1.1    .................... moves to amend H.F. No. 1978; S.F. No. 430, as follows:
1.2Delete everything after the enacting clause and insert:


1.5    Section 1. Minnesota Statutes 2006, section 3A.05, is amended to read:
1.63A.05 APPLICATION FOR SURVIVOR BENEFIT.
1.7    (a) Applications for survivor benefits under section 3A.04 must be filed with the
1.8director by the surviving spouse and dependent child or children entitled to benefits under
1.9section 3A.04, or by the guardian of the estate, if there is one, of the dependent child or
1.10children.
1.11    (b) Survivor benefits accrue as of the first day of the month following the death of
1.12the member of the legislature or former legislator and payments commence as of the first
1.13of the month next following the filing of the application, and are retroactive to the date the
1.14benefit accrues or the first of the month occurring 12 months before the month in which
1.15the application is filed with the director, whichever is earlier later.
1.16EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

1.17    Sec. 2. Minnesota Statutes 2006, section 13.632, subdivision 1, is amended to read:
1.18    Subdivision 1. Beneficiary and survivor data. The following data on beneficiaries
1.19and survivors of the Minneapolis Teachers Retirement Fund Association, the St. Paul
1.20Teachers Retirement Fund Association, and the Duluth Teachers Retirement Fund
1.21Association members are private data on individuals: home address, date of birth, direct
1.22deposit number, and tax withholding data.
1.23EFFECTIVE DATE.This section is effective the day after final enactment.

1.24    Sec. 3. Minnesota Statutes 2006, section 126C.41, subdivision 4, is amended to read:
1.25    Subd. 4. Minneapolis health insurance subsidy. Each year Special School District
1.26No. 1, Minneapolis, may make an additional levy not to exceed the amount raised by a net
2.1tax rate of .10 percent times the adjusted net tax capacity for taxes payable in 1991 and
2.2thereafter of the property in the district for the preceding year. The proceeds may be used
2.3only to subsidize health insurance costs for eligible teachers as provided in this section.
2.4    "Eligible teacher" means a retired teacher who is a retired member of the Teachers
2.5Retirement Association, who was a basic member of the former Minneapolis Teachers
2.6Retirement Fund Association, who retired before May 1, 1974, or who had 20 or more
2.7years of basic member service in the former Minneapolis Teachers Retirement Fund
2.8Association and retired before June 30, 1983, and who is not eligible to receive the
2.9hospital insurance benefits of the federal Medicare program of the Social Security Act
2.10without payment of a monthly premium. The district must notify eligible teachers that a
2.11subsidy is available. To obtain a subsidy, an eligible teacher must submit to the school
2.12district a copy of receipts for health insurance premiums paid. The district must disburse
2.13the health insurance premium subsidy to each eligible teacher according to a schedule
2.14determined by the district, but at least annually. An eligible teacher may receive a subsidy
2.15up to an amount equal to the lesser of 90 percent of the cost of the eligible teacher's
2.16health insurance or up to 90 percent of the cost of the number two qualified plan of health
2.17coverage for individual policies made available by the Minnesota comprehensive health
2.18association under chapter 62E.
2.19    If funds remaining from the previous year's health insurance subsidy levy, minus
2.20the previous year's required subsidy amount, are sufficient to pay the estimated current
2.21year subsidy, the levy must be discontinued until the remaining funds are estimated by the
2.22school board to be insufficient to pay the subsidy.
2.23    This subdivision does not extend benefits to teachers who retire after June 30,
2.241983, and does not create a contractual right or claim for altering the benefits in this
2.25subdivision. This subdivision does not restrict the district's right to modify or terminate
2.26coverage under this subdivision.
2.27EFFECTIVE DATE.This section is effective the day after final enactment.

2.28    Sec. 4. Minnesota Statutes 2006, section 353.01, subdivision 2b, is amended to read:
2.29    Subd. 2b. Excluded employees. The following public employees are not eligible
2.30to participate as members of the association with retirement coverage by the public
2.31employees retirement plan, the local government correctional employees retirement plan
2.32under chapter 353E, or the public employees police and fire retirement plan:
2.33    (1) public officers, other than county sheriffs, who are elected to a governing body,
2.34or persons who are appointed to fill a vacancy in an elective office of a governing body,
2.35whose term of office commences on or after July 1, 2002, for the service to be rendered
3.1in that elective position. Elected governing body officials who were active members of
3.2the association's coordinated or basic retirement plans as of June 30, 2002, continue
3.3participation throughout incumbency in office until termination of public service occurs as
3.4defined in subdivision 11a;
3.5    (2) election officers or election judges;
3.6    (3) patient and inmate personnel who perform services for a governmental
3.7subdivision;
3.8    (4) except as otherwise specified in subdivision 12a, employees who are hired for
3.9a temporary position as defined under subdivision 12a, and employees who resign from
3.10a nontemporary position and accept a temporary position within 30 days in the same
3.11governmental subdivision;
3.12    (5) employees who are employed by reason of work emergency caused by fire,
3.13flood, storm, or similar disaster;
3.14    (6) employees who by virtue of their employment in one governmental subdivision
3.15are required by law to be a member of and to contribute to any of the plans or funds
3.16administered by the Minnesota State Retirement System, the Teachers Retirement
3.17Association, the Duluth Teachers Retirement Fund Association, the Minneapolis Teachers
3.18Retirement Fund Association, the St. Paul Teachers Retirement Fund Association, the
3.19Minneapolis Employees Retirement Fund, or any police or firefighters relief association
3.20governed by section 69.77 that has not consolidated with the Public Employees Retirement
3.21Association, or any local police or firefighters consolidation account who have not elected
3.22the type of benefit coverage provided by the public employees police and fire fund under
3.23sections 353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4,
3.245, or 6, who have not elected public employees police and fire plan benefit coverage. This
3.25clause must not be construed to prevent a person from being a member of and contributing
3.26to the Public Employees Retirement Association and also belonging to and contributing to
3.27another public pension plan or fund for other service occurring during the same period
3.28of time. A person who meets the definition of "public employee" in subdivision 2 by
3.29virtue of other service occurring during the same period of time becomes a member of the
3.30association unless contributions are made to another public retirement fund on the salary
3.31based on the other service or to the Teachers Retirement Association by a teacher as
3.32defined in section 354.05, subdivision 2;
3.33    (7) persons who are members of a religious order and are excluded from coverage
3.34under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
3.35performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
4.1as amended through January 1, 1987, if no irrevocable election of coverage has been made
4.2under section 3121(r) of the Internal Revenue Code of 1954, as amended;
4.3    (8) employees of a governmental subdivision who have not reached the age of
4.423 and are enrolled on a full-time basis to attend or are attending classes on a full-time
4.5basis at an accredited school, college, or university in an undergraduate, graduate, or
4.6professional-technical program, or a public or charter high school;
4.7    (9) resident physicians, medical interns, and pharmacist residents and pharmacist
4.8interns who are serving in a degree or residency program in public hospitals;
4.9    (10) students who are serving in an internship or residency program sponsored
4.10by an accredited educational institution;
4.11    (11) persons who hold a part-time adult supplementary technical college license who
4.12render part-time teaching service in a technical college;
4.13    (12) except for employees of Hennepin County or Hennepin Healthcare System,
4.14Inc., foreign citizens working for a governmental subdivision with a work permit of less
4.15than three years, or an H-1b visa valid for less than three years of employment. Upon
4.16notice to the association that the work permit or visa extends beyond the three-year period,
4.17the foreign citizens must be reported for membership from the date of the extension;
4.18    (13) public hospital employees who elected not to participate as members of the
4.19association before 1972 and who did not elect to participate from July 1, 1988, to October
4.201, 1988;
4.21    (14) except as provided in section 353.86, volunteer ambulance service personnel,
4.22as defined in subdivision 35, but persons who serve as volunteer ambulance service
4.23personnel may still qualify as public employees under subdivision 2 and may be members
4.24of the Public Employees Retirement Association and participants in the public employees
4.25retirement fund or the public employees police and fire fund, whichever applies, on the
4.26basis of compensation received from public employment service other than service as
4.27volunteer ambulance service personnel;
4.28    (15) except as provided in section 353.87, volunteer firefighters, as defined in
4.29subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
4.30provided that a person who is a volunteer firefighter may still qualify as a public
4.31employee under subdivision 2 and may be a member of the Public Employees Retirement
4.32Association and a participant in the public employees retirement fund or the public
4.33employees police and fire fund, whichever applies, on the basis of compensation received
4.34from public employment activities other than those as a volunteer firefighter;
4.35    (16) pipefitters and associated trades personnel employed by Independent School
4.36District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
5.1pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
5.2if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
5.3241, article 2, section 12;
5.4    (17) electrical workers, plumbers, carpenters, and associated trades personnel
5.5employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
5.6who have retirement coverage under a collective bargaining agreement by the Electrical
5.7Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
5.8or the Carpenters Local 87 pension plan who were either first employed after May 1,
5.92000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
5.10chapter 461, article 7, section 5;
5.11    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
5.12painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
5.13Independent School District No. 625, St. Paul, with coverage under a collective
5.14bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
5.15the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
5.16pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
5.17Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
5.18first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
5.19Session chapter 10, article 10, section 6;
5.20    (19) plumbers employed by the Metropolitan Airports Commission, with coverage
5.21under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
5.22were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
5.23be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
5.24    (20) employees who are hired after June 30, 2002, to fill seasonal positions under
5.25subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
5.26days or less in each year of employment with the governmental subdivision;
5.27    (21) persons who are provided supported employment or work-study positions
5.28by a governmental subdivision and who participate in an employment or industries
5.29program maintained for the benefit of these persons where the governmental subdivision
5.30limits the position's duration to three years or less, including persons participating in a
5.31federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
5.32unemployment relief program where the training or work experience is not provided as a
5.33part of, or for, future permanent public employment;
5.34    (22) independent contractors and the employees of independent contractors; and
5.35    (23) reemployed annuitants of the association during the course of that
5.36reemployment.
6.1EFFECTIVE DATE.This section is effective the day after final enactment.

6.2    Sec. 5. Minnesota Statutes 2006, section 354.44, subdivision 6, is amended to read:
6.3    Subd. 6. Computation of formula program retirement annuity. (a) The formula
6.4retirement annuity must be computed in accordance with the applicable provisions of the
6.5formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
6.6section 354.05, subdivision 13a, for the period of the member's formula service credit.
6.7    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
6.8became a member of the association or a member of a pension fund listed in section
6.9356.30, subdivision 3 , before July 1, 1989, unless paragraph (d), in conjunction with
6.10paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
6.11average salary as defined in section 354.05, subdivision 13a, multiplied by the following
6.12percentages per year of formula service credit shall determine the amount of the annuity to
6.13which the member qualifying therefor is entitled for service rendered before July 1, 2006:

6.14				Coordinated Member		Basic Member
6.15 6.16 6.17 6.18 6.19		Each year of service during first ten		the percent specified in section 356.315, subdivision 1, per year		the percent specified in section 356.315, subdivision 3, per year
6.20 6.21 6.22 6.23 6.24		Each year of service thereafter		the percent specified in section 356.315, subdivision 2, per year		the percent specified in section 356.315, subdivision 4, per year

6.25    For service rendered on or after July 1, 2006, the average salary as defined in section
6.26354.05 , subdivision 13a, multiplied by the following percentages per year of service credit,
6.27determines the amount the annuity to which the member qualifying therefor is entitled:

6.28				Coordinated Member		Basic Member
6.29 6.30 6.31 6.32 6.33		Each year of service during first ten		the percent specified in section 356.315, subdivision 1a, per year		the percent specified in section 356.315, subdivision 3, per year
6.34 6.35 6.36 6.37 6.38		Each year of service after ten years of service		the percent specified in section 356.315, subdivision 2b, per year		the percent specified in section 356.315, subdivision 4, per year

6.39    (c)(i) This paragraph applies only to a person who first became a member of the
6.40association or a member of a pension fund listed in section 356.30, subdivision 3, before
6.41July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
7.1conjunction with this paragraph than when calculated under paragraph (d), in conjunction
7.2with paragraph (e).
7.3    (ii) Where any member retires prior to normal retirement age under a formula
7.4annuity, the member shall be paid a retirement annuity in an amount equal to the normal
7.5annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
7.6that the member is under normal retirement age at the time of retirement except that for
7.7any member who has 30 or more years of allowable service credit, the reduction shall be
7.8applied only for each month that the member is under age 62.
7.9    (iii) Any member whose attained age plus credited allowable service totals 90 years
7.10is entitled, upon application, to a retirement annuity in an amount equal to the normal
7.11annuity provided in paragraph (b), without any reduction by reason of early retirement.
7.12    (d) This paragraph applies to a member who has become at least 55 years old and
7.13first became a member of the association after June 30, 1989, and to any other member
7.14who has become at least 55 years old and whose annuity amount when calculated under
7.15this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
7.16under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
7.17salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
7.18by section 356.315, subdivision 4, for each year of service for a basic member shall
7.19determine the amount of the retirement annuity to which the basic member is entitled.
7.20The annuity of a basic member who was a member of the former Minneapolis Teachers
7.21Retirement Fund Association as of June 30, 2006, must be determined according to the
7.22annuity formula under the articles of incorporation of the former Minneapolis Teachers
7.23Retirement Fund Association in effect as of that date. For a coordinated member, the
7.24average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent
7.25specified in section 356.315, subdivision 2, for each year of service rendered before July
7.261, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year of
7.27service rendered on or after July 1, 2006, determines the amount of the retirement annuity
7.28to which the coordinated member is entitled.
7.29    (e) This paragraph applies to a person who has become at least 55 years old and first
7.30becomes a member of the association after June 30, 1989, and to any other member who
7.31has become at least 55 years old and whose annuity is higher when calculated under
7.32paragraph (d) in conjunction with this paragraph than when calculated under paragraph
7.33(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
7.34before the normal retirement age shall be paid the normal annuity provided in paragraph
7.35(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
7.36be payable to the employee if the employee deferred receipt of the annuity and the annuity
8.1amount were augmented at an annual rate of three percent compounded annually from the
8.2day the annuity begins to accrue until the normal retirement age if the employee became
8.3an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
8.4becomes an employee after June 30, 2006.
8.5    (f) No retirement annuity is payable to a former employee with a salary that exceeds
8.695 percent of the governor's salary unless and until the salary figures used in computing
8.7the highest five successive years average salary under paragraph (a) have been audited by
8.8the Teachers Retirement Association and determined by the executive director to comply
8.9with the requirements and limitations of section 354.05, subdivisions 35 and 35a.
8.10EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

