LCPR05-350
  1.1      ............... moves to amend Special Session H.F. No. 44, 
  1.2   as follows: 
  1.3      Delete everything after the enacting clause and insert: 
  1.4                    "2005 OMNIBUS RETIREMENT BILL
  1.5                              ARTICLE 1
  1.6                 CLARIFICATION AND RECODIFICATION OF
  1.7                 STATEWIDE SPECIALTY RETIREMENT PLANS
  1.8      Section 1.  Minnesota Statutes 2004, section 3A.01, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [PURPOSES.] Each of the terms defined in 
  1.11  this section, for the purposes of this chapter shall be 
  1.12  given has the meanings meaning ascribed to them. 
  1.13     Sec. 2.  Minnesota Statutes 2004, section 3A.01, is amended 
  1.14  by adding a subdivision to read: 
  1.15     Subd. 1a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
  1.16  means the condition of one allowance or benefit having an equal 
  1.17  actuarial present value to another allowance or benefit, 
  1.18  determined by the actuary retained under section 356.214 as of a 
  1.19  given date at a specified age with each actuarial present value 
  1.20  based on the mortality table applicable for the plan and 
  1.21  approved under section 356.215, subdivision 18, and using the 
  1.22  applicable preretirement or postretirement interest rate 
  1.23  assumption specified in section 356.215, subdivision 8. 
  1.24     Sec. 3.  Minnesota Statutes 2004, section 3A.01, is amended 
  2.1   by adding a subdivision to read: 
  2.2      Subd. 1b.  [AVERAGE MONTHLY SALARY.] "Average monthly 
  2.3   salary" means the average of the member's highest five 
  2.4   successive years of salary that was received as a member of the 
  2.5   legislature and upon which the member has made contributions 
  2.6   under section 3A.03, subdivision 1, or for which the member of 
  2.7   the legislature has made payments for past service under 
  2.8   Minnesota Statutes 2004, section 3A.02, subdivision 2, or has 
  2.9   made, before July 1, 1994, payments in lieu of contributions 
  2.10  under Minnesota Statutes 1992, section 3A.031. 
  2.11     Sec. 4.  Minnesota Statutes 2004, section 3A.01, is amended 
  2.12  by adding a subdivision to read: 
  2.13     Subd. 1c.  [CONSTITUTIONAL OFFICER.] "Constitutional 
  2.14  officer" means a person who was duly elected, qualifies for, and 
  2.15  serves as the governor, the lieutenant governor, the attorney 
  2.16  general, the secretary of state, or the state auditor of the 
  2.17  state of Minnesota. 
  2.18     Sec. 5.  Minnesota Statutes 2004, section 3A.01, 
  2.19  subdivision 2, is amended to read: 
  2.20     Subd. 2.  [DEPENDENT CHILD.] (a) "Dependent child" means 
  2.21  any natural or adopted child of a deceased member of the 
  2.22  legislature or a former legislator who is under the age of 18, 
  2.23  or who is under the age of 22 and is a full-time student, and 
  2.24  who, in either case, is unmarried and was actually dependent for 
  2.25  more than one-half of support upon such the legislator for a 
  2.26  period of at least 90 days immediately prior to before the 
  2.27  legislator's death.  It 
  2.28     (b) The term also includes any child of the member of the 
  2.29  legislature or former legislator who was conceived during the 
  2.30  lifetime of, and who was born after the death of, the member or 
  2.31  former legislator.  This subdivision shall be retroactive as to 
  2.32  any dependent child under the age of 22 years as of April 1, 
  2.33  1975. 
  2.34     Sec. 6.  Minnesota Statutes 2004, section 3A.01, 
  2.35  subdivision 6, is amended to read: 
  2.36     Subd. 6.  [DIRECTOR.] "Director" means the executive 
  3.1   director of the Minnesota State Retirement System who was 
  3.2   appointed under section 352.03, subdivision 5. 
  3.3      Sec. 7.  Minnesota Statutes 2004, section 3A.01, is amended 
  3.4   by adding a subdivision to read: 
  3.5      Subd. 6b.  [FORMER LEGISLATOR.] "Former legislator" means a 
  3.6   legislator who has ceased to be a member of the legislature for 
  3.7   any reason, including, but not limited to, the expiration of the 
  3.8   term for which a member of the legislature was elected or the 
  3.9   death of the member. 
  3.10     Sec. 8.  Minnesota Statutes 2004, section 3A.01, is amended 
  3.11  by adding a subdivision to read: 
  3.12     Subd. 6c.  [MEMBER OF THE LEGISLATURE.] "Member of the 
  3.13  legislature" means a person who was a member of the House of 
  3.14  Representatives or of the Senate of the state of Minnesota who 
  3.15  has subscribed to the oath of office after July 1, 1965, and who 
  3.16  was first elected to a legislative office before July 1, 1997, 
  3.17  and retained coverage by the plan under Laws 1997, chapter 233, 
  3.18  article 2, section 15. 
  3.19     Sec. 9.  Minnesota Statutes 2004, section 3A.01, 
  3.20  subdivision 8, is amended to read: 
  3.21     Subd. 8.  [NORMAL RETIREMENT AGE.] "Normal retirement age" 
  3.22  means the age of 60 years with regard to any member of the 
  3.23  legislature whose service terminates prior to the beginning of 
  3.24  the 1981 legislative session, and the age of 62 years with 
  3.25  regard to any member of the legislature whose service terminates 
  3.26  after the beginning of the 1981 session. 
  3.27     Sec. 10.  Minnesota Statutes 2004, section 3A.01, is 
  3.28  amended by adding a subdivision to read: 
  3.29     Subd. 9.  [RETIREMENT.] "Retirement" means the period of 
  3.30  time after which a former legislator is entitled to a retirement 
  3.31  allowance. 
  3.32     Sec. 11.  Minnesota Statutes 2004, section 3A.01, is 
  3.33  amended by adding a subdivision to read: 
  3.34     Subd. 10.  [SALARY.] (a) "Salary" means the regular 
  3.35  compensation payable under law to a member of the legislature 
  3.36  and paid to the person for service as a legislator. 
  4.1      (b) The term includes the monthly compensation paid to the 
  4.2   member of the legislature and the per diem payments paid during 
  4.3   a regular or special session to the member of the legislature. 
  4.4      (c) The term does not include per diem payments paid to a 
  4.5   member of the legislature other than during the regular or 
  4.6   special session; additional compensation attributable to a 
  4.7   leadership position under section 3.099, subdivision 3; living 
  4.8   expense payments under section 3.101; and special session living 
  4.9   expense payments under section 3.103. 
  4.10     Sec. 12.  Minnesota Statutes 2004, section 3A.011, is 
  4.11  amended to read: 
  4.12     3A.011 [ADMINISTRATION OF PLAN.] 
  4.13     The executive director and the board of directors of the 
  4.14  Minnesota State Retirement System shall administer the 
  4.15  legislators retirement plan in accordance with this chapter and 
  4.16  chapter 356A. 
  4.17     Sec. 13.  Minnesota Statutes 2004, section 3A.02, 
  4.18  subdivision 1, is amended to read: 
  4.19     Subdivision 1.  [QUALIFICATIONS.] (a) A former legislator 
  4.20  is entitled, upon written application to the director, to 
  4.21  receive a retirement allowance monthly, if the person: 
  4.22     (1) has either served at least six full years, without 
  4.23  regard to the application of section 3A.10, subdivision 2, or 
  4.24  has served during all or part of four regular sessions as a 
  4.25  member of the legislature, which service need not be continuous; 
  4.26     (2) has attained the normal retirement age; 
  4.27     (3) has retired as a member of the legislature; and 
  4.28     (4) has made all contributions provided for in section 
  4.29  3A.03, has made payments for past service under subdivision 2, 
  4.30  or has made payments in lieu of contributions under Minnesota 
  4.31  Statutes 1992, section 3A.031, prior to before July 1, 1994. 
  4.32     (b) This paragraph applies to members of the legislature 
  4.33  who terminate service as a legislator before July 1, 1997.  For 
  4.34  service rendered before the beginning of the 1979 legislative 
  4.35  session, but not to exceed eight years of service, the 
  4.36  retirement allowance is an amount equal to five percent per year 
  5.1   of service of that member's average monthly salary.  For service 
  5.2   in excess of eight years rendered before the beginning of the 
  5.3   1979 legislative session, and for service rendered after the 
  5.4   beginning of the 1979 legislative session, Unless the former 
  5.5   legislator has legislative service before January 1, 1979, the 
  5.6   retirement allowance is an amount equal to 2-1/2 percent per 
  5.7   year of service of that member's average monthly salary. 
  5.8      (c) This paragraph applies to members of the legislature 
  5.9   who terminate service as a legislator after June 30, 1997.  The 
  5.10  retirement allowance is an amount equal to the applicable rate 
  5.11  or rates under paragraph (b) per year of service of the member's 
  5.12  average monthly salary and adjusted for that person on an 
  5.13  actuarial equivalent basis to reflect the change in the 
  5.14  postretirement interest rate actuarial assumption under section 
  5.15  356.215, subdivision 8, from five percent to six percent.  The 
  5.16  adjustment must be calculated by or, alternatively, the 
  5.17  adjustment procedure must be specified by, the actuary retained 
  5.18  by the Legislative Commission on Pensions and Retirement under 
  5.19  section 356.214.  The purpose of this adjustment is to ensure 
  5.20  that the total amount of benefits that the actuary predicts an 
  5.21  individual member will receive over the member's lifetime under 
  5.22  this paragraph will be the same as the total amount of benefits 
  5.23  the actuary predicts the individual member would receive over 
  5.24  the member's lifetime under the law in effect before enactment 
  5.25  of this paragraph.  If the former legislator has legislative 
  5.26  service before January 1, 1979, the person's benefit must 
  5.27  include the additional benefit amount in effect on January 1, 
  5.28  1979, and adjusted as otherwise provided in this paragraph. 
  5.29     (d) (c) The retirement allowance accrues beginning with the 
  5.30  first day of the month of receipt of the application, but not 
  5.31  before age 60, and for the remainder of the former legislator's 
  5.32  life, if the former legislator is not serving as a member of the 
  5.33  legislature or as a constitutional officer or commissioner as 
  5.34  defined in section 352C.021, subdivisions 2 and 3 section 3A.01, 
  5.35  subdivision 1c.  The annuity does not begin to accrue prior to 
  5.36  before the person's retirement as a legislator.  No annuity 
  6.1   payment may be made retroactive for more than 180 days before 
  6.2   the date that the annuity application is filed with the director.
  6.3      (e) (d) Any member who has served during all or part of 
  6.4   four regular sessions is considered to have served eight years 
  6.5   as a member of the legislature. 
  6.6      (f) (e) The retirement allowance ceases with the last 
  6.7   payment that accrued to the retired legislator during the 
  6.8   retired legislator's lifetime, except that the surviving spouse, 
  6.9   if any, is entitled to receive the retirement allowance of the 
  6.10  retired legislator for the calendar month in which the retired 
  6.11  legislator died. 
  6.12     Sec. 14.  Minnesota Statutes 2004, section 3A.02, 
  6.13  subdivision 1b, is amended to read: 
  6.14     Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
  6.15  separation from service after the beginning of the 1981 
  6.16  legislative session, a former member of the legislature who has 
  6.17  attained the age set by the board of directors of the Minnesota 
  6.18  State Retirement System and who is otherwise qualified in 
  6.19  accordance with under subdivision 1 is entitled, upon making 
  6.20  written application on forms supplied a form prescribed by the 
  6.21  director, to a reduced retirement allowance in.  The reduced 
  6.22  retirement allowance is an amount equal to the retirement 
  6.23  allowance specified in subdivision 1, paragraph (b), that is 
  6.24  reduced so that the reduced annuity allowance is the actuarial 
  6.25  equivalent of the annuity allowance that would be payable if the 
  6.26  former member of the legislature deferred receipt of the annuity 
  6.27  allowance and the annuity allowance amount were was augmented 
  6.28  at an annual rate of three percent compounded annually from the 
  6.29  date the annuity allowance begins to accrue until age 62. 
  6.30     (b) The age set by the board of directors under paragraph 
  6.31  (a) cannot be less an earlier age than the early retirement age 
  6.32  under section 352.116, subdivision 1a. 
  6.33     (c) If there is an actuarial cost to the plan of resetting 
  6.34  the early retirement age under paragraph (a), the retired 
  6.35  legislator is required to pay an additional amount to cover the 
  6.36  full actuarial value.  The additional amount must be paid in a 
  7.1   lump sum within 30 days of the certification of the amount by 
  7.2   the executive director.  
  7.3      (d) The executive director of the Minnesota State 
  7.4   Retirement System shall report to the Legislative Commission on 
  7.5   Pensions and Retirement on the utilization of this 
  7.6   provision annually on or before September 1, 2000. 
  7.7      Sec. 15.  Minnesota Statutes 2004, section 3A.02, 
  7.8   subdivision 3, is amended to read: 
  7.9      Subd. 3.  [APPROPRIATION.] The amounts required for payment 
  7.10  of retirement allowances provided by this section are 
  7.11  appropriated annually to the director from the participation of 
  7.12  the legislators retirement plan in the Minnesota postretirement 
  7.13  investment fund and shall.  The retirement allowance must be 
  7.14  paid monthly to the recipients entitled thereto to those 
  7.15  retirement allowances. 
  7.16     Sec. 16.  Minnesota Statutes 2004, section 3A.02, 
  7.17  subdivision 4, is amended to read: 
  7.18     Subd. 4.  [DEFERRED ANNUITIES AUGMENTATION.] (a) The 
  7.19  deferred annuity retirement allowance of any former legislator 
  7.20  must be augmented as provided herein.  
  7.21     (b) The required reserves applicable to the 
  7.22  deferred annuity retirement allowance, determined as of the date 
  7.23  the benefit begins to accrue using an appropriate mortality 
  7.24  table and an interest assumption of six percent, must be 
  7.25  augmented from the first of the month following the termination 
  7.26  of active service, or July 1, 1973, whichever is later, to the 
  7.27  first day of the month in which the annuity allowance begins to 
  7.28  accrue, at the following annually compounded rate of five 
  7.29  percent per annum compounded annually until January 1, 1981, and 
  7.30  thereafter at the rate of three percent per annum compounded 
  7.31  annually until January 1 of the year in which the former 
  7.32  legislator attains age 55.  From that date to the effective date 
  7.33  of retirement, the rate is five percent compounded annually. or 
  7.34  rates: 
  7.35          rate                   period
  7.36       (1) five percent     until January 1, 1981
  8.1        (2) three percent    from January 1, 1981, or from the
  8.2                             first day of the month following
  8.3                             the termination of active service,
  8.4                             whichever is later, until January 1
  8.5                             of the year in which the former
  8.6                             legislator attains age 55
  8.8        (3) five percent     from the period end date under
  8.9                             clause (2) to the effective date 
  8.10                            of retirement. 
  8.11     (b) The retirement allowance of, or the survivor benefit 
  8.12  payable on behalf of, a former member of the legislature who 
  8.13  terminated service before July 1, 1997, which is not first 
  8.14  payable until after June 30, 1997, must be increased on an 
  8.15  actuarial equivalent basis to reflect the change in the 
  8.16  postretirement interest rate actuarial assumption under section 
  8.17  356.215, subdivision 8, from five percent to six percent under a 
  8.18  calculation procedure and tables adopted by the board of 
  8.19  directors of the Minnesota State Retirement System and approved 
  8.20  by the actuary retained by the Legislative Commission on 
  8.21  Pensions and Retirement. 
  8.22     Sec. 17.  Minnesota Statutes 2004, section 3A.02, 
  8.23  subdivision 5, is amended to read: 
  8.24     Subd. 5.  [OPTIONAL ANNUITIES.] (a) The board of directors 
  8.25  shall establish an optional retirement annuity in the form of a 
  8.26  joint and survivor annuity and an optional retirement annuity in 
  8.27  the form of a period certain and life thereafter.  Except as 
  8.28  provided in paragraph (b), these optional annuity forms must be 
  8.29  actuarially equivalent to the normal annuity allowance computed 
  8.30  under this section, plus the actuarial value of any surviving 
  8.31  spouse benefit otherwise potentially payable at the time of 
  8.32  retirement under section 3A.04, subdivision 1.  An individual 
  8.33  selecting an optional annuity under this subdivision waives and 
  8.34  the person's spouse waive any rights to surviving spouse 
  8.35  benefits under section 3A.04, subdivision 1. 
  8.36     (b) If a retired legislator selects the joint and survivor 
  9.1   annuity option, the retired legislator must receive a normal 
  9.2   single-life annuity allowance if the designated optional annuity 
  9.3   beneficiary dies before the retired legislator and no reduction 
  9.4   may be made in the annuity to provide for restoration of the 
  9.5   normal single-life annuity allowance in the event of the death 
  9.6   of the designated optional annuity beneficiary. 
  9.7      (c) The surviving spouse of a legislator who has attained 
  9.8   at least age 60 and who dies while a member of the legislature 
  9.9   may elect an optional joint and survivor annuity under paragraph 
  9.10  (a), in lieu of surviving spouse benefits under section 3A.04, 
  9.11  subdivision 1. 
  9.12     Sec. 18.  Minnesota Statutes 2004, section 3A.03, 
  9.13  subdivision 1, is amended to read: 
  9.14     Subdivision 1.  [PERCENTAGE.] (a) Every member of the 
  9.15  legislature shall contribute nine percent of total salary,. 
  9.16     (b) The contribution must be made by payroll deduction, 
  9.17  to and must be paid into the state treasury and deposited in the 
  9.18  general fund.  It shall be the duty of 
  9.19     (c) The director to must record the periodic contributions 
  9.20  of each member of the legislature and must credit such each 
  9.21  contribution to the member's account. 
  9.22     Sec. 19.  Minnesota Statutes 2004, section 3A.03, 
  9.23  subdivision 2, is amended to read: 
  9.24     Subd. 2.  [REFUND.] (a) A former member who has made 
  9.25  contributions under subdivision 1 and who is no longer a member 
  9.26  of the legislature is entitled to receive, upon written 
  9.27  application to the executive director on a form prescribed by 
  9.28  the executive director, a refund from the general fund of all 
  9.29  contributions credited to the member's account with interest 
  9.30  computed as provided in section 352.22, subdivision 2. 
  9.31     (b) The refund of contributions as provided in paragraph (a)
  9.32  terminates all rights of a former member of the legislature and 
  9.33  the survivors of the former member under this chapter. 
  9.34     (c) If the former member of the legislature again becomes a 
  9.35  member of the legislature after having taken a refund as 
  9.36  provided in paragraph (a), the member must be considered is a 
 10.1   new member of this plan the unclassified employees retirement 
 10.2   program of the Minnesota State Retirement System.  
 10.3      (d) However, the member may reinstate the rights and credit 
 10.4   for service previously forfeited under this chapter if the 
 10.5   member repays all refunds taken, plus interest at an annual rate 
 10.6   of 8.5 percent compounded annually from the date on which the 
 10.7   refund was taken to the date on which the refund is repaid.  
 10.8      (d) (e) No person may be required to apply for or to accept 
 10.9   a refund. 
 10.10     Sec. 20.  Minnesota Statutes 2004, section 3A.04, 
 10.11  subdivision 1, is amended to read: 
 10.12     Subdivision 1.  [SURVIVING SPOUSE.] (a) Upon the death of a 
 10.13  member of the legislature while serving as such a member after 
 10.14  June 30, 1973, or upon the death of a former member of the 
 10.15  legislature with at least the number of six full years of 
 10.16  service as required by section 3A.02, subdivision 1, clause 
 10.17  (1) or service in all or part of four regular legislative 
 10.18  sessions, the surviving spouse shall be paid is entitled to a 
 10.19  survivor benefit in the amount of. 
 10.20     (b) The surviving spouse benefit is one-half of the 
 10.21  retirement allowance of the member of the legislature computed 
 10.22  as though the member were at least normal retirement age on the 
 10.23  date of death and based upon the member's allowable service 
 10.24  or upon eight years, whichever is greater.  The augmentation 
 10.25  provided in section 3A.02, subdivision 4, if applicable, shall 
 10.26  must be applied for the period up to, and including, the month 
 10.27  of death.  
 10.28     (c) Upon the death of a former legislator receiving a 
 10.29  retirement allowance, the surviving spouse shall be is entitled 
 10.30  to one-half of the amount of the retirement allowance being paid 
 10.31  to the legislator.  Such 
 10.32     (d) The surviving spouse benefit shall be paid during is 
 10.33  payable for the lifetime of the surviving spouse. 
 10.34     Sec. 21.  Minnesota Statutes 2004, section 3A.04, 
 10.35  subdivision 2, is amended to read: 
 10.36     Subd. 2.  [DEPENDENT CHILDREN.] (a) Upon the death of a 
 11.1   member of the legislature while serving as a member, or upon the 
 11.2   death of a former member of the legislature who has rendered at 
 11.3   least the number of six full years of service as required by 
 11.4   section 3A.02, subdivision 1, clause (1) or service in all or 
 11.5   part of four regular legislative sessions and who was not 
 11.6   receiving a retirement allowance, each dependent child of the 
 11.7   member or former legislator shall be is entitled to receive a 
 11.8   survivor benefit in the following amount:  
 11.9      (1) for the first dependent child, a monthly allowance 
 11.10  which equals benefit equal to 25 percent of the monthly 
 11.11  retirement allowance of the member of the legislature or the 
 11.12  former legislator computed as though the member or the former 
 11.13  legislator had attained at least the normal retirement age on 
 11.14  the date of death and based upon the average monthly salary as 
 11.15  of the date of death or as of the date of termination, whichever 
 11.16  is applicable applies, and the member's allowable service or 
 11.17  eight years, whichever is greater; 
 11.18     (2) for each additional dependent child, a monthly 
 11.19  allowance which equals benefit equal to 12-1/2 percent of the 
 11.20  monthly retirement allowance of the member or the former 
 11.21  legislator computed as provided in the case of the first child 
 11.22  clause (1); but and 
 11.23     (3) the total amount paid to the surviving spouse and to 
 11.24  the dependent child or children shall may not exceed, in any 
 11.25  one month, 100 percent of the monthly retirement allowance of 
 11.26  the member or of the former legislator computed as provided in 
 11.27  the case of the first child clause (1).  
 11.28     (b) The augmentation provided in section 3A.02, subdivision 
 11.29  4, if applicable, shall be applied applies from the first day of 
 11.30  the month next following the date of the termination of the 
 11.31  person from service as a member of the legislature to the month 
 11.32  of the death of the person.  
 11.33     (c) Upon the death of a former legislator who was receiving 
 11.34  a retirement allowance, the a surviving dependent child shall be 
 11.35  is entitled to the applicable percentage specified above in 
 11.36  paragraph (a), clause (1) or (2), whichever applies, of the 
 12.1   amount of the allowance which was paid to the former legislator 
 12.2   for the month immediately prior to before the date of death of 
 12.3   the former legislator.  
 12.4      (d) The payments for dependent children shall must be made 
 12.5   to the surviving spouse or to the guardian of the estate of the 
 12.6   dependent children, if there is one.  
 12.7      Sec. 22.  Minnesota Statutes 2004, section 3A.04, 
 12.8   subdivision 3, is amended to read: 
 12.9      Subd. 3.  [PAYMENT.] The surviving spouse's spouse and 
 12.10  dependent children's child or children survivor benefits payable 
 12.11  under this section shall be paid are payable by the director 
 12.12  monthly in the same manner as retirement allowances are 
 12.13  authorized to be paid by this chapter.  
 12.14     Sec. 23.  Minnesota Statutes 2004, section 3A.04, 
 12.15  subdivision 4, is amended to read: 
 12.16     Subd. 4.  [DEATH REFUNDS.] (a) Upon the death of a member 
 12.17  of the legislature or of a former legislator who was not 
 12.18  receiving a retirement allowance, without leaving either a 
 12.19  surviving spouse or a dependent child or dependent children, the 
 12.20  last designated beneficiary named on a form that was filed with 
 12.21  the director before the death of the legislator, or if no 
 12.22  designation is filed, the estate of the member or the former 
 12.23  legislator, upon application, shall be is entitled to a refund. 
 12.24     (b) The refund is the amount of contributions credited to 
 12.25  the person's account plus interest as provided in section 3A.03, 
 12.26  subdivision 2, clause (2) paragraph (a). 
 12.27     Sec. 24.  Minnesota Statutes 2004, section 3A.04, is 
 12.28  amended by adding a subdivision to read: 
 12.29     Subd. 5.  [APPROPRIATION.] The survivor benefits and the 
 12.30  death refunds authorized by this section are appropriated to the 
 12.31  director from the general fund when they are due and payable. 
 12.32     Sec. 25.  Minnesota Statutes 2004, section 3A.05, is 
 12.33  amended to read: 
 12.34     3A.05 [APPLICATION FOR SURVIVOR BENEFIT.] 
 12.35     (a) Applications for survivor benefits pursuant to under 
 12.36  section 3A.04 shall must be filed with the director by the 
 13.1   surviving spouse and dependent child or children entitled to 
 13.2   benefits pursuant to under section 3A.04, or by the guardian of 
 13.3   the estate, if there is one, of the dependent child or children. 
 13.4      (b) Survivor benefits shall accrue as of the first day of 
 13.5   the month following the death of the member of the legislature 
 13.6   or former legislator and payments shall commence as of the first 
 13.7   of the month next following the filing of the application, 
 13.8   and shall be are retroactive to the date the benefit accrues; 
 13.9   provided, however, that no payment shall be retroactive for more 
 13.10  than or the first of the month occurring 12 months prior 
 13.11  to before the month in which the application is filed with the 
 13.12  director, whichever is earlier. 
 13.13     Sec. 26.  Minnesota Statutes 2004, section 3A.07, is 
 13.14  amended to read: 
 13.15     3A.07 [APPLICATION.] 
 13.16     (a) Except as provided in paragraph (b), this chapter 
 13.17  applies to members of the legislature in service after July 1, 
 13.18  1965, who otherwise meet the requirements of this chapter. 
 13.19     (b) Members of the legislature who were elected for the 
 13.20  first time after June 30, 1997, or members of the legislature 
 13.21  who were elected before July 1, 1997, and who, after July 1, 
 13.22  1998, elect not to be members of the plan established by this 
 13.23  chapter are covered by the unclassified employees retirement 
 13.24  program governed by chapter 352D. 
 13.25     (c) The post-July 1, 1998, coverage election under 
 13.26  paragraph (b) is irrevocable and must be made on a form 
 13.27  prescribed by the director.  The second chance referendum 
 13.28  election under Laws 2002, chapter 392, article 15, also is 
 13.29  irrevocable. 
 13.30     Sec. 27.  Minnesota Statutes 2004, section 3A.10, 
 13.31  subdivision 1, is amended to read: 
 13.32     Subdivision 1.  [SERVICE CREDIT FOR LEGISLATIVE TERM.] (a) 
 13.33  In the case of a member of the house of representatives, one 
 13.34  full term of office shall must be considered two full years of 
 13.35  service, notwithstanding the fact that the oath of office may be 
 13.36  was taken on different days each biennium.  
 14.1      (b) In the case of a member of the senate, one full term of 
 14.2   office shall must be considered four full years of service, 
 14.3   notwithstanding the fact that the oath of office may be was 
 14.4   taken on different days at the start of each term.  
 14.5      (c) For purposes of this chapter, a legislative term shall 
 14.6   must be deemed to commence on January 1st 1 and to end on 
 14.7   December 31st 31.  
 14.8      Sec. 28.  Minnesota Statutes 2004, section 3A.12, is 
 14.9   amended to read: 
 14.10     3A.12 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 
 14.11  ASSOCIATION.] 
 14.12     Subdivision 1.  [ENTITLEMENT TO ANNUITY.] (a) Any 
 14.13  legislator who has been an employee covered by a member of a 
 14.14  retirement plan listed in paragraph (b) is entitled, when 
 14.15  otherwise qualified, to a retirement allowance or annuity from 
 14.16  each plan if the total allowable service in all plans or in any 
 14.17  two of these plans totals ten or more years. 
 14.18     (b) This section applies to any retirement plan or program 
 14.19  administered by the Minnesota State Retirement System, or a 
 14.20  member of any retirement plan administered by the Public 
 14.21  Employees Retirement Association, including the Public Employees 
 14.22  Retirement Association police and fire fund, or the Teachers 
 14.23  Retirement Association, or the Minneapolis employees 
 14.24  retirement Fund plan, or the State Patrol retirement fund plan, 
 14.25  or any other public employee retirement system in the state of 
 14.26  Minnesota having a like provision but excluding all. 
 14.27     (c) This section does not apply to other funds retirement 
 14.28  plans providing benefits for police or firefighters, shall be 
 14.29  entitled when qualified to an annuity from each fund if the 
 14.30  total allowable service for which the legislator has credit in 
 14.31  all funds or in any two of these funds totals ten or more years, 
 14.32  provided. 
 14.33     (d) No portion of the allowable service upon which the 
 14.34  retirement annuity from one fund plan is based is again used in 
 14.35  the computation for benefits from another fund plan.  The 
 14.36  annuity from each fund shall plan must be determined by the 
 15.1   appropriate provisions of the law, except that the requirement 
 15.2   that a person must have at least ten a minimum number of years 
 15.3   of allowable service in the respective system or 
 15.4   association shall does not apply for the purposes of this 
 15.5   section provided if the combined service in two or more of these 
 15.6   funds plans equals ten or more years.  The augmentation of 
 15.7   deferred annuities provided in section 3A.02, subdivision 
 15.8   4, shall apply applies to the annuities accruing hereunder under 
 15.9   this section. 
 15.10     Subd. 2.  [REFUND REPAYMENT.] Any A former legislator who 
 15.11  has received a refund as provided in section 3A.03, subdivision 
 15.12  2, who is a currently contributing member of a retirement fund 
 15.13  plan specified in subdivision 1, paragraph (b), may repay the 
 15.14  refund as provided in section 3A.03, subdivision 2.  Any A 
 15.15  member of the legislature who has received a refund from any of 
 15.16  the funds retirement plans specified in subdivision 1, may repay 
 15.17  the refund to the respective fund plan under such terms and 
 15.18  conditions consistent with the law governing such fund the 
 15.19  retirement plan if the law governing such fund the plan permits 
 15.20  the repayment of refunds.  If the total amount to be repaid, 
 15.21  including principal and interest exceeds $2,000, repayment may 
 15.22  be made in three equal installments over a period of 18 months, 
 15.23  with the interest accrued during the period of the repayment 
 15.24  added to the final installment. 
 15.25     Sec. 29.  Minnesota Statutes 2004, section 3A.13, is 
 15.26  amended to read: 
 15.27     3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
 15.28  DEDUCTION.] 
 15.29     (a) The provisions of section 352.15 shall apply to the 
 15.30  legislators retirement plan, chapter 3A.  
 15.31     (b) The executive director of the Minnesota State 
 15.32  Retirement System must, at the request of a retired legislator 
 15.33  who is enrolled in a health insurance plan covering state 
 15.34  employees, deduct the person's health insurance premiums from 
 15.35  the person's annuity and transfer the amount of the premium to a 
 15.36  health insurance carrier covering state employees. 
 16.1      Sec. 30.  [352C.001] [RETIREMENT PLAN; APPLICATION.] 
 16.2      (a) The retirement plan applicable to a former 
 16.3   constitutional officer who was first elected to a constitutional 
 16.4   office after July 1, 1967, and before July 1, 1997, is the 
 16.5   applicable portions of this chapter and chapter 356 in effect on 
 16.6   the date on which the person terminated active service as a 
 16.7   constitutional officer. 
 16.8      (b) Nothing in this section or section 352C.091, 
 16.9   subdivision 1, or 490.125, subdivision 2, is intended to reduce 
 16.10  the benefits of former constitutional officers or to adversely 
 16.11  modify their eligibility for benefits in effect as of the day 
 16.12  before the effective date of this section. 
 16.13     Sec. 31.  Minnesota Statutes 2004, section 352C.091, 
 16.14  subdivision 1, is amended to read: 
 16.15     Subdivision 1.  [ADMINISTRATIVE AGENCY AND STANDARDS.] This 
 16.16  chapter (a) The elected officers retirement plan must be 
 16.17  administered by the board of directors and the executive 
 16.18  director of the Minnesota State Retirement System.  
 16.19     (b) The elected state officers retirement plan must be 
 16.20  administered consistent with this chapter the applicable 
 16.21  statutory provisions governing the plan and chapters 356 and 
 16.22  356A. 
 16.23     Sec. 32.  Minnesota Statutes 2004, section 352C.10, is 
 16.24  amended to read: 
 16.25     352C.10 [BENEFIT ADJUSTMENTS.] 
 16.26     Retirement allowances payable to retired constitutional 
 16.27  officers pursuant to section 352C.031 and surviving spouse 
 16.28  benefits payable pursuant to section 352C.04, shall must be 
 16.29  adjusted in the same manner, at the same times and in the same 
 16.30  amounts as are benefits payable from the Minnesota 
 16.31  postretirement investment fund to retirees of a participating 
 16.32  public pension fund.  
 16.33     Sec. 33.  Minnesota Statutes 2004, section 352D.02, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
 16.36  paragraph (c), clauses (2), (3), (4), and (6) to (14), if they 
 17.1   are in the unclassified service of the state or Metropolitan 
 17.2   Council and are eligible for coverage under the general state 
 17.3   employees retirement plan under chapter 352, are participants in 
 17.4   the unclassified plan under this chapter unless the employee 
 17.5   gives notice to the executive director of the Minnesota State 
 17.6   Retirement System within one year following the commencement of 
 17.7   employment in the unclassified service that the employee desires 
 17.8   coverage under the general state employees retirement plan.  For 
 17.9   the purposes of this chapter, an employee who does not file 
 17.10  notice with the executive director is deemed to have exercised 
 17.11  the option to participate in the unclassified plan. 
 17.12     (b) Persons referenced in paragraph (c), clauses (1) and 
 17.13  clause (5), are participants in the unclassified program under 
 17.14  this chapter unless the person is eligible to elect different 
 17.15  coverage under section 3A.07 or 352C.011 and, after July 1, 
 17.16  1998, elects elected retirement coverage by the applicable 
 17.17  alternative retirement plan.  Persons referenced in paragraph 
 17.18  (c), clause (15), are participants in the unclassified program 
 17.19  under this chapter for judicial employment in excess of the 
 17.20  service credit limit in section 490.121, subdivision 22. 
 17.21     (c) Enumerated employees and referenced persons are: 
 17.22     (1) the governor, the lieutenant governor, the secretary of 
 17.23  state, the state auditor, and the attorney general; 
 17.24     (2) an employee in the Office of the Governor, Lieutenant 
 17.25  Governor, Secretary of State, State Auditor, Attorney General; 
 17.26     (3) an employee of the State Board of Investment; 
 17.27     (4) the head of a department, division, or agency created 
 17.28  by statute in the unclassified service, an acting department 
 17.29  head subsequently appointed to the position, or an employee 
 17.30  enumerated in section 15A.0815 or 15A.083, subdivision 4; 
 17.31     (5) a member of the legislature; 
 17.32     (6) a full-time unclassified employee of the legislature or 
 17.33  a commission or agency of the legislature who is appointed 
 17.34  without a limit on the duration of the employment or a temporary 
 17.35  legislative employee having shares in the supplemental 
 17.36  retirement fund as a result of former employment covered by this 
 18.1   chapter, whether or not eligible for coverage under the 
 18.2   Minnesota State Retirement System; 
 18.3      (7) a person who is employed in a position established 
 18.4   under section 43A.08, subdivision 1, clause (3), or in a 
 18.5   position authorized under a statute creating or establishing a 
 18.6   department or agency of the state, which is at the deputy or 
 18.7   assistant head of department or agency or director level; 
 18.8      (8) the regional administrator, or executive director of 
 18.9   the Metropolitan Council, general counsel, division directors, 
 18.10  operations managers, and other positions as designated by the 
 18.11  council, all of which may not exceed 27 positions at the council 
 18.12  and the chair; 
 18.13     (9) the executive director, associate executive director, 
 18.14  and not to exceed nine positions of the Higher Education 
 18.15  Services Office in the unclassified service, as designated by 
 18.16  the Higher Education Services Office before January 1, 1992, or 
 18.17  subsequently redesignated with the approval of the board of 
 18.18  directors of the Minnesota State Retirement System, unless the 
 18.19  person has elected coverage by the individual retirement account 
 18.20  plan under chapter 354B; 
 18.21     (10) the clerk of the appellate courts appointed under 
 18.22  article VI, section 2, of the Constitution of the state of 
 18.23  Minnesota; 
 18.24     (11) the chief executive officers of correctional 
 18.25  facilities operated by the Department of Corrections and of 
 18.26  hospitals and nursing homes operated by the Department of Human 
 18.27  Services; 
 18.28     (12) an employee whose principal employment is at the state 
 18.29  ceremonial house; 
 18.30     (13) an employee of the Minnesota Educational Computing 
 18.31  Corporation; 
 18.32     (14) an employee of the State Lottery who is covered by the 
 18.33  managerial plan established under section 43A.18, subdivision 3; 
 18.34  and 
 18.35     (15) a judge who has exceeded the service credit limit in 
 18.36  section 490.121, subdivision 22. 
 19.1      Sec. 34.  Minnesota Statutes 2004, section 355.01, 
 19.2   subdivision 3e, is amended to read: 
 19.3      Subd. 3e.  [JUDGE.] "Judge" means a judge as defined in 
 19.4   section 490.121, subdivision 3 21a. 
 19.5      Sec. 35.  Minnesota Statutes 2004, section 356.65, 
 19.6   subdivision 2, is amended to read: 
 19.7      Subd. 2.  [DISPOSITION OF ABANDONED AMOUNTS.] Any unclaimed 
 19.8   public pension fund amounts existing in any public pension fund 
 19.9   are presumed to be abandoned, but are not subject to the 
 19.10  provisions of sections 345.31 to 345.60.  Unless the benefit 
 19.11  plan of the public pension fund specifically provides for a 
 19.12  different disposition of unclaimed or abandoned funds or 
 19.13  amounts, any unclaimed public pension fund amounts cancel and 
 19.14  must be credited to the public pension fund.  If the unclaimed 
 19.15  public pension fund amount exceeds $25 and the inactive or 
 19.16  former member again becomes a member of the applicable public 
 19.17  pension plan or applies for a retirement annuity under section 
 19.18  3A.12, 352.72, 352B.30, 352C.051, 353.71, 354.60, 356.30, or 
 19.19  422A.16, subdivision 8, whichever applies, the canceled amount 
 19.20  must be restored to the credit of the person. 
 19.21     Sec. 36.  Minnesota Statutes 2004, section 490.121, 
 19.22  subdivision 1, is amended to read: 
 19.23     Subdivision 1.  [SCOPE.] For purposes of sections 490.121 
 19.24  to 490.132, unless the context clearly indicates otherwise, each 
 19.25  of the terms defined in this section have has the meanings 
 19.26  meaning given them unless the context clearly indicates 
 19.27  otherwise it. 
 19.28     Sec. 37.  Minnesota Statutes 2004, section 490.121, is 
 19.29  amended by adding a subdivision to read: 
 19.30     Subd. 2a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 19.31  means the condition of one annuity or benefit having an equal 
 19.32  actuarial present value as another annuity or benefit, 
 19.33  determined as of a given date with each actuarial present value 
 19.34  based on the appropriate mortality table adopted by the board of 
 19.35  directors of the Minnesota State Retirement System based on the 
 19.36  experience of the fund as recommended by the actuary retained 
 20.1   under section 356.214 and approved under section 356.215, 
 20.2   subdivision 18, and using the applicable preretirement or 
 20.3   postretirement interest rate assumption specified in section 
 20.4   356.215, subdivision 8. 
 20.5      Sec. 38.  Minnesota Statutes 2004, section 490.121, 
 20.6   subdivision 4, is amended to read: 
 20.7      Subd. 4.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 20.8   means any calendar month, subject to the service credit limit in 
 20.9   subdivision 22, served as a judge at any time, or during which 
 20.10  the judge received compensation for that service from the state, 
 20.11  municipality, or county, whichever applies, and for which the 
 20.12  judge made any required member contribution.  It also includes 
 20.13  any month served as a referee in probate for all referees in 
 20.14  probate who were in office prior to before January 1, 1974. 
 20.15     (b) "Allowable service" does not mean service as a retired 
 20.16  judge. 
 20.17     Sec. 39.  Minnesota Statutes 2004, section 490.121, 
 20.18  subdivision 6, is amended to read: 
 20.19     Subd. 6.  [ANNUITY.] "Annuity" means the payments that are 
 20.20  made each year to an annuitant from the judges' retirement fund, 
 20.21  pursuant to the provisions of under sections 490.121 to 490.132. 
 20.22     Sec. 40.  Minnesota Statutes 2004, section 490.121, 
 20.23  subdivision 7, is amended to read: 
 20.24     Subd. 7.  [ANNUITANT.] "Annuitant" means a former judge, a 
 20.25  surviving spouse, or a dependent child who is entitled to and is 
 20.26  receiving an annuity under the provisions of sections 490.121 to 
 20.27  490.132. 
 20.28     Sec. 41.  Minnesota Statutes 2004, section 490.121, is 
 20.29  amended by adding a subdivision to read: 
 20.30     Subd. 7a.  [APPROVED ACTUARY.] "Approved actuary" means an 
 20.31  actuary as defined in section 356.215, subdivision 1, paragraph 
 20.32  (c).  
 20.33     Sec. 42.  Minnesota Statutes 2004, section 490.121, is 
 20.34  amended by adding a subdivision to read: 
 20.35     Subd. 7b.  [COURT.] "Court" means any court of this state 
 20.36  that is established by the Minnesota Constitution. 
 21.1      Sec. 43.  Minnesota Statutes 2004, section 490.121, is 
 21.2   amended by adding a subdivision to read: 
 21.3      Subd. 7c.  [DEPENDENT SURVIVING CHILD.] "Dependent 
 21.4   surviving child" means any natural or adopted child of a 
 21.5   deceased judge who has not reached the age of 18 years, or 
 21.6   having reached the age of 18, is under age 22 and who is a 
 21.7   full-time student throughout the normal school year, is 
 21.8   unmarried, and is actually dependent for more than one-half of 
 21.9   the child's support upon the judge for a period of at least 90 
 21.10  days before the judge's death.  It also includes any natural 
 21.11  child of the judge who was born after the death of the judge. 
 21.12     Sec. 44.  Minnesota Statutes 2004, section 490.121, 
 21.13  subdivision 13, is amended to read: 
 21.14     Subd. 13.  [DISABILITY.] "Disability" means the permanent 
 21.15  inability of a judge to continue to perform the functions of 
 21.16  judge by reason of a physical or mental impairment resulting 
 21.17  from a sickness or an injury. 
 21.18     Sec. 45.  Minnesota Statutes 2004, section 490.121, 
 21.19  subdivision 14, is amended to read: 
 21.20     Subd. 14.  [DISABILITY RETIREMENT DATE.] "Disability 
 21.21  retirement date" means the last day of the first month after the 
 21.22  date on which the governor determines, upon receipt of the 
 21.23  voluntary application by the judge or otherwise, that a judge 
 21.24  suffers from a disability. 
 21.25     Sec. 46.  Minnesota Statutes 2004, section 490.121, 
 21.26  subdivision 15, is amended to read: 
 21.27     Subd. 15.  [DISABILITY RETIREMENT ANNUITY.] "Disability 
 21.28  retirement annuity" means an annuity to which a judge is 
 21.29  entitled under section 490.124, subdivisions 1 and 4, after the 
 21.30  retirement for reason of the judge because of a disability. 
 21.31     Sec. 47.  Minnesota Statutes 2004, section 490.121, is 
 21.32  amended by adding a subdivision to read: 
 21.33     Subd. 15a.  [EARLY RETIREMENT DATE.] "Early retirement date"
 21.34  means the last day of the month after a judge attains the age of 
 21.35  60 but before the judge reaches the normal retirement date. 
 21.36     Sec. 48.  Minnesota Statutes 2004, section 490.121, is 
 22.1   amended by adding a subdivision to read: 
 22.2      Subd. 15b.  [EARLY RETIREMENT ANNUITY.] "Early retirement 
 22.3   annuity" means an annuity to which a judge is entitled under 
 22.4   section 490.124, subdivisions 1 and 3, upon retirement by the 
 22.5   judge at an early retirement date. 
 22.6      Sec. 49.  Minnesota Statutes 2004, section 490.121, 
 22.7   subdivision 21, is amended to read: 
 22.8      Subd. 21.  [FINAL AVERAGE COMPENSATION.] "Final average 
 22.9   compensation" means the total amount of the salary payable to a 
 22.10  judge in the highest five years out of the last ten years prior 
 22.11  to before the event of maturity of benefits termination of 
 22.12  judicial service, divided by five; provided, however, that if 
 22.13  the number of years of service by the judge equals or exceeds 
 22.14  ten.  If the number of years of service by the judge is less 
 22.15  than ten, but more than five, the highest five shall years of 
 22.16  salary must be counted, and.  If the number of years of service 
 22.17  by the judge is less than five, the aggregate salary in such for 
 22.18  the period shall of service must be divided by the number of 
 22.19  months in such the period and multiplied by 12. 
 22.20     Sec. 50.  Minnesota Statutes 2004, section 490.121, is 
 22.21  amended by adding a subdivision to read: 
 22.22     Subd. 21a.  [JUDGE.] "Judge" means a judge or a justice of 
 22.23  any court as defined under subdivision 7b. 
 22.24     Sec. 51.  Minnesota Statutes 2004, section 490.121, is 
 22.25  amended by adding a subdivision to read: 
 22.26     Subd. 21b.  [JUDGES' RETIREMENT FUND; RETIREMENT FUND; 
 22.27  FUND.] "Judges' retirement fund," "retirement fund," or "fund" 
 22.28  means the fund created by section 490.123. 
 22.29     Sec. 52.  Minnesota Statutes 2004, section 490.121, is 
 22.30  amended by adding a subdivision to read: 
 22.31     Subd. 21c.  [MANDATORY RETIREMENT DATE.] "Mandatory 
 22.32  retirement date" means the last day of the month in which a 
 22.33  judge has attained 70 years of age. 
 22.34     Sec. 53.  Minnesota Statutes 2004, section 490.121, is 
 22.35  amended by adding a subdivision to read: 
 22.36     Subd. 21d.  [NORMAL RETIREMENT ANNUITY.] Except as 
 23.1   otherwise provided in sections 490.121 to 490.132, "normal 
 23.2   retirement annuity" means an annuity to which a judge is 
 23.3   entitled under section 490.124, subdivision 1, upon retirement 
 23.4   on or after the normal retirement date of the judge. 
 23.5      Sec. 54.  Minnesota Statutes 2004, section 490.121, is 
 23.6   amended by adding a subdivision to read: 
 23.7      Subd. 21e.  [NORMAL RETIREMENT DATE.] "Normal retirement 
 23.8   date" means the last day of the month in which a judge attains 
 23.9   the age of 65. 
 23.10     Sec. 55.  Minnesota Statutes 2004, section 490.121, 
 23.11  subdivision 22, is amended to read: 
 23.12     Subd. 22.  [SERVICE CREDIT LIMIT.] "Service credit limit" 
 23.13  means the greater of:  (1) 24 years of allowable service 
 23.14  under this chapter 490; or (2) for judges with allowable service 
 23.15  rendered prior to before July 1, 1980, the number of years of 
 23.16  allowable service under chapter 490, which, when multiplied by 
 23.17  the percentage listed in section 356.315, subdivision 7 or 8, 
 23.18  whichever is applicable to each year of service, equals 76.8. 
 23.19     Sec. 56.  Minnesota Statutes 2004, section 490.121, is 
 23.20  amended by adding a subdivision to read: 
 23.21     Subd. 23.  [SURVIVING SPOUSE.] "Surviving spouse" means the 
 23.22  surviving legally married spouse of a deceased judge. 
 23.23     Sec. 57.  Minnesota Statutes 2004, section 490.121, is 
 23.24  amended by adding a subdivision to read: 
 23.25     Subd. 24.  [SURVIVOR'S ANNUITY.] "Survivor's annuity" means 
 23.26  an annuity to which a surviving spouse or dependent child is 
 23.27  entitled under section 490.124, subdivision 9. 
 23.28     Sec. 58.  Minnesota Statutes 2004, section 490.122, is 
 23.29  amended to read: 
 23.30     490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.] 
 23.31     Subdivision 1.  [ADMINISTRATION.] The policy-making, 
 23.32  management, and administrative functions governing the operation 
 23.33  of the judges' retirement fund and the administration 
 23.34  of sections 490.121 to 490.132 this chapter are vested in the 
 23.35  board of directors and executive director of the Minnesota State 
 23.36  Retirement System with such.  In administering the plan and 
 24.1   fund, the board and the director have the same duties, 
 24.2   authority, and responsibility as are provided in chapter 352.  
 24.3      Subd. 2.  [INAPPLICABILITY OF CERTAIN LAWS.] Except as 
 24.4   otherwise specified, no provision of chapter 352 applies to the 
 24.5   judges' retirement fund or any judge.  
 24.6      Subd. 3.  [FIDUCIARY RESPONSIBILITY.] Fiduciary 
 24.7   activities of relating to the uniform judges' retirement and 
 24.8   Survivors' Annuities for Judges plan must be undertaken in a 
 24.9   manner consistent with chapter 356A. 
 24.10     Sec. 59.  Minnesota Statutes 2004, section 490.123, 
 24.11  subdivision 1, is amended to read: 
 24.12     Subdivision 1.  [FUND CREATION; REVENUE AND AUTHORIZED 
 24.13  DISBURSEMENTS.] (a) There is created a special fund to be known 
 24.14  as the "judges' retirement fund." 
 24.15     (b) The judges' retirement fund must be credited with all 
 24.16  contributions,; all interest, dividends, and other investment 
 24.17  proceeds; and all other income authorized by this chapter or 
 24.18  other applicable law.  
 24.19     (c) From this fund there are appropriated the payments 
 24.20  authorized by sections 490.121 to 490.132, in the amounts and at 
 24.21  the times provided, including the necessary and reasonable 
 24.22  expenses of the Minnesota State Retirement System in 
 24.23  administering the fund and the transfers to the Minnesota 
 24.24  postretirement investment fund.  
 24.25     Sec. 60.  Minnesota Statutes 2004, section 490.123, 
 24.26  subdivision 1a, is amended to read: 
 24.27     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 24.28  covered by the federal Old Age, Survivors, Disability, and 
 24.29  Health Insurance Program and whose service does not exceed the 
 24.30  service credit limit in section 490.121, subdivision 22, shall 
 24.31  contribute to the fund from each salary payment a sum equal to 
 24.32  8.00 percent of salary.  
 24.33     (b) A judge not so covered whose service does not exceed 
 24.34  the service credit limit in section 490.121, subdivision 22, 
 24.35  shall contribute to the fund from each salary payment a sum 
 24.36  equal to 8.15 percent of salary. 
 25.1      (c) The contribution under this subdivision is payable by 
 25.2   salary deduction.  The deduction must be made by the state court 
 25.3   administrator under section 352.04, subdivisions 4, 5, and 8. 
 25.4      Sec. 61.  Minnesota Statutes 2004, section 490.123, 
 25.5   subdivision 1b, is amended to read: 
 25.6      Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] (a) The employer 
 25.7   contribution rate to the fund on behalf of a judge is 20.5 
 25.8   percent of salary and.  The employer obligation continues after 
 25.9   a judge exceeds the service credit limit in section 490.121, 
 25.10  subdivision 22. 
 25.11     (b) The employer contribution must be paid by the state 
 25.12  court administrator and.  The employer contribution is payable 
 25.13  at the same time as member contributions are made under 
 25.14  subdivision 1a or as employee contributions are made to the 
 25.15  unclassified plan in program governed by chapter 352D for judges 
 25.16  whose service exceeds the limit in section 490.121, subdivision 
 25.17  22, are remitted. 
 25.18     Sec. 62.  Minnesota Statutes 2004, section 490.123, 
 25.19  subdivision 1c, is amended to read: 
 25.20     Subd. 1c.  [ADDITIONAL EMPLOYER CONTRIBUTION.] In the event 
 25.21  that If the employer contribution under subdivision 1b and the 
 25.22  assets of the judges retirement fund are insufficient to meet 
 25.23  reserve transfers to the Minnesota postretirement investment 
 25.24  fund or payments of survivor benefits before July 1, 1993 in a 
 25.25  month, the necessary amount is appropriated from the general 
 25.26  fund to the executive director of the Minnesota State Retirement 
 25.27  System, upon the certification of the required amount by the 
 25.28  executive director to the commissioner of finance. 
 25.29     Sec. 63.  Minnesota Statutes 2004, section 490.123, 
 25.30  subdivision 2, is amended to read: 
 25.31     Subd. 2.  [COMMISSIONER OF FINANCE.] The commissioner of 
 25.32  finance shall be is the ex officio treasurer of the judges' 
 25.33  retirement fund and the.  The commissioner's general bond to the 
 25.34  state shall must be so conditioned as to cover all liability for 
 25.35  acting as the treasurer of this the fund.  All moneys money 
 25.36  received by the commissioner pursuant to under this section 
 26.1   shall must be set aside in the state treasury to the credit of 
 26.2   the judges' retirement fund.  The commissioner shall transmit 
 26.3   monthly to the executive director described in section 352.03, 
 26.4   subdivision 5, a detailed statement of all amounts so received 
 26.5   and credited to the fund.  The commissioner shall pay out the 
 26.6   fund only upon vouchers signed by said executive director; 
 26.7   provided that vouchers for investment may be signed by the 
 26.8   secretary of the State Board of Investment. 
 26.9      Sec. 64.  Minnesota Statutes 2004, section 490.123, 
 26.10  subdivision 3, is amended to read: 
 26.11     Subd. 3.  [INVESTMENT.] (a) The executive director referred 
 26.12  to in subdivision 2 of the Minnesota State Retirement System 
 26.13  shall, from time to time, certify to the State Board of 
 26.14  Investment such portions of the judges' retirement fund as in 
 26.15  the director's judgment may not be required for immediate use.  
 26.16     (b) Assets from the judges' retirement fund shall must be 
 26.17  transferred to the Minnesota postretirement investment fund for 
 26.18  retirement and disability benefits as provided in sections 
 26.19  11A.18 and 352.119.  
 26.20     (c) The State Board of Investment shall thereupon invest 
 26.21  and reinvest sums so transferred, or certified, in such 
 26.22  securities as are duly authorized legal investments for such 
 26.23  purposes under section 11A.24 in compliance with sections 
 26.24  356A.04 and 356A.06.  
 26.25     Sec. 65.  Minnesota Statutes 2004, section 490.124, 
 26.26  subdivision 1, is amended to read: 
 26.27     Subdivision 1.  [BASIC RETIREMENT ANNUITY.] (a) Except as 
 26.28  qualified hereinafter from and after the mandatory retirement 
 26.29  date, the normal retirement date, the early retirement date, or 
 26.30  one year from the disability retirement date, as the case may 
 26.31  be, a retiring judge is eligible to receive a retirement annuity 
 26.32  shall be payable to a retiring judge from the judges' retirement 
 26.33  fund in. 
 26.34     (b) The retirement annuity is an amount equal to:  (1) the 
 26.35  percent specified in section 356.315, subdivision 7, multiplied 
 26.36  by the judge's final average compensation with that result then 
 27.1   multiplied by the number of years and fractions of years of 
 27.2   allowable service rendered prior to before July 1, 1980; plus 
 27.3   (2) the percent specified in section 356.315, subdivision 8, 
 27.4   multiplied by the judge's final average compensation with that 
 27.5   result then multiplied by the number of years and fractions of 
 27.6   years of allowable service rendered after June 30, 1980. 
