81.7      352F.04 [AUGMENTATION INTEREST RATE FOR TERMINATED 
 81.8   UNIVERSITY HOSPITAL EMPLOYEES.] 
 81.9      The deferred annuity of a terminated hospital employee is 
 81.10  subject to augmentation in accordance with Minnesota Statutes 
 81.11  1994, section 352.72, subdivision 2, except that the rate of 
 81.12  interest for this purpose is 5.5 percent compounded annually 
 81.13  until January 1 following the year in which such person attains 
 81.14  age 55.  From that date to the effective date of retirement, the 
 81.15  rate is 7.5 percent.  These increased augmentation rates are no 
 81.16  longer applicable for any time after the terminated 
 81.17  hospital employee or academic health center employee becomes 
 81.18  covered again by a retirement fund enumerated in section 356.30, 
 81.19  subdivision 3.  These increased deferred annuity augmentation 
 81.20  rates do not apply to a terminated transferred hospital employee 
 81.21  or academic health center employee who begins receipt of a 
 81.22  retirement annuity while employed by Fairview. 
 81.23     Sec. 8.  Minnesota Statutes 1996, section 352F.05, is 
 81.24  amended to read: 
 81.25     352F.05 [AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR 
 81.26  CERTAIN EARLY RETIREMENT PURPOSES.] 
 81.27     For purpose of determining eligibility for early retirement 
 81.28  benefits provided under Minnesota Statutes 1994, section 
 81.29  352.116, subdivision 1, paragraphs (a) and (b), and 
 81.30  notwithstanding any provision of chapter 352 to the contrary, 
 81.31  the years of allowable service for a terminated hospital 
 81.32  employee who transfers to employment at Fairview, University of 
 81.33  Minnesota Physicians, or University Affiliated Family Physicians 
 81.34  on the effective date and does not apply for a refund of 
 81.35  contributions under Minnesota Statutes 1994, section 352.22, 
 81.36  subdivision 2, or any similar provision in future Minnesota 
 82.1   Statutes, includes service with Fairview, University of 
 82.2   Minnesota Physicians, or University Affiliated Family Physicians 
 82.3   following the effective date.  Fairview, University of Minnesota 
 82.4   Physicians, or University Affiliated Family Physicians shall 
 82.5   provide any reports that the executive director of the Minnesota 
 82.6   state retirement system may reasonably request to permit 
 82.7   calculation of benefits. 
 82.8      To be eligible for early retirement benefits under this 
 82.9   section, the individual must separate from service with 
 82.10  Fairview, University of Minnesota Physicians, or University 
 82.11  Affiliated Family Physicians.  The terminated eligible 
 82.12  individual, or an individual authorized to act on behalf of that 
 82.13  individual, may apply for an annuity following application 
 82.14  procedures under section 352.115, subdivision 7. 
 82.15     Sec. 9.  Minnesota Statutes 1996, section 352F.06, is 
 82.16  amended to read: 
 82.17     352F.06 [APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 
 82.18  LIMITATIONS.] 
 82.19     The reemployed annuitant earnings limitations of section 
 82.20  352.115, subdivision 10, apply to any service by a terminated 
 82.21  hospital employee as an employee of Fairview, University of 
 82.22  Minnesota Physicians, or University Affiliated Family Physicians.
 82.23     Sec. 10.  Minnesota Statutes 1996, section 352F.07, is 
 82.24  amended to read: 
 82.25     352F.07 [EFFECT ON REFUND.] 
 82.26     Notwithstanding any provision of chapter 352 to the 
 82.27  contrary, terminated hospital employees may receive a refund of 
 82.28  employee accumulated contributions plus interest at the rate of 
 82.29  six percent per year compounded annually in accordance with 
 82.30  Minnesota Statutes 1994, section 352.22, subdivision 2, at any 
 82.31  time after the transfer of employment to Fairview, University of 
 82.32  Minnesota Physicians, or University Affiliated Family 
 82.33  Physicians.  If a terminated hospital employee has received a 
 82.34  refund from a pension plan enumerated in section 356.30, 
 82.35  subdivision 3, the person may not repay that refund unless the 
 82.36  person again becomes a member of one of those enumerated plans 
 83.1   and complies with section 356.30, subdivision 2.  
 83.2      Sec. 11.  Minnesota Statutes 1996, section 352F.08, is 
 83.3   amended to read: 
 83.4      352F.08 [COUNSELING SERVICES.] 
 83.5      The University of Minnesota hospital and clinics or the 
 83.6   academic health center, whichever is applicable and the 
 83.7   Minnesota state retirement system shall provide terminated 
 83.8   hospital employees with counseling on their benefits available 
 83.9   under the general state employees retirement plan of the 
 83.10  Minnesota state retirement system. 
 83.11     Sec. 12.  [EFFECTIVE DATE.] 
 83.12     Sections 1 to 11 are effective the day following final 
 83.13  enactment. 
 83.14                             ARTICLE 8 
 83.15                 GENERAL STATEWIDE EMPLOYEE PENSION 
 83.16                         PLAN MODIFICATIONS 
 83.17     Section 1.  Minnesota Statutes 1996, section 136F.45, is 
 83.18  amended by adding a subdivision to read: 
 83.19     Subd. 3.  [TAX-SHELTERED ANNUITY ADMINISTRATIVE 
 83.20  EXPENSES.] (a) The reasonable and necessary administrative 
 83.21  expenses of the tax-sheltered annuity program, to a maximum of 
 83.22  $100,000 annually, must be paid by the financial institutions 
 83.23  authorized by the board of trustees of the Minnesota state 
 83.24  colleges and universities system to provide tax-sheltered 
 83.25  annuity investment options. 
 83.26     (b) Annually, the board of trustees shall establish a 
 83.27  budget for the tax-sheltered annuity program administrative 
 83.28  expenses.  The total budgeted administrative expense must be 
 83.29  allocated among the applicable financial institutions by the 
 83.30  board of trustees. 
 83.31     Sec. 2.  Minnesota Statutes 1996, section 136F.45, is 
 83.32  amended by adding a subdivision to read: 
 83.33     Subd. 4.  [PERIODIC REVIEW.] If the board so chooses, it 
 83.34  may solicit bids or proposals for options under subdivision 1.  
 83.35  The board may retain consulting services to assist it in 
 83.36  soliciting and evaluating bids or proposals and in the periodic 
 84.1   review of companies offering options under subdivision 1.  The 
 84.2   board may annually establish a budget for its costs in the 
 84.3   soliciting, evaluating, and periodic review processes.  The 
 84.4   board may charge a proportional share of all costs related to 
 84.5   the periodic review to each company currently under contract and 
 84.6   may charge a proportional share of all costs related to 
 84.7   soliciting and evaluating bids or proposals to each company 
 84.8   selected by the board.  Contracts must provide that all options 
 84.9   in subdivision 1 must:  (1) be presented in an unbiased manner, 
 84.10  (2) be reported on a periodic basis to all employees 
 84.11  participating in the tax-sheltered annuity program, and (3) not 
 84.12  be the subject of unreasonable solicitation of state employees 
 84.13  to participate in the program.  The contract may not permit any 
 84.14  person to jeopardize the tax-deferred status of money invested 
 84.15  by state employees under this section.  All costs or fees in 
 84.16  relation to the bid solicitation and evaluation process for the 
 84.17  options provided under subdivision 1 must be paid by the 
 84.18  underwriting companies ultimately selected by the board. 