8.11    Sec. 6. Minnesota Statutes 2006, section 354A.12, subdivision 3b, is amended to read:
8.12    Subd. 3b. Special direct state matching aid to the Teachers Retirement
8.13Association. (a) Special School District No. 1 must make an additional employer
8.14contribution to the Teachers Retirement Fund Association. The city of Minneapolis must
8.15make a contribution to the Teachers Retirement Association. This contribution must be
8.16made by a levy of the board of estimate and taxation of the city of Minneapolis and the
8.17levy, if made, is classified as that of a special taxing district for purposes of sections
8.18275.065 and 276.04, and for all other property tax purposes.
8.19    (b) $1,125,000 $1,250,000 must be contributed by Special School District No.
8.201 and $1,125,000 $1,250,000 must be contributed by the city of Minneapolis to the
8.21Teachers Retirement Association under paragraph (a), and the state shall pay to the
8.22Teachers Retirement Association $2,500,000 each fiscal year. The superintendent of
8.23Special School District No. 1, the mayor of the city of Minneapolis, and the executive
8.24director of the Teachers Retirement Association shall jointly certify to the commissioner
8.25of finance the total amount that has been contributed by Special School District No. 1
8.26and by the city of Minneapolis to the Teachers Retirement Association. Any certification
8.27to the commissioner of education must be made quarterly. If the total certifications for a
8.28fiscal year exceed the maximum annual direct state matching aid amount in any quarter,
8.29the amount of direct state matching aid payable to the Teachers Retirement Association
8.30must be limited to the balance of the maximum annual direct state matching aid amount
8.31available. The amount required under this paragraph, subject to the maximum direct state
8.32matching aid amount, is appropriated annually to the commissioner of finance.
8.33    (c) The commissioner of finance may prescribe the form of the certifications
8.34required under paragraph (b).
8.35EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

9.1    Sec. 7. Minnesota Statutes 2006, section 354A.12, subdivision 3c, is amended to read:
9.2    Subd. 3c. Termination of supplemental contributions and direct matching
9.3and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
9.4Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
9.5under section 423A.02, subdivision 3, which must continue to be paid to the Teachers
9.6Retirement Association until 2037, or. The supplemental contributions payable to the St.
9.7Paul Teachers Retirement Fund Association by Independent School District No. 625 under
9.8section 423A.02, subdivision 3, or the direct state aids under subdivision 3a to the St. Paul
9.9Teachers Retirement Fund Association terminate at the end of the fiscal year in which the
9.10accrued liability funding ratio for that fund, as determined in the most recent actuarial
9.11report for that fund by the actuary retained under section 356.214, equals or exceeds the
9.12accrued liability funding ratio for the teachers retirement association, as determined in
9.13the most recent actuarial report for the Teachers Retirement Association by the actuary
9.14retained under section 356.214.
9.15    (b) If the state direct matching, state supplemental, or state aid is terminated for a
9.16first class city teachers retirement fund association under paragraph (a), it may not again
9.17be received by that fund.
9.18    (c) If the St. Paul Teachers Retirement Fund Association is funded at the funding
9.19ratio applicable to the Teachers Retirement Association when the provisions of paragraph
9.20(b) become effective, then any state aid previously distributed to that association must be
9.21immediately transferred to the Teachers Retirement Association.
9.22EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

9.23    Sec. 8. Minnesota Statutes 2006, section 354A.12, subdivision 3d, is amended to read:
9.24    Subd. 3d. Supplemental administrative expense assessment. (a) The active and
9.25retired membership of the St. Paul Teachers Retirement Fund Association is responsible
9.26for defraying supplemental administrative expenses other than investment expenses of the
9.27respective teacher retirement fund association.
9.28    (b) Investment expenses of the teachers retirement fund association are those
9.29expenses incurred by or on behalf of the retirement fund in connection with the investment
9.30of the assets of the retirement fund other than investment security transaction costs. Other
9.31administrative expenses are all expenses incurred by or on behalf of the retirement fund
9.32for all other retirement fund functions other than the investment of retirement fund assets.
9.33Investment and other administrative expenses must be accounted for using generally
9.34accepted accounting principles and in a manner consistent with the comprehensive annual
10.1financial report of the teachers retirement fund association for the immediately previous
10.2fiscal year under section 356.20.
10.3    (c) Supplemental administrative expenses other than investment expenses of the St.
10.4Paul Teachers Retirement Fund Association are those expenses for the fiscal year that:
10.5    (1) exceed, for the St. Paul Teachers Retirement Fund Association, $443,745 plus
10.6an additional amount derived by applying the percentage increase in the Consumer Price
10.7Index for Urban Wage Earners and Clerical Workers All Items Index published by the
10.8Bureau of Labor Statistics of the United States Department of Labor since July 1, 2001,
10.9to the dollar amount; and
10.10    (2) exceed the amount computed by applying the most recent percentage of
10.11pay administrative expense amount, other than investment expenses, for the teachers
10.12retirement association governed by chapter 354 to the covered payroll of the respective
10.13teachers retirement fund association for the fiscal year.
10.14    (d) The board of trustees of the St. Paul Teachers Retirement Fund Association
10.15shall allocate the total dollar amount of supplemental administrative expenses other than
10.16investment expenses determined under paragraph (c), clause (2), among the various active
10.17and retired membership groups of the teachers retirement fund association and shall assess
10.18the various membership groups their respective share of the supplemental administrative
10.19expenses other than investment expenses, in amounts determined by the board of trustees.
10.20The supplemental administrative expense assessments must be paid by the membership
10.21group in a manner determined by the board of trustees of the respective teachers retirement
10.22association. Supplemental administrative expenses payable by the active members of the
10.23pension plan must be picked up by the employer in accordance with section 356.62.
10.24    (e) With respect to the St. Paul Teachers Retirement Fund Association, the
10.25supplemental administrative expense assessment must be fully disclosed to the various
10.26active and retired membership groups of the teachers retirement fund association. The
10.27chief administrative officer of the St. Paul Teachers Retirement Fund Association shall
10.28prepare a supplemental administrative expense assessment disclosure notice, which must
10.29include the following:
10.30    (1) the total amount of administrative expenses of the St. Paul Teachers Retirement
10.31Fund Association, the amount of the investment expenses of the St. Paul Teachers
10.32Retirement Fund Association, and the net remaining amount of administrative expenses of
10.33the St. Paul Teachers Retirement Fund Association;
10.34    (2) the amount of administrative expenses for the St. Paul Teachers Retirement Fund
10.35Association that would be equivalent to the teachers retirement association noninvestment
10.36administrative expense level described in paragraph (c);
11.1    (3) the total amount of supplemental administrative expenses required for assessment
11.2calculated under paragraph (c);
11.3    (4) the portion of the total amount of the supplemental administrative expense
11.4assessment allocated to each membership group and the rationale for that allocation;
11.5    (5) the manner of collecting the supplemental administrative expense assessment
11.6from each membership group, the number of assessment payments required during the
11.7year, and the amount of each payment or the procedure used to determine each payment;
11.8and
11.9    (6) any other information that the chief administrative officer determines is necessary
11.10to fairly portray the manner in which the supplemental administrative expense assessment
11.11was determined and allocated.
11.12    (f) The disclosure notice must be provided annually in the annual report of the
11.13association.
11.14    (g) The supplemental administrative expense assessments must be deposited in the
11.15applicable teachers retirement fund upon receipt.
11.16    (h) Any omitted active membership group assessments that remain undeducted
11.17and unpaid to the teachers retirement fund association for 90 days must be paid by the
11.18respective school district. The school district may recover any omitted active membership
11.19group assessment amounts that it has previously paid. The teachers retirement fund
11.20association shall deduct any omitted retired membership group assessment amounts from
11.21the benefits next payable after the discovery of the omitted amounts.
11.22EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

11.23    Sec. 9. Minnesota Statutes 2006, section 354B.21, subdivision 3, is amended to read:
11.24    Subd. 3. Default coverage. (a) Prior to making an election under subdivision 2, or
11.25if an eligible person fails to elect coverage by the plan under subdivision 2 or if the person
11.26fails to make a timely election, the following retirement coverage applies:
11.27    (1) for employees of the board who are employed in faculty positions in the technical
11.28colleges, in the state universities or in the community colleges, the retirement coverage
11.29is by the plan established by this chapter;
11.30    (2) for employees of the board who are employed in faculty positions in the technical
11.31colleges, the retirement coverage is by the plan established by this chapter unless on June
11.3230, 1997, the employee was a member of the Teachers Retirement Association established
11.33under chapter 354 and then the retirement coverage is by the Teachers Retirement
11.34Association, or, unless the employee was a member of a first class city teacher retirement
11.35fund established under chapter 354A on June 30, 1995, and then the retirement coverage
12.1is by the Duluth Teachers Retirement Fund Association if the person was a member of
12.2that plan on June 30, 1995, or the Minneapolis Teachers Retirement Fund Association
12.3Teachers Retirement Association if the person was a member of that plan the former
12.4Minneapolis Teachers Retirement Fund Association on June 30, 1995, or the St. Paul
12.5Teachers Retirement Fund Association if the person was a member of that plan on June
12.630, 1995; and
12.7    (3) for employees of the board who are employed in eligible unclassified
12.8administrative positions, the retirement coverage is by the plan established by this chapter.
12.9    (b) If an employee fails to correctly certify prior membership in the Teachers
12.10Retirement Association to the Minnesota State colleges and Universities system, the
12.11system shall not pay interest on employee contributions, employer contributions, and
12.12additional employer contributions to the Teachers Retirement Association under section
12.13354.52, subdivision 4 .
12.14EFFECTIVE DATE.This section is effective the day after final enactment.

12.15    Sec. 10. Minnesota Statutes 2006, section 355.01, subdivision 3h, is amended to read:
12.16    Subd. 3h. Minneapolis teacher. "Minneapolis teacher" means a person employed
12.17by Special School District No. 1, Minneapolis, who holds a position covered by the
12.18Minneapolis Teachers Retirement Fund Association established Teachers Retirement
12.19Association under chapter 354A section 354.70.
12.20EFFECTIVE DATE.This section is effective the day after final enactment.

12.21    Sec. 11. Minnesota Statutes 2006, section 356A.06, subdivision 6, is amended to read:
12.22    Subd. 6. Limited list of authorized investment securities. (a) Except to the
12.23extent otherwise authorized by law, a covered pension plan may invest its assets only in
12.24investment securities authorized by this subdivision if the plan does not:
12.25    (1) have assets with a book value in excess of $1,000,000;
12.26    (2) use the services of an investment advisor registered with the Securities and
12.27Exchange Commission in accordance with the Investment Advisers Act of 1940, or
12.28registered as an investment advisor in accordance with sections 80A.58, and 80A.59
12.2980A.60, for the investment of at least 60 percent of its assets, calculated on book value;
12.30    (3) use the services of the State Board of Investment for the investment of at least 60
12.31percent of its assets, calculated on book value; or
12.32    (4) use a combination of the services of an investment advisor meeting the
12.33requirements of clause (2) and the services of the State Board of Investment for the
12.34investment of at least 75 percent of its assets, calculated on book value.
13.1    (b) Investment securities authorized for a pension plan covered by this subdivision
13.2are:
13.3    (1) certificates of deposit issued, to the extent of available insurance or
13.4collateralization, by a financial institution that is a member of the Federal Deposit
13.5Insurance Corporation or the Federal Savings and Loan Insurance Corporation, is insured
13.6by the National Credit Union Administration, or is authorized to do business in this state
13.7and has deposited with the chief administrative officer of the plan a sufficient amount of
13.8marketable securities as collateral in accordance with section 118A.03;
13.9    (2) savings accounts, to the extent of available insurance, with a financial institution
13.10that is a member of the Federal Deposit Insurance Corporation or the Federal Savings
13.11and Loan Insurance Corporation;
13.12    (3) governmental obligations, including bonds, notes, bills, or other fixed
13.13obligations, issued by the United States, an agency or instrumentality of the United States,
13.14an organization established and regulated by an act of Congress or by a state, state agency
13.15or instrumentality, municipality, or other governmental or political subdivision that:
13.16    (i) for the obligation in question, issues an obligation that equals or exceeds the
13.17stated investment yield of debt securities not exempt from federal income taxation and of
13.18comparable quality;
13.19    (ii) for an obligation that is a revenue bond, has been completely self-supporting
13.20for the last five years; and
13.21    (iii) for an obligation other than a revenue bond, has issued an obligation backed by
13.22the full faith and credit of the applicable taxing jurisdiction and has not been in default on
13.23the payment of principal or interest on the obligation in question or any other nonrevenue
13.24bond obligation during the preceding ten years;
13.25    (4) corporate obligations, including bonds, notes, debentures, or other regularly
13.26issued and readily marketable evidences of indebtedness issued by a corporation organized
13.27under the laws of any state that during the preceding five years has had on average
13.28annual net pretax earnings at least 50 percent greater than the annual interest charges
13.29and principal payments on the total issued debt of the corporation during that period
13.30and that, for the obligation in question, has issued an obligation rated in one of the top
13.31three quality categories by Moody's Investors Service, Incorporated, or Standard and
13.32Poor's Corporation; and
13.33    (5) shares in an open-end investment company registered under the federal
13.34Investment Company Act of 1940, if the portfolio investments of the company are limited
13.35to investments that meet the requirements of clauses (1) to (4).
13.36EFFECTIVE DATE.This section is effective retroactively to August 1, 2006.

14.1    Sec. 12. Minnesota Statutes 2006, section 423A.02, subdivision 3, is amended to read:
14.2    Subd. 3. Reallocation of amortization or supplementary amortization state
14.3aid. (a) Seventy percent of the difference between $5,720,000 and the current year
14.4amortization aid or supplemental amortization aid distributed under subdivisions 1 and 1a
14.5that is not distributed for any reason to a municipality for use by a local police or salaried
14.6fire relief association must be distributed by the commissioner of revenue according to this
14.7paragraph. The commissioner shall distribute 70 percent of the amounts derived under this
14.8paragraph to the Minneapolis Teachers Retirement Fund Association Teachers Retirement
14.9Association and 30 percent to the St. Paul Teachers Retirement Fund Association to
14.10fund the unfunded actuarial accrued liabilities of the respective funds. These payments
14.11shall be made on or before June 30 each fiscal year. The amount required under this
14.12paragraph is appropriated annually from the general fund to the commissioner of revenue.
14.13If either the Minneapolis Teachers Retirement Fund Association or the St. Paul Teachers
14.14Retirement Fund Association becomes funded at the funding ratio applicable to the
14.15teachers retirement association based on the actuarial reports prepared by the actuary for
14.16the Legislative Commission on Pensions and Retirement, then the commissioner shall
14.17distribute that fund's share under this paragraph to the other fund. The appropriation
14.18under this paragraph terminates when both funds become fully funded, its eligibility for
14.19this aid ceases. Amounts remaining in the undistributed balance account at the end of the
14.20biennium if aid eligibility ceases cancel to the general fund.
14.21    (b) In order to receive amortization and supplementary amortization aid under
14.22paragraph (a), Independent School District No. 625, St. Paul, must make contributions
14.23to the St. Paul Teachers Retirement Fund Association in accordance with the following
14.24schedule:

14.25		Fiscal Year		Amount
14.26		1996		$0
14.27		1997		$0
14.28		1998		$200,000
14.29		1999		$400,000
14.30		2000		$600,000
14.31		2001 and thereafter		$800,000

14.32    (c) In order to receive amortization and supplementary amortization aid under
14.33paragraph (a), Special School District No. 1, Minneapolis, and the city of Minneapolis
14.34must each make contributions to the Minneapolis Teachers Retirement Fund Association
14.35Teachers Retirement Association in accordance with the following schedule:

15.1 15.2 15.3		Fiscal Year	City amount		School district amount
15.4		1996	$0		$0
15.5		1997	$0		$0
15.6		1998	$250,000		$250,000
15.7		1999	$400,000		$400,000
15.8		2000	$550,000		$550,000
15.9		2001	$700,000		$700,000
15.10		2002	$850,000		$850,000
15.11		2003 and thereafter	$1,000,000		$1,000,000

15.12    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
15.13applicable, must be credited to a separate account in the applicable teachers retirement
15.14fund and may not be used in determining any benefit increases. The separate account
15.15terminates for a fund when the aid payments to the fund under paragraph (a) cease.
15.16    (e) Thirty percent of the difference between $5,720,000 and the current year
15.17amortization aid or supplemental amortization aid under subdivisions 1 and 1a that is not
15.18distributed for any reason to a municipality for use by a local police or salaried firefighter
15.19relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
15.20as additional funding to support a minimum fire state aid amount for volunteer firefighter
15.21relief associations. The amount required under this paragraph is appropriated annually
15.22to the commissioner of revenue.
15.23EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

15.24    Sec. 13. Minnesota Statutes 2006, section 423A.02, subdivision 5, is amended to read:
15.25    Subd. 5. Termination of state aid programs. The amortization state aid,
15.26supplemental amortization state aid, and additional amortization state aid programs
15.27terminate as of the December 31, next following the date of the actuarial valuation when
15.28the assets of the Minneapolis Teachers Retirement Fund Association equal the actuarial
15.29accrued liability of that plan and when the assets of the St. Paul Teachers Retirement
15.30Fund Association equal the actuarial accrued liability of that plan or December 31, 2009,
15.31whichever is later.
15.32EFFECTIVE DATE.This section is effective the day after final enactment.