 27.7      (c) Service that exceeds the service credit limit in 
 27.8   section 490.121, subdivision 22, must be excluded in calculating 
 27.9   the retirement annuity, but the compensation earned by the judge 
 27.10  during this period of judicial service must be used in 
 27.11  determining a judge's final average compensation and calculating 
 27.12  the retirement annuity.  
 27.13     Sec. 66.  Minnesota Statutes 2004, section 490.124, 
 27.14  subdivision 2, is amended to read: 
 27.15     Subd. 2.  [MINIMUM SERVICE REQUIREMENT; EXTENSION OF TERM.] 
 27.16  No (a) Unless section 356.30 applies, a judge shall be is not 
 27.17  eligible for an annuity at the normal retirement date or the 
 27.18  early retirement date if the judge has less than five years of 
 27.19  allowable service.  
 27.20     (b) A judge who shall retire retires on or, as permitted 
 27.21  under sections 490.121 to 490.132, after the judge's mandatory 
 27.22  retirement date, shall be is entitled to a proportionate annuity 
 27.23  based upon the allowable service of the judge at the date of 
 27.24  retirement. 
 27.25     A judge who was in office on December 31, 1973, and 
 27.26  thereafter and who, by the date on which the current term 
 27.27  expires, would not be eligible to retire with full benefits 
 27.28  under statutes in effect on December 31, 1973, may apply to the 
 27.29  governor for an extension to serve up to three additional years, 
 27.30  stating the intention of the judge to retire upon attaining 
 27.31  eligibility to receive a retirement allowance.  Notwithstanding 
 27.32  section 490.125, the governor shall forthwith make a written 
 27.33  order accepting the retirement application, and extending the 
 27.34  term of office of the judge for the period of time, not to 
 27.35  exceed three years, as may be necessary to make the judge 
 27.36  eligible for retirement, solely for purposes of computing 
 28.1   benefits hereunder. 
 28.2      Sec. 67.  Minnesota Statutes 2004, section 490.124, 
 28.3   subdivision 3, is amended to read: 
 28.4      Subd. 3.  [EARLY REDUCED RETIREMENT.] The retirement 
 28.5   annuity provided by under subdivision 1 of any judge electing 
 28.6   who elects to retire at an early retirement date shall must be 
 28.7   reduced by one-half of one percent per month from the retirement 
 28.8   date to the normal retirement date. 
 28.9      Sec. 68.  Minnesota Statutes 2004, section 490.124, 
 28.10  subdivision 4, is amended to read: 
 28.11     Subd. 4.  [DISABILITY RETIREMENT.] (a) When the governor 
 28.12  determines that a judge is disabled under section 490.121, 
 28.13  subdivision 13, notice of the governor's determination must be 
 28.14  sent to the judge, the chief justice of the Supreme Court, the 
 28.15  state court administrator, and the executive director of the 
 28.16  Minnesota State Retirement System. 
 28.17     (b) From and after disability retirement date, a disabled 
 28.18  judge shall be is entitled to continuation of the judge's full 
 28.19  salary payable by the judge's employer, as if the judge's office 
 28.20  were not vacated by retirement, for a period of up to one full 
 28.21  year, but in no event beyond the judge's mandatory retirement 
 28.22  date.  During this year the judge will is entitled to earn 
 28.23  additional service credit in the judges' retirement plan.  The 
 28.24  salary earned will be payable to a disabled judge is subject to 
 28.25  retirement deductions and will must be included in computing 
 28.26  final average compensation of the judge.  Thereafter 
 28.27     (c) At the conclusion of the year of continued salary 
 28.28  following a disability or upon the judge's mandatory retirement 
 28.29  date, whichever is earlier, the disabled judge is entitled to a 
 28.30  disability retirement annuity computed as provided in 
 28.31  subdivision 1 shall be paid, provided that.  If the computed 
 28.32  retirement annuity is a smaller amount, the judge shall is 
 28.33  entitled to receive a minimum annuity of 25 percent of the 
 28.34  judge's final average compensation. 
 28.35     Sec. 69.  Minnesota Statutes 2004, section 490.124, 
 28.36  subdivision 5, is amended to read: 
 29.1      Subd. 5.  [DEFERRED BENEFITS.] (a) Any A benefit to which a 
 29.2   judge is entitled under this section may be deferred until the 
 29.3   early or normal retirement date or later, notwithstanding the 
 29.4   termination of such the judge's service prior thereto. 
 29.5      (b) The retirement annuity of, or the survivor benefit 
 29.6   payable on behalf of, a former judge, who terminated service 
 29.7   before July 1, 1997, which is not first payable until after June 
 29.8   30, 1997, must be increased on an actuarial equivalent basis to 
 29.9   reflect the change in the postretirement interest rate actuarial 
 29.10  assumption under section 356.215, subdivision 8, from five 
 29.11  percent to six percent under a calculation procedure and tables 
 29.12  adopted by the board of directors of the Minnesota State 
 29.13  Retirement System and approved by the actuary retained by the 
 29.14  Legislative Commission on Pensions and Retirement under section 
 29.15  356.214. 
 29.16     Sec. 70.  Minnesota Statutes 2004, section 490.124, 
 29.17  subdivision 8, is amended to read: 
 29.18     Subd. 8.  [EXCLUSIVE NORMAL RETIREMENT BENEFITS.] Any (a) 
 29.19  Except as provided in paragraph (b), a judge who retires after 
 29.20  December 31, 1973, shall be is entitled to a retirement pension, 
 29.21  retirement compensation or other retirement payment under 
 29.22  statutes applicable solely to judges pursuant to under this 
 29.23  section only, except that any such. 
 29.24     (b) A judge who was in office prior to before January 1, 
 29.25  1974, who retires at or after normal retirement age may then 
 29.26  elect to receive during the judge's lifetime a normal retirement 
 29.27  annuity computed on the basis of retirement compensation 
 29.28  provided for such judge under statutes in effect on December 31, 
 29.29  1973, in lieu of the amount of normal retirement annuity 
 29.30  otherwise computed under sections 490.121 to 490.132.  
 29.31     For purposes of this subdivision, the Conciliation Court of 
 29.32  the city of Duluth shall be deemed to have been a court of 
 29.33  record by the statutes in effect on December 31, 1973.  
 29.34     Sec. 71.  Minnesota Statutes 2004, section 490.124, 
 29.35  subdivision 9, is amended to read: 
 29.36     Subd. 9.  [SURVIVORS' ANNUITY.] (a) Upon the death of a 
 30.1   judge prior to before retirement, or upon the death of a person 
 30.2   who has qualified for an annuity under this section but who 
 30.3   ceases to be a judge prior to before retirement and has who not 
 30.4   received a refund of contributions pursuant to under subdivision 
 30.5   12, a surviving spouse is entitled to, or, if there be no 
 30.6   surviving spouse, dependent children, shall are entitled to 
 30.7   receive an annuity, payable monthly, equal in total to 60 
 30.8   percent of the normal retirement annuity which would have been 
 30.9   payable to the judge or former judge had the date of death been 
 30.10  the normal retirement date, provided that the. 
 30.11     (b) The annuity payable to a surviving spouse or to 
 30.12  dependent children shall receive an annuity is an amount of not 
 30.13  less than 25 percent of the judge's or the former judge's final 
 30.14  average compensation. 
 30.15     If a judge, whose surviving spouse was not entitled to 
 30.16  survivors benefits provided solely for judges under statutes in 
 30.17  effect prior to January 1, 1974, shall have died prior to 
 30.18  retirement on or after May 23, 1973 and before January 1, 1974, 
 30.19  a surviving spouse and dependent children, if any, shall be 
 30.20  entitled to survivors benefits as provided hereunder as if such 
 30.21  judge had died on January 1, 1974. 
 30.22     Sec. 72.  Minnesota Statutes 2004, section 490.124, 
 30.23  subdivision 10, is amended to read: 
 30.24     Subd. 10.  [PRIOR SURVIVORS' BENEFITS; LIMITATION.] (a) 
 30.25  Benefits provided pursuant to under Minnesota Statutes 2004, 
 30.26  section 490.102, subdivision 6, or 490.1091, for a surviving 
 30.27  spouse of a retired judge, payable after the death of the judge, 
 30.28  shall be are limited to: 
 30.29     (a) spouses of judges who have retired prior to before 
 30.30  January 1, 1974; and. 
 30.31     (b) spouses of judges in office on December 31, 1973 and 
 30.32  thereafter who elect to continue contributions pursuant to 
 30.33  section 490.102, subdivision 6 or 490.109.  The contributions 
 30.34  shall be in addition to contributions pursuant to section 
 30.35  490.123, and upon retirement the judge may not elect to receive 
 30.36  any optional annuity pursuant to subdivision 11 unless the judge 
 31.1   and the spouse shall waive any benefits pursuant to section 
 31.2   490.102, subdivision 6 or 490.1091. 
 31.3      No other judge in office on or after January 1, 1974, shall 
 31.4   be is required to contribute pursuant to under Minnesota 
 31.5   Statutes 2004, section 490.102, subdivision 6, or 490.109. 
 31.6      Sec. 73.  Minnesota Statutes 2004, section 490.124, 
 31.7   subdivision 11, is amended to read: 
 31.8      Subd. 11.  [LIMITATION ON SURVIVOR BENEFITS; OPTIONAL 
 31.9   ANNUITIES.] (a) No survivor or death benefits may be paid in 
 31.10  connection with the death of a judge who retires after December 
 31.11  31, 1973, except as otherwise provided in sections 490.121 to 
 31.12  490.132.  
 31.13     (b) Except as provided in subdivision 10, a judge may elect 
 31.14  to receive, instead of the normal retirement annuity, an 
 31.15  optional retirement annuity in the form of either (1) an annuity 
 31.16  payable for a period certain and for life after that period, (2) 
 31.17  a joint and survivor annuity without reinstatement in the event 
 31.18  of if the designated beneficiary predeceasing predeceases the 
 31.19  retired judge, or (3) a joint and survivor annuity with 
 31.20  reinstatement in the event of if the designated beneficiary 
 31.21  predeceasing predeceases the retired judge.  
 31.22     (c) An optional retirement annuity must be actuarially 
 31.23  equivalent to a single-life annuity with no term certain and 
 31.24  must be established by the board of directors of the Minnesota 
 31.25  State Retirement System.  In establishing these optional 
 31.26  retirement annuity forms, the board shall obtain the written 
 31.27  recommendation of the actuary retained by the Legislative 
 31.28  Commission on Pensions and Retirement under section 356.214.  
 31.29  The recommendations must be retained as a part of the permanent 
 31.30  records of the board. 
 31.31     Sec. 74.  Minnesota Statutes 2004, section 490.124, 
 31.32  subdivision 12, is amended to read: 
 31.33     Subd. 12.  [REFUND.] (a) A person who ceases to be a 
 31.34  judge but who does not qualify for a retirement annuity or other 
 31.35  benefit under section 490.121 is entitled to a refund in an 
 31.36  amount that is equal to all of the member's employee 
 32.1   contributions to the judges' retirement fund plus interest 
 32.2   computed under section 352.22, subdivision 2. 
 32.3      (b) A refund of contributions under paragraph (a) 
 32.4   terminates all service credits and all rights and benefits of 
 32.5   the judge and the judge's survivors under this chapter.  
 32.6      (c) A person who becomes a judge again after taking a 
 32.7   refund under paragraph (a) may reinstate the previously 
 32.8   terminated allowable service credits credit, rights, and 
 32.9   benefits by repaying the total amount of the previously received 
 32.10  refund.  The refund repayment must include interest on the total 
 32.11  amount previously received at an annual rate of 8.5 percent, 
 32.12  compounded annually, from the date on which the refund was 
 32.13  received until the date on which the refund is repaid. 
 32.14     Sec. 75.  Minnesota Statutes 2004, section 490.124, 
 32.15  subdivision 13, is amended to read: 
 32.16     Subd. 13.  [DEATH REFUND.] If a judge who has not received 
 32.17  other benefits under this chapter dies and there are no survivor 
 32.18  benefits payable under this chapter, a refund plus interest as 
 32.19  provided in subdivision 12 is payable to the last designated 
 32.20  beneficiary named on a form filed with the director before the 
 32.21  death of the judge, or, if no designation is on file, the refund 
 32.22  is payable to the estate of the deceased judge. 
 32.23     Sec. 76.  Minnesota Statutes 2004, section 490.125, 
 32.24  subdivision 1, is amended to read: 
 32.25     Subdivision 1.  [MANDATORY RETIREMENT AGE.] Except as 
 32.26  otherwise provided in sections 490.121 to 490.132, each a judge 
 32.27  shall retire terminate active service as a judge on the judge's 
 32.28  mandatory retirement date.  
 32.29     Sec. 77.  Minnesota Statutes 2004, section 490.125, 
 32.30  subdivision 2, is amended to read: 
 32.31     Subd. 2.  [EXCEPTION.] Except as provided by sections 
 32.32  490.025, subdivision 3, 490.102, subdivisions 3 and 3a and 
 32.33  490.12, subdivision 2, Any judge in office on December 31, 1973 
 32.34  who shall have attained 70 years of age on or prior to such date 
 32.35  shall retire upon the expiration of the term of office of such 
 32.36  judge.  
 33.1      Sec. 78.  Minnesota Statutes 2004, section 490.126, is 
 33.2   amended to read: 
 33.3      490.126 [PROCEDURES.] 
 33.4      Subdivision 1.  [COMPULSORY RETIREMENT.] Proceedings for 
 33.5   compulsory retirement of a judge, if necessary, shall must be 
 33.6   conducted in accordance with rules issued by the Supreme Court 
 33.7   pursuant to under section 490.16 490A.02. 
 33.8      Subd. 2.  [VACANCIES.] Any judge may make written 
 33.9   application to the governor for retirement.  The governor 
 33.10  thereupon shall direct the judge's retirement by written order 
 33.11  which, when filed in the Office of the Secretary of State, shall 
 33.12  effect effects a vacancy in the office to be filled as provided 
 33.13  by law.  
 33.14     Subd. 3.  [APPLICATION FOR ANNUITY OR REFUND.] An 
 33.15  application for an annuity or a refund under sections 490.121 to 
 33.16  490.132 may be made by the potential annuitant or by someone 
 33.17  authorized to act for the potential annuitant.  Every 
 33.18  application for an annuity or refund, with accompanied by a 
 33.19  proof of age and by a record of years of service when 
 33.20  required, shall must be submitted to the governing 
 33.21  body executive director of the Minnesota State Retirement System 
 33.22  in a form prescribed by it the director.  
 33.23     Subd. 4.  [MANNER OF PAYMENT.] Unless otherwise 
 33.24  specifically provided by statute or agreed upon by the annuitant 
 33.25  and the governing body board of directors of the Minnesota State 
 33.26  Retirement System, annuities payable under sections 490.121 to 
 33.27  490.132 shall must be paid in the manner and at the intervals as 
 33.28  prescribed by the executive director of the Minnesota State 
 33.29  Retirement System.  The annuity shall cease ceases with the last 
 33.30  payment received by the annuitant while living.  
 33.31     Subd. 5.  [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 
 33.32  the money, annuities, or other benefits provided in this chapter 
 33.33  is assignable either in law or equity or is subject to state 
 33.34  estate tax, or to execution, levy, attachment, garnishment, or 
 33.35  other legal process, except as provided in section 518.58, 
 33.36  518.581, or 518.6111. 
 34.1      Sec. 79.  Minnesota Statutes 2004, section 490.133, is 
 34.2   amended to read: 
 34.3      490.133 [RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 
 34.4   COURT OF APPEALS.] 
 34.5      (a) If a judge to whom or to whose survivors benefits would 
 34.6   be payable under Minnesota Statutes 2004, sections 490.101 to 
 34.7   490.12, is elected or appointed to the Court of Appeals, that 
 34.8   judge and the judge's survivors, shall continue to be eligible 
 34.9   for benefits under those sections and not under sections 490.121 
 34.10  to 490.132.  
 34.11     (b) In that the case of a judge to whom paragraph (a) 
 34.12  applies, the service of the judge in the Court of Appeals shall 
 34.13  must be added to the prior service as district judge, probate 
 34.14  judge, or judge of any other court of record in determining 
 34.15  eligibility and the compensation of a judge of the Court of 
 34.16  Appeals at the time of the judge's death, disability, or 
 34.17  retirement shall be is the "compensation allotted to the office" 
 34.18  for the purposes of calculating benefit amounts.  
 34.19     (c) All other judges of the Court of Appeals and their 
 34.20  survivors shall be are subject to the retirement and survivor's 
 34.21  annuity provisions of sections 490.121 to 490.132. 
 34.22     Sec. 80.  [490A.01] [BOARD OF JUDICIAL STANDARDS; 
 34.23  ESTABLISHMENT.] 
 34.24     Subdivision 1.  [ESTABLISHMENT; COMPOSITION.] The Board on 
 34.25  Judicial Standards is established.  The Board on Judicial 
 34.26  Standards is a continuation of the board established by Laws 
 34.27  1971, chapter 909, sections 1 and 2, as amended.  For the 
 34.28  purposes of this chapter, "board" means the Board on Judicial 
 34.29  Standards. 
 34.30     Subd. 2.  [COMPOSITION; APPOINTMENT.] (a) The board 
 34.31  consists of one judge of the Court of Appeals, three trial court 
 34.32  judges, two lawyers who have practiced law in the state for at 
 34.33  least ten years, and four citizens who are not judges, retired 
 34.34  judges, or lawyers. 
 34.35     (b) All members must be appointed by the governor with the 
 34.36  advice and consent of the senate.  Senate confirmation is not 
 35.1   required for judicial members. 
 35.2      Subd. 3.  [TERM MAXIMUM; MEMBERSHIP TERMINATION.] No member 
 35.3   may serve more than two full four-year terms or their equivalent.
 35.4   Membership terminates if a member ceases to hold the position 
 35.5   that qualified the member for appointment. 
 35.6      Subd. 4.  [MEMBER TERMS; COMPENSATION; REMOVAL.] The 
 35.7   membership terms, compensation, removal of members, and filling 
 35.8   of vacancies on the board are as provided in section 15.0575. 
 35.9      Subd. 5.  [EXECUTIVE SECRETARY APPOINTMENT; SALARY.] (a) 
 35.10  The board shall appoint the executive secretary. 
 35.11     (b) The salary of the executive secretary of the board is 
 35.12  85 percent of the maximum salary provided for an administrative 
 35.13  law judge under section 15A.083, subdivision 6a. 
 35.14     Sec. 81.  [490A.02] [JUDICIAL STANDARDS BOARD; POWERS.] 
 35.15     Subdivision 1.  [JUDICIAL DISQUALIFICATION.] A judge is 
 35.16  disqualified from acting as a judge, without a loss of salary, 
 35.17  while there is pending an indictment or any information charging 
 35.18  the judge with a crime that is punishable as a felony under 
 35.19  either Minnesota law or federal law, or while there is pending a 
 35.20  recommendation to the Supreme Court by the Board on Judicial 
 35.21  Standards for the judge's removal or retirement. 
 35.22     Subd. 2.  [JUDICIAL SUSPENSION.] On receipt of a 
 35.23  recommendation of the Board on Judicial Standards or on its own 
 35.24  motion, the Supreme Court may suspend a judge from office 
 35.25  without salary when the judge pleads guilty to or no contest to 
 35.26  or is found guilty of a crime that is punishable as a felony 
 35.27  under either Minnesota law or federal law or any other crime 
 35.28  that involves moral turpitude.  If the conviction is reversed, 
 35.29  the suspension terminates and the judge must be paid a salary 
 35.30  for the period of suspension.  If the judge is suspended and the 
 35.31  conviction becomes final, the Supreme Court shall remove the 
 35.32  judge from office. 
 35.33     Subd. 3.  [JUDICIAL DISABILITY.] On receipt of a 
 35.34  recommendation of the Board on Judicial Standards, the Supreme 
 35.35  Court may retire a judge for a disability that the court 
 35.36  determines seriously interferes with the performance of the 
 36.1   judge's duties and is or is likely to become permanent, and 
 36.2   censure or remove a judge for an action or inaction that may 
 36.3   constitute persistent failure to perform the judge's duties, 
 36.4   incompetence in performing the judge's duties, habitual 
 36.5   intemperance, or conduct prejudicial to the administration of 
 36.6   justice that brings the judicial office into disrepute. 
 36.7      Subd. 4.  [AUTHORITY TO REOPEN MATTERS.] The board is 
 36.8   specifically empowered to reopen any matter wherein any 
 36.9   information or evidence was previously precluded by a statute of 
 36.10  limitations or by a previously existing provision of time 
 36.11  limitation. 
 36.12     Subd. 5.  [RETIREMENT STATUS.] (a) A judge who is retired 
 36.13  by the Supreme Court must be considered to have retired 
 36.14  voluntarily. 
 36.15     (b) This section and section 490A.01 must not affect the 
 36.16  right of a judge who is suspended, retired, or removed under 
 36.17  this section from qualifying for any pension or other retirement 
 36.18  benefits to which the judge would otherwise be entitled by law 
 36.19  to receive. 
 36.20     Subd. 6.  [ELIGIBILITY FOR JUDICIAL OFFICE; PRACTICE 
 36.21  LAW.] A judge removed by the Supreme Court is ineligible for any 
 36.22  future service in a judicial office.  The question of the right 
 36.23  of a removed judge to practice law in this state must be 
 36.24  referred to the proper authority for review. 
 36.25     Subd. 7.  [SUPREME COURT RULES.] The Supreme Court shall 
 36.26  make rules to implement this section. 
 36.27     Sec. 82.  [490A.03] [PERSONS AFFECTED.] 
 36.28     The provisions of sections 490A.01 and 490A.02 apply to all 
 36.29  judges, judicial officers, and referees.  
 36.30     Sec. 83.  Minnesota Statutes 2004, section 525.05, is 
 36.31  amended to read: 
 36.32     525.05 [JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.] 
 36.33     The following shall be grounds for disqualification of any 
 36.34  judge or referee from acting in any matter:  (1) That the judge 
 36.35  or the judge's spouse or any of either of their kin nearer than 
 36.36  first cousin is interested as representative, heir, devisee, 
 37.1   legatee, ward, or creditor in the estate involved therein; (2) 
 37.2   that it involves the validity or interpretation of a will drawn 
 37.3   or witnessed by the judge; (3) that the judge may be a necessary 
 37.4   witness in the matter; (4) that it involves a property right in 
 37.5   respect to which the judge has been engaged or is engaged as an 
 37.6   attorney; or (5) that the judge was engaged in a joint 
 37.7   enterprise for profit with the decedent at the time of death or 
 37.8   that the judge is then engaged in a joint enterprise for profit 
 37.9   with any person interested in the matter as representative, 
 37.10  heir, devisee, legatee, ward, or creditor.  When grounds for 
 37.11  disqualification exist, the judge may, and upon proper petition 
 37.12  of any person interested in the estate must, request another 
 37.13  judge or a judge who has retired as provided in section 490.12, 
 37.14  subdivision 2, to act in the judge's stead in the matter. 
 37.15     Sec. 84.  [REPEALER; EFFECT ON BENEFIT COVERAGE.] 
 37.16     Subdivision 1.  [LEGISLATORS RETIREMENT PLAN; REPEALED AS 
 37.17  OBSOLETE.] Minnesota Statutes 2004, sections 3A.01, subdivisions 
 37.18  3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1a; 
 37.19  and 3A.09, are repealed. 
 37.20     Subd. 2.  [ELECTIVE STATE OFFICERS RETIREMENT PLAN; 
 37.21  REPEALED AS OBSOLETE.] Minnesota Statutes 2004, sections 
 37.22  352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 
 37.23  352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are 
 37.24  repealed. 
 37.25     Subd. 3.  [JUDICIAL RETIREMENT PLANS; REPEALED AS 
 37.26  OBSOLETE.] Minnesota Statutes 2004, sections 490.021; 490.025; 
 37.27  490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108; 
 37.28  490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 
 37.29  10, 11, 12, 16, 17, 18, 19, and 20; 490.124, subdivision 6; and 
 37.30  490.132, are repealed. 
 37.31     Subd. 4.  [JUDICIAL STANDARDS BOARD; REPEALED FOR 
 37.32  RELOCATION AS MINNESOTA STATUTES, CHAPTER 490A.] Minnesota 
 37.33  Statutes 2004, sections 490.15, 490.16, and 490.18, are repealed.
 37.34     Subd. 5.  [UNIFORM JUDICIAL RETIREMENT PLAN; NO BENEFIT 
 37.35  DIMINISHMENT INTENDED; PROCEDURE.] Sections 32 to 76 are not 
 37.36  intended to reduce or increase the entitlement of active, 
 38.1   deferred, or retired judges to retirement annuities or benefits 
 38.2   as of July 1, 2005, as reflected in the records of the Minnesota 
 38.3   State Retirement System.  If the executive director of the 
 38.4   Minnesota State Retirement System determines that any provisions 
 38.5   of sections 32 to 76 functions to modify, impair, or diminish 
 38.6   the retirement annuity or benefit entitlement of any judge that 
 38.7   had accrued or earned before July 1, 2005, the executive 
 38.8   director shall certify that determination and a recommendation 
 38.9   as to the required legislative correction to the chair of the 
 38.10  Legislative Commission on Pensions and Retirement, the chair of 
 38.11  the senate State and Local Governmental Operations Committee, 
 38.12  the chair of the house Governmental Operations and Veterans 
 38.13  Affairs Policy Committee, and the executive director of the 
 38.14  Legislative Commission on Pensions and Retirement on or before 
 38.15  the October 1 next following that determination. 
 38.16     Sec. 85.  [REVISOR INSTRUCTIONS.] 
 38.17     (a) In Minnesota Statutes, chapters 352, 352D, 355, 356, 
 38.18  and 487, the revisor of statutes shall change references to 
 38.19  "sections 490.121 to 490.132" to "chapter 490."  
 38.20     (b) In Minnesota Statutes, chapter 490, the revisor of 
 38.21  statutes shall change references to "sections 490.121 to 
 38.22  490.132" to "this chapter."  
 38.23     (c) In Minnesota Statutes, sections 175A.01, subdivision 4, 
 38.24  and 271.01, subdivision 1, the revisor of statutes shall change 
 38.25  references to "sections 490.15 and 490.16" to "sections 490A.01 
 38.26  and 490A.02." 
 38.27     Sec. 86.  [EFFECTIVE DATE.] 
 38.28     This article is effective July 1, 2005. 
 38.29                             ARTICLE 2
 38.30                   COVERED SALARY; AVERAGE SALARY
 38.31     Section 1.  Minnesota Statutes 2004, section 352.01, 
 38.32  subdivision 13, is amended to read: 
 38.33     Subd. 13.  [SALARY.] (a) Subject to the limitations of 
 38.34  section 356.611, "salary" means wages, or other periodic 
 38.35  compensation, paid to an employee before deductions for deferred 
 38.36  compensation, supplemental retirement plans, or other voluntary 
 39.1   salary reduction programs.  
 39.2      (b) "Salary" does not include: 
 39.3      (1) lump sum sick leave payments; 
 39.4      (2) severance payments; 
 39.5      (3) lump sum annual leave payments and overtime payments 
 39.6   made at the time of separation from state service; 
 39.7      (4) payments in lieu of any employer-paid group insurance 
 39.8   coverage, including the difference between single and family 
 39.9   rates that may be paid to an employee with single coverage; 
 39.10     (5) payments made as an employer-paid fringe benefit; 
 39.11     (6) workers' compensation payments; 
 39.12     (7) employer contributions to a deferred compensation or 
 39.13  tax sheltered annuity program; and 
 39.14     (8) amounts contributed under a benevolent vacation and 
 39.15  sick leave donation program. 
 39.16     (c) Amounts provided to an employee by the employer through 
 39.17  a grievance proceeding or a legal settlement are salary only if 
 39.18  the settlement is reviewed by the executive director and the 
 39.19  amounts are determined by the executive director to be 
 39.20  consistent with paragraph (a) and prior determinations. 
 39.21     Sec. 2.  Minnesota Statutes 2004, section 352.01, is 
 39.22  amended by adding a subdivision to read: 
 39.23     Subd. 14a.  [AVERAGE SALARY.] (a) "Average salary" means 
 39.24  the average of the highest five successive years of salary upon 
 39.25  which the employee has made contributions to the retirement fund 
 39.26  by payroll deductions.  Average salary must be based upon all 
 39.27  allowable service if this service is less than five years. 
 39.28     (b) "Average salary" does not include the payment of 
 39.29  accrued unused annual leave or overtime paid at time of final 
 39.30  separation from state service if paid in a lump sum nor does it 
 39.31  include the reduced salary, if any, paid during the period the 
 39.32  employee is entitled to workers' compensation benefit payments 
 39.33  for temporary disability. 
 39.34     (c) For an employee covered by the correctional state 
 39.35  employees retirement plan, "average salary" means the average of 
 39.36  the monthly salary during the employee's highest five successive 
 40.1   years of salary as an employee covered by the general state 
 40.2   employees retirement plan, or the correctional state employees 
 40.3   retirement plan, or by a combination of the two.  If the total 
 40.4   of the covered service is less than five years, the 
 40.5   determination of average salary must be based on all allowable 
 40.6   service.  
 40.7      Sec. 3.  Minnesota Statutes 2004, section 352.115, 
 40.8   subdivision 2, is amended to read: 
 40.9      Subd. 2.  [AVERAGE SALARY NORMAL RETIREMENT ANNUITY.] The 
 40.10  retirement annuity hereunder payable at normal retirement age or 
 40.11  thereafter must be computed in accordance with the applicable 
 40.12  provisions of the formula stated in subdivision 3, on the basis 
 40.13  of the employee's average salary for the period of allowable 
 40.14  service.  This retirement annuity is known as the "normal" 
 40.15  retirement annuity.  
 40.16     For each year of allowable service, "average salary" of an 
 40.17  employee in determining a retirement annuity means the average 
 40.18  of the highest five successive years of salary upon which the 
 40.19  employee has made contributions to the retirement fund by 
 40.20  payroll deductions.  Average salary must be based upon all 
 40.21  allowable service if this service is less than five years. 
 40.22     "Average salary" does not include the payment of accrued 
 40.23  unused annual leave or overtime paid at time of final separation 
 40.24  from state service if paid in a lump sum nor does it include the 
 40.25  reduced salary, if any, paid during the period the employee is 
 40.26  entitled to workers' compensation benefit payments for temporary 
 40.27  disability. 
 40.28     Sec. 4.  Minnesota Statutes 2004, section 352.115, 
 40.29  subdivision 3, is amended to read: 
 40.30     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
 40.31  in conjunction with section 352.116, subdivision 1, applies to a 
 40.32  person who became a covered employee or a member of a pension 
 40.33  fund listed in section 356.30, subdivision 3, before July 1, 
 40.34  1989, unless paragraph (b), in conjunction with section 352.116, 
 40.35  subdivision 1a, produces a higher annuity amount, in which case 
 40.36  paragraph (b) will apply.  The employee's average salary, as 
 41.1   defined in section 352.01, subdivision 2 14a, multiplied by the 
 41.2   percent specified in section 356.315, subdivision 1, per year of 
 41.3   allowable service for the first ten years and the percent 
 41.4   specified in section 356.315, subdivision 2, for each later year 
 41.5   of allowable service and pro rata for completed months less than 
 41.6   a full year shall determine the amount of the retirement annuity 
 41.7   to which the employee is entitled. 
 41.8      (b) This paragraph applies to a person who has become at 
 41.9   least 55 years old and first became a covered employee after 
 41.10  June 30, 1989, and to any other covered employee who has become 
 41.11  at least 55 years old and whose annuity amount, when calculated 
 41.12  under this paragraph and in conjunction with section 352.116, 
 41.13  subdivision 1a, is higher than it is when calculated under 
 41.14  paragraph (a), in conjunction with section 352.116, subdivision 
 41.15  1.  The employee's average salary, as defined in section 352.01, 
 41.16  subdivision 2 14a, multiplied by the percent specified in 
 41.17  section 356.315, subdivision 2, for each year of allowable 
 41.18  service and pro rata for months less than a full year shall 
 41.19  determine the amount of the retirement annuity to which the 
 41.20  employee is entitled. 
 41.21     Sec. 5.  Minnesota Statutes 2004, section 352.87, 
 41.22  subdivision 3, is amended to read: 
 41.23     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 41.24  in subdivision 1 will have is entitled to receive a retirement 
 41.25  annuity applicable for allowable service credit under this 
 41.26  section calculated by multiplying the employee's average salary, 
 41.27  as defined in section 352.115 352.01, subdivision 2 14a, by the 
 41.28  percent specified in section 356.315, subdivision 2a, for each 
 41.29  year or portions of a year of allowable service credit.  No 
 41.30  reduction for retirement prior to before the normal retirement 
 41.31  age, as specified in section 352.01, subdivision 25, applies to 
 41.32  service to which this section applies. 
 41.33     Sec. 6.  Minnesota Statutes 2004, section 352.93, 
 41.34  subdivision 1, is amended to read: 
 41.35     Subdivision 1.  [BASIS OF ANNUITY; WHEN TO APPLY.] After 
 41.36  separation from state service, an employee covered under section 
 42.1   352.91 who has reached age 55 years and has credit for at least 
 42.2   three years of covered correctional service or a combination of 
 42.3   covered correctional service and regular Minnesota general 
 42.4   employees state retirement System plan service is entitled upon 
 42.5   application to a retirement annuity under this section, based 
 42.6   only on covered correctional employees' service.  Application 
 42.7   may be made no earlier than 60 days before the date the employee 
 42.8   is eligible to retire by reason of both age and service 
 42.9   requirements.  
 42.10     In this section, "average salary" means the average of the 
 42.11  monthly salary during the employee's highest five successive 
 42.12  years of salary as an employee covered by the Minnesota State 
 42.13  Retirement System.  Average salary must be based upon all 
 42.14  allowable service if this service is less than five years. 
 42.15     Sec. 7.  Minnesota Statutes 2004, section 352B.01, 
 42.16  subdivision 11, is amended to read: 
 42.17     Subd. 11.  [AVERAGE MONTHLY SALARY.] (a) Subject to the 
 42.18  limitations of section 356.611, "average monthly salary" means 
 42.19  the average of the highest monthly salaries for five years of 
 42.20  service as a member upon which contributions were deducted from 
 42.21  pay under section 352B.02, or upon which appropriate 
 42.22  contributions or payments were made to the fund to receive 
 42.23  allowable service and salary credit as specified under the 
 42.24  applicable law.  Average monthly salary must be based upon all 
 42.25  allowable service if this service is less than five years.  
 42.26     (b) "Average monthly salary" means the salary of the member 
 42.27  as defined in section 352.01, subdivision 13.  "Average monthly 
 42.28  salary" does not include any lump-sum annual leave payments and 
 42.29  overtime payments made at the time of separation from state 
 42.30  service, any amounts of severance pay, or any reduced salary 
 42.31  paid during the period the person is entitled to workers' 
 42.32  compensation benefit payments for temporary disability.  
 42.33     (c) A member on leave of absence receiving temporary 
 42.34  workers' compensation payments and a reduced salary or no salary 
 42.35  from the employer who is entitled to allowable service credit 
 42.36  for the period of absence may make payment to the fund for the 
 43.1   difference between salary received, if any, and the salary the 
 43.2   member would normally receive if not on leave of absence during 
 43.3   the period.  The member shall pay an amount equal to the member 
 43.4   and employer contribution rate under section 352B.02, 
 43.5   subdivisions 1b and 1c, on the differential salary amount for 
 43.6   the period of the leave of absence.  The employing department, 
 43.7   at its option, may pay the employer amount on behalf of the 
 43.8   member.  Payment made under this subdivision must include 
 43.9   interest at the rate of 8.5 percent per year, and must be 
 43.10  completed within one year of the return from the leave of 
 43.11  absence. 
 43.12     Sec. 8.  Minnesota Statutes 2004, section 352C.021, is 
 43.13  amended by adding a subdivision to read: 
 43.14     Subd. 1a.  [AVERAGE SALARY.] "Average salary," for purposes 
 43.15  of calculating the normal retirement annuity under section 
 43.16  352C.031, subdivision 4, means the average of the highest five 
 43.17  successive years of salary upon which contributions have been 
 43.18  made under section 352C.09.  
 43.19     Sec. 9.  Minnesota Statutes 2004, section 353.01, 
 43.20  subdivision 10, is amended to read: 
 43.21     Subd. 10.  [SALARY.] (a) Subject to the limitations of 
 43.22  section 356.611, "salary" means: 
 43.23     (1) the periodic compensation of a public employee, before 
 43.24  deductions for deferred compensation, supplemental retirement 
 43.25  plans, or other voluntary salary reduction programs, and also 
 43.26  means "wages" and includes net income from fees; 
 43.27     (2) for a public employee who is covered by a supplemental 
 43.28  retirement plan under section 356.24, subdivision 1, clause (8), 
 43.29  (9), or (10), which require all plan contributions be made by 
 43.30  the employer, the contribution to the applicable supplemental 
 43.31  retirement plan when the contribution is from mandatory 
 43.32  withholdings from employees' wages; and 
 43.33     (2) (3) for a public employee who has prior service covered 
 43.34  by a local police or firefighters relief association that has 
 43.35  consolidated with the Public Employees Retirement Association or 
 43.36  to which section 353.665 applies and who has elected coverage 
 44.1   either under the public employees police and fire fund benefit 
 44.2   plan under section 353A.08 following the consolidation or under 
 44.3   section 353.665, subdivision 4, the rate of salary upon which 
 44.4   member contributions to the special fund of the relief 
 44.5   association were made prior to the effective date of the 
 44.6   consolidation as specified by law and by bylaw provisions 
 44.7   governing the relief association on the date of the initiation 
 44.8   of the consolidation procedure and the actual periodic 
 44.9   compensation of the public employee after the effective date of 
 44.10  consolidation. 
 44.11     (b) Salary does not mean: 
 44.12     (1) the fees paid to district court reporters, unused 
 44.13  annual vacation or sick leave payments, in lump-sum or periodic 
 44.14  payments, severance payments, reimbursement of expenses, 
 44.15  lump-sum settlements not attached to a specific earnings period, 
 44.16  or workers' compensation payments; 
 44.17     (2) employer-paid amounts used by an employee toward the 
 44.18  cost of insurance coverage, employer-paid fringe benefits, 
 44.19  flexible spending accounts, cafeteria plans, health care expense 
 44.20  accounts, day care expenses, or any payments in lieu of any 
 44.21  employer-paid group insurance coverage, including the difference 
 44.22  between single and family rates that may be paid to a member 
 44.23  with single coverage and certain amounts determined by the 
 44.24  executive director to be ineligible; 
 44.25     (3) the amount equal to that which the employing 
 44.26  governmental subdivision would otherwise pay toward single or 
 44.27  family insurance coverage for a covered employee when, through a 
 44.28  contract or agreement with some but not all employees, the 
 44.29  employer: 
 44.30     (i) discontinues, or for new hires does not provide, 
 44.31  payment toward the cost of the employee's selected insurance 
 44.32  coverages under a group plan offered by the employer; 
 44.33     (ii) makes the employee solely responsible for all 
 44.34  contributions toward the cost of the employee's selected 
 44.35  insurance coverages under a group plan offered by the employer, 
 44.36  including any amount the employer makes toward other employees' 
 45.1   selected insurance coverages under a group plan offered by the 
 45.2   employer; and 
 45.3      (iii) provides increased salary rates for employees who do 
 45.4   not have any employer-paid group insurance coverages; 
 45.5      (4) except as provided in section 353.86 or 353.87, 
 45.6   compensation of any kind paid to volunteer ambulance service 
 45.7   personnel or volunteer firefighters, as defined in subdivision 
 45.8   35 or 36; and 
 45.9      (5) the amount of compensation that exceeds the limitation 
 45.10  provided in section 356.611.  
 45.11     (c) Amounts provided to an employee by the employer through 
 45.12  a grievance proceeding or a legal settlement are salary only if 
 45.13  the settlement is reviewed by the executive director and the 
 45.14  amounts are determined by the executive director to be 
 45.15  consistent with paragraph (a) and prior determinations. 
 45.16     Sec. 10.  Minnesota Statutes 2004, section 353.01, is 
 45.17  amended by adding a subdivision to read: 
 45.18     Subd. 17a.  [AVERAGE SALARY.] (a) "Average salary," for 
 45.19  purposes of calculating a retirement annuity under section 
 45.20  353.29, subdivision 3, means an amount equivalent to the average 
 45.21  of the highest salary of the member, police officer, or 
 45.22  firefighter, whichever applies, upon which employee 
 45.23  contributions were paid for any five successive years of 
 45.24  allowable service, based on dates of salary periods as listed on 
 45.25  salary deduction reports.  Average salary must be based upon all 
 45.26  allowable service if this service is less than five years.  
 45.27     (b) "Average salary" may not include any reduced salary 
 45.28  paid during a period in which the employee is entitled to 
 45.29  benefit payments from workers' compensation for temporary 
 45.30  disability, unless the average salary is higher, including this 
 45.31  period. 
 45.32     Sec. 11.  Minnesota Statutes 2004, section 353.29, 
 45.33  subdivision 3, is amended to read: 
 45.34     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
 45.35  in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 
 45.36  1c, applies to any member who first became a public employee or 
 46.1   a member of a pension fund listed in section 356.30, subdivision 
 46.2   3, before July 1, 1989, unless paragraph (b), in conjunction 
 46.3   with section 353.30, subdivision 5, produces a higher annuity 
 46.4   amount, in which case paragraph (b) will apply.  The average 
 46.5   salary as defined in section 353.01, subdivision 2 17a, 
 46.6   multiplied by the percent specified in section 356.315, 
 46.7   subdivision 3, for each year of allowable service for the first 
 46.8   ten years and thereafter by the percent specified in section 
 46.9   356.315, subdivision 4, per year of allowable service and 
 46.10  completed months less than a full year for the "basic member," 
 46.11  and the percent specified in section 356.315, subdivision 1, for 
 46.12  each year of allowable service for the first ten years and 
 46.13  thereafter by the percent specified in section 356.315, 
 46.14  subdivision 2, per year of allowable service and completed 
 46.15  months less than a full year for the "coordinated member," shall 
 46.16  determine the amount of the "normal" retirement annuity. 
 46.17     (b) This paragraph applies to a member who has become at 
 46.18  least 55 years old and first became a public employee after June 
 46.19  30, 1989, and to any other member whose annuity amount, when 
 46.20  calculated under this paragraph and in conjunction with section 
 46.21  353.30, subdivision 5, is higher than it is when calculated 
 46.22  under paragraph (a), in conjunction with section 353.30, 
 46.23  subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined 
 46.24  in section 353.01, subdivision 2 17a, multiplied by the percent 
 46.25  specified in section 356.315, subdivision 4, for each year of 
 46.26  allowable service and completed months less than a full year for 
 46.27  a basic member and the percent specified in section 356.315, 
 46.28  subdivision 2, per year of allowable service and completed 
 46.29  months less than a full year for a coordinated member, shall 
 46.30  determine the amount of the normal retirement annuity. 
 46.31     Sec. 12.  Minnesota Statutes 2004, section 353.33, 
 46.32  subdivision 3, is amended to read: 
 46.33     Subd. 3.  [COMPUTATION OF BENEFITS.] This disability 
 46.34  benefit is an amount equal to the normal annuity payable to a 
 46.35  member who has reached normal retirement age with the same 
 46.36  number of years of allowable service and the same average 
 47.1   salary, as provided in section 353.01, subdivision 17a, and 
 47.2   section 353.29, subdivisions 2 and subdivision 3. 
 47.3      A basic member shall receive a supplementary monthly 
 47.4   benefit of $25 to age 65 or the five-year anniversary of the 
 47.5   effective date of the disability benefit, whichever is later. 
 47.6      If the disability benefits under this subdivision exceed 
 47.7   the average salary as defined in section 353.29 353.01, 
 47.8   subdivision 2 17a, the disability benefits must be reduced to an 
 47.9   amount equal to said the average salary. 
 47.10     Sec. 13.  Minnesota Statutes 2004, section 353.651, 
 47.11  subdivision 3, is amended to read: 
 47.12     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] The average salary 
 47.13  as defined in section 353.01, subdivision 2 17a, multiplied by 
 47.14  the percent specified in section 356.315, subdivision 6, per 
 47.15  year of allowable service determines the amount of the normal 
 47.16  retirement annuity.  If the member has earned allowable service 
 47.17  for performing services other than those of a police officer or 
 47.18  firefighter, the annuity representing such that service is must 
 47.19  be computed under sections 353.29 and 353.30. 
 47.20     Sec. 14.  Minnesota Statutes 2004, section 353.656, 
 47.21  subdivision 1, is amended to read: 
 47.22     Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
 47.23  A member of the police and fire plan who becomes disabled and 
 47.24  physically unfit to perform duties as a police officer, 
 47.25  firefighter, or paramedic as defined under section 353.64, 
 47.26  subdivision 10, as a direct result of an injury, sickness, or 
 47.27  other disability incurred in or arising out of any act of duty, 
 47.28  which has or is expected to render the member physically or 
 47.29  mentally unable to perform the duties as a police officer, 
 47.30  firefighter, or paramedic as defined under section 353.64, 
 47.31  subdivision 10, for a period of at least one year, shall receive 
 47.32  disability benefits during the period of such disability.  The 
 47.33  benefits must be in an amount equal to 60 percent of the 
 47.34  "average salary" as defined in section 353.651 353.01, 
 47.35  subdivision 2 17a, plus an additional percent specified in 
 47.36  section 356.315, subdivision 6, of that average salary for each 
 48.1   year of service in excess of 20 years.  If the disability under 
 48.2   this subdivision occurs before the member has at least five 
 48.3   years of allowable service credit in the police and fire plan, 
 48.4   the disability benefit must be computed on the "average salary" 
 48.5   from which deductions were made for contribution to the police 
 48.6   and fire fund. 
 48.7      Sec. 15.  Minnesota Statutes 2004, section 353B.02, 
 48.8   subdivision 10, is amended to read: 
 48.9      Subd. 10.  [SALARY.] (a) "Salary" under this chapter is 
 48.10  subject to the limitations of section 356.611.  
 48.11     (b) "Salary" for benefit computation and contribution 
 48.12  purposes means the salary of a first class or first grade 
 48.13  firefighter or patrol officer, whichever applies, for the former 
 48.14  members of the following consolidating relief associations:  
 48.15     (1) Anoka Police Relief Association; 
 48.16     (2) Austin Firefighters Relief Association; 
 48.17     (3) Austin Police Relief Association; 
 48.18     (4) Columbia Heights Fire Department Relief Association, 
 48.19  Paid Division; 
 48.20     (5) Fairmont Police Benefit Association; 
 48.21     (6) Faribault Fire Department Relief Association; 
 48.22     (7) Mankato Fire Department Relief Association; 
 48.23     (8) Minneapolis Fire Department Relief Association; 
 48.24     (9) Minneapolis Police Relief Association; 
 48.25     (10) Richfield Fire Department Relief Association; 
 48.26     (11) Rochester Fire Department Relief Association; 
 48.27     (12) Rochester Police Relief Association; 
 48.28     (13) St. Cloud Fire Department Relief Association; 
 48.29     (14) St. Cloud Police Relief Association; 
 48.30     (15) St. Paul Fire Department Relief Association; 
 48.31     (16) South St. Paul Firefighters Relief Association; 
 48.32     (17) West St. Paul Firefighters Relief Association; 
 48.33     (18) West St. Paul Police Relief Association; and 
 48.34     (19) Winona Fire Department Relief Association. 
 48.35     (b) (c) "Salary" for benefit computation purposes means the 
 48.36  salary of a first grade patrol officer for the second month of 
 49.1   the previous fiscal year and for contribution purposes means the 
 49.2   current salary of a first grade patrol officer, for the former 
 49.3   members of the following consolidating relief associations:  
 49.4      (1) Bloomington Police Relief Association; 
 49.5      (2) Crystal Police Relief Association; 
 49.6      (3) Fridley Police Pension Association; 
 49.7      (4) Richfield Police Relief Association; 
 49.8      (5) St. Louis Park Police Relief Association; and 
 49.9      (6) Winona Police Relief Association.  
 49.10     (c) (d) "Salary" for benefit computation purposes means the 
 49.11  final salary and for contribution purposes means the current 
 49.12  salary for the former members of the following consolidating 
 49.13  relief associations:  
 49.14     (1) Albert Lea Firefighters Relief Association; 
 49.15     (2) Albert Lea Police Relief Association; 
 49.16     (3) Buhl Police Relief Association; 
 49.17     (4) Chisholm Firefighters Relief Association; 
 49.18     (5) Crookston Fire Department Relief Association; 
 49.19     (6) Crookston Police Relief Association; 
 49.20     (7) Faribault Police Benefit Association; 
 49.21     (8) Red Wing Police Relief Association; and 
 49.22     (9) Virginia Fire Department Relief Association.  
 49.23     (d) (e) "Salary" for benefit computation purposes means the 
 49.24  average earnings or salary for the final six months of 
 49.25  employment before retirement and for contribution purposes means 
 49.26  the current salary for the former members of the following 
 49.27  consolidating relief associations:  
 49.28     (1) Chisholm Police Relief Association; 
 49.29     (2) Hibbing Firefighters Relief Association; and 
 49.30     (3) Hibbing Police Relief Association.  
 49.31     (e) (f) "Salary" for benefit computation purposes means the 
 49.32  greater of the final salary at retirement or the highest salary 
 49.33  of a patrol officer and for contribution purposes means the 
 49.34  greater of the current salary or the current highest salary of a 
 49.35  patrol officer for the former members of the following 
 49.36  consolidating relief associations:  
 50.1      (1) Brainerd Police Benefit Association; and 
 50.2      (2) New Ulm Police Relief Association.  
 50.3      (f) (g) "Salary" for benefit computation and contribution 
 50.4   purposes means the following for the former members of the 
 50.5   consolidating relief associations as indicated:  
 50.6      (1) salary of a top grade patrol officer, including 
 50.7   longevity pay and education incentive pay in an amount not to 
 50.8   exceed $235 per month, Columbia Heights Police Relief 
 50.9   Association; 
 50.10     (2) maximum pay of a firefighter, including overtime 
 50.11  payments for a regular workweek of a firefighter mandated by the 
 50.12  federal Fair Labor Standards Act of 1938, as amended, Duluth 
 50.13  Firefighters Relief Association; 
 50.14     (3) salary of a first class patrol officer with 16 years of 
 50.15  service, Duluth Police Pension Association; 
 50.16     (4) base salary for the rank currently held, plus longevity 
 50.17  pay, pay for eligibility for next higher rank and pay for first 
 50.18  aid care, Mankato Police Benefit Association; 
 50.19     (5) average annual salary for highest three paid years for 
 50.20  benefit computation purposes and current salary for contribution 
 50.21  purposes, Red Wing Fire Department Relief Association; 
 50.22     (6) pay of the highest grade full-time firefighter, St. 
 50.23  Louis Park Fire Department Relief Association; 
 50.24     (7) maximum monthly pay of a patrol officer, St. Paul 
 50.25  Police Relief Association; 
 50.26     (8) prevailing base pay of rank held at retirement for 
 50.27  benefit computation purposes and current salary for contribution 
 50.28  purposes, South St. Paul Police Relief Association; and 
 50.29     (9) prevailing pay for rank held for at least six months 
 50.30  before retirement for benefit computation purposes and current 
 50.31  salary for contribution purposes, Virginia Police Relief 
 50.32  Association. 
 50.33     Sec. 16.  Minnesota Statutes 2004, section 354.05, is 
 50.34  amended by adding a subdivision to read: 
 50.35     Subd. 13a.  [AVERAGE SALARY.] (a) "Average salary," for the 
 50.36  purpose of determining the member's retirement annuity, means 
 51.1   the average salary upon which contributions were made for the 
 51.2   highest five successive years of formula service credit.  
 51.3      (b) "Average salary" may not include any more than the 
 51.4   equivalent of 60 monthly salary payments.  
 51.5      (c) "Average salary" must be based upon all years of 
 51.6   formula service credit if this service credit is less than five 
 51.7   years.  
 51.8      Sec. 17.  Minnesota Statutes 2004, section 354.05, 
 51.9   subdivision 35, is amended to read: 
 51.10     Subd. 35.  [SALARY.] (a) Subject to the limitations of 
 51.11  section 356.611, "salary" means the periodic compensation, upon 
 51.12  which member contributions are required before deductions for 
 51.13  deferred compensation, supplemental retirement plans, or other 
 51.14  voluntary salary reduction programs. 
 51.15     (b) "Salary" does not mean: 
 51.16     (1) lump sum annual leave payments; 
 51.17     (2) lump sum wellness and sick leave payments; 
 51.18     (3) employer-paid amounts used by an employee toward the 
 51.19  cost of insurance coverage, employer-paid fringe benefits, 
 51.20  flexible spending accounts, cafeteria plans, health care expense 
 51.21  accounts, day care expenses, or any payments in lieu of any 
 51.22  employer-paid group insurance coverage, including the difference 
 51.23  between single and family rates that may be paid to a member 
 51.24  with single coverage and certain amounts determined by the 
 51.25  executive director to be ineligible; 
 51.26     (4) any form of payment made in lieu of any other 
 51.27  employer-paid fringe benefit or expense; 
 51.28     (5) any form of severance payments; 
 51.29     (6) workers' compensation payments; 
 51.30     (7) disability insurance payments, including self-insured 
 51.31  disability payments; 
 51.32     (8) payments to school principals and all other 
 51.33  administrators for services that are in addition to the normal 
 51.34  work year contract if these additional services are performed on 
 51.35  an extended duty day, Saturday, Sunday, holiday, annual leave 
 51.36  day, sick leave day, or any other nonduty day; 
 52.1      (9) payments under section 356.24, subdivision 1, clause 
 52.2   (4); and 
 52.3      (10) payments made under section 122A.40, subdivision 12, 
 52.4   except for payments for sick leave that are accumulated under 
 52.5   the provisions of a uniform school district policy that applies 
 52.6   equally to all similarly situated persons in the district. 
 52.7      (c) Amounts provided to an employee by the employer through 
 52.8   a grievance proceeding or a legal settlement are salary only if 
 52.9   the settlement is reviewed by the executive director and the 
 52.10  amounts are determined by the executive director to be 
 52.11  consistent with paragraph (a) and prior determinations. 
 52.12     Sec. 18.  Minnesota Statutes 2004, section 354.44, 
 52.13  subdivision 6, is amended to read: 
 52.14     Subd. 6.  [COMPUTATION OF FORMULA PROGRAM RETIREMENT 
 52.15  ANNUITY.] (a) The formula retirement annuity must be computed in 
 52.16  accordance with the applicable provisions of the formulas stated 
 52.17  in paragraph (b) or (d) on the basis of each member's average 
 52.18  salary under section 354.05, subdivision 13a, for the period of 
 52.19  the member's formula service credit.  
 52.20     For all years of formula service credit, "average salary," 
 52.21  for the purpose of determining the member's retirement annuity, 
 52.22  means the average salary upon which contributions were made and 
 52.23  upon which payments were made to increase the salary limitation 
 52.24  provided in Minnesota Statutes 1971, section 354.511, for the 
 52.25  highest five successive years of formula service credit 
 52.26  provided, however, that such "average salary" shall not include 
 52.27  any more than the equivalent of 60 monthly salary payments.  
 52.28  Average salary must be based upon all years of formula service 
 52.29  credit if this service credit is less than five years. 