 84.19     Sec. 3.  Minnesota Statutes 1996, section 352.01, 
 84.20  subdivision 2a, is amended to read: 
 84.21     Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
 84.22  includes: 
 84.23     (1) employees of the Minnesota historical society; 
 84.24     (2) employees of the state horticultural society; 
 84.25     (3) employees of the Disabled American Veterans, Department 
 84.26  of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
 84.27  if employed before July 1, 1963; 
 84.28     (4) employees of the Minnesota crop improvement 
 84.29  association; 
 84.30     (5) employees of the adjutant general who are paid from 
 84.31  federal funds and who are not covered by any federal civilian 
 84.32  employees retirement system; 
 84.33     (6) employees of the state universities employed under the 
 84.34  university activities program; 
 84.35     (7) currently contributing employees covered by the system 
 84.36  who are temporarily employed by the legislature during a 
 85.1   legislative session or any currently contributing employee 
 85.2   employed for any special service as defined in clause (8) of 
 85.3   subdivision 2b; 
 85.4      (8) employees of the armory building commission; 
 85.5      (9) permanent employees of the legislature and persons 
 85.6   employed or designated by the legislature or by a legislative 
 85.7   committee or commission or other competent authority to conduct 
 85.8   a special inquiry, investigation, examination, or installation; 
 85.9      (10) trainees who are employed on a full-time established 
 85.10  training program performing the duties of the classified 
 85.11  position for which they will be eligible to receive immediate 
 85.12  appointment at the completion of the training period; 
 85.13     (11) employees of the Minnesota safety council; 
 85.14     (12) any employees on authorized leave of absence from the 
 85.15  transit operating division of the former metropolitan transit 
 85.16  commission who are employed by the labor organization which is 
 85.17  the exclusive bargaining agent representing employees of the 
 85.18  transit operating division; 
 85.19     (13) employees of the metropolitan council, metropolitan 
 85.20  parks and open space commission, metropolitan sports facilities 
 85.21  commission, metropolitan mosquito control commission, or 
 85.22  metropolitan radio board unless excluded or covered by another 
 85.23  public pension fund or plan under section 473.415, subdivision 
 85.24  3; 
 85.25     (14) judges of the tax court; and 
 85.26     (15) personnel employed on June 30, 1992, by the University 
 85.27  of Minnesota in the management, operation, or maintenance of its 
 85.28  heating plant facilities, whose employment transfers to an 
 85.29  employer assuming operation of the heating plant facilities, so 
 85.30  long as the person is employed at the University of Minnesota 
 85.31  heating plant by that employer or by its successor organization; 
 85.32     (16) seasonal help in the classified service employed by 
 85.33  the department of revenue; and 
 85.34     (17) a person who renders teaching or other service for the 
 85.35  Minnesota state colleges and universities system and who also 
 85.36  renders service on a part-time basis for an employer with 
 86.1   employees covered by the general state employees retirement plan 
 86.2   of the Minnesota state retirement system, for all service with 
 86.3   the Minnesota state colleges and universities system, if the 
 86.4   person's nonteaching service comprises at least 50 percent of 
 86.5   the combined total salary received by the person as determined 
 86.6   by the chancellor of the Minnesota state colleges and 
 86.7   universities system or if the person is certified for general 
 86.8   state employees retirement plan coverage by the chancellor of 
 86.9   the Minnesota state colleges and universities system. 
 86.10     (b) Employees specified in paragraph (a), clause (15), are 
 86.11  included employees under paragraph (a) providing that if 
 86.12  employer and employee contributions are made in a timely manner 
 86.13  in the amounts required by section 352.04.  Employee 
 86.14  contributions must be deducted from salary.  Employer 
 86.15  contributions are the sole obligation of the employer assuming 
 86.16  operation of the University of Minnesota heating plant 
 86.17  facilities or any successor organizations to that employer. 
 86.18     Sec. 4.  Minnesota Statutes 1996, section 352.01, 
 86.19  subdivision 2b, is amended to read: 
 86.20     Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
 86.21  include: 
 86.22     (1) elective state officers; 
 86.23     (2) students employed by the University of Minnesota, the 
 86.24  state universities, and community colleges unless approved for 
 86.25  coverage by the board of regents, the state university board, or 
 86.26  the state board for community colleges, as the case may be; 
 86.27     (3) employees who are eligible for membership in the state 
 86.28  teachers retirement association except employees of the 
 86.29  department of children, families, and learning who have chosen 
 86.30  or may choose to be covered by the Minnesota state retirement 
 86.31  system instead of the teachers retirement association; 
 86.32     (4) employees of the University of Minnesota who are 
 86.33  excluded from coverage by action of the board of regents; 
 86.34     (5) officers and enlisted personnel in the national guard 
 86.35  and the naval militia who are assigned to permanent peacetime 
 86.36  duty and who under federal law are or are required to be members 
 87.1   of a federal retirement system; 
 87.2      (6) election officers; 
 87.3      (7) persons engaged in public work for the state but 
 87.4   employed by contractors when the performance of the contract is 
 87.5   authorized by the legislature or other competent authority; 
 87.6      (8) officers and employees of the senate and house of 
 87.7   representatives or a legislative committee or commission who are 
 87.8   temporarily employed; 
 87.9      (9) receivers, jurors, notaries public, and court employees 
 87.10  who are not in the judicial branch as defined in section 43A.02, 
 87.11  subdivision 25, except referees and adjusters employed by the 
 87.12  department of labor and industry; 
 87.13     (10) patient and inmate help in state charitable, penal, 
 87.14  and correctional institutions including the Minnesota veterans 
 87.15  home; 
 87.16     (11) persons employed for professional services where the 
 87.17  service is incidental to regular professional duties and whose 
 87.18  compensation is paid on a per diem basis; 
 87.19     (12) employees of the Sibley House Association; 
 87.20     (13) the members of any state board or commission who serve 
 87.21  the state intermittently and are paid on a per diem basis; the 
 87.22  secretary, secretary-treasurer, and treasurer of those boards if 
 87.23  their compensation is $5,000 or less per year, or, if they are 
 87.24  legally prohibited from serving more than three years; and the 
 87.25  board of managers of the state agricultural society and its 
 87.26  treasurer unless the treasurer is also its full-time secretary; 
 87.27     (14) state troopers; 
 87.28     (15) temporary employees of the Minnesota state fair 
 87.29  employed on or after July 1 for a period not to extend beyond 
 87.30  October 15 of that year; and persons employed at any time by the 
 87.31  state fair administration for special events held on the 
 87.32  fairgrounds; 
 87.33     (16) emergency employees in the classified service; except 
 87.34  that if an emergency employee, within the same pay period, 
 87.35  becomes a provisional or probationary employee on other than a 
 87.36  temporary basis, the employee shall be considered a "state 
 88.1   employee" retroactively to the beginning of the pay period; 
 88.2      (17) persons described in section 352B.01, subdivision 2, 
 88.3   clauses (2) to (5); 
 88.4      (18) temporary employees in the classified service, and 
 88.5   temporary employees in the unclassified service appointed for a 
 88.6   definite period of not more than six months and employed less 
 88.7   than six months in any one-year period and seasonal help in the 
 88.8   classified service employed by the department of revenue; 
 88.9      (19) trainee employees, except those listed in subdivision 
 88.10  2a, clause (10); 
 88.11     (20) persons whose compensation is paid on a fee basis; 
 88.12     (21) state employees who in any year have credit for 12 
 88.13  months service as teachers in the public schools of the state 
 88.14  and as teachers are members of the teachers retirement 
 88.15  association or a retirement system in St. Paul, Minneapolis, or 
 88.16  Duluth; 
 88.17     (22) employees of the adjutant general employed on an 
 88.18  unlimited intermittent or temporary basis in the classified and 
 88.19  unclassified service for the support of army and air national 
 88.20  guard training facilities; 
 88.21     (23) chaplains and nuns who are excluded from coverage 
 88.22  under the federal Old Age, Survivors, Disability, and Health 
 88.23  Insurance Program for the performance of service as specified in 
 88.24  United States Code, title 42, section 410(a)(8)(A), as amended, 
 88.25  if no irrevocable election of coverage has been made under 
 88.26  section 3121(r) of the Internal Revenue Code of 1986, as amended 
 88.27  through December 31, 1992; 
 88.28     (24) examination monitors employed by departments, 
 88.29  agencies, commissions, and boards to conduct examinations 
 88.30  required by law; 
 88.31     (25) persons appointed to serve as members of fact-finding 
 88.32  commissions or adjustment panels, arbitrators, or labor referees 
 88.33  under chapter 179; 
 88.34     (26) temporary employees employed for limited periods under 
 88.35  any state or federal program for training or rehabilitation 
 88.36  including persons employed for limited periods from areas of 
 89.1   economic distress except skilled and supervisory personnel and 
 89.2   persons having civil service status covered by the system; 
 89.3      (27) full-time students employed by the Minnesota 
 89.4   historical society intermittently during part of the year and 
 89.5   full-time during the summer months; 
 89.6      (28) temporary employees, appointed for not more than six 
 89.7   months, of the metropolitan council and of any of its statutory 
 89.8   boards, if the board members are appointed by the metropolitan 
 89.9   council; 
 89.10     (29) persons employed in positions designated by the 
 89.11  department of employee relations as student workers; 
 89.12     (30) members of trades employed by the successor to the 
 89.13  metropolitan waste control commission with trade union pension 
 89.14  plan coverage under a collective bargaining agreement first 
 89.15  employed after June 1, 1977; 
 89.16     (31) persons employed in subsidized on-the-job training, 
 89.17  work experience, or public service employment as enrollees under 
 89.18  the federal Comprehensive Employment and Training Act after 
 89.19  March 30, 1978, unless the person has as of the later of March 
 89.20  30, 1978, or the date of employment sufficient service credit in 
 89.21  the retirement system to meet the minimum vesting requirements 
 89.22  for a deferred annuity, or the employer agrees in writing on 
 89.23  forms prescribed by the director to make the required employer 
 89.24  contributions, including any employer additional contributions, 
 89.25  on account of that person from revenue sources other than funds 
 89.26  provided under the federal Comprehensive Employment and Training 
 89.27  Act, or the person agrees in writing on forms prescribed by the 
 89.28  director to make the required employer contribution in addition 
 89.29  to the required employee contribution; 
 89.30     (32) off-duty peace officers while employed by the 
 89.31  metropolitan council; 
 89.32     (33) persons who are employed as full-time police officers 
 89.33  by the metropolitan council and as police officers are members 
 89.34  of the public employees police and fire fund; 
 89.35     (34) persons who are employed as full-time firefighters by 
 89.36  the department of military affairs and as firefighters are 
 90.1   members of the public employees police and fire fund; 
 90.2      (35) foreign citizens with a work permit of less than three 
 90.3   years, or an H-1b/JV visa valid for less than three years of 
 90.4   employment, unless notice of extension is supplied which allows 
 90.5   them to work for three or more years as of the date the 
 90.6   extension is granted, in which case they are eligible for 
 90.7   coverage from the date extended; and 
 90.8      (36) persons who are employed by the board of trustees of 
 90.9   the Minnesota state colleges and universities and who elect to 
 90.10  remain members of the public employees retirement association or 
 90.11  the Minneapolis employees retirement fund, whichever applies, 
 90.12  under section 136C.75. 