15.33    Sec. 14. Laws 2006, chapter 271, article 2, section 12, subdivision 1, is amended to
15.34read:
15.35    Subdivision 1. Election of prior state coverage. (a) An employee in the
15.36occupational position of laundry coordinator or delivery van driver at the Minnesota
15.37Correctional Facility-Faribault who has future retirement coverage transferred to the
16.1correctional state employees retirement plan under section 5 is entitled to elect to obtain
16.2prior service credit for eligible correctional state service performed after June 30, 1997,
16.3and before July 1, 2006, with the Department of Corrections and an employee who had
16.4future retirement coverage transferred to the correctional state employees retirement
16.5plan under Laws 2004, chapter 267, article 1, section 1, is entitled to elect to obtain
16.6prior service credit for eligible correctional state service performed at the Minnesota
16.7Correctional Facility-Rush City before August 1, 2004. All prior service credit in either
16.8instance must be purchased.
16.9    (b) Eligible correctional state service is either a prior period of continuous service
16.10after June 30, 1997, at the Minnesota Correctional Facility-Faribault, or a prior period
16.11of continuous service at the Minnesota Correctional Facility-Rush City before August 1,
16.122004, whichever applies, performed as an employee of the Department of Corrections that
16.13would have been eligible for the correctional state employees retirement plan coverage
16.14under section 1, if that prior service had been performed after August 1, 2004, or June 30,
16.152006, rather than before August 1, 2004, or July 1, 2006, whichever applies. Service is
16.16continuous if there has been no period of discontinuation of eligible state service for a
16.17period greater than 30 calendar days.
16.18    (c) The commissioner of corrections shall certify eligible correctional state service
16.19to the commissioner of employee relations and to the executive director of the Minnesota
16.20State Retirement System.
16.21    (d) A correctional employee covered under section 1 this subdivision is entitled to
16.22purchase the past service if the department certifies that the employee met the eligibility
16.23requirements for coverage. The employee must make additional employee contributions.
16.24Payment for past service must be completed by June 30, 2007.
16.25EFFECTIVE DATE.This section is effective retroactively to June 14, 2006.

16.26    Sec. 15. Laws 2006, chapter 271, article 2, section 13, subdivision 3, is amended to
16.27read:
16.28    Subd. 3. Employee equivalent contribution. To receive the transfer of service
16.29credit specified in subdivision 1, the individual must pay to the executive director of the
16.30Minnesota State Retirement System the difference between the employee contribution rate
16.31for the general state employees retirement plan and the employee contribution rate for the
16.32correctional state employees retirement plan in effect during the period eligible for transfer
16.33applied to the eligible individual's salary at the time each additional contribution would
16.34have been deducted from pay if coverage had been provided by the correctional state
16.35employees retirement plan. These amounts shall be paid in a lump sum by September 1,
17.12005 2007, or prior to termination of service, whichever is earlier, plus 8.5 percent annual
17.2compound interest from the applicable payroll deduction date until paid.
17.3EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.

17.4    Sec. 16. Laws 2006, chapter 271, article 14, section 2, subdivision 3, is amended to
17.5read:
17.6    Subd. 3. Payment. If an eligible person meets the requirements to purchase service
17.7credit under this section, the public employees police and fire fund must be paid the
17.8amount determined under Minnesota Statutes, section 356.551. Of this amount:
17.9    (1) the eligible person must pay an amount equal to the employee contribution rate
17.10during the period of service to be purchased, applied to the actual salary in effect during
17.11that period, plus interest at the rate of 8.5 percent per year compounded annually from
17.12the date on which the contributions should have been made to the date on which payment
17.13is made under this section; and
17.14    (2) the city of Faribault must pay the remainder of the amount determined under
17.15Minnesota Statutes, section 356.551.
17.16EFFECTIVE DATE.This section is effective retroactively to June 2, 2006.


17.19    Section 1. Minnesota Statutes 2006, section 3A.02, subdivision 1, is amended to read:
17.20    Subdivision 1. Qualifications. (a) A former legislator is entitled, upon written
17.21application to the director, to receive a retirement allowance monthly, if the person:
17.22    (1) has either served at least six full years, without regard to the application of
17.23section 3A.10, subdivision 2, or has served during all or part of four regular sessions as a
17.24member of the legislature, which service need not be continuous;
17.25    (2) has attained the normal retirement age;
17.26    (3) has retired as a member of the legislature; and
17.27    (4) has made all contributions provided for in section 3A.03, has made payments
17.28for past service under subdivision 2, or has made payments in lieu of contributions under
17.29Minnesota Statutes 1992, section 3A.031, before July 1, 1994.
17.30    (b) Unless the former legislator has legislative service before January 1, 1979,
17.31the retirement allowance is an amount equal to 2-1/2 percent per year of service of that
17.32member's average monthly salary and adjusted for that person on an actuarial equivalent
17.33basis to reflect the change in the postretirement interest rate actuarial assumption under
17.34section 356.215, subdivision 8, from five percent to six percent. The adjustment must be
17.35calculated by or, alternatively, the adjustment procedure must be specified by, the actuary
18.1retained under section 356.214. The purpose of this adjustment is to ensure that the total
18.2amount of benefits that the actuary predicts an individual member will receive over the
18.3member's lifetime under this paragraph will be the same as the total amount of benefits the
18.4actuary predicts the individual member would receive over the member's lifetime under
18.5the law in effect before enactment of this paragraph. If the former legislator has legislative
18.6service before January 1, 1979, the person's benefit must include the additional benefit
18.7amount in effect on January 1, 1979, and adjusted as otherwise provided in this paragraph.
18.8    (c) The retirement allowance accrues beginning with the first day of the month of
18.9receipt of the application, following the receipt by the director of a retirement application
18.10on a form prescribed by the director, but not before the normal retirement age 60, and,
18.11except as specified in subdivision 1b. The annuity is payable for the remainder of the
18.12former legislator's life, if the former legislator is not serving as a member of the legislature
18.13or as a constitutional officer as defined in section 3A.01, subdivision 1c. The annuity does
18.14not begin to accrue before the person's retirement as a legislator. No annuity payment may
18.15be made retroactive for more than 180 days before the date that the annuity application
18.16is filed with the director.
18.17    (d) Any member who has served during all or part of four regular sessions is
18.18considered to have served eight years as a member of the legislature.
18.19    (e) The retirement allowance ceases with the last payment that accrued to the retired
18.20legislator during the retired legislator's lifetime, except that the surviving spouse, if any,
18.21is entitled to receive the retirement allowance of the retired legislator for the calendar
18.22month in which the retired legislator died.
18.23EFFECTIVE DATE.This section is effective the day after final enactment.

18.24    Sec. 2. Minnesota Statutes 2006, section 352.01, subdivision 2a, is amended to read:
18.25    Subd. 2a. Included employees. (a) "State employee" includes:
18.26    (1) employees of the Minnesota Historical Society;
18.27    (2) employees of the State Horticultural Society;
18.28    (3) employees of the Disabled American Veterans, Department of Minnesota,
18.29Veterans of Foreign Wars, Department of Minnesota, if employed before July 1, 1963;
18.30    (4) (3) employees of the Minnesota Crop Improvement Association;
18.31    (5) (4) employees of the adjutant general who are paid from federal funds and who
18.32are not covered by any federal civilian employees retirement system;
18.33    (6) (5) employees of the Minnesota State Colleges and Universities employed under
18.34the university or college activities program;
19.1    (7) (6) currently contributing employees covered by the system who are temporarily
19.2employed by the legislature during a legislative session or any currently contributing
19.3employee employed for any special service as defined in subdivision 2b, clause (8);
19.4    (8) employees of the Armory Building Commission;
19.5    (9) (7) employees of the legislature appointed without a limit on the duration of their
19.6employment and persons employed or designated by the legislature or by a legislative
19.7committee or commission or other competent authority to conduct a special inquiry,
19.8investigation, examination, or installation;
19.9    (10) (8) trainees who are employed on a full-time established training program
19.10performing the duties of the classified position for which they will be eligible to receive
19.11immediate appointment at the completion of the training period;
19.12    (11) (9) employees of the Minnesota Safety Council;
19.13    (12) (10) any employees on authorized leave of absence from the Transit Operating
19.14Division of the former Metropolitan Transit Commission who are employed by the
19.15labor organization which is the exclusive bargaining agent representing employees of
19.16the Transit Operating Division;
19.17    (13) (11) employees of the Metropolitan Council, Metropolitan Parks and Open
19.18Space Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito
19.19Control Commission, or Metropolitan Radio Board unless excluded or covered by another
19.20public pension fund or plan under section 473.415, subdivision 3;
19.21    (14) (12) judges of the Tax Court;
19.22    (15) (13) personnel employed on June 30, 1992, by the University of Minnesota
19.23in the management, operation, or maintenance of its heating plant facilities, whose
19.24employment transfers to an employer assuming operation of the heating plant facilities,
19.25so long as the person is employed at the University of Minnesota heating plant by that
19.26employer or by its successor organization;
19.27    (16) (14) seasonal help in the classified service employed by the Department of
19.28Revenue; and
19.29    (17) (15) persons employed by the Department of Commerce as a peace officer in
19.30the Insurance Fraud Prevention Division under section 45.0135 who have attained the
19.31mandatory retirement age specified in section 43A.34, subdivision 4.; and
19.32    (16) employees of the University of Minnesota unless excluded under subdivision
19.332b, clause (3).
19.34    (b) Employees specified in paragraph (a), clause (15) (13), are included employees
19.35under paragraph (a) if employer and employee contributions are made in a timely manner
19.36in the amounts required by section 352.04. Employee contributions must be deducted from
20.1salary. Employer contributions are the sole obligation of the employer assuming operation
20.2of the University of Minnesota heating plant facilities or any successor organizations to
20.3that employer.
20.4EFFECTIVE DATE.This section is effective the day after final enactment.

20.5    Sec. 3. Minnesota Statutes 2006, section 352.01, subdivision 2b, is amended to read:
20.6    Subd. 2b. Excluded employees. "State employee" does not include:
20.7    (1) students employed by the University of Minnesota, or the state colleges and
20.8universities, unless approved for coverage by the Board of Regents of the University of
20.9Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, as
20.10the case may be whichever is applicable;
20.11    (2) employees who are eligible for membership in the state Teachers Retirement
20.12Association, except employees of the Department of Education who have chosen or may
20.13choose to be covered by the general state employees retirement plan of the Minnesota
20.14State Retirement System instead of the Teachers Retirement Association;
20.15    (3) employees of the University of Minnesota who are excluded from coverage by
20.16action of the Board of Regents;
20.17    (4) officers and enlisted personnel in the National Guard and the naval militia who
20.18are assigned to permanent peacetime duty and who under federal law are or are required to
20.19be members of a federal retirement system;
20.20    (5) election officers;
20.21    (6) persons who are engaged in public work for the state but who are employed
20.22by contractors when the performance of the contract is authorized by the legislature or
20.23other competent authority;
20.24    (7) officers and employees of the senate, or of the house of representatives, or of a
20.25legislative committee or commission who are temporarily employed;
20.26    (8) receivers, jurors, notaries public, and court employees who are not in the judicial
20.27branch as defined in section 43A.02, subdivision 25, except referees and adjusters
20.28employed by the Department of Labor and Industry;
20.29    (9) patient and inmate help in state charitable, penal, and correctional institutions
20.30including the Minnesota Veterans Home;
20.31    (10) persons who are employed for professional services where the service is
20.32incidental to their regular professional duties and whose compensation is paid on a per
20.33diem basis;
20.34    (11) employees of the Sibley House Association;
21.1    (12) the members of any state board or commission who serve the state intermittently
21.2and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
21.3boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
21.4from serving more than three years; and the board of managers of the State Agricultural
21.5Society and its treasurer unless the treasurer is also its full-time secretary;
21.6    (13) state troopers and persons who are described in section 352B.01, subdivision 2,
21.7clauses (2) to (6);
21.8    (14) temporary employees of the Minnesota State Fair who are employed on or
21.9after July 1 for a period not to extend beyond October 15 of that year; and persons who
21.10are employed at any time by the state fair administration for special events held on the
21.11fairgrounds;
21.12    (15) emergency employees who are in the classified service; except that if an
21.13emergency employee, within the same pay period, becomes a provisional or probationary
21.14employee on other than a temporary basis, the employee shall be considered a "state
21.15employee" retroactively to the beginning of the pay period;
21.16    (16) persons who are described in section 352B.01, subdivision 2, clauses (2) to (6);
21.17    (17) (16) temporary employees in the classified service, and temporary employees
21.18in the unclassified service who are appointed for a definite period of not more than six
21.19months and who are employed less than six months in any one-year period;
21.20    (18) (17) interns hired for six months or less and trainee employees, except those
21.21listed in subdivision 2a, clause (10) (8);
21.22    (19) (18) persons whose compensation is paid on a fee basis or as an independent
21.23contractor;
21.24    (20) (19) state employees who are employed by the Board of Trustees of the
21.25Minnesota State Colleges and Universities in unclassified positions enumerated in section
21.2643A.08, subdivision 1 , clause (9);
21.27    (21) (20) state employees who in any year have credit for 12 months service as
21.28teachers in the public schools of the state and as teachers are members of the Teachers
21.29Retirement Association or a retirement system in St. Paul, Minneapolis, or Duluth, except
21.30for incidental employment as a state employee that is not covered by one of the teacher
21.31retirement associations or systems;
21.32    (22) (21) employees of the adjutant general who are employed on an unlimited
21.33intermittent or temporary basis in the classified or unclassified service for the support of
21.34Army and Air National Guard training facilities;
21.35    (23) (22) chaplains and nuns who are excluded from coverage under the federal
21.36Old Age, Survivors, Disability, and Health Insurance Program for the performance of
22.1service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if
22.2no irrevocable election of coverage has been made under section 3121(r) of the Internal
22.3Revenue Code of 1986, as amended through December 31, 1992;
22.4    (24) (23) examination monitors who are employed by departments, agencies,
22.5commissions, and boards to conduct examinations required by law;
22.6    (25) (24) persons who are appointed to serve as members of fact-finding
22.7commissions or adjustment panels, arbitrators, or labor referees under chapter 179;
22.8    (26) (25) temporary employees who are employed for limited periods under any state
22.9or federal program for training or rehabilitation, including persons who are employed for
22.10limited periods from areas of economic distress, but not including skilled and supervisory
22.11personnel and persons having civil service status covered by the system;
22.12    (27) (26) full-time students who are employed by the Minnesota Historical Society
22.13intermittently during part of the year and full-time during the summer months;
22.14    (28) (27) temporary employees who are appointed for not more than six months,
22.15of the Metropolitan Council and of any of its statutory boards, if the board members are
22.16appointed by the Metropolitan Council;
22.17    (29) (28) persons who are employed in positions designated by the Department of
22.18Employee Relations as student workers;
22.19    (30) (29) members of trades who are employed by the successor to the Metropolitan
22.20Waste Control Commission, who have trade union pension plan coverage under a
22.21collective bargaining agreement, and who are first employed after June 1, 1977;
22.22    (31) persons who are employed in subsidized on-the-job training, work experience,
22.23or public service employment as enrollees under the federal Comprehensive Employment
22.24and Training Act after March 30, 1978, unless the person has as of the later of March 30,
22.251978, or the date of employment sufficient service credit in the retirement system to meet
22.26the minimum vesting requirements for a deferred annuity, or the employer agrees in
22.27writing on forms prescribed by the director to make the required employer contributions,
22.28including any employer additional contributions, on account of that person from revenue
22.29sources other than funds provided under the federal Comprehensive Employment and
22.30Training Act, or the person agrees in writing on forms prescribed by the director to make
22.31the required employer contribution in addition to the required employee contribution;
22.32    (32) (30) off-duty peace officers while employed by the Metropolitan Council;
22.33    (33) (31) persons who are employed as full-time police officers by the Metropolitan
22.34Council and as police officers are members of the public employees police and fire fund;
23.1    (34) (32) persons who are employed as full-time firefighters by the Department
23.2of Military Affairs and as firefighters are members of the public employees police and
23.3fire fund;
23.4    (35) (33) foreign citizens with a work permit of less than three years, or an H-1b/JV
23.5visa valid for less than three years of employment, unless notice of extension is supplied
23.6which allows them to work for three or more years as of the date the extension is granted,
23.7in which case they are eligible for coverage from the date extended; and
23.8    (36) (34) persons who are employed by the Board of Trustees of the Minnesota State
23.9Colleges and Universities and who elect to remain members of the Public Employees
23.10Retirement Association or the Minneapolis Employees Retirement Fund, whichever
23.11applies, under section 136C.75.
23.12EFFECTIVE DATE.This section is effective the day after final enactment.