 52.30     (b) This paragraph, in conjunction with paragraph (c), 
 52.31  applies to a person who first became a member of the association 
 52.32  or a member of a pension fund listed in section 356.30, 
 52.33  subdivision 3, before July 1, 1989, unless paragraph (d), in 
 52.34  conjunction with paragraph (e), produces a higher annuity 
 52.35  amount, in which case paragraph (d) applies.  The average salary 
 52.36  as defined in paragraph (a) section 354.05, subdivision 13a, 
 53.1   multiplied by the following percentages per year of formula 
 53.2   service credit shall determine the amount of the annuity to 
 53.3   which the member qualifying therefor is entitled: 
 53.4                          Coordinated Member   Basic Member
 53.5   Each year of service     the percent        the percent
 53.6   during first ten         specified in       specified in
 53.7                            section 356.315,   section 356.315,
 53.8                            subdivision 1,     subdivision 3,
 53.9                            per year           per year
 53.10  Each year of service     the percent        the percent
 53.11  thereafter               specified in       specified in
 53.12                           section 356.315,   section 356.315,
 53.13                           subdivision 2,     subdivision 4,
 53.14                           per year           per year
 53.15     (c)(i) This paragraph applies only to a person who first 
 53.16  became a member of the association or a member of a pension fund 
 53.17  listed in section 356.30, subdivision 3, before July 1, 1989, 
 53.18  and whose annuity is higher when calculated under paragraph (b), 
 53.19  in conjunction with this paragraph than when calculated under 
 53.20  paragraph (d), in conjunction with paragraph (e). 
 53.21     (ii) Where any member retires prior to normal retirement 
 53.22  age under a formula annuity, the member shall be paid a 
 53.23  retirement annuity in an amount equal to the normal annuity 
 53.24  provided in paragraph (b) reduced by one-quarter of one percent 
 53.25  for each month that the member is under normal retirement age at 
 53.26  the time of retirement except that for any member who has 30 or 
 53.27  more years of allowable service credit, the reduction shall be 
 53.28  applied only for each month that the member is under age 62. 
 53.29     (iii) Any member whose attained age plus credited allowable 
 53.30  service totals 90 years is entitled, upon application, to a 
 53.31  retirement annuity in an amount equal to the normal annuity 
 53.32  provided in paragraph (b), without any reduction by reason of 
 53.33  early retirement. 
 53.34     (d) This paragraph applies to a member who has become at 
 53.35  least 55 years old and first became a member of the association 
 53.36  after June 30, 1989, and to any other member who has become at 
 54.1   least 55 years old and whose annuity amount when calculated 
 54.2   under this paragraph and in conjunction with paragraph (e), is 
 54.3   higher than it is when calculated under paragraph (b), in 
 54.4   conjunction with paragraph (c).  The average salary, as defined 
 54.5   in paragraph (a) section 354.05, subdivision 13a, multiplied by 
 54.6   the percent specified by section 356.315, subdivision 4, for 
 54.7   each year of service for a basic member and by the percent 
 54.8   specified in section 356.315, subdivision 2, for each year of 
 54.9   service for a coordinated member shall determine the amount of 
 54.10  the retirement annuity to which the member is entitled. 
 54.11     (e) This paragraph applies to a person who has become at 
 54.12  least 55 years old and first becomes a member of the association 
 54.13  after June 30, 1989, and to any other member who has become at 
 54.14  least 55 years old and whose annuity is higher when calculated 
 54.15  under paragraph (d) in conjunction with this paragraph than when 
 54.16  calculated under paragraph (b), in conjunction with paragraph 
 54.17  (c).  An employee who retires under the formula annuity before 
 54.18  the normal retirement age shall be paid the normal annuity 
 54.19  provided in paragraph (d) reduced so that the reduced annuity is 
 54.20  the actuarial equivalent of the annuity that would be payable to 
 54.21  the employee if the employee deferred receipt of the annuity and 
 54.22  the annuity amount were augmented at an annual rate of three 
 54.23  percent compounded annually from the day the annuity begins to 
 54.24  accrue until the normal retirement age. 
 54.25     (f) No retirement annuity is payable to a former employee 
 54.26  with a salary that exceeds 95 percent of the governor's salary 
 54.27  unless and until the salary figures used in computing the 
 54.28  highest five successive years average salary under paragraph (a) 
 54.29  have been audited by the Teachers Retirement Association and 
 54.30  determined by the executive director to comply with the 
 54.31  requirements and limitations of section 354.05, subdivisions 35 
 54.32  and 35a. 
 54.33     Sec. 19.  Minnesota Statutes 2004, section 354A.011, is 
 54.34  amended by adding a subdivision to read: 
 54.35     Subd. 7a.  [AVERAGE SALARY.] "Average salary," for purposes 
 54.36  of computing a normal coordinated program retirement annuity 
 55.1   under section 354A.31, subdivision 4 or 4a, means an amount 
 55.2   equal to the average salary upon which contributions were made 
 55.3   for the highest five successive years of service credit but may 
 55.4   not, in any event, include any more than the equivalent of 60 
 55.5   monthly salary payments.  Average salary must be based upon all 
 55.6   years of service credit if this service credit is less than five 
 55.7   years.  
 55.8      Sec. 20.  Minnesota Statutes 2004, section 354A.011, 
 55.9   subdivision 24, is amended to read: 
 55.10     Subd. 24.  [SALARY; COVERED SALARY.] (a) Subject to the 
 55.11  limitations of section 356.611, "salary" or "covered salary" 
 55.12  means the entire compensation, upon which member contributions 
 55.13  are required and made, that is paid to a teacher before 
 55.14  deductions for deferred compensation, supplemental retirement 
 55.15  plans, or other voluntary salary reduction programs. 
 55.16     (b) "Salary" does not mean: 
 55.17     (1) lump sum annual leave payments; 
 55.18     (2) lump sum wellness and sick leave payments; 
 55.19     (3) employer-paid amounts used by an employee toward the 
 55.20  cost of insurance coverage, employer-paid fringe benefits, 
 55.21  flexible spending accounts, cafeteria plans, health care expense 
 55.22  accounts, day care expenses, or any payments in lieu of any 
 55.23  employer-paid group insurance coverage, including the difference 
 55.24  between single and family rates that may be paid to a member 
 55.25  with single coverage, and certain amounts determined by the 
 55.26  executive secretary or director to be ineligible; 
 55.27     (4) any form of payment that is made in lieu of any other 
 55.28  employer-paid fringe benefit or expense; 
 55.29     (5) any form of severance payments; 
 55.30     (6) workers' compensation payments; 
 55.31     (7) disability insurance payments, including self-insured 
 55.32  disability payments; 
 55.33     (8) payments to school principals and all other 
 55.34  administrators for services that are in addition to the normal 
 55.35  work year contract if these additional services are performed on 
 55.36  an extended duty day, Saturday, Sunday, holiday, annual leave 
 56.1   day, sick leave day, or any other nonduty day; 
 56.2      (9) payments under section 356.24, subdivision 1, clause 
 56.3   (4)(ii); and 
 56.4      (10) payments made under section 122A.40, subdivision 12, 
 56.5   except for payments for sick leave that are accumulated under 
 56.6   the provisions of a uniform school district policy that applies 
 56.7   equally to all similarly situated persons in the district. 
 56.8      (c) Amounts provided to an employee by the employer through 
 56.9   a grievance proceeding or a legal settlement are salary only if 
 56.10  the settlement is reviewed by the executive director and the 
 56.11  amounts are determined by the executive director to be 
 56.12  consistent with paragraph (a) and prior determinations. 
 56.13     Sec. 21.  Minnesota Statutes 2004, section 354A.31, 
 56.14  subdivision 4, is amended to read: 
 56.15     Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
 56.16  ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 
 56.17  applies to the coordinated programs of the Minneapolis Teachers 
 56.18  Retirement Fund Association and the St. Paul Teachers Retirement 
 56.19  Fund Association.  
 56.20     (b) The normal coordinated retirement annuity shall be is 
 56.21  an amount equal to a retiring coordinated member's average 
 56.22  salary under section 354A.011, subdivision 7a, multiplied by the 
 56.23  retirement annuity formula percentage.  Average salary for 
 56.24  purposes of this section shall mean an amount equal to the 
 56.25  average salary upon which contributions were made for the 
 56.26  highest five successive years of service credit, but which shall 
 56.27  not in any event include any more than the equivalent of 60 
 56.28  monthly salary payments.  Average salary must be based upon all 
 56.29  years of service credit if this service credit is less than five 
 56.30  years. 
 56.31     (c) This paragraph, in conjunction with subdivision 6, 
 56.32  applies to a person who first became a member or a member in a 
 56.33  pension fund listed in section 356.30, subdivision 3, before 
 56.34  July 1, 1989, unless paragraph (d), in conjunction with 
 56.35  subdivision 7, produces a higher annuity amount, in which case 
 56.36  paragraph (d) will apply.  The retirement annuity formula 
 57.1   percentage for purposes of this paragraph is the percent 
 57.2   specified in section 356.315, subdivision 1, per year for each 
 57.3   year of coordinated service for the first ten years and the 
 57.4   percent specified in section 356.315, subdivision 2, for each 
 57.5   year of coordinated service thereafter.  
 57.6      (d) This paragraph applies to a person who has become at 
 57.7   least 55 years old and who first becomes a member after June 30, 
 57.8   1989, and to any other member who has become at least 55 years 
 57.9   old and whose annuity amount, when calculated under this 
 57.10  paragraph and in conjunction with subdivision 7 is higher than 
 57.11  it is when calculated under paragraph (c), in conjunction with 
 57.12  the provisions of subdivision 6.  The retirement annuity formula 
 57.13  percentage for purposes of this paragraph is the percent 
 57.14  specified in section 356.315, subdivision 2, for each year of 
 57.15  coordinated service.  
 57.16     Sec. 22.  Minnesota Statutes 2004, section 354A.31, 
 57.17  subdivision 4a, is amended to read: 
 57.18     Subd. 4a.  [COMPUTATION OF THE NORMAL COORDINATED 
 57.19  RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 
 57.20  to the new law coordinated program of the Duluth Teachers 
 57.21  Retirement Fund Association. 
 57.22     (b) The normal coordinated retirement annuity is an amount 
 57.23  equal to a retiring coordinated member's average salary under 
 57.24  section 354A.011, subdivision 7a, multiplied by the retirement 
 57.25  annuity formula percentage.  Average salary for purposes of this 
 57.26  section means an amount equal to the average salary upon which 
 57.27  contributions were made for the highest five successive years of 
 57.28  service credit, but may not in any event include any more than 
 57.29  the equivalent of 60 monthly salary payments.  Average salary 
 57.30  must be based upon all years of service credit if this service 
 57.31  credit is less than five years. 
 57.32     (c) This paragraph, in conjunction with subdivision 6, 
 57.33  applies to a person who first became a member or a member in a 
 57.34  pension fund listed in section 356.30, subdivision 3, before 
 57.35  July 1, 1989, unless paragraph (d), in conjunction with 
 57.36  subdivision 7, produces a higher annuity amount, in which case 
 58.1   paragraph (d) applies.  The retirement annuity formula 
 58.2   percentage for purposes of this paragraph is the percent 
 58.3   specified in section 356.315, subdivision 1, per year for each 
 58.4   year of coordinated service for the first ten years and the 
 58.5   percent specified in section 356.315, subdivision 2, for each 
 58.6   subsequent year of coordinated service. 
 58.7      (d) This paragraph applies to a person who is at least 55 
 58.8   years old and who first becomes a member after June 30, 1989, 
 58.9   and to any other member who is at least 55 years old and whose 
 58.10  annuity amount, when calculated under this paragraph and in 
 58.11  conjunction with subdivision 7, is higher than it is when 
 58.12  calculated under paragraph (c) in conjunction with subdivision 
 58.13  6.  The retirement annuity formula percentage for purposes of 
 58.14  this paragraph is the percent specified in section 356.315, 
 58.15  subdivision 2, for each year of coordinated service. 
 58.16     Sec. 23.  Minnesota Statutes 2004, section 356.611, 
 58.17  subdivision 1, is amended to read: 
 58.18     Subdivision 1.  [STATE SALARY LIMITATIONS.] (a) 
 58.19  Notwithstanding any provision of law, bylaws, articles of 
 58.20  incorporation, retirement and disability allowance plan 
 58.21  agreements, or retirement plan contracts to the contrary, the 
 58.22  covered salary for pension purposes for a plan participant of a 
 58.23  covered retirement fund enumerated in section 356.30, 
 58.24  subdivision 3, may not exceed 95 110 percent of the salary 
 58.25  established for the governor under section 15A.082 at the time 
 58.26  the person received the salary. 
 58.27     (b) This section does not apply to a salary paid: 
 58.28     (1) to the governor or to a judge; 
 58.29     (2) to an employee or an elected official who is not 
 58.30  subject to the limit as specified under section 43A.17, 
 58.31  subdivision 9; 
 58.32     (3) to an employee of a political subdivision in a position 
 58.33  that is excluded from the limit as specified under section 
 58.34  43A.17, subdivision 9; 
 58.35     (3) (4) to a state employee as defined under section 
 58.36  43A.02, subdivision 21; 
 59.1      (4) (5) to an employee of Gillette Hospital who is covered 
 59.2   by the general state employees retirement plan of the Minnesota 
 59.3   State Retirement System; 
 59.4      (5) (6) to an employee of the Minnesota Crop Improvement 
 59.5   Council; or 
 59.6      (6) (7) to an employee of the Minnesota Historical Society; 
 59.7      (8) to an employee of the Southern Minnesota Municipal 
 59.8   Power Association; or 
 59.9      (9) to the director of the Duluth Port Authority. 
 59.10     (c) The limited covered salary determined under this 
 59.11  section must be used in determining employee and employer 
 59.12  contributions and in determining retirement annuities and other 
 59.13  benefits under the respective covered retirement fund and under 
 59.14  this chapter. 
 59.15     Sec. 24.  Minnesota Statutes 2004, section 422A.01, is 
 59.16  amended by adding a subdivision to read: 
 59.17     Subd. 4a.  [AVERAGE SALARY.] (a) "Average salary" means the 
 59.18  arithmetic average annual salary, wages, or compensation of the 
 59.19  member from the city for any five calendar years out of the last 
 59.20  ten calendar years of service, except as provided for in section 
 59.21  422A.16, which may include the year in which the employee 
 59.22  retires, as selected by the employee.  
 59.23     (b) A member with more than five calendar years of service, 
 59.24  but less than ten calendar years, may select any five calendar 
 59.25  years of service to determine the average salary.  A member with 
 59.26  less than five years of service with the city shall use all 
 59.27  earnings to determine the average salary.  
 59.28     Sec. 25.  Minnesota Statutes 2004, section 422A.01, is 
 59.29  amended by adding a subdivision to read: 
 59.30     Subd. 13a.  [COVERED SALARY.] "Salary" is subject to the 
 59.31  limitations of section 356.611. 
 59.32     Sec. 26.  Minnesota Statutes 2004, section 422A.15, 
 59.33  subdivision 1, is amended to read: 
 59.34     Subdivision 1.  [FORMULA PENSION AND ANNUITY.] Except as 
 59.35  otherwise provided in subdivision 3, each contributing member 
 59.36  who, at the time of retirement, fulfills the conditions 
 60.1   necessary to enable the member to retire, shall is entitled to 
 60.2   receive what shall be known as a "formula pension and annuity" 
 60.3   equal to two percent for each year of allowable service for the 
 60.4   first ten years and thereafter 2.5 percent per year of allowable 
 60.5   service of the arithmetic average annual salary, wages or 
 60.6   compensation of the member from the city for any five calendar 
 60.7   years out of the last ten calendar years of service except as 
 60.8   provided for in section 422A.16, which may include the year in 
 60.9   which the employee retires, as selected by the employee, 
 60.10  multiplied by the years of service credited by the retirement 
 60.11  fund.  The formula pension and annuity shall must be computed on 
 60.12  the single life plan but subject to the option selections 
 60.13  provided for in section 422A.17. 
 60.14     In order to be entitled to the formula pension and annuity 
 60.15  herein provided for, the retiring employee at the time of 
 60.16  cessation of employment and of actual retirement shall must have 
 60.17  attained the age of 60 years or have been employed by the city 
 60.18  not less than 30 years, or meet the qualifications provided for 
 60.19  in section 422A.16, and in addition thereto have contributed to 
 60.20  the retirement fund at the percentage rate prescribed by the 
 60.21  retirement law applicable when the salary, wages or compensation 
 60.22  was paid on all salaries, wages, or compensation received from 
 60.23  the city or from an applicable employing unit.  The years of 
 60.24  service to be applied in the formula pension and annuity shall 
 60.25  must be found and determined by the retirement board, except 
 60.26  that no credit shall may be allowed for any year in which a back 
 60.27  charge is owing at time of retirement and the earnings from any 
 60.28  year in which a back charge is owing shall may not be used in 
 60.29  determining the average annual salary. 
 60.30     Sec. 27.  Minnesota Statutes 2004, section 422A.16, 
 60.31  subdivision 9, is amended to read: 
 60.32     Subd. 9.  [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 
 60.33  the contributing class who becomes permanently separated from 
 60.34  the service of the city under subdivision 8, may, by an 
 60.35  instrument in writing, filed with the municipal employees 
 60.36  retirement board within 30 days after such the separation 
 61.1   becomes permanent, elect to allow the member contributions 
 61.2   to such the fund to the date of separation to remain on deposit 
 61.3   in such the fund, and in such the event the member shall be 
 61.4   is entitled to receive a retirement allowance at age 65, 
 61.5   provided the member, or someone acting in the member's behalf if 
 61.6   the member be incompetent, shall must make a written application 
 61.7   for such the retirement allowance in the same manner provided 
 61.8   for in section 422A.17 and in accordance with the provisions of 
 61.9   section 422A.15, subdivision 1, except for determining 
 61.10  average annual salary.  A member with more than five calendar 
 61.11  years of service but less than ten calendar years may select any 
 61.12  five calendar years of service to determine the average annual 
 61.13  salary.  A member with less than five years of service with the 
 61.14  city shall use all earnings to determine the average annual 
 61.15  salary. 
 61.16     If the contributing member dies before reaching the age of 
 61.17  65 years, or having attained the age of 65 years without having 
 61.18  made the election provided for herein, the net accumulated 
 61.19  amount of deductions from the member's salary, pay or 
 61.20  compensation, plus interest, to the member's credit on date of 
 61.21  death shall be paid is payable to such the person or persons as 
 61.22  have been nominated by written designation filed with the 
 61.23  retirement board, in such the form as that the retirement board 
 61.24  shall require requires. 
 61.25     If the employee fails to make a designation, or if the 
 61.26  person or persons designated by such the employee predeceases 
 61.27  such the employee, the net accumulated credit to such the 
 61.28  employee's account on date of death shall be paid is payable to 
 61.29  such the employee's estate. 
 61.30     The provisions of subdivisions 4, 5, and 6 shall also apply 
 61.31  to any member qualifying for benefits under this subdivision, 
 61.32  except for purposes of this subdivision the age referred to in 
 61.33  subdivision 4 shall be is 65 years. 
 61.34     Sec. 28.  Minnesota Statutes 2004, section 423B.01, is 
 61.35  amended by adding a subdivision to read: 
 61.36     Subd. 22.  [COVERED SALARY.] "Salary" is subject to the 
 62.1   limitations of section 356.611. 
 62.2      Sec. 29.  Minnesota Statutes 2004, section 423C.01, is 
 62.3   amended by adding a subdivision to read: 
 62.4      Subd. 29.  [COVERED SALARY.] "Salary" is subject to the 
 62.5   limitations of section 356.611. 
 62.6      Sec. 30.  Minnesota Statutes 2004, section 490.121, 
 62.7   subdivision 21, is amended to read: 
 62.8      Subd. 21.  [FINAL AVERAGE COMPENSATION.] "Final average 
 62.9   compensation" means the total amount of salary payable to a 
 62.10  judge in the highest five years out of the last ten years prior 
 62.11  to before the event of maturity of benefits termination of 
 62.12  judicial service, divided by five; provided, however, that if 
 62.13  the number of years of service by the judge equals or exceeds 
 62.14  ten.  If the number of years of service by the judge is less 
 62.15  than ten, but more than five, the highest five shall years of 
 62.16  salary must be counted, and.  If the number of years of service 
 62.17  by the judge is less than five, the aggregate salary in such for 
 62.18  the period shall of service must be divided by the number of 
 62.19  months in such the period and multiplied by 12. 
 62.20     Sec. 31.  Minnesota Statutes 2004, section 490.121, is 
 62.21  amended by adding a subdivision to read: 
 62.22     Subd. 21a.  [COVERED SALARY LIMITATION.] "Final average 
 62.23  compensation" is subject to the limitations of section 356.611. 
 62.24     Sec. 32.  [REPEALER.] 
 62.25     Minnesota Statutes 2004, sections 352C.031, subdivision 3; 
 62.26  353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 
 62.27     Sec. 33.  [EFFECTIVE DATE.] 
 62.28     This article is effective on the day following final 
 62.29  enactment except that section 23 applies retroactively from 
 62.30  April 28, 1994. 
 62.31                             ARTICLE 3
 62.32                      ALLOWABLE SERVICE CREDIT
 62.33     Section 1.  [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 
 62.34  FOR STRIKE PERIODS.] 
 62.35     Subdivision 1.  [COVERED PLANS.] This section applies to 
 62.36  all defined benefit plans specified in section 356.30, 
 63.1   subdivision 3. 
 63.2      Subd. 2.  [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 
 63.3   employee covered by a plan specified in subdivision 1 may 
 63.4   purchase allowable service credit in the applicable plan for any 
 63.5   period of time during which the employee was on a public 
 63.6   employee strike without pay, not to exceed a period of one year, 
 63.7   if the employee makes a payment in lieu of salary deductions as 
 63.8   specified in paragraph (b) or (c), whichever applies.  The 
 63.9   employing unit, at its option, may pay the employer portion of 
 63.10  the amount specified in paragraph (b) on behalf of its employees.
 63.11     (b) If payment is received by the applicable pension plan 
 63.12  executive director within one year from the end of the strike, 
 63.13  the payment amount is equal to the applicable employee and 
 63.14  employer contribution rates specified in law for the applicable 
 63.15  plan during the strike period, applied to the employee's rate of 
 63.16  salary in effect at the conclusion of the strike for the period 
 63.17  of the strike without pay, plus compound interest at a monthly 
 63.18  rate of 0.71 percent from the last day of the strike period 
 63.19  until the date payment is received. 
 63.20     (c) If payment is received by the applicable pension fund 
 63.21  director after one year and before five years from the end of 
 63.22  the strike, the payment amount is the amount determined under 
 63.23  section 356.551. 
 63.24     (d) Payments may not be made more than five years after the 
 63.25  end of the strike. 
 63.26     Sec. 2.  Minnesota Statutes 2004, section 490.121, 
 63.27  subdivision 4, is amended to read: 
 63.28     Subd. 4.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 63.29  means any calendar month, subject to the service credit limit in 
 63.30  subdivision 22, served as a judge at any time, or served as a 
 63.31  referee in probate for all referees in probate who were in 
 63.32  office prior to January 1, 1974. 
 63.33     (b) "Allowable service" also means a period of authorized 
 63.34  leave of absence for which the judge has made a payment in lieu 
 63.35  of contributions, not in an amount in excess of the service 
 63.36  credit limit under subdivision 22.  To obtain the service 
 64.1   credit, the judge shall pay an amount equal to the normal cost 
 64.2   of the judges retirement plan on the date of return from the 
 64.3   leave of absence, as determined in the most recent actuarial 
 64.4   report for the plan filed with the Legislative Commission on 
 64.5   Pensions and Retirement, multiplied by the judge's average 
 64.6   monthly salary rate during the authorized leave of absence and 
 64.7   multiplied by the number of months of the authorized leave of 
 64.8   absence, plus annual compound interest at the rate of 8.5 
 64.9   percent from the date of the termination of the leave to the 
 64.10  date on which payment is made.  The payment must be made within 
 64.11  one year of the date on which the authorized leave of absence 
 64.12  terminated.  Service credit for an authorized leave of absence 
 64.13  is in addition to a uniformed service leave under section 
 64.14  490.1211. 
 64.15     Sec. 3.  Laws 1999, chapter 222, article 16, section 16, as 
 64.16  amended by Laws 2002, chapter 392, article 7, section 1, and 
 64.17  Laws 2003, First Special Session chapter 12, article 6, section 
 64.18  2, and Laws 2004, chapter 267, article 17, section 6, is amended 
 64.19  to read:  
 64.20     Sec. 16.  [REPEALER.] 
 64.21     (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 
 64.22  2004.  
 64.23     (b) Sections 1 and 7 are repealed on May 16, 2006 2007.  
 64.24     Sec. 4.  Laws 2000, chapter 461, article 4, section 4, as 
 64.25  amended by Laws 2003, First Special Session chapter 12, article 
 64.26  6, section 3, and Laws 2004, chapter 267, article 17, section 7, 
 64.27  is amended to read:  
 64.28     Sec. 4.  [EFFECTIVE DATE; SUNSET REPEALER.] 
 64.29     (a) Sections 1, 2, and 3 are effective on the day following 
 64.30  final enactment.  
 64.31     (b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.
 64.32     Sec. 5.  [METRO TRANSIT STRIKE PROVISION.] 
 64.33     Notwithstanding the payment deadline specified in Minnesota 
 64.34  Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 
 64.35  Transit employee covered by the general state employees 
 64.36  retirement plan of the Minnesota State Retirement System who was 
 65.1   on strike on or after January 1, 2004, and before the effective 
 65.2   date of this section, is authorized to make a payment under that 
 65.3   paragraph on or before one year after the effective date of this 
 65.4   section. 
 65.5      Sec. 6.  [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 
 65.6      Notwithstanding the payment deadline specified in Minnesota 
 65.7   Statutes, section 356.195, subdivision 2, paragraph (b), a 
 65.8   Crosby-Ironton public school teacher covered by the Teachers 
 65.9   Retirement Association who was on strike during a period that 
 65.10  included April 1, 2005, and before the effective date of this 
 65.11  section, is authorized to make a payment under that paragraph on 
 65.12  or before one year after the effective date of this section. 
 65.13     Sec. 7.  [UNIVERSITY OF MINNESOTA STRIKE PROVISION.] 
 65.14     Notwithstanding the payment deadline specified in Minnesota 
 65.15  Statutes, section 356.195, subdivision 2, paragraph (b), a 
 65.16  University of Minnesota employee covered by the Minnesota State 
 65.17  Retirement System who was on strike on or after October 21, 
 65.18  2003, and before the effective date of this section, is 
 65.19  authorized to make a payment under that paragraph on or before 
 65.20  one year after the effective date of this section. 
 65.21     Sec. 8.  [EFFECTIVE DATE.] 
 65.22     (a) Sections 1 and 3 to 7 are effective the day following 
 65.23  final enactment. 
 65.24     (b) Section 2 is effective retroactively from January 1, 
 65.25  2005, and applies to any person who was in active service as a 
 65.26  judge on or after that date and applies to an authorized leave 
 65.27  of absence that occurred before or after that date.  For a 
 65.28  person for whom section 2 is retroactive, the equivalent 
 65.29  contribution payment must be made on or before July 1, 2006. 
 65.30                             ARTICLE 4
 65.31              ACTUARIAL FINANCIAL REPORTING AND OTHER 
 65.32            GENERALLY APPLICABLE ADMINISTRATIVE CHANGES
 65.33     Section 1.  Minnesota Statutes 2004, section 352.01, 
 65.34  subdivision 12, is amended to read: 
 65.35     Subd. 12.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 65.36  means the condition of one annuity or benefit having an equal 
 66.1   actuarial present value as another annuity or benefit, 
 66.2   determined as of a given date at a specified age with each 
 66.3   actuarial present value based on the appropriate mortality table 
 66.4   adopted by the board of directors based on the experience of the 
 66.5   fund as recommended by the actuary retained by the Legislative 
 66.6   Commission on Pensions and Retirement under section 356.214, and 
 66.7   approved under section 356.215, subdivision 18, and using the 
 66.8   applicable preretirement or postretirement interest rate 
 66.9   assumption specified in section 356.215, subdivision 8. 
 66.10     Sec. 2.  Minnesota Statutes 2004, section 353.01, 
 66.11  subdivision 14, is amended to read: 
 66.12     Subd. 14.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 66.13  means the condition of one annuity or benefit having an equal 
 66.14  actuarial present value as another annuity or benefit, 
 66.15  determined as of a given date with each actuarial present value 
 66.16  based on the appropriate mortality table adopted by the board of 
 66.17  trustees based on the experience of the fund as recommended by 
 66.18  the actuary retained by the Legislative Commission on Pensions 
 66.19  and Retirement under section 356.214, and approved under section 
 66.20  356.215, subdivision 18, and using the applicable preretirement 
 66.21  or postretirement interest rate assumption specified in section 
 66.22  356.215, subdivision 8.  
 66.23     Sec. 3.  Minnesota Statutes 2004, section 354.05, 
 66.24  subdivision 7, is amended to read: 
 66.25     Subd. 7.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 66.26  means the condition of one annuity or benefit having an equal 
 66.27  actuarial present value as another annuity or benefit, 
 66.28  determined as of a given date with each actuarial present value 
 66.29  based on the appropriate mortality table adopted by the board of 
 66.30  trustees based on the experience of the association as 
 66.31  recommended by the actuary retained by the Legislative 
 66.32  Commission on Pensions and Retirement under section 356.214, and 
 66.33  approved under section 356.215, subdivision 18, and using the 
 66.34  applicable preretirement or postretirement interest rate 
 66.35  assumption specified in section 356.215, subdivision 8. 
 66.36     Sec. 4.  Minnesota Statutes 2004, section 354.094, 
 67.1   subdivision 1, is amended to read: 
 67.2      Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] (a) Upon 
 67.3   granting any extended leave of absence under section 122A.46 or 
 67.4   136F.43, the employing unit granting the leave must certify the 
 67.5   leave to the association on a form specified by the executive 
 67.6   director.  A member granted an extended leave of absence under 
 67.7   section 122A.46 or 136F.43 may pay employee contributions and 
 67.8   receive allowable service credit toward annuities and other 
 67.9   benefits under this chapter, for each year of the leave, 
 67.10  provided that the member and the employing board make the 
 67.11  required employer contribution in any proportion they may agree 
 67.12  upon, during the period of the leave.  The employer may enter 
 67.13  into an agreement with the exclusive bargaining representative 
 67.14  of the teachers in the district under which, for an individual 
 67.15  teacher, all or a portion of the employee's contribution is paid 
 67.16  by the employer.  Any such agreement must include a sunset of 
 67.17  eligibility to qualify for the payment and must not be a part of 
 67.18  the collective bargaining agreement.  The leave period must not 
 67.19  exceed five years.  A member may not receive more than five 
 67.20  years of allowable service credit under this section.  The 
 67.21  employee and employer contributions must be based upon the rates 
 67.22  of contribution prescribed by section 354.42 for the salary 
 67.23  received during the year immediately preceding the extended 
 67.24  leave.  
 67.25     (b) Employee contribution payments for the years for which 
 67.26  a member is receiving service credit while on extended leave 
 67.27  must be made on or before the later of June 30 of each fiscal 
 67.28  year for which service credit is to be received or within 30 
 67.29  days after first notification of the amount due, if requested by 
 67.30  the member, is given by the association.  If payment is to be 
 67.31  made by a transfer of pretax assets authorized under section 
 67.32  356.441, payment is authorized after June 30 of the fiscal year 
 67.33  providing that authorization for the asset transfer has been 
 67.34  received by the applicable third party administrator by June 30, 
 67.35  and the payment must include interest at a rate of .708 percent 
 67.36  per month from June 30 through the end of the month in which 
 68.1   payment is received.  No payment is permitted after the 
 68.2   following September 30.  Payments received after June 30 must 
 68.3   include interest at an annual rate of 8.5 percent from June 30 
 68.4   through the end of the month in which payment is received.  
 68.5      (c) Notwithstanding the provisions of any agreements to the 
 68.6   contrary, employee and employer contributions may not be made to 
 68.7   receive allowable service credit if the member does not have 
 68.8   full reinstatement rights as provided in section 122A.46 or 
 68.9   136F.43, both during and at the end of the extended leave. 
 68.10     (d) Any school district paying the employee's retirement 
 68.11  contributions under this section shall forward to the applicable 
 68.12  retirement association or retirement fund a copy of the 
 68.13  agreement executed by the school district and the employee. 
 68.14     Sec. 5.  Minnesota Statutes 2004, section 354A.011, 
 68.15  subdivision 3a, is amended to read: 
 68.16     Subd. 3a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 68.17  means the condition of one annuity or benefit having an equal 
 68.18  actuarial present value as another annuity or benefit, 
 68.19  determined as of a given date with each actuarial present value 
 68.20  based on the appropriate mortality table adopted by the 
 68.21  appropriate board of trustees based on the experience of that 
 68.22  retirement fund association as recommended by the actuary 
 68.23  retained by the Legislative Commission on Pensions and 
 68.24  Retirement under section 356.214, and approved under section 
 68.25  356.215, subdivision 18, and using the applicable preretirement 
 68.26  or postretirement interest rate assumption specified in section 
 68.27  356.215, subdivision 8. 
 68.28     Sec. 6.  Minnesota Statutes 2004, section 356.20, 
 68.29  subdivision 4, is amended to read: 
 68.30     Subd. 4.  [CONTENTS OF FINANCIAL REPORT.] (a) The financial 
 68.31  report required by this section must contain financial 
 68.32  statements and disclosures that indicate the financial 
 68.33  operations and position of the retirement plan and fund.  The 
 68.34  report must conform with generally accepted governmental 
 68.35  accounting principles, applied on a consistent basis.  The 
 68.36  report must be audited.  The report must include, as part of its 
 69.1   exhibits or its footnotes, an actuarial disclosure item based on 
 69.2   the actuarial valuation calculations prepared by the 
 69.3   commission-retained actuary retained under section 356.214 or by 
 69.4   the actuary retained by the retirement fund or plan, if 
 69.5   applicable whichever applies, according to applicable actuarial 
 69.6   requirements enumerated in section 356.215, and specified in the 
 69.7   most recent standards for actuarial work adopted by the 
 69.8   Legislative Commission on Pensions and Retirement.  The accrued 
 69.9   assets, the accrued liabilities, including accrued reserves, and 
 69.10  the unfunded actuarial accrued liability of the fund or plan 
 69.11  must be disclosed.  The disclosure item must contain a 
 69.12  declaration by the actuary retained by the Legislative 
 69.13  Commission on Pensions and Retirement under section 356.214 or 
 69.14  the actuary retained by the fund or plan, whichever applies, 
 69.15  specifying that the required reserves for any retirement, 
 69.16  disability, or survivor benefits provided under a benefit 
 69.17  formula are computed in accordance with the entry age actuarial 
 69.18  cost method and in accordance with the most recent applicable 
 69.19  standards for actuarial work adopted by the Legislative 
 69.20  Commission on Pensions and Retirement. 
 69.21     (b) Assets of the fund or plan contained in the disclosure 
 69.22  item must include the following statement of the actuarial value 
 69.23  of current assets as defined in section 356.215, subdivision 1: 
 69.24                                      Value         Value 
 69.25                                     at cost       at market
 69.26   Cash, cash equivalents, and  
 69.27     short-term securities           .........     ......... 
 69.28   Accounts receivable               .........     .........
 69.29   Accrued investment income         .........     .........  
 69.30   Fixed income investments          .........     ......... 
 69.31   Equity investments other 
 69.32     than real estate                .........     ......... 
 69.33   Real estate investments           .........     ......... 
 69.34   Equipment                         .........     ......... 
 69.35   Equity Participation in the Minnesota 
 69.36     postretirement investment
 70.1      fund or the retirement
 70.2      benefit fund                    .........     ......... 
 70.3    Other                             .........     .........  
 70.4     
 70.5    Total assets 
 70.6      Value at cost                                 .........
 70.7      Value at market                               ......... 
 70.8      Actuarial value of current assets             ......... 
 70.9      (c) The unfunded actuarial accrued liability of the fund or 
 70.10  plan contained in the disclosure item must include the following 
 70.11  measures of unfunded actuarial accrued liability, using 
 70.12  the actuarial value of current assets:  
 70.13     (1) the unfunded actuarial accrued liability, determined by 
 70.14  subtracting the current assets and the present value of future 
 70.15  normal costs from the total current and expected future benefit 
 70.16  obligations; and 
 70.17     (2) the unfunded pension benefit obligation, determined by 
 70.18  subtracting the current assets from the actuarial present value 
 70.19  of credited projected benefits. 
 70.20     If the current assets of the fund or plan exceed the 
 70.21  actuarial accrued liabilities, the excess must be disclosed and 
 70.22  indicated as a surplus. 
 70.23     (d) The pension benefit obligations schedule included in 
 70.24  the disclosure must contain the following information on the 
 70.25  benefit obligations: 
 70.26     (1) the pension benefit obligation, determined as the 
 70.27  actuarial present value of credited projected benefits on 
 70.28  account of service rendered to date, separately identified as 
 70.29  follows: 
 70.30           (i) for annuitants;
 70.31                 retirement annuities;
 70.32                 disability benefits;
 70.33                 surviving spouse and child benefits;
 70.34           (ii)  for former members without vested rights;
 70.35           (iii) for deferred annuitants' benefits, including 
 70.36                 any augmentation;
 71.1            (iv)  for active employees;
 71.2                  accumulated employee contributions,
 71.3                  including allocated investment income;
 71.4                  employer-financed benefits vested;
 71.5                  employer-financed benefits nonvested;
 71.6                  total pension benefit obligation; and
 71.7      (2) if there are additional benefits not appropriately 
 71.8   covered by the foregoing items of benefit obligations, a 
 71.9   separate identification of the obligation. 
 71.10     (e) The report must contain an itemized exhibit describing 
 71.11  the administrative expenses of the plan, including, but not 
 71.12  limited to, the following items, classified on a consistent 
 71.13  basis from year to year, and with any further meaningful detail: 
 71.14     (1) personnel expenses; 
 71.15     (2) communication-related expenses; 
 71.16     (3) office building and maintenance expenses; 
 71.17     (4) professional services fees; and 
 71.18     (5) other expenses. 
 71.19     (f) The report must contain an itemized exhibit describing 
 71.20  the investment expenses of the plan, including, but not limited 
 71.21  to, the following items, classified on a consistent basis from 
 71.22  year to year, and with any further meaningful detail: 
 71.23     (1) internal investment-related expenses; and 
 71.24     (2) external investment-related expenses. 
 71.25     (g) Any additional statements or exhibits or more detailed 
 71.26  or subdivided itemization of a disclosure item that will enable 
 71.27  the management of the fund to portray a true interpretation of 
 71.28  the fund's financial condition must be included in the 
 71.29  additional statements or exhibits. 
 71.30     Sec. 7.  Minnesota Statutes 2004, section 356.47, 
 71.31  subdivision 3, is amended to read: 
 71.32     Subd. 3.  [PAYMENT.] (a) Upon the retired member attaining 
 71.33  the age of 65 years or upon the first day of the month next 
 71.34  following the month occurring one year after the termination of 
 71.35  the reemployment that gave rise to the limitation, whichever is 
 71.36  later, and the filing of a written application, the retired 
 72.1   member is entitled to the payment, in a lump sum, of the value 
 72.2   of the person's amount under subdivision 2, plus interest at the 
 72.3   compound annual rate of six percent from the date that the 
 72.4   amount was deducted from the retirement annuity to the date of 
 72.5   payment. 
 72.6      (b) The written application must be on a form prescribed by 
 72.7   the chief administrative officer of the applicable retirement 
 72.8   plan. 
 72.9      (c) If the retired member dies before the payment provided 
 72.10  for in paragraph (a) is made, the amount is payable, upon 
 72.11  written application, to the deceased person's surviving spouse, 
 72.12  or if none, to the deceased person's designated beneficiary, or 
 72.13  if none, to the deceased person's estate. 
 72.14     (d) In lieu of the direct payment of the person's amount 
 72.15  under subdivision 2, on or after the payment date under 
 72.16  paragraph (a), if the federal Internal Revenue Code so permits, 
 72.17  the retired member may elect to have all or any portion of the 
 72.18  payment amount under this section paid in the form of a direct 
 72.19  rollover to an eligible retirement plan as defined in section 
 72.20  402(c) of the federal Internal Revenue Code that is specified by 
 72.21  the retired member.  If the retired member dies with a balance 
 72.22  remaining payable under this section, the surviving spouse of 
 72.23  the retired member, or if none, the deceased person's designated 
 72.24  beneficiary, or if none, the administrator of the deceased 
 72.25  person's estate may elect a direct rollover under this paragraph.
 72.26     Sec. 8.  Minnesota Statutes 2004, section 422A.01, 
 72.27  subdivision 6, is amended to read: 
 72.28     Subd. 6.  [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 
 72.29  or "present value" means that the present amount of money if 
 72.30  increased at the applicable postretirement or preretirement 
 72.31  interest rate assumption specified in section 356.215, 
 72.32  subdivision 8, and based on the mortality table adopted by the 
 72.33  board of trustees based on the experience of the fund as 
 72.34  recommended by the actuary retained by the Legislative 
 72.35  Commission on Pensions and Retirement under section 356.214, and 
 72.36  approved under section 356.215, subdivision 18, will at 
 73.1   retirement equal the actuarial accrued liability of the annuity 
 73.2   already earned. 
 73.3      Sec. 9.  Minnesota Statutes 2004, section 490.121, 
 73.4   subdivision 20, is amended to read: 
 73.5      Subd. 20.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 73.6   means the condition of one annuity or benefit having an equal 
 73.7   actuarial present value as another annuity or benefit, 
 73.8   determined as of a given date with each actuarial present value 
 73.9   based on the appropriate mortality table adopted by the board of 
 73.10  trustees directors of the Minnesota State Retirement System 
 73.11  based on the experience of the fund as recommended by 
 73.12  the commission-retained actuary retained under section 356.214, 
 73.13  and approved under section 356.215, subdivision 18, and using 
 73.14  the applicable preretirement or postretirement interest rate 
 73.15  assumption specified in section 356.215, subdivision 8. 
 73.16     Sec. 10.  [EFFECTIVE DATE.] 
 73.17     (a) Sections 1 to 5, 8, and 9 are effective July 1, 2005. 
 73.18     (b) Section 6 is effective the day following final 
 73.19  enactment and applies to annual financial reporting occurring on 
 73.20  or after June 30, 2005. 
 73.21     (c) Section 4 is effective the day following final 
 73.22  enactment.  
 73.23     (d) Section 7 is effective July 1, 2005, and applies to 
 73.24  retired members with an amount in a reemployed annuitant's 
 73.25  account on or after that date. 
 73.26                             ARTICLE 5
 73.27                       MEMBERSHIP INCLUSIONS
 73.28                           AND EXCLUSIONS
 73.29     Section 1.  Minnesota Statutes 2004, section 69.011, is 
 73.30  amended by adding a subdivision to read: 
 73.31     Subd. 2c.  [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 
 73.32  police officer employed by the University of Minnesota who is 
 73.33  required by the Board of Regents to be a member of the 
 73.34  University of Minnesota faculty retirement plan is not eligible 
 73.35  to be included in any police state-aid certification under this 
 73.36  section. 
 74.1      Sec. 2.  Minnesota Statutes 2004, section 352.01, 
 74.2   subdivision 2a, is amended to read: 
 74.3      Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
 74.4   includes: 
 74.5      (1) employees of the Minnesota Historical Society; 
 74.6      (2) employees of the State Horticultural Society; 
 74.7      (3) employees of the Disabled American Veterans, Department 
 74.8   of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
 74.9   if employed before July 1, 1963; 
 74.10     (4) employees of the Minnesota Crop Improvement 
 74.11  Association; 
 74.12     (5) employees of the adjutant general who are paid from 
 74.13  federal funds and who are not covered by any federal civilian 
 74.14  employees retirement system; 
 74.15     (6) employees of the Minnesota State Colleges and 
 74.16  Universities employed under the university or college activities 
 74.17  program; 
 74.18     (7) currently contributing employees covered by the system 
 74.19  who are temporarily employed by the legislature during a 
 74.20  legislative session or any currently contributing employee 
 74.21  employed for any special service as defined in subdivision 2b, 
 74.22  clause (8); 
 74.23     (8) employees of the Armory Building Commission; 
 74.24     (9) employees of the legislature appointed without a limit 
 74.25  on the duration of their employment and persons employed or 
 74.26  designated by the legislature or by a legislative committee or 
 74.27  commission or other competent authority to conduct a special 
 74.28  inquiry, investigation, examination, or installation; 
 74.29     (10) trainees who are employed on a full-time established 
 74.30  training program performing the duties of the classified 
 74.31  position for which they will be eligible to receive immediate 
 74.32  appointment at the completion of the training period; 
 74.33     (11) employees of the Minnesota Safety Council; 
 74.34     (12) any employees on authorized leave of absence from the 
 74.35  Transit Operating Division of the former Metropolitan Transit 
 74.36  Commission who are employed by the labor organization which is 
 75.1   the exclusive bargaining agent representing employees of the 
 75.2   Transit Operating Division; 
 75.3      (13) employees of the Metropolitan Council, Metropolitan 
 75.4   Parks and Open Space Commission, Metropolitan Sports Facilities 
 75.5   Commission, Metropolitan Mosquito Control Commission, or 
 75.6   Metropolitan Radio Board unless excluded or covered by another 
 75.7   public pension fund or plan under section 473.415, subdivision 
 75.8   3; 
 75.9      (14) judges of the Tax Court; 
 75.10     (15) personnel employed on June 30, 1992, by the University 
 75.11  of Minnesota in the management, operation, or maintenance of its 
 75.12  heating plant facilities, whose employment transfers to an 
 75.13  employer assuming operation of the heating plant facilities, so 
 75.14  long as the person is employed at the University of Minnesota 
 75.15  heating plant by that employer or by its successor organization; 
 75.16  and 
 75.17     (16) seasonal help in the classified service employed by 
 75.18  the Department of Revenue; and 
 75.19     (17) persons employed by the Department of Commerce as a 
 75.20  peace officer in the Insurance Fraud Prevention Division under 
 75.21  section 45.0135 who have attained the mandatory retirement age 
 75.22  specified in section 43A.34, subdivision 4.  
 75.23     (b) Employees specified in paragraph (a), clause (15), are 
 75.24  included employees under paragraph (a) if employer and employee 
 75.25  contributions are made in a timely manner in the amounts 
 75.26  required by section 352.04.  Employee contributions must be 
 75.27  deducted from salary.  Employer contributions are the sole 
 75.28  obligation of the employer assuming operation of the University 
 75.29  of Minnesota heating plant facilities or any successor 
 75.30  organizations to that employer. 
 75.31     Sec. 3.  Minnesota Statutes 2004, section 352.91, is 
 75.32  amended by adding a subdivision to read: 
 75.33     Subd. 4a.  [PROCESS FOR EVALUATING AND RECOMMENDING 
 75.34  POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 
 75.35  The Department of Corrections and the Department of Human 
 75.36  Services must establish a procedure for evaluating periodic 
 76.1   requests by department employees for qualification for 
 76.2   recommendation by the commissioner for inclusion of the 
 76.3   employment position in the correctional facility or human 
 76.4   services facility in the correctional retirement plan and for 
 76.5   periodically determining employment positions that no longer 
 76.6   qualify for continued correctional retirement plan coverage.  
 76.7      (b) The procedure must provide for an evaluation of the 
 76.8   extent of the employee's working time spent in direct contact 
 76.9   with patients or inmates, the extent of the physical hazard that 
 76.10  the employee is routinely subjected to in the course of 
 76.11  employment, and the extent of intervention routinely expected of 
 76.12  the employee in the event of a facility incident.  The 
 76.13  percentage of routine direct contact with inmates or patients 
 76.14  may not be less than 75 percent.  
 76.15     (c) The applicable commissioner shall notify the employee 
 76.16  of the determination of the appropriateness of recommending the 
 76.17  employment position for inclusion in the correctional retirement 
 76.18  plan, if the evaluation procedure results in a finding that the 
 76.19  employee: 
 76.20     (1) routinely spends 75 percent of the employee's time in 
 76.21  direct contact with inmates or patients; and 
 76.22     (2) is regularly engaged in the rehabilitation, treatment, 
 76.23  custody, or supervision of inmates or patients.  
 76.24     (d) After providing the affected employee an opportunity to 
 76.25  dispute or clarify any evaluation determinations, if the 
 76.26  commissioner determines that the employment position is 
 76.27  appropriate for inclusion in the correctional retirement plan, 
 76.28  the commissioner shall forward that recommendation and 
 76.29  supporting documentation to the chair of the Legislative 
 76.30  Commission on Pensions and Retirement, the chair of the State 
 76.31  and Local Governmental Operations Committee of the senate, the 
 76.32  chair of the Governmental Operations and Veterans Affairs Policy 
 76.33  Committee of the house of representatives, and the executive 
 76.34  director of the Legislative Commission on Pensions and 
 76.35  Retirement in the form of the appropriate proposed legislation.  
 76.36  The recommendation must be forwarded to the legislature before 
 77.1   January 15 for the recommendation to be considered in that 
 77.2   year's legislative session.  
 77.3      Sec. 4.  Minnesota Statutes 2004, section 352B.01, 
 77.4   subdivision 2, is amended to read: 
 77.5      Subd. 2.  [MEMBER.] "Member" means: 
 77.6      (1) a State Patrol member currently employed after June 30, 
 77.7   1943, under section 299D.03 by the state, who is a peace officer 
 77.8   under section 626.84, and whose salary or compensation is paid 
 77.9   out of state funds; 
 77.10     (2) a conservation officer employed under section 97A.201, 
 77.11  currently employed by the state, whose salary or compensation is 
 77.12  paid out of state funds; 
 77.13     (3) a crime bureau officer who was employed by the crime 
 77.14  bureau and was a member of the Highway Patrolmen's retirement 
 77.15  fund on July 1, 1978, whether or not that person has the power 
 77.16  of arrest by warrant after that date, or who is employed as 
 77.17  police personnel, with powers of arrest by warrant under section 
 77.18  299C.04, and who is currently employed by the state, and whose 
 77.19  salary or compensation is paid out of state funds; 
 77.20     (4) a person who is employed by the state in the Department 
 77.21  of Public Safety in a data processing management position with 
 77.22  salary or compensation paid from state funds, who was a crime 
 77.23  bureau officer covered by the State Patrol retirement plan on 
 77.24  August 15, 1987, and who was initially hired in the data 
 77.25  processing management position within the department during 
 77.26  September 1987, or January 1988, with membership continuing for 
 77.27  the duration of the person's employment in that position, 
 77.28  whether or not the person has the power of arrest by warrant 
 77.29  after August 15, 1987; 
 77.30     (5) a public safety employee defined as a peace officer in 
 77.31  section 626.84, subdivision 1, paragraph (c), and employed with 
 77.32  the Division of Alcohol and Gambling Enforcement under section 
 77.33  299L.01; and 
 77.34     (6) a Fugitive Apprehension Unit officer after October 31, 
 77.35  2000, employed by the Office of Special Investigations of the 
 77.36  Department of Corrections who is a peace officer under section 
 78.1   626.84; and 
 78.2      (7) an employee of the Department of Commerce defined as a 
 78.3   peace officer in section 626.84, subdivision 1, paragraph (c), 
 78.4   who is employed by the Division of Insurance Fraud Prevention 
 78.5   under section 45.0135 after January 1, 2005, and who has not 
 78.6   attained the mandatory retirement age specified in section 
 78.7   43A.34, subdivision 4.  
 78.8      Sec. 5.  Minnesota Statutes 2004, section 353.01, 
 78.9   subdivision 6, is amended to read: 
 78.10     Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
 78.11  subdivision" means a county, city, town, school district within 
 78.12  this state, or a department or unit of state government, or any 
 78.13  public body whose revenues are derived from taxation, fees, 
 78.14  assessments or from other sources. 
 78.15     (b) Governmental subdivision also means the Public 
 78.16  Employees Retirement Association, the League of Minnesota 
 78.17  Cities, the Association of Metropolitan Municipalities, public 
 78.18  hospitals owned or operated by, or an integral part of, a 
 78.19  governmental subdivision or governmental subdivisions, the 
 78.20  Association of Minnesota Counties, the Metropolitan Intercounty 
 78.21  Association, the Minnesota Municipal Utilities Association, the 
 78.22  Metropolitan Airports Commission, the University of Minnesota 
 78.23  with respect to police officers covered by the public employees 
 78.24  police and fire retirement plan, the Minneapolis Employees 
 78.25  Retirement Fund for employment initially commenced after June 
 78.26  30, 1979, the Range Association of Municipalities and Schools, 
 78.27  soil and water conservation districts, economic development 
 78.28  authorities created or operating under sections 469.090 to 
 78.29  469.108, the Port Authority of the city of St. Paul, the Spring 
 78.30  Lake Park Fire Department, incorporated, the Lake Johanna 
 78.31  Volunteer Fire Department, incorporated, the Red Wing 
 78.32  Environmental Learning Center, and the Dakota County 
 78.33  Agricultural Society. 
 78.34     (c) Governmental subdivision does not mean any municipal 
 78.35  housing and redevelopment authority organized under the 
 78.36  provisions of sections 469.001 to 469.047; or any port authority 
 79.1   organized under sections 469.048 to 469.089 other than the Port 
 79.2   Authority of the city of St. Paul; or any hospital district 
 79.3   organized or reorganized prior to July 1, 1975, under sections 
 79.4   447.31 to 447.37 or the successor of the district, nor the 
 79.5   Minneapolis Community Development Agency. 
 79.6      Sec. 6.  Minnesota Statutes 2004, section 353.64, is 
 79.7   amended by adding a subdivision to read: 
 79.8      Subd. 6a.  [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 
 79.9   INCLUSIONS AND EXCLUSIONS.] (a) Unless paragraph (b) applies, a 
 79.10  person who is employed as a peace officer by the University of 
 79.11  Minnesota at any campus or facility of the university, who is 
 79.12  required by the university to be and is licensed as a peace 
 79.13  officer by the Minnesota Peace Officer Standards and Training 
 79.14  Board under sections 626.84 to 626.863, and who has the full 
 79.15  power of arrest is a member of the public employees police and 
 79.16  fire retirement plan. 
 79.17     (b) A police officer employed by the University of 
 79.18  Minnesota who is required by the Board of Regents to contribute 
 79.19  to the University of Minnesota faculty retirement plan is not 
 79.20  eligible to be a member of the public employees police and fire 
 79.21  retirement plan. 
 79.22     Sec. 7.  Minnesota Statutes 2004, section 354B.21, 
 79.23  subdivision 2, is amended to read: 
 79.24     Subd. 2.  [COVERAGE; ELECTION.] (a) An eligible person is 
 79.25  entitled to elect coverage by the plan.  If the eligible person 
 79.26  does not make a timely election of coverage by the plan, the 
 79.27  person has the coverage specified in subdivision 3. 
 79.28     (b) For eligible persons who were employed by the former 
 79.29  state university system or the former community college system 
 79.30  before May 1, 1995, the person has the retirement coverage that 
 79.31  the person had for employment immediately before May 1, 1995. 
 79.32     (c) (b) For all other eligible persons, the election of 
 79.33  coverage must be made within 90 days of May 10, 1995, or 90 days 
 79.34  of receiving notice from the employer of the options available 
 79.35  under this section, whichever occurs later unless otherwise 
 79.36  specified in this section, the eligible person is authorized to 
 80.1   elect prospective Teachers Retirement Association plan coverage 
 80.2   rather than coverage by the plan established by this chapter.  