 90.13     Sec. 5.  Minnesota Statutes 1996, section 354B.21, 
 90.14  subdivision 3, is amended to read: 
 90.15     Subd 3.  [DEFAULT COVERAGE.] (a) If an eligible person 
 90.16  fails to elect coverage by the plan under subdivision 2 or if 
 90.17  the person fails to make a timely election, the following 
 90.18  retirement coverage applies: 
 90.19     (1) for employees of the board who are employed in faculty 
 90.20  positions in the technical colleges, in the state universities 
 90.21  or in the community colleges, the retirement coverage is by the 
 90.22  plan established by this chapter; 
 90.23     (2) for employees of the board who are employed in faculty 
 90.24  positions in the technical colleges, the retirement coverage is 
 90.25  by the plan established by this chapter unless on June 30, 1997, 
 90.26  the employee was a member of the teachers retirement association 
 90.27  established under chapter 354 and then the retirement coverage 
 90.28  is by the teachers retirement association, or, unless the 
 90.29  employee was a member of a first class city teacher retirement 
 90.30  fund established under chapter 354A on June 30, 1995, and then 
 90.31  the retirement coverage is by the Duluth teachers retirement 
 90.32  fund association if the person was a member of that plan on June 
 90.33  30, 1995, or the Minneapolis teachers retirement fund 
 90.34  association if the person was a member of that plan on June 30, 
 90.35  1995, or the St. Paul teachers retirement fund association if 
 90.36  the person was a member of that plan on June 30, 1995; and 
 91.1      (3) for employees of the board who are employed in eligible 
 91.2   unclassified administrative positions, the retirement coverage 
 91.3   is by the plan established by this chapter. 
 91.4      (b) If an employee fails to correctly certify prior 
 91.5   membership in the teachers retirement association to the 
 91.6   Minnesota state colleges and universities system, the system 
 91.7   shall not pay interest on employee contributions, employer 
 91.8   contributions, and additional employer contributions to the 
 91.9   teachers retirement association under section 354.52, 
 91.10  subdivision 4. 
 91.11     Sec. 6.  Minnesota Statutes 1996, section 354C.11, is 
 91.12  amended to read: 
 91.13     354C.11 [COVERAGE.] 
 91.14     Personnel employed by the board of trustees of the 
 91.15  Minnesota state colleges and universities who are in the 
 91.16  unclassified service of the state, and who have completed at 
 91.17  least two years of employment by the board or a predecessor 
 91.18  board with a full-time contract are participants in the 
 91.19  supplemental retirement plan, effective on the next following 
 91.20  July 1, if the person is employed in an eligible unclassified 
 91.21  administrative position as defined in section 354B.20, 
 91.22  subdivision 6, or is employed in an employment classification 
 91.23  included in one of the following collective bargaining units 
 91.24  under section 179A.10, subdivision 2: 
 91.25     (1) the state university instructional unit; 
 91.26     (2) the community college instructional unit; 
 91.27     (3) the technical college instructional unit; and 
 91.28     (4) the state university administrative unit. 
 91.29     Once a person qualifies for participation in the 
 91.30  supplemental plan, all subsequent service by the person as an 
 91.31  unclassified employee of the state university board, the state 
 91.32  board for community colleges, the higher education board, or the 
 91.33  technical colleges is covered by the supplemental plan. 
 91.34     Sec. 7.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION.] 
 91.35     Subdivision 1.  [ELIGIBLE EMPLOYEE.] (a) An eligible 
 91.36  employee described in paragraph (b) is eligible to purchase 
 92.1   service credit in the Minnesota state retirement system general 
 92.2   plan as specified in subdivision 2. 
 92.3      (b) An eligible employee is a person who: 
 92.4      (1) is employed in the classified service by the department 
 92.5   of revenue as seasonal help, newly authorized to receive 
 92.6   prospective service credit under section 3; and 
 92.7      (2) was employed in the classified service by the 
 92.8   department of revenue as seasonal help in each of the last three 
 92.9   fiscal years. 
 92.10     Subd. 2.  [RETIREMENT COVERAGE.] An eligible employee under 
 92.11  subdivision 1, paragraph (b), is entitled to purchase service 
 92.12  credit in the Minnesota state retirement system general plan for 
 92.13  the period of service prior to the effective date of section 3 
 92.14  as seasonal help in the classified service by the department of 
 92.15  revenue.  Any period for which the individual has received 
 92.16  service credit or is eligible to receive service credit in any 
 92.17  other Minnesota public pension plan, other than a volunteer fire 
 92.18  plan, is not eligible for purchase. 
 92.19     Subd. 3.  [AMOUNT.] (a) To receive service credit under 
 92.20  subdivision 2, the Minnesota state retirement system must 
 92.21  receive an amount equal to the actuarial present value, on the 
 92.22  date of payment, as calculated by the actuary retained by the 
 92.23  legislative commission on pensions and retirement, of the amount 
 92.24  of the additional retirement annuity obtained by the acquisition 
 92.25  of the additional service credit in this section.  Calculation 
 92.26  of this amount must be made using the preretirement interest 
 92.27  rate applicable to the Minnesota state retirement system general 
 92.28  plan specified in Minnesota Statutes, section 356.215, 
 92.29  subdivision 4d, and the mortality table adopted for the pension 
 92.30  plan.  The calculation must assume continuous future service in 
 92.31  the association until, and retirement at, the age at which the 
 92.32  minimum requirements of the fund for normal retirement or 
 92.33  retirement with an annuity unreduced for retirement at an early 
 92.34  age, including Minnesota Statutes, section 356.30, are met with 
 92.35  the additional service credit purchased.  The calculation must 
 92.36  assume that the individual accrues future service credit each 
 93.1   year based on a three year average using the most recent three 
 93.2   year period prior to the effective date of section 3 for service 
 93.3   provided compared to full-time service.  The salary used in the 
 93.4   calculation must be the eligible person's actual current hourly 
 93.5   salary.  The calculation must assume a future salary history 
 93.6   that includes annual salary increases at the applicable salary 
 93.7   increase rate for the plan specified in Minnesota Statutes, 
 93.8   section 356.215, subdivision 4d. 
 93.9      (b) Payment must be made in one lump sum before July 1, 
 93.10  1998, or before retirement, whichever is earlier. 
 93.11     (c) Payment of the amount calculated under this subdivision 
 93.12  must be made by the eligible employee.  However, the Minnesota 
 93.13  department of revenue may, at its discretion, pay all or any 
 93.14  portion of the payment amount that exceeds an amount equal to 
 93.15  the employee contribution rates in effect during the periods of 
 93.16  prior service applied to the actual salary rates in effect 
 93.17  during the periods of prior service, plus interest at the rate 
 93.18  of 8-1/2 percent a year compounded annually from the date on 
 93.19  which the contributions would have been made if retirement 
 93.20  coverage were authorized at the time, to the date on which the 
 93.21  payment is made.  If the department agrees to payments under 
 93.22  this paragraph, the eligible employee must make the employee 
 93.23  payments required under this paragraph before July 1, 1998.  If 
 93.24  that employee payment is made, the department payment under this 
 93.25  paragraph must be remitted to the executive director of the 
 93.26  Minnesota state retirement system within 60 days of receipt by 
 93.27  the executive director of the employee payments specified under 
 93.28  this paragraph. 
 93.29     Subd. 4.  [SERVICE CREDIT GRANT.] Service credit for the 
 93.30  purchase period must be granted by the Minnesota state 
 93.31  retirement system to the account of the eligible employee upon 
 93.32  receipt of the purchase payment amount specified in subdivision 
 93.33  3. 
 93.34     Sec. 8.  [STUDY.] 
 93.35     The state board of investment, in consultation with the 
 93.36  commissioner of commerce, shall study and make recommendations 
 94.1   to the legislature on the most desirable method for evaluating 
 94.2   insurance companies for purposes of Minnesota Statutes, section 
 94.3   356.24, subdivision 1, and on the most desirable method for the 
 94.4   use of Internal Revenue Code, section 403(b), annuities and the 
 94.5   most effective delivery mechanism to employees.  The board shall 
 94.6   report to the legislative commission on pensions and retirement 
 94.7   by February 1, 1998. 