23.13    Sec. 4. Minnesota Statutes 2006, section 352.01, subdivision 11, is amended to read:
23.14    Subd. 11. Allowable service. (a) "Allowable service" means:
23.15    (1) Service by an employee for which on or before July 1, 1957, the employee was
23.16entitled to allowable service credit on the records of the system by reason of employee
23.17contributions in the form of salary deductions, payments in lieu of salary deductions, or in
23.18any other manner authorized by Minnesota Statutes 1953, chapter 352, as amended by
23.19Laws 1955, chapter 239.
23.20    (2) (1) service by an employee for which on or before July 1, 1961, the employee
23.21chose to obtain credit for service by making payments to the fund under Minnesota
23.22Statutes 1961, section 352.24.;
23.23    (3) Except as provided in clauses (8) and (9), (2) service by an employee after July 1,
23.241957, for any calendar month in which the employee is paid salary from which deductions
23.25are made, deposited, and credited in the fund, including deductions made, deposited, and
23.26credited as provided in section 352.041.;
23.27    (4) Except as provided in clauses (8) and (9), (3) service by an employee after July
23.281, 1957, for any calendar month for which payments in lieu of salary deductions are
23.29made, deposited, and credited in the fund, as provided in section 352.27 and Minnesota
23.30Statutes 1957, section 352.021, subdivision 4.;
23.31    For purposes of clauses (3) and (4), except as provided in clauses (8) and (9), any
23.32salary paid for a fractional part of any calendar month, including the month of separation
23.33from state service, is deemed the compensation for the entire calendar month.
23.34    (5) (4) the period of absence from their duties by employees who are temporarily
23.35disabled because of injuries incurred in the performance of duties and for which disability
24.1the state is liable under the workers' compensation law until the date authorized by the
24.2director for the commencement of payments of a total and permanent disability benefit
24.3from the retirement fund.;
24.4    (6) (5) service covered by a refund repaid as provided in section 352.23 or 352D.05,
24.5subdivision 4 , except service rendered as an employee of the adjutant general for which
24.6the person has credit with the federal civil service retirement system.;
24.7    (7) (6) service before July 1, 1978, by an employee of the Transit Operating Division
24.8of the Metropolitan Transit Commission or by an employee on an authorized leave of
24.9absence from the Transit Operating Division of the Metropolitan Transit Commission who
24.10is employed by the labor organization which is the exclusive bargaining agent representing
24.11employees of the Transit Operating Division, which was credited by the Metropolitan
24.12Transit Commission-Transit Operating Division employees retirement fund or any of its
24.13predecessor plans or funds as past, intermediate, future, continuous, or allowable service
24.14as defined in the Metropolitan Transit Commission-Transit Operating Division employees
24.15retirement fund plan document in effect on December 31, 1977.;
24.16    (8) (7) service after July 1, 1983, by an employee who is employed on a part-time
24.17basis for less than 50 percent of full time, for which the employee is paid salary from
24.18which deductions are made, deposited, and credited in the fund, including deductions
24.19made, deposited, and credited as provided in section 352.041 or for which payments in
24.20lieu of salary deductions are made, deposited, and credited in the fund as provided in
24.21section 352.27 shall be credited on a fractional basis either by pay period, monthly, or
24.22annually based on the relationship that the percentage of salary earned bears to a full-time
24.23salary, with any salary paid for the fractional service credited on the basis of the rate of
24.24salary applicable for a full-time pay period, month, or a full-time year. For periods of
24.25part-time service that is duplicated service credit, section 356.30, subdivision 1, clauses
24.26(i) and (j), govern.; and
24.27    Allowable service determined and credited on a fractional basis shall be used in
24.28calculating the amount of benefits payable, but service as determined on a fractional basis
24.29must not be used in determining the length of service required for eligibility for benefits.
24.30    (9) (8) any period of authorized leave of absence without pay that does not
24.31exceed one year and for which the employee obtained credit by payment to the fund
24.32in lieu of salary deductions. To obtain credit, the employee shall pay an amount equal
24.33to the employee and employer contribution rate in section 352.04, subdivisions 2 and 3,
24.34multiplied by the employee's hourly rate of salary on the date of return from leave of
24.35absence and by the days and months of the leave of absence without pay for which the
24.36employee wants allowable service credit. The employing department, at its option, may
25.1pay the employer amount on behalf of its employees. Payments made under this clause
25.2must include interest at an annual rate of 8.5 percent compounded annually from the date
25.3of termination of the leave of absence to the date payment is made unless payment is
25.4completed within one year of the return from leave of absence under section 352.017.
25.5    (10) (9) MS 2002 [Expired]
25.6    (11) (10) [Expired, 2002 c 392 art 2 s 4]
25.7    (b) For purposes of paragraph (a), clauses (2) and (3), any salary that is paid for
25.8a fractional part of any calendar month, including the month of separation from state
25.9service, is deemed to be the compensation for the entire calendar month.
25.10    (c) Allowable service determined and credited on a fractional basis must be used in
25.11calculating the amount of benefits payable, but service as determined on a fractional basis
25.12must not be used in determining the length of service required for eligibility for benefits.
25.13EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
25.14authorized leaves of absence that commence on or after the effective date.

25.15    Sec. 5. [352.017] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT
25.16PURCHASE PROCEDURE.
25.17    Subdivision 1. Application. Except for leaves or breaks in service covered by
25.18section 352.27 or 352.275, this section applies to all plans specified in this chapter for
25.19any period of authorized leave of absence without pay that does not exceed one year
25.20and for which the employee obtains credit for allowable service by making payment as
25.21specified in this section to the applicable fund.
25.22    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
25.23this chapter may purchase credit for allowable service in that plan for a period specified
25.24in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
25.25whichever applies. The employing unit, at its option, may pay the employer portion of the
25.26amount specified in paragraph (b) on behalf of its employees.
25.27    (b) If payment is received by the executive director within one year from the end
25.28of the authorized leave, the payment amount is equal to the employee and employer
25.29contribution rates specified in law for the applicable plan at the end of the leave period
25.30multiplied by the employee's hourly rate of salary on the date of return from the leave of
25.31absence and by the days and months of the leave of absence for which the employee wants
25.32allowable service credit. Payments made under this paragraph must include compound
25.33interest at a monthly rate of 0.71 percent from the last day of the leave period until the last
25.34day of the month in which payment is received.
26.1    (c) If payment is received by the executive director after one year, the payment
26.2amount is the amount determined under section 356.551.
26.3EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
26.4authorized leaves of absence that commence on or after the effective date.

26.5    Sec. 6. Minnesota Statutes 2006, section 352.12, subdivision 2a, is amended to read:
26.6    Subd. 2a. Surviving spouse coverage term certain. (a) In lieu of the 100 percent
26.7optional annuity under subdivision 2, or refund under subdivision 1, the surviving spouse
26.8of a deceased employee or former employee may elect to receive survivor coverage in
26.9a term certain of five, ten, 15, or 20 years, but monthly payments must not exceed 75
26.10percent of the average high-five monthly salary of the deceased employee or former
26.11employee. The monthly term certain annuity must be actuarially equivalent to the 100
26.12percent optional annuity under subdivision 2.
26.13    (b) If a survivor elects a term certain annuity and dies before the expiration of the
26.14specified term certain period, the commuted value of the remaining annuity payments
26.15must be paid in a lump sum to the survivor's estate.
26.16EFFECTIVE DATE.This section is effective the day after final enactment.

26.17    Sec. 7. Minnesota Statutes 2006, section 352.27, is amended to read:
26.18352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
26.19SERVICE.
26.20    (a) An employee who is absent from employment by reason of service in the
26.21uniformed services, as defined in United States Code, title 38, section 4303(13), and who
26.22returns to state service upon discharge from service in the uniformed service within the
26.23time frames required in United States Code, title 38, section 4312(e), may obtain service
26.24credit for the period of the uniformed service as further specified in this section, provided
26.25that the employee did not separate from uniformed service with a dishonorable or bad
26.26conduct discharge or under other than honorable conditions.
26.27    (b) The employee may obtain credit by paying into the fund an equivalent employee
26.28contribution based upon the contribution rate or rates in effect at the time that the
26.29uniformed service was performed multiplied by the full and fractional years being
26.30purchased and applied to the annual salary rate. The annual salary rate is the average
26.31annual salary during the purchase period that the employee would have received if the
26.32employee had continued to be employed in covered employment rather than to provide
26.33uniformed service, or, if the determination of that rate is not reasonably certain, the annual
26.34salary rate is the employee's average salary rate during the 12-month period of covered
26.35employment rendered immediately preceding the period of the uniformed service.
27.1    (c) The equivalent employer contribution and, if applicable, the equivalent
27.2additional employer contribution provided in section 352.04 chapter 352 must be paid by
27.3the department employing the employee from funds available to the department at the
27.4time and in the manner provided in section 352.04 chapter 352, using the employer and
27.5additional employer contribution rate or rates in effect at the time that the uniformed
27.6service was performed, applied to the same annual salary rate or rates used to compute the
27.7equivalent employee contribution.
27.8    (d) If the employee equivalent contributions provided in this section are not paid in
27.9full, the employee's allowable service credit must be prorated by multiplying the full and
27.10fractional number of years of uniformed service eligible for purchase by the ratio obtained
27.11by dividing the total employee contribution received by the total employee contribution
27.12otherwise required under this section.
27.13    (e) To receive service credit under this section, the contributions specified in this
27.14section must be transmitted to the Minnesota State Retirement System during the period
27.15which begins with the date on which the individual returns to state service and which has a
27.16duration of three times the length of the uniformed service period, but not to exceed five
27.17years. If the determined payment period is less than one year, the contributions required
27.18under this section to receive service credit may be made within one year of the discharge
27.19date.
27.20    (f) The amount of service credit obtainable under this section may not exceed five
27.21years unless a longer purchase period is required under United States Code, title 38,
27.22section 4312.
27.23    (g) The employing unit shall pay interest on all equivalent employee and employer
27.24contribution amounts payable under this section. Interest must be computed at a rate of
27.258.5 percent compounded annually from the end of each fiscal year of the leave or the break
27.26in service to the end of the month in which the payment is received.
27.27EFFECTIVE DATE.This section is effective the day after final enactment.

27.28    Sec. 8. Minnesota Statutes 2006, section 352.951, is amended to read:
27.29352.951 APPLICABILITY OF GENERAL LAW.
27.30    Except as otherwise provided, this chapter applies to covered correctional
27.31employees, military affairs personnel covered under section 352.85, and Transportation
27.32Department pilots covered under section 352.86, and state fire marshal employees under
27.33section 352.87.
27.34EFFECTIVE DATE.This section is effective the day after final enactment.

28.1    Sec. 9. Minnesota Statutes 2006, section 352.98, is amended by adding a subdivision
28.2to read:
28.3    Subd. 8. Exemption from process. Assets in a health care savings plan account
28.4described in this section must be used for the reimbursement of healthcare expenses and
28.5are not assignable or subject to execution, levy, attachment, garnishment, or other legal
28.6process, except as provided in section 518.58, 518.581, or 518A.53.
28.7EFFECTIVE DATE.This section is effective the day after final enactment.