 80.3   The election of prospective Teachers Retirement Association plan 
 80.4   coverage shall be made within one year of commencing eligible 
 80.5   Minnesota State Colleges and Universities system employment.  If 
 80.6   an election is not made within the specified election period due 
 80.7   to a termination of Minnesota State Colleges and Universities 
 80.8   system employment, an election may be made within 90 days of 
 80.9   returning to eligible Minnesota State Colleges and Universities 
 80.10  system employment.  All elections are irrevocable.  Prior to 
 80.11  making an election the eligible person shall be covered by the 
 80.12  plan indicated as default coverage under subdivision 3.  
 80.13     (c) A purchase of service credit in the Teachers Retirement 
 80.14  Association plan for any period or periods of Minnesota State 
 80.15  Colleges and Universities system employment occurring prior to 
 80.16  the election under paragraph (b) is prohibited.  
 80.17     Sec. 8.  Minnesota Statutes 2004, section 354B.21, 
 80.18  subdivision 3, is amended to read: 
 80.19     Subd. 3.  [DEFAULT COVERAGE.] (a) Prior to making an 
 80.20  election under subdivision 2, or if an eligible person fails to 
 80.21  elect coverage by the plan under subdivision 2 or if the person 
 80.22  fails to make a timely election, the following retirement 
 80.23  coverage applies: 
 80.24     (1) for employees of the board who are employed in faculty 
 80.25  positions in the technical colleges, in the state universities 
 80.26  or in the community colleges, the retirement coverage is by the 
 80.27  plan established by this chapter; 
 80.28     (2) for employees of the board who are employed in faculty 
 80.29  positions in the technical colleges, the retirement coverage is 
 80.30  by the plan established by this chapter unless on June 30, 1997, 
 80.31  the employee was a member of the Teachers Retirement Association 
 80.32  established under chapter 354 and then the retirement coverage 
 80.33  is by the Teachers Retirement Association, or, unless the 
 80.34  employee was a member of a first class city teacher retirement 
 80.35  fund established under chapter 354A on June 30, 1995, and then 
 80.36  the retirement coverage is by the Duluth Teachers Retirement 
 81.1   Fund Association if the person was a member of that plan on June 
 81.2   30, 1995, or the Minneapolis Teachers Retirement Fund 
 81.3   Association if the person was a member of that plan on June 30, 
 81.4   1995, or the St. Paul Teachers Retirement Fund Association if 
 81.5   the person was a member of that plan on June 30, 1995; and 
 81.6      (3) for employees of the board who are employed in eligible 
 81.7   unclassified administrative positions, the retirement coverage 
 81.8   is by the plan established by this chapter. 
 81.9      (b) If an employee fails to correctly certify prior 
 81.10  membership in the Teachers Retirement Association to the 
 81.11  Minnesota State colleges and Universities system, the system 
 81.12  shall not pay interest on employee contributions, employer 
 81.13  contributions, and additional employer contributions to the 
 81.14  Teachers Retirement Association under section 354.52, 
 81.15  subdivision 4. 
 81.16     Sec. 9.  [EFFECTIVE DATE.] 
 81.17     (a) Sections 1, 3, 5, and 6 are effective July 1, 2005.  
 81.18     (b) Sections 2 and 4 are effective retroactively from 
 81.19  January 1, 2005. 
 81.20     (c) Sections 7 and 8 are effective the day following final 
 81.21  enactment. 
 81.22                             ARTICLE 6
 81.23                      RETIREMENT CONTRIBUTIONS
 81.24     Section 1.  Minnesota Statutes 2004, section 353.27, 
 81.25  subdivision 2, is amended to read: 
 81.26     Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) The employee 
 81.27  contribution is the following applicable percentage of the total 
 81.28  salary amount for a "basic member" and for a "coordinated 
 81.29  member": 
 81.30                                      Basic    Coordinated
 81.31                                     Program     Program
 81.32  Before January 1, 2002              8.75         4.75  
 81.33  Effective January 1, 2002 
 81.34  Effective before January 1, 2006    9.10         5.10
 81.35  Effective January 1, 2006           9.10         5.50 
 81.36  Effective January 1, 2007           9.10         5.75 
 82.1   Effective January 1, 2008           9.10         6.00 plus any
 82.2                                                    contribution
 82.3                                                    rate adjustment
 82.4                                                    under
 82.5                                                    subdivision 3b
 82.6      (b) These contributions must be made by deduction from 
 82.7   salary as defined in section 353.01, subdivision 10, in the 
 82.8   manner provided in subdivision 4.  Where If any portion of a 
 82.9   member's salary is paid from other than public funds, such the 
 82.10  member's employee contribution must be based on the total salary 
 82.11  received by the member from all sources. 
 82.12     Sec. 2.  Minnesota Statutes 2004, section 353.27, 
 82.13  subdivision 3, is amended to read: 
 82.14     Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) The employer 
 82.15  contribution is the following applicable percentage of the total 
 82.16  salary amount for "basic members" and for "coordinated members": 
 82.17                                    Basic     Coordinated  
 82.18                                   Program      Program
 82.19  Before January 1, 2002            8.75          4.75 
 82.20  Effective January 1, 2002 
 82.21  Effective before January 1, 2006  9.10          5.10
 82.22  Effective January 1, 2006         9.10          5.50 
 82.23  Effective January 1, 2007         9.10          5.75 
 82.24  Effective January 1, 2008         9.10          6.00 plus any
 82.25                                                  contribution
 82.26                                                  rate adjustment
 82.27                                                  under
 82.28                                                  subdivision 3b
 82.29     (b) This contribution must be made from funds available to 
 82.30  the employing subdivision by the means and in the manner 
 82.31  provided in section 353.28. 
 82.32     Sec. 3.  Minnesota Statutes 2004, section 353.27, 
 82.33  subdivision 3a, is amended to read: 
 82.34     Subd. 3a.  [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An 
 82.35  additional employer contribution must be made equal to (1) 2.68 
 82.36  percent of the following applicable percentage of the total 
 83.1   salary of each amount for "basic member members"; and (2) 
 83.2   .43 percent of the total salary of each for "coordinated member. 
 83.3   members": 
 83.4                                        Basic         Coordinated
 83.5                                       Program          Program
 83.6   Effective before January 1, 2006     2.68              .43
 83.7   Effective January 1, 2006            2.68              .50
 83.8   Effective January 1, 2009            2.68              .75
 83.9   Effective January 1, 2010            2.68              1.00
 83.10     These contributions must be made from funds available to 
 83.11  the employing subdivision by the means and in the manner 
 83.12  provided in section 353.28.  
 83.13     (b) The coordinated program contribution rates set forth in 
 83.14  paragraph (a) effective for January 1, 2009, or January 1, 2010, 
 83.15  must not be implemented if, following receipt of the July 1, 
 83.16  2008, or July 1, 2009, annual actuarial valuation reports under 
 83.17  section 356.215, respectively, the actuarially required 
 83.18  contributions are equal to or less than the total rates under 
 83.19  this section in effect as of January 1, 2008. 
 83.20     (c) This subdivision is repealed once the actuarial value 
 83.21  of the assets of the plan equal or exceed the actuarial accrued 
 83.22  liability of the plan as determined by the actuary retained by 
 83.23  the Legislative Commission on Pensions and Retirement under 
 83.24  section 356.215.  The repeal is effective on the first day of 
 83.25  the first full pay period occurring after March 31 of the 
 83.26  calendar year following the issuance of the actuarial valuation 
 83.27  upon which the repeal is based. 
 83.28     Sec. 4.  Minnesota Statutes 2004, section 353.27, is 
 83.29  amended by adding a subdivision to read: 
 83.30     Subd. 3b.  [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 
 83.31  IN CERTAIN INSTANCES.] (a) For purposes of this section, a 
 83.32  contribution sufficiency exists if the total of the employee 
 83.33  contribution under subdivision 2, the employer contribution 
 83.34  under subdivision 3, the additional employer contribution under 
 83.35  subdivision 3a, and any additional contribution previously 
 83.36  imposed under this subdivision exceeds the total of the normal 
 84.1   cost, the administrative expenses, and the amortization 
 84.2   contribution of the retirement plan as reported in the most 
 84.3   recent actuarial valuation of the retirement plan prepared by 
 84.4   the actuary retained under section 356.214 and prepared under 
 84.5   section 356.215 and the standards for actuarial work of the 
 84.6   Legislative Commission on Pensions and Retirement.  For purposes 
 84.7   of this section, a contribution deficiency exists if the total 
 84.8   of the employee contributions under subdivision 2, the employer 
 84.9   contributions under subdivision 3, the additional employer 
 84.10  contribution under subdivision 3a, and any additional 
 84.11  contribution previously imposed under this subdivision is less 
 84.12  than the total of the normal cost, the administrative expenses, 
 84.13  and the amortization contribution of the retirement plan as 
 84.14  reported in the most recent actuarial valuation of the 
 84.15  retirement plan prepared by the actuary retained under section 
 84.16  356.214 and prepared under section 356.215 and the standards for 
 84.17  actuarial work of the Legislative Commission on Pensions and 
 84.18  Retirement. 
 84.19     (b) Employee and employer contributions under subdivisions 
 84.20  2 and 3 must be adjusted: 
 84.21     (1) if, after July 1, 2010, the regular actuarial 
 84.22  valuations of the general employees retirement plan of the 
 84.23  Public Employees Retirement Association under section 356.215 
 84.24  indicate that there is a contribution sufficiency under 
 84.25  paragraph (a) equal to or greater than 0.5 percent of covered 
 84.26  payroll for two consecutive years, the coordinated program 
 84.27  employee and employer contribution rates must be decreased as 
 84.28  determined under paragraph (c) to a level such that the 
 84.29  sufficiency equals no more than 0.25 percent of covered payroll 
 84.30  based on the most recent actuarial valuation; or 
 84.31     (2) if, after July 1, 2010, the regular actuarial 
 84.32  valuations of the general employees retirement plan of the 
 84.33  Public Employees Retirement Association under section 356.215 
 84.34  indicate that there is a deficiency equal to or greater than 0.5 
 84.35  percent of covered payroll for two consecutive years, the 
 84.36  coordinated program employee and employer contribution rates 
 85.1   must be increased as determined under paragraph (c) to a level 
 85.2   such that no deficiency exists based on the most recent 
 85.3   actuarial valuation. 
 85.4      (c) The contribution rate increase or decrease must be 
 85.5   determined by the executive director of the Public Employees 
 85.6   Retirement Association, must be reported to the chair and the 
 85.7   executive director of the Legislative Commission on Pensions and 
 85.8   Retirement on or before the next February 1, and, if the 
 85.9   Legislative Commission on Pensions and Retirement does not 
 85.10  recommend against the rate change or does not recommend a 
 85.11  modification in the rate change, is effective on the next July 1 
 85.12  following the determination by the executive director that a 
 85.13  contribution deficiency or sufficiency has existed for two 
 85.14  consecutive fiscal years based on the most recent actuarial 
 85.15  valuations under section 356.215.  If the actuarially required 
 85.16  contribution exceeds or is less than the total support provided 
 85.17  by the combined employee and employer contribution rates by more 
 85.18  than 0.5 percent of covered payroll, the coordinated program 
 85.19  employee and employer contribution rates must be adjusted 
 85.20  incrementally over one or more years to a level such that there 
 85.21  remains a contribution sufficiency of no more than 0.25 percent 
 85.22  of covered payroll.  
 85.23     (d) No incremental adjustment may exceed 0.25 percent for 
 85.24  either the coordinated program employee and employer 
 85.25  contribution rates per year in which any adjustment is 
 85.26  implemented.  A contribution rate adjustment under this 
 85.27  subdivision must not be made until at least two years have 
 85.28  passed since fully implementing a previous adjustment under this 
 85.29  subdivision. 
 85.30     Sec. 5.  Minnesota Statutes 2004, section 353.28, 
 85.31  subdivision 5, is amended to read: 
 85.32     Subd. 5.  [INTEREST CHARGES CHARGEABLE ON AMOUNTS DUE.] Any 
 85.33  amount due under this section or section 353.27, subdivision 4, 
 85.34  is payable with interest at an annual compound rate of 8.5 
 85.35  percent compounded annually from the date due until the date 
 85.36  payment is received by the association, with a minimum interest 
 86.1   charge of $10.  Interest for past due payments of excess police 
 86.2   state aid under section 69.031, subdivision 5, must be charged 
 86.3   at an annual rate of 8.5 percent compounded annually. 
 86.4      Sec. 6.  Minnesota Statutes 2004, section 353.28, 
 86.5   subdivision 6, is amended to read: 
 86.6      Subd. 6.  [FAILURE TO PAY COLLECTION OF UNPAID AMOUNTS.] (a)
 86.7   If the a governmental subdivision which receives the direct 
 86.8   proceeds of property taxation fails to pay amounts an amount due 
 86.9   under chapters chapter 353, 353A, 353B, 353C, and or 353D or 
 86.10  fails to make payments of excess police state aid to the public 
 86.11  employees police and fire fund under section 69.031, subdivision 
 86.12  5, the executive director shall certify those amounts the amount 
 86.13  to the governmental subdivision for payment.  If the 
 86.14  governmental subdivision fails to remit the sum so due in a 
 86.15  timely fashion, the executive director shall certify amounts the 
 86.16  amount to the applicable county auditor for collection.  The 
 86.17  county auditor shall collect such amounts the amount out of the 
 86.18  revenue of the governmental subdivision, or shall add them the 
 86.19  amount to the levy of the governmental subdivision and make 
 86.20  payment directly to the association.  This tax shall must be 
 86.21  levied, collected, and apportioned in the manner that other 
 86.22  taxes are levied, collected, and apportioned. 
 86.23     (b) If a governmental subdivision which is not funded 
 86.24  directly from the proceeds of property taxation fails to pay an 
 86.25  amount due under this chapter, the executive director shall 
 86.26  certify the amount to the governmental subdivision for payment.  
 86.27  If the governmental subdivision fails to pay the amount for a 
 86.28  period of 60 days after certification, the executive director 
 86.29  shall certify the amount to the commissioner of finance, who 
 86.30  shall deduct the amount from any subsequent state-aid payment or 
 86.31  state appropriation amount applicable to the governmental 
 86.32  subdivision. 
 86.33     Sec. 7.  Minnesota Statutes 2004, section 353.65, 
 86.34  subdivision 2, is amended to read: 
 86.35     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] (a) The employee 
 86.36  contribution is an amount equal to 6.2 the percent of the total 
 87.1   salary of the member specified in paragraph (b).  This 
 87.2   contribution must be made by deduction from salary in the manner 
 87.3   provided in subdivision 4.  Where any portion of a member's 
 87.4   salary is paid from other than public funds, the member's 
 87.5   employee contribution is based on the total salary received from 
 87.6   all sources.  
 87.7      (b) For calendar year 2006, the employee contribution rate 
 87.8   is 7.0 percent.  For calendar year 2007, the employee 
 87.9   contribution rate is 7.8 percent.  For calendar year 2008, the 
 87.10  employee contribution rate is 8.6 percent.  For calendar year 
 87.11  2009 and thereafter, the employee contribution rate is 9.4 
 87.12  percent. 
 87.13     Sec. 8.  Minnesota Statutes 2004, section 353.65, 
 87.14  subdivision 3, is amended to read: 
 87.15     Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] (a) The employer 
 87.16  contribution shall be an amount equal to 9.3 the percent of the 
 87.17  total salary of every member as specified in paragraph (b).  
 87.18  This contribution shall be made from funds available to the 
 87.19  employing subdivision by the means and in the manner provided in 
 87.20  section 353.28. 
 87.21     (b) For calendar year 2006, the employer contribution rate 
 87.22  is 10.5 percent.  For calendar year 2007, the employer 
 87.23  contribution rate is 11.7 percent.  For calendar year 2008, the 
 87.24  employer contribution rate is 12.9 percent.  For calendar year 
 87.25  2009 and thereafter, the employer contribution rate is 14.1 
 87.26  percent. 
 87.27     Sec. 9.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST 
 87.28  ON SERVICE CREDIT PURCHASE PAYMENT RETURN.] 
 87.29     If a former employee of the Minneapolis Community 
 87.30  Development Agency made a prior service credit purchase payment 
 87.31  under Minnesota Statutes 2002, section 356.55, in an amount that 
 87.32  is greater than the actually required payment amount because of 
 87.33  the use of an inaccurate salary figure or other similar 
 87.34  reporting or clerical error, the general employees retirement 
 87.35  plan of the Public Employees Retirement Association may pay 
 87.36  interest on the overage amount at an annual compound rate of six 
 88.1   percent per year. 
 88.2      Sec. 10.  [RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT 
 88.3   FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.] 
 88.4      (a) An eligible person, upon written application, may 
 88.5   receive a return of a prior service credit purchase payment 
 88.6   under Minnesota Statutes 2002, section 356.55, plus interest on 
 88.7   the amount at an annual compound rate of six percent per year.  
 88.8   The return amount and interest must be made in an 
 88.9   institution-to-institution transfer to a federal tax qualified 
 88.10  retirement plan or account and may not be paid directly to an 
 88.11  individual.  
 88.12     (b) An eligible person is a person who was an employee of 
 88.13  the Minneapolis Community Development Agency and made a payment 
 88.14  for the purchase of prior service credit under Laws 2003, 
 88.15  chapter 127, article 12, section 31, subdivision 4, and 
 88.16  Minnesota Statutes 2002, section 356.55, in an erroneous amount 
 88.17  because of an inaccurate salary figure supplied by the employing 
 88.18  agency. 
 88.19     Sec. 11.  [EFFECTIVE DATE.] 
 88.20     (a) Sections 5 and 6 are effective retroactive to July 1, 
 88.21  2005. 
 88.22     (b) Sections 9 and 10 are effective the day following final 
 88.23  enactment. 
 88.24     (c) Section 10 expires June 30, 2005. 
 88.25                             ARTICLE 7
 88.26                PENSION BENEFITS UPON PRIVATIZATION
 88.27     Section 1.  Minnesota Statutes 2004, section 353F.02, 
 88.28  subdivision 4, is amended to read: 
 88.29     Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
 88.30     (1) Bridges Medical Services; 
 88.31     (2) the Fair Oaks Lodge, Wadena; 
 88.32     (2) (3) the Glencoe Area Health Center; 
 88.33     (3) (4) the Hutchinson Area Health Care; 
 88.34     (5) the Kanabec Hospital; 
 88.35     (4) (6) the Luverne Public Hospital; 
 88.36     (7) the Northfield Hospital; 
 89.1      (5) (8) the RenVilla Nursing Home; 
 89.2      (6) (9) the Renville County Hospital in Olivia; 
 89.3      (7) (10) the St. Peter Community Healthcare Center; and 
 89.4      (8) (11) the Waconia-Ridgeview Medical Center. 
 89.5      Sec. 2.  Minnesota Statutes 2004, section 471A.10, is 
 89.6   amended to read: 
 89.7      471A.10 [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING 
 89.8   FACILITY.] 
 89.9      (a) Unless expressly provided therein, and except as 
 89.10  provided in this section, no state law, charter provision, or 
 89.11  ordinance of a municipality relating to public employees shall 
 89.12  apply to a person solely by reason of that person's employment 
 89.13  by a private vendor in connection with services rendered under a 
 89.14  service contract. 
 89.15     (b) A private vendor purchasing or leasing existing related 
 89.16  facilities from a municipality or operating or maintaining the 
 89.17  facility shall recognize all exclusive bargaining 
 89.18  representatives and existing labor agreements and those 
 89.19  agreements shall remain in force until they expire by their 
 89.20  terms.  Persons who are not who were employed by a municipality 
 89.21  in a related facility at the time of and who were members of the 
 89.22  Public Employees Retirement Association general plan due to that 
 89.23  employment are not permitted to remain as active members of the 
 89.24  plan following a lease or purchase of the facility by the a 
 89.25  private vendor are not "public employees" within the meaning of 
 89.26  the Public Employees Retirement Act, chapter 353.  Persons 
 89.27  employed by a municipality in a related facility at the time of 
 89.28  a lease or purchase of the facility by a private vendor shall 
 89.29  continue to be considered to be "public employees" within the 
 89.30  meaning of the Public Employees Retirement Act, chapter 353, but 
 89.31  may elect to terminate their participation in the Public 
 89.32  Employees Retirement Association as provided in this section.  
 89.33  Each such employee may exercise the election annually on the 
 89.34  anniversary of the person's initial employment by the 
 89.35  municipality.  An employee electing to terminate participation 
 89.36  in the association is entitled to benefits that the employee 
 90.1   would be entitled to if terminating public employment and may 
 90.2   participate in a retirement program established by the private 
 90.3   vendor. 
 90.4      Sec. 3.  Laws 2004, chapter 267, article 12, section 4, is 
 90.5   amended to read:  
 90.6      Sec. 4.  [EFFECTIVE DATE.] 
 90.7      (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 
 90.8   effective upon the latter of: 
 90.9      (1) the day after the governing body of Todd County and its 
 90.10  chief clerical officer timely complete their compliance with 
 90.11  Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
 90.12     (2) the day after the governing body of Wadena County and 
 90.13  its chief clerical officer timely complete their compliance with 
 90.14  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
 90.15     (b) Section 1, relating to the RenVilla Nursing Home, is 
 90.16  effective upon the latter of: 
 90.17     (1) the day after the governing body of the city of 
 90.18  Renville and its chief clerical officer timely complete their 
 90.19  compliance with Minnesota Statutes, section 645.021, 
 90.20  subdivisions 2 and 3, except that the certificate of approval 
 90.21  must be filed before January 1, 2006; and 
 90.22     (2) the first day of the month next following certification 
 90.23  to the governing body of the city of Renville by the executive 
 90.24  director of the Public Employees Retirement Association that the 
 90.25  actuarial accrued liability of the special benefit coverage 
 90.26  proposed for extension to the privatized RenVilla Nursing Home 
 90.27  employees under section 1 does not exceed the actuarial gain 
 90.28  otherwise to be accrued by the Public Employees Retirement 
 90.29  Association, as calculated by the consulting actuary retained by 
 90.30  the Legislative Commission on Pensions and Retirement, or the 
 90.31  actuary retained under Minnesota Statutes, section 356.214, 
 90.32  whichever is applicable. 
 90.33     (c) The cost of the actuarial calculations must be borne by 
 90.34  the city of Renville or the purchaser of the RenVilla Nursing 
 90.35  Home. 
 90.36     (d) Section 1, relating to the St. Peter Community 
 91.1   Healthcare Center, is effective upon the latter of: 
 91.2      (1) the day after the governing body of the city of St. 
 91.3   Peter and its chief clerical officer timely complete their 
 91.4   compliance with Minnesota Statutes, section 645.021, 
 91.5   subdivisions 2 and 3; and 
 91.6      (2) the first day of the month next following certification 
 91.7   to the governing body of the city of St. Peter by the executive 
 91.8   director of the Public Employees Retirement Association that the 
 91.9   actuarial accrued liability of the special benefit coverage 
 91.10  proposed for extension to the privatized St. Peter Community 
 91.11  Healthcare Center employees under section 1 does not exceed the 
 91.12  actuarial gain otherwise to be accrued by the Public Employees 
 91.13  Retirement Association, as calculated by the consulting actuary 
 91.14  retained by the Legislative Commission on Pensions and 
 91.15  Retirement, or the actuary retained under Minnesota Statutes, 
 91.16  section 356.214, whichever is applicable. 
 91.17     (e) The cost of the actuarial calculations must be borne by 
 91.18  the city of St. Peter or the purchaser of the St. Peter 
 91.19  Community Healthcare Center. 
 91.20     (f) If the required actions under paragraphs (b) and (c) 
 91.21  occur, section 1 applies retroactively to the RenVilla Nursing 
 91.22  Home as of the date of privatization. 
 91.23     (g) If the required actions under paragraph (a) occur, 
 91.24  section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 
 91.25  of January 1, 2004. 
 91.26     (h) Sections 2 and 3 are effective on the day following 
 91.27  final enactment. 
 91.28     Sec. 4.  [EFFECTIVE DATE.] 
 91.29     (a) Section 1, relating to Bridges Medical Services, is 
 91.30  effective upon the later of: 
 91.31     (1) the day after the governing body of the city of Ada and 
 91.32  its chief clerical officer timely complete their compliance with 
 91.33  Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
 91.34     (2) the first day of the month next following certification 
 91.35  to the governing body of the city of Ada by the executive 
 91.36  director of the Public Employees Retirement Association that the 
 92.1   actuarial accrued liability of the special benefit coverage 
 92.2   proposed for extension to the privatized Bridges Medical 
 92.3   Services employees under section 1 does not exceed the actuarial 
 92.4   gain otherwise to be accrued by the Public Employees Retirement 
 92.5   Association, as calculated by the consulting actuary retained 
 92.6   under Minnesota Statutes, section 356.214. 
 92.7      (b) Section 1, relating to the Hutchinson Area Health Care, 
 92.8   is effective upon the later of: 
 92.9      (1) the day after the governing body of the city of 
 92.10  Hutchinson and its chief clerical officer timely complete their 
 92.11  compliance with Minnesota Statutes, section 645.021, 
 92.12  subdivisions 2 and 3; and 
 92.13     (2) the first day of the month next following certification 
 92.14  to the governing body of the city of Hutchinson by the executive 
 92.15  director of the Public Employees Retirement Association that the 
 92.16  actuarial accrued liability of the special benefit coverage 
 92.17  proposed for extension to the privatized Hutchinson Area Health 
 92.18  Care employees under section 1 does not exceed the actuarial 
 92.19  gain otherwise to be accrued by the Public Employees Retirement 
 92.20  Association, as calculated by the consulting actuary retained by 
 92.21  the Legislative Commission on Pensions and Retirement. 
 92.22     (c) Section 1, relating to the Northfield Hospital, is 
 92.23  effective upon the later of: 
 92.24     (1) the day after the governing body of the city of 
 92.25  Northfield and its chief clerical officer timely complete their 
 92.26  compliance with Minnesota Statutes, section 645.021, 
 92.27  subdivisions 2 and 3; and 
 92.28     (2) the first day of the month next following certification 
 92.29  to the governing body of the city of Northfield by the executive 
 92.30  director of the Public Employees Retirement Association that the 
 92.31  actuarial accrued liability of the special benefit coverage 
 92.32  proposed for extension to the privatized Northfield Hospital 
 92.33  employees under section 1 does not exceed the actuarial gain 
 92.34  otherwise to be accrued by the Public Employees Retirement 
 92.35  Association, as calculated by the consulting actuary retained by 
 92.36  the Legislative Commission on Pensions and Retirement. 
 93.1      (d) The cost of the actuarial calculations must be borne by 
 93.2   the facility, the city in which the facility is located, or the 
 93.3   purchaser of the facility. 
 93.4      (e) If the required actions in paragraphs (a), (b), or (c) 
 93.5   and (d) occur, section 1 applies retroactively to the date of 
 93.6   privatization. 
 93.7      (f) Section 3 is effective the day following final 
 93.8   enactment. 
 93.9      (g) Section 2 is effective the day following final 
 93.10  enactment and applies to privatizations occurring on or after 
 93.11  the effective date. 
 93.12                             ARTICLE 8
 93.13                      FIRST CLASS CITY TEACHER
 93.14                    RETIREMENT FUND ASSOCIATIONS
 93.15     Section 1.  Minnesota Statutes 2004, section 354A.021, is 
 93.16  amended by adding a subdivision to read: 
 93.17     Subd. 9.  [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 
 93.18  FILING.] (a) On or before July 1, 2006, and within six months of 
 93.19  the date of the approval of any amendment to the articles of 
 93.20  incorporation or bylaws, the chief administrative officer of 
 93.21  each first class city teacher retirement fund association shall 
 93.22  prepare and publish an updated compilation of the articles of 
 93.23  incorporation and the bylaws of the association. 
 93.24     (b) The chief administrative officer of the first class 
 93.25  city teacher retirement fund association must certify the 
 93.26  accuracy and the completeness of the compilation. 
 93.27     (c) The compilation of the articles of incorporation and 
 93.28  bylaws of a first class city teacher retirement fund association 
 93.29  must contain an index. 
 93.30     (d) The compilation must be made available to association 
 93.31  members and other interested parties.  The association may 
 93.32  charge a fee for a copy that reflects the price of printing or 
 93.33  otherwise producing the copy.  Two copies of the compilation 
 93.34  must be filed, without charge, by each retirement fund 
 93.35  association with the Legislation Commission on Pensions and 
 93.36  Retirement, the Legislative Reference Library, the state 
 94.1   auditor, the commissioner of education, the chancellor of the 
 94.2   Minnesota State Colleges and Universities system, and the 
 94.3   superintendent of the applicable school district. 
 94.4      (e) A first class city teacher retirement fund association 
 94.5   may contract with the revisor of statutes for the preparation of 
 94.6   the compilation. 
 94.7      (f) If a first class city teacher retirement fund 
 94.8   association makes an updated copy of its articles of 
 94.9   incorporation and bylaws available on its Web site, the 
 94.10  retirement fund association is not obligated to file a hard copy 
 94.11  of the documents under paragraph (d) for the applicable filing 
 94.12  period. 
 94.13     Sec. 2.  [EFFECTIVE DATE.] 
 94.14     Section 1 is effective July 1, 2005. 
 94.15                             ARTICLE 9
 94.16             MINNESOTA STATE COLLEGES AND UNIVERSITIES 
 94.17             INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES 
 94.18     Section 1.  Minnesota Statutes 2004, section 354B.25, 
 94.19  subdivision 2, is amended to read: 
 94.20     Subd. 2.  [INVESTMENT OPTIONS.] (a) The plan administrator 
 94.21  shall arrange for the purchase of investment products. 
 94.22     (b) The investment products must be purchased with 
 94.23  contributions under section 354B.23 or with money or assets 
 94.24  otherwise provided by law by authority of the board.  
 94.25     (c) Various investment accounts offered through the 
 94.26  Minnesota supplemental investment fund established under section 
 94.27  11A.17 and administered by the State Board of Investment is one 
 94.28  of the may be included as investment products for the individual 
 94.29  retirement account plan.  Direct access must also be provided to 
 94.30  lower expense and no-load mutual funds, as those terms are 
 94.31  defined by the federal Securities and Exchange Commission, 
 94.32  including stock funds, bond funds, and balanced funds.  Other 
 94.33  investment products or combination of investment products which 
 94.34  may be included are: 
 94.35     (1) savings accounts at federally insured financial 
 94.36  institutions; 
 95.1      (2) life insurance contracts, fixed and variable annuity 
 95.2   contracts from companies that are subject to regulation by the 
 95.3   commerce commissioner; 
 95.4      (3) investment options from open-ended investment companies 
 95.5   registered under the federal Investment Company Act of 1940, 
 95.6   United States Code, title 15, sections 80a-1 to 80a-64; 
 95.7      (4) investment options from a firm that is a registered 
 95.8   investment advisor under the federal Investment Advisers Act of 
 95.9   1940, United States Code, title 15, sections 80b-1 to 80b-21; 
 95.10  and 
 95.11     (5) investment options of a bank as defined in United 
 95.12  States Code, title 15, section 80b-2, subsection (a), paragraph 
 95.13  2, or a bank holding company as defined in the Bank Holding 
 95.14  Company Act of 1956, United States Code, title 12, section 1841, 
 95.15  subsection (a), paragraph (1). 
 95.16     Sec. 2.  [EFFECTIVE DATE.] 
 95.17     Section 1 is effective the day following final enactment. 
 95.18                             ARTICLE 10
 95.19                   SUPPLEMENTAL RETIREMENT PLANS
 95.20     Section 1.  Minnesota Statutes 2004, section 356.24, 
 95.21  subdivision 1, is amended to read: 
 95.22     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
 95.23  for a school district or other governmental subdivision or state 
 95.24  agency to levy taxes for, or to contribute public funds to a 
 95.25  supplemental pension or deferred compensation plan that is 
 95.26  established, maintained, and operated in addition to a primary 
 95.27  pension program for the benefit of the governmental subdivision 
 95.28  employees other than: 
 95.29     (1) to a supplemental pension plan that was established, 
 95.30  maintained, and operated before May 6, 1971; 
 95.31     (2) to a plan that provides solely for group health, 
 95.32  hospital, disability, or death benefits; 
 95.33     (3) to the individual retirement account plan established 
 95.34  by chapter 354B; 
 95.35     (4) to a plan that provides solely for severance pay under 
 95.36  section 465.72 to a retiring or terminating employee; 
 96.1      (5) for employees other than personnel employed by the 
 96.2   Board of Trustees of the Minnesota State Colleges and 
 96.3   Universities and covered under the Higher Education Supplemental 
 96.4   Retirement Plan under chapter 354C, if the supplemental plan 
 96.5   coverage is provided for in a personnel policy of the public 
 96.6   employer or in the collective bargaining agreement between the 
 96.7   public employer and the exclusive representative of public 
 96.8   employees in an appropriate unit, in an amount matching employee 
 96.9   contributions on a dollar for dollar basis, but not to exceed an 
 96.10  employer contribution of $2,000 a year per employee; 
 96.11     (i) to the state of Minnesota deferred compensation plan 
 96.12  under section 352.96; or 
 96.13     (ii) in payment of the applicable portion of the 
 96.14  contribution made to any investment eligible under section 
 96.15  403(b) of the Internal Revenue Code, if the employing unit has 
 96.16  complied with any applicable pension plan provisions of the 
 96.17  Internal Revenue Code with respect to the tax-sheltered annuity 
 96.18  program during the preceding calendar year; 
 96.19     (6) for personnel employed by the Board of Trustees of the 
 96.20  Minnesota State Colleges and Universities and not covered by 
 96.21  clause (5), to the supplemental retirement plan under chapter 
 96.22  354C, if the supplemental plan coverage is provided for in a 
 96.23  personnel policy or in the collective bargaining agreement of 
 96.24  the public employer with the exclusive representative of the 
 96.25  covered employees in an appropriate unit, in an amount matching 
 96.26  employee contributions on a dollar for dollar basis, but not to 
 96.27  exceed an employer contribution of $2,700 a year for each 
 96.28  employee; 
 96.29     (7) to a supplemental plan or to a governmental trust to 
 96.30  save for postretirement health care expenses qualified for 
 96.31  tax-preferred treatment under the Internal Revenue Code, if the 
 96.32  supplemental plan coverage is provided for in a personnel policy 
 96.33  or in the collective bargaining agreement of a public employer 
 96.34  with the exclusive representative of the covered employees in an 
 96.35  appropriate unit; 
 96.36     (8) to the laborer's national industrial pension fund or to 
 97.1   a laborer's local pension fund for the employees of a 
 97.2   governmental subdivision who are covered by a collective 
 97.3   bargaining agreement that provides for coverage by that fund and 
 97.4   that sets forth a fund contribution rate, but not to exceed an 
 97.5   employer contribution of $2,000 $5,000 per year per employee; 
 97.6      (9) to the plumbers' and pipefitters' national pension fund 
 97.7   or to a plumbers' and pipefitters' local pension fund for the 
 97.8   employees of a governmental subdivision who are covered by a 
 97.9   collective bargaining agreement that provides for coverage by 
 97.10  that fund and that sets forth a fund contribution rate, but not 
 97.11  to exceed an employer contribution of $2,000 $5,000 per year per 
 97.12  employee; 
 97.13     (10) to the international union of operating engineers 
 97.14  pension fund for the employees of a governmental subdivision who 
 97.15  are covered by a collective bargaining agreement that provides 
 97.16  for coverage by that fund and that sets forth a fund 
 97.17  contribution rate, but not to exceed an employer contribution of 
 97.18  $2,000 $5,000 per year per employee; or 
 97.19     (11) to a supplemental plan organized and operated under 
 97.20  the federal Internal Revenue Code, as amended, that is wholly 
 97.21  and solely funded by the employee's accumulated sick leave, 
 97.22  accumulated vacation leave, and accumulated severance pay at the 
 97.23  date of retirement or the termination of active employment. 
 97.24     Sec. 2.  [EFFECTIVE DATE.] 
 97.25     Section 1 is effective the day following final enactment. 
 97.26                             ARTICLE 11
 97.27                    VOLUNTEER FIREFIGHTER RELIEF
 97.28                        ASSOCIATION CHANGES
 97.29     Section 1.  Minnesota Statutes 2004, section 69.051, 
 97.30  subdivision 1, is amended to read: 
 97.31     Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
 97.32  each salaried firefighters relief association, police relief 
 97.33  association, and volunteer firefighters relief association as 
 97.34  defined in section 424A.001, subdivision 4, with assets of at 
 97.35  least $200,000 or liabilities of at least $200,000 in the prior 
 97.36  year or in any previous year, according to the most recent 
 98.1   applicable actuarial valuation or financial report if no 
 98.2   valuation is required, shall:  
 98.3      (1) prepare a financial report covering the special and 
 98.4   general funds of the relief association for the preceding fiscal 
 98.5   year on a form prescribed by the state auditor.  The financial 
 98.6   report shall must contain financial statements and disclosures 
 98.7   which present the true financial condition of the relief 
 98.8   association and the results of relief association operations in 
 98.9   conformity with generally accepted accounting principles and in 
 98.10  compliance with the regulatory, financing and funding provisions 
 98.11  of this chapter and any other applicable laws.  The financial 
 98.12  report shall must be countersigned by the municipal clerk or 
 98.13  clerk-treasurer of the municipality in which the relief 
 98.14  association is located if the relief association is a 
 98.15  firefighters relief association which is directly associated 
 98.16  with a municipal fire department or is a police relief 
 98.17  association, or countersigned by the secretary of the 
 98.18  independent nonprofit firefighting corporation and by the 
 98.19  municipal clerk or clerk-treasurer of the largest municipality 
 98.20  in population which contracts with the independent nonprofit 
 98.21  firefighting corporation if the volunteer firefighter relief 
 98.22  association is a subsidiary of an independent nonprofit 
 98.23  firefighting corporation; 
 98.24     (2) file the financial report in its office for public 
 98.25  inspection and present it to the city council after the close of 
 98.26  the fiscal year.  One copy of the financial report shall must be 
 98.27  furnished to the state auditor after the close of the fiscal 
 98.28  year; and 
 98.29     (3) submit to the state auditor audited financial 
 98.30  statements which have been attested to by a certified public 
 98.31  accountant, public accountant, or the state auditor within 180 
 98.32  days after the close of the fiscal year.  The state auditor may 
 98.33  accept this report in lieu of the report required in clause (2). 
 98.34     Sec. 2.  Minnesota Statutes 2004, section 69.051, 
 98.35  subdivision 1a, is amended to read: 
 98.36     Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
 99.1   volunteer firefighters relief association, as defined in section 
 99.2   424A.001, subdivision 4, with assets of less than $200,000 and 
 99.3   liabilities less than $200,000, according to the most recent 
 99.4   financial report, shall that is not required to file a financial 
 99.5   report and audit under subdivision 1 must prepare a detailed 
 99.6   statement of the financial affairs for the preceding fiscal year 
 99.7   of the relief association's special and general funds in the 
 99.8   style and form prescribed by the state auditor.  The detailed 
 99.9   statement must show the sources and amounts of all money 
 99.10  received; all disbursements, accounts payable and accounts 
 99.11  receivable; the amount of money remaining in the treasury; total 
 99.12  assets including a listing of all investments; the accrued 
 99.13  liabilities; and all items necessary to show accurately the 
 99.14  revenues and expenditures and financial position of the relief 
 99.15  association. 
 99.16     (b) The detailed financial statement required under 
 99.17  paragraph (a) must be certified by an independent public 
 99.18  accountant or auditor or by the auditor or accountant who 
 99.19  regularly examines or audits the financial transactions of the 
 99.20  municipality.  In addition to certifying the financial condition 
 99.21  of the special and general funds of the relief association, the 
 99.22  accountant or auditor conducting the examination shall give an 
 99.23  opinion as to the condition of the special and general funds of 
 99.24  the relief association, and shall comment upon any exceptions to 
 99.25  the report.  The independent accountant or auditor shall must 
 99.26  have at least five years of public accounting, auditing, or 
 99.27  similar experience, and shall must not be an active, inactive, 
 99.28  or retired member of the relief association or the fire or 
 99.29  police department. 
 99.30     (c) The detailed statement required under paragraph (a) 
 99.31  must be countersigned by the municipal clerk or clerk-treasurer 
 99.32  of the municipality, or, where applicable, by the secretary of 
 99.33  the independent nonprofit firefighting corporation and by the 
 99.34  municipal clerk or clerk-treasurer of the largest municipality 
 99.35  in population which contracts with the independent nonprofit 
 99.36  firefighting corporation if the relief association is a 
100.1   subsidiary of an independent nonprofit firefighting corporation. 
100.2      (d) The volunteer firefighters' relief association board 
100.3   must file the detailed statement required under paragraph (a) in 
100.4   the relief association office for public inspection and present 
100.5   it to the city council within 45 days after the close of the 
100.6   fiscal year, and must submit a copy of the detailed statement to 
100.7   the state auditor within 90 days of the close of the fiscal year.
100.8      Sec. 3.  Minnesota Statutes 2004, section 69.771, is 
100.9   amended to read: 
100.10     69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 
100.11  FINANCING GUIDELINES ACT; APPLICATION.] 
100.12     Subdivision 1.  [COVERED RELIEF ASSOCIATIONS.] The 
100.13  applicable provisions of sections 69.771 to 69.776 shall apply 
100.14  to any firefighters' relief association other than a relief 
100.15  association enumerated in section 69.77, subdivision 1a, which 
100.16  is organized under any laws of this state, which is composed of 
100.17  volunteer firefighters or is composed partially of volunteer 
100.18  firefighters and partially of salaried firefighters with 
100.19  retirement coverage provided by the public employees police and 
100.20  fire fund and which, in either case, operates subject to the 
100.21  service pension minimum requirements for entitlement and 
100.22  maximums contained in section 424A.02, or subject to a special 
100.23  law modifying those requirements or maximums. 
100.24     Subd. 2.  [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 
100.25  ASSOCIATION.] Notwithstanding any law to the contrary, a 
100.26  municipality may lawfully contribute public funds, including the 
100.27  transfer of any applicable fire state aid, or may levy property 
100.28  taxes for the support of a firefighters' relief association 
100.29  specified in subdivision 1, however organized, which provides 
100.30  retirement coverage or pays a service pension to retired 
100.31  firefighter or a retirement benefit to a disabled firefighter or 
100.32  a surviving dependent of either an active or retired firefighter 
100.33  for the operation and maintenance of the relief association only 
100.34  if the municipality and the relief association both comply with 
100.35  the applicable provisions of sections 69.771 to 69.776. 
100.36     Subd. 3.  [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 
101.1   Any (a) A municipality in which there exists a firefighters' 
101.2   relief association as specified in subdivision 1 which does not 
101.3   comply with the applicable provisions of sections 69.771 to 
101.4   69.776 or the provisions of any applicable special law relating 
101.5   to the funding or financing of the association shall does not 
101.6   qualify initially to receive, or be and is not entitled 
101.7   subsequently to retain, fire state aid pursuant to under 
101.8   sections 69.011 to 69.051 until the reason for the 
101.9   disqualification specified by the state auditor is remedied, 
101.10  whereupon the municipality or relief association, if otherwise 
101.11  qualified, shall be is entitled to again receive fire state aid 
101.12  for the year occurring immediately subsequent to the year in 
101.13  which the disqualification is remedied.  
101.14     (b) The state auditor shall determine if a municipality to 
101.15  which a firefighters' relief association is directly associated 
101.16  or a firefighters' relief association fails to comply with the 
101.17  provisions of sections 69.771 to 69.776 or the funding or 
101.18  financing provisions of any applicable special law based upon 
101.19  the information contained in the annual financial report of the 
101.20  firefighters' relief association required pursuant to under 
101.21  section 69.051., the actuarial valuation of the relief 
101.22  association, if applicable, the relief association officers' 
101.23  financial requirements of the relief association and minimum 
101.24  municipal obligation determination documentation under section 
101.25  69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 
101.26  69.774, subdivision 2, if requested to be filed by the state 
101.27  auditor, the applicable municipal or nonprofit firefighting 
101.28  corporation budget, if requested to be filed by the state 
101.29  auditor, and any other relevant documents or reports obtained by 
101.30  the state auditor. 
101.31     (c) The municipality or nonprofit firefighting corporation 
101.32  and the associated relief association are not eligible to 
101.33  receive or to retain fire state aid if: 
101.34     (1) the relief association fails to prepare or to file the 
101.35  financial report or financial statement under section 69.051; 
101.36     (2) the relief association treasurer is not bonded in the 
102.1   manner and in the amount required by section 69.051, subdivision 
102.2   2; 
102.3      (3) the relief association officers fail to determine or 
102.4   improperly determine the accrued liability and the annual 
102.5   accruing liability of the relief association under section 
102.6   69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 
102.7   applicable; 
102.8      (4) if applicable, the relief association officers fail to 
102.9   obtain and file a required actuarial valuation or the officers 
102.10  file an actuarial valuation that does not contain the special 
102.11  fund actuarial liability calculated under the entry age normal 
102.12  actuarial cost method, the special fund current assets, the 
102.13  special fund unfunded actuarial accrued liability, the special 
102.14  fund normal cost under the entry age normal actuarial cost 
102.15  method, the amortization requirement for the special fund 
102.16  unfunded actuarial accrued liability by the applicable target 
102.17  date, a summary of the applicable benefit plan, a summary of the 
102.18  membership of the relief association, a summary of the actuarial 
102.19  assumptions used in preparing the valuation, and a signed 
102.20  statement by the actuary attesting to its results and certifying 
102.21  to the qualifications of the actuary as an approved actuary 
102.22  under section 356.215, subdivision 1, paragraph (c); 
102.23     (5) the municipality failed to provide a municipal 
102.24  contribution, or the nonprofit firefighting corporation failed 
102.25  to provide a corporate contribution, in the amount equal to the 
102.26  minimum municipal obligation if the relief association is 
102.27  governed under section 69.772, or the amount necessary, when 
102.28  added to the fire state aid actually received in the plan year 
102.29  in question, to at least equal in total the calculated annual 
102.30  financial requirements of the special fund of the relief 
102.31  association if the relief association is governed under section 
102.32  69.773, and, if the municipal or corporate contribution is 
102.33  deficient, the municipality failed to include the minimum 
102.34  municipal obligation certified under section 69.772, subdivision 
102.35  3, or 69.773, subdivision 5, in its budget and tax levy or the 
102.36  nonprofit firefighting corporation failed to include the minimum 
103.1   corporate obligation certified under section 69.774, subdivision 
103.2   2, in the corporate budget; 
103.3      (6) the relief association did not receive municipal 
103.4   ratification for the most recent plan amendment when municipal 
103.5   ratification was required under section 69.772, subdivision 6; 
103.6   69.773, subdivision 6; or 424A.02, subdivision 10; 
103.7      (7) the relief association invested special fund assets in 
103.8   an investment security that is not authorized under section 
103.9   69.775; 
103.10     (8) the relief association had an administrative expense 
103.11  that is not authorized under section 69.80 or 424A.05, 
103.12  subdivision 3, or the municipality had an expenditure that is 
103.13  not authorized under section 424A.08; 
103.14     (9) the relief association officers fail to provide a 
103.15  complete and accurate public pension plan investment portfolio 
103.16  and performance disclosure under section 356.219; 
103.17     (10) the relief association fails to obtain the 
103.18  acknowledgment from a broker of the statement of investment 
103.19  restrictions under section 356A.06, subdivision 8b; 
103.20     (11) the relief association officers permitted to occur a 
103.21  prohibited transaction under section 356A.06, subdivision 9, or 
103.22  424A.001, subdivision 7, or failed to undertake correction of a 
103.23  prohibited transaction that did occur; or 
103.24     (12) the relief association pays a defined benefit service 
103.25  pension in an amount that is in excess of the applicable service 
103.26  pension maximum under section 424A.02, subdivision 3. 
103.27     Sec. 4.  Minnesota Statutes 2004, section 69.772, 
103.28  subdivision 3, is amended to read: 
103.29     Subd. 3.  [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 
103.30  MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 
103.31  July, the officers of the relief association shall determine the 
103.32  overall funding balance of the special fund for the current 
103.33  calendar year, the financial requirements of the special fund 
103.34  for the following calendar year and the minimum obligation of 
103.35  the municipality with respect to the special fund for the 
103.36  following calendar year in accordance with the requirements of 
104.1   this subdivision.  
104.2      (1) (b) The overall funding balance of the special fund for 
104.3   the current calendar year shall must be determined in the 
104.4   following manner: 
104.5      (a) (1) The total accrued liability of the special fund for 
104.6   all active and deferred members of the relief association as of 
104.7   December 31 of the current year shall must be calculated 
104.8   pursuant to under subdivisions 2 and 2a, if applicable. 
104.9      (b) (2) The total present assets of the special fund 
104.10  projected to December 31 of the current year, including receipts 
104.11  by and disbursements from the special fund anticipated to occur 
104.12  on or before December 31 shall, must be calculated.  To the 
104.13  extent possible, for those assets for which a market value is 
104.14  readily ascertainable, the current market value as of the date 
104.15  of the calculation for those assets shall must be utilized in 
104.16  making this calculation.  For any asset for which no market 
104.17  value is readily ascertainable, the cost value or the book 
104.18  value, whichever is applicable, shall must be utilized in making 
104.19  this calculation. 
104.20     (c) (3) The amount of the total present assets of the 
104.21  special fund calculated pursuant to under clause (b) shall (2) 
104.22  must be subtracted from the amount of the total accrued 
104.23  liability of the special fund calculated pursuant to under 
104.24  clause (a) (1).  If the amount of total present assets exceeds 
104.25  the amount of the total accrued liability, then the special fund 
104.26  shall be is considered to have a surplus over full funding.  If 
104.27  the amount of the total present assets is less than the amount 
104.28  of the total accrued liability, then the special fund shall be 
104.29  is considered to have a deficit from full funding.  If the 
104.30  amount of total present assets is equal to the amount of the 
104.31  total accrued liability, then the special fund shall be is 
104.32  considered to be fully funded. 
104.33     (2) (c) The financial requirements of the special fund for 
104.34  the following calendar year shall must be determined in the 
104.35  following manner: 
104.36     (a) (1) The total accrued liability of the special fund for 
105.1   all active and deferred members of the relief association as of 
105.2   December 31 of the calendar year next following the current 
105.3   calendar year shall must be calculated pursuant to under 
105.4   subdivisions 2 and 2a, if applicable. 
105.5      (b) (2) The increase in the total accrued liability of the 
105.6   special fund for the following calendar year over the total 
105.7   accrued liability of the special fund for the current year shall 
105.8   must be calculated. 
105.9      (c) (3) The amount of anticipated future administrative 
105.10  expenses of the special fund shall must be calculated by 
105.11  multiplying the dollar amount of the administrative expenses of 
105.12  the special fund for the most recent prior calendar year by the 
105.13  factor of 1.035. 
105.14     (d) (4) If the special fund is fully funded, the financial 
105.15  requirement requirements of the special fund for the following 
105.16  calendar year shall be are the figure which represents the 
105.17  increase in the total accrued liability of the special fund as 
105.18  amounts calculated pursuant to subclause (b) under clauses (2) 
105.19  and (3).  
105.20     (e) (5) If the special fund has a deficit from full 
105.21  funding, the financial requirements of the special fund for the 
105.22  following calendar year shall be are the financial requirements 
105.23  of the special fund calculated as though the special fund were 
105.24  fully funded pursuant to subclause (d) under clause (4) plus an 
105.25  amount equal to one-tenth of the original amount of the deficit 
105.26  from full funding of the special fund as determined pursuant to 
105.27  this section for the calendar year 1971 until that deficit from 
105.28  full funding is fully retired, and plus an amount equal to 
105.29  one-tenth of the increase in the deficit from full funding of 
105.30  the special fund under clause (2) resulting either from an 
105.31  increase in the amount of the service pension accruing after 
105.32  December 31, 1971 occurring in the last ten years or from a net 
105.33  annual investment loss occurring during the last ten years until 
105.34  each increase in the deficit from full funding is fully 
105.35  retired.  The annual amortization contribution under this clause 
105.36  may not exceed the amount of the deficit from full funding. 
106.1      (f) (6) If the special fund has a surplus over full 
106.2   funding, the financial requirements of the special fund for the 
106.3   following calendar year shall be are the financial requirements 
106.4   of the special fund calculated as though the special fund were 
106.5   fully funded pursuant to subclause (d) under clause (4) reduced 
106.6   by an amount equal to one-tenth of the amount of the surplus 
106.7   over full funding of the special fund. 
106.8      (3) (d) The minimum obligation of the municipality with 
106.9   respect to the special fund shall be is the financial 
106.10  requirements of the special fund reduced by the amount of any 
106.11  fire state aid payable pursuant to under sections 69.011 to 
106.12  69.051 reasonably anticipated to be received by the municipality 
106.13  for transmittal to the special fund during the following 
106.14  calendar year, an amount of interest on the assets of the 
106.15  special fund projected to the beginning of the following 
106.16  calendar year calculated at the rate of five percent per annum, 
106.17  and the amount of any anticipated contributions to the special 
106.18  fund required by the relief association bylaws from the active 
106.19  members of the relief association reasonably anticipated to be 
106.20  received during the following calendar year.  A reasonable 
106.21  amount of anticipated fire state aid is an amount that does not 
106.22  exceed the fire state aid actually received in the prior year 
106.23  multiplied by the factor 1.035.  
106.24     Sec. 5.  Minnesota Statutes 2004, section 69.772, 
106.25  subdivision 4, is amended to read: 
106.26     Subd. 4.  [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 
106.27  MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 
106.28  relief association shall certify the financial requirements of 
106.29  the special fund of the relief association and the minimum 
106.30  obligation of the municipality with respect to the special fund 
106.31  of the relief association as determined pursuant to under 
106.32  subdivision 3 to the governing body of the municipality on or 
106.33  before August 1 of each year.  The financial requirements of the 
106.34  relief association and the minimum municipal obligation must be 
106.35  included in the financial report or financial statement under 
106.36  section 69.051.  
107.1      (b) The municipality shall provide for at least the minimum 
107.2   obligation of the municipality with respect to the special fund 
107.3   of the relief association by tax levy or from any other source 
107.4   of public revenue.  
107.5      (c) The municipality may levy taxes for the payment of the 
107.6   minimum municipal obligation without any limitation as to rate 
107.7   or amount and irrespective of any limitations imposed by other 
107.8   provisions of law upon the rate or amount of taxation until the 
107.9   balance of the special fund or any fund of the relief 
107.10  association has attained a specified level.  In addition, any 
107.11  taxes levied pursuant to under this section shall must not cause 
107.12  the amount or rate of any other taxes levied in that year or to 
107.13  be levied in a subsequent year by the municipality which are 
107.14  subject to a limitation as to rate or amount to be reduced.  
107.15     (d) If the municipality does not include the full amount of 
107.16  the minimum municipal obligations in its levy for any year, the 
107.17  officers of the relief association shall certify that amount to 
107.18  the county auditor, who shall spread a levy in the amount of the 
107.19  certified minimum municipal obligation on the taxable property 
107.20  of the municipality. 
107.21     (e) If the state auditor determines that a municipal 
107.22  contribution actually made in a plan year was insufficient under 
107.23  section 69.771, subdivision 3, paragraph (c), clause (5), the 
107.24  state auditor may request a copy of the certifications under 
107.25  this subdivision from the relief association or from the city.  
107.26  The relief association or the city, whichever applies, must 
107.27  provide the certifications within 14 days of the date of the 
107.28  request from the state auditor. 
107.29     Sec. 6.  Minnesota Statutes 2004, section 69.773, 
107.30  subdivision 4, is amended to read: 
107.31     Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
107.32  to (a) On or before August 1 of each year, the officers of the 
107.33  relief association shall determine the financial requirements of 
107.34  the special fund of the relief association in accordance with 
107.35  the requirements of this subdivision.  