 94.8      Sec. 9.  [REPEALER.] 
 94.9      Laws 1995, chapter 262, article 1, sections 8, 9, 10, 11, 
 94.10  and 12, are repealed. 
 94.11     Sec. 10.  [EFFECTIVE DATE.] 
 94.12     Sections 1 to 9 are effective on July 1, 1997. 
 94.13                             ARTICLE 9 
 94.14                     PENSION MODIFICATIONS WITH 
 94.15                        A LOCAL APPLICATION 
 94.16     Section 1.  Minnesota Statutes 1996, section 423A.02, 
 94.17  subdivision 2, is amended to read: 
 94.18     Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
 94.19  qualified for amortization state aid under subdivision 1 on 
 94.20  December 31, 1984, and has an additional municipal contribution 
 94.21  payable under section 353A.09, subdivision 5, paragraph (b), as 
 94.22  of the most recent December 31, continues upon application to be 
 94.23  entitled to receive amortization state aid under subdivision 1 
 94.24  and supplementary amortization state aid under subdivision 1a, 
 94.25  after the local police or salaried firefighters' relief 
 94.26  association has been consolidated into the public employees 
 94.27  police and fire fund.  If a municipality loses entitlement for 
 94.28  amortization state aid and supplementary amortization state aid 
 94.29  in any year because of not having an additional municipal 
 94.30  contribution, the municipality is not entitled to the aid 
 94.31  amounts in any subsequent year.  If the actuarial assumptions 
 94.32  specified in section 356.215 are changed in 1997, and the change 
 94.33  results in a municipality having an additional municipal 
 94.34  contribution, and the municipality had previously lost 
 94.35  entitlement for amortization aid and supplementary amortization 
 94.36  due to not having an additional municipal contribution, then the 
 95.1   municipality is again entitled to receive amortization aid and 
 95.2   supplementary amortization aid in the same amount as it 
 95.3   previously received.  
 95.4      Sec. 2.  Minnesota Statutes 1996, section 423B.06, 
 95.5   subdivision 1, is amended to read: 
 95.6      Subdivision 1.  [SOURCES.] The fund is derived from the 
 95.7   following sources: 
 95.8      (1) gifts provided to the fund; 
 95.9      (2) rewards received by active members of the Minneapolis 
 95.10  police department; 
 95.11     (3) money coming into the hands of active members of the 
 95.12  Minneapolis police department in their official capacity and 
 95.13  remaining unclaimed for six months; 
 95.14     (4) proceeds from sales of property coming into the hands 
 95.15  of active members of the Minneapolis police department in their 
 95.16  official capacity and remaining unclaimed for six months, upon 
 95.17  sale by the chief of police of the city; 
 95.18     (5) an amount equal to the minimum percentage specified in 
 95.19  section 69.77, subdivision 2a, of the salary of a first grade 
 95.20  patrol officer deducted from the monthly salary of each active 
 95.21  member; 
 95.22     (6) all money derived from taxation as provided by sections 
 95.23  69.77, subdivisions 2b, 2c, 2d, 2e, and 2f; and 423A.01, 
 95.24  subdivision 2; 
 95.25     (7) all money received from the state amortization aid 
 95.26  programs under section 423A.02, to fund the unfunded actuarial 
 95.27  accrued liability of the association; 
 95.28     (8) all money received from the state under chapter 69, as 
 95.29  state police aid; 
 95.30     (9) all money provided by the state for the association in 
 95.31  addition to clauses (7) and (8); 
 95.32     (10) all money derived from taxation by the municipality 
 95.33  for the support of the association and the payment of pensions; 
 95.34  and 
 95.35     (11) money from the investment of, earnings on, and 
 95.36  interest on the assets of the fund. 
 96.1      Sec. 3.  Minnesota Statutes 1996, section 423B.06, 
 96.2   subdivision 1a, is amended to read: 
 96.3      Subd. 1a.  [SALES OF UNCLAIMED PROPERTY.] The chief of 
 96.4   police of the city shall sell property coming into the hands of 
 96.5   active members of the Minneapolis police department in their 
 96.6   official capacity and remaining unclaimed for six months.  
 96.7      Sec. 4.  [TEACHER RETIREMENT DATE.] 
 96.8      Notwithstanding Minnesota Statutes, section 354.44, 
 96.9   subdivision 4, teachers terminating active teaching service at 
 96.10  the high school in independent school district No. 701, Hibbing, 
 96.11  during June, 1997, shall have May 30, 1997, as their date of 
 96.12  retirement for the purpose of receiving retirement benefits from 
 96.13  the teachers retirement association. 
 96.14     Sec. 5.  [EFFECTIVE DATE.] 
 96.15     Sections 1 to 4 are effective on the day following final 
 96.16  enactment. 
 96.17                             ARTICLE 10 
 96.18                 INVESTMENT REPORTING MODIFICATIONS 
 96.19     Section 1.  Minnesota Statutes 1996, section 69.051, 
 96.20  subdivision 1, is amended to read: 
 96.21     Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
 96.22  each salaried firefighters' and relief association, police 
 96.23  relief association, and of each volunteer firefighters' relief 
 96.24  association as defined in section 424A.001, subdivision 4, with 
 96.25  assets of at least $200,000 or liabilities of at least $200,000, 
 96.26  according to the most recent actuarial valuation or financial 
 96.27  report if no valuation is required, shall:  
 96.28     (a) (1) Prepare a financial report covering the special and 
 96.29  general funds of the relief association for the preceding fiscal 
 96.30  year on a form prescribed by the state auditor.  The financial 
 96.31  report shall contain financial statements and disclosures which 
 96.32  present the true financial condition of the relief association 
 96.33  and the results of relief association operations in conformity 
 96.34  with generally accepted accounting principles and in compliance 
 96.35  with the regulatory, financing and funding provisions of this 
 96.36  chapter and any other applicable laws.  The financial report 
 97.1   shall be countersigned by the municipal clerk or clerk-treasurer 
 97.2   of the municipality in which the relief association is located 
 97.3   if the relief association is a firefighters' relief association 
 97.4   which is directly associated with a municipal fire department or 
 97.5   is a police relief association, or countersigned by the 
 97.6   secretary of the independent nonprofit firefighting corporation 
 97.7   and by the municipal clerk or clerk-treasurer of the largest 
 97.8   municipality in population which contracts with the independent 
 97.9   nonprofit firefighting corporation if the relief association is 
 97.10  a subsidiary of an independent nonprofit firefighting 
 97.11  corporation; 
 97.12     (b) (2) File the financial report in its office for public 
 97.13  inspection and present it to the city council after the close of 
 97.14  the fiscal year.  One copy of the financial report shall be 
 97.15  furnished to the state auditor after the close of the fiscal 
 97.16  year; and 
 97.17     (c) (3) Submit to the state auditor audited financial 
 97.18  statements which have been attested to by a certified public 
 97.19  accountant, public accountant, or the state auditor within 180 
 97.20  days after the close of the fiscal year, except that the state 
 97.21  auditor may upon request of a city and a showing of inability to 
 97.22  conform, extend the deadline.  The state auditor may accept this 
 97.23  report in lieu of the report required in clause (b) (2). 
 97.24     Sec. 2.  Minnesota Statutes 1996, section 69.051, 
 97.25  subdivision 1a, is amended to read: 
 97.26     Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
 97.27  volunteer firefighters' relief association and each independent 
 97.28  nonprofit firefighting corporation, as defined in section 
 97.29  424A.001, subdivision 4, with assets of less than $200,000 and 
 97.30  liabilities less than $200,000, according to the most recent 
 97.31  financial report, shall: 
 97.32     (a) prepare a detailed statement of the financial affairs 
 97.33  for the preceding fiscal year of the relief association's 
 97.34  special and general funds in the style and form prescribed by 
 97.35  the state auditor, for the preceding fiscal year showing all 
 97.36  money received, with the sources, and respective amounts 
 98.1   thereof.  The detailed statement must show the sources and 
 98.2   amounts of all money received; all disbursements for which 
 98.3   orders have been drawn upon the treasurer; all, accounts 
 98.4   payable; all and accounts receivable; the amount of money 
 98.5   remaining in the treasury; total assets including a listing of 
 98.6   all investments; the accrued liabilities; and all items 
 98.7   necessary to show accurately the revenues and expenditures and 
 98.8   financial position of the relief association;. 