28.8    Sec. 10. Minnesota Statutes 2006, section 352D.02, subdivision 1, is amended to read:
28.9    Subdivision 1. Coverage. (a) Employees enumerated in paragraph (c), clauses (2),
28.10(3), (4), and (6) to (14), and (16) to (18), if they are in the unclassified service of the state
28.11or Metropolitan Council and are eligible for coverage under the general state employees
28.12retirement plan under chapter 352, are participants in the unclassified plan program under
28.13this chapter unless the employee gives notice to the executive director of the Minnesota
28.14State Retirement System within one year following the commencement of employment
28.15in the unclassified service that the employee desires coverage under the general state
28.16employees retirement plan. For the purposes of this chapter, an employee who does not
28.17file notice with the executive director is deemed to have exercised the option to participate
28.18in the unclassified plan program.
28.19    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
28.20program under this chapter unless the person was eligible to elect different coverage under
28.21section 3A.07 and elected retirement coverage by the applicable alternative retirement
28.22plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified
28.23program under this chapter for judicial employment in excess of the service credit limit in
28.24section 490.121, subdivision 22.
28.25    (c) Enumerated employees and referenced persons are:
28.26    (1) the governor, the lieutenant governor, the secretary of state, the state auditor,
28.27and the attorney general;
28.28    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary
28.29of State, State Auditor, Attorney General;
28.30    (3) an employee of the State Board of Investment;
28.31    (4) the head of a department, division, or agency created by statute in the unclassified
28.32service, an acting department head subsequently appointed to the position, or an employee
28.33enumerated in section 15A.0815 or 15A.083, subdivision 4;
28.34    (5) a member of the legislature;
29.1    (6) a full-time unclassified employee of the legislature or a commission or agency of
29.2the legislature who is appointed without a limit on the duration of the employment or a
29.3temporary legislative employee having shares in the supplemental retirement fund as a
29.4result of former employment covered by this chapter, whether or not eligible for coverage
29.5under the Minnesota State Retirement System;
29.6    (7) a person who is employed in a position established under section 43A.08,
29.7subdivision 1 , clause (3), or in a position authorized under a statute creating or establishing
29.8a department or agency of the state, which is at the deputy or assistant head of department
29.9or agency or director level;
29.10    (8) the regional administrator, or executive director of the Metropolitan Council,
29.11general counsel, division directors, operations managers, and other positions as designated
29.12by the council, all of which may not exceed 27 positions at the council and the chair;
29.13    (9) the executive director, associate executive director, and not to exceed nine
29.14positions of the Minnesota Office of Higher Education in the unclassified service, as
29.15designated by the Minnesota Office of Higher Education before January 1, 1992, or
29.16subsequently redesignated with the approval of the board of directors of the Minnesota
29.17State Retirement System, unless the person has elected coverage by the individual
29.18retirement account plan under chapter 354B;
29.19    (10) the clerk of the appellate courts appointed under article VI, section 2, of the
29.20Constitution of the state of Minnesota;
29.21    (11) the chief executive officers of correctional facilities operated by the Department
29.22of Corrections and of hospitals and nursing homes operated by the Department of Human
29.23Services;
29.24    (12) an employee whose principal employment is at the state ceremonial house;
29.25    (13) an employee of the Minnesota Educational Computing Corporation Agricultural
29.26Utilization Research Institute;
29.27    (14) an employee of the State Lottery who is covered by the managerial plan
29.28established under section 43A.18, subdivision 3; and
29.29    (15) a judge who has exceeded the service credit limit in section 490.121,
29.30subdivision 22 .;
29.31    (16) an employee of Minnesota Technology Incorporated;
29.32    (17) a person employed by the Minnesota State Colleges and Universities as faculty
29.33or in an eligible unclassified administrative position as defined in section 354B.20,
29.34subdivision 6, who was employed by the former state university or the former community
29.35college system before May 1, 1995, and elected unclassified program coverage prior to
29.36May 1, 1995; and
30.1    (18) a person employed by the Minnesota State Colleges and Universities who
30.2was employed in state service before July 1, 1995, who subsequently is employed in an
30.3eligible unclassified administrative position as defined in section 354B.20, subdivision
30.46, and who elects coverage by the unclassified program.
30.5EFFECTIVE DATE.This section is effective the day after final enactment.

30.6    Sec. 11. Minnesota Statutes 2006, section 352D.02, subdivision 3, is amended to read:
30.7    Subd. 3. Election irrevocable Transfer to general plan. An election to not
30.8participate is irrevocable during any period of covered employment. (a) An employee
30.9credited with employee shares in the unclassified program, after acquiring credit for
30.10ten years of allowable service but prior to and not later than one month following the
30.11termination of covered employment, may, notwithstanding other provisions of this
30.12subdivision, elect to terminate participation in the unclassified plan program and be
30.13covered by the regular general plan by filing such a written election with the executive
30.14director. The executive director shall thereupon then redeem the employee's total shares
30.15and shall credit to the employee's account in the regular general plan the amount of
30.16contributions that would have been so credited had the employee been covered by the
30.17regular general plan during the employee's entire covered employment. The balance
30.18of money so redeemed and not credited to the employee's account shall be transferred
30.19to the state contribution reserve of the state employees general plan retirement fund,
30.20except that (1) the employee contribution paid to the unclassified plan program must be
30.21compared to (2) the employee contributions that would have been paid to the general plan
30.22for the comparable period, if the individual had been covered by that plan. If clause (1)
30.23is greater than clause (2), the difference must be refunded to the employee as provided
30.24in section 352.22. If clause (2) is greater than clause (1), the difference must be paid by
30.25the employee within six months of electing general plan coverage or before the effective
30.26date of the annuity, whichever is sooner.
30.27    (b) An election under paragraph (a) to transfer coverage to the general plan is
30.28irrevocable during any period of covered employment.
30.29EFFECTIVE DATE.This section is effective the day after final enactment.

30.30    Sec. 12. Minnesota Statutes 2006, section 352D.06, subdivision 3, is amended to read:
30.31    Subd. 3. Accrual date. An annuity under this section accrues the first day of the first
30.32full month after an application is received or after the day following termination of state
30.33service, whichever is later. Upon the former employee's request, the annuity may begin
30.34to accrue up to six months before redemption of shares, but not prior to the termination
30.35date from covered service, and must be based on the account value at redemption and
31.1upon the age of the former employee at the date annuity accrual starts. The account must
31.2be valued and redeemed on the later of the end of the month of termination of covered
31.3employment, or the end of the month of receipt of the annuity application for the purpose
31.4of computing the annuity.
31.5EFFECTIVE DATE.This section is effective the day after final enactment.

31.6    Sec. 13. Minnesota Statutes 2006, section 353.01, subdivision 2a, is amended to read:
31.7    Subd. 2a. Included employees. (a) Public employees whose salary from
31.8employment in one or more positions within one governmental subdivision exceeds $425
31.9in any month shall participate as members of the association. If the salary is less than
31.10$425 in a subsequent month, the employee retains membership eligibility. Eligible public
31.11employees shall participate as members of the association with retirement coverage by
31.12the public employees retirement plan or the public employees police and fire retirement
31.13plan under this chapter, or the local government correctional employees retirement plan
31.14under chapter 353E, whichever applies, as a condition of their employment on the first
31.15day of employment unless they:
31.16    (1) are specifically excluded under subdivision 2b;
31.17    (2) do not exercise their option to elect retirement coverage in the association as
31.18provided in subdivision 2d, paragraph (a); or
31.19    (3) are employees of the governmental subdivisions listed in subdivision 2d,
31.20paragraph (b), where the governmental subdivision has not elected to participate as a
31.21governmental subdivision covered by the association.
31.22    (b) A public employee who was a member of the association on June 30, 2002,
31.23based on employment that qualified for membership coverage by the public employees
31.24retirement plan or the public employees police and fire plan under this chapter, or the
31.25local government correctional employees retirement plan under chapter 353E as of June
31.2630, 2002, retains that membership for the duration of the person's employment in that
31.27position or incumbency in elected office. Except as provided in subdivision 28, the person
31.28shall participate as a member until the employee or elected official terminates public
31.29employment under subdivision 11a or terminates membership under subdivision 11b.
31.30    (c) Public employees under paragraph (a) include physicians under section 353D.01,
31.31subdivision 2, who do not elect public employees defined contribution plan coverage
31.32under section 353D.02, subdivision 2.
31.33EFFECTIVE DATE.This section is effective the day after final enactment.

31.34    Sec. 14. Minnesota Statutes 2006, section 353.01, subdivision 2b, is amended to read:
32.1    Subd. 2b. Excluded employees. The following public employees are not eligible
32.2to participate as members of the association with retirement coverage by the public
32.3employees retirement plan, the local government correctional employees retirement plan
32.4under chapter 353E, or the public employees police and fire retirement plan:
32.5    (1) public officers, other than county sheriffs, who are elected to a governing body,
32.6or persons who are appointed to fill a vacancy in an elective office of a governing body,
32.7whose term of office commences on or after July 1, 2002, for the service to be rendered
32.8in that elective position. Elected governing body officials who were active members
32.9of the association's coordinated or basic retirement plans as of June 30, 2002, continue
32.10participation throughout incumbency in office until termination of public service occurs as
32.11defined in subdivision 11a;
32.12    (2) election officers or election judges;
32.13    (3) patient and inmate personnel who perform services for a governmental
32.14subdivision;
32.15    (4) except as otherwise specified in subdivision 12a, employees who are hired for
32.16a temporary position as defined under subdivision 12a, and employees who resign from
32.17a nontemporary position and accept a temporary position within 30 days in the same
32.18governmental subdivision;
32.19    (5) employees who are employed by reason of work emergency caused by fire,
32.20flood, storm, or similar disaster;
32.21    (6) employees who by virtue of their employment in one governmental subdivision
32.22are required by law to be a member of and to contribute to any of the plans or funds
32.23administered by the Minnesota State Retirement System, the Teachers Retirement
32.24Association, the Duluth Teachers Retirement Fund Association, the Minneapolis Teachers
32.25Retirement Fund Association, the St. Paul Teachers Retirement Fund Association, the
32.26Minneapolis Employees Retirement Fund, or any police or firefighters relief association
32.27governed by section 69.77 that has not consolidated with the Public Employees Retirement
32.28Association, or any local police or firefighters consolidation account who have not elected
32.29the type of benefit coverage provided by the public employees police and fire fund under
32.30sections 353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4,
32.315, or 6, who have not elected public employees police and fire plan benefit coverage. This
32.32clause must not be construed to prevent a person from being a member of and contributing
32.33to the Public Employees Retirement Association and also belonging to and contributing to
32.34another public pension plan or fund for other service occurring during the same period
32.35of time. A person who meets the definition of "public employee" in subdivision 2 by
32.36virtue of other service occurring during the same period of time becomes a member of the
33.1association unless contributions are made to another public retirement fund on the salary
33.2based on the other service or to the Teachers Retirement Association by a teacher as
33.3defined in section 354.05, subdivision 2;
33.4    (7) persons who are members of a religious order and are excluded from coverage
33.5under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
33.6performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
33.7as amended through January 1, 1987, if no irrevocable election of coverage has been made
33.8under section 3121(r) of the Internal Revenue Code of 1954, as amended;
33.9    (8) employees of a governmental subdivision who have not reached the age of
33.1023 and are enrolled on a full-time basis to attend or are attending classes on a full-time
33.11basis at an accredited school, college, or university in an undergraduate, graduate, or
33.12professional-technical program, or a public or charter high school;
33.13    (9) resident physicians, medical interns, and pharmacist residents and pharmacist
33.14interns who are serving in a degree or residency program in public hospitals;
33.15    (10) students who are serving in an internship or residency program sponsored
33.16by an accredited educational institution;
33.17    (11) persons who hold a part-time adult supplementary technical college license who
33.18render part-time teaching service in a technical college;
33.19    (12) except for employees of Hennepin County or Hennepin Healthcare System,
33.20Inc., foreign citizens working for a governmental subdivision with a work permit of less
33.21than three years, or an H-1b visa valid for less than three years of employment. Upon
33.22notice to the association that the work permit or visa extends beyond the three-year period,
33.23the foreign citizens must be reported for membership from the date of the extension;
33.24    (13) public hospital employees who elected not to participate as members of the
33.25association before 1972 and who did not elect to participate from July 1, 1988, to October
33.261, 1988;
33.27    (14) except as provided in section 353.86, volunteer ambulance service personnel,
33.28as defined in subdivision 35, but persons who serve as volunteer ambulance service
33.29personnel may still qualify as public employees under subdivision 2 and may be members
33.30of the Public Employees Retirement Association and participants in the public employees
33.31retirement fund or the public employees police and fire fund, whichever applies, on the
33.32basis of compensation received from public employment service other than service as
33.33volunteer ambulance service personnel;
33.34    (15) except as provided in section 353.87, volunteer firefighters, as defined in
33.35subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
33.36provided that a person who is a volunteer firefighter may still qualify as a public
34.1employee under subdivision 2 and may be a member of the Public Employees Retirement
34.2Association and a participant in the public employees retirement fund or the public
34.3employees police and fire fund, whichever applies, on the basis of compensation received
34.4from public employment activities other than those as a volunteer firefighter;
34.5    (16) pipefitters and associated trades personnel employed by Independent School
34.6District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
34.7pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
34.8if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
34.9241, article 2, section 12;
34.10    (17) electrical workers, plumbers, carpenters, and associated trades personnel
34.11employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
34.12who have retirement coverage under a collective bargaining agreement by the Electrical
34.13Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
34.14or the Carpenters Local 87 pension plan who were either first employed after May 1,
34.152000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
34.16chapter 461, article 7, section 5;
34.17    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
34.18painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
34.19Independent School District No. 625, St. Paul, with coverage under a collective
34.20bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
34.21the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
34.22pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
34.23Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
34.24first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
34.25Session chapter 10, article 10, section 6;
34.26    (19) plumbers employed by the Metropolitan Airports Commission, with coverage
34.27under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
34.28were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
34.29be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
34.30    (20) employees who are hired after June 30, 2002, to fill seasonal positions under
34.31subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
34.32days or less in each year of employment with the governmental subdivision;
34.33    (21) persons who are provided supported employment or work-study positions
34.34by a governmental subdivision and who participate in an employment or industries
34.35program maintained for the benefit of these persons where the governmental subdivision
34.36limits the position's duration to three years or less, including persons participating in a
35.1federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
35.2unemployment relief program where the training or work experience is not provided as a
35.3part of, or for, future permanent public employment;
35.4    (22) independent contractors and the employees of independent contractors; and
35.5    (23) reemployed annuitants of the association during the course of that
35.6reemployment.
35.7EFFECTIVE DATE.This section is effective the day after final enactment.