107.36     (b) The financial requirements of the relief 
108.1   association shall must be based on the most recent actuarial 
108.2   valuation of the special fund prepared in accordance with 
108.3   subdivision 2.  If the relief association has an unfunded 
108.4   actuarial accrued liability as reported in the most recent 
108.5   actuarial valuation, the financial requirements shall must be 
108.6   determined by adding the figures calculated pursuant to under 
108.7   paragraph (d), clauses (a) (1), (b) (2), and (c) (3).  If 
108.8   the relief association does not have an unfunded actuarial 
108.9   accrued liability as reported in the most recent actuarial 
108.10  valuation, the financial requirements shall must be an amount 
108.11  equal to the figure calculated pursuant to under paragraph (d), 
108.12  clauses (a) (1) and (b) (2), reduced by an amount equal to 
108.13  one-tenth of the amount of any assets in excess of the actuarial 
108.14  accrued liability of the relief association.  
108.15     (c) The determination of whether or not the relief 
108.16  association has an unfunded actuarial accrued liability 
108.17  shall must be based on the current market value of assets for 
108.18  which a market value is readily ascertainable and the cost or 
108.19  book value, whichever is applicable, for assets for which no 
108.20  market value is readily ascertainable. 
108.21     (a) (d) The components of the financial requirements of the 
108.22  relief association are the following: 
108.23     (1) The normal level cost requirement for the following 
108.24  year, expressed as a dollar amount, shall be is the figure for 
108.25  the normal level cost of the relief association as reported in 
108.26  the actuarial valuation. 
108.27     (b) (2) The amount of anticipated future administrative 
108.28  expenses of the special fund shall must be calculated by 
108.29  multiplying the dollar amount of the administrative expenses of 
108.30  the special fund for the most recent prior calendar year by the 
108.31  factor of 1.035. 
108.32     (c) (3) The amortization contribution requirement to retire 
108.33  the current unfunded actuarial accrued liability by the 
108.34  established date for full funding shall be is the figure for the 
108.35  amortization contribution as reported in the actuarial 
108.36  valuation.  If there has not been a change in the actuarial 
109.1   assumptions used for calculating the actuarial accrued liability 
109.2   of the special fund, a change in the bylaws of the relief 
109.3   association governing the service pensions, retirement benefits, 
109.4   or both, payable from the special fund, or a change in the 
109.5   actuarial cost method used to value all or a portion of the 
109.6   special fund which change or changes, which by themselves, 
109.7   without inclusion of any other items of increase or decrease, 
109.8   produce a net increase in the unfunded actuarial accrued 
109.9   liability of the special fund since December 31, 1970, the 
109.10  established date for full funding shall be is the December 31, 
109.11  1990 occurring ten years later.  If there has been a change in 
109.12  the actuarial assumptions used for calculating the actuarial 
109.13  accrued liability of the special fund, a change in the bylaws of 
109.14  the relief association governing the service pensions, 
109.15  retirement benefits, or both payable from the special fund or a 
109.16  change in the actuarial cost method used to value all or a 
109.17  portion of the special fund and the change or changes, by 
109.18  themselves and without inclusion of any other items of increase 
109.19  or decrease, produce a net increase in the unfunded actuarial 
109.20  accrued liability of the special fund since December 31, 1970, 
109.21  but prior to January 1, 1979 within the past 20 years, the 
109.22  established date for full funding shall be December 31, 1998, 
109.23  and if there has been a change since December 31, 1978, the 
109.24  established date for full funding shall must be determined using 
109.25  the following procedure:  
109.26     (i) the unfunded actuarial accrued liability of the special 
109.27  fund attributable to experience losses that have occurred since 
109.28  the most recent prior actuarial valuation must be determined and 
109.29  the level annual dollar contribution needed to amortize the 
109.30  experience loss over a period of ten years ending on the 
109.31  December 31 occurring ten years later must be calculated; 
109.32     (ii) the unfunded actuarial accrued liability of the 
109.33  special fund shall must be determined in accordance with the 
109.34  provisions governing service pensions, retirement benefits, and 
109.35  actuarial assumptions in effect before an applicable change; 
109.36     (ii) (iii) the level annual dollar contribution needed to 
110.1   amortize this unfunded actuarial accrued liability amount by the 
110.2   date for full funding in effect prior to before the change shall 
110.3   must be calculated using the interest assumption specified in 
110.4   section 356.215, subdivision 8, in effect before any applicable 
110.5   change; 
110.6      (iii) (iv) the unfunded actuarial accrued liability of the 
110.7   special fund shall must be determined in accordance with any new 
110.8   provisions governing service pensions, retirement benefits, and 
110.9   actuarial assumptions and the remaining provisions governing 
110.10  service pensions, retirement benefits, and actuarial assumptions 
110.11  in effect before an applicable change; 
110.12     (iv) (v) the level annual dollar contribution needed to 
110.13  amortize the difference between the unfunded actuarial accrued 
110.14  liability amount calculated pursuant to subclause (i) under item 
110.15  (ii) and the unfunded actuarial accrued liability amount 
110.16  calculated pursuant to subclause (iii) under item (iv) over a 
110.17  period of 20 years starting December 31 of the year in which the 
110.18  change is effective shall must be calculated using the interest 
110.19  assumption specified in section 356.215, subdivision 8, in 
110.20  effect after any applicable change; 
110.21     (v) (vi) the annual amortization contribution calculated 
110.22  pursuant to subclause (iv) shall under item (v) must be added to 
110.23  the annual amortization contribution calculated pursuant to 
110.24  subclause (ii) under items (i) and (iii); 
110.25     (vi) (vii) the period in which the unfunded actuarial 
110.26  accrued liability amount determined in subclause (iii) item (iv) 
110.27  will be amortized by the total annual amortization contribution 
110.28  computed pursuant to subclause (v) shall under item (vi) must be 
110.29  calculated using the interest assumption specified in section 
110.30  356.215, subdivision 8, in effect after any applicable change, 
110.31  rounded to the nearest integral number of years, but which shall 
110.32  must not exceed a period of 20 years from the end of the year in 
110.33  which the determination of the date for full funding using this 
110.34  procedure is made and which shall must not be less than the 
110.35  period of years beginning in the year in which the determination 
110.36  of the date for full funding using this procedure is made and 
111.1   ending by the date for full funding in effect before the change; 
111.2      (vii) (viii) the period determined pursuant to subclause 
111.3   (vi) shall under item (vii) must be added to the date as of 
111.4   which the actuarial valuation was prepared and the resulting 
111.5   date shall be is the new date for full funding. 
111.6      Sec. 7.  Minnesota Statutes 2004, section 69.773, 
111.7   subdivision 5, is amended to read: 
111.8      Subd. 5.  [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 
111.9   of the relief association shall determine the minimum obligation 
111.10  of the municipality with respect to the special fund of the 
111.11  relief association for the following calendar year prior to on 
111.12  or before August 1 of each year in accordance with the 
111.13  requirements of this subdivision.  
111.14     (b) The minimum obligation of the municipality with respect 
111.15  to the special fund shall be is an amount equal to the financial 
111.16  requirements of the special fund of the relief association 
111.17  determined pursuant to under subdivision 4, reduced by the 
111.18  estimated amount of any fire state aid payable pursuant to under 
111.19  sections 69.011 to 69.051 reasonably anticipated to be received 
111.20  by the municipality for transmittal to the special fund of the 
111.21  relief association during the following year and the amount of 
111.22  any anticipated contributions to the special fund required by 
111.23  the relief association bylaws from the active members of the 
111.24  relief association reasonably anticipated to be received during 
111.25  the following calendar year.  A reasonable amount of anticipated 
111.26  fire state aid is an amount that does not exceed the fire state 
111.27  aid actually received in the prior year multiplied by the factor 
111.28  1.035. 
111.29     (c) The officers of the relief association shall certify 
111.30  the financial requirements of the special fund of the relief 
111.31  association and the minimum obligation of the municipality with 
111.32  respect to the special fund of the relief association as 
111.33  determined pursuant to under subdivision 4 and this subdivision 
111.34  to the governing body of the municipality by August 1 of each 
111.35  year.  The financial requirements of the relief association and 
111.36  the minimum municipal obligation must be included in the 
112.1   financial report or financial statement under section 69.051.  
112.2      (d) The municipality shall provide for at least the minimum 
112.3   obligation of the municipality with respect to the special fund 
112.4   of the relief association by tax levy or from any other source 
112.5   of public revenue.  The municipality may levy taxes for the 
112.6   payment of the minimum municipal obligation without any 
112.7   limitation as to rate or amount and irrespective of any 
112.8   limitations imposed by other provisions of law or charter upon 
112.9   the rate or amount of taxation until the balance of the special 
112.10  fund or any fund of the relief association has attained a 
112.11  specified level.  In addition, any taxes levied pursuant to 
112.12  under this section shall must not cause the amount or rate of 
112.13  any other taxes levied in that year or to be levied in a 
112.14  subsequent year by the municipality which are subject to a 
112.15  limitation as to rate or amount to be reduced.  
112.16     (e) If the municipality does not include the full amount of 
112.17  the minimum municipal obligation in its levy for any year, the 
112.18  officers of the relief association shall certify that amount to 
112.19  the county auditor, who shall spread a levy in the amount of the 
112.20  minimum municipal obligation on the taxable property of the 
112.21  municipality. 
112.22     (f) If the state auditor determines that a municipal 
112.23  contribution actually made in a plan year was insufficient under 
112.24  section 69.771, subdivision 3, paragraph (c), clause (5), the 
112.25  state auditor may request from the relief association or from 
112.26  the city a copy of the certifications under this subdivision.  
112.27  The relief association or the city, whichever applies, must 
112.28  provide the certifications within 14 days of the date of the 
112.29  request from the state auditor. 
112.30     Sec. 8.  Minnesota Statutes 2004, section 69.775, is 
112.31  amended to read: 
112.32     69.775 [INVESTMENTS.] 
112.33     (a) The special fund assets of the a relief associations 
112.34  association governed by sections 69.771 to 69.776 must be 
112.35  invested in securities that are authorized investments under 
112.36  section 356A.06, subdivision 6 or 7.  
113.1      (b) Notwithstanding the foregoing, up to 75 percent of the 
113.2   market value of the assets of the special fund, not including 
113.3   any money market mutual funds, may be invested in open-end 
113.4   investment companies registered under the federal Investment 
113.5   Company Act of 1940, if the portfolio investments of the 
113.6   investment companies comply with the type of securities 
113.7   authorized for investment under section 356A.06, subdivision 7.  
113.8      (c) Securities held by the associations before June 2, 
113.9   1989, that do not meet the requirements of this section may be 
113.10  retained after that date if they were proper investments for the 
113.11  association on that date.  
113.12     (d) The governing board of the association may select and 
113.13  appoint investment agencies to act for and in its behalf or may 
113.14  certify special fund assets for investment by the State Board of 
113.15  Investment under section 11A.17.  
113.16     (e) The governing board of the association may certify 
113.17  general fund assets of the relief association for investment by 
113.18  the State Board of Investment in fixed income pools or in a 
113.19  separately managed account at the discretion of the State Board 
113.20  of Investment as provided in section 11A.14.  
113.21     (f) The governing board of the association may select and 
113.22  appoint a qualified private firm to measure management 
113.23  performance and return on investment, and the firm shall use the 
113.24  formula or formulas developed by the state board under section 
113.25  11A.04, clause (11). 
113.26     Sec. 9.  Minnesota Statutes 2004, section 356A.06, 
113.27  subdivision 7, is amended to read: 
113.28     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
113.29  SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
113.30  authorized by law or bylaws, a covered pension plan not 
113.31  described by subdivision 6, paragraph (a), may invest its assets 
113.32  only in accordance with this subdivision. 
113.33     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
113.34  the authority to purchase, sell, lend, or exchange the 
113.35  securities specified in paragraphs (c) to (g) (h), including 
113.36  puts and call options and future contracts traded on a contract 
114.1   market regulated by a governmental agency or by a financial 
114.2   institution regulated by a governmental agency.  These 
114.3   securities may be owned as units in commingled trusts that own 
114.4   the securities described in paragraphs (c) to (g) (h).  
114.5      (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
114.6   invest funds in governmental bonds, notes, bills, mortgages, and 
114.7   other evidences of indebtedness provided the issue is backed by 
114.8   the full faith and credit of the issuer or the issue is rated 
114.9   among the top four quality rating categories by a nationally 
114.10  recognized rating agency.  The obligations in which funds may be 
114.11  invested under this paragraph include guaranteed or insured 
114.12  issues of (1) the United States, its agencies, its 
114.13  instrumentalities, or organizations created and regulated by an 
114.14  act of Congress; (2) Canada and its provinces, provided the 
114.15  principal and interest is payable in United States dollars; (3) 
114.16  the states and their municipalities, political subdivisions, 
114.17  agencies, or instrumentalities; (4) the International Bank for 
114.18  Reconstruction and Development, the Inter-American Development 
114.19  Bank, the Asian Development Bank, the African Development Bank, 
114.20  or any other United States government sponsored organization of 
114.21  which the United States is a member, provided the principal and 
114.22  interest is payable in United States dollars. 
114.23     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
114.24  invest funds in bonds, notes, debentures, transportation 
114.25  equipment obligations, or any other longer term evidences of 
114.26  indebtedness issued or guaranteed by a corporation organized 
114.27  under the laws of the United States or any state thereof, or the 
114.28  Dominion of Canada or any province thereof if they conform to 
114.29  the following provisions: 
114.30     (1) the principal and interest of obligations of 
114.31  corporations incorporated or organized under the laws of the 
114.32  Dominion of Canada or any province thereof must be payable in 
114.33  United States dollars; and 
114.34     (2) obligations must be rated among the top four quality 
114.35  categories by a nationally recognized rating agency. 
114.36     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
115.1   invest funds in bankers acceptances, certificates of deposit, 
115.2   deposit notes, commercial paper, mortgage participation 
115.3   certificates and pools, asset backed securities, repurchase 
115.4   agreements and reverse repurchase agreements, guaranteed 
115.5   investment contracts, savings accounts, and guaranty fund 
115.6   certificates, surplus notes, or debentures of domestic mutual 
115.7   insurance companies if they conform to the following provisions: 
115.8      (i) bankers acceptances and deposit notes of United States 
115.9   banks are limited to those issued by banks rated in the highest 
115.10  four quality categories by a nationally recognized rating 
115.11  agency; 
115.12     (ii) certificates of deposit are limited to those issued by 
115.13  (A) United States banks and savings institutions that are rated 
115.14  in the highest four quality categories by a nationally 
115.15  recognized rating agency or whose certificates of deposit are 
115.16  fully insured by federal agencies; or (B) credit unions in 
115.17  amounts up to the limit of insurance coverage provided by the 
115.18  National Credit Union Administration; 
115.19     (iii) commercial paper is limited to those issued by United 
115.20  States corporations or their Canadian subsidiaries and rated in 
115.21  the highest two quality categories by a nationally recognized 
115.22  rating agency; 
115.23     (iv) mortgage participation or pass through certificates 
115.24  evidencing interests in pools of first mortgages or trust deeds 
115.25  on improved real estate located in the United States where the 
115.26  loan to value ratio for each loan as calculated in accordance 
115.27  with section 61A.28, subdivision 3, does not exceed 80 percent 
115.28  for fully amortizable residential properties and in all other 
115.29  respects meets the requirements of section 61A.28, subdivision 
115.30  3; 
115.31     (v) collateral for repurchase agreements and reverse 
115.32  repurchase agreements is limited to letters of credit and 
115.33  securities authorized in this section; 
115.34     (vi) guaranteed investment contracts are limited to those 
115.35  issued by insurance companies or banks rated in the top four 
115.36  quality categories by a nationally recognized rating agency or 
116.1   to alternative guaranteed investment contracts where the 
116.2   underlying assets comply with the requirements of this 
116.3   subdivision; 
116.4      (vii) savings accounts are limited to those fully insured 
116.5   by federal agencies; and 
116.6      (viii) asset backed securities must be rated in the top 
116.7   four quality categories by a nationally recognized rating agency.
116.8      (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
116.9   not apply to certificates of deposit and collateralization 
116.10  agreements executed by the covered pension plan under clause 
116.11  (1), item (ii). 
116.12     (3) In addition to investments authorized by clause (1), 
116.13  item (iv), the covered pension plan may purchase from the 
116.14  Minnesota Housing Finance Agency all or any part of a pool of 
116.15  residential mortgages, not in default, that has previously been 
116.16  financed by the issuance of bonds or notes of the agency.  The 
116.17  covered pension plan may also enter into a commitment with the 
116.18  agency, at the time of any issue of bonds or notes, to purchase 
116.19  at a specified future date, not exceeding 12 years from the date 
116.20  of the issue, the amount of mortgage loans then outstanding and 
116.21  not in default that have been made or purchased from the 
116.22  proceeds of the bonds or notes.  The covered pension plan may 
116.23  charge reasonable fees for any such commitment and may agree to 
116.24  purchase the mortgage loans at a price sufficient to produce a 
116.25  yield to the covered pension plan comparable, in its judgment, 
116.26  to the yield available on similar mortgage loans at the date of 
116.27  the bonds or notes.  The covered pension plan may also enter 
116.28  into agreements with the agency for the investment of any 
116.29  portion of the funds of the agency.  The agreement must cover 
116.30  the period of the investment, withdrawal privileges, and any 
116.31  guaranteed rate of return. 
116.32     (f)  [CORPORATE STOCKS.] The covered pension plan may 
116.33  invest funds in stocks or convertible issues of any corporation 
116.34  organized under the laws of the United States or the states 
116.35  thereof, any corporation organized under the laws of the 
116.36  Dominion of Canada or its provinces, or any corporation listed 
117.1   on the New York Stock Exchange or the American Stock Exchange an 
117.2   exchange regulated by an agency of the United States or of the 
117.3   Canadian national government, if they conform to the following 
117.4   provisions: 
117.5      (1) the aggregate value of corporate stock investments, as 
117.6   adjusted for realized profits and losses, must not exceed 85 
117.7   percent of the market or book value, whichever is less, of a 
117.8   fund, less the aggregate value of investments according to 
117.9   subdivision 6 paragraph (h); 
117.10     (2) investments must not exceed five percent of the total 
117.11  outstanding shares of any one corporation. 
117.12     (g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may 
117.13  invest funds in exchange traded funds, subject to the maximums, 
117.14  the requirements, and the limitations set forth in paragraph 
117.15  (d), (e), (f), or (h), whichever applies. 
117.16     (h)  [OTHER INVESTMENTS.] (1) In addition to the 
117.17  investments authorized in paragraphs (b) to (f) (g), and subject 
117.18  to the provisions in clause (2), the covered pension plan may 
117.19  invest funds in:  
117.20     (i) venture capital investment businesses through 
117.21  participation in limited partnerships and corporations; 
117.22     (ii) real estate ownership interests or loans secured by 
117.23  mortgages or deeds of trust through investment in limited 
117.24  partnerships, bank sponsored collective funds, trusts, and 
117.25  insurance company commingled accounts, including separate 
117.26  accounts; 
117.27     (iii) regional and mutual funds through bank sponsored 
117.28  collective funds and open-end investment companies registered 
117.29  under the Federal Investment Company Act of 1940; 
117.30     (iv) resource investments through limited partnerships, 
117.31  private placements, and corporations; and 
117.32     (v) international securities. 
117.33     (2) The investments authorized in clause (1) must conform 
117.34  to the following provisions:  
117.35     (i) the aggregate value of all investments made according 
117.36  to clause (1) may not exceed 35 percent of the market value of 
118.1   the fund for which the covered pension plan is investing; 
118.2      (ii) there must be at least four unrelated owners of the 
118.3   investment other than the state board covered pension plan for 
118.4   investments made under clause (1), item (i), (ii), (iii), or 
118.5   (iv); 
118.6      (iii) covered pension plan participation in an investment 
118.7   vehicle is limited to 20 percent thereof for investments made 
118.8   under clause (1), item (i), (ii), (iii), or (iv); and 
118.9      (iv) covered pension plan participation in a limited 
118.10  partnership does not include a general partnership interest or 
118.11  other interest involving general liability.  The covered pension 
118.12  plan may not engage in any activity as a limited partner which 
118.13  creates general liability. 
118.14     Sec. 10.  Minnesota Statutes 2004, section 424A.02, 
118.15  subdivision 3, is amended to read: 
118.16     Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 
118.17  on or before August 1 as part of the certification of the 
118.18  financial requirements and minimum municipal obligation 
118.19  determined under section 69.772, subdivision 4, or 69.773, 
118.20  subdivision 5, as applicable, the secretary or some other 
118.21  official of the relief association designated in the bylaws of 
118.22  each relief association shall calculate and certify to the 
118.23  governing body of the applicable qualified municipality the 
118.24  average amount of available financing per active covered 
118.25  firefighter for the most recent three-year period.  The amount 
118.26  of available financing shall include any amounts of fire state 
118.27  aid received or receivable by the relief association, any 
118.28  amounts of municipal contributions to the relief association 
118.29  raised from levies on real estate or from other available 
118.30  revenue sources exclusive of fire state aid, and one-tenth of 
118.31  the amount of assets in excess of the accrued liabilities of the 
118.32  relief association calculated under section 69.772, subdivision 
118.33  2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 
118.34  any.  
118.35     (b) The maximum service pension which the relief 
118.36  association has authority to provide for in its bylaws for 
119.1   payment to a member retiring after the calculation date when the 
119.2   minimum age and service requirements specified in subdivision 1 
119.3   are met must be determined using the table in paragraph (c) or 
119.4   (d), whichever applies. 
119.5      (c) For a relief association where the governing bylaws 
119.6   provide for a monthly service pension to a retiring member, the 
119.7   maximum monthly service pension amount per month for each year 
119.8   of service credited that may be provided for in the bylaws is 
119.9   the greater of the service pension amount provided for in the 
119.10  bylaws on the date of the calculation of the average amount of 
119.11  the available financing per active covered firefighter or the 
119.12  maximum service pension figure corresponding to the average 
119.13  amount of available financing per active covered firefighter: 
119.14    Minimum Average Amount of      Maximum Service Pension
119.15    Available Financing per        Amount Payable per Month
119.16         Firefighter               for Each Year of Service
119.17           $...                            $  .25
119.18             42   41                          .50
119.19             84   81                         1.00
119.20            126  122                         1.50
119.21            168  162                         2.00
119.22            209  203                         2.50
119.23            252  243                         3.00
119.24            294  284                         3.50
119.25            335  324                         4.00
119.26            378  365                         4.50
119.27            420  405                         5.00
119.28            503  486                         6.00
119.29            587  567                         7.00
119.30            672  648                         8.00
119.31            755  729                         9.00
119.32            839  810                        10.00
119.33            923  891                        11.00
119.34           1007  972                        12.00
119.35           1090 1053                        13.00
119.36           1175 1134                        14.00
120.1            1259 1215                        15.00
120.2            1342 1296                        16.00
120.3            1427 1377                        17.00
120.4            1510 1458                        18.00
120.5            1594 1539                        19.00
120.6            1677 1620                        20.00
120.7            1762 1701                        21.00
120.8            1845 1782                        22.00
120.9            1888 1823                        22.50
120.10           1929 1863                        23.00
120.11           2014 1944                        24.00
120.12           2098 2025                        25.00
120.13           2183 2106                        26.00
120.14           2267 2187                        27.00
120.15           2351 2268                        28.00
120.16           2436 2349                        29.00
120.17           2520 2430                        30.00
120.18           2604 2511                        31.00
120.19           2689 2592                        32.00
120.20           2773 2673                        33.00
120.21           2857 2754                        34.00
120.22           2942 2834                        35.00
120.23           3026 2916                        36.00
120.24           3110 2997                        37.00
120.25           3194 3078                        38.00
120.26           3278 3159                        39.00
120.27           3362 3240                        40.00
120.28           3446 3321                        41.00
120.29           3530 3402                        42.00
120.30           3614 3483                        43.00
120.31           3698 3564                        44.00
120.32           3782 3645                        45.00
120.33           3866 3726                        46.00
120.34           3950 3807                        47.00
120.35           4034 3888                        48.00
120.36           4118 3969                        49.00
121.1            4202 4050                        50.00
121.2            4286 4131                        51.00
121.3            4370 4212                        52.00
121.4      Effective beginning December 31, 2003: 
121.5            4454 4293                        53.00
121.6            4538 4374                        54.00
121.7            4622 4455                        55.00
121.8            4706 4536                        56.00
121.9      (d) For a relief association in which the governing bylaws 
121.10  provide for a lump sum service pension to a retiring member, the 
121.11  maximum lump sum service pension amount for each year of service 
121.12  credited that may be provided for in the bylaws is the greater 
121.13  of the service pension amount provided for in the bylaws on the 
121.14  date of the calculation of the average amount of the available 
121.15  financing per active covered firefighter or the maximum service 
121.16  pension figure corresponding to the average amount of available 
121.17  financing per active covered firefighter for the applicable 
121.18  specified period: 
121.19   Minimum Average Amount         Maximum Lump Sum Service
121.20   of Available Financing         Pension Amount Payable
121.21      per Firefighter             for Each Year of Service
121.22          $..                              $10
121.23           11                               20
121.24           16                               30
121.25           23                               40
121.26           27                               50
121.27           32                               60
121.28           43                               80
121.29           54                              100
121.30           65                              120
121.31           77                              140
121.32           86                              160
121.33           97                              180
121.34          108                              200
121.35          131                              240
121.36          151                              280
122.1           173                              320
122.2           194                              360
122.3           216                              400
122.4           239                              440
122.5           259                              480
122.6           281                              520
122.7           302                              560
122.8           324                              600
122.9           347                              640
122.10          367                              680
122.11          389                              720
122.12          410                              760
122.13          432                              800
122.14          486                              900
122.15          540                             1000
122.16          594                             1100
122.17          648                             1200
122.18          702                             1300
122.19          756                             1400
122.20          810                             1500
122.21          864                             1600
122.22          918                             1700
122.23          972                             1800
122.24         1026                             1900
122.25         1080                             2000
122.26         1134                             2100
122.27         1188                             2200
122.28         1242                             2300
122.29         1296                             2400
122.30         1350                             2500
122.31         1404                             2600
122.32         1458                             2700
122.33         1512                             2800
122.34         1566                             2900
122.35         1620                             3000
122.36         1672                             3100
123.1          1726                             3200
123.2          1753                             3250
123.3          1780                             3300
123.4          1820                             3375
123.5          1834                             3400
123.6          1888                             3500
123.7          1942                             3600
123.8          1996                             3700
123.9          2023                             3750
123.10         2050                             3800
123.11         2104                             3900
123.12         2158                             4000
123.13         2212                             4100
123.14         2265                             4200
123.15         2319                             4300
123.16         2373                             4400
123.17         2427                             4500
123.18         2481                             4600
123.19         2535                             4700
123.20         2589                             4800
123.21         2643                             4900
123.22         2697                             5000
123.23         2751                             5100
123.24         2805                             5200
123.25         2859                             5300
123.26         2913                             5400
123.27         2967                             5500
123.28         3021                             5600
123.29         3075                             5700
123.30         3129                             5800
123.31         3183                             5900
123.32         3237                             6000
123.33         3291                             6100
123.34         3345                             6200
123.35         3399                             6300
123.36         3453                             6400
124.1          3507                             6500
124.2          3561                             6600
124.3          3615                             6700
124.4          3669                             6800
124.5          3723                             6900
124.6          3777                             7000
124.7      Effective beginning December 31, 2003: 
124.8          3831                             7100
124.9          3885                             7200
124.10         3939                             7300
124.11         3993                             7400
124.12         4047                             7500
124.13     (e) For a relief association in which the governing bylaws 
124.14  provide for a monthly benefit service pension as an alternative 
124.15  form of service pension payment to a lump sum service pension, 
124.16  the maximum service pension amount for each pension payment type 
124.17  must be determined using the applicable table contained in this 
124.18  subdivision. 
124.19     (f) If a relief association establishes a service pension 
124.20  in compliance with the applicable maximum contained in paragraph 
124.21  (c) or (d) and the minimum average amount of available financing 
124.22  per active covered firefighter is subsequently reduced because 
124.23  of a reduction in fire state aid or because of an increase in 
124.24  the number of active firefighters, the relief association may 
124.25  continue to provide the prior service pension amount specified 
124.26  in its bylaws, but may not increase the service pension amount 
124.27  until the minimum average amount of available financing per 
124.28  firefighter under the table in paragraph (c) or (d), whichever 
124.29  applies, permits. 
124.30     (g) No relief association is authorized to provide a 
124.31  service pension in an amount greater than the largest applicable 
124.32  flexible service pension maximum amount even if the amount of 
124.33  available financing per firefighter is greater than the 
124.34  financing amount associated with the largest applicable flexible 
124.35  service pension maximum. 
124.36     Sec. 11.  Minnesota Statutes 2004, section 424A.02, 
125.1   subdivision 4, is amended to read: 
125.2      Subd. 4.  [DEFINED CONTRIBUTION LUMP SUM SERVICE 
125.3   PENSIONS.] (a) If the bylaws governing the relief association so 
125.4   provide exclusively, the relief association may pay a defined 
125.5   contribution lump sum service pension in lieu of any defined 
125.6   benefit service pension governed by subdivision 2.  
125.7      (b) An individual account for each firefighter who is a 
125.8   member of the relief association shall must be established.  To 
125.9   each individual active member account shall must be credited a 
125.10  right to an equal share of:  (a) (1) any amounts of fire state 
125.11  aid received by the relief association; (b) (2) any amounts of 
125.12  municipal contributions to the relief association raised from 
125.13  levies on real estate or from other available revenue sources 
125.14  exclusive of fire state aid; and (c) (3) any amounts equal to 
125.15  the share of the assets of the special fund to the credit 
125.16  of:  (1) (i) any former member who terminated active service 
125.17  with the fire department to which the relief association is 
125.18  associated prior to before meeting the minimum service 
125.19  requirement provided for in subdivision 1 and has not returned 
125.20  to active service with the fire department for a period no 
125.21  shorter than five years; or (2) (ii) any retired member who 
125.22  retired prior to before obtaining a full nonforfeitable interest 
125.23  in the amounts credited to the individual member 
125.24  account pursuant to under subdivision 2 and any applicable 
125.25  provision of the bylaws of the relief association.  In addition, 
125.26  any interest or investment income earned return on the assets of 
125.27  the special fund shall must be credited in proportion to the 
125.28  share of the assets of the special fund to the credit of each 
125.29  individual active member account through the date on which the 
125.30  investment return is recognized by and credited to the special 
125.31  fund.  
125.32     (c) At the time of retirement pursuant to under subdivision 
125.33  1 and any applicable provision of the bylaws of the relief 
125.34  association, a retiring member shall be is entitled to that 
125.35  portion of the assets of the special fund to the credit of the 
125.36  member in the individual member account which is 
126.1   nonforfeitable pursuant to under subdivision 2 and any 
126.2   applicable provision of the bylaws of the relief association 
126.3   based on the number of years of service to the credit of the 
126.4   retiring member.  
126.5      Sec. 12.  Minnesota Statutes 2004, section 424A.02, 
126.6   subdivision 7, is amended to read: 
126.7      Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
126.8   relief association to which this section applies is entitled to 
126.9   a deferred service pension if the member: 
126.10     (1) has completed the lesser of the minimum period of 
126.11  active service with the fire department specified in the bylaws 
126.12  or 20 years of active service with the fire department; 
126.13     (2) has completed at least five years of active membership 
126.14  in the relief association; and 
126.15     (3) separates from active service and membership before 
126.16  reaching age 50 or the minimum age for retirement and 
126.17  commencement of a service pension specified in the bylaws 
126.18  governing the relief association if that age is greater than age 
126.19  50.  
126.20     (b) The deferred service pension starts is payable when the 
126.21  former member reaches age 50, or the minimum age specified in 
126.22  the bylaws governing the relief association if that age is 
126.23  greater than age 50, and when the former member makes a valid 
126.24  written application. 
126.25     (c) A relief association that provides a lump sum service 
126.26  pension governed by subdivision 3 may, when its governing bylaws 
126.27  so provide, pay interest on the deferred lump sum service 
126.28  pension during the period of deferral.  If provided for in the 
126.29  bylaws, interest must be paid in one of the following manners: 
126.30     (1) at the investment performance rate actually earned on 
126.31  that portion of the assets if the deferred benefit amount is 
126.32  invested by the relief association in a separate account 
126.33  established and maintained by the relief association or if the 
126.34  deferred benefit amount is invested in a separate investment 
126.35  vehicle held by the relief association; 
126.36     (2) at the an interest rate of up to five percent, 
127.1   compounded annually, as set by the board of directors and 
127.2   approved as provided in subdivision 10; or 
127.3      (3) at a rate equal to the actual time weighted total rate 
127.4   of return investment performance of the special fund as reported 
127.5   by the Office of the State Auditor under section 356.219, up to 
127.6   five percent, compounded annually, and applied consistently for 
127.7   all deferred service pensioners. 
127.8      (d) A relief association may not use the method provided 
127.9   for in paragraph (c), clause (3), until it has modified its 
127.10  bylaws to be consistent with that clause. 
127.11     (d) Interest under paragraph (c), clause (2) or (3), is 
127.12  payable from the first day of the month next following the date 
127.13  on which the municipality has approved the deferred service 
127.14  pension interest rate established by the board of trustees or 
127.15  from the first day of the month next following the date on which 
127.16  the member separated from active fire department service and 
127.17  relief association membership, whichever is later, to the last 
127.18  day of the month immediately before the month in which the 
127.19  deferred member becomes eligible to begin receipt of the service 
127.20  pension and applies for the deferred service pension.  
127.21     (e) A relief association that provides a defined 
127.22  contribution service pension may, if its governing bylaws so 
127.23  provide, credit interest or additional investment performance on 
127.24  the deferred lump sum service pension during the period of 
127.25  deferral.  If provided for in the bylaws, the interest must be 
127.26  paid in one of the manners specified in paragraph (c) or 
127.27  alternatively the relief association may credit any investment 
127.28  return on the assets of the special fund of the defined 
127.29  contribution volunteer firefighter relief association in 
127.30  proportion to the share of the assets of the special fund to the 
127.31  credit of each individual deferred member account through the 
127.32  date on which the investment return is recognized by and 
127.33  credited to the special fund.  
127.34     (f) For a deferred service pension that is transferred to a 
127.35  separate account established and maintained by the relief 
127.36  association or separate investment vehicle held by the relief 
128.1   association, the deferred member bears the full investment risk 
128.2   subsequent to transfer and in calculating the accrued liability 
128.3   of the volunteer firefighters relief association that pays a 
128.4   lump sum service pension, the accrued liability for deferred 
128.5   service pensions is equal to the separate relief association 
128.6   account balance or the fair market value of the separate 
128.7   investment vehicle held by the relief association. 
128.8      (f) (g) The deferred service pension is governed by and 
128.9   must be calculated under the general statute, special law, 
128.10  relief association articles of incorporation, and relief 
128.11  association bylaw provisions applicable on the date on which the 
128.12  member separated from active service with the fire department 
128.13  and active membership in the relief association. 
128.14     Sec. 13.  [424A.021] [CREDIT FOR BREAK IN SERVICE TO 
128.15  PROVIDE UNIFORMED SERVICE.] 
128.16     Subdivision 1.  [AUTHORIZATION.] Subject to restrictions 
128.17  stated in this section, a volunteer firefighter who is absent 
128.18  from firefighting service due to service in the uniformed 
128.19  services, as defined in United States Code, title 38, section 
128.20  4303(13), may obtain service credit if the relief association is 
128.21  a defined benefit plan or an allocation of any fire state aid, 
128.22  any municipal contributions, and any investment return received 
128.23  by the relief association if the relief association is a defined 
128.24  contribution plan for the period of the uniformed service, not 
128.25  to exceed five years, unless a longer period is required under 
128.26  United States Code, title 38, section 4312.  
128.27     Subd. 2.  [LIMITATIONS.] (a) To be eligible for service 
128.28  credit or an investment return allocation under this section, 
128.29  the volunteer firefighter must return to firefighting service 
128.30  with coverage by the same relief association or by the successor 
128.31  to that relief association upon discharge from service in the 
128.32  uniformed service within the time frame required in United 
128.33  States Code, title 38, section 4312(e). 
128.34     (b) Service credit or an investment return allocation is 
128.35  not authorized if the firefighter separates from uniformed 
128.36  service with a dishonorable or bad conduct discharge or under 
129.1   other than honorable conditions. 
129.2      (c) Service credit or an investment return allocation is 
129.3   not authorized if the firefighter fails to provide notice to the 
129.4   fire department that the individual is leaving to provide 
129.5   service in the uniformed service, unless it is not feasible to 
129.6   provide that notice due to the emergency nature of the situation.
129.7      Sec. 14.  Minnesota Statutes 2004, section 424A.04, 
129.8   subdivision 1, is amended to read: 
129.9      Subdivision 1.  [MEMBERSHIP.] (a) Every A relief 
129.10  association that is directly associated with a municipal fire 
129.11  department shall must be managed by a board of trustees 
129.12  consisting of nine members.  Six trustees shall must be elected 
129.13  from the membership of the relief association and three trustees 
129.14  shall must be drawn from the officials of the municipalities 
129.15  served by the fire department to which the relief association is 
129.16  directly associated.  The bylaws of a relief association which 
129.17  provides a monthly benefit service pension may provide that one 
129.18  of the six trustees elected from the relief 
129.19  association membership may be a retired member receiving a 
129.20  monthly pension who is elected by the membership of the relief 
129.21  association.  The three ex officio municipal trustees shall be 
129.22  the mayor, the clerk, clerk-treasurer or finance director, must 
129.23  be one elected municipal official and one elected or appointed 
129.24  municipal official who are designated as municipal 
129.25  representatives by the municipal governing board annually and 
129.26  the chief of the municipal fire department. 
129.27     (b) Every A relief association that is a subsidiary of an 
129.28  independent nonprofit firefighting corporation shall must be 
129.29  managed by a board of trustees consisting of ten nine members.  
129.30  Six trustees shall must be elected from the membership of the 
129.31  relief association, three two trustees shall must be drawn from 
129.32  the officials of the municipalities served by the fire 
129.33  department to which the relief association is directly 
129.34  associated, and one trustee shall be the fire chief serving with 
129.35  the independent nonprofit firefighting corporation.  The bylaws 
129.36  of a relief association may provide that one of the six trustees 
130.1   elected from the relief association membership may be a retired 
130.2   member receiving a monthly pension who is elected by the 
130.3   membership of the relief association.  The three ex officio two 
130.4   municipal trustees who are the elected officials shall must 
130.5   be elected or appointed municipal officials, selected as follows:
130.6      (1) if only one municipality contracts with the independent 
130.7   nonprofit firefighting corporation, the ex officio municipal 
130.8   trustees shall must be three elected two officials of the 
130.9   contracting municipality who are designated annually by the 
130.10  governing body of the municipality; 
130.11     (2) if two municipalities contract with the independent 
130.12  nonprofit firefighting corporation, the ex officio trustees 
130.13  shall be two elected officials of the largest municipality in 
130.14  population and one elected official of the next largest 
130.15  municipality in population who are designated by the governing 
130.16  bodies of the applicable municipalities; or 
130.17     (3) (2) if three two or more municipalities contract with 
130.18  the independent nonprofit corporation, the ex officio municipal 
130.19  trustees shall must be one elected official of from each of 
130.20  the three two largest municipalities in population who are 
130.21  designated annually by the governing bodies of the applicable 
130.22  municipalities. 
130.23     (c) The municipal trustees for a relief association that is 
130.24  directly associated with a fire department operated as or by a 
130.25  joint powers entity must be designated annually by the joint 
130.26  powers board.  The municipal trustees for a relief association 
130.27  that is directly associated with a fire department service area 
130.28  township must be designated by the township board. 
130.29     (d) If a relief association lacks the ex officio municipal 
130.30  board members provided for in paragraph (a), (b), or (b) (c) 
130.31  because the fire department is not located in or associated with 
130.32  an organized municipality, joint powers entity, or township, the 
130.33  ex officio municipal board members must be appointed from the 
130.34  fire department service area by the board of commissioners of 
130.35  the applicable county.  
130.36     (e) The term of these appointed ex officio municipal board 
131.1   members is three years one year or until the person's successor 
131.2   is qualified, whichever is later. 
131.3      (d) An ex officio (f) A municipal trustee under paragraph 
131.4   (a), (b), or (c) shall have, or (d) has all the rights and 
131.5   duties accorded to any other trustee, except the right to be an 
131.6   officer of the relief association board of trustees.  
131.7      (e) (g) A board shall must have at least three officers, 
131.8   which shall be who are a president, a secretary and a treasurer. 
131.9   These officers shall must be elected from among the elected 
131.10  trustees by either the full board of trustees or by the 
131.11  membership, as specified in the bylaws, and.  In no event shall 
131.12  may any trustee hold more than one officer position at any one 
131.13  time.  The terms of the elected trustees and of the officers of 
131.14  the board shall must be specified in the bylaws of the relief 
131.15  association, but shall may not exceed three years.  If the term 
131.16  of the elected trustees exceeds one year, the election of the 
131.17  various trustees elected from the membership shall initially and 
131.18  shall thereafter continue to must be staggered on as equal a 
131.19  basis as is practicable. 
131.20     Sec. 15.  Minnesota Statutes 2004, section 424B.10, 
131.21  subdivision 1, is amended to read: 
131.22     Subdivision 1.  [BENEFITS.] (a) Notwithstanding any 
131.23  provision of section 424A.02, subdivision 3, to the contrary, 
131.24  the service pension of the subsequent relief association as of 
131.25  the effective date of consolidation is either the service 
131.26  pension amount specified in clause (1) or the service pension 
131.27  amounts specified in clause (2), as provided for in the 
131.28  consolidated relief association's articles of incorporation or 
131.29  bylaws: 
131.30     (1) the highest dollar amount service pension amount of any 
131.31  prior volunteer firefighters relief association in effect 
131.32  immediately before the consolidation initiation if the pension 
131.33  amount was implemented consistent with section 424A.02; or 
131.34     (2) for service rendered by each individual volunteer 
131.35  firefighter before consolidation, the service pension amount 
131.36  under the consolidating volunteer firefighters relief 
132.1   association that the firefighter belonged to immediately before 
132.2   the consolidation if the pension amount was implemented 
132.3   consistent with section 424A.02 and for service rendered after 
132.4   the effective date of the consolidation, the highest dollar 
132.5   amount service pension of any of the consolidating volunteer 
132.6   firefighters relief associations in effect immediately before 
132.7   the consolidation if the pension amount was implemented 
132.8   consistent with section 424A.02. 
132.9      (b) Any increase in the service pension amount beyond the 
132.10  amount implemented under paragraph (a) must conform with the 
132.11  requirements and limitations of sections 69.771 to 69.775 and 
132.12  424A.02. 
132.13     Sec. 16.  [STUDY OF STATEWIDE LUMP-SUM VOLUNTEER 
132.14  FIREFIGHTER RETIREMENT PLAN; CREATION OF TASK FORCE.] 
132.15     Subdivision 1.  [TASK FORCE MEMBERSHIP.] (a) A statewide 
132.16  Volunteer Firefighter Retirement Plan Study Task Force is 
132.17  created. 
132.18     (b) The task force members are: 
132.19     (1) four members who are appointed by the president of the 
132.20  Minnesota Area Relief Association coalition; 
132.21     (2) four members who are appointed by the president of the 
132.22  Minnesota State Fire Department Association; 
132.23     (3) four members who are appointed by the president of the 
132.24  Minnesota State Fire Chiefs Association; 
132.25     (4) four members who are appointed by the board of 
132.26  directors of the League of Minnesota Cities; 
132.27     (5) two members who are appointed by the board of directors 
132.28  of the Insurance Federation of Minnesota; 
132.29     (6) two members who are appointed by the board of directors 
132.30  of the Minnesota Association of Farm Mutual Insurance Companies; 
132.31  and 
132.32     (7) the Minnesota state auditor or the auditor's designee. 
132.33     (c) Appointments must be made on or before July 1, 2005.  
132.34  If the appointment is not made in a timely manner, or if there 
132.35  is a vacancy, the state auditor shall appoint the task force 
132.36  member or the replacement member. 
133.1      (d) The chair of the task force shall be selected by the 
133.2   task force.  
133.3      (e) Administrative services for the task force must be 
133.4   provided by the Department of Public Safety. 
133.5      Subd. 2.  [TASK FORCE DUTIES.] (a) The task force shall 
133.6   conduct fact finding regarding the creation of a statewide 
133.7   volunteer firefighter retirement plan. 
133.8      (b) The task force shall recommend whether or not a 
133.9   statewide volunteer firefighter retirement plan should be 
133.10  created.  If the task force concludes a statewide volunteer 
133.11  firefighter retirement plan has merit, the task force shall 
133.12  recommend the investment vehicle or vehicles to be utilized by 
133.13  the plan, the administration and corporate governance structure 
133.14  of the plan, the incentives needed to formulate the plan, the 
133.15  limitations applicable to the plan, and the state resources 
133.16  needed to be dedicated to the plan.  The task force may also 
133.17  consider creation of regional volunteer firefighter retirement 
133.18  plans.  
133.19     Subd. 3.  [REPORT.] The task force shall prepare a report 
133.20  detailing its findings about a potential statewide or regional 
133.21  volunteer firefighter retirement plan or plans.  The report is 
133.22  due January 15, 2006, and must be filed with the Legislative 
133.23  Reference Library; the chair of the Legislative Commission on 
133.24  Pensions and Retirement; the chair of the State and Local 
133.25  Governmental Operations Committee of the senate; the chair of 
133.26  the State Government Budget Division of the senate Finance 
133.27  Committee; the chair of the Governmental Operations and Veterans 
133.28  Affairs Committee of the house of representatives; and the chair 
133.29  of the State Government Finance Committee of the house of 
133.30  representatives. 
133.31     Sec. 17.  [EFFECTIVE DATE.] 
133.32     (a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
133.33     (b) Section 13 is effective July 1, 2005, and applies to 
133.34  breaks in service that end on or after that date. 
133.35     (c) Section 16 is effective the day following final 
133.36  enactment. 
134.1                              ARTICLE 12
134.2                         VARIOUS CORRECTIONS
134.3                          AND CLARIFICATIONS
134.4      Section 1.  Minnesota Statutes 2004, section 3A.13, is 
134.5   amended to read: 
134.6      3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
134.7   DEDUCTION.] 
134.8      (a) The provisions of section 352.15 shall 356.401 apply to 
134.9   the legislators retirement plan, chapter 3A. 
134.10     (b) The executive director of the Minnesota State 
134.11  Retirement System must, at the request of a retired legislator 
134.12  who is enrolled in a health insurance plan covering state 
134.13  employees, deduct the person's health insurance premiums from 
134.14  the person's annuity and transfer the amount of the premium to a 
134.15  health insurance carrier covering state employees. 
134.16     Sec. 2.  Minnesota Statutes 2004, section 69.011, 
134.17  subdivision 2b, is amended to read: 
134.18     Subd. 2b.  [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 
134.19  SAFETY.] (a) On or before July 1, 1997, the commissioner of 
134.20  natural resources shall certify one-half of the number of peace 
134.21  officers as defined in subdivision 1, clause (g), employed by 
134.22  the Enforcement Division during calendar year 1996 and the 
134.23  commissioner of public safety shall certify one-half of the 
134.24  number of peace officers as defined in subdivision 1, clause 
134.25  (g), employed by the Bureau of Criminal Apprehension, the 
134.26  Gambling Enforcement Division, and the State Patrol Division 
134.27  during calendar year 1996. 
134.28     (b) On or before March 15, 1998, the commissioner of 
134.29  natural resources shall certify seven-tenths of the number of 
134.30  peace officers as defined in subdivision 1, clause (g), employed 
134.31  by the Enforcement Division and the commissioner of public 
134.32  safety shall certify seven-tenths of the number of peace 
134.33  officers as defined in subdivision 1, clause (g), employed by 
134.34  the Bureau of Criminal Apprehension, the Gambling Enforcement 
134.35  Division, and the State Patrol Division. 
134.36     (c) On or before March 15, 1999, and annually on or before 
135.1   each March 15 thereafter, the commissioner of natural resources 
135.2   shall certify the number of peace officers as defined in 
135.3   subdivision 1, clause (g), employed by the Enforcement Division 
135.4   and the commissioner of public safety shall certify the number 
135.5   of peace officers as defined in subdivision 1, clause (g), 
135.6   employed by the Bureau of Criminal Apprehension, the Gambling 
135.7   Enforcement Division, and the State Patrol Division. 
135.8      (d) (b) The certification must be on a form prescribed by 
135.9   the commissioner.  Peace officers certified under this paragraph 
135.10  must be included in the total certifications under subdivision 2.
135.11     Sec. 3.  Minnesota Statutes 2004, section 69.021, 
135.12  subdivision 5, is amended to read: 
135.13     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
135.14  fire state aid available for apportionment, before the addition 
135.15  of the minimum fire state aid allocation amount under 
135.16  subdivision 7, is equal to 107 percent of the amount of premium 
135.17  taxes paid to the state upon the fire, lightning, sprinkler 
135.18  leakage, and extended coverage premiums reported to the 
135.19  commissioner by insurers on the Minnesota Firetown Premium 
135.20  Report.  This amount shall must be reduced by the amount 
135.21  required to pay the state auditor's costs and expenses of the 
135.22  audits or exams of the firefighters relief associations. 
135.23     The total amount for apportionment in respect to fire state 
135.24  aid must not be less than two percent of the premiums reported 
135.25  to the commissioner by insurers on the Minnesota Firetown 
135.26  Premium Report after subtracting the following amounts: 
135.27     (1) the amount required to pay the state auditor's costs 
135.28  and expenses of the audits or exams of the firefighters relief 
135.29  associations; and 
135.30     (2) one percent of the premiums reported by town and 
135.31  farmers' mutual insurance companies and mutual property and 
135.32  casualty companies with total assets of $5,000,000 or less.  
135.33     (b) The total amount for apportionment as police state aid 
135.34  is equal to 104 percent of the amount of premium taxes paid to 
135.35  the state on the premiums reported to the commissioner by 
135.36  insurers on the Minnesota Aid to Police Premium Report, reduced 
136.1   by the amount required to pay the costs and expenses of the 
136.2   state auditor for audits or exams of police relief 
136.3   associations.  The total amount for apportionment in respect to 
136.4   the police state aid program must not be less than two percent 
136.5   of the amount of premiums reported to the commissioner by 
136.6   insurers on the Minnesota Aid to Police Premium Report after 
136.7   subtracting the amount required to pay the state auditor's cost 
136.8   and expenses of the audits or exams of the police relief 
136.9   associations.  
136.10     (c) The commissioner shall calculate the percentage of 
136.11  increase or decrease reflected in the apportionment over or 
136.12  under the previous year's available state aid using the same 
136.13  premiums as a basis for comparison. 
136.14     (d) The amount for apportionment in respect to peace 
136.15  officer state aid under paragraph (b) must be further reduced by 
136.16  $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 
136.17  and $2,404,000 in fiscal year 2001.  These reductions in this 
136.18  paragraph cancel to the general fund. 
136.19     (e) In addition to the amount for apportionment of police 
136.20  state aid under paragraph (b), each year $100,000 shall must be 
136.21  apportioned for police state aid.  An amount sufficient to pay 
136.22  this increase is annually appropriated from the general fund. 
136.23     Sec. 4.  Minnesota Statutes 2004, section 69.021, 
136.24  subdivision 11, is amended to read: 
136.25     Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 
136.26  The excess police state-aid holding account is established in 
136.27  the general fund.  The excess police state-aid holding account 
136.28  must be administered by the commissioner. 
136.29     (b) Excess police state aid determined according to 
136.30  subdivision 10, must be deposited in the excess police state-aid 
136.31  holding account. 
136.32     (c) From the balance in the excess police state-aid holding 
136.33  account, $900,000 is appropriated to and must be transferred 
136.34  annually to the ambulance service personnel longevity award and 
136.35  incentive suspense account established by section 144E.42, 
136.36  subdivision 2. 
137.1      (d) If a police officer stress reduction program is created 
137.2   by law and money is appropriated for that program, an amount 
137.3   equal to that appropriation must be transferred to the 
137.4   administrator of that program from the balance in the excess 
137.5   police state-aid holding account. 
137.6      (e) On October 1, 1997, and annually on each subsequent 
137.7   October 1 of each year, one-half of the balance of the excess 
137.8   police state-aid holding account remaining after the deductions 
137.9   under paragraphs (c) and (d) is appropriated for additional 
137.10  amortization aid under section 423A.02, subdivision 1b. 
137.11     (f) Annually, the remaining balance in the excess police 
137.12  state-aid holding account, after the deductions under paragraphs 
137.13  (c), (d), and (e), cancels to the general fund. 
137.14     Sec. 5.  Minnesota Statutes 2004, section 69.33, is amended 
137.15  to read: 
137.16     69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 
137.17  COMPANIES.] 
137.18     The commissioner shall enclose in the annual statement 
137.19  blank that is sent to all fire insurance companies doing 
137.20  business in this state a blank form containing the names of all 
137.21  firefighters' relief associations in all cities of the first 
137.22  class and the names of the cities and require these companies, 
137.23  at the time of making their annual statements to the 
137.24  commissioner, to state on these blanks the amount of premiums 
137.25  received by them upon properties insured within the corporate 
137.26  limits of the cities named thereon during the year ending 
137.27  December 31st last past.  Thereafter, before July first each 
137.28  year, the commissioner shall certify to the commissioner of 
137.29  finance the information thus obtained, together with the amount 
137.30  of the tax for the benefit of the relief association pension 
137.31  plans covering firefighters in cities of the first class paid in 
137.32  such year by these companies upon these insurance premiums. 
137.33     Sec. 6.  Minnesota Statutes 2004, section 69.773, 
137.34  subdivision 4, is amended to read: 
137.35     Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
137.36  to Before August 1 of each year, the officers of the relief 
138.1   association shall determine the financial requirements of the 
138.2   special fund of the relief association in accordance with the 
138.3   requirements of this subdivision.  The financial requirements of 
138.4   the relief association shall must be based on the most recent 
138.5   actuarial valuation of the special fund prepared in accordance 
138.6   with subdivision 2.  If the relief association has an unfunded 
138.7   actuarial accrued liability as reported in the most recent 
138.8   actuarial valuation, the financial requirements shall must be 
138.9   determined by adding the figures calculated pursuant to under 
138.10  clauses (a), (b), and (c).  If the relief association does not 
138.11  have an unfunded actuarial accrued liability as reported in the 
138.12  most recent actuarial valuation, the financial requirements 
138.13  shall must be an amount equal to the figure calculated pursuant 
138.14  to under clauses (a) and (b), reduced by an amount equal to 
138.15  one-tenth of the amount of any assets in excess of the actuarial 
138.16  accrued liability of the relief association.  The determination 
138.17  of whether or not the relief association has an unfunded 
138.18  actuarial accrued liability shall must be based on the current 
138.19  market value of assets for which a market value is readily 
138.20  ascertainable and the cost or book value, whichever is 
138.21  applicable, for assets for which no market value is readily 
138.22  ascertainable. 
138.23     (a) The normal level cost requirement for the following 
138.24  year, expressed as a dollar amount, shall be is the figure for 
138.25  the normal level cost of the relief association as reported in 
138.26  the actuarial valuation. 
138.27     (b) The amount of anticipated future administrative 
138.28  expenses of the special fund shall must be calculated by 
138.29  multiplying the dollar amount of the administrative expenses of 
138.30  the special fund for the most recent year by the factor of 1.035.