 98.9      (b) The detailed financial statement required under 
 98.10  paragraph (a) shall must be certified by an independent public 
 98.11  accountant or auditor or by the auditor or accountant who 
 98.12  regularly examines or audits the financial transactions of the 
 98.13  municipality.  In addition to certifying the financial condition 
 98.14  of the special and general funds of the relief association, the 
 98.15  accountant or auditor conducting the examination shall give an 
 98.16  opinion as to the condition of the special and general funds of 
 98.17  the relief association, and shall comment upon any exceptions to 
 98.18  the report.  The independent accountant or auditor shall have at 
 98.19  least five years of public accounting, auditing, or similar 
 98.20  experience, and shall not be an active, inactive, or retired 
 98.21  member of the relief association or the fire or police 
 98.22  department;. 
 98.23     (c) The detailed statement required under paragraph (a) 
 98.24  shall must be countersigned by the municipal clerk or 
 98.25  clerk-treasurer of the municipality, or, where applicable, by 
 98.26  the secretary of the independent nonprofit firefighting 
 98.27  corporation and by the municipal clerk or clerk-treasurer of the 
 98.28  largest municipality in population which contracts with the 
 98.29  independent nonprofit firefighting corporation if the relief 
 98.30  association is a subsidiary of an independent nonprofit 
 98.31  firefighting corporation;. 
 98.32     (d) The volunteer firefighters' relief association board 
 98.33  must file the detailed statement required under paragraph (a) in 
 98.34  the relief association office for public inspection and present 
 98.35  it to the city council within 45 days after the close of the 
 98.36  fiscal year;, and must 
 99.1      (e) submit within 90 days after the close of the fiscal 
 99.2   year a copy of the detailed statement to the state auditor 
 99.3   within 90 days of the close of the fiscal year.  
 99.4      Sec. 3.  Minnesota Statutes 1996, section 69.051, 
 99.5   subdivision 1b, is amended to read: 
 99.6      Subd. 1b.  [QUALIFICATION.] The state auditor may, upon a 
 99.7   demonstration by a relief association of hardship or inability 
 99.8   to conform, extend the deadline for reports under subdivisions 1 
 99.9   or 1a, but not beyond November 30th following the due date.  If 
 99.10  the reports are not received by November 30th, the municipality 
 99.11  or relief association will forfeit its current year state aid, 
 99.12  and until the state auditor receives the required information, 
 99.13  the relief or municipality will be ineligible to receive any 
 99.14  future state aid.  A municipality or police or firefighters' 
 99.15  relief association shall not qualify initially to receive, or be 
 99.16  entitled subsequently to retain, state aid pursuant to this 
 99.17  chapter if the financial reporting requirement or the applicable 
 99.18  requirements of this chapter or any other statute or special law 
 99.19  have not been complied with or are not fulfilled.  
 99.20     Sec. 4.  Minnesota Statutes 1996, section 356.219, is 
 99.21  amended to read: 
 99.22     356.219 [DISCLOSURE OF ADDITIONAL PUBLIC PENSION PLAN 
 99.23  INVESTMENT INFORMATION.] 
 99.24     Subdivision 1.  [REPORT REQUIRED.] (a) Except as indicated 
 99.25  in subdivision 4, the state board of investment on behalf of the 
 99.26  public pension funds and programs for which it is the investment 
 99.27  authority and any Minnesota public pension plan not wholly fully 
 99.28  invested through the state board of investment, including a 
 99.29  local police or firefighters' relief association governed by 
 99.30  sections 69.77 or 69.771 to 69.775, shall report the information 
 99.31  specified in subdivision 2 3 to the state auditor.  The state 
 99.32  auditor may prescribe a form or forms for the purposes of the 
 99.33  reporting requirements contained in this section. 
 99.34     (b) A local police or firefighters' relief association 
 99.35  governed by section 69.77 or sections 69.771 to 69.775 is fully 
 99.36  invested during a given calendar year for purposes of this 
100.1   section if all assets of the applicable pension plan beyond 
100.2   sufficient cash equivalent investments to cover six months 
100.3   expected expenses are invested under section 11A.17.  The board 
100.4   of any fully invested public pension plan remains responsible 
100.5   for submitting investment policy statements and subsequent 
100.6   revisions as required by subdivision 3, paragraph (a). 
100.7      (c) For purposes of this section, the state board of 
100.8   investment is considered to be the investment authority for any 
100.9   Minnesota public pension fund required to be invested by the 
100.10  state board of investment under section 11A.23, or for any 
100.11  Minnesota public pension fund authorized to invest in the 
100.12  supplemental investment fund under section 11A.17 and which is 
100.13  fully invested. 
100.14     Subd. 2.  [ASSET CLASS DEFINITION.] (a) For purposes of 
100.15  this section, "asset class" means any of the following asset 
100.16  groupings as authorized in applicable law, by-laws, or articles 
100.17  of incorporation: 
100.18     (1) cash and any cash equivalent investments with 
100.19  maturities of one year or less when issued; 
100.20     (2) debt securities with maturities greater than one year 
100.21  when issued, including but not limited to mortgage participation 
100.22  certificates and pools, asset backed securities, guaranteed 
100.23  investment contracts, and authorized government and corporate 
100.24  obligations of corporations organized under laws of the United 
100.25  States or any state, or the Dominion of Canada or its provinces; 
100.26     (3) stocks or convertible issues of any corporation 
100.27  organized under laws of the United States or any state, or the 
100.28  Dominion of Canada or its provinces, or any corporation listed 
100.29  on the New York Stock Exchange or the American Stock Exchange; 
100.30     (4) international stocks or convertible issues; 
100.31     (5) international debt securities; and 
100.32     (6) real estate and venture capital. 
100.33     (b) If the pension plan is investing under section 69.77, 
100.34  subdivision 2g, section 69.775, or other applicable law, in 
100.35  open-end investment companies registered under the federal 
100.36  Investment Company Act of 1940, or in the Minnesota supplemental 
101.1   investment fund under section 11A.17, this investment must be 
101.2   included under an asset class indicated in paragraph (a), 
101.3   clauses (1) through (6), as appropriate.  If the investment 
101.4   vehicle includes underlying securities from more than one asset 
101.5   class as indicated by paragraph (a), clauses (1) through (6), 
101.6   the investment may be treated as a separate asset class. 
101.7      Subd. 2 3.  [CONTENT AND TIMING OF REPORTS.] (a) The 
101.8   following information shall be included in the report required 
101.9   by subdivision 1: 
101.10     (1) the market value of all investments at the close of the 
101.11  reporting period; 
101.12     (2) regular payroll-based contributions to the fund 
101.13     (3) other contributions and revenue paid into the fund, 
101.14  including, but not limited to, state or local non-payroll-based 
101.15  contributions, repaid refunds, and buybacks; 
101.16     (4) total benefits paid to members; 
101.17     (5) fees paid for investment management services; 
101.18     (6) salaries and other administrative expenses paid; and 
101.19     (7) total return on investment. 
101.20     The report required by subdivision 1 must also include a 
101.21  written statement of the investment policy in effect on June 30, 
101.22  1988, and 1997, if that statement has not been previously 
101.23  submitted.  Following that date, subsequent reports must include 
101.24  any investment policy changes made subsequently and shall 
101.25  include the effective date of each policy change rather than a 
101.26  complete statement of investment policy, unless the state 
101.27  auditor requests submission of a complete current statement.  
101.28  The report must also include the information required by the 
101.29  following paragraphs, as applicable.  The information required 
101.30  under this subdivision must be reported separately for each 
101.31  investment account or investment portfolio included in the 
101.32  pension fund. 
101.33     (b) For public pension plans other than volunteer 
101.34  firefighters' relief associations governed by sections 69.77 or 
101.35  69.771 to 69.775, the information specified in paragraph (a) 
101.36  must be provided separately for each quarter for the fiscal 
102.1   years of the pension fund ending during calendar years 1989 
102.2   through 1991 and on a monthly basis thereafter.  For volunteer 
102.3   firefighters' relief associations governed by sections 69.77 or 
102.4   69.771 to 69.775, the information specified in paragraph (a) 
102.5   must be provided separately each quarter. 
102.6      (c) Firefighters' relief associations that have assets with 
102.7   a market value of less than $300,000 must submit a written 
102.8   statement of their current investment policy on or before 
102.9   October 1, 1996, must report any subsequent investment policy 
102.10  changes, including the effective date of the change, within 90 
102.11  days of the change, must begin collecting the required 
102.12  information under paragraph (a), clauses (1) to (7), on January 
102.13  1, 1997, and must submit the required information to the state 
102.14  auditor on or before October 1, 1998, and subsequently within 
102.15  six months of the end of each fiscal year.  Other associations 
102.16  must submit the required information through fiscal year 1993 to 
102.17  the state auditor on or before October 1, 1994, and subsequently 
102.18  within six months of the end of each fiscal year. 