35.8    Sec. 15. Minnesota Statutes 2006, section 353.01, subdivision 6, is amended to read:
35.9    Subd. 6. Governmental subdivision. (a) "Governmental subdivision" means
35.10a county, city, town, school district within this state, or a department or, unit or
35.11instrumentality of state or local government, or any public body whose revenues are
35.12derived established under state or local authority that has a governmental purpose, is
35.13under public control, is responsible for the employment and payment of the salaries of
35.14employees of the entity, and receives a major portion of its revenues from taxation, fees,
35.15assessments or from other public sources.
35.16    (b) Governmental subdivision also means the Public Employees Retirement
35.17Association, the League of Minnesota Cities, the Association of Metropolitan
35.18Municipalities, charter schools formed under section 124D.10, service cooperatives
35.19exercising retirement plan participation under section 123A.21, subdivision 5, joint powers
35.20boards organized under section 471.59, subdivision 11, paragraph (a), family service
35.21collaboratives and children's mental health collaboratives organized under section 471.59,
35.22subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives
35.23are governmental units that otherwise qualify for retirement plan membership, public
35.24hospitals owned or operated by, or an integral part of, a governmental subdivision or
35.25governmental subdivisions, the Association of Minnesota Counties, the Metropolitan
35.26Minnesota Intercounty Association, the Minnesota Municipal Utilities Association, the
35.27Metropolitan Airports Commission, the University of Minnesota with respect to police
35.28officers covered by the public employees police and fire retirement plan, the Minneapolis
35.29Employees Retirement Fund for employment initially commenced after June 30, 1979, the
35.30Range Association of Municipalities and Schools, soil and water conservation districts,
35.31economic development authorities created or operating under sections 469.090 to
35.32469.108 , the Port Authority of the city of St. Paul, the Spring Lake Park Fire Department,
35.33incorporated, the Lake Johanna Volunteer Fire Department, incorporated, the Red Wing
35.34Environmental Learning Center, the Dakota County Agricultural Society, and Hennepin
35.35Healthcare System, Inc.
36.1    (c) Governmental subdivision does not mean any municipal housing and
36.2redevelopment authority organized under the provisions of sections 469.001 to 469.047;
36.3or any port authority organized under sections 469.048 to 469.089 other than the Port
36.4Authority of the city of St. Paul; or any hospital district organized or reorganized prior
36.5to July 1, 1975, under sections 447.31 to 447.37 or the successor of the district, nor
36.6the Minneapolis Community Development Agency; or the board of a family service
36.7collaborative or children's mental health collaborative organized under sections 124D.23,
36.8245.491 to 245.495, or 471.59, if that board is not controlled by representatives of
36.9governmental units.
36.10    (d) A nonprofit corporation governed by chapter 317A or organized under Internal
36.11Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a
36.12governmental subdivision unless the entity has obtained a written advisory opinion from
36.13the United States Department of Labor or a ruling from the Internal Revenue Service
36.14declaring the entity to be an instrumentality of the state so as to provide that any future
36.15contributions by the entity on behalf of its employees are contributions to a governmental
36.16plan within the meaning of Internal Revenue Code, section 414(d).
36.17    (e) A public body created by state or local authority may request membership on
36.18behalf of its employees by providing sufficient evidence that it meets the requirements in
36.19paragraph (a).
36.20    (f) An entity determined to be a governmental subdivision is subject to the reporting
36.21requirements of this chapter upon receipt of a written notice of eligibility from the
36.22association.
36.23EFFECTIVE DATE.This section is effective the day after final enactment.
36.24Paragraphs (e) and (f) apply to initial plan coverage dates occurring on or after the
36.25effective date.

36.26    Sec. 16. Minnesota Statutes 2006, section 353.01, subdivision 16, is amended to read:
36.27    Subd. 16. Allowable service; limits and computation. (a) "Allowable service"
36.28means:
36.29    (1) service during years of actual membership in the course of which employee
36.30contributions were made, periods covered by payments in lieu of salary deductions under
36.31section 353.35;
36.32    (2) service in years during which the public employee was not a member but for
36.33which the member later elected, while a member, to obtain credit by making payments to
36.34the fund as permitted by any law then in effect;
37.1    (3) a period of authorized leave of absence with pay from which deductions for
37.2employee contributions are made, deposited, and credited to the fund;
37.3    (4) a period of authorized personal, parental, or medical leave of absence without
37.4pay, including a leave of absence covered under the federal Family Medical Leave Act,
37.5that does not exceed one year, and during or for which a member obtained service credit
37.6for each month in the leave period by payments payment under section 353.0161 to the
37.7fund made in place of salary deductions. The payments must be made in an amount
37.8or amounts based on the member's average salary on which deductions were paid for
37.9the last six months of public service, or for that portion of the last six months while the
37.10member was in public service, to apply to the period in either case that immediately
37.11precedes the commencement of the leave of absence. If the employee elects to pay the
37.12employee contributions for the period of any authorized personal, parental, or medical
37.13leave of absence without pay, or for any portion of the leave, the employee shall also, as
37.14a condition to the exercise of the election, pay to the fund an amount equivalent to the
37.15required employer and the additional employer contributions, if any, for the employee.
37.16The payment must be made within one year from the expiration of the leave of absence
37.17or within 20 days after termination of public service under subdivision 11a, whichever
37.18is earlier. The employer, by appropriate action of its governing body which is made a
37.19part of its official records and which is adopted before the date of the first payment of
37.20the employee contribution, may certify to the association in writing its commitment to
37.21pay the employer and additional employer contributions from the proceeds of a tax levy
37.22made under section 353.28. Payments under this paragraph must include interest at an
37.23annual rate of 8.5 percent compounded annually from the date of the termination of the
37.24leave of absence to the date payment is made. An employee must return to public service
37.25and render a minimum of three months of allowable service in order to be eligible to
37.26pay employee and employer contributions make payment under section 353.0161 for a
37.27subsequent authorized leave of absence without pay. Upon payment, the employee must
37.28be granted allowable service credit for the purchased period;
37.29    (5) a periodic, repetitive leave that is offered to all employees of a governmental
37.30subdivision. The leave program may not exceed 208 hours per annual normal work
37.31cycle as certified to the association by the employer. A participating member obtains
37.32service credit by making employee contributions in an amount or amounts based on the
37.33member's average salary that would have been paid if the leave had not been taken. The
37.34employer shall pay the employer and additional employer contributions on behalf of the
37.35participating member. The employee and the employer are responsible to pay interest on
37.36their respective shares at the rate of 8.5 percent a year, compounded annually, from the
38.1end of the normal cycle until full payment is made. An employer shall also make the
38.2employer and additional employer contributions, plus 8.5 percent interest, compounded
38.3annually, on behalf of an employee who makes employee contributions but terminates
38.4public service. The employee contributions must be made within one year after the end of
38.5the annual normal working cycle or within 20 days after termination of public service,
38.6whichever is sooner. The executive director shall prescribe the manner and forms to be
38.7used by a governmental subdivision in administering a periodic, repetitive leave. Upon
38.8payment, the member must be granted allowable service credit for the purchased period;
38.9    (6) an authorized temporary or seasonal layoff under subdivision 12, limited to three
38.10months allowable service per authorized temporary or seasonal layoff in one calendar year.
38.11An employee who has received the maximum service credit allowed for an authorized
38.12temporary or seasonal layoff must return to public service and must obtain a minimum of
38.13three months of allowable service subsequent to the layoff in order to receive allowable
38.14service for a subsequent authorized temporary or seasonal layoff; or
38.15    (7) a period during which a member is absent from employment by a governmental
38.16subdivision by reason of service in the uniformed services, as defined in United States
38.17Code, title 38, section 4303(13), if the member returns to public service upon discharge
38.18from service in the uniformed service within the time frames required under United
38.19States Code, title 38, section 4312(e), provided that the member did not separate from
38.20uniformed service with a dishonorable or bad conduct discharge or under other than
38.21honorable conditions. The service is credited if the member pays into the fund equivalent
38.22employee contributions based upon the contribution rate or rates in effect at the time
38.23that the uniformed service was performed multiplied by the full and fractional years
38.24being purchased and applied to the annual salary rate. The annual salary rate is the
38.25average annual salary during the purchase period that the member would have received
38.26if the member had continued to be employed in covered employment rather than to
38.27provide uniformed service, or, if the determination of that rate is not reasonably certain,
38.28the annual salary rate is the member's average salary rate during the 12-month period of
38.29covered employment rendered immediately preceding the period of the uniformed service.
38.30Payment of the member equivalent contributions must be made during a period that begins
38.31with the date on which the individual returns to public employment and that is three times
38.32the length of the military leave period, or within five years of the date of discharge from
38.33the military service, whichever is less. If the determined payment period is less than
38.34one year, the contributions required under this clause to receive service credit may be
38.35made within one year of the discharge date. Payment may not be accepted following 20
38.36days after termination of public service under subdivision 11a. If the member equivalent
39.1contributions provided for in this clause are not paid in full, the member's allowable
39.2service credit must be prorated by multiplying the full and fractional number of years of
39.3uniformed service eligible for purchase by the ratio obtained by dividing the total member
39.4contributions received by the total member contributions otherwise required under this
39.5clause. The equivalent employer contribution, and, if applicable, the equivalent additional
39.6employer contribution must be paid by the governmental subdivision employing the
39.7member if the member makes the equivalent employee contributions. The employer
39.8payments must be made from funds available to the employing unit, using the employer
39.9and additional employer contribution rate or rates in effect at the time that the uniformed
39.10service was performed, applied to the same annual salary rate or rates used to compute the
39.11equivalent member contribution. The governmental subdivision involved may appropriate
39.12money for those payments. The amount of service credit obtainable under this section may
39.13not exceed five years unless a longer purchase period is required under United States Code,
39.14title 38, section 4312. The employing unit shall pay interest on all equivalent member and
39.15employer contribution amounts payable under this clause. Interest must be computed at
39.16a rate of 8.5 percent compounded annually from the end of each fiscal year of the leave
39.17or the break in service to the end of the month in which the payment is received. Upon
39.18payment, the employee must be granted allowable service credit for the purchased period.
39.19    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
39.20state officers and employees displaced by the Community Corrections Act, chapter 401,
39.21and transferred into county service under section 401.04, "allowable service" means the
39.22combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
39.23section 352.01, subdivision 11.
39.24    (c) For a public employee who has prior service covered by a local police or
39.25firefighters relief association that has consolidated with the Public Employees Retirement
39.26Association or to which section 353.665 applies, and who has elected the type of benefit
39.27coverage provided by the public employees police and fire fund either under section
39.28353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
39.29service" is a period of service credited by the local police or firefighters relief association
39.30as of the effective date of the consolidation based on law and on bylaw provisions
39.31governing the relief association on the date of the initiation of the consolidation procedure.
39.32    (d) No member may receive more than 12 months of allowable service credit in a
39.33year either for vesting purposes or for benefit calculation purposes.
39.34    (e) MS 2002 [Expired]
39.35EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
39.36authorized leaves of absence that commence on or after the effective date.

40.1    Sec. 17. Minnesota Statutes 2006, section 353.01, subdivision 28, is amended to read:
40.2    Subd. 28. Retirement. (a) "Retirement" means the commencement of the payment
40.3of an annuity based on a date designated by the board of trustees. This date determines
40.4the rights under this chapter which occur either before or after retirement. A right to
40.5retirement is subject to termination of public service under subdivision 11a. A right to
40.6retirement requires a complete and continuous separation for 30 days from employment as
40.7a public employee and from the provision of paid services to that employer.
40.8    (b) An individual who separates from employment as a public employee and who,
40.9within 30 days of separation, returns to provide service to a governmental subdivision
40.10as an independent contractor or as an employee of an independent contractor, has not
40.11satisfied the separation requirements under paragraph (a).
40.12    (c) A former member of the basic or police and fire fund who becomes a coordinated
40.13member upon returning to eligible, nontemporary public service, terminates employment
40.14before obtaining six months' allowable service under subdivision 16, paragraph (a), in
40.15the coordinated fund, and is eligible to receive an annuity the first day of the month after
40.16the most recent termination date shall not accrue a right to a retirement annuity under the
40.17coordinated fund. An annuity otherwise payable to the former member must be based on
40.18the laws in effect on the date of termination of the most recent service under the basic or
40.19police and fire fund and shall be retroactive to the first day of the month following that
40.20termination date or one year preceding the filing of an application for retirement annuity
40.21as provided by section 353.29, subdivision 7, whichever is later. The annuity payment
40.22must be suspended under the provisions of section 353.37, if earned compensation for the
40.23reemployment equals or exceeds the amounts indicated under that section. The association
40.24will refund the employee deductions made to the coordinated fund, with interest under
40.25section 353.34, subdivision 2, return the accompanying employer contributions, and
40.26remove the allowable service credits covering the deductions refunded.
40.27    (d) (c) Notwithstanding the 30-day separation requirement under paragraph (a), a
40.28member of the a defined benefit plan under this chapter, who also participates in the public
40.29employees defined contribution plan under chapter 353D for other public service, may be
40.30paid, if eligible, a retirement annuity from the defined benefit plan while participating in the
40.31defined contribution plan. A retirement annuity is also payable from a defined benefit plan
40.32under this chapter to an eligible member who terminates public service and who, within
40.3330 days of separation, takes office as an elected official of a governmental subdivision.
40.34    (d) Elected officials included in association membership under subdivisions 2a and
40.352d meet the 30-day separation requirement under this section by resigning from office
41.1before filing for a subsequent term in the same office and by remaining completely and
41.2continuously separated from that office for 30 days prior to the date of the election.
41.3EFFECTIVE DATE.This section is effective the day after final enactment.

41.4    Sec. 18. [353.0161] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT
41.5PURCHASE PROCEDURE.
41.6    Subdivision 1. Application. This section applies to employees covered by any
41.7plan specified in this chapter or chapter 353E for any period of authorized leave of
41.8absence specified in section 353.01, subdivision 16, paragraph (a), clause (4), for which
41.9the employee obtains credit for allowable service by making payment as specified in
41.10this section to the applicable fund.
41.11    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
41.12subdivision 1 may purchase credit for allowable service in that plan for a period specified
41.13in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
41.14whichever applies. The employing unit, at its option, may pay the employer portion of the
41.15amount specified in paragraph (b) on behalf of its employees.
41.16    (b) If payment is received by the executive director within one year from the end
41.17of the authorized leave, the payment amount is equal to the employee and employer
41.18contribution rates specified in law for the applicable plan at the end of the leave period
41.19multiplied by the employee's hourly rate of salary on the date of return from the leave of
41.20absence and by the days and months of the leave of absence for which the employee wants
41.21allowable service credit. Payments made under this paragraph must include compound
41.22interest at a monthly rate of 0.71 percent from the last day of the leave period until the last
41.23day of the month in which payment is received.
41.24    (c) If payment is received by the executive director after one year, the payment
41.25amount is the amount determined under section 356.551.
41.26EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
41.27authorized leaves of absence that commence on or after the effective date.