138.31     (c) The amortization contribution requirement to retire the 
138.32  current unfunded actuarial accrued liability by the established 
138.33  date for full funding shall be is the figure for the 
138.34  amortization contribution as reported in the actuarial 
138.35  valuation.  If there has not been a change in the actuarial 
138.36  assumptions used for calculating the actuarial accrued liability 
139.1   of the special fund, a change in the bylaws of the relief 
139.2   association governing the service pensions, retirement benefits, 
139.3   or both payable from the special fund or a change in the 
139.4   actuarial cost method used to value all or a portion of the 
139.5   special fund which change or changes, which by themselves 
139.6   without inclusion of any other items of increase or decrease, 
139.7   produce a net increase in the unfunded actuarial accrued 
139.8   liability of the special fund since December 31, 1970, the 
139.9   established date for full funding shall be December 31, 1990.  
139.10  If there has been a change in the actuarial assumptions used for 
139.11  calculating the actuarial accrued liability of the special fund, 
139.12  a change in the bylaws of the relief association governing the 
139.13  service pensions, retirement benefits, or both payable from the 
139.14  special fund or a change in the actuarial cost method used to 
139.15  value all or a portion of the special fund and the change or 
139.16  changes, by themselves and without inclusion of any other items 
139.17  of increase or decrease, produce a net increase in the unfunded 
139.18  actuarial accrued liability of the special fund since December 
139.19  31, 1970, but prior to January 1, 1979, the established date for 
139.20  full funding shall be December 31, 1998, and if there has been a 
139.21  change since December 31, 1978, the established date for full 
139.22  funding shall must be determined using the following procedure:  
139.23     (i) the unfunded actuarial accrued liability of the special 
139.24  fund shall must be determined in accordance with the provisions 
139.25  governing service pensions, retirement benefits, and actuarial 
139.26  assumptions in effect before an applicable change; 
139.27     (ii) the level annual dollar contribution needed to 
139.28  amortize this unfunded actuarial accrued liability amount by the 
139.29  date for full funding in effect prior to before the change shall 
139.30  must be calculated using the interest assumption specified in 
139.31  section 356.215, subdivision 8, in effect before any applicable 
139.32  change; 
139.33     (iii) the unfunded actuarial accrued liability of the 
139.34  special fund shall must be determined in accordance with any new 
139.35  provisions governing service pensions, retirement benefits, and 
139.36  actuarial assumptions and the remaining provisions governing 
140.1   service pensions, retirement benefits, and actuarial assumptions 
140.2   in effect before an applicable change; 
140.3      (iv) the level annual dollar contribution needed to 
140.4   amortize the difference between the unfunded actuarial accrued 
140.5   liability amount calculated pursuant to under subclause (i) and 
140.6   the unfunded actuarial accrued liability amount 
140.7   calculated pursuant to under subclause (iii) over a period of 20 
140.8   years starting December 31 of the year in which the change is 
140.9   effective shall must be calculated using the interest assumption 
140.10  specified in section 356.215, subdivision 8, in effect after any 
140.11  applicable change; 
140.12     (v) the annual amortization contribution calculated 
140.13  pursuant to under subclause (iv) shall must be added to the 
140.14  annual amortization contribution calculated pursuant to under 
140.15  subclause (ii); 
140.16     (vi) the period in which the unfunded actuarial accrued 
140.17  liability amount determined in subclause (iii) will be amortized 
140.18  by the total annual amortization contribution computed pursuant 
140.19  to under subclause (v) shall must be calculated using the 
140.20  interest assumption specified in section 356.215, subdivision 8, 
140.21  in effect after any applicable change, rounded to the nearest 
140.22  integral number of years, but which shall does not exceed a 
140.23  period of 20 years from the end of the year in which the 
140.24  determination of the date for full funding using this procedure 
140.25  is made and which shall is not be less than the period of years 
140.26  beginning in the year in which the determination of the date for 
140.27  full funding using this procedure is made and ending by the date 
140.28  for full funding in effect before the change; 
140.29     (vii) the period determined pursuant to under subclause (vi)
140.30  shall must be added to the date as of which the actuarial 
140.31  valuation was prepared and the resulting date shall be is the 
140.32  new date for full funding. 
140.33     Sec. 7.  Minnesota Statutes 2004, section 352.01, 
140.34  subdivision 4, is amended to read: 
140.35     Subd. 4.  [ACCUMULATED CONTRIBUTIONS.] "Accumulated 
140.36  contributions" means the total, exclusive of interest, of (1) 
141.1   the sums deducted from the salary of an employee, (2) the amount 
141.2   of payments, including assessments, paid by the employee in lieu 
141.3   of salary deductions and all other payments made under Laws 
141.4   1929, chapter 191, as amended, this chapter and credited to the 
141.5   employee's individual account in the retirement fund. 
141.6      Sec. 8.  Minnesota Statutes 2004, section 352.01, 
141.7   subdivision 5, is amended to read: 
141.8      Subd. 5.  [RETIREMENT FUND.] (a) "Retirement fund" means 
141.9   the general state employees retirement fund created by section 
141.10  352.04, subdivision 1, with respect to the general state 
141.11  employees retirement plan or the correctional state employees 
141.12  retirement fund created by section 352.911, subdivision 1, with 
141.13  respect to the correctional state employees retirement plan. 
141.14     (b) "The retirement fund" includes the aggregate of 
141.15  accumulated contributions of employees covered by the applicable 
141.16  plan, and all other funds paid into the state treasury or 
141.17  received by the director under Laws 1929, chapter 191, as 
141.18  amended this chapter, together with all income and profits from 
141.19  the money and interest on it, including contributions on the 
141.20  part of the federal government, the state, and state departments.
141.21     Sec. 9.  Minnesota Statutes 2004, section 352.01, 
141.22  subdivision 21, is amended to read: 
141.23     Subd. 21.  [ACCRUED ANNUITIES.] (a) In this chapter and 
141.24  chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an 
141.25  annuity that had become payable to a retired employee in the 
141.26  lifetime of the employee.  
141.27     (b) An annuity or benefit authorized as provided in this 
141.28  chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 
141.29  the first day of each calendar month for that calendar month and 
141.30  is to must be paid on the first day of each calendar month 
141.31  beginning with benefits payable on and after December 1, 1977. 
141.32     (c) Notwithstanding any provision to the contrary in this 
141.33  chapter and chapters 3A, 352B, 352C, and 490, benefit payment 
141.34  authorized as "payable for life" is payable for the entire month 
141.35  in which death occurs, and the benefit payment for the month of 
141.36  death is payable to the surviving spouse or other beneficiary 
142.1   only if the annuitant dies before negotiating the benefit check. 
142.2      Sec. 10.  Minnesota Statutes 2004, section 352.01, 
142.3   subdivision 23, is amended to read: 
142.4      Subd. 23.  [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage"  
142.5   or "covered by the system" means that a state employees employee 
142.6   who serve serves the state of Minnesota and make makes the 
142.7   required employee contributions to the retirement fund will is, 
142.8   by reason of these contributions become, entitled to either (1) 
142.9   a retirement annuity, or (2) a disability benefit, or (3) a 
142.10  refund of accumulated contributions, as provided in this chapter.
142.11     Sec. 11.  Minnesota Statutes 2004, section 352.021, 
142.12  subdivision 1, is amended to read: 
142.13     Subdivision 1.  [ESTABLISHMENT.] (a) There is established 
142.14  the general state employees retirement plan of the Minnesota 
142.15  State Retirement System for state employees.  
142.16     (b) The system general state employees retirement plan is a 
142.17  continuation of the State Employees Retirement Association.  
142.18     (c) Any person who was a member of the State Employees 
142.19  Retirement Association on June 30, 1967, is covered by 
142.20  the system general state employees retirement plan and is 
142.21  entitled to all benefits provided by the system plan upon 
142.22  fulfilling the age, service, contribution, and other 
142.23  requirements of this chapter.  
142.24     Sec. 12.  Minnesota Statutes 2004, section 352.021, 
142.25  subdivision 2, is amended to read: 
142.26     Subd. 2.  [STATE EMPLOYEES COVERED.] Every person who is a 
142.27  state employee, as defined in section 352.01, on July 1, 1967, 
142.28  or becomes a state employee after that date as defined in 
142.29  section 352.01 is covered by the system general state employees 
142.30  retirement plan.  Acceptance of state employment or continuance 
142.31  in state service is deemed to be consent to have deductions made 
142.32  from salary for deposit to the credit of the account of the 
142.33  state employee in the retirement fund.  
142.34     Sec. 13.  Minnesota Statutes 2004, section 352.021, 
142.35  subdivision 3, is amended to read: 
142.36     Subd. 3.  [OPTIONAL EXEMPTIONS.] Any person who is 
143.1   appointed by the governor or lieutenant governor may request 
143.2   exemption from coverage by the general state employees 
143.3   retirement plan under this chapter if the appointee is not so 
143.4   covered at by the plan on the date of appointment.  To qualify 
143.5   for this exemption, a written request must be made within 90 
143.6   days from the date of entering upon the duties of the position 
143.7   to which the person is appointed.  After making the request, a 
143.8   person requesting the exemption is not entitled to coverage by 
143.9   the general state employees retirement plan while employed in 
143.10  the position that entitled that person to an exemption from 
143.11  coverage.  
143.12     Sec. 14.  Minnesota Statutes 2004, section 352.021, 
143.13  subdivision 4, is amended to read: 
143.14     Subd. 4.  [REENTERING SERVICE AFTER REFUND.] When a former 
143.15  employee who has withdrawn accumulated contributions reenters 
143.16  employment in a position entitled to coverage under the 
143.17  system general state employees retirement plan, the employee 
143.18  shall must be covered by the system plan on the same basis as a 
143.19  new employee and is not entitled to credit for any former 
143.20  service.  The annuity rights forfeited when taking a refund can 
143.21  only be restored as provided in this chapter.  
143.22     Sec. 15.  Minnesota Statutes 2004, section 352.04, 
143.23  subdivision 1, is amended to read: 
143.24     Subdivision 1.  [FUND CREATED.] (a) There is created a 
143.25  special fund to be known as the general state employees 
143.26  retirement fund.  In that fund there shall be deposited 
143.27  employees, employee contributions, employers employer 
143.28  contributions, and other amounts authorized by law must be 
143.29  deposited.  
143.30     (b) Effective July 1, 1969, The general state employees 
143.31  retirement plan of the Minnesota State Retirement System shall 
143.32  must participate in the Minnesota postretirement investment fund.
143.33  In that fund there shall be deposited The amounts provided in 
143.34  section 352.119 must be deposited in the Minnesota 
143.35  postretirement investment fund.  
143.36     Sec. 16.  Minnesota Statutes 2004, section 352.04, 
144.1   subdivision 12, is amended to read: 
144.2      Subd. 12.  [FUND DISBURSEMENT RESTRICTED.] The general 
144.3   state employees retirement fund and the participation in the 
144.4   Minnesota postretirement investment fund must be disbursed only 
144.5   for the purposes provided by law.  The expenses of the system 
144.6   and any benefits provided by law, other than benefits payable 
144.7   from the Minnesota postretirement investment fund, must be paid 
144.8   from the general state employees retirement fund.  The 
144.9   retirement allowances, retirement annuities, and disability 
144.10  benefits, as well as refunds of any sum remaining to the credit 
144.11  of a deceased retired employee or a disabled employee must be 
144.12  paid only from the general state employees retirement fund after 
144.13  the needs have been certified and the amounts withdrawn from the 
144.14  participation in the Minnesota postretirement investment fund 
144.15  under section 11A.18.  The amounts necessary to make the 
144.16  payments from the general state employees retirement fund and 
144.17  the participation in the Minnesota postretirement investment 
144.18  fund are annually appropriated from these funds for those 
144.19  purposes.  
144.20     Sec. 17.  Minnesota Statutes 2004, section 352.041, 
144.21  subdivision 1, is amended to read: 
144.22     Subdivision 1.  [ALLOWABLE SERVICE CREDIT.] Any (a) An 
144.23  employee covered by the system general state employees 
144.24  retirement plan who is given a leave of absence for employment 
144.25  by a political subdivision of the state shall remains a member 
144.26  of the plan and must continue to pay member contributions into 
144.27  the general state employees retirement fund for the period of 
144.28  leave.  
144.29     (b) Upon payment of member contributions, the employee must 
144.30  be given allowable service credit as a state employee on the 
144.31  records of the system retirement plan as though the employee had 
144.32  received salary from the state during the leave.  Payments into 
144.33  the retirement fund shall must be at the rate required in 
144.34  section 352.04, subdivision 2, and must be based upon the salary 
144.35  received from the political subdivision subject to the maximum 
144.36  amount, if any. 
145.1      Sec. 18.  Minnesota Statutes 2004, section 352.041, 
145.2   subdivision 2, is amended to read: 
145.3      Subd. 2.  [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 
145.4   or employee who is authorized by law to pay salaries to 
145.5   employees of the political subdivision which is employing a 
145.6   state employee shall have must deduct employee contributions 
145.7   deducted for the general state employees retirement plan under 
145.8   section 352.04, subdivision 2, from the salary of each employee 
145.9   who is on leave of absence from state service on each payroll 
145.10  abstract and shall must pay the sum to the director following 
145.11  the conclusion of each pay period. 
145.12     Sec. 19.  Minnesota Statutes 2004, section 352.041, 
145.13  subdivision 3, is amended to read: 
145.14     Subd. 3.  [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 
145.15  or employee who is authorized by law to pay salaries to 
145.16  employees of the political subdivision which is employing a 
145.17  state employee covered by the system shall general state 
145.18  employees retirement plan also must have employer contributions 
145.19  made to the general state employees retirement fund on following 
145.20  the conclusion of each payroll abstract in the amount required 
145.21  by section 352.04, subdivision 3.  These contributions are to 
145.22  must be charged to the political subdivision as an 
145.23  administrative cost.  
145.24     Sec. 20.  Minnesota Statutes 2004, section 352.041, 
145.25  subdivision 5, is amended to read: 
145.26     Subd. 5.  [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 
145.27  LEVIES.] (a) Every political subdivision which is employing a 
145.28  state employee covered by the system on leave of absence from 
145.29  state service for employment by a political subdivision of the 
145.30  state shall must pay into the general state employees retirement 
145.31  fund the amount of the employer contribution required by law for 
145.32  state employees covered by the system under section 352.04, 
145.33  subdivision 3.  
145.34     (b) Employing political subdivisions, except other than 
145.35  school districts, may levy taxes necessary for the payment of 
145.36  employer contributions without limitation as to rate or amount.  
146.1   The levy of the taxes does not reduce the amount of other 
146.2   taxes to that may be levied by political subdivisions, 
146.3   except other than school districts, which are subject to any 
146.4   limitation.  
146.5      Sec. 21.  Minnesota Statutes 2004, section 352.15, 
146.6   subdivision 1, is amended to read: 
146.7      Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
146.8   annuities, or other benefits mentioned in this chapter is 
146.9   assignable either in law or in equity or subject to execution, 
146.10  levy, attachment, garnishment, or other legal process, except as 
146.11  provided in subdivision 1a or section 518.58, 518.581, or 
146.12  518.6111. The provisions of section 356.401 apply to the general 
146.13  state employees retirement plan and to the correctional state 
146.14  employees retirement plan.  
146.15     Sec. 22.  Minnesota Statutes 2004, section 352.15, 
146.16  subdivision 3, is amended to read: 
146.17     Subd. 3.  [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 
146.18  The board may direct authorize, at its discretion, the deduction 
146.19  of a retiree's health or dental insurance premiums and transfer 
146.20  of the amounts to a health or dental insurance carrier covering 
146.21  state employees.  The insurance carrier must certify that the 
146.22  retired employee has signed an authorization for the deduction 
146.23  and provide a computer readable roster of covered retirees and 
146.24  amounts.  The health or dental insurance carrier must refund 
146.25  deductions withheld from a retiree's check in error directly to 
146.26  the retiree.  The board shall require that the insurance carrier 
146.27  to reimburse the fund for the administrative expense of 
146.28  withholding the premium amounts.  The insurance carrier shall 
146.29  assume liability for any failure of the system to properly 
146.30  withhold the premium amounts. 
146.31     Sec. 23.  Minnesota Statutes 2004, section 352.15, 
146.32  subdivision 4, is amended to read: 
146.33     Subd. 4.  [DIRECT TRANSFER OF REFUNDS.] A direct transfer 
146.34  of account refunds under this chapter may be made to an 
146.35  individual retirement savings accounts account or a qualified 
146.36  retirement plans plan of the person upon the receipt of an 
147.1   application for transfer by a former employee, on forms 
147.2   acceptable to the executive director. 
147.3      Sec. 24.  Minnesota Statutes 2004, section 352.22, 
147.4   subdivision 10, is amended to read: 
147.5      Subd. 10.  [OTHER REFUNDS.] Former employees covered by the 
147.6   system are entitled to apply for refunds if they are or become 
147.7   members of the State Patrol retirement fund, the state Teachers 
147.8   Retirement Association, or employees of the University of 
147.9   Minnesota excluded from coverage under the system by action of 
147.10  the Board of Regents; or labor service employees, excluded from 
147.11  coverage under section 352.01, subdivision 2b, clause (25); or 
147.12  employees of the adjutant general who under federal law 
147.13  effectually elect membership in a federal retirement system; or 
147.14  officers or employees of the senate or house of representatives, 
147.15  excluded from coverage under section 352.01, subdivision 2b, 
147.16  clause (8) (7).  The refunds must include accumulated 
147.17  contributions plus interest as provided in subdivision 2.  These 
147.18  employees may apply for a refund once 30 days or more have 
147.19  elapsed after their coverage ceases, even if they continue in 
147.20  state service but in positions not covered by this chapter. 
147.21     Sec. 25.  Minnesota Statutes 2004, section 352B.01, 
147.22  subdivision 1, is amended to read: 
147.23     Subdivision 1.  [SCOPE.] In this chapter, each of the terms 
147.24  defined in this section have has the meanings meaning given 
147.25  them to it. 
147.26     Sec. 26.  Minnesota Statutes 2004, section 352B.01, 
147.27  subdivision 2, is amended to read: 
147.28     Subd. 2.  [MEMBER.] "Member" means: 
147.29     (1) a State Patrol member currently employed after June 30, 
147.30  1943, under section 299D.03 by the state, who is a peace officer 
147.31  under section 626.84, and whose salary or compensation is paid 
147.32  out of state funds; 
147.33     (2) a conservation officer employed under section 97A.201, 
147.34  currently employed by the state, whose salary or compensation is 
147.35  paid out of state funds; 
147.36     (3) a crime bureau officer who was employed by the crime 
148.1   bureau and was a member of the Highway Patrolmen's retirement 
148.2   fund on July 1, 1978, whether or not that person has the power 
148.3   of arrest by warrant after that date, or who is employed as 
148.4   police personnel, with powers of arrest by warrant under section 
148.5   299C.04, and who is currently employed by the state, and whose 
148.6   salary or compensation is paid out of state funds; 
148.7      (4) a person who is employed by the state in the Department 
148.8   of Public Safety in a data processing management position with 
148.9   salary or compensation paid from state funds, who was a crime 
148.10  bureau officer covered by the State Patrol retirement plan on 
148.11  August 15, 1987, and who was initially hired in the data 
148.12  processing management position within the department during 
148.13  September 1987, or January 1988, with membership continuing for 
148.14  the duration of the person's employment in that position, 
148.15  whether or not the person has the power of arrest by warrant 
148.16  after August 15, 1987; 
148.17     (5) a public safety employee defined as who is a peace 
148.18  officer in under section 626.84, subdivision 1, paragraph (c), 
148.19  and who is employed with by the Division of Alcohol and Gambling 
148.20  Enforcement under section 299L.01; and 
148.21     (6) a Fugitive Apprehension Unit officer after October 31, 
148.22  2000, who is employed by the Office of Special Investigations of 
148.23  the Department of Corrections and who is a peace officer under 
148.24  section 626.84.  
148.25     Sec. 27.  Minnesota Statutes 2004, section 352B.01, 
148.26  subdivision 3, is amended to read: 
148.27     Subd. 3.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
148.28  means:  
148.29     (1) for members defined in subdivision 2, clause (a) (1), 
148.30  monthly service is granted for in any month for which payments 
148.31  have been made to the State Patrol retirement fund, and 
148.32     (2) for members defined in subdivision 2, clauses (b) (2) 
148.33  and (c) (3), service for which payments have been made to the 
148.34  State Patrol retirement fund, service for which payments were 
148.35  made to the State Police officers retirement fund after June 30, 
148.36  1961, and all prior service which was credited to a member for 
149.1   service on or before June 30, 1961.  
149.2      (b) Allowable service also includes any period of absence 
149.3   from duty by a member who, by reason of injury incurred in the 
149.4   performance of duty, is temporarily disabled and for which 
149.5   disability the state is liable under the workers' compensation 
149.6   law, until the date authorized by the executive director for 
149.7   commencement of payment of a disability benefit or return to 
149.8   employment.  
149.9      (c) MS 2002 (Expired) 
149.10     (d) Allowable service means service in a month during which 
149.11  a member is paid a salary from which a member contribution is 
149.12  deducted, deposited, and credited in the State Patrol retirement 
149.13  plan. 
149.14     Sec. 28.  Minnesota Statutes 2004, section 352B.02, 
149.15  subdivision 1e, is amended to read: 
149.16     Subd. 1e.  [AUDIT; ACTUARIAL VALUATION.] The legislative 
149.17  auditor shall audit the fund.  Any actuarial valuation of the 
149.18  fund required under section 356.215 must be prepared by the 
149.19  actuary retained under section 356.214.  Any approved actuary 
149.20  retained by the executive director under section 352.03, 
149.21  subdivision 6, may perform actuarial valuations and experience 
149.22  studies to supplement those performed by the commission-retained 
149.23  actuary retained under section 356.214.  Any supplemental 
149.24  actuarial valuation or experience studies shall must be filed 
149.25  with the executive director of the Legislative Commission on 
149.26  Pensions and Retirement.  
149.27     Sec. 29.  Minnesota Statutes 2004, section 352B.071, is 
149.28  amended to read: 
149.29     352B.071 [EXEMPTION FROM PROCESS.] 
149.30     None of the money, annuities, or other benefits provided 
149.31  for in this chapter is assignable either in law or in equity or 
149.32  be subject to execution, levy, attachment, garnishment, or other 
149.33  legal process, except as provided in section 518.58, 518.581, or 
149.34  518.6111. The provisions of section 356.401 apply to the State 
149.35  Patrol retirement plan. 
149.36     Sec. 30.  Minnesota Statutes 2004, section 352D.01, is 
150.1   amended to read: 
150.2      352D.01 [ESTABLISHMENT.] 
150.3      There is hereby established within the Minnesota State 
150.4   Retirement System a retirement program for certain public 
150.5   employees to be known as the Minnesota unclassified employees 
150.6   retirement program, which shall be.  The program must be 
150.7   administered by the Minnesota State Retirement System.  
150.8      Sec. 31.  Minnesota Statutes 2004, section 352D.015, 
150.9   subdivision 3, is amended to read: 
150.10     Subd. 3.  [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 
150.11  investment fund" means the fund established and governed by 
150.12  section 11A.17.  
150.13     Sec. 32.  Minnesota Statutes 2004, section 352D.015, 
150.14  subdivision 4, is amended to read: 
150.15     Subd. 4.  [GENERAL FUND.] "General fund" means the general 
150.16  state employees retirement fund except the moneys for the 
150.17  unclassified program.  
150.18     Sec. 33.  Minnesota Statutes 2004, section 352D.03, is 
150.19  amended to read: 
150.20     352D.03 [TRANSFER OF ASSETS.] 
150.21     Unless an eligible employee enumerated in section 352D.02, 
150.22  subdivision 1 or 1a, has elected coverage under the individual 
150.23  retirement account plan under chapter 354B, a sum of money 
150.24  representing the assets credited to each employee exercising the 
150.25  option contained in section 352D.02, plus an equal employer 
150.26  contribution together with interest for the employment period at 
150.27  the actuarially assumed rates applicable preretirement interest 
150.28  actuarial assumption rate during this period, compounded 
150.29  annually, shall must be used for the purchase of shares on 
150.30  behalf of each employee in the accounts of the supplemental 
150.31  retirement fund established by section 11A.17.  Any employer's 
150.32  contribution to amortize the deficit in the state employee's 
150.33  retirement fund shall not, however, be used for the purchase of 
150.34  shares.  
150.35     Sec. 34.  Minnesota Statutes 2004, section 352D.05, 
150.36  subdivision 4, is amended to read: 
151.1      Subd. 4.  [REPAYMENT OF REFUND.] (a) A participant in the 
151.2   unclassified program may repay regular refunds taken pursuant to 
151.3   under section 352.22, as provided in section 352.23.  
151.4      (b) A participant in the unclassified program or an 
151.5   employee covered by the general plan who has withdrawn the value 
151.6   of the total shares may repay the refund taken and thereupon 
151.7   restore the service credit, rights and benefits forfeited by 
151.8   paying into the fund the amount refunded plus interest at an 
151.9   annual rate of 8.5 percent compounded annually from the date 
151.10  that the refund was taken until the date that the refund is 
151.11  repaid.  If the participant had withdrawn only the employee 
151.12  shares as permitted under prior laws, repayment shall must be 
151.13  pro rata.  Payment shall 
151.14     (c) Except as provided in section 356.441, the repayment of 
151.15  a refund under this section must be made in a lump sum.  
151.16     Sec. 35.  Minnesota Statutes 2004, section 352D.085, 
151.17  subdivision 1, is amended to read: 
151.18     Subdivision 1.  [COMBINED SERVICE.] Except as provided in 
151.19  section 356.30, 356.302, or 356.303, service under the 
151.20  unclassified program for which the employee has been credited 
151.21  with employee shares may be used for the limited purpose of 
151.22  qualifying for benefits under sections 352.115, 352.72, 
151.23  subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60; 
151.24  provided such.  The service also may not be used to qualify for 
151.25  a disability benefit under section 352.113 or 354.48 if a 
151.26  participant was under the unclassified program at the time of 
151.27  the disability, and provided further that.  Also, the years of 
151.28  service and salary paid while the participant was in the 
151.29  unclassified program shall may not be used in determining the 
151.30  amount of benefits. 
151.31     Sec. 36.  Minnesota Statutes 2004, section 352D.09, 
151.32  subdivision 5, is amended to read: 
151.33     Subd. 5.  [UNCLAIMED BENEFITS.] If the beneficiary, 
151.34  surviving spouse or estate has not made application for benefits 
151.35  within ten years after the date of the death of a participant, 
151.36  the value of the shares shall be is appropriated to the regular 
152.1   general state employees retirement fund and the provisions of 
152.2   section 352.12, subdivision 12 shall, govern.  If a former 
152.3   participant fails to make a claim for benefits within five years 
152.4   after the termination of covered service or by age 70, whichever 
152.5   is later, the value of the shares shall be is appropriated to 
152.6   the general state employees retirement fund and the provisions 
152.7   of section 352.22, subdivision 8, shall apply.  
152.8      Sec. 37.  Minnesota Statutes 2004, section 352D.12, is 
152.9   amended to read: 
152.10     352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
152.11     (a) An employee who is a participant in the unclassified 
152.12  program and who has prior service credit in a covered plan under 
152.13  chapters 3A, chapter 352, 352C, 353, 354, 354A, and or 422A 
152.14  may, within the time limits specified in this section, elect to 
152.15  transfer to the unclassified program prior service contributions 
152.16  to one or more of those plans.  Participants with six or more 
152.17  years of prior service credit in a plan governed by chapter 3A 
152.18  or 352C on July 1, 1998, may not transfer prior service 
152.19  contributions.  Participants with less than six years of prior 
152.20  service credit in a plan governed by chapter 3A or 352C on July 
152.21  1, 1998, must be contributing to the unclassified plan on or 
152.22  after January 5, 1999, in order to transfer prior contributions. 
152.23     (b) For participants with prior service credit in a plan 
152.24  governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
152.25  contributions" means the accumulated employee and equal employer 
152.26  contributions with interest at an annual rate of 8.5 percent 
152.27  compounded annually, based on fiscal year balances.  For 
152.28  participants with less than six years of service credit as of 
152.29  July 1, 1998, and with prior service credit in a plan governed 
152.30  by chapter 3A or 352C, "prior service contributions" means an 
152.31  amount equal to twice the amount of the accumulated member 
152.32  contributions plus annual compound interest at the rate of 8.5 
152.33  percent, computed on fiscal year balances.  
152.34     (c) If a participant has taken a refund from a retirement 
152.35  plan listed in this section, the participant may repay the 
152.36  refund to that plan, notwithstanding any restrictions on 
153.1   repayment to that plan, plus 8.5 percent interest compounded 
153.2   annually and have the accumulated employee and equal employer 
153.3   contributions transferred to the unclassified program with 
153.4   interest at an annual rate of 8.5 percent compounded annually 
153.5   based on fiscal year balances.  If a person repays a refund and 
153.6   subsequently elects to have the money transferred to the 
153.7   unclassified program, the repayment amount, including interest, 
153.8   is added to the fiscal year balance in the year which the 
153.9   repayment was made. 
153.10     (d) A participant electing to transfer prior service 
153.11  contributions credited to a retirement plan governed by chapter 
153.12  352, 353, 354, 354A, or 422A as provided under this section must 
153.13  complete the a written application for the transfer and repay 
153.14  any refund within one year of the commencement of the employee's 
153.15  participation in the unclassified program.  A participant 
153.16  electing to transfer prior service contributions credited to a 
153.17  retirement plan governed by chapter 3A or 352C as provided under 
153.18  this section must complete the application for the transfer and 
153.19  repay any refund between January 5, 1999, and June 1, 1999, if 
153.20  the employee commenced participation in the unclassified program 
153.21  before January 5, 1999, or within one year of the commencement 
153.22  of the employee's participation in the unclassified program if 
153.23  the employee commenced participation in the unclassified program 
153.24  after January 4, 1999. 
153.25     Sec. 38.  Minnesota Statutes 2004, section 353.01, 
153.26  subdivision 32, is amended to read: 
153.27     Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
153.28  any a public employee, including any a public hospital employee, 
153.29  who is covered by any an agreement or modification made between 
153.30  the state and the Secretary of Health, Education and Welfare 
153.31  Human Services, making the provisions of the federal Old Age, 
153.32  Survivors and Disability Insurance Act applicable to the member 
153.33  if the membership eligibility criteria are met under this 
153.34  chapter.  A coordinated member also is a former basic member who 
153.35  has a complete and continuous separation for at least 30 days 
153.36  from employment as a public employee meeting the requirements 
154.1   specified in subdivision 28, paragraphs (a) and (b), and who 
154.2   reenters public service as a public employee and meets the 
154.3   membership eligibility criteria under this chapter. 
154.4      Sec. 39.  Minnesota Statutes 2004, section 353.01, 
154.5   subdivision 33, is amended to read: 
154.6      Subd. 33.  [BASIC MEMBER.] "Basic member" means any a 
154.7   public employee, including any a public hospital employee, who 
154.8   is not covered by any agreement or modification made between the 
154.9   state and the Secretary of Health, Education and Welfare Human 
154.10  Services. 
154.11     Sec. 40.  Minnesota Statutes 2004, section 353.025, is 
154.12  amended to read: 
154.13     353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 
154.14     From and after January 1, 1982, Employees of the Range 
154.15  Association of Municipalities and Schools hereinafter referred 
154.16  to as the association, shall become are coordinated members of 
154.17  the general employees retirement plan of the Public Employees 
154.18  Retirement Association unless specifically exempt under section 
154.19  353.01, subdivision 2b, and.  The Range Association shall be 
154.20  deemed to be of Municipalities and Schools is a governmental 
154.21  subdivision for the purposes of this chapter.  
154.22     Sec. 41.  Minnesota Statutes 2004, section 353.026, is 
154.23  amended to read: 
154.24     353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 
154.25  EMPLOYEES.] 
154.26     Any person who was employed by the city of Minneapolis, 
154.27  Special School District No. 1, or public corporation as defined 
154.28  in section 422A.01, subdivision 9, on or after July 1, 1978, and 
154.29  prior to before July 1, 1979, and who was excluded from 
154.30  retirement coverage by the coordinated program of the 
154.31  Minneapolis municipal employees retirement fund pursuant to 
154.32  under section 422A.09, subdivision 3, shall be is entitled to 
154.33  retirement coverage by the general employees retirement plan of 
154.34  the Public Employees Retirement Association unless specifically 
154.35  excluded pursuant to under section 353.01, subdivision 2b, from 
154.36  and after May 19, 1981.  
155.1      Sec. 42.  Minnesota Statutes 2004, section 353.027, is 
155.2   amended to read: 
155.3      353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 
155.4   EMPLOYEES.] 
155.5      Any person employed on January 1, 1975, by a municipal 
155.6   court established pursuant to under Minnesota Statutes 1957, 
155.7   section 488.03, and located in the cities of New Brighton, 
155.8   Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 
155.9   Paul shall be is eligible for membership in the general 
155.10  employees retirement plan of the Public Employees Retirement 
155.11  Association and shall retain retains any rights or benefits the 
155.12  person had attained as a member of the general employees 
155.13  retirement plan of the association on January 1, 1975, so long 
155.14  as the person remains an employee of the municipal court of 
155.15  Ramsey County.  
155.16     Sec. 43.  Minnesota Statutes 2004, section 353.028, is 
155.17  amended to read: 
155.18     353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 
155.19     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
155.20  section, each of the terms in this subdivision has the meaning 
155.21  indicated. 
155.22     (b) "City manager" means (1) a person who is duly appointed 
155.23  to and is holding the position of city manager in a Plan B 
155.24  statutory city or in a home rule city operating under the 
155.25  "council-manager" form of government, or (2) a person who is 
155.26  appointed to and is holding the position of chief administrative 
155.27  officer of a home rule charter city or a statutory city pursuant 
155.28  to under a charter provision, ordinance, or resolution 
155.29  establishing such a position and prescribing its duties and 
155.30  responsibilities.  
155.31     (c) "Governing body" means the city council of the city 
155.32  employing the city manager.  
155.33     (d) "Election" means the election described in subdivision 
155.34  2.  
155.35     Subd. 2.  [ELECTION.] (a) A city manager may elect to be 
155.36  excluded from membership in the general employees retirement 
156.1   plan of the Public Employees Retirement Association.  The 
156.2   election of exclusion must be made within six months following 
156.3   the commencement of employment, must be made in writing on a 
156.4   form prescribed by the executive director, and must be approved 
156.5   by a resolution of adopted by the governing body of the city.  
156.6   The election of exclusion is not effective until it is filed 
156.7   with the executive director.  Membership of a city manager in 
156.8   the association general employees retirement plan ceases on the 
156.9   date the written election is received by the executive director 
156.10  or upon a later date specified.  Employee and employer 
156.11  contributions made on behalf of a person exercising the option 
156.12  to be excluded from membership under this section must be 
156.13  refunded in accordance with section 353.27, subdivision 7. 
156.14     (b) A city manager who has elected exclusion under this 
156.15  subdivision may elect to revoke that action by filing a written 
156.16  notice with the executive director.  The notice must be on a 
156.17  form prescribed by the executive director and must be approved 
156.18  by a resolution of the governing body of the city.  Membership 
156.19  of the city manager in the association resumes prospectively 
156.20  from the date of the first day of the pay period for which 
156.21  contributions were deducted or, if pay period coverage dates are 
156.22  not provided, the date on which the notice of revocation or 
156.23  contributions are received in the office of the association, 
156.24  provided that the notice of revocation is received by the 
156.25  association within 60 days of the receipt of contributions. 
156.26     (c) An election under paragraph (b) is irrevocable.  Any 
156.27  election under paragraph (a) or (b) must include a statement 
156.28  that the individual will not seek authorization to purchase 
156.29  service credit for any period of excluded service. 
156.30     Subd. 3.  [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 
156.31  election of exclusion is made, and if the city manager and the 
156.32  governing body of the city additionally agree in writing that 
156.33  the additional compensation is to be deferred and shall is to be 
156.34  contributed on behalf of the city manager to a deferred 
156.35  compensation program which meets the requirements of section 457 
156.36  of the Internal Revenue Code of 1954 1986, as amended through 
157.1   December 31, 1980, the governing body may compensate the city 
157.2   manager, in addition to the salary allowed under any limitation 
157.3   imposed on salaries by law or charter, in an amount equal to the 
157.4   employer contribution which would be required by section 353.27, 
157.5   subdivision 3, if the city manager were a member of the 
157.6   association general employees retirement plan.  
157.7      Subd. 4.  [REFUNDS; DEFERRED ANNUITY.] A city manager who 
157.8   makes an election to be excluded from membership is entitled to 
157.9   a refund of accumulated deductions or, if otherwise qualified, a 
157.10  deferred annuity in the manner provided by under section 353.34, 
157.11  at the option of the manager.  
157.12     Subd. 5.  [ELECTION; OTHER EMPLOYMENT.] If a city manager 
157.13  who has made an election to be excluded subsequently accepts 
157.14  employment in another governmental subdivision or subsequently 
157.15  accepts employment other than as a city manager in the same 
157.16  city, the election shall be deemed to have been is rescinded on 
157.17  the effective date of employment.  
157.18     Sec. 44.  Minnesota Statutes 2004, section 353.14, is 
157.19  amended to read: 
157.20     353.14 [BENEFITS FROM OTHER FUNDS.] 
157.21     No annuity or benefit provided by this chapter shall may be 
157.22  affected, diminished, or impaired by any pension, benefit, or 
157.23  annuity which any member or survivor is entitled to receive from 
157.24  a tax supported public retirement plan or system authorized by 
157.25  any other law, for based on service that is different service 
157.26  than the service for which the member or survivor is entitled to 
157.27  receive benefit or annuity from a retirement plan administered 
157.28  by the Public Employees Retirement Association. 
157.29     Sec. 45.  Minnesota Statutes 2004, section 353.15, 
157.30  subdivision 1, is amended to read: 
157.31     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
157.32  or benefit provided for in this chapter is assignable or subject 
157.33  to execution, levy, attachment, garnishment, or legal process, 
157.34  except as provided in subdivision 2 or section 518.58, 518.581, 
157.35  or 518.6111. The provisions of section 356.401 apply to the 
157.36  general employees retirement plan, to the public employees 
158.1   police and fire retirement plan, and to the local government 
158.2   correctional service retirement plan.  
158.3      Sec. 46.  Minnesota Statutes 2004, section 353.15, 
158.4   subdivision 3, is amended to read: 
158.5      Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
158.6   of the executive director, conditions so warrant, payment of an 
158.7   annuity, a retirement benefit, or a refund may be made to a 
158.8   public body in behalf of an annuitant, disabilitant, or survivor 
158.9   upon such terms as the executive director may prescribe. 
158.10     Sec. 47.  Minnesota Statutes 2004, section 353.27, 
158.11  subdivision 11, is amended to read: 
158.12     Subd. 11.  [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 
158.13  INFORMATION.] (a) All governmental subdivisions shall furnish 
158.14  promptly such other information relative to the employment 
158.15  status of all employees or former employees, including, but not 
158.16  limited to, payroll abstracts pertaining to all past and present 
158.17  employees, as may be requested by the association or its 
158.18  executive director, including schedules of salaries applicable 
158.19  to various categories of employment.  
158.20     (b) In the event payroll abstract records have been lost or 
158.21  destroyed, for whatever reason or in whatever manner, so that 
158.22  such schedules of salaries cannot be furnished therefrom, the 
158.23  employing governmental subdivision, in lieu thereof, shall 
158.24  furnish to the association an estimate of the earnings of any 
158.25  employee or former employee for any period as may be requested 
158.26  by the association or its executive director.  Should If the 
158.27  association receive such schedules is provided a schedule of 
158.28  estimated earnings, the executive director is hereby authorized 
158.29  to use the same as a basis for making whatever computations 
158.30  might be necessary for determining obligations of the employee 
158.31  and employer to the retirement fund.  If estimates are not 
158.32  furnished by the employer pursuant to at the request of the 
158.33  association or its executive director, the association executive 
158.34  director may estimate the obligations of the employee and 
158.35  employer to the retirement fund based upon such those records as 
158.36  that are in its possession.  Where payroll abstracts have been 
159.1   lost or destroyed, the governmental agency need not furnish any 
159.2   information pertaining to employment prior to July 1, 1963.  The 
159.3   association shall make no estimate of any obligation of any 
159.4   employee, former employee, or employer covering employment prior 
159.5   to July 1, 1963. 
159.6      Sec. 48.  Minnesota Statutes 2004, section 353.271, is 
159.7   amended to read: 
159.8      353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 
159.9   INVESTMENT FUND.] 
159.10     Subdivision 1.  [AUTHORIZATION.] The general employees 
159.11  retirement plan of the Public Employees Retirement Association, 
159.12  including the public employees police and fire fund but 
159.13  excluding the various local relief association consolidation 
159.14  accounts, is retirement plan, and the local government 
159.15  correctional service retirement plan are authorized to 
159.16  participate in the Minnesota postretirement investment fund.  
159.17  There shall be is one general participation in the Minnesota 
159.18  postretirement investment fund for all purposes by each plan of 
159.19  the Public Employees Retirement fund and one general 
159.20  participation in the Minnesota postretirement investment fund 
159.21  for all purposes by the public employees police and fire 
159.22  fund Association. 
159.23     Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
159.24  (1) (a) The required reserves for retirement annuities payable 
159.25  as provided in this chapter other than those payable from the 
159.26  various local relief association consolidation accounts, as 
159.27  determined in accordance with the appropriate mortality table 
159.28  adopted by the board of trustees based on the experience of the 
159.29  fund as recommended by the actuary retained by the Legislative 
159.30  Commission on Pensions and Retirement under section 356.214, and 
159.31  approved under section 356.215, subdivision 18, and using the 
159.32  postretirement interest assumption specified in section 356.215, 
159.33  subdivision 8, shall must be transferred to the Minnesota 
159.34  postretirement investment fund as of the last business day of 
159.35  the month in which the retirement annuity begins.  
159.36     (2) (b) Annuity payments other than those payable from the 
160.1   various local relief association consolidation accounts 
160.2   shall must be adjusted in accordance with the provisions of 
160.3   section 11A.18.  
160.4      (3) (c) Increases in payments pursuant to under this 
160.5   section or from the various local relief association 
160.6   consolidation accounts, if applicable, will must be made 
160.7   automatically unless the intended recipient files written notice 
160.8   with the executive director of the Public Employees Retirement 
160.9   Association requesting that the increase shall not be made. 
160.10     Sec. 49.  Minnesota Statutes 2004, section 353.31, 
160.11  subdivision 1c, is amended to read: 
160.12     Subd. 1c.  [COORDINATED MEMBERS.] Except for benefits 
160.13  provided under section 353.32, subdivisions 1 and 1a, no 
160.14  survivor benefits are payable to the surviving spouse or 
160.15  dependent children of a deceased coordinated member. 
160.16     Sec. 50.  Minnesota Statutes 2004, section 353.32, 
160.17  subdivision 9, is amended to read: 
160.18     Subd. 9.  [PAYMENT TO A MINOR.] If a member or former 
160.19  member dies having named as beneficiary a person who is a minor 
160.20  at the time of the application for refund, the board may make 
160.21  the payment (a) (1) directly to the minor, (b) (2) to any 
160.22  a person who has legally qualified and is acting as guardian of 
160.23  the minor's person or property in any jurisdiction, or (c) (3) 
160.24  to either parent of the minor or to any an adult person with 
160.25  whom the minor may at the time be living, provided only that.  
160.26  The parent or other person to whom any amount is to be 
160.27  paid shall have advised must advise the board in writing that 
160.28  the amount will be held or used in trust for the benefit of such 
160.29  minor.  Any annuity or disability benefit payable at the time of 
160.30  death of an annuitant or recipient of a disability benefit, 
160.31  which is payable to a beneficiary who is a minor, may be paid in 
160.32  the same manner.  Such The payment shall be is a bar to recovery 
160.33  by any other person or persons. 
160.34     Sec. 51.  Minnesota Statutes 2004, section 353.33, 
160.35  subdivision 12, is amended to read: 
160.36     Subd. 12.  [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 
161.1   member who is receiving a disability benefit under subdivision 3:
161.2      (a) (1) dies before attaining age 65 or within five years 
161.3   of the effective date of the disability, whichever is later, the 
161.4   surviving spouse shall is entitled to receive a survivor benefit 
161.5   under section 353.31, unless the surviving spouse elected to 
161.6   receive a refund under section 353.32, subdivision 1.; 
161.7      (b) (2) is living at age 65 or five years after the 
161.8   effective date of the disability, whichever is later, the basic 
161.9   member may continue to receive a normal disability benefit, or 
161.10  elect a joint and survivor optional annuity under section 
161.11  353.31, subdivision 1b.  The election of the joint and survivor 
161.12  optional annuity must occur within 90 days of attaining age 65 
161.13  or of reaching the five-year anniversary of the effective date 
161.14  of the disability benefit, whichever is later.  The optional 
161.15  annuity takes effect on the first day of the month following the 
161.16  month in which the person attains age 65 or reaches the 
161.17  five-year anniversary of the effective date of the disability 
161.18  benefit, whichever is later.; or 
161.19     (c) (3) if there is a dependent child or children under 
161.20  paragraph (a) or (b) clause (1) or (2), the association shall 
161.21  grant dependent child is entitled to a dependent child benefit 
161.22  under section 353.31, subdivision 1b, paragraph (b). 
161.23     Sec. 52.  Minnesota Statutes 2004, section 354.091, is 
161.24  amended to read: 
161.25     354.091 [SERVICE CREDIT.] 
161.26     (a) In computing service credit, no teacher shall may 
161.27  receive credit for more than one year of teaching service for 
161.28  any fiscal year.  Commencing July 1, 1961 Additionally, in 
161.29  crediting allowable service: 
161.30     (1) if a teacher teaches less than five hours in a day, 
161.31  service credit must be given for the fractional part of the day 
161.32  as the term of service performed bears to five hours; 
161.33     (2) if a teacher teaches five or more hours in a day, 
161.34  service credit must be given for only one day; 
161.35     (3) if a teacher teaches at least 170 full days in any 
161.36  fiscal year, service credit must be given for a full year of 
162.1   teaching service; and 
162.2      (4) if a teacher teaches for only a fractional part of the 
162.3   year, service credit must be given for such fractional part of 
162.4   the year in the same relationship as the period of service 
162.5   performed bears to 170 days. 
162.6      (b) A teacher shall must receive a full year of service 
162.7   credit based on the number of days in the employer's full school 
162.8   year if it that school year is less than 170 days.  Teaching 
162.9   service performed before July 1, 1961, must be computed under 
162.10  the law in effect at the time it was performed. 
162.11     (c) A teacher must not lose or gain retirement service 
162.12  credit as a result of the employer converting to a flexible or 
162.13  alternate work schedule.  If the employer converts to a flexible 
162.14  or alternate work schedule, the forms for reporting teaching 
162.15  service and the procedures for determining service credit must 
162.16  be determined by the executive director with the approval of the 
162.17  board of trustees.  
162.18     (d) For all services rendered on or after July 1, 2003, 
162.19  service credit for all members employed by the Minnesota State 
162.20  Colleges and Universities system must be determined: 
162.21     (1) for full-time employees, by the definition of full-time 
162.22  employment contained in the collective bargaining agreement for 
162.23  those units listed in section 179A.10, subdivision 2, or 
162.24  contained in the applicable personnel or salary plan for those 
162.25  positions designated in section 179A.10, subdivision 1; 
162.26     (2) for part-time employees, by the appropriate proration 
162.27  of full-time equivalency based on the provisions contained in 
162.28  the collective bargaining agreement for those units listed in 
162.29  section 179A.10, subdivision 2, or contained in the applicable 
162.30  personnel or salary plan for those positions designated in 
162.31  section 179A.10, subdivision 1, and the applicable procedures of 
162.32  the Minnesota State Colleges and Universities system; and 
162.33     (3) in no case may a member receive more than one year of 
162.34  service credit for any fiscal year. 
162.35     Sec. 53.  Minnesota Statutes 2004, section 354.10, 
162.36  subdivision 1, is amended to read: 
163.1      Subdivision 1.  [EXEMPTION; EXCEPTIONS.] (a) The provisions 
163.2   of section 356.401 apply to the teachers retirement plan.  
163.3      (b) The right of a teacher to take advantage of the 
163.4   benefits provided by this chapter, is a personal right only and 
163.5   is not assignable.  All money to the credit of a teacher's 
163.6   account in the fund or any money payable to the teacher from the 
163.7   fund belongs to the state of Minnesota until actually paid to 
163.8   the teacher or a beneficiary under this chapter.  
163.9      (c) The association may acknowledge a properly completed 
163.10  power of attorney form.  An assignment or attempted assignment 
163.11  of a teacher's interest in the fund, or of the beneficiary's 
163.12  interest in the fund, by a teacher or a beneficiary is void and 
163.13  exempt from garnishment or levy under attachment or execution, 
163.14  except as provided in subdivision 2 or 3, or section 518.58, 
163.15  518.581, or 518.6111.  
163.16     Sec. 54.  Minnesota Statutes 2004, section 354.10, 
163.17  subdivision 3, is amended to read: 
163.18     Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
163.19  of the executive director, conditions so warrant, payment of an 
163.20  annuity, a retirement benefit, or a refund may be made to a 
163.21  public body in behalf of an annuitant, disabilitant, or survivor 
163.22  upon such terms as the executive director may prescribe.  
163.23     Sec. 55.  Minnesota Statutes 2004, section 354.10, 
163.24  subdivision 4, is amended to read: 
163.25     Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any (a) A 
163.26  beneficiary designated by a retiree or member under section 
163.27  354.05, subdivision 22, may be changed or revoked by the retiree 
163.28  or member on a form provided by the executive director.  
163.29     (b) A change or revocation made under this subdivision is 
163.30  valid only if the properly completed form is received by the 
163.31  association on or before the date of death of the retiree or the 
163.32  member.  
163.33     (c) If a designated beneficiary dies before the retiree or 
163.34  member designating the beneficiary, and a new beneficiary is not 
163.35  designated, the retiree's or member's estate is the beneficiary. 
163.36     Sec. 56.  Minnesota Statutes 2004, section 354.33, 
164.1   subdivision 5, is amended to read: 
164.2      Subd. 5.  [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 
164.3   Notwithstanding the provisions of section 354.55, subdivision 3, 
164.4   when any person retires after July 1, 1973, who (a) (1) has ten 
164.5   or more years of allowable service, and (b) (2) does not have 
164.6   any retroactive Social Security coverage by reason of the 
164.7   person's position in the retirement system, and (c) (3) does not 
164.8   qualify for federal old age and survivor primary benefits at the 
164.9   time of retirement, the annuity shall must be computed under 
164.10  section 354.44, subdivision 2, of the law in effect on June 30, 
164.11  1969, except that accumulations after June 30, 1957, shall must 
164.12  be calculated using the same mortality table and interest 
164.13  assumption as are used to transfer the required reserves to the 
164.14  Minnesota postretirement investment fund. 
164.15     Sec. 57.  Minnesota Statutes 2004, section 354.39, is 
164.16  amended to read: 
164.17     354.39 [EFFECTIVE DATE; APPLICATION.] 
164.18     After July 1, 1971, any A member of the Teachers Retirement 
164.19  Association who is employed in a new state university and or any 
164.20  other new institutions institution of higher learning not 
164.21  included in any agreement or modification made between the state 
164.22  and the federal Secretary of Health, Education and Welfare Human 
164.23  Services, making the provisions of the federal Old Age and, 
164.24  Survivors and Disability Insurance Act applicable to such 
164.25  members, shall must be covered under the provisions of this 
164.26  chapter applicable to coordinated members. 
164.27     Sec. 58.  Minnesota Statutes 2004, section 354.41, 
164.28  subdivision 2, is amended to read: 
164.29     Subd. 2.  [TEACHERS.] Every teacher after June 30, 1957, in 
164.30  the service or entering the service of the state or one of its 
164.31  governmental subdivision subdivisions as a teacher, except 
164.32  persons specially specifically excluded, shall must become a 
164.33  member of the association by the acceptance of such employment. 
164.34     Sec. 59.  Minnesota Statutes 2004, section 354.42, is 
164.35  amended by adding a subdivision to read: 
164.36     Subd. 1a.  [TEACHERS RETIREMENT FUND.] (a) Within the 
165.1   Teachers Retirement Association and the state treasury is 
165.2   created a special retirement fund, which must include all the 
165.3   assets of the Teachers Retirement Association and all revenue of 
165.4   the association.  The fund is the continuation of the fund 
165.5   established under Laws 1931, chapter 406, section 2, 
165.6   notwithstanding the repeal of Minnesota Statutes 1973, section 
165.7   354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 
165.8      (b) The teachers retirement fund must be credited with all 
165.9   employee and employer contributions, all investment revenue and 
165.10  gains, and all other income authorized by law. 
165.11     (c) From the teachers retirement fund is appropriated the 
165.12  payments of annuities and benefits authorized by this chapter, 
165.13  the transfers to the Minnesota postretirement investment fund, 
165.14  and the reasonable and necessary expenses of administering the 
165.15  fund and the association. 
165.16     Sec. 60.  Minnesota Statutes 2004, section 354.44, 
165.17  subdivision 2, is amended to read: 
165.18     Subd. 2.  [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 
165.19  amount of retirement annuity is an amount equal to double the 
165.20  annuity which could be purchased by the member's accumulated 
165.21  deductions plus interest thereon.  The annuity shall must be 
165.22  determined by the member's age, sex, double the amount of 
165.23  accumulated deductions, double the amount of interest earned on 
165.24  the accumulated deductions, and the appropriate mortality tables 
165.25  and interest rates.  To determine the amount of the annuity for 
165.26  a basic member, the accumulated deductions prior to before July 
165.27  1, 1957, and the accumulated deductions subsequent to after July 
165.28  1, 1957, shall must be considered separately. 
165.29     (1) (b) For service rendered prior to before July 1, 1957, 
165.30  the accumulated deductions for any a member shall must be 
165.31  carried forward at a fixed amount which is shown credited to the 
165.32  member's account as of that date.  That fixed amount shall must 
165.33  also include any payments in lieu of salary deductions which are 
165.34  to be made in the future and are were actually so made pursuant 
165.35  to under an agreement executed between the member and the board 
165.36  as authorized by section 354.50 or any other authorized payments 
166.1   made by the member to the fund.  The annuity granted with 
166.2   respect to the period shall must be determined as follows: 
166.3      (a) (1) the fixed amount of the accumulated deductions for 
166.4   the period including the interest credited on the amount as 
166.5   earned up to July 1, 1957.; and 
166.6      (b) (2) annuity purchase rates based on the applicable 
166.7   mortality table established by the board and the interest rate 
166.8   assumption in effect prior to before July 1, 1957, in the case 
166.9   of basic members and an annuity purchase rate based on an 
166.10  appropriate annuity table of mortality established by the board 
166.11  as provided in section 354.07, subdivision 1, and using the 
166.12  applicable postretirement interest rate assumption specified in 
166.13  section 356.215, subdivision 8, in the case of coordinated 
166.14  members. 
166.15     (2) (c) For service rendered subsequent to after July 1, 
166.16  1957, the accumulated deductions for any a member shall must 
166.17  consist of the amounts actually credited to the member's account 
166.18  by reason of salary deductions.  The annuity granted with 
166.19  respect to the period shall must be determined by the following: 
166.20     (a) (1) accumulated deductions for the period; 
166.21     (b) (2) interest credited on these accumulated deductions 
166.22  from July 1, 1957, to the date of retirement; 
166.23     (c) (3) interest credited on accumulated deductions 
166.24  including prior credited interest provided in paragraph (1) (b) 
166.25  from July 1, 1957, to the date of retirement; 
166.26     (d) (4) after the amount available for an annuity granted 
166.27  with respect to the person is determined in accordance with the 
166.28  provisions of this subdivision, an additional amount equal to 20 
166.29  percent of the sum of clause (2)(a) (1) plus interest credited 
166.30  to members a member's account from July 1, 1957, to date of 
166.31  retirement is to be added.  This added amount is not to be 
166.32  doubled as provided for other amounts determined in this 
166.33  subdivision; and 
166.34     (e) (5) the annuity purchase rate based on an appropriate 
166.35  annuity table of mortality established by the board as provided 
166.36  in section 354.07, subdivision 1, and using the applicable 
167.1   postretirement interest rate assumption specified in section 
167.2   356.215, subdivision 8. 