102.19     (b) If a public pension plan has a total market value of 
102.20  $10 million or more as of the beginning of the calendar year, 
102.21  the report required by subdivision 1 must include the market 
102.22  value of the total portfolio and the market value of each 
102.23  investment account, investment portfolio, or asset class 
102.24  included in the pension fund as of the beginning of the calendar 
102.25  year and for each month, and the amount and date of each 
102.26  injection and withdrawal to the total portfolio and to each 
102.27  investment account, investment portfolio, or asset class.  If a 
102.28  public pension plan once files a report under this paragraph, it 
102.29  must continue reporting under this paragraph for any year in 
102.30  which the public pension plan is not fully invested as specified 
102.31  in subdivision 1, paragraph (b), even if asset values drop below 
102.32  $10 million in market value in a subsequent year. 
102.33     (c) For public pension plans to which paragraph (b) 
102.34  applies, the report required by subdivision 1 must also include 
102.35  a calculation of the total time-weighted rate of return 
102.36  available from index-matching investments assuming the asset 
103.1   class performance targets and target asset mix indicated in the 
103.2   written statement of investment policy.  The provided 
103.3   information must include a description of indices used in the 
103.4   analyses and an explanation of why those indices are 
103.5   appropriate.  This paragraph does not apply to any fully 
103.6   invested plan, as defined by subdivision 1, paragraph (b).  
103.7   Reporting by the state board of investment under this paragraph 
103.8   is limited to information on the Minnesota public pension plans 
103.9   required to be invested by the state board of investment under 
103.10  section 11A.23. 
103.11     (d) If a public pension plan has a total market value of 
103.12  less than $10 million as of the beginning of the calendar year 
103.13  and was never required to file under paragraph (b), the report 
103.14  required by subdivision 1 must include the amount and date of 
103.15  each total portfolio injection and withdrawal.  In addition, the 
103.16  report must include the market value of the total portfolio as 
103.17  of the beginning of the calendar year and for each quarter. 
103.18     (e) Any public pension plan reporting under paragraph (b) 
103.19  or (d) may include computed time-weighted rates of return with 
103.20  the report, in addition to all other required information, as 
103.21  applicable.  If returns are supplied, the individual who 
103.22  computed the returns must certify that the returns are net of 
103.23  all costs and fees, including investment management fees, and 
103.24  that the procedures used to compute the returns are consistent 
103.25  with bank administration institute studies of investment 
103.26  performance measurement and association of investment management 
103.27  and research presentation standards. 
103.28     (f) For public pension plans reporting under paragraph (d), 
103.29  the public pension plan must retain information specifying the 
103.30  date and amount of each injection and withdrawal to each 
103.31  investment account and investment portfolio.  The public pension 
103.32  plan must also retain the market value of each investment 
103.33  account and investment portfolio at the beginning of the 
103.34  calendar year and for each quarter.  Information that is 
103.35  required to be collected and retained for any given year or 
103.36  years under this paragraph must be submitted to the office of 
104.1   the state auditor if the office of the state auditor requests in 
104.2   writing that the information be submitted by a public pension 
104.3   plan or plans, or be submitted by the state board of investment 
104.4   for any plan or plans for which the state board of investment is 
104.5   the investment authority under this section.  If the state 
104.6   auditor requests information under this subdivision, and the 
104.7   public plan fails to comply, the pension plan will be subject to 
104.8   penalties under subdivision 5, unless penalties are waived by 
104.9   the state auditor under that subdivision. 
104.10     Subd. 4.  [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 
104.11  of requirements in subdivision 3, the applicable administration 
104.12  for the individual retirement account plans under chapters 354B 
104.13  and 354D and for the university of Minnesota faculty retirement 
104.14  plan shall submit computed time-weighted rates of return to the 
104.15  office of the state auditor.  These time-weighted rates of 
104.16  return must cover the most recent complete calendar year, and 
104.17  must be computed for each investment option available to plan 
104.18  members.  To the extent feasible, the returns must be computed 
104.19  net of all costs, fees, and charges, so that the computed return 
104.20  reflects the net time-weighted return available to the 
104.21  investor.  If this is not practical, the existence of any 
104.22  remaining cost, fee, or charge which could further lower the net 
104.23  return must be disclosed.  The procedures used to compute the 
104.24  returns must be consistent with bank administration institute 
104.25  studies of investment performance measurement and association of 
104.26  investment management and research presentation standards, or, 
104.27  if applicable, securities exchange commission requirements.  The 
104.28  individual who computes the returns must certify that the 
104.29  supplied returns comply with this subdivision.  The applicable 
104.30  plan administrator must also submit, with the return 
104.31  information, the total amounts invested by the plan members, in 
104.32  aggregate, in each investment option as of the last day of the 
104.33  calendar year. 
104.34     Subd. 3 5.  [PENALTY FOR NONCOMPLIANCE.] Failure to comply 
104.35  with the reporting requirements of this section shall result in 
104.36  a withholding of all state aid or state appropriation to which 
105.1   the pension plan may otherwise be directly or indirectly 
105.2   entitled until the pension plan has complied with the reporting 
105.3   requirements.  The state auditor shall instruct the 
105.4   commissioners of revenue and finance to withhold state aid or 
105.5   state appropriation from any pension plan that fails to comply 
105.6   with the reporting requirements contained in this section, until 
105.7   the pension plan has complied with the reporting 
105.8   requirements.  The state auditor may waive the withholding of 
105.9   state aid or state appropriations if the state auditor 
105.10  determines in writing that compliance would create an excessive 
105.11  hardship. 
105.12     The state auditor shall agree to waive the withholding of 
105.13  all state aid required by this subdivision for a volunteer 
105.14  firefighters' relief association governed by sections 69.77 or 
105.15  69.771 to 69.775 if: 
105.16     (1) the relief association certifies to the state auditor 
105.17  that the financial records necessary to comply with this 
105.18  reporting requirement for the fiscal years of the pension fund 
105.19  ending during calendar years 1991 to 1993 no longer exist; or 
105.20     (2) the state auditor determines that reconstructing 
105.21  historical financial data for the fiscal years of the pension 
105.22  fund ending during calendar years 1991 to 1993 would create an 
105.23  excessive hardship for the relief association. 
105.24     Subd. 4 6.  [INVESTMENT DISCLOSURE REPORT.] Using the 
105.25  information provided under subdivision 2, (a) The state auditor 
105.26  shall prepare an annual report to the legislature on 
105.27  the components of investment performance resulting from stages 
105.28  in the investment decision making process of the various public 
105.29  pension plans subject to this section.  The content of the 
105.30  report is specified in paragraphs (b) to (e). 
105.31     (b) For each public pension plan reporting under 
105.32  subdivision 3, paragraph (b), the state auditor shall compute 
105.33  and report total portfolio and asset class time-weighted rates 
105.34  of return, net of all costs and fees. 
105.35     (c) For each public pension plan reporting under 
105.36  subdivision 3, paragraph (d), the state auditor shall compute 
106.1   and report total portfolio time-weighted rates of return, net of 
106.2   all costs and fees.  If the state auditor has requested data for 
106.3   a plan under subdivision 3, paragraph (f), the state auditor may 
106.4   also compute and report asset class time-weighted rates of 
106.5   return, net of all costs and fees. 
106.6      (d) The report by the state auditor must include the 
106.7   information submitted by the pension plans under subdivision 3, 
106.8   paragraph (c), or a synopsis of that information. 
106.9      (e) The report by the state auditor may also include a 
106.10  presentation of multi-year performance, information collected 
106.11  under subdivision 4, and any other information or analysis 
106.12  deemed appropriate by the state auditor.  The state auditor may 
106.13  contract with a qualified consultant or consulting firm to 
106.14  perform the analysis and prepare the report required under this 
106.15  subdivision.  
106.16     Subd. 5 7.  [EXPENSE OF REPORT.] All expenses incurred 
106.17  relating to the investment disclosure report by the state 
106.18  auditor described in subdivision 4 6 must be borne by the office 
106.19  of the state auditor and may not be charged back to the entities 
106.20  described in subdivision subdivisions 1 or 4. 
106.21     Subd. 8.  [TIMING OF REPORTS.] (a) For salaried firefighter 
106.22  relief associations, police relief associations, and volunteer 
106.23  firefighter relief associations, the information required under 
106.24  this section must be submitted by the due date for reports 
106.25  required under section 69.051, subdivision 1 or 1a, as 
106.26  applicable.  If a relief association satisfies the definition of 
106.27  a fully invested plan under subdivision 1, paragraph (b), for 
106.28  the calendar year covered by the report required under section 
106.29  69.051, subdivision 1 or 1a, as applicable, the chief 
106.30  administrative officer of the covered pension plan shall certify 
106.31  compliance on a form prescribed by the state auditor.  The state 
106.32  auditor shall transmit annually to the state board of investment 
106.33  a list or lists of covered pension plans which submitted 
106.34  certifications, in order to facilitate reporting by the state 
106.35  board of investment under paragraph (c) of this subdivision. 