41.28    Sec. 19. Minnesota Statutes 2006, section 353.03, subdivision 3, is amended to read:
41.29    Subd. 3. Duties and powers of the board. (a) The board shall:
41.30    (1) elect a president and vice-president. The board shall;
41.31    (2) approve the staffing complement, as recommended by the executive director,
41.32necessary to administer the fund. The cost of administering this chapter must be paid by
41.33the fund.;
42.1    (b) The board shall (3) adopt bylaws for its own government and for the management
42.2of the fund consistent with the laws of the state and may modify them at pleasure. It shall;
42.3    (4) adopt, alter, and enforce reasonable rules consistent with the laws of the state
42.4and the terms of the applicable benefit plans for the administration and management of the
42.5fund, for the payment and collection of payments from members, and for the payment
42.6of withdrawals and benefits. It shall, and that are necessary in order to comply with the
42.7applicable federal Internal Revenue Service and Department of Labor requirements;
42.8    (5) pass upon and allow or disallow all applications for membership in the fund
42.9and shall allow or disallow claims for withdrawals, pensions, or benefits payable from
42.10the fund. It shall;
42.11    (6) adopt an appropriate mortality table based on experience of the fund as
42.12recommended by the association actuary and approved under section 356.215, subdivision
42.1318, with interest set at the rate specified in section 356.215, subdivision 8. It shall;
42.14    (7) provide for the payment out of the fund of the cost of administering this
42.15chapter, of all necessary expenses for the administration of the fund and of all claims for
42.16withdrawals, pensions, or benefits allowed. The board shall; and
42.17    (8) approve or disapprove all recommendations and actions of the executive director
42.18made subject to its approval or disapproval by subdivision 3a.
42.19    (c) (b) In passing upon all applications and claims, the board may summon, swear,
42.20hear, and examine witnesses and, in the case of claims for disability benefits, may require
42.21the claimant to submit to a medical examination by a physician of the board's choice, at the
42.22expense of the fund, as a condition precedent to the passing on the claim, and, in the case
42.23of all applications and claims, may conduct investigations necessary to determine their
42.24validity and merit. The board shall establish procedures to assure that a benefit applicant
42.25and recipient may have a review of a benefit eligibility or benefit amount determination
42.26affecting the applicant or recipient. The review procedure may afford the benefit applicant
42.27or benefit recipient an opportunity to present views at any review proceeding conducted,
42.28but is not a contested case under chapter 14.
42.29    (d) (c) The board may continue to authorize the sale of life insurance to members
42.30under the insurance program in effect on January 1, 1985, but must not change that
42.31program without the approval of the commissioner of finance. The association shall
42.32not receive any financial benefit from the life insurance program beyond the amount
42.33necessary to reimburse the association for costs incurred in administering the program.
42.34The association shall not engage directly or indirectly in any other activity involving the
42.35sale or promotion of goods or services, or both, whether to members or nonmembers.
43.1    (e) (d) The board shall establish procedures governing reimbursement of expenses to
43.2board members. These procedures shall must define the types of activities and expenses
43.3that qualify for reimbursement, shall must provide that all out-of-state travel must be
43.4authorized by the board, and shall must provide for the independent verification of claims
43.5for expense reimbursement. The procedures must comply with the applicable rules
43.6and policies of the Department of Finance, the Department of Administration, and the
43.7Department of Employee Relations.
43.8    (f) (e) The board may purchase fiduciary liability insurance and official bonds for the
43.9officers and members of the board of trustees and employees of the association and may
43.10purchase property insurance or may establish a self-insurance risk reserve including, but
43.11not limited to, data processing insurance and "extra-expense" coverage.
43.12EFFECTIVE DATE.This section is effective the day after final enactment.

43.13    Sec. 20. Minnesota Statutes 2006, section 353.03, subdivision 3a, is amended to read:
43.14    Subd. 3a. Executive director. (a) Appointment. The board shall appoint, with
43.15the advice and consent of the senate, an executive director on the basis of education,
43.16experience in the retirement field, and leadership ability. The executive director shall must
43.17have had at least five years' experience in an executive level management position, which
43.18has included responsibility for pensions, deferred compensation, or employee benefits.
43.19The executive director serves at the pleasure of the board. The salary of the executive
43.20director is as provided by section 15A.0815.
43.21    (b) Duties. The management of the association is vested in the executive director
43.22who shall be the executive and administrative head of the association. The executive
43.23director shall act as adviser to the board on all matters pertaining to the association and
43.24shall also act as the secretary of the board. The executive director shall:
43.25    (1) attend all meetings of the board;
43.26    (2) prepare and recommend to the board appropriate rules to carry out the provisions
43.27of this chapter;
43.28    (3) establish and maintain an adequate system of records and accounts following
43.29recognized accounting principles and controls;
43.30    (4) designate, with the approval of the board, up to two persons who shall may serve
43.31in the unclassified service and whose salary is salaries are set in accordance with section
43.3243A.18, subdivision 3 , appoint a confidential secretary in the unclassified service, and
43.33appoint employees to carry out this chapter, who are subject to chapters 43A and 179A
43.34in the same manner as are executive branch employees;
44.1    (5) organize the work of the association as the director deems necessary to fulfill
44.2the functions of the association, and define the duties of its employees and delegate to
44.3them any powers or duties, subject to the control of, and under such conditions as, the
44.4executive director may prescribe;
44.5    (6) with the approval of the board, contract for the services of an approved actuary,
44.6professional management services, and any other consulting services as necessary
44.7to fulfill the purposes of this chapter. All contracts are subject to chapter 16C. The
44.8commissioner of administration shall not approve, and the association shall not enter
44.9into, any contract to provide lobbying services or legislative advocacy of any kind.
44.10Any approved actuary retained by the executive director shall function as the actuarial
44.11advisor of the board and the executive director and may perform actuarial valuations and
44.12experience studies to supplement those performed by the actuary retained under section
44.13356.214 . Any supplemental actuarial valuations or experience studies shall be filed with
44.14the executive director of the Legislative Commission on Pensions and Retirement. Copies
44.15of professional management survey reports shall be transmitted to the secretary of the
44.16senate, the chief clerk of the house of representatives, and the Legislative Reference
44.17Library as provided by section 3.195, and to the executive director of the commission at
44.18the same time as reports are furnished to the board. Only management firms experienced
44.19in conducting management surveys of federal, state, or local public retirement systems
44.20shall be qualified to contract with the director hereunder;
44.21    (7) with the approval of the board provide in-service training for the employees
44.22of the association;
44.23    (8) make refunds of accumulated contributions to former members and to the
44.24designated beneficiary, surviving spouse, legal representative or next of kin of deceased
44.25members or deceased former members, as provided in this chapter;
44.26    (9) determine the amount of the annuities and disability benefits of members covered
44.27by the association and authorize payment of the annuities and benefits beginning as of
44.28the dates on which the annuities and benefits begin to accrue, in accordance with the
44.29provisions of this chapter;
44.30    (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating
44.31expenses of the association;
44.32    (11) prepare and submit to the board and the legislature an annual financial report
44.33covering the operation of the association, as required by section 356.20;
44.34    (12) prepare and submit biennial and annual budgets to the board for its approval
44.35and submit the approved budgets to the Department of Finance for approval by the
44.36commissioner;
45.1    (13) reduce all or part of the accrued interest payable under section 353.27,
45.2subdivisions 12, 12a, and 12b , or 353.28, subdivision 5, upon receipt of proof by the
45.3association of an unreasonable processing delay or other extenuating circumstances of
45.4the employing unit. The executive director shall prescribe and submit for approval by the
45.5board the conditions under which such interest may be reduced; and
45.6    (14) with the approval of the board, perform such other duties as may be required for
45.7the administration of the association and the other provisions of this chapter and for the
45.8transaction of its business.
45.9EFFECTIVE DATE.This section is effective the day after final enactment.

45.10    Sec. 21. Minnesota Statutes 2006, section 353.03, subdivision 4, is amended to read:
45.11    Subd. 4. Offices. The commissioner of administration shall make provision for
45.12suitable office space in the state capitol or other state office buildings, or at such other
45.13location as is determined by the commissioner for the use of the board of trustees and its
45.14executive director. The commissioner shall give the board at least four months notice
45.15for any proposed removal from their present location. Any and all rental charges shall
45.16be paid by the trustees from the public employees retirement fund public pension fund
45.17facilities created under section 356B.10.
45.18EFFECTIVE DATE.This section is effective the day after final enactment.

45.19    Sec. 22. Minnesota Statutes 2006, section 353.27, is amended by adding a subdivision
45.20to read:
45.21    Subd. 14. Treatment of periods before initial coverage date. (a) If an entity
45.22is determined to be a governmental subdivision due to receipt of a written notice of
45.23eligibility from the association, that employer and its employees are subject to the
45.24requirements of subdivision 12, effective retroactive to the date that the executive director
45.25of the association determines that the entity first met the definition of a governmental
45.26subdivision, if that date predates the notice of eligibility.
45.27    (b) If the retroactive time period under paragraph (a) exceeds three years, an
45.28employee is authorized to purchase service credit in the applicable Public Employees
45.29Retirement Association plan for the portion of the period in excess of three years, by
45.30making payment under section 356.551.
45.31    (c) This subdivision does not apply if the applicable employment under paragraph
45.32(a) included coverage by any public or private defined benefit or defined contribution
45.33retirement plan, other than a volunteer firefighters relief association. If this paragraph
45.34applies, an individual is prohibited from purchasing service credit for any period or
45.35periods specified in paragraph (a).
46.1EFFECTIVE DATE.This section is effective the day after final enactment and
46.2applies to initial plan coverage dates occurring on or after the effective date.

46.3    Sec. 23. Minnesota Statutes 2006, section 353.28, subdivision 6, is amended to read:
46.4    Subd. 6. Collection of unpaid amounts. (a) If a governmental subdivision which
46.5receives the direct proceeds of property taxation fails to pay an amount due under chapter
46.6353, 353A, 353B, 353C, or 353D, the executive director shall certify the amount to the
46.7governmental subdivision for payment. If the governmental subdivision fails to remit the
46.8sum so due in a timely fashion, the executive director shall certify the amount to the
46.9applicable county auditor for collection. The county auditor shall collect the amount
46.10out of the revenue of the governmental subdivision, or shall add the amount to the levy
46.11of the governmental subdivision and make payment directly to the association. This
46.12tax must be levied, collected, and apportioned in the manner that other taxes are levied,
46.13collected, and apportioned.
46.14    (b) If a governmental subdivision which is not funded directly from the proceeds
46.15of property taxation fails to pay an amount due under this chapter, the executive
46.16director shall certify the amount to the governmental subdivision for payment. If the
46.17governmental subdivision fails to pay the amount for a period of 60 days after the date
46.18of the certification, the executive director shall certify the amount to the commissioner
46.19of finance, who shall deduct the amount from any subsequent state-aid payment or state
46.20appropriation amount applicable to the governmental subdivision and make payment
46.21directly to the association. If the amount of the state-aid payment or state appropriation is
46.22not sufficient to pay the full sum due, the amounts paid to the association must be applied
46.23first to the unpaid employee deductions withheld from the employees' wages and next to
46.24the unpaid employer contributions. Any remaining amount received by the association
46.25must be applied to the interest due on the employee and employer contribution amounts.
46.26If a government subdivision under this paragraph owes amounts to more than one public
46.27retirement plan, section 356.98 applies.
46.28    (c) If a governmental subdivision has been dissolved or closed, the requirements in
46.29paragraph (b) of a certification to the governmental subdivision and the related 60-day
46.30waiting period do not apply. The executive director is authorized to immediately certify
46.31the applicable amount to the commissioner of finance.
46.32EFFECTIVE DATE.This section is effective the day after final enactment.

46.33    Sec. 24. Minnesota Statutes 2006, section 353.29, subdivision 3, is amended to read:
46.34    Subd. 3. Retirement annuity formula. (a) This paragraph, in conjunction with
46.35section 353.30, subdivisions 1, 1a, 1b, and 1c, applies to any member who first became a
47.1public employee or a member of a pension fund listed in section 356.30, subdivision 3,
47.2before July 1, 1989, unless paragraph (b), in conjunction with section 353.30, subdivision
47.35 , produces a higher annuity amount, in which case paragraph (b) will apply. The average
47.4salary as defined in section 353.01, subdivision 17a, multiplied by the percent specified in
47.5section 356.315, subdivision 3, for each year of allowable service for the first ten years
47.6and thereafter by the percent specified in section 356.315, subdivision 4, per year of
47.7allowable service and completed months less than a full year for the "basic member," a
47.8basic member, and the percent specified in section 356.315, subdivision 1, for each year of
47.9allowable service for the first ten years and thereafter by the percent specified in section
47.10356.315, subdivision 2 , per year of allowable service and completed months less than a
47.11full year for the "coordinated member," a coordinated member shall determine the amount
47.12of the "normal" normal retirement annuity.
47.13    (b) This paragraph applies to a member who has become at least 55 years old and
47.14first became a public employee after June 30, 1989, and to any other member whose
47.15annuity amount, when calculated under this paragraph and in conjunction with section
47.16353.30, subdivision 5 , is higher than it is when calculated under paragraph (a), in
47.17conjunction with section 353.30, subdivisions 1, 1a, 1b, and 1c. The average salary, as
47.18defined in section 353.01, subdivision 17a, multiplied by the percent specified in section
47.19356.315, subdivision 4 , for each year of allowable service and completed months less than
47.20a full year for a basic member and the percent specified in section 356.315, subdivision 2,
47.21per year of allowable service and completed months less than a full year for a coordinated
47.22member, shall determine the amount of the normal retirement annuity.
47.23EFFECTIVE DATE.This section is effective the day after final enactment.

47.24    Sec. 25. Minnesota Statutes 2006, section 353.30, subdivision 1a, is amended to read:
47.25    Subd. 1a. Pre-July 1, 1989 members: rule of 90. Any Upon termination of
47.26public service under section 353.01, subdivision 11a, a person who first became a public
47.27employee or a member of a pension fund listed in section 356.30, subdivision 3, before
47.28July 1, 1989, and whose attained age plus credited allowable service totals 90 years is
47.29entitled upon application to a retirement annuity in an amount equal to the normal annuity
47.30provided in section 353.29, subdivisions 2 and subdivision 3, paragraph (a), without any
47.31reduction in annuity by reason of such due to early retirement.
47.32EFFECTIVE DATE.This section is effective the day after final enactment.

47.33    Sec. 26. Minnesota Statutes 2006, section 353.30, subdivision 1b, is amended to read:
47.34    Subd. 1b. Pre-July 1, 1989 members: 30 years of service. Any Upon termination
47.35of public service under section 353.01, subdivision 11a, a person who first became a
48.1public employee or a member of a pension fund listed in section 356.30, subdivision
48.23 , before July 1, 1989, with 30 years or more of allowable service credit, who elects
48.3early retirement under subdivision 1 to retire prior to normal retirement age, shall receive
48.4an annuity in an amount equal to the normal annuity provided under section 353.29,
48.5subdivisions 2 and subdivision 3 , paragraph (a), reduced by one-quarter of one percent for
48.6each month that the member is under age 62 at the time of retirement.
48.7EFFECTIVE DATE.This section is effective the day after final enactment.

48.8    Sec. 27. Minnesota Statutes 2006, section 353.30, subdivision 1c, is amended to read:
48.9    Subd. 1c. Pre-July 1, 1989 members: early retirement. Any Upon termination of
48.10public service, a person who first became a public employee or a member of a pension
48.11fund listed in section 356.30, subdivision 3, before July 1, 1989, and who has received
48.12credit for at least 30 years of allowable service or who has become at least 55 years old but
48.13not normal retirement age, and has received credit for at least three years of allowable
48.14service is entitled upon application to a retirement annuity in an amount equal to the
48.15normal annuity provided in section 353.29, subdivisions 2 and subdivision 3, paragraph
48.16(a), reduced by one-quarter of one percent for each month that the member is under normal
48.17retirement age at the time of retirement, except that for any member who has 30 or more
48.18years of allowable service the reduction shall be applied only for each month that the
48.19member is under age 62 at the time of retirement.
48.20EFFECTIVE DATE.This section is effective the day after final enactment.