167.3      Sec. 61.  Minnesota Statutes 2004, section 354A.021, 
167.4   subdivision 5, is amended to read: 
167.5      Subd. 5.  [TAX SHELTERED ANNUITY PROGRAM AND FUND.] Any A 
167.6   teachers retirement fund association may establish a tax 
167.7   sheltered annuity program and fund meeting the requirements of 
167.8   section 403(b) of the Internal Revenue Code of 1986, as amended 
167.9   through December 31, 1992, which shall must include all assets 
167.10  which were acquired for the specific purpose of being credited 
167.11  to the program and fund and to which shall must be credited all 
167.12  employee contributions, and employer contributions, if 
167.13  negotiated under a collective bargaining agreement, designated 
167.14  for this purpose and all interest income attributable to the 
167.15  assets of the program and fund.  
167.16     Sec. 62.  Minnesota Statutes 2004, section 354A.097, 
167.17  subdivision 1, is amended to read: 
167.18     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
167.19  teacher who has at least three years of allowable service credit 
167.20  with the teachers retirement fund association and who performed 
167.21  service in the United States armed forces before becoming a 
167.22  teacher as defined in section 354A.011, subdivision 27, or who 
167.23  failed to obtain service credit for a military leave of absence 
167.24  period under section 354A.093, is entitled to purchase allowable 
167.25  service credit for the initial period of enlistment, induction, 
167.26  or call to active duty without any voluntary extension by making 
167.27  payment under section 356.55 provided 356.551 if the teacher has 
167.28  not purchased service credit from another Minnesota defined 
167.29  benefit public employee pension plan for the same period of 
167.30  service. 
167.31     Sec. 63.  Minnesota Statutes 2004, section 354A.31, 
167.32  subdivision 5, is amended to read: 
167.33     Subd. 5.  [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 
167.34  retirement at normal retirement age with at least three years of 
167.35  service credit, a coordinated member shall be is entitled to a 
167.36  normal retirement annuity calculated pursuant to under 
168.1   subdivision 4 or 4a, whichever applies.  
168.2      Sec. 64.  [356.401] [EXEMPTION FROM PROCESS.] 
168.3      Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
168.4   annuities, or other benefits provided for in the governing law 
168.5   of a covered retirement plan is assignable either in law or in 
168.6   equity or subject to state estate tax, or to execution, levy, 
168.7   attachment, garnishment, or other legal process, except as 
168.8   provided in subdivision 2 or section 518.58, 518.581, or 
168.9   518.6111.  
168.10     Subd. 2.  [AUTOMATIC DEPOSITS.] (a) The chief 
168.11  administrative officer of a covered retirement plan may remit, 
168.12  through an automatic deposit system, annuity, benefit, or refund 
168.13  payments only to a financial institution associated with the 
168.14  National Automated Clearinghouse Association or a comparable 
168.15  successor organization that is trustee for a person who is 
168.16  eligible to receive the annuity, benefit, or refund.  
168.17     (b) Upon the request of a retiree, disabilitant, survivor, 
168.18  or former member, the chief administrative officer of a covered 
168.19  retirement plan may remit the annuity, benefit, or refund check 
168.20  to the applicable financial institution for deposit in the 
168.21  person's individual account or the person's joint account.  An 
168.22  overpayment to a joint account after the death of the annuitant 
168.23  or benefit recipient must be repaid to the fund of the 
168.24  applicable covered retirement plan by the joint tenant if the 
168.25  overpayment is not repaid to that fund by the financial 
168.26  institution associated with the National Automated Clearinghouse 
168.27  Association or its successor.  The governing board of the 
168.28  covered retirement plan may prescribe the conditions under which 
168.29  these payments may be made.  
168.30     Subd. 3.  [COVERED RETIREMENT PLANS.] The provisions of 
168.31  this section apply to the following retirement plans: 
168.32     (1) the legislators retirement plan, established by chapter 
168.33  3A; 
168.34     (2) the general state employees retirement plan of the 
168.35  Minnesota State Retirement System, established by chapter 352; 
168.36     (3) the correctional state employees retirement plan of the 
169.1   Minnesota State Retirement System, established by chapter 352; 
169.2      (4) the State Patrol retirement plan, established by 
169.3   chapter 352B; 
169.4      (5) the elective state officers retirement plan, 
169.5   established by chapter 352C; 
169.6      (6) the unclassified state employees retirement program, 
169.7   established by chapter 352D; 
169.8      (7) the general employees retirement plan of the Public 
169.9   Employees Retirement Association, established by chapter 353; 
169.10     (8) the public employees police and fire plan of the Public 
169.11  Employees Retirement Association, established by chapter 353; 
169.12     (9) the public employees defined contribution plan, 
169.13  established by chapter 353D; 
169.14     (10) the local government correctional service retirement 
169.15  plan of the Public Employees Retirement Association, established 
169.16  by chapter 353E; 
169.17     (11) the Teachers Retirement Association, established by 
169.18  chapter 354; 
169.19     (12) the Duluth Teachers Retirement Fund Association, 
169.20  established by chapter 354A; 
169.21     (13) the Minneapolis Teachers Retirement Fund Association, 
169.22  established by chapter 354A; 
169.23     (14) the St. Paul Teachers Retirement Fund Association, 
169.24  established by chapter 354A; 
169.25     (15) the individual retirement account plan, established by 
169.26  chapter 354B; 
169.27     (16) the higher education supplemental retirement plan, 
169.28  established by chapter 354C; 
169.29     (17) the Minneapolis employees retirement fund, established 
169.30  by chapter 422A; 
169.31     (18) the Minneapolis Police Relief Association, established 
169.32  by chapter 423B; 
169.33     (19) the Minneapolis Firefighters Relief Association, 
169.34  established by chapter 423C; and 
169.35     (20) the judges retirement fund, established by sections 
169.36  490.121 to 490.132.  
170.1      Sec. 65.  Minnesota Statutes 2004, section 356.551, is 
170.2   amended to read: 
170.3      356.551 [POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT 
170.4   PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
170.5      Subdivision 1.  [APPLICATION.] (a) Unless the prior service 
170.6   credit purchase authorization special law or general statute 
170.7   provision explicitly specifies a different purchase payment 
170.8   amount determination procedure, and if section 356.55 has 
170.9   expired, this section governs the determination of the prior 
170.10  service credit purchase payment amount of any prior service 
170.11  credit purchase. 
170.12     (b) The purchase payment amount determination procedure 
170.13  must recognize any service credit accrued to the purchaser in a 
170.14  pension plan enumerated in section 356.30, subdivision 3. 
170.15     (c) Any service credit in a Minnesota defined benefit 
170.16  public employee pension plan available to be reinstated by the 
170.17  purchaser through the repayment of a refund of member or 
170.18  employee contributions previously received must be repaid in 
170.19  full before any purchase of prior service credit payment is made 
170.20  under this section. 
170.21     Subd. 2.  [DETERMINATION.] (a) Unless the minimum purchase 
170.22  amount set forth in paragraph (c) applies, the prior service 
170.23  credit purchase amount is an amount equal to the actuarial 
170.24  present value, on the date of payment, as calculated by the 
170.25  chief administrative officer of the pension plan and reviewed by 
170.26  the actuary retained by the Legislative Commission on Pensions 
170.27  and Retirement under section 356.214, of the amount of the 
170.28  additional retirement annuity obtained by the acquisition of the 
170.29  additional service credit in this section.  
170.30     (b) Calculation of this amount must be made using the 
170.31  preretirement interest rate applicable to the public pension 
170.32  plan specified in section 356.215, subdivision 4d 8, and the 
170.33  mortality table adopted for the public pension plan.  The 
170.34  calculation must assume continuous future service in the public 
170.35  pension plan until, and retirement at, the age at which the 
170.36  minimum requirements of the fund for normal retirement or 
171.1   retirement with an annuity unreduced for retirement at an early 
171.2   age, including section 356.30, are met with the additional 
171.3   service credit purchased.  The calculation must also assume a 
171.4   full-time equivalent salary, or actual salary, whichever is 
171.5   greater, and a future salary history that includes annual salary 
171.6   increases at the applicable salary increase rate for the plan 
171.7   specified in section 356.215, subdivision 4d.  
171.8      (c) The prior service credit purchase amount may not be 
171.9   less than the amount determined by applying the current employee 
171.10  or member contribution rate, the employer contribution rate, and 
171.11  the additional employer contribution rate, if any, to the 
171.12  person's current annual salary and multiplying that result by 
171.13  the number of whole and fraction years of service to be 
171.14  purchased. 
171.15     (d) Payment must be made in one lump sum within one year of 
171.16  the prior service credit authorization.  Payment of the amount 
171.17  calculated under this section must be made by the applicable 
171.18  eligible person.  
171.19     (e) However, the current employer or the prior employer 
171.20  may, at its discretion, pay all or any portion of the payment 
171.21  amount that exceeds an amount equal to the employee contribution 
171.22  rates in effect during the period or periods of prior service 
171.23  applied to the actual salary rates in effect during the period 
171.24  or periods of prior service, plus interest at the rate of 8.5 
171.25  percent a year compounded annually from the date on which the 
171.26  contributions would otherwise have been made to the date on 
171.27  which the payment is made.  If the employer agrees to payments 
171.28  under this subdivision, the purchaser must make the employee 
171.29  payments required under this subdivision within 290 90 days of 
171.30  the prior service credit authorization.  If that employee 
171.31  payment is made, the employer payment under this subdivision 
171.32  must be remitted to the chief administrative officer of the 
171.33  public pension plan within 60 days of receipt by the chief 
171.34  administrative officer of the employee payments specified under 
171.35  this subdivision. 
171.36     Subd. 3.  [DOCUMENTATION.] The prospective prior service 
172.1   credit purchaser must provide any relevant documentation 
172.2   required by the chief administrative officer of the applicable 
172.3   public pension plan to determine eligibility for the prior 
172.4   service credit under this section. 
172.5      Subd. 4.  [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service 
172.6   credit for the purchase period must be granted by the public 
172.7   pension plan to the purchaser upon receipt of the full purchase 
172.8   payment amount specified in subdivision 2. 
172.9      Sec. 66.  Minnesota Statutes 2004, section 356A.06, 
172.10  subdivision 7, is amended to read: 
172.11     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
172.12  SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
172.13  authorized by law or bylaws, a covered pension plan not 
172.14  described by subdivision 6, paragraph (a), may invest its assets 
172.15  only in accordance with this subdivision. 
172.16     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
172.17  the authority to purchase, sell, lend, or exchange the 
172.18  securities specified in paragraphs (c) to (g), including puts 
172.19  and call options and future contracts traded on a contract 
172.20  market regulated by a governmental agency or by a financial 
172.21  institution regulated by a governmental agency.  These 
172.22  securities may be owned as units in commingled trusts that own 
172.23  the securities described in paragraphs (c) to (g).  
172.24     (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
172.25  invest funds in governmental bonds, notes, bills, mortgages, and 
172.26  other evidences of indebtedness provided the issue is backed by 
172.27  the full faith and credit of the issuer or the issue is rated 
172.28  among the top four quality rating categories by a nationally 
172.29  recognized rating agency.  The obligations in which funds may be 
172.30  invested under this paragraph include guaranteed or insured 
172.31  issues of (1) the United States, its agencies, its 
172.32  instrumentalities, or organizations created and regulated by an 
172.33  act of Congress; (2) Canada and its provinces, provided the 
172.34  principal and interest is payable in United States dollars; (3) 
172.35  the states and their municipalities, political subdivisions, 
172.36  agencies, or instrumentalities; (4) the International Bank for 
173.1   Reconstruction and Development, the Inter-American Development 
173.2   Bank, the Asian Development Bank, the African Development Bank, 
173.3   or any other United States government sponsored organization of 
173.4   which the United States is a member, provided the principal and 
173.5   interest is payable in United States dollars. 
173.6      (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
173.7   invest funds in bonds, notes, debentures, transportation 
173.8   equipment obligations, or any other longer term evidences of 
173.9   indebtedness issued or guaranteed by a corporation organized 
173.10  under the laws of the United States or any state thereof, or the 
173.11  Dominion of Canada or any province thereof if they conform to 
173.12  the following provisions: 
173.13     (1) the principal and interest of obligations of 
173.14  corporations incorporated or organized under the laws of the 
173.15  Dominion of Canada or any province thereof must be payable in 
173.16  United States dollars; and 
173.17     (2) obligations must be rated among the top four quality 
173.18  categories by a nationally recognized rating agency. 
173.19     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
173.20  invest funds in bankers acceptances, certificates of deposit, 
173.21  deposit notes, commercial paper, mortgage participation 
173.22  certificates and pools, asset backed securities, repurchase 
173.23  agreements and reverse repurchase agreements, guaranteed 
173.24  investment contracts, savings accounts, and guaranty fund 
173.25  certificates, surplus notes, or debentures of domestic mutual 
173.26  insurance companies if they conform to the following provisions: 
173.27     (i) bankers acceptances and deposit notes of United States 
173.28  banks are limited to those issued by banks rated in the highest 
173.29  four quality categories by a nationally recognized rating 
173.30  agency; 
173.31     (ii) certificates of deposit are limited to those issued by 
173.32  (A) United States banks and savings institutions that are rated 
173.33  in the highest four quality categories by a nationally 
173.34  recognized rating agency or whose certificates of deposit are 
173.35  fully insured by federal agencies; or (B) credit unions in 
173.36  amounts up to the limit of insurance coverage provided by the 
174.1   National Credit Union Administration; 
174.2      (iii) commercial paper is limited to those issued by United 
174.3   States corporations or their Canadian subsidiaries and rated in 
174.4   the highest two quality categories by a nationally recognized 
174.5   rating agency; 
174.6      (iv) mortgage participation or pass through certificates 
174.7   evidencing interests in pools of first mortgages or trust deeds 
174.8   on improved real estate located in the United States where the 
174.9   loan to value ratio for each loan as calculated in accordance 
174.10  with section 61A.28, subdivision 3, does not exceed 80 percent 
174.11  for fully amortizable residential properties and in all other 
174.12  respects meets the requirements of section 61A.28, subdivision 
174.13  3; 
174.14     (v) collateral for repurchase agreements and reverse 
174.15  repurchase agreements is limited to letters of credit and 
174.16  securities authorized in this section; 
174.17     (vi) guaranteed investment contracts are limited to those 
174.18  issued by insurance companies or banks rated in the top four 
174.19  quality categories by a nationally recognized rating agency or 
174.20  to alternative guaranteed investment contracts where the 
174.21  underlying assets comply with the requirements of this 
174.22  subdivision; 
174.23     (vii) savings accounts are limited to those fully insured 
174.24  by federal agencies; and 
174.25     (viii) asset backed securities must be rated in the top 
174.26  four quality categories by a nationally recognized rating agency.
174.27     (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
174.28  not apply to certificates of deposit and collateralization 
174.29  agreements executed by the covered pension plan under clause 
174.30  (1), item (ii). 
174.31     (3) In addition to investments authorized by clause (1), 
174.32  item (iv), the covered pension plan may purchase from the 
174.33  Minnesota Housing Finance Agency all or any part of a pool of 
174.34  residential mortgages, not in default, that has previously been 
174.35  financed by the issuance of bonds or notes of the agency.  The 
174.36  covered pension plan may also enter into a commitment with the 
175.1   agency, at the time of any issue of bonds or notes, to purchase 
175.2   at a specified future date, not exceeding 12 years from the date 
175.3   of the issue, the amount of mortgage loans then outstanding and 
175.4   not in default that have been made or purchased from the 
175.5   proceeds of the bonds or notes.  The covered pension plan may 
175.6   charge reasonable fees for any such commitment and may agree to 
175.7   purchase the mortgage loans at a price sufficient to produce a 
175.8   yield to the covered pension plan comparable, in its judgment, 
175.9   to the yield available on similar mortgage loans at the date of 
175.10  the bonds or notes.  The covered pension plan may also enter 
175.11  into agreements with the agency for the investment of any 
175.12  portion of the funds of the agency.  The agreement must cover 
175.13  the period of the investment, withdrawal privileges, and any 
175.14  guaranteed rate of return. 
175.15     (f)  [CORPORATE STOCKS.] The covered pension plan may 
175.16  invest funds in stocks or convertible issues of any corporation 
175.17  organized under the laws of the United States or the states 
175.18  thereof, the Dominion of Canada or its provinces, or any 
175.19  corporation listed on the New York Stock Exchange or the 
175.20  American Stock Exchange, if they conform to the following 
175.21  provisions: 
175.22     (1) the aggregate value of corporate stock investments, as 
175.23  adjusted for realized profits and losses, must not exceed 85 
175.24  percent of the market or book value, whichever is less, of a 
175.25  fund, less the aggregate value of investments according to 
175.26  subdivision 6 paragraph (g); 
175.27     (2) investments must not exceed five percent of the total 
175.28  outstanding shares of any one corporation. 
175.29     (g)  [OTHER INVESTMENTS.] (1) In addition to the 
175.30  investments authorized in paragraphs (b) to (f), and subject to 
175.31  the provisions in clause (2), the covered pension plan may 
175.32  invest funds in:  
175.33     (i) venture capital investment businesses through 
175.34  participation in limited partnerships and corporations; 
175.35     (ii) real estate ownership interests or loans secured by 
175.36  mortgages or deeds of trust through investment in limited 
176.1   partnerships, bank sponsored collective funds, trusts, and 
176.2   insurance company commingled accounts, including separate 
176.3   accounts; 
176.4      (iii) regional and mutual funds through bank sponsored 
176.5   collective funds and open-end investment companies registered 
176.6   under the Federal Investment Company Act of 1940; 
176.7      (iv) resource investments through limited partnerships, 
176.8   private placements, and corporations; and 
176.9      (v) international securities. 
176.10     (2) The investments authorized in clause (1) must conform 
176.11  to the following provisions:  
176.12     (i) the aggregate value of all investments made according 
176.13  to clause (1) may not exceed 35 percent of the market value of 
176.14  the fund for which the covered pension plan is investing; 
176.15     (ii) there must be at least four unrelated owners of the 
176.16  investment other than the state board covered pension plan for 
176.17  investments made under clause (1), item (i), (ii), (iii), or 
176.18  (iv); 
176.19     (iii) covered pension plan participation in an investment 
176.20  vehicle is limited to 20 percent thereof for investments made 
176.21  under clause (1), item (i), (ii), (iii), or (iv); and 
176.22     (iv) covered pension plan participation in a limited 
176.23  partnership does not include a general partnership interest or 
176.24  other interest involving general liability.  The covered pension 
176.25  plan may not engage in any activity as a limited partner which 
176.26  creates general liability. 
176.27     Sec. 67.  Minnesota Statutes 2004, section 422A.01, 
176.28  subdivision 11, is amended to read: 
176.29     Subd. 11.  [EMPLOYEE.] "Employee" means any a person who is 
176.30  not exempted from the contributing class pursuant to under 
176.31  section 422A.09, subdivision 3, who is was employed before July 
176.32  1, 1979, by and paid, in whole or in part, by the city or any of 
176.33  its boards, departments, or commissions, operated as a 
176.34  department of city government or independently if financed in 
176.35  whole or in part by city funds, including any a person who was 
176.36  employed by a public corporation as herein defined, and 
177.1   including any a person who was employed before July 1, 1979, by 
177.2   Special School District No. 1, and who is not a member of any 
177.3   other retirement system, and also including any a person who is 
177.4   was employed before July 1, 1973, by the county of Hennepin, who 
177.5   was entitled by law to elect and has elected to retain 
177.6   membership in the municipal Minneapolis Employees Retirement 
177.7   Fund and who makes any required member contributions to the fund 
177.8   and who remains so employed. 
177.9      Sec. 68.  Minnesota Statutes 2004, section 422A.06, 
177.10  subdivision 7, is amended to read: 
177.11     Subd. 7.  [DISABILITY BENEFIT FUND.] (a) The required 
177.12  reserves for disability allowances which become effective after 
177.13  December 31, 1973, shall be transferred from the deposit 
177.14  accumulation fund to the A disability benefit fund is 
177.15  established, containing the required reserves for disability 
177.16  allowances under this chapter.  A proportionate share of income 
177.17  from investments shall must be allocated to this fund.  
177.18  There shall must be paid from this fund the disability 
177.19  allowances which become effective after December 31, 1973 
177.20  payable under this chapter. 
177.21     (b) In the event of the termination of any disability 
177.22  allowance for any reason other than the death of the recipient, 
177.23  the balance of the required reserves for the disability 
177.24  allowance as of the date of the termination shall must be 
177.25  transferred from the disability benefit fund to the deposit 
177.26  accumulation fund. 
177.27     (c) At the end of each fiscal year, as part of the annual 
177.28  actuarial valuation, a determination shall must be made of the 
177.29  required reserves for all disability allowances being paid from 
177.30  the disability benefit fund.  Any excess of assets over 
177.31  actuarial required reserves in the disability benefit fund shall 
177.32  must be transferred to the deposit accumulation fund.  Any 
177.33  excess of actuarial reserves over assets in the disability 
177.34  benefit fund shall must be funded by a transfer of the 
177.35  appropriate amount of assets from the deposit accumulation fund. 
177.36     Sec. 69.  Minnesota Statutes 2004, section 422A.10, 
178.1   subdivision 1, is amended to read: 
178.2      Subdivision 1.  [MEMBER CONTRIBUTION RATE; DEDUCTIONS.] (a) 
178.3   There shall must be deducted and withheld from the basic salary, 
178.4   pay or compensation of each employee in the contributing class, 
178.5   prior to January 1, 1980 an amount equal to 7-1/4 percent, after 
178.6   December 31, 1979 but prior to January 1, 1981 an amount equal 
178.7   to 8-1/4 percent and after December 31, 1980 an amount equal to 
178.8   9-1/4 percent of such salary, pay or compensation, except as 
178.9   hereinafter provided.  
178.10     (b) The retirement board may increase the percentage rate 
178.11  of contribution to the retirement fund of any employee or 
178.12  employees for the purpose of establishing and maintaining on an 
178.13  actuarial basis a plan of insurance, survivors' benefits, or 
178.14  other type of benefit or benefits, the cost of which shall must 
178.15  be paid out of such extra percentage so authorized and deducted 
178.16  from the employee's compensation, except as hereinafter 
178.17  provided.  Any plan or plans so established and placed in 
178.18  operation may be amended from time to time, or may be abandoned, 
178.19  but if abandoned, any surplus remaining from the operation of a 
178.20  plan shall must be the property of the fund, and shall must be 
178.21  credited to the reserve for loss in investment account. 
178.22     Sec. 70.  Minnesota Statutes 2004, section 422A.10, 
178.23  subdivision 2, is amended to read: 
178.24     Subd. 2.  [CONSENT TO DEDUCTIONS MANDATORY MEMBER 
178.25  CONTRIBUTIONS.] Every employee to whom sections 422A.01 to 
178.26  422A.25 this chapter applies who shall continue in the service 
178.27  after the passage of Laws 1919, chapter 522, as well as every 
178.28  person to whom sections 422A.01 to 422A.25 applies who may 
178.29  hereafter be appointed to a position or place, shall be is 
178.30  deemed to consent and agree to the deductions made and provided 
178.31  for herein, and payment with such reductions, for service, shall 
178.32  be are a full and complete discharge and acquittance of all 
178.33  claims and demands for all services rendered by such person 
178.34  during the period covered by such payment; except the person's 
178.35  claim to the benefits to which the person may be entitled under 
178.36  the provisions of sections 422A.01 to 422A.25 this chapter.  
179.1      Sec. 71.  Minnesota Statutes 2004, section 422A.22, 
179.2   subdivision 1, is amended to read: 
179.3      Subdivision 1.  [RETENTION; TRANSFER.] (a) If an employee 
179.4   to whom sections 422A.01 to 422A.25 this chapter applies becomes 
179.5   absolutely separated from the active service prior to before 
179.6   attaining the minimum retirement age established in section 
179.7   422A.13, the employee is entitled to a refund of the net 
179.8   accumulated amount of deduction from salary, pay, or 
179.9   compensation, made for the purpose of accumulating a fund from 
179.10  which to pay retirement allowances, shall be returned to such 
179.11  employee, with interest at the annual compound rate of six 
179.12  percent.  
179.13     (b) Any contributing employee who separates from a 
179.14  department, board or commission of the city whose employees are 
179.15  covered by a fund organized under sections 422A.01 to 422A.25 
179.16  this chapter, and becomes an employee of a department or board 
179.17  of the same city, whose employees are covered by a retirement 
179.18  fund or relief association by whatever name known, organized 
179.19  under any other law and supported in whole or in part by taxes 
179.20  on the same city, shall have has the option of: 
179.21     (1) retaining their membership in the fund organized under 
179.22  sections 422A.01 to 422A.25 this chapter, regardless of the 
179.23  provisions of any law, rule, bylaw or other action requiring 
179.24  membership in any other retirement fund or relief association 
179.25  however organized.; or 
179.26     (2) transferring to the fund or association covering the 
179.27  employees of the department or board to which they are 
179.28  transferring, providing they are eligible for membership therein.
179.29     (c) Any contributing employee who elects to transfer to 
179.30  another fund or association as herein provided in paragraph (b), 
179.31  clause (2), shall must make such election within one year from 
179.32  the date of separation from the city service covered by this 
179.33  fund.  If the contributing employee elects to transfer to 
179.34  another fund as herein provided, the employee is entitled to a 
179.35  refund of the net accumulated contributions made by such 
179.36  employee to the fund organized under sections 422A.01 to 
180.1   422A.25, shall be returned to the employee this chapter with 
180.2   interest at the annual compound rate of six percent.  
180.3      Sec. 72.  Minnesota Statutes 2004, section 422A.22, 
180.4   subdivision 3, is amended to read: 
180.5      Subd. 3.  [LIMITATION ON ELIGIBILITY.] No employee of the 
180.6   city shall be is eligible to be a member of, or receive benefits 
180.7   from, more than one retirement plan or fund of the city for the 
180.8   same period of service.  
180.9      Sec. 73.  Minnesota Statutes 2004, section 422A.22, 
180.10  subdivision 4, is amended to read: 
180.11     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
180.12  of an active member prior to before the employee's termination 
180.13  of active service, there shall be paid to the beneficiary or 
180.14  beneficiaries designated by the member on a form specified by 
180.15  the executive director and filed with the retirement board, are 
180.16  entitled to receive the net accumulated employee deductions from 
180.17  salary, pay, or compensation, including interest under 
180.18  subdivision 1, paragraph (a), compounded annually to the date of 
180.19  the member's death.  The amount must not include any 
180.20  contributions made by the employee or on the employee's behalf, 
180.21  or any interest or investment earnings on those contributions, 
180.22  which were allocated to the survivor benefit fund under section 
180.23  422A.06, subdivision 6. 
180.24     (b) If the employee fails to make a designation, or if the 
180.25  beneficiary or beneficiaries designated by the employee 
180.26  predeceases the employee, the benefit specified in paragraph (a) 
180.27  must be paid to the deceased employee's estate is entitled to 
180.28  the benefit specified in paragraph (a). 
180.29     (c) A benefit payable under this subdivision is in addition 
180.30  to any applicable survivor benefit under section 422A.23. 
180.31     Sec. 74.  Minnesota Statutes 2004, section 422A.22, 
180.32  subdivision 6, is amended to read: 
180.33     Subd. 6.  [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 
180.34  Any A person who has received a refund from the municipal 
180.35  Minneapolis Employees Retirement Fund, and who is a member of a 
180.36  public retirement system included in section 422A.16, 
181.1   subdivision 8, may repay such refund with interest at a compound 
181.2   annual rate of 8.5 percent to the municipal Minneapolis 
181.3   Employees Retirement Fund.  If a refund is repaid to the fund 
181.4   and if more than one refund has been received from the fund, all 
181.5   refunds must be repaid.  Repayment shall must be made as 
181.6   provided in sections 422A.01 to 422A.25 this chapter.  
181.7      Sec. 75.  Minnesota Statutes 2004, section 422A.231, is 
181.8   amended to read: 
181.9      422A.231 [COST ALLOCATION.] 
181.10     (a) Notwithstanding any law to the contrary, all current 
181.11  and future contribution requirements due to this article are 
181.12  payable by the participating contributing employing units other 
181.13  than the state of Minnesota. 
181.14     (b) In each actuarial valuation of the retirement fund, the 
181.15  actuary retained by the Legislative Commission on Pensions and 
181.16  Retirement under section 356.214 shall include an exhibit on the 
181.17  impact of the benefit increases contained in this article on the 
181.18  survivor benefit fund.  The actuary shall calculate the expected 
181.19  change in the present value of the future benefits payable from 
181.20  the survivor benefit fund attributable to this article, using 
181.21  the actuarial method and assumptions applicable to the 
181.22  Minneapolis Employees Retirement Fund, from the prior actuarial 
181.23  valuation and shall compare that result with the actual change 
181.24  in the present value of future benefits payable from the 
181.25  survivor benefit fund attributable to this article from the 
181.26  prior actuarial valuation. 
181.27     (c) The executive director shall assess each participating 
181.28  employer, other than the state of Minnesota, its proportional 
181.29  share of the net increase amount calculated under paragraph 
181.30  (b).  The assessment must be made on the first business day of 
181.31  the following February, plus compound interest at an annual rate 
181.32  of six percent on the amount from the actuarial valuation date 
181.33  to the date of payment. 
181.34     Sec. 76.  Minnesota Statutes 2004, section 422A.24, is 
181.35  amended to read: 
181.36     422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 
182.1      No money payable pursuant to this chapter shall be 
182.2   assignable either in law or equity or be subject to execution, 
182.3   levy, attachment, garnishment, or other legal process, except as 
182.4   provided in section 518.58, 518.581, or 518.6111, nor shall any 
182.5   of the proceeds of payments due pursuant to this chapter be 
182.6   subject to the inheritance tax provisions of this state upon 
182.7   transfer to a surviving spouse or minor or dependent child of 
182.8   the decedent or a trust for their benefit. The provisions of 
182.9   section 356.401 apply to the Minneapolis employees retirement 
182.10  plan.  
182.11     Sec. 77.  Minnesota Statutes 2004, section 423B.17, is 
182.12  amended to read: 
182.13     423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 
182.14     A payment made by the association under a provision of 
182.15  sections 423B.01 to 423B.18, as amended, is exempt from legal 
182.16  process except as provided in section 518.58, 518.581, or 
182.17  518.6111.  No person entitled to a payment may assign the same.  
182.18  The association may not recognize an assignment or pay a sum on 
182.19  account of an assignment. The provisions of section 356.401 
182.20  apply to the Minneapolis Police Relief Association.  
182.21     Sec. 78.  Minnesota Statutes 2004, section 423C.09, is 
182.22  amended to read: 
182.23     423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 
182.24     All payments made, or to be made, by the association under 
182.25  this chapter shall be totally exempt from garnishment, 
182.26  execution, or other legal process, except as provided in section 
182.27  518.58, 518.581, or 518.6111.  No person entitled to a payment 
182.28  shall have the right to assign the name, nor shall the 
182.29  association have authority to recognize any assignment or to pay 
182.30  any sum on account thereof.  Any attempt to transfer any right 
182.31  or claim, or any part thereof, shall be void. The provisions of 
182.32  section 356.401 apply to the Minneapolis Firefighters Relief 
182.33  Association.  
182.34     Sec. 79.  Minnesota Statutes 2004, section 490.126, 
182.35  subdivision 5, is amended to read: 
182.36     Subd. 5.  [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 
183.1   the money, annuities, or other benefits provided in this chapter 
183.2   is assignable either in law or equity or is subject to 
183.3   execution, levy, attachment, garnishment, or other legal 
183.4   process, except as provided in section 518.58, 518.581, or 
183.5   518.6111. The provisions of section 356.401 apply to the judges 
183.6   retirement plan.  
183.7      Sec. 80.  [REVISOR'S INSTRUCTION.] 
183.8      In the next edition and subsequent editions of Minnesota 
183.9   Statutes, the revisor of statutes shall replace the reference to 
183.10  "sections 422A.01 to 422A.25" with the reference to "this 
183.11  chapter" wherever the reference appears in Minnesota Statutes, 
183.12  chapter 422A. 
183.13     Sec. 81.  [REPEALER.] 
183.14     (a) Minnesota Statutes 2004, section 352.119, subdivision 
183.15  1, is repealed. 
183.16     (b) Minnesota Statutes 2004, sections 353.34, subdivision 
183.17  3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 
183.18  4; 353.663; 353.74; and 353.75, are repealed. 
183.19     (c) Minnesota Statutes 2004, section 354.59, is repealed. 
183.20     (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 
183.21  2 and 5; and 422A.221, are repealed. 
183.22     (e) Minnesota Statutes 2004, sections 352.15, subdivision 
183.23  1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 
183.24  repealed.  
183.25     Sec. 82.  [EFFECTIVE DATE.] 
183.26     (a) Sections 1 to 73 and 75 to 81 are effective July 1, 
183.27  2005. 
183.28     (b) Section 74 is effective January 1, 2006. 
183.29     (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 
183.30  79, and 81, paragraph (e), do not apply to any cause of action 
183.31  that is proceeding on the date of enactment or to any cause of 
183.32  action for which the applicable statute of limitations has not 
183.33  expired as of the date of enactment. 
183.34                             ARTICLE 13
183.35                       LOCAL RETIREMENT PLANS
183.36     Section 1.  Minnesota Statutes 2004, section 69.77, 
184.1   subdivision 4, is amended to read: 
184.2      Subd. 4.  [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS; 
184.3   MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief 
184.4   association shall determine the financial requirements of the 
184.5   relief association and minimum obligation of the municipality 
184.6   for the following calendar year in accordance with the 
184.7   requirements of this subdivision.  The financial requirements of 
184.8   the relief association and the minimum obligation of the 
184.9   municipality must be determined on or before the submission date 
184.10  established by the municipality under subdivision 5. 
184.11     (b) The financial requirements of the relief association 
184.12  for the following calendar year must be based on the most recent 
184.13  actuarial valuation or survey of the special fund of the 
184.14  association if more than one fund is maintained by the 
184.15  association, or of the association, if only one fund is 
184.16  maintained, prepared in accordance with sections 356.215, 
184.17  subdivisions 4 to 15, and 356.216, as required under subdivision 
184.18  10.  If an actuarial estimate is prepared by the actuary of the 
184.19  relief association as part of obtaining a modification of the 
184.20  benefit plan of the relief association and the modification is 
184.21  implemented, the actuarial estimate must be used in calculating 
184.22  the subsequent financial requirements of the relief association. 
184.23     (c) If the relief association has an unfunded actuarial 
184.24  accrued liability as reported in the most recent actuarial 
184.25  valuation or survey, the total of the amounts calculated under 
184.26  clauses (1), (2), and (3), constitute the financial requirements 
184.27  of the relief association for the following year.  If the relief 
184.28  association does not have an unfunded actuarial accrued 
184.29  liability as reported in the most recent actuarial valuation or 
184.30  survey, the amount calculated under clauses (1) and (2) 
184.31  constitute the financial requirements of the relief association 
184.32  for the following year.  The financial requirement elements are: 
184.33     (1) the normal level cost requirement for the following 
184.34  year, expressed as a dollar amount, which must be determined by 
184.35  applying the normal level cost of the relief association as 
184.36  reported in the actuarial valuation or survey and expressed as a 
185.1   percentage of covered payroll to the estimated covered payroll 
185.2   of the active membership of the relief association, including 
185.3   any projected change in the active membership, for the following 
185.4   year; 
185.5      (2) for the Bloomington Fire Department Relief Association, 
185.6   the Fairmont Police Relief Association, and the Virginia Fire 
185.7   Department Relief Association, to the dollar amount of normal 
185.8   cost determined under clause (1) must be added an amount equal 
185.9   to the dollar amount of the administrative expenses of the 
185.10  special fund of the association if more than one fund is 
185.11  maintained by the association, or of the association if only one 
185.12  fund is maintained, for the most recent year, multiplied by the 
185.13  factor of 1.035.  The administrative expenses are those 
185.14  authorized under section 69.80.  No amount of administrative 
185.15  expenses under this clause are to be included in the financial 
185.16  requirements of the Minneapolis Firefighters Relief Association 
185.17  or the Minneapolis Police Relief Association; and 
185.18     (3) to the dollar amount of normal cost and expenses 
185.19  determined under clauses (1) and (2) must be added an amount 
185.20  equal to the level annual dollar amount which is sufficient to 
185.21  amortize the unfunded actuarial accrued liability by December 
185.22  31, 2010, the Fairmont Police Relief Association, the 
185.23  Minneapolis Firefighters Relief Association, and the Virginia 
185.24  Fire Department Relief Association, by the date determined under 
185.25  section 356.216, paragraph (a), clause (2), for the Bloomington 
185.26  Fire Department Relief Association, and by December 31, 2020, 
185.27  for the Minneapolis Police Relief Association, as determined 
185.28  from the actuarial valuation or survey of the fund, using an 
185.29  interest assumption set at the applicable rate specified in 
185.30  section 356.215, subdivision 8.  The amortization date specified 
185.31  in this clause applies to all local police or salaried 
185.32  firefighters' relief associations and that date supersedes any 
185.33  amortization date specified in any applicable special law. 
185.34     (d) The minimum obligation of the municipality is an amount 
185.35  equal to the financial requirements of the relief association 
185.36  reduced by the estimated amount of member contributions from 
186.1   covered salary anticipated for the following calendar year and 
186.2   the estimated amounts anticipated for the following calendar 
186.3   year from the applicable state aid program established under 
186.4   sections 69.011 to 69.051 receivable by the relief association 
186.5   after any allocation made under section 69.031, subdivision 5, 
186.6   paragraph (b), clause (2), or 423A.01, subdivision 2, clause 
186.7   (6), from the local police and salaried firefighters' relief 
186.8   association amortization aid program established under section 
186.9   423A.02, subdivision 1, from the supplementary amortization 
186.10  state-aid program established under section 423A.02, subdivision 
186.11  1a, and from the additional amortization state aid under section 
186.12  423A.02, subdivision 1b. 
186.13     Sec. 2.  Minnesota Statutes 2004, section 356.215, 
186.14  subdivision 8, is amended to read: 
186.15     Subd. 8.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
186.16  actuarial valuation must use the applicable following 
186.17  preretirement interest assumption and the applicable following 
186.18  postretirement interest assumption: 
186.19                                     preretirement  postretirement 
186.20                                     interest rate  interest rate 
186.21              plan                      assumption     assumption 
186.22       general state employees 
186.23           retirement plan                  8.5%          6.0% 
186.24       correctional state employees 
186.25           retirement plan                  8.5           6.0 
186.26       State Patrol retirement plan         8.5           6.0 
186.27       legislators retirement plan          8.5           6.0 
186.28       elective state officers
186.29           retirement plan                  8.5           6.0 
186.30       judges retirement plan               8.5           6.0 
186.31       general public employees 
186.32           retirement plan                  8.5           6.0 
186.33       public employees police and fire 
186.34           retirement plan                  8.5           6.0 
186.35       local government correctional 
186.36           service retirement plan          8.5           6.0 
186.37       teachers retirement plan             8.5           6.0 
186.38       Minneapolis employees 
186.39           retirement plan                  6.0           5.0 
186.40       Duluth teachers retirement plan      8.5           8.5 
186.41       Minneapolis teachers retirement
186.42           plan                             8.5           8.5 
186.43       St. Paul teachers retirement 
186.44           plan                             8.5           8.5 
186.45       Minneapolis Police Relief 
186.46           Association                      6.0           6.0 
186.47       Fairmont Police Relief 
186.48           Association                      5.0           5.0 
186.49       Minneapolis Fire Department 
186.50           Relief Association               6.0           6.0 
186.51       Virginia Fire Department
186.52           Relief Association               5.0           5.0 
186.53       Bloomington Fire Department
187.1            Relief Association               6.0           6.0
187.2        local monthly benefit volunteer 
187.3            firefighters relief associations 5.0           5.0 
187.4      (b) The actuarial valuation must use the applicable 
187.5   following single rate future salary increase assumption, the 
187.6   applicable following modified single rate future salary increase 
187.7   assumption, or the applicable following graded rate future 
187.8   salary increase assumption: 
187.9      (1) single rate future salary increase assumption 
187.10                                              future salary 
187.11              plan                          increase assumption 
187.12       legislators retirement plan                  5.0% 
187.13       elective state officers retirement 
187.14           plan                                     5.0 
187.15       judges retirement plan                       5.0 
187.16       Minneapolis Police Relief Association        4.0 
187.17       Fairmont Police Relief 
187.18           Association                              3.5 
187.19       Minneapolis Fire Department Relief 
187.20           Association                              4.0 
187.21       Virginia Fire Department
187.22           Relief Association                       3.5 
187.23       Bloomington Fire Department Relief 
187.24           Association                              4.0
187.25     (2) modified single rate future salary increase assumption 
187.26                                              future salary 
187.27                 plan                       increase assumption
187.28           Minneapolis employees        the prior calendar year 
187.29             retirement plan            amount increased first by 
187.30                                        1.0198 percent to prior 
187.31                                        fiscal year date and
187.32                                        then increased by 4.0 
187.33                                        percent annually for
187.34                                        each future year
187.35     (3) select and ultimate future salary increase assumption 
187.36  or graded rate future salary increase assumption 
187.37                                               future salary 
187.38                 plan                       increase assumption 
187.39       general state employees             select calculation and
187.40           retirement plan                      assumption A 
187.41       correctional state employees 
187.42           retirement plan                      assumption H 
187.43       State Patrol retirement plan             assumption H 
187.44       general public employees            select calculation and
187.45           retirement plan                      assumption B 
187.46       public employees police and fire 
187.47           fund retirement plan                 assumption C 
187.48       local government correctional service 
187.49           retirement plan                      assumption H 
187.50       teachers retirement plan                 assumption D 
187.51       Duluth teachers retirement plan          assumption E 
187.52       Minneapolis teachers retirement plan     assumption F 
187.53       St. Paul teachers retirement plan        assumption G 
187.54       
187.55       The select calculation is:
187.56       during the ten-year select period, a designated percent
187.57       is multiplied by the result of ten minus T, where T is 
188.1        the number of completed years of service, and is added
188.2        to the applicable future salary increase assumption.  The
188.3        designated percent is 0.2 percent for the correctional state
188.4        employees retirement plan, the State Patrol retirement
188.5        plan, the public employees police and fire plan, and the
188.6        local government correctional service plan; 0.3 percent
188.7        for the general state employees retirement plan, the
188.8        general public employees retirement plan, the teachers
188.9        retirement plan, the Duluth Teachers Retirement Fund
188.10       Association, and the St. Paul Teachers Retirement Fund
188.11       Association; and 0.4 percent for the Minneapolis Teachers
188.12       Retirement Fund Association.
188.13       
188.14            The ultimate future salary increase assumption is:
188.15       
188.16       age  A     B      C     D     E     F     G      H 
188.17       16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
188.18       17  6.90  6.90  11.50  8.15  8.00  6.50  6.90  7.7500
188.19       18  6.85  6.85  11.50  8.10  8.00  6.50  6.90  7.7500
188.20       19  6.80  6.80  11.50  8.05  8.00  6.50  6.90  7.7500
188.21       20  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.7500
188.22       21  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.1454
188.23       22  6.75  6.40  11.00  6.00  6.90  6.50  6.90  7.0725
188.24       23  6.75  6.40  10.50  6.00  6.85  6.50  6.85  7.0544
188.25       24  6.75  6.40  10.00  6.00  6.80  6.50  6.80  7.0363
188.26       25  6.75  6.40   9.50  6.00  6.75  6.50  6.75  7.0000 
188.27       26  6.75  6.36   9.20  6.00  6.70  6.50  6.70  7.0000
188.28       27  6.75  6.32   8.90  6.00  6.65  6.50  6.65  7.0000 
188.29       28  6.75  6.28   8.60  6.00  6.60  6.50  6.60  7.0000
188.30       29  6.75  6.24   8.30  6.00  6.55  6.50  6.55  7.0000
188.31       30  6.75  6.20   8.00  6.00  6.50  6.50  6.50  7.0000
188.32       31  6.75  6.16   7.80  6.00  6.45  6.50  6.45  7.0000
188.33       32  6.75  6.12   7.60  6.00  6.40  6.50  6.40  7.0000
188.34       33  6.75  6.08   7.40  6.00  6.35  6.50  6.35  7.0000
188.35       34  6.75  6.04   7.20  6.00  6.30  6.50  6.30  7.0000
188.36       35  6.75  6.00   7.00  6.00  6.25  6.50  6.25  7.0000
188.37       36  6.75  5.96   6.80  6.00  6.20  6.50  6.20  6.9019
188.38       37  6.75  5.92   6.60  6.00  6.15  6.50  6.15  6.8074
188.39       38  6.75  5.88   6.40  5.90  6.10  6.50  6.10  6.7125
188.40       39  6.75  5.84   6.20  5.80  6.05  6.50  6.05  6.6054
188.41       40  6.75  5.80   6.00  5.70  6.00  6.50  6.00  6.5000
188.42       41  6.75  5.76   5.90  5.60  5.90  6.50  5.95  6.3540
188.43       42  6.75  5.72   5.80  5.50  5.80  6.50  5.90  6.2087
188.44       43  6.65  5.68   5.70  5.40  5.70  6.50  5.85  6.0622
188.45       44  6.55  5.64   5.60  5.30  5.60  6.50  5.80  5.9048
188.46       45  6.45  5.60   5.50  5.20  5.50  6.50  5.75  5.7500
188.47       46  6.35  5.56   5.45  5.10  5.40  6.40  5.70  5.6940
188.48       47  6.25  5.52   5.40  5.00  5.30  6.30  5.65  5.6375
188.49       48  6.15  5.48   5.35  5.00  5.20  6.20  5.60  5.5822
188.50       49  6.05  5.44   5.30  5.00  5.10  6.10  5.55  5.5404
188.51       50  5.95  5.40   5.25  5.00  5.00  6.00  5.50  5.5000
188.52       51  5.85  5.36   5.25  5.00  5.00  5.90  5.45  5.4384
188.53       52  5.75  5.32   5.25  5.00  5.00  5.80  5.40  5.3776
188.54       53  5.65  5.28   5.25  5.00  5.00  5.70  5.35  5.3167
188.55       54  5.55  5.24   5.25  5.00  5.00  5.60  5.30  5.2826
188.56       55  5.45  5.20   5.25  5.00  5.00  5.50  5.25  5.2500 
188.57       56  5.35  5.16   5.25  5.00  5.00  5.40  5.20  5.2500
188.58       57  5.25  5.12   5.25  5.00  5.00  5.30  5.15  5.2500
188.59       58  5.25  5.08   5.25  5.10  5.00  5.20  5.10  5.2500
188.60       59  5.25  5.04   5.25  5.20  5.00  5.10  5.05  5.2500
188.61       60  5.25  5.00   5.25  5.30  5.00  5.00  5.00  5.2500
188.62       61  5.25  5.00   5.25  5.40  5.00  5.00  5.00  5.2500
188.63       62  5.25  5.00   5.25  5.50  5.00  5.00  5.00  5.2500
188.64       63  5.25  5.00   5.25  5.60  5.00  5.00  5.00  5.2500
188.65       64  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.66       65  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.67       66  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.68       67  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.69       68  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.70       69  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
188.71       70  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
189.1        71  5.25  5.00         5.70
189.2      (c) The actuarial valuation must use the applicable 
189.3   following payroll growth assumption for calculating the 
189.4   amortization requirement for the unfunded actuarial accrued 
189.5   liability where the amortization retirement is calculated as a 
189.6   level percentage of an increasing payroll: 
189.7                                                    payroll growth
189.8                     plan                             assumption 
189.9        general state employees retirement plan          5.00% 
189.10       correctional state employees retirement plan     5.00 
189.11       State Patrol retirement plan                     5.00 
189.12       legislators retirement plan                      5.00 
189.13       elective state officers retirement plan          5.00 
189.14       judges retirement plan                           5.00 
189.15       general public employees retirement plan         6.00 
189.16       public employees police and fire 
189.17           retirement plan                              6.00 
189.18       local government correctional service 
189.19           retirement plan                              6.00 
189.20       teachers retirement plan                         5.00 
189.21       Duluth teachers retirement plan                  5.00 
189.22       Minneapolis teachers retirement plan             5.00 
189.23       St. Paul teachers retirement plan                5.00 
189.24     Sec. 3.  Minnesota Statutes 2004, section 356.216, is 
189.25  amended to read: 
189.26     356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 
189.27  AND FIRE FUNDS.] 
189.28     (a) The provisions of section 356.215 that govern the 
189.29  contents of actuarial valuations must apply to any local police 
189.30  or fire pension fund or relief association required to make an 
189.31  actuarial report under this section, except as follows: 
189.32     (1) in calculating normal cost and other requirements, if 
189.33  required to be expressed as a level percentage of covered 
189.34  payroll, the salaries used in computing covered payroll must be 
189.35  the maximum rate of salary on which retirement and survivorship 
189.36  credits and amounts of benefits are determined and from which 
189.37  any member contributions are calculated and deducted; 
189.38     (2) in lieu of the amortization date specified in section 
189.39  356.215, subdivision 11, the appropriate amortization target 
189.40  date specified in section 69.77, subdivision 4, or 69.773, 
189.41  subdivision 4, clause (c), must be used in calculating any 
189.42  required amortization contribution, except that if the actuarial 
189.43  report for the Bloomington Fire Department Relief Association 
189.44  indicates an unfunded actuarial accrued liability, the unfunded 
190.1   obligation is to be amortized on a level dollar basis by 
190.2   December 31 of the year occurring 20 years later, and if 
190.3   subsequent actuarial valuations for the Bloomington Fire 
190.4   Department Relief Association determine a net actuarial 
190.5   experience loss incurred during the year which ended as of the 
190.6   day before the most recent actuarial valuation date, any 
190.7   unfunded liability due to that loss is to be amortized on a 
190.8   level dollar basis by December 31 of the year occurring 20 years 
190.9   later and except that the amortization date for the Minneapolis 
190.10  Police Relief Association is December 31, 2020; 
190.11     (3) in addition to the tabulation of active members and 
190.12  annuitants provided for in section 356.215, subdivision 13, the 
190.13  member contributions for active members for the calendar year 
190.14  and the prospective annual retirement annuities under the 
190.15  benefit plan for active members must be reported; 
190.16     (4) actuarial valuations required under section 69.773, 
190.17  subdivision 2, must be made at least every four years and 
190.18  actuarial valuations required under section 69.77 shall be made 
190.19  annually; 
190.20     (5) the actuarial balance sheet showing accrued assets 
190.21  valued at market value if the actuarial valuation is required to 
190.22  be prepared at least every four years or valued as current 
190.23  assets under section 356.215, subdivision 1, clause (6), or 
190.24  paragraph (b), whichever applies, if the actuarial valuation is 
190.25  required to be prepared annually, actuarial accrued liabilities, 
190.26  and the unfunded actuarial accrued liability must include the 
190.27  following required reserves: 
190.28           (i) For active members 
190.29        1.  Retirement benefits 
190.30        2.  Disability benefits 
190.31        3.  Refund liability due to death or withdrawal 
190.32        4.  Survivors' benefits 
190.33           (ii) For deferred annuitants' benefits 
190.34           (iii) For former members without vested rights 
190.35           (iv) For annuitants 
190.36        1.  Retirement annuities 
191.1         2.  Disability annuities 
191.2         3.  Surviving spouses' annuities 
191.3         4.  Surviving children's annuities 
191.4      In addition to those required reserves, separate items must 
191.5   be shown for additional benefits, if any, which may not be 
191.6   appropriately included in the reserves listed above; and 
191.7      (6) actuarial valuations are due by the first day of the 
191.8   seventh month after the end of the fiscal year which the 
191.9   actuarial valuation covers. 
191.10     (b) For the Minneapolis Firefighters Relief Association or 
191.11  the Minneapolis Police Relief Association, the following 
191.12  provisions additionally apply: 
191.13     (1) in calculating the actuarial balance sheet, unfunded 
191.14  actuarial accrued liability, and amortization contribution of 
191.15  the relief association, "current assets" means the value of all 
191.16  assets at cost, including realized capital gains and losses, 
191.17  plus or minus, whichever applies, the average value of total 
191.18  unrealized capital gains or losses for the most recent 
191.19  three-year period ending with the end of the plan year 
191.20  immediately preceding the actuarial valuation report 
191.21  transmission date; and 
191.22     (2) in calculating the applicable portions of the actuarial 
191.23  valuation, an annual preretirement interest assumption of six 
191.24  percent, an annual postretirement interest assumption of six 
191.25  percent, and an annual salary increase assumption of four 
191.26  percent must be used. 
191.27     Sec. 4.  Minnesota Statutes 2004, section 383B.46, 
191.28  subdivision 2, is amended to read: 
191.29     Subd. 2.  [ESTABLISHMENT OF ACCOUNT; CONTRIBUTIONS.] The 
191.30  county of Hennepin shall deduct from the salary of every person 
191.31  who is eligible for coverage and who elected to retain or obtain 
191.32  coverage by the Hennepin County supplemental retirement program 
191.33  a sum equal to one percent of the total salary of the person.  
191.34  Any classified or unclassified employee who is employed in 
191.35  subsidized on-the-job training, work experience or public 
191.36  service employment as an enrollee under the federal 
192.1   Comprehensive Employment and Training Act shall not be included 
192.2   in the supplemental retirement account from and after March 30, 
192.3   1978 unless the employee has as of the later of March 30, 1978 
192.4   or the date of employment sufficient service credit in the 
192.5   public employees retirement fund or the Minneapolis municipal 
192.6   employees retirement fund, whichever is applicable, to meet the 
192.7   minimum vesting requirements for a deferred retirement annuity, 
192.8   or the county agrees in writing to make the required employer 
192.9   contributions on account of the individual from revenue sources 
192.10  other than funds provided under the federal Comprehensive 
192.11  Employment and Training Act, or the employee agrees in writing 
192.12  to make the required employer contribution in addition to the 
192.13  employee contribution.  The deduction shall be made in the same 
192.14  manner as other retirement deductions are made from the salary 
192.15  of the person.  An amount equal to the amounts deducted during 
192.16  each payroll period shall be contributed by the county of 
192.17  Hennepin.  The total amount deducted and contributed shall be 
192.18  deposited to the credit of the supplemental retirement account 
192.19  in the treasury of the county of Hennepin a separate account 
192.20  administered by the Minnesota State Retirement System on behalf 
192.21  of Hennepin County.  The Hennepin County supplemental retirement 
192.22  account is hereby established as an account separate and 
192.23  distinct from other funds, accounts, or assets of the county of 
192.24  Hennepin. 
192.25     Sec. 5.  Minnesota Statutes 2004, section 383B.47, is 
192.26  amended to read: 
192.27     383B.47 [PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT 
192.28  FUND.] 
192.29     With the moneys deposited to the credit of the supplemental 
192.30  retirement account in the treasury of the county of Hennepin, 
192.31  the county of Hennepin, the Minnesota State Retirement System 
192.32  shall purchase shares on behalf of Hennepin County in the 
192.33  accounts of the Minnesota supplemental investment fund as 
192.34  provided in section 383B.48. 