106.36     (b) For the Minneapolis teachers retirement fund 
107.1   association, the St. Paul teachers retirement fund association, 
107.2   the Duluth teachers retirement fund association, the Minneapolis 
107.3   employees retirement fund, the University of Minnesota faculty 
107.4   supplemental retirement plan, and the applicable administrators 
107.5   for the University of Minnesota faculty retirement plan and the 
107.6   individual retirement account plans under chapter 354B and 354D, 
107.7   the information required under this section must be submitted to 
107.8   the state auditor by June 1 of each year. 
107.9      (c) The state board of investment, on behalf of pension 
107.10  funds specified in subdivision 1, paragraph (c), must report 
107.11  information required under this section by September 1 of each 
107.12  year. 
107.13     Sec. 5.  Minnesota Statutes 1996, section 424A.02, 
107.14  subdivision 10, is amended to read: 
107.15     Subd. 10.  [LOCAL APPROVAL OF BYLAW AMENDMENTS; FILING 
107.16  REQUIREMENTS.] (a) Each relief association to which this section 
107.17  applies shall file a revised copy of its governing bylaws with 
107.18  the commissioner of commerce state auditor upon the adoption of 
107.19  any amendment to its governing bylaws by the relief association 
107.20  or upon the approval of any amendment to its governing bylaws 
107.21  granted by the governing body of each municipality served by the 
107.22  fire department to which the relief association is directly 
107.23  associated.  Failure of the relief association to file a copy of 
107.24  the bylaws or any bylaw amendments with the commissioner of 
107.25  commerce state auditor shall disqualify the municipality from 
107.26  the distribution of any future fire state aid until this filing 
107.27  requirement has been completed.  
107.28     (b) If the special fund of the relief association does not 
107.29  have a surplus over full funding pursuant to section 69.772, 
107.30  subdivision 3, clause (2), subclause (e), or 69.773, subdivision 
107.31  4, and if the municipality is required to provide financial 
107.32  support to the special fund of the relief association pursuant 
107.33  to section 69.772 or 69.773, no bylaw amendment which would 
107.34  affect the amount of, the manner of payment of, or the 
107.35  conditions for qualification for service pensions or ancillary 
107.36  benefits or disbursements other than administrative expenses 
108.1   authorized pursuant to section 69.80 payable from the special 
108.2   fund of the relief association shall be effective until it has 
108.3   been ratified by the governing body or bodies of the appropriate 
108.4   municipalities.  If the municipality is not required to provide 
108.5   financial support to the special fund pursuant to this section, 
108.6   the relief association may adopt or amend without municipal 
108.7   ratification its articles of incorporation or bylaws which 
108.8   increase or otherwise affect the service pensions or ancillary 
108.9   benefits payable from the special fund so long as the changes do 
108.10  not cause the amount of the resulting increase in the accrued 
108.11  liability of the special fund to exceed 90 percent of the amount 
108.12  of the prior surplus over full funding and the changes do not 
108.13  result in the financial requirements of the special fund 
108.14  exceeding the expected amount of the future fire state aid to be 
108.15  received by the relief association.  
108.16     (c) If the relief association pays only a lump sum pension, 
108.17  the financial requirements are to be determined by the board of 
108.18  trustees following the preparation of an estimate of the 
108.19  expected increase in the accrued liability and annual accruing 
108.20  liability of the relief association attributable to the change.  
108.21  If the relief association pays a monthly benefit service 
108.22  pension, the financial requirements are to be determined by the 
108.23  board of trustees following either an updated actuarial 
108.24  valuation including the proposed change or an estimate of the 
108.25  expected actuarial impact of the proposed change prepared by the 
108.26  actuary of the relief association.  If a relief association 
108.27  adopts or amends its articles of incorporation or bylaws without 
108.28  municipal ratification pursuant to this subdivision, and, 
108.29  subsequent to the amendment or adoption, the financial 
108.30  requirements of the special fund pursuant to this section are 
108.31  such so as to require financial support from the municipality, 
108.32  the provision which was implemented without municipal 
108.33  ratification shall no longer be effective without municipal 
108.34  ratification, and any service pensions or ancillary benefits 
108.35  payable after that date shall be paid only in accordance with 
108.36  the articles of incorporation or bylaws as amended or adopted 
109.1   with municipal ratification.  
109.2      Sec. 6.  [REVIEW OF LARGE PLAN REPORTING REQUIREMENTS.] 
109.3      Prior to January 1, 1999, the state auditor shall report to 
109.4   the legislative commission on pensions and retirement with any 
109.5   recommendations for enhancing the consistency and utility of 
109.6   information provided by or on behalf of a public pension plan 
109.7   under Minnesota Statutes, section 356.219, subdivision 3, 
109.8   paragraph (c). 
109.9      Sec. 7.  [REPEALER.] 
109.10     Minnesota Statutes 1996, section 356.218, is repealed. 
109.11     Sec. 8.  [EFFECTIVE DATE.] 
109.12     Sections 1 to 7 are effective January 1, 1998, except that 
109.13  no penalty for non-compliance with section 4 may be assessed on 
109.14  account of any failure to comply with reporting requirements of 
109.15  that section prior to January 1, 1999. 
109.16                             ARTICLE 11 
109.17                    CORRECTIONAL RETIREMENT PLAN 
109.18                           MODIFICATIONS 
109.19     Section 1.  Laws 1996, chapter 408, article 8, section 21, 
109.20  is amended to read:  
109.21     Sec. 21.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
109.22  RETIREMENT COVERAGE.] 
109.23     (a) An employee in a position specified as qualifying under 
109.24  sections 12, 14, and 15, or an auto mechanic lead, an 
109.25  electrician, an electrician master of record, a groundskeeper 
109.26  intermediate, or a plumber master in charge at the Minnesota 
109.27  correctional facility-Red Wing, may elect to retain coverage 
109.28  under the general employees retirement plan of the Minnesota 
109.29  state retirement system or the teachers retirement association, 
109.30  or may elect to have coverage transferred to and to contribute 
109.31  to the correctional employees retirement plan.  An employee 
109.32  electing to participate in the correctional employees retirement 
109.33  plan shall begin making contributions to the correctional plan 
109.34  beginning the first full pay period after January 1, 1997, or 
109.35  the first full pay period following filing of their election to 
109.36  transfer coverage to the correctional employees retirement plan, 
110.1   whichever is later.  The election to retain coverage or to 
110.2   transfer coverage must be made in writing by the person on a 
110.3   form prescribed by the executive director of the Minnesota state 
110.4   retirement system and must be filed with the executive director 
110.5   no later than June 30 December 31, 1997. 
110.6      (b) An employee failing to make an election by June 15, 
110.7   1997, must be notified by certified mail by the executive 
110.8   director of the Minnesota state retirement system or of the 
110.9   teachers retirement association, whichever applies, of the 
110.10  deadline to make a choice.  A person who does not submit an 
110.11  election form must continue coverage in the general employees 
110.12  retirement plan or the teachers retirement association, 
110.13  whichever applies, and forfeits all rights to transfer 
110.14  retirement coverage to the correctional employees retirement 
110.15  plan. 
110.16     (c) The election to retain coverage in the general employee 
110.17  retirement plan or the teachers retirement association or the 
110.18  election to transfer retirement coverage to the correctional 
110.19  employees retirement plan is irrevocable once it is filed with 
110.20  the executive director. 
110.21     Sec. 2.  Laws 1996, chapter 408, article 8, section 22, 
110.22  subdivision 1, is amended to read: 
110.23     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
110.24  (a) An employee who has future retirement coverage transferred 
110.25  to the correctional employees retirement plan under sections 11, 
110.26  12, 14, and 15, and 16, or an auto mechanic lead, an 
110.27  electrician, an electrician master of record, a groundskeeper 
110.28  intermediate, or a plumber master in charge at the Minnesota 
110.29  correctional facility-Red Wing, and who does not elect to retain 
110.30  general state employee retirement plan or teachers retirement 
110.31  association coverage is entitled to elect to obtain prior 
110.32  service credit for eligible state service performed on or after 
110.33  July 1, 1975, and before the first day of the first full pay 
110.34  period beginning after June 30 December 31, 1997, with the 
110.35  department of corrections or with the department of human 
110.36  services at the Minnesota security hospital or the Minnesota 
111.1   sexual psychopathic personality treatment center.  All prior 
111.2   service credit must be purchased.  
111.3      (b) Eligible state service with the department of 
111.4   corrections or with the department of human services is any 
111.5   prior period of continuous service on or after July 1, 1975, 
111.6   performed as an employee of the department of corrections or of 
111.7   the department of human services that would have been eligible 
111.8   for the correctional employees retirement plan coverage under 
111.9   sections 11, 12, 14, and 15, and 16, or an auto mechanic lead, 
111.10  an electrician, an electrician master of record, a groundskeeper 
111.11  intermediate, or a plumber master in charge at the Minnesota 
111.12  correctional facility-Red Wing, if that prior service had been 
111.13  performed after the first day of the first full pay period 
111.14  beginning after December 31, 1996, rather than before that 
111.15  date.  Service is continuous if there has been no period of 
111.16  discontinuation of eligible state service for a period greater 
111.17  than 180 calendar days. 