192.35     Sec. 6.  Minnesota Statutes 2004, section 383B.48, is 
192.36  amended to read: 
193.1      383B.48 [BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.] 
193.2      At the time a person becomes eligible for coverage and 
193.3   elects to obtain coverage by the Hennepin County supplemental 
193.4   retirement program and before November 1 of each subsequent 
193.5   year, A participant in the Hennepin County supplemental 
193.6   retirement program shall indicate in writing on a form provided 
193.7   by the county of Hennepin the account of the Minnesota 
193.8   supplemental investment fund in which the participant wishes 
193.9   salary deductions and county matching contributions attributable 
193.10  to salary deductions to be invested for the subsequent 12-month 
193.11  period such time as allowed by the Minnesota State Retirement 
193.12  System.  For that 12-month period, The county of Hennepin 
193.13  Minnesota State Retirement System shall purchase with the salary 
193.14  deductions and county matching funds attributable to the salary 
193.15  deductions shares in the appropriate account of the Minnesota 
193.16  supplemental investment fund in accordance with the indicated 
193.17  preferences of the participant.  However, the county of Hennepin 
193.18  has the authority to determine which accounts of the Minnesota 
193.19  supplemental investment fund will be available for participant 
193.20  investment.  The shares purchased must stand in the name of the 
193.21  county of Hennepin.  A record must be kept by the county of 
193.22  Hennepin Minnesota State Retirement System indicating the number 
193.23  of shares in each account of the Minnesota supplemental 
193.24  investment fund purchased with the salary deductions and county 
193.25  matching funds attributable to the salary deductions of each 
193.26  participant.  The record must be known as the "participant's 
193.27  share account record."  The participant's share account record 
193.28  must show, in addition to the number of shares in the account, 
193.29  any cash balance of salary deductions or county matching funds 
193.30  attributable to those deductions which stand uninvested in 
193.31  shares.  At the option of the county of Hennepin, and subject to 
193.32  any terms and conditions established and communicated in writing 
193.33  by the county to a participant, the participant may designate no 
193.34  more often than once each calendar quarter month that prior 
193.35  salary deductions and county matching contributions attributable 
193.36  to the salary deductions, together with any interest earned, be 
194.1   reinvested in another account of the Minnesota supplemental 
194.2   investment fund made available by the county of Hennepin. 
194.3      Sec. 7.  Minnesota Statutes 2004, section 383B.49, is 
194.4   amended to read: 
194.5      383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF 
194.6   SHARES.] 
194.7      When requested to do so, in writing, on forms provided by 
194.8   the county Minnesota State Retirement System, by a participant, 
194.9   surviving spouse, a guardian of a surviving child or a personal 
194.10  representative, whichever is applicable, the county of Hennepin 
194.11  Minnesota State Retirement System shall on behalf of Hennepin 
194.12  County redeem shares in the accounts of the Minnesota 
194.13  supplemental investment fund standing in a participant's share 
194.14  account record under the following circumstances and in 
194.15  accordance with the laws and regulations governing the Minnesota 
194.16  supplemental investment fund: 
194.17     (1) A participant who is no longer employed by the county 
194.18  of Hennepin is entitled to receive the cash realized on the 
194.19  redemption of the shares to the credit of the participant's 
194.20  share account record of the person.  The participant may request 
194.21  the redemption of all or a portion of the shares in the 
194.22  participant's share account record of the person, but may not 
194.23  request more than one redemption in any one calendar year.  If 
194.24  only a portion of the shares in the participant's share account 
194.25  record is requested to be redeemed the person may request to 
194.26  redeem not less than 20 percent of the shares in any one 
194.27  calendar year and the redemption must be completed in no more 
194.28  than five years.  The person may select annual redemption in a 
194.29  single lump sum or in monthly payments.  An election is 
194.30  irrevocable except that a participant may request an amendment 
194.31  of the election to redeem all of the person's remaining shares.  
194.32  All requests under this paragraph are subject to application to 
194.33  and approval of the Hennepin County administrator, in the sole 
194.34  discretion of the administrator Minnesota State Retirement 
194.35  System upon verification by Hennepin County through the county 
194.36  administrator of the recipient's eligibility to redeem funds.  
195.1      (2) In the event of the death of a participant leaving a 
195.2   surviving spouse, the surviving spouse is entitled to receive 
195.3   the cash realized on the redemption of all or a portion of the 
195.4   shares in the participant's share account record of the deceased 
195.5   spouse, but in no event may the spouse request more than one 
195.6   redemption in each calendar year.  If only a portion of the 
195.7   shares in the participant's share account record is requested to 
195.8   be redeemed, the surviving spouse may request the redemption of 
195.9   not less than 20 percent of the shares in any one calendar year. 
195.10  The surviving spouse may elect annual redemption in a single 
195.11  lump sum payment or in monthly payments.  Redemption must be 
195.12  completed in no more than five years.  An election is 
195.13  irrevocable except that the surviving spouse may request an 
195.14  amendment of the election to redeem all of the participant's 
195.15  remaining shares.  All requests under this paragraph are subject 
195.16  to application to and approval of the Hennepin County 
195.17  administrator, in the sole discretion of the 
195.18  administrator Minnesota State Retirement System upon 
195.19  verification by Hennepin County through the county administrator 
195.20  of the recipient's eligibility to redeem funds.  Upon the death 
195.21  of the surviving spouse, any shares remaining in the 
195.22  participant's share account record must be redeemed on behalf of 
195.23  Hennepin County by the county of Hennepin Minnesota State 
195.24  Retirement System and the cash realized from the redemption 
195.25  distributed to the estate of the surviving spouse. 
195.26     (3) In the event of the death of a participant leaving no 
195.27  surviving spouse, but leaving a minor surviving child or minor 
195.28  surviving children, the guardianship estate of the minor child 
195.29  is, or the guardianship estates of the minor children are, 
195.30  entitled to receive the cash realized on the redemption of all 
195.31  shares to the credit of the participant's share account record 
195.32  of the deceased participant.  In the event of minor surviving 
195.33  children, the cash realized must be paid in equal shares to the 
195.34  guardianship estates of the minor surviving children. 
195.35     (4) In the event of the death of a participant leaving no 
195.36  surviving spouse and no minor surviving children, the estate of 
196.1   the deceased participant is entitled to receive the cash 
196.2   realized on the redemption of all shares to the credit of the 
196.3   participant's share account record of the deceased participant. 
196.4      Sec. 8.  [383B.491] [MINNESOTA STATE RETIREMENT SYSTEM 
196.5   BILLING AUTHORITY.] 
196.6      The Minnesota State Retirement System executive director is 
196.7   authorized to enter into an interagency agreement with Hennepin 
196.8   County under which the Minnesota State Retirement System would 
196.9   directly bill the county for the cost of the Minnesota State 
196.10  Retirement System's administration of the Hennepin County 
196.11  Supplemental Retirement Plan.  
196.12     Sec. 9.  Minnesota Statutes 2004, section 423B.05, 
196.13  subdivision 3, is amended to read: 
196.14     Subd. 3.  [CONTINUATION OF BOARD.] Notwithstanding the 
196.15  provisions of section 423A.01, subdivision 2, or any other law, 
196.16  the board of trustees and its successors established under 
196.17  subdivision 1 shall continue to govern the association until 
196.18  there are no more than 100 225 members of the police pension 
196.19  fund.  The fund thereafter must become a trust fund in 
196.20  accordance with section 423A.01, subdivision 2. 
196.21     Sec. 10.  Minnesota Statutes 2004, section 423B.09, 
196.22  subdivision 1, is amended to read: 
196.23     Subdivision 1.  [MINNEAPOLIS POLICE; PERSONS ENTITLED TO 
196.24  RECEIVE PENSIONS.] The association shall grant pensions payable 
196.25  from the police pension fund in monthly installments to persons 
196.26  entitled to pensions in the manner and for the following 
196.27  purposes. 
196.28     (a) When the actuarial value of assets of the fund 
196.29  according to the most recent annual actuarial valuation 
196.30  performed in accordance with sections 356.215 and 356.216 is 
196.31  less than 90 percent of the actuarial accrued liabilities, An 
196.32  active member or a deferred pensioner who has performed duty as 
196.33  a member of the police department of the city for five years or 
196.34  more, upon written application after retiring from duty and 
196.35  reaching at least age 50, is entitled to be paid monthly for 
196.36  life a service pension equal to eight units.  For full years of 
197.1   service beyond five years, the service pension increases by 1.6 
197.2   units for each full year, to a maximum of 40 units.  When the 
197.3   actuarial value of assets of the fund according to the most 
197.4   recent annual actuarial valuation prepared in accordance with 
197.5   sections 356.215 and 356.216 is greater than 90 percent of 
197.6   actuarial accrued liabilities,.  Active members, deferred 
197.7   members, and service pensioners are entitled to a service 
197.8   pension according to the following schedule: 
197.9                  5 years           8.0 units
197.10                 6 years           9.6 units
197.11                 7 years          11.2 units
197.12                 8 years          12.8 units
197.13                 9 years          14.4 units
197.14                10 years          16.0 units
197.15                11 years          17.6 units
197.16                12 years          19.2 units
197.17                13 years          20.8 units
197.18                14 years          22.4 units
197.19                15 years          24.0 units
197.20                16 years          25.6 units
197.21                17 years          27.2 units
197.22                18 years          28.8 units
197.23                19 years          30.4 units
197.24                                         A           B 
197.25                20 years          34.0 34.5 units  35.0 units
197.26                21 years          35.6 36.1 units  36.6 units
197.27                22 years          37.2 37.7 units  38.2 units
197.28                23 years          38.8 39.3 units  39.8 units
197.29                24 years          40.4 40.9 units  41.4 units
197.30                25 years          42.0 42.5 units  43.0 units
197.31     Column A is applicable until December 31, 2005, and applies 
197.32  retroactively to January 1, 2005, for a service pensioner who 
197.33  retired before January 1, 2005.  Column B applies on and after 
197.34  January 1, 2006. 
197.35     Fractional years of service may not be used in computing 
197.36  pensions. 
198.1      (b) An active member who after five years' service but less 
198.2   than 20 years' service with the police department of the city, 
198.3   becomes superannuated so as to be permanently unable to perform 
198.4   the person's assigned duties, is entitled to be paid monthly for 
198.5   life a superannuation pension equal to four units for five years 
198.6   of service and an additional two units for each full year of 
198.7   service over five years and less than 20 years. 
198.8      (c) An active member who is not eligible for a service 
198.9   pension and who, while a member of the police department of the 
198.10  city, becomes diseased or sustains an injury while in the 
198.11  service that permanently unfits the member for the performance 
198.12  of police duties is entitled to be paid monthly for life a 
198.13  pension equal to 34 units while so disabled.  
198.14     Sec. 11.  Minnesota Statutes 2004, section 423B.09, is 
198.15  amended by adding a subdivision to read: 
198.16     Subd. 7.  [ADDITIONAL UNIT.] The additional half units 
198.17  provided to members by subdivision 1 must also be provided under 
198.18  the same terms and at the same time as applicable under 
198.19  subdivision 1 to members who selected a joint annuity option 
198.20  under subdivision 6 and must be in an amount that is actuarially 
198.21  equivalent to the service pension and the automatic survivor 
198.22  coverage for that additional unit. 
198.23     Sec. 12.  Minnesota Statutes 2004, section 423B.10, 
198.24  subdivision 1, is amended to read: 
198.25     Subdivision 1.  [ENTITLEMENT; BENEFIT AMOUNT.] (a) The 
198.26  surviving spouse of a deceased service pensioner, disability 
198.27  pensioner, deferred pensioner, superannuation pensioner, or 
198.28  active member, who was the legally married spouse of the 
198.29  decedent, residing with the decedent, and who was married while 
198.30  or before the time the decedent was on the payroll of the police 
198.31  department, and who, if the deceased member was a service or 
198.32  deferred pensioner, was legally married to the member for a 
198.33  period of at least one year before retirement from the police 
198.34  department, is entitled to a surviving spouse benefit.  The 
198.35  surviving spouse benefit is equal to 22 22.5 units per month 
198.36  until December 31, 2005, and 23 units per month beginning on 
199.1   January 1, 2006, if the person is the surviving spouse of a 
199.2   deceased active member or disabilitant.  The surviving spouse 
199.3   benefit is equal to six units per month, plus an additional one 
199.4   unit for each year of service to the credit of the decedent in 
199.5   excess of five years, to a maximum of 22 22.5 units per month 
199.6   until December 31, 2005, and 23 units per month beginning on 
199.7   January 1, 2006, if the person is the surviving spouse of a 
199.8   deceased service pensioner, deferred pensioner, or 
199.9   superannuation pensioner.  The surviving spouse benefit is 
199.10  payable for the life of the surviving spouse. 
199.11     (b) A surviving child of a deceased service pensioner, 
199.12  disability pensioner, deferred pensioner, superannuation 
199.13  pensioner, or active member, who was living while the decedent 
199.14  was an active member of the police department or was born within 
199.15  nine months after the decedent terminated active service in the 
199.16  police department, is entitled to a surviving child benefit.  
199.17  The surviving child benefit is equal to eight units per month if 
199.18  the person is the surviving child of a deceased active member or 
199.19  disabilitant.  The surviving child benefit is equal to two units 
199.20  per month, plus an additional four-tenths of one unit per month 
199.21  for each year of service to the credit of the decedent in excess 
199.22  of five years, to a maximum of eight units, if the person is the 
199.23  surviving child of a deceased service pensioner, deferred 
199.24  pensioner, or superannuation pensioner.  The surviving child 
199.25  benefit is payable until the person attains age 18, or, if in 
199.26  full-time attendance during the normal school year, in a school 
199.27  approved by the board of directors, until the person receives a 
199.28  bachelor's degree or attains the age of 22 years, whichever 
199.29  occurs first.  In the event of the death of both parents leaving 
199.30  a surviving child or children entitled to a surviving child 
199.31  benefit as determined in this paragraph, the surviving child is, 
199.32  or the surviving children are, entitled to a surviving child 
199.33  benefit in such sums as determined by the board of directors to 
199.34  be necessary for the care and education of such surviving child 
199.35  or children, but not to exceed the family maximum benefit per 
199.36  month, to the children of any one family.  
200.1      (c) The surviving spouse and surviving child benefits are 
200.2   subject to a family maximum benefit.  The family maximum benefit 
200.3   is 41 units per month. 
200.4      (d) A surviving spouse who is otherwise not qualified may 
200.5   receive a benefit if the surviving spouse was married to the 
200.6   decedent for a period of five years and was residing with the 
200.7   decedent at the time of death.  The surviving spouse benefit is 
200.8   the same as that provided in paragraph (a), except that if the 
200.9   surviving spouse is younger than the decedent, the surviving 
200.10  spouse benefit must be actuarially equivalent to a surviving 
200.11  spouse benefit that would have been paid to the member's spouse 
200.12  had the member been married to a person of the same age or a 
200.13  greater age than the member's age before retirement. 
200.14     (e) For any surviving spouse who began receiving survivor 
200.15  benefits before January 1, 2005, the half-unit increase under 
200.16  paragraph (a) is effective retroactive to January 1, 2005. 
200.17     Sec. 13.  Minnesota Statutes 2004, section 423C.05, 
200.18  subdivision 2, is amended to read: 
200.19     Subd. 2.  [SERVICE PENSION.] (a) An active A member who has 
200.20  performed duty for the fire department for five years or more, 
200.21  upon written application after retiring from duty and reaching 
200.22  at least age 50, is entitled to be paid monthly for life a 
200.23  service pension under paragraph (b). 
200.24     (b) Based on the percentage that the actuarial value of 
200.25  assets of the special fund equal to the actuarial accrued 
200.26  liabilities of the special fund according to the most recent 
200.27  annual actuarial valuation of the relief association prepared in 
200.28  accordance with sections 356.215 and 356.216, The amount of the 
200.29  service pension is as follows: 
200.30  Length of    Service        Service          Service
200.31  allowable    pension        pension          pension
200.32  service      payable if     payable          payable if  
200.33  credit       under 90       if greater       greater
200.34               percent        than 89.99       than 92.49  
200.35                              percent and      percent  
200.36                              less than        Number of   
201.1                               92.5 percent     units    
201.2    5 years         -            8.0 units       8.0 units 
201.3    6 years         -            9.6 units       9.6 units 
201.4    7 years         -           11.2 units      11.2 units 
201.5    8 years         -           12.8 units      12.8 units 
201.6    9 years         -           14.4 units      14.4 units 
201.7   10 years    16.0 units       16.0 units      16.0 units
201.8   11 years    17.6 units       17.6 units      17.6 units 
201.9   12 years    19.2 units       19.2 units      19.2 units  
201.10  13 years    20.8 units       20.8 units      20.8 units  
201.11  14 years    22.4 units       22.4 units      22.4 units  
201.12  15 years    24.0 units       24.0 units      24.0 units 
201.13  16 years    25.6 units       25.6 units      25.6 units 
201.14  17 years    27.2 units       27.2 units      27.2 units 
201.15  18 years    28.8 units       28.8 units      28.8 units 
201.16  19 years    30.4 units       30.4 units      30.4 units 
201.17  20 years    33.0 units       33.5 units      34.0 units 
201.18  21 years    34.6 units       35.1 units      35.6 units 
201.19  22 years    36.2 units       37.7 units      37.2 units 
201.20  23 years    37.8 units       38.3 units      38.8 units 
201.21  24 years    39.4 units       39.9 units      40.4 units 
201.22  25 years 
201.23   or more    41.0 units       41.5 units      42.0 units
201.24     (c) A member entitled to a benefit under this subdivision 
201.25  may elect to have it paid as an optional retirement annuity 
201.26  pursuant to the conditions set forth in subdivision 8.  A member 
201.27  receiving a benefit pursuant to subdivision 5 or 6 shall not 
201.28  simultaneously be entitled to a benefit under this subdivision. 
201.29     Sec. 14.  [423C.16] [RECOMPUTATION OF DISABLED BENEFIT 
201.30  PROHIBITED.] 
201.31     Notwithstanding section 423A.11, the Board of Trustees of 
201.32  the Minneapolis Firefighters Relief Association shall not 
201.33  recompute the disability benefit of a member who became 
201.34  permanently disabled as the result of a service-related disease 
201.35  or injury.  Any prior recomputation of a disabled member's 
201.36  service-related disability pension shall be revoked upon the 
202.1   member's request and upon the member's signed and sworn 
202.2   agreement to waive any right to a recomputation of the benefit 
202.3   in the future.  Non-service-related disability pension benefits 
202.4   that were recomputed at full 25-year service pensions shall 
202.5   remain in effect.  
202.6      Sec. 15.  [NO REDUCTION OF BENEFITS.] 
202.7      When a pension benefit is properly paid in accordance with 
202.8   the laws governing the Minneapolis Police Relief Association or 
202.9   the Minneapolis Firefighters Relief Association, whichever 
202.10  apply, to any member, the dollar amount of the pension a member 
202.11  received may not be reduced if the city of Minneapolis and the 
202.12  collective bargaining agent representing active police officers 
202.13  or firefighters enter into or are required to abide by an 
202.14  agreement that would otherwise require the association to reduce 
202.15  the dollar amount of a pension that had properly been paid to 
202.16  any member. 
202.17     Sec. 16.  [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 
202.18  VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 
202.19     (a) This section applies to consolidation of any 
202.20  combination of two or more of the following volunteer 
202.21  firefighter relief associations:  Aurora, Biwabik City, Hoyt 
202.22  Lakes, and Palo. 
202.23     (b) Notwithstanding Minnesota Statutes, section 424B.10, 
202.24  subdivision 1, paragraph (a), the service pension to be paid by 
202.25  the relief association existing after the consolidation is as 
202.26  follows: 
202.27     (1) for the service rendered by each individual volunteer 
202.28  firefighter before the effective date of the consolidation, the 
202.29  service pension amount is the amount payable to that volunteer 
202.30  firefighter under the articles of incorporation or bylaws of the 
202.31  consolidating volunteer firefighters relief association that the 
202.32  firefighter was a member of immediately before the 
202.33  consolidation; 
202.34     (2) for the service rendered after the effective date of 
202.35  the consolidation, the service pension amount is the highest 
202.36  dollar amount service pension of any of the consolidating 
203.1   volunteer firefighters relief associations under the articles of 
203.2   incorporation or bylaws in effect immediately before the 
203.3   consolidation; and 
203.4      (3) after consolidation, increases in the amounts 
203.5   established in clauses (1) and (2) may be implemented if 
203.6   consistent with applicable requirements of Minnesota Statutes, 
203.7   chapters 69 and 424A. 
203.8      Sec. 17.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
203.9   HOC POSTRETIREMENT ADJUSTMENT.] 
203.10     (a) In addition to the current pensions and other 
203.11  retirement benefits payable, the pensions and retirement 
203.12  benefits payable to retired police officers and firefighters and 
203.13  their surviving spouses by the Eveleth police and fire trust 
203.14  fund are increased by $100 per month.  Increases are retroactive 
203.15  from January 1, 2005. 
203.16     (b) Following the January 1, 2005, effective date of the 
203.17  benefit increase provided under paragraph (a), every two years 
203.18  thereafter, to be effective no earlier than the applicable 
203.19  January 1, the city council of the city of Eveleth is authorized 
203.20  to provide permanent, uniform benefit increases, not less than 
203.21  $10 per month nor to exceed $100 per month, to any remaining 
203.22  retirees and survivors receiving benefits from the Eveleth 
203.23  police and fire trust fund.  Any given benefit improvement under 
203.24  this paragraph is not effective unless the city council passes a 
203.25  resolution approving the increase. 
203.26     (c) Within 30 days following the approval of a resolution 
203.27  under paragraph (b), the chief administrative officer of the 
203.28  city of Eveleth shall file a copy of the resolution with the 
203.29  executive director of the Legislative Commission on Pensions and 
203.30  Retirement, with the chair of the house Governmental Operations 
203.31  and Veterans Affairs Committee, and with the chair of the senate 
203.32  State and Local Government Operations Committee.  Along with a 
203.33  copy of the resolution, the city's chief administrative officer 
203.34  must send a statement indicating the age of each benefit 
203.35  recipient and the retirement benefit or survivor benefit being 
203.36  received before and after the benefit increase. 
204.1      Sec. 18.  [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 
204.2   RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 
204.3      Notwithstanding any limitations in Minnesota Statutes, 
204.4   section 424A.02, subdivision 13, or any other provision of law 
204.5   to the contrary, if an agreement between the affected relief 
204.6   associations and cities is reached as provided in this section, 
204.7   the Maplewood Firefighters Relief Association may transfer 
204.8   assets from its special fund to the Oakdale Fire Department 
204.9   Relief Association representing the value of the accumulated 
204.10  service credit for the current members of the Oakdale Fire 
204.11  Department Relief Association who are currently eligible to 
204.12  receive a combined service pension for firefighter service in 
204.13  both associations.  The transfer of the assets from the 
204.14  Maplewood Firefighters Relief Association to the Oakdale Fire 
204.15  Department Relief Association must be in an amount representing 
204.16  the cumulative value of the service credit earned by the members 
204.17  of the Oakdale Fire Department Relief Association who are 
204.18  currently eligible to receive a combined service pension for 
204.19  firefighting service in both associations for the service credit 
204.20  that they accrued while working for the Maplewood Fire 
204.21  Department.  The amount of the assets, liabilities, and service 
204.22  credit to be transferred must be specified in a joint agreement 
204.23  negotiated by the secretaries of the two relief associations and 
204.24  ratified by the boards of trustees of both relief associations 
204.25  and of the cities of Maplewood and Oakdale.  The agreement must 
204.26  specify by name or other appropriate means the firefighters 
204.27  affected by the liability, asset, and service credit transfer.  
204.28  The ratification must be expressed in the form of resolutions 
204.29  adopted by each entity.  The agreements must specify the amount 
204.30  of assets to be transferred, the amount of liabilities to be 
204.31  transferred, and the amount of service credit each of the 
204.32  applicable individuals will receive in the Oakdale Fire 
204.33  Department Relief Association.  Upon the ratification of the 
204.34  agreement by both relief associations and both cities, the 
204.35  assets, liabilities, and service credit of the applicable 
204.36  individuals must be transferred to the Oakdale Fire Department 
205.1   Relief Association, and the Maplewood Firefighters Relief 
205.2   Association is relieved of any obligation to the individuals.  A 
205.3   certified copy of the ratified agreement must be filed with the 
205.4   state auditor and with the secretary of state. 
205.5      Sec. 19.  [EFFECTIVE DATE; LOCAL APPROVAL.] 
205.6      (a) Sections 2 and 3 with respect to the Bloomington Fire 
205.7   Department Relief Association are effective the day after the 
205.8   date on which the city council of the city of Bloomington and 
205.9   its chief clerical officer timely complete their compliance with 
205.10  Minnesota Statutes, section 645.021, subdivisions 2 and 4. 
205.11     (b) Sections 1, 3, with respect to the Minneapolis Police 
205.12  Relief Association, 9, 10, 11, 12, 13, and 15 are not severable 
205.13  and are effective the day after the date of the approval by the 
205.14  city council of the city of Minneapolis and the timely 
205.15  completion by the chief clerical officer of the city of 
205.16  Minneapolis of compliance with Minnesota Statutes, section 
205.17  645.021, subdivisions 2 and 3. 
205.18     (c) Sections 4, 5, 6, 7, and 8 are effective the day after 
205.19  the board of Hennepin County and its chief clerical officer 
205.20  complete in a timely manner their compliance with Minnesota 
205.21  Statutes, section 645.021, subdivisions 2 and 3.  
205.22     (d) Sections 14 and 15 are effective the day after the 
205.23  governing body of the city of Minneapolis and its chief clerical 
205.24  officer timely complete their compliance with Minnesota 
205.25  Statutes, section 645.021, subdivisions 2 and 3. 
205.26     (e) Section 17 is effective the day after the date on which 
205.27  the city council of the city of Eveleth and its chief clerical 
205.28  officer timely complete their compliance with Minnesota 
205.29  Statutes, section 645.021, subdivisions 2 and 3. 
205.30     (f) Section 16 is effective with respect to a volunteer 
205.31  firefighters relief association listed in column A the day after 
205.32  the governing body of the municipality listed in column B and 
205.33  its chief clerical officer timely complete compliance with 
205.34  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
205.35                   A                      B       
205.36                Aurora              city of Aurora
206.1                 Biwabik             city of Biwabik
206.2                 Hoyt Lakes          city of Hoyt Lakes
206.3                 Palo                town of White
206.4      (g) Section 18 is effective the day after the governing 
206.5   body of the city of Maplewood, the governing body of the city of 
206.6   Oakdale, the Maplewood chief clerical officer, and the Oakdale 
206.7   chief clerical officer complete their compliance with Minnesota 
206.8   Statutes, section 645.021, subdivisions 2 and 3. 
206.9                              ARTICLE 14 
206.10                  MINNEAPOLIS EMPLOYEES RETIREMENT 
206.11                            FUND CHANGES 
206.12     Section 1.  Minnesota Statutes 2004, section 43A.17, 
206.13  subdivision 9, is amended to read: 
206.14     Subd. 9.  [POLITICAL SUBDIVISION COMPENSATION LIMIT.] (a) 
206.15  The salary and the value of all other forms of compensation of a 
206.16  person employed by a political subdivision of this state, 
206.17  excluding a school district, or employed under section 422A.03 
206.18  may not exceed 95 percent of the salary of the governor as set 
206.19  under section 15A.082, except as provided in this subdivision.  
206.20  For purposes of this subdivision, "political subdivision of this 
206.21  state" includes a statutory or home rule charter city, county, 
206.22  town, metropolitan or regional agency, or other political 
206.23  subdivision, but does not include a hospital, clinic, or health 
206.24  maintenance organization owned by such a governmental unit or a 
206.25  retirement plan governed by chapter 422A.  
206.26     (b) Deferred compensation and payroll allocations to 
206.27  purchase an individual annuity contract for an employee are 
206.28  included in determining the employee's salary.  Other forms of 
206.29  compensation which shall be included to determine an employee's 
206.30  total compensation are all other direct and indirect items of 
206.31  compensation which are not specifically excluded by this 
206.32  subdivision.  Other forms of compensation which shall not be 
206.33  included in a determination of an employee's total compensation 
206.34  for the purposes of this subdivision are: 
206.35     (1) employee benefits that are also provided for the 
206.36  majority of all other full-time employees of the political 
207.1   subdivision, vacation and sick leave allowances, health and 
207.2   dental insurance, disability insurance, term life insurance, and 
207.3   pension benefits or like benefits the cost of which is borne by 
207.4   the employee or which is not subject to tax as income under the 
207.5   Internal Revenue Code of 1986; 
207.6      (2) dues paid to organizations that are of a civic, 
207.7   professional, educational, or governmental nature; and 
207.8      (3) reimbursement for actual expenses incurred by the 
207.9   employee which the governing body determines to be directly 
207.10  related to the performance of job responsibilities, including 
207.11  any relocation expenses paid during the initial year of 
207.12  employment. 
207.13     The value of other forms of compensation shall be the 
207.14  annual cost to the political subdivision for the provision of 
207.15  the compensation.  
207.16     (c) The salary of a medical doctor or doctor of osteopathy 
207.17  occupying a position that the governing body of the political 
207.18  subdivision has determined requires an M.D. or D.O. degree is 
207.19  excluded from the limitation in this subdivision.  
207.20     (d) The commissioner may increase the limitation in this 
207.21  subdivision for a position that the commissioner has determined 
207.22  requires special expertise necessitating a higher salary to 
207.23  attract or retain a qualified person.  The commissioner shall 
207.24  review each proposed increase giving due consideration to salary 
207.25  rates paid to other persons with similar responsibilities in the 
207.26  state and nation.  The commissioner may not increase the 
207.27  limitation until the commissioner has presented the proposed 
207.28  increase to the Legislative Coordinating Commission and received 
207.29  the commission's recommendation on it.  The recommendation is 
207.30  advisory only.  If the commission does not give its 
207.31  recommendation on a proposed increase within 30 days from its 
207.32  receipt of the proposal, the commission is deemed to have made 
207.33  no recommendation. 
207.34     Sec. 2.  Minnesota Statutes 2004, section 422A.05, 
207.35  subdivision 2c, is amended to read: 
207.36     Subd. 2c.  [MINNEAPOLIS EMPLOYEES RETIREMENT FUND 
208.1   INVESTMENT AUTHORITY.] (a) For investments made on or after July 
208.2   1, 1991, the board shall invest funds only in investments 
208.3   authorized by section 356A.06, subdivision 7.  
208.4      (b) However, in addition to real estate investments 
208.5   authorized under paragraph (a), the board may also make loans to 
208.6   purchasers of Minnesota situs nonfarm residential real estate 
208.7   that is owned by the Minneapolis Employees Retirement Fund.  The 
208.8   loans must be secured by mortgages or deeds of trust.  
208.9      (c) For investments made before July 1, 1991, the board 
208.10  may, but is not required to, comply with paragraph (a).  
208.11  However, with respect to these investments, the board shall act 
208.12  in accordance with subdivision 2a and chapter 356A. 
208.13     (d) The board may certify assets for investment by the 
208.14  State Board of Investment under sections 11A.14 and 11A.17.  
208.15     Sec. 3.  Minnesota Statutes 2004, section 422A.06, 
208.16  subdivision 3, is amended to read: 
208.17     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] (a) The deposit 
208.18  accumulation fund consists of the assets held in the fund, 
208.19  including amounts contributed by or for employees, amounts 
208.20  contributed by the city, amounts contributed by municipal 
208.21  activities supported in whole or in part by revenues other than 
208.22  taxes and amounts contributed by any public corporation, amounts 
208.23  paid by the state, and by income from investments.  
208.24     (b) There must be paid from the fund the amounts required 
208.25  to be transferred to the retirement benefit fund, or the 
208.26  disability benefit fund, refunds of contributions, including the 
208.27  death-while-active refund specified in section 422A.22, 
208.28  subdivision 4, postretirement increases in retirement allowances 
208.29  granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
208.30  and expenses of the administration of the retirement fund which 
208.31  were not charged by the retirement board against the income of 
208.32  the retirement benefit fund from investments as the cost of 
208.33  handling the investments of the retirement benefit fund. 
208.34     (c) To the extent that the deposit accumulation fund has 
208.35  insufficient assets to transfer the total value of the required 
208.36  reserves for retirement annuities to either the disability 
209.1   benefit fund under subdivisions 5 and 7 or the retirement 
209.2   benefit fund under subdivisions 5 and 8 as required, the deposit 
209.3   accumulation fund has a transfer amount payable on which an 
209.4   interest charge accrues.  The executive director must determine 
209.5   the interest charge for the period that transfer amount payable 
209.6   remains unpaid at an annual rate equal to five percent plus the 
209.7   percentage increase in the amount of the annual Consumer Price 
209.8   Index for urban wage earners and clerical workers as calculated 
209.9   by the Bureau of Labor Statistics of the United States 
209.10  Department of Labor from the previous June 30.  The interest 
209.11  charge must be reflected in the books of the Minneapolis 
209.12  Employees Retirement Fund and assessed against the deposit 
209.13  accumulation fund based on the average quarterly transfer amount 
209.14  payable balance outstanding.  Any revenue received by the 
209.15  deposit accumulation fund subsequent to unpaid transfers must be 
209.16  transferred from the deposit accumulation fund to the disability 
209.17  benefit fund or to the retirement fund, whichever applies, must 
209.18  first be applied to any remaining interest charge and then must 
209.19  be applied to the principal amount of transfer amount payable 
209.20  outstanding.  
209.21     Sec. 4.  Minnesota Statutes 2004, section 422A.06, 
209.22  subdivision 5, is amended to read: 
209.23     Subd. 5.  [TRANSFER OF RESERVES TO RETIREMENT BENEFIT FUND; 
209.24  ADJUSTMENTS OF ANNUITIES AND BENEFITS.] (a) Assets equal to the 
209.25  required reserves for retirement annuities as determined in 
209.26  accordance with the appropriate mortality table adopted by the 
209.27  board of trustees based on the experience of the fund as 
209.28  recommended by the commission-retained actuary retained under 
209.29  section 356.214 and using the postretirement interest assumption 
209.30  specified in section 356.215, subdivision 8, shall must be 
209.31  transferred to the disability benefit fund as provided in 
209.32  subdivision 7, or the retirement benefit fund, except for any 
209.33  amounts payable from the survivor benefit fund, as of date of 
209.34  retirement. 
209.35     (b) If a full transfer amount is not payable from the 
209.36  deposit accumulation fund, the applicable fund must be credited 
210.1   with an interest-bearing transfer amount receivable. 
210.2      (b) (c) Annuity payments shall must be adjusted in 
210.3   accordance with this chapter, except that no minimum retirement 
210.4   payments described in this chapter shall must include any 
210.5   amounts payable from the survivors' benefit fund or disability 
210.6   benefit fund and supplemented benefits specifically financed by 
210.7   statute. 
210.8      (c) (d) Increases in annuity payments pursuant to under 
210.9   this section shall be made automatically unless written notice 
210.10  on a form prescribed by the board is filed with the retirement 
210.11  board requesting that the increase not be made. 
210.12     (d) (e) Any additional annuity which began to accrue on 
210.13  July 1, 1973, or which began to accrue on January 1, 1974, 
210.14  pursuant to Laws 1973, chapter 770, section 1, shall must be 
210.15  considered as part of the base amount to be used in determining 
210.16  any postretirement adjustments payable pursuant to under the 
210.17  provisions of subdivision 8. 
210.18     Sec. 5.  Minnesota Statutes 2004, section 422A.06, 
210.19  subdivision 7, is amended to read: 
210.20     Subd. 7.  [DISABILITY BENEFIT FUND.] (a) Unless subdivision 
210.21  3, paragraph (c), applies, the required reserves for disability 
210.22  allowances which become effective after December 31, 1973, shall 
210.23  must be transferred from the deposit accumulation fund to the 
210.24  disability benefit fund.  A proportionate share of income from 
210.25  investments shall must be allocated to this fund and any 
210.26  interest charge under subdivision 3, paragraph (c), must be 
210.27  credited to the fund.  There shall be paid From this fund, the 
210.28  disability allowances which become effective after December 31, 
210.29  1973, must be paid. 
210.30     (b) In the event of termination of any disability allowance 
210.31  for any reason other than the death of the recipient, the 
210.32  balance of the required reserves for the disability allowance as 
210.33  of the date of termination shall must be transferred from the 
210.34  disability benefit fund to the deposit accumulation fund. 
210.35     (c) At the end of each fiscal year, as part of the annual 
210.36  actuarial valuation, a determination shall must be made of the 
211.1   required reserves for all disability allowances being paid from 
211.2   the disability benefit fund.  Any excess of assets over 
211.3   actuarial required reserves in the disability benefit fund shall 
211.4   must be transferred to the deposit accumulation fund.  Unless 
211.5   subdivision 3, paragraph (c), applies, any excess of actuarial 
211.6   reserves over assets in the disability benefit fund shall must 
211.7   be funded by a transfer of the appropriate amount of assets from 
211.8   the deposit accumulation fund. 
211.9      Sec. 6.  Minnesota Statutes 2004, section 422A.06, 
211.10  subdivision 8, is amended to read: 
211.11     Subd. 8.  [RETIREMENT BENEFIT FUND.] (a) The retirement 
211.12  benefit fund shall consist consists of amounts held for payment 
211.13  of retirement allowances for members retired pursuant to under 
211.14  this chapter, including any transfer amount payable under 
211.15  subdivision 3, paragraph (c).  
211.16     (b) Unless subdivision 3, paragraph (c), applies, assets 
211.17  equal to the required reserves for retirement 
211.18  allowances pursuant to under this chapter determined in 
211.19  accordance with the appropriate mortality table adopted by the 
211.20  board of trustees based on the experience of the fund as 
211.21  recommended by the commission-retained actuary shall retained 
211.22  under section 356.214, must be transferred from the deposit 
211.23  accumulation fund to the retirement benefit fund as of the last 
211.24  business day of the month in which the retirement allowance 
211.25  begins.  The income from investments of these assets shall must 
211.26  be allocated to this fund and any interest charge under 
211.27  subdivision 3, paragraph (c), must be credited to the fund.  
211.28  There shall must be paid from this fund the retirement annuities 
211.29  authorized by law.  A required reserve calculation for the 
211.30  retirement benefit fund must be made by the actuary retained by 
211.31  the Legislative Commission on Pensions and Retirement under 
211.32  section 356.214 and must be certified to the retirement board by 
211.33  the commission-retained actuary. 
211.34     (c) The retirement benefit fund shall must be governed by 
211.35  the applicable laws governing the accounting and audit 
211.36  procedures, investment, actuarial requirements, calculation and 
212.1   payment of postretirement benefit adjustments, discharge of any 
212.2   deficiency in the assets of the fund when compared to the 
212.3   actuarially determined required reserves, and other applicable 
212.4   operations and procedures regarding the Minnesota postretirement 
212.5   investment fund in effect on June 30, 1997, established under 
212.6   Minnesota Statutes 1996, section 11A.18, and any legal or 
212.7   administrative interpretations of those laws of the State Board 
212.8   of Investment, the legal advisor to the Board of Investment and 
212.9   the executive director of the State Board of Investment in 
212.10  effect on June 30, 1997.  If a deferred yield adjustment account 
212.11  is established for the Minnesota postretirement investment fund 
212.12  before June 30, 1997, under Minnesota Statutes 1996, section 
212.13  11A.18, subdivision 5, the retirement board shall also establish 
212.14  and maintain a deferred yield adjustment account within this 
212.15  fund.  
212.16     (d) Annually, following the calculation of any 
212.17  postretirement adjustment payable from the retirement benefit 
212.18  fund, the board of trustees shall submit a report to the 
212.19  executive director of the Legislative Commission on Pensions and 
212.20  Retirement and to the commissioner of finance indicating the 
212.21  amount of any postretirement adjustment and the underlying 
212.22  calculations on which that postretirement adjustment amount is 
212.23  based, including the amount of dividends, the amount of 
212.24  interest, and the amount of net realized capital gains or losses 
212.25  utilized in the calculations. 
212.26     (e) With respect to a former contributing member who began 
212.27  receiving a retirement annuity or disability benefit under 
212.28  section 422A.151, paragraph (a), clause (2), after June 30, 
212.29  1997, or with respect to a survivor of a former contributing 
212.30  member who began receiving a survivor benefit under section 
212.31  422A.151, paragraph (a), clause (2), after June 30, 1997, the 
212.32  reserves attributable to the one percent lower amount of the 
212.33  cost-of-living adjustment payable to those annuity or benefit 
212.34  recipients annually must be transferred back to the deposit 
212.35  accumulation fund to the credit of the Metropolitan Airports 
212.36  Commission.  The calculation of this annual reduced 
213.1   cost-of-living adjustment reserve transfer must be reviewed by 
213.2   the actuary retained by the Legislative Commission on Pensions 
213.3   and Retirement under section 356.214. 
213.4      Sec. 7.  Minnesota Statutes 2004, section 422A.101, 
213.5   subdivision 3, is amended to read: 
213.6      Subd. 3.  [STATE CONTRIBUTIONS.] (a) Subject to the 
213.7   limitation set forth in paragraph (c), the state shall pay to 
213.8   the Minneapolis Employees Retirement Fund annually an amount 
213.9   equal to the amount calculated under paragraph (b). 
213.10     (b) The payment amount is an amount equal to the financial 
213.11  requirements of the Minneapolis Employees Retirement Fund 
213.12  reported in the actuarial valuation of the fund prepared by the 
213.13  commission-retained actuary pursuant to section 356.215 for the 
213.14  most recent year but based on a target date for full 
213.15  amortization of the unfunded actuarial accrued liabilities by 
213.16  June 30, 2020, less the amount of employee contributions 
213.17  required pursuant to section 422A.10, and the amount of employer 
213.18  contributions required pursuant to subdivisions 1a, 2, and 2a.  
213.19  Payments shall be made September 15 annually.  
213.20     (c) The annual state contribution under this subdivision 
213.21  may not exceed $9,000,000, plus the cost of the annual 
213.22  supplemental benefit determined under section 356.43. 
213.23     (d) If the amount determined under paragraph (b) exceeds 
213.24  $11,910,000 $9,000,000, the excess must be allocated to and paid 
213.25  to the fund by the employers identified in subdivisions 1a and 
213.26  2, other than units of metropolitan government.  Each employer's 
213.27  share of the excess is proportionate to the employer's share of 
213.28  the fund's unfunded actuarial accrued liability as disclosed in 
213.29  the annual actuarial valuation prepared by the actuary 
213.30  retained by the Legislative Commission on Pensions and 
213.31  Retirement under section 356.214 compared to the total unfunded 
213.32  actuarial accrued liability attributed to all employers 
213.33  identified in subdivisions 1a and 2, other than units of 
213.34  metropolitan government.  Payments must be made in equal 
213.35  installments as set forth in paragraph (b). 
213.36     Sec. 8.  [REPEALER.] 
214.1      Minnesota Statutes 2004, section 422A.101, subdivision 4, 
214.2   is repealed.  
214.3      Sec. 9.  [EFFECTIVE DATE; LOCAL APPROVAL.] 
214.4      Sections 1 to 8 are effective retroactively on June 30, 
214.5   2005, if the city council of the city of Minneapolis and its 
214.6   chief clerical officer timely complete their compliance with 
214.7   Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
214.8                              ARTICLE 15 
214.9                      ONE PERSON AND SMALL GROUP 
214.10                         RETIREMENT CHANGES 
214.11     Section 1.  [PURCHASE OF PRIOR SERVICE CREDIT.] 
214.12     (a) An eligible person described in paragraph (b) is 
214.13  entitled to purchase up to one year of allowable service credit 
214.14  from the Teachers Retirement Association for the 2003-2004 
214.15  school year.  The service credit purchase under this section 
214.16  must be made in accordance with Minnesota Statutes, section 
214.17  356.551, except as otherwise stated in this section. 
214.18     (b) An eligible person is a person who: 
214.19     (1) is currently a member of the Teachers Retirement 
214.20  Association; 
214.21     (2) was born on April 2, 1949; 
214.22     (3) has been employed by Independent School District No. 
214.23  11, Anoka-Hennepin, since the 1971-1972 school year; 
214.24     (4) applied for and was granted an extended leave of 
214.25  absence from Independent School District No. 11, Anoka-Hennepin, 
214.26  for the 2002-2003, 2003-2004, and 2004-2005 school years under 
214.27  Minnesota Statutes, section 122A.46; 
214.28     (5) was unable to make timely payment for the 2003-2004 
214.29  school year under Minnesota Statutes, section 354.094, because 
214.30  of a problem in transferring funds from the individual's 
214.31  tax-sheltered annuity account; and 
214.32     (6) was not permitted by the Teachers Retirement 
214.33  Association to make payment after June 30, 2004, with interest. 
214.34     (c) Notwithstanding Minnesota Statutes, section 356.551, 
214.35  payment must be made by September 1, 2005, or prior to 
214.36  termination of service, whichever is earlier, and the employee 
215.1   payment amount is an amount equal to the employee contribution 
215.2   rate in effect during the 2003-2004 school year applied to the 
215.3   eligible individual's salary in the year prior to the leave, 
215.4   plus .708 percent monthly interest from June 30, 2004, until the 
215.5   end of the month in which payment is made.  If the full payment 
215.6   required under this paragraph is made, then notwithstanding 
215.7   Minnesota Statutes, section 354.094, the individual is 
215.8   authorized under Minnesota Statutes, section 354.094, to make 
215.9   the required contribution for the 2004-2005 school year, and any 
215.10  subsequent years of the leave.  Notwithstanding payment 
215.11  deadlines in Minnesota Statutes, section 354.094, the employee 
215.12  contribution for the 2004-2005 school year must be made on or 
215.13  before September 30, 2005, with .708 percent monthly interest 
215.14  from June 30, 2005, until paid.  
215.15     (d) If payment is received under paragraph (c), the 
215.16  executive director of the Teachers Retirement Association shall 
215.17  bill Independent School District No. 11, Anoka-Hennepin, for the 
215.18  employer contribution that would have been made on behalf of the 
215.19  eligible person for the 2003-2004 fiscal year under Minnesota 
215.20  Statutes, section 354.094.  The remainder of the full actuarial 
215.21  value payment under Minnesota Statutes, section 356.551, is 
215.22  waived.  If the school district fails to make payment under this 
215.23  paragraph within 30 days of notification of the amount due, the 
215.24  executive director shall notify the commissioner of the 
215.25  Department of Finance of that fact and the employer payment 
215.26  amount shall be deducted from any subsequent state aid to the 
215.27  school district.  
215.28     Sec. 2.  [EFFECTIVE DATE.] 
215.29     Section 1 is effective the day following final enactment." 
215.30     Delete the title and insert: 
215.31                         "A bill for an act 
215.32            relating to retirement; various public pension plans; 
215.33            clarifying and revising various plan provisions; 
215.34            eliminating obsolete provisions; defining final 
215.35            average salary; modifying the definition of allowable 
215.36            service to include time on strike; permitting judges 
215.37            to purchase service credit for an authorized leave; 
215.38            requiring specified payments; clarifying references to 
215.39            actuarial services in determining actuarial 
215.40            equivalence; defining covered salary to include 
216.1             certain employer contributions to supplemental 
216.2             retirement plans; specifying itemized detail of plan 
216.3             administrative expenses in annual financial reporting; 
216.4             excluding police officers of the University of 
216.5             Minnesota from the public employees police and fire 
216.6             fund; clarifying collection procedures relating to 
216.7             charter schools; adding a uniform nonassignment and 
216.8             legal process exemption provision; providing for 
216.9             various member and employer contribution rate 
216.10            increases; adding employees of Bridges Medical 
216.11            Services, Hutchinson Area Health Care, and Northfield 
216.12            Hospital to privatization coverage; extending date for 
216.13            filing special law approval with the secretary of 
216.14            state for the RenVilla Nursing Home; requiring the 
216.15            privatization periodic filing of updated copies of 
216.16            articles of incorporation and bylaws; modifying a 
216.17            higher education individual retirement account plan 
216.18            investment option provision; implementing the 
216.19            recommendations of the Volunteer Firefighter Relief 
216.20            Association working group of the state auditor; 
216.21            modifying the trigger date for filing financial 
216.22            reports; revising the per firefighter financing 
216.23            requirements for monthly benefit service pensions; 
216.24            modifying the options for crediting interest on 
216.25            deferred service pensions; clarifying the deferred 
216.26            service pension options available to defined 
216.27            contribution plans; providing for the crediting of 
216.28            service during military service leaves; requiring the 
216.29            amortization of experience losses; clarifying the 
216.30            compliance requirements for the qualification for fire 
216.31            state aid; modifying a limit on mutual fund 
216.32            investments; clarifying corporate stock and exchange 
216.33            traded funds investment authority; modifying the 
216.34            municipal representation requirements on relief 
216.35            association governing boards; clarifying exemptions 
216.36            from process and taxation; providing that certain laws 
216.37            do not apply to the consolidation of specified 
216.38            volunteer firefighter relief associations; providing 
216.39            an ad hoc postretirement adjustment to Eveleth police 
216.40            and fire trust fund benefit recipients; authorizing 
216.41            the Maplewood Firefighters Relief Association to 
216.42            transfer assets to the Oakdale Firefighters Relief 
216.43            Association to cover service credits earned by certain 
216.44            individuals; appropriating money; amending Minnesota 
216.45            Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 
216.46            8, by adding subdivisions; 3A.011; 3A.02, subdivisions 
216.47            1, 1b, 3, 4, 5; 3A.03, subdivisions 1, 2; 3A.04, 
216.48            subdivisions 1, 2, 3, 4, by adding a subdivision; 
216.49            3A.05; 3A.07; 3A.10, subdivision 1; 3A.12; 3A.13; 
216.50            43A.17, subdivision 9; 69.011, subdivision 2b, by 
216.51            adding a subdivision; 69.021, subdivisions 5, 11; 
216.52            69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision 
216.53            4; 69.771; 69.772, subdivisions 3, 4; 69.773, 
216.54            subdivisions 4, 4, 5; 69.775; 352.01, subdivisions 2a, 
216.55            4, 5, 12, 13, 21, 23, by adding a subdivision; 
216.56            352.021, subdivisions 1, 2, 3, 4; 352.04, subdivisions 
216.57            1, 12; 352.041, subdivisions 1, 2, 3, 5; 352.115, 
216.58            subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 
216.59            352.22, subdivision 10; 352.87, subdivision 3; 352.91, 
216.60            by adding a subdivision; 352.93, subdivision 1; 
216.61            352B.01, subdivisions 1, 2, 2, 3, 11; 352B.02, 
216.62            subdivision 1e; 352B.071; 352C.021, by adding a 
216.63            subdivision; 352C.091, subdivision 1; 352C.10; 
216.64            352D.01; 352D.015, subdivisions 3, 4; 352D.02, 
216.65            subdivision 1; 352D.03; 352D.05, subdivision 4; 
216.66            352D.085, subdivision 1; 352D.09, subdivision 5; 
216.67            352D.12; 353.01, subdivisions 6, 10, 14, 32, 33, by 
216.68            adding a subdivision; 353.025; 353.026; 353.027; 
216.69            353.028; 353.14; 353.15, subdivisions 1, 3; 353.27, 
216.70            subdivisions 2, 3, 3a, 11, by adding a subdivision; 
216.71            353.271; 353.28, subdivisions 5, 6; 353.29, 
217.1             subdivision 3; 353.31, subdivision 1c; 353.32, 
217.2             subdivision 9; 353.33, subdivisions 3, 12; 353.64, by 
217.3             adding a subdivision; 353.65, subdivisions 2, 3; 
217.4             353.651, subdivision 3; 353.656, subdivision 1; 
217.5             353B.02, subdivision 10; 353F.02, subdivision 4; 
217.6             354.05, subdivisions 7, 35, by adding a subdivision; 
217.7             354.091; 354.094, subdivision 1; 354.10, subdivisions 
217.8             1, 3, 4; 354.33, subdivision 5; 354.39; 354.41, 
217.9             subdivision 2; 354.42, by adding a subdivision; 
217.10            354.44, subdivisions 2, 6; 354A.011, subdivisions 3a, 
217.11            24, by adding a subdivision; 354A.021, subdivision 5, 
217.12            by adding a subdivision; 354A.097, subdivision 1; 
217.13            354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions 
217.14            2, 3; 354B.25, subdivision 2; 355.01, subdivision 3e; 
217.15            356.20, subdivision 4; 356.215, subdivision 8; 
217.16            356.216; 356.24, subdivision 1; 356.47, subdivision 3; 
217.17            356.551; 356.611, subdivision 1; 356.65, subdivision 
217.18            2; 356A.06, subdivisions 7, 7; 383B.46, subdivision 2; 
217.19            383B.47; 383B.48; 383B.49; 422A.01, subdivisions 6, 
217.20            11, by adding subdivisions; 422A.05, subdivision 2c; 
217.21            422A.06, subdivisions 3, 5, 7, 7, 8; 422A.10, 
217.22            subdivisions 1, 2; 422A.101, subdivision 3; 422A.15, 
217.23            subdivision 1; 422A.16, subdivision 9; 422A.22, 
217.24            subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.01, 
217.25            by adding a subdivision; 423B.05, subdivision 3; 
217.26            423B.09, subdivision 1, by adding a subdivision; 
217.27            423B.10, subdivision 1; 423B.17; 423C.01, by adding a 
217.28            subdivision; 423C.05, subdivision 2; 423C.09; 424A.02, 
217.29            subdivisions 3, 4, 7; 424A.04, subdivision 1; 424B.10, 
217.30            subdivision 1; 471A.10; 490.121, subdivisions 1, 4, 4, 
217.31            6, 7, 13, 14, 15, 20, 21, 21, 22, by adding 
217.32            subdivisions; 490.122; 490.123, subdivisions 1, 1a, 
217.33            1b, 1c, 2, 3; 490.124, subdivisions 1, 2, 3, 4, 5, 8, 
217.34            9, 10, 11, 12, 13; 490.125, subdivisions 1, 2; 
217.35            490.126, subdivision 5; 490.133; 525.05; Laws 1999 
217.36            Chapter 222, Article 16, Section 16; Laws 2000 Chapter 
217.37            461, Article 4, Section 4; Laws 2004 Chapter 267, 
217.38            Article 12, Section 4; proposing coding for new law 
217.39            in/as Minnesota Statutes, chapters 352C; 356; 383B; 
217.40            423C; 424A; 490A; repealing Minnesota Statutes 2004, 
217.41            sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, 
217.42            subdivision 2; 3A.04, subdivision 1a; 3A.09; 352.119, 
217.43            subdivision 1; 352.15, subdivision 1a; 352C.01; 
217.44            352C.011; 352C.021; 352C.031, subdivision 3; 352C.033; 
217.45            352C.04; 352C.051; 352C.09; 352C.091, subdivisions 2, 
217.46            3; 353.15, subdivision 2; 353.29, subdivision 2; 
217.47            353.34, subdivision 3b; 353.36, subdivisions 2, 2a, 
217.48            2b, 2c; 353.46, subdivision 4; 353.651, subdivision 2; 
217.49            353.663; 353.74; 353.75; 354.10, subdivision 2; 
217.50            354.59; 422A.101, subdivision 4; 422A.22, subdivisions 
217.51            2, 5; 422A.221; 490.021; 490.025; 490.101; 490.102; 
217.52            490.103; 490.105; 490.106; 490.107; 490.108; 490.109; 
217.53            490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 
217.54            10, 11, 12, 16, 17, 18, 19, 20; 490.124, subdivision 
217.55            6; 490.132; 490.15; 490.16; and 490.18."