111.18     (c) The department of corrections or the department of 
111.19  human services, whichever applies, shall certify eligible state 
111.20  service to the executive director of the Minnesota state 
111.21  retirement system. 
111.22     (d) A covered correctional plan employee employed on 
111.23  January 1, 1997, who has past service in a job classification 
111.24  covered under section 11, 12, 14, or 15, or 16, or an auto 
111.25  mechanic lead, an electrician, an electrician master of record, 
111.26  a groundskeeper intermediate, or a plumber master in charge at 
111.27  the Minnesota correctional facility-Red Wing, on January 1, 
111.28  1997, is entitled to purchase the past service if the applicable 
111.29  department certifies that the employee met the eligibility 
111.30  requirements for coverage.  The employee must make the 
111.31  additional employee contributions under section 17.  Payments 
111.32  for past service must be completed by June 30, 1999. 
111.33     Sec. 3.  Laws 1996, chapter 408, article 8, section 24, is 
111.34  amended to read: 
111.35     Sec. 24.  [EARLY RETIREMENT INCENTIVE.] 
111.36     This section applies to an employee who has future 
112.1   retirement coverage transferred to the correctional employee 
112.2   retirement plan under sections 11, 12, 14, and 15, and 16, and 
112.3   who is at least 55 years old on the effective date of sections 
112.4   11, 12, 14, and 15, and 16.  This section also applies to an 
112.5   auto mechanic lead, an electrician, an electrician master of 
112.6   record, a groundskeeper intermediate, or a plumber master in 
112.7   charge at the Minnesota correctional facility-Red Wing who has 
112.8   transferred to the correctional employee retirement plan under 
112.9   this act.  That employee may participate in a health insurance 
112.10  early retirement incentive available under the terms of a 
112.11  collective bargaining agreement in effect on the day before the 
112.12  effective date of sections 11, 12, 14, and 15, and 16, 
112.13  notwithstanding any provision of the collective bargaining 
112.14  agreement that limits participation to persons who select the 
112.15  option during the payroll period in which their 55th birthday 
112.16  occurs.  A person selecting the health insurance early 
112.17  retirement incentive under this section must retire by the later 
112.18  of December 31, 1997 June 30, 1998, or within the pay period 
112.19  following the time at which the person has at least three years 
112.20  of covered correctional service, including any purchased service 
112.21  credit.  An employee meeting this criteria who wishes to extend 
112.22  the person's employment must do so under Minnesota Statutes, 
112.23  section 43A.34, subdivision 3. 
112.24     Sec. 4.  [EFFECTIVE DATE.] 
112.25     Sections 1 to 3 are effective on the day following final 
112.26  enactment. 
112.27                             ARTICLE 12 
112.28                      MISCELLANEOUS PROVISIONS 
112.29     Section 1.  [EXEMPTION; METROPOLITAN STATE UNIVERSITY.] 
112.30     (a) Minnesota Statutes, section 352.115, subdivision 10, 
112.31  does not apply to a person who: 
112.32     (1) was born June 22, 1939; 
112.33     (2) retires from the faculty of Metropolitan State 
112.34  University with at least ten years of combined service credit in 
112.35  a system under the jurisdiction of the board of trustees of the 
112.36  Minnesota state colleges and universities; 
113.1      (3) was employed on a full-time basis immediately preceding 
113.2   retirement; 
113.3      (4) begins drawing an annuity from the Minnesota state 
113.4   retirement system; and 
113.5      (5) returns to work on not less than a one-third time basis 
113.6   and not more than a two-thirds time basis at Metropolitan State 
113.7   University under an agreement in which the person may not earn a 
113.8   salary of more than $35,000 in a calendar year from employment 
113.9   after retirement at Metropolitan State University. 
113.10     (b) Initial participation, the amount of time worked, and 
113.11  the duration of participation under this section must be 
113.12  mutually agreed upon by the employer and the employee.  The 
113.13  employer may require up to a one-year notice of intent to 
113.14  participate in the program as a condition of participation under 
113.15  this section.  The employer shall determine the time of year the 
113.16  employee shall work. 
113.17     (c) Minnesota Statutes, section 136F.48, applies to a 
113.18  person described in paragraph (a), even though the person draws 
113.19  an annuity from the Minnesota state retirement system instead of 
113.20  a teachers retirement association. 
113.21     (d) Notwithstanding any law to the contrary, a person 
113.22  eligible under paragraphs (a) and (b) may not earn further 
113.23  service credit in the Minnesota state retirement system or the 
113.24  teachers retirement association and is not eligible to 
113.25  participate in the individual retirement account plan or the 
113.26  supplemental retirement plan established in chapter 354B as a 
113.27  result of service under this section.  No employer or employee 
113.28  contribution to any of these plans may be made on behalf of such 
113.29  a person.  
113.30     Sec. 2.  [ACCEPTANCE OF BENEFICIARY DESIGNATION CHANGE IN 
113.31  CERTAIN INSTANCES.] 
113.32     (a) Notwithstanding any provision of Minnesota Statutes 
113.33  1996, chapter 354, to the contrary, the teachers retirement 
113.34  association may consider as validly filed a beneficiary 
113.35  designation change form under Minnesota Statutes 1996, section 
113.36  354.10, subdivision 4, and a joint specification form under 
114.1   Minnesota Statutes 1996, section 354.46, subdivision 5, which 
114.2   was postmarked on January 8, 1997, and received by the teachers 
114.3   retirement association on January 10, 1997, on behalf of a 
114.4   teacher who was born on February 28, 1947, and who died on 
114.5   December 22, 1996. 
114.6      (b) The designated beneficiary of the teacher specified in 
114.7   paragraph (a) is entitled to receive the applicable monthly 
114.8   survivor benefit retroactive to January 1, 1997. 
114.9      Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE FOR CERTAIN PUBLIC 
114.10  EMPLOYEES.] 
114.11     (a) A person described in paragraph (b) is entitled to 
114.12  purchase the period of allowable service credit from the public 
114.13  employees retirement association described in paragraph (c) if 
114.14  the purchase payment specified in paragraph (d) is made to the 
114.15  public employees retirement association. 
114.16     (b) An eligible person is a person who: 
114.17     (1) was born on August 10, 1939; 
114.18     (2) was initially employed on a full-time basis by the 
114.19  parks and recreation division of the city of St. Paul on 
114.20  February 12, 1964; 
114.21     (3) was initially covered by the public employees 
114.22  retirement association on November 1, 1964; and 
114.23     (4) left public service on September 16, 1996. 
114.24     (c) The period of purchasable allowable service credit is 
114.25  the period beginning on February 12, 1964, and ending on October 
114.26  31, 1964. 
114.27     (d) To purchase credit for prior eligible service under 
114.28  paragraph (c), there must be paid to the public employees 
114.29  retirement association an amount equal to the present value of 
114.30  the amount of the additional disability benefit obtained by 
114.31  purchase of the additional service credit.  The calculation of 
114.32  this amount must be made by the executive director of the public 
114.33  employees retirement association using the applicable 
114.34  preretirement interest rate specified in Minnesota Statutes, 
114.35  section 356.215, subdivision 4d, and the mortality table adopted 
114.36  for the retirement association.  The person making the purchase 
115.1   must establish in the records of the association proof of the 
115.2   service for which the purchase of prior service is requested.  
115.3   The manner of the proof of service must be in accordance with 
115.4   procedures prescribed by the executive director of the 
115.5   retirement association.  Payment of the amount calculated under 
115.6   this subdivision is the obligation of the eligible person and 
115.7   must be made prior to July 1, 1998, in a lump sum.  However, the 
115.8   former employer of the eligible individual may, at its 
115.9   discretion, pay all or any portion of the payment amount that 
115.10  exceeds an amount equal to the employee contribution rate or 
115.11  rates in effect during the period or periods of prior service, 
115.12  plus interest at the rate of 8.5 percent per year compounded 
115.13  annually from the date on which the contributions would 
115.14  otherwise have been made to the date on which the payment is 
115.15  made.  If the employer agrees to payments under this paragraph, 
115.16  the person must make the employee payments required under this 
115.17  paragraph prior to July 1, 1998.  If that employee payment is 
115.18  made, the employing unit payment under this paragraph must be 
115.19  remitted to the executive director of the retirement association 
115.20  within 60 days of receipt by the executive director of the 
115.21  employee payments specified under this paragraph. 
115.22     (e) Service credit for the purchase period or periods must 
115.23  be granted to the account of the eligible person upon receipt of 
115.24  the purchase payment amount specified in paragraph (d) and the 
115.25  disability benefit of the person must be recalculated in light 
115.26  of the additional service credit. 
115.27     Sec. 4.  [EFFECTIVE DATE.] 
115.28     Sections 1, 2, and 3 are effective on the day following 
115.29  final enactment.