48.21    Sec. 28. Minnesota Statutes 2006, section 353.32, subdivision 1a, is amended to read:
48.22    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member
48.23who has credit for not less than three years of allowable service and dies before the
48.24annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or
48.25353.33, subdivision 2 , notwithstanding any designation of beneficiary to the contrary, the
48.26surviving spouse may elect to receive, instead of a refund with interest under subdivision
48.271, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal
48.28to the a 100 percent joint and survivor annuity that the member could have qualified for
48.29had the member terminated service on the date of death computed consistent with section
48.30353.30, subdivision 1a, 1c, or 5, whichever is applicable.
48.31    (b) If the a member was under age 55 first became a public employee or a member of
48.32a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, and has credit
48.33for at least 30 years of allowable service on the date of death, the surviving spouse may
48.34elect to receive a 100 percent joint and survivor annuity based on the age of the member
48.35and surviving spouse on the date of death. The annuity is payable using computed using
49.1section 353.30, subdivision 1b, except that the full early retirement reduction under section
49.2353.30, subdivisions 1b and 1c, to that provision will be applied from age 62 back to age 55
49.3and one-half of the early retirement reduction from age 55 back to the age payment begins.
49.4    (c) If the a member who was under age 55 and has credit for at least three years of
49.5allowable service on the date of death dies, but did not qualify for retirement on the date
49.6of death, the surviving spouse may elect to receive the a 100 percent joint and survivor
49.7annuity based on the age of the member and surviving spouse at the time of death. The
49.8annuity is payable computed using section 353.30, subdivision 1c or 5, as applicable,
49.9except that the full early retirement reduction under section 353.30, subdivision 1, 1b, 1c,
49.10or 5, specified in the applicable subdivision will be applied to age 55 and one-half of the
49.11early retirement reduction from age 55 back to the age payment begins.
49.12    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
49.1320 , a former spouse of the member, if any, is entitled to a portion of the monthly surviving
49.14spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
49.15with the association. If there is no surviving spouse or child or children, a former spouse
49.16may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
49.17marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
49.18the terms of a marriage dissolution decree filed with the association.
49.19    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
49.20may apply for the annuity at any time after the date on which the deceased employee would
49.21have attained the required age for retirement based on the employee's allowable service.
49.22The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) may
49.23apply for an annuity any time after the member's death. The annuity must be computed
49.24under sections 353.29, subdivisions 2 and 3; and 353.30, subdivisions 1, 1a, 1b, 1c, and 5.
49.25    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
49.26annuity or surviving spouse benefit payable under this subdivision. No payment may
49.27accrue beyond the end of the month in which entitlement to the annuity has terminated or
49.28upon expiration of the term certain benefit payment under subdivision 1b.
49.29    (g) An amount equal to any excess of the accumulated contributions that were
49.30credited to the account of the deceased employee over and above the total of the annuities
49.31paid and payable to the surviving spouse must be paid to the surviving spouse's estate.
49.32    (g) (h) A member may specify in writing that this subdivision does not apply and
49.33that payment may be made only to the designated beneficiary as otherwise provided by
49.34this chapter. The waiver of a surviving spouse annuity under this section does not make a
49.35dependent child eligible for benefits under subdivision 1c.
50.1    (i) If the deceased member or former member first became a public employee or a
50.2member of a public pension plan listed in section 356.30, subdivision 3, on or after July
50.31, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
50.4specified in section 353.30, subdivision 5, except for the revised early retirement reduction
50.5specified in paragraph (c), if paragraph (c) is the applicable provision.
50.6    (j) For any survivor annuity determined under this subdivision, the payment is to be
50.7based on the total allowable service that the member had accrued as of the date of death
50.8and the age of the member and surviving spouse on that date.
50.9EFFECTIVE DATE.This section is effective for survivor benefits based on a date
50.10of death occurring on or after July 1, 2007. This section, other than paragraph (j), is not
50.11intended to increase, modify, impair, or diminish the benefit entitlements specified in
50.12the subdivision within the Minnesota Statutes being amended. If the executive director
50.13of the Public Employees Retirement Association determines that any provision of this
50.14section, other than paragraph (j), does increase, modify, impair, or diminish the benefit
50.15entitlements as reflected in applicable law just before the effective date of this section,
50.16the executive director shall certify that determination and a recommendation as to the
50.17required legislative correction to the chairs of the Legislative Commission on Pensions
50.18and Retirement, the house Governmental Operations, Reform, Technology and Elections
50.19Committee, the senate State and Local Governmental Operations Committee, and to the
50.20executive director of the Legislative Commission on Pensions and Retirement.

50.21    Sec. 29. Minnesota Statutes 2006, section 353.32, subdivision 1b, is amended to read:
50.22    Subd. 1b. Survivor coverage term certain. (a) In lieu of the 100 percent optional
50.23annuity under subdivision 1a, or a refund under subdivision 1, the surviving spouse of
50.24a deceased member may elect to receive survivor coverage for a term certain period of
50.25ten, 15, or 20 years, but monthly payments must not exceed 75 percent of the average
50.26high-five monthly salary of the deceased member. The benefit terminates at the end of
50.27the specified term certain period. Except as otherwise specified in this subdivision, the
50.28monthly term certain annuity must be actuarially equivalent to the 100 percent optional
50.29annuity under subdivision 1a.
50.30    (b) If a surviving spouse elects a term certain annuity and dies before the expiration
50.31of the specified term certain period, the commuted value of the remaining annuity
50.32payments must be paid in a lump sum to the survivor's estate.
50.33EFFECTIVE DATE.This section is effective the day after final enactment.

50.34    Sec. 30. Minnesota Statutes 2006, section 353.34, subdivision 3, is amended to read:
51.1    Subd. 3. Deferred annuity; eligibility; computation. A member with at least
51.2three years of allowable service when termination of public service or termination of
51.3membership occurs has the option of leaving the accumulated deductions in the fund and
51.4being entitled to a deferred retirement annuity commencing at normal retirement age
51.5or to a deferred early retirement annuity under section 353.30, subdivision 1, 1a, 1b,
51.61c, or 5. The deferred annuity must be computed under section 353.29, subdivisions 2
51.7and subdivision 3 , on the basis of the law in effect on the date of termination of public
51.8service or termination of membership, whichever is earlier, and must be augmented as
51.9provided in section 353.71, subdivision 2. A former member qualified to apply for a
51.10deferred retirement annuity may revoke this option at any time before the commencement
51.11of deferred annuity payments by making application for a refund. The person is entitled to
51.12a refund of accumulated member contributions within 30 days following date of receipt of
51.13the application by the executive director.
51.14EFFECTIVE DATE.This section is effective the day after final enactment.

51.15    Sec. 31. Minnesota Statutes 2006, section 354.05, subdivision 13, is amended to read:
51.16    Subd. 13. Allowable service. "Allowable service" means:
51.17    (1) Any service rendered by a teacher for which on or before July 1, 1957, the
51.18teacher's account in the retirement fund was credited by reason of employee contributions
51.19in the form of salary deductions, payments in lieu of salary deductions, or in any other
51.20manner authorized by Minnesota Statutes 1953, sections 135.01 to 135.13, as amended by
51.21Laws 1955, chapters 361, 549, 550, 611, or
51.22    (2) Any service rendered by a teacher for which on or before July 1, 1961, the
51.23teacher elected to obtain credit for service by making payments to the fund pursuant to
51.24Minnesota Statutes 1980, section 354.09 and section 354.51, or
51.25    (3) Any service rendered by a teacher after July 1, 1957, for any calendar month
51.26when the member receives salary from which deductions are made, deposited and credited
51.27in the fund, or
51.28    (4) Any service rendered by a person after July 1, 1957, for any calendar month
51.29where payments in lieu of salary deductions are made, deposited and credited into the
51.30fund as provided in Minnesota Statutes 1980, section 354.09, subdivision 4, and section
51.31354.53 , or
51.32    (5) Any service rendered by a teacher for which the teacher elected to obtain
51.33credit for service by making payments to the fund pursuant to Minnesota Statutes 1980,
51.34section 354.09, subdivisions 1 and 4, sections 354.50, 354.51, Minnesota Statutes 1957,
52.1section 135.41, subdivision 4, Minnesota Statutes 1971, section 354.09, subdivision 2, or
52.2Minnesota Statutes, 1973 Supplement, section 354.09, subdivision 3, or
52.3    (6) Both service during years of actual membership in the course of which
52.4contributions were currently made and service in years during which the teacher was not a
52.5member but for which the teacher later elected to obtain credit by making payments to the
52.6fund as permitted by any law then in effect, or
52.7    (7) Any service rendered where contributions were made and no allowable service
52.8credit was established because of the limitations contained in Minnesota Statutes 1957,
52.9section 135.09, subdivision 2, as determined by the ratio between the amounts of money
52.10credited to the teacher's account in a fiscal year and the maximum retirement contribution
52.11allowable for that year, or
52.12    (8) MS 2002 [Expired]
52.13    (9) A period of time during which a teacher who is a state employee was on strike
52.14without pay, not to exceed a period of one year, if the teacher makes a payment in lieu of
52.15salary deductions or makes a prior service credit purchase payment, whichever applies. If
52.16the payment is made within 12 months, the payment by the teacher must be an amount
52.17equal to the employee and employer contribution rates set forth in section 354.42,
52.18subdivisions 2 and 3 , applied to the teacher's rate of salary in effect on the conclusion of
52.19the strike for the period of the strike without pay, plus compound interest at a monthly rate
52.20of 0.71 percent from the last day of the strike until the date of payment. If the payment by
52.21the employee is not made within 12 months, the payment must be in an amount equal to
52.22the payment amount determined under section 356.551 354.72, or
52.23    (10) A period of service before July 1, 2006, that was properly credited as allowable
52.24service by the Minneapolis Teachers Retirement Fund Association, and that was rendered
52.25by a teacher as an employee of Special School District No. 1, Minneapolis, or by an
52.26employee of the Minneapolis Teachers Retirement Fund Association who was a member
52.27of the Minneapolis Teachers Retirement Fund Association by virtue of that employment,
52.28who has not begun receiving an annuity or other retirement benefit from the former
52.29Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that
52.30service before July 1, 2006, and who has not taken a refund of member contributions
52.31related to that service unless the refund is repaid under section 354.50, subdivision 4.
52.32Service as an employee of Special School District No. 1, Minneapolis, on or after July 1,
52.332006, is "allowable service" only as provided by this chapter.
52.34EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
52.35authorized leaves of absence that commence on or after the effective date.

53.1    Sec. 32. Minnesota Statutes 2006, section 354.093, is amended to read:
53.2354.093 PARENTAL LEAVE.
53.3    Upon granting a parental leave for the birth or adoption of a child, the employing
53.4unit granting the leave must certify the leave to the association on a form specified by the
53.5executive director. A member of the association granted parental leave of absence by
53.6the employing unit is entitled to service credit not to exceed one year for the period of
53.7leave upon payment to the association by the end of the fiscal year following the fiscal
53.8year in which the leave of absence terminated. This payment must equal the total required
53.9employee and employer contributions, and amortization contributions, if any, for the
53.10period of leave prescribed in section 354.42. The payment must be based on the member's
53.11average full-time monthly salary rate on the date the leave of absence commenced, and
53.12must be without interest under section 354.72. Notwithstanding the provisions of any
53.13agreements to the contrary, the contributions specified in this section may not be made to
53.14receive allowable service credit under this section if the member does not retain the right
53.15to full reinstatement at the end of the leave.
53.16EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
53.17authorized leaves of absence that commence on or after the effective date.

53.18    Sec. 33. Minnesota Statutes 2006, section 354.094, is amended to read:
53.19354.094 EXTENDED LEAVES OF ABSENCE.
53.20    Subdivision 1. Service credit contributions. (a) Upon granting any extended leave
53.21of absence under section 122A.46 or 136F.43, the employing unit granting the leave
53.22must certify the leave to the association on a form specified by the executive director.
53.23A member granted an extended leave of absence under section 122A.46 or 136F.43
53.24may pay employee contributions and shall receive allowable and formula service credit
53.25toward annuities and other benefits under this chapter, for each year of the leave, provided
53.26that the member and the employing board make the required employer contribution in
53.27any proportion they may agree upon, during the period of the leave payment is made as
53.28specified in paragraph (b). The employer may enter into an agreement with the exclusive
53.29bargaining representative of the teachers in the district under which, for an individual
53.30teacher, all or a portion of the employee's contribution is paid by the employer. Any such
53.31agreement must include a sunset of eligibility to qualify for the payment and must not
53.32be a part of the collective bargaining agreement. The leave period must not exceed five
53.33years. A member may not receive more than five years of allowable or formula service
53.34credit under this section. The employee and employer contributions must be based upon
54.1the rates of contribution prescribed by section 354.42 for the salary received during the
54.2year immediately preceding the extended leave.
54.3    (b) Employee contribution payments without interest for the years for which a
54.4member is receiving service credit while on extended leave must be made on or before
54.5June 30 of each fiscal year for which service credit is to be received, or in instances of
54.6late reporting by the employer, within 30 days after the association gives notification to
54.7the member of the amount due. If payment is to be made by a transfer of pretax assets
54.8authorized under section 356.441, payment is authorized after June 30 of the fiscal year
54.9providing that authorization for the asset transfer has been received by the applicable
54.10third party administrator by June 30, and the payment must include interest at a rate of
54.11.708 percent per month from June 30 through the end of the month in which payment
54.12is received. No payment is permitted after the following September 30. Payment is
54.13authorized after June 30 as specified in section 354.72.
54.14    (c) Notwithstanding the provisions of any agreements to the contrary, employee and
54.15employer contributions payments may not be made to receive allowable and formula
54.16service credit if the member does not have full reinstatement rights as provided in section
54.17122A.46 or 136F.43, both during and at the end of the extended leave.
54.18    (d) Any school district paying the employee's retirement contributions or payments
54.19under this section shall forward to the applicable Teachers Retirement Association or
54.20retirement fund a copy of the agreement executed by the school district and the employee.
54.21    Subd. 2. Membership; retention. Notwithstanding section 354.49, subdivision
54.224 , clause (3), a member on extended leave whose employee and employer contributions
54.23are paid into the fund pursuant to under subdivision 1 shall retain membership in the
54.24association for as long as the contributions are paid if payment under subdivision 1,
54.25paragraph (b), or section 354.72, is made, under the same terms and conditions as if
54.26the member had continued to teach in the district or the Minnesota State Colleges and
54.27Universities system.
54.28    Subd. 3. Effect of nonpayment. A member on extended leave of absence pursuant
54.29to under section 122A.46 or 136F.43 who does not pay employee contributions or whose
54.30employer contribution is not paid into the fund in any fails to make payments under
54.31subdivision 1, paragraph (b), or section 354.72, for any given year of the leave shall be
54.32deemed to cease to render teaching services beginning in that year for purposes of this
54.33chapter and may not pay employee or employer contributions into make payment to the
54.34fund in for any subsequent year of the leave until full payment is made for all prior years
54.35of the leave. Nonpayment of contributions into the fund Failure to make payment shall
55.1does not affect the rights or obligations of the member or the member's employer under
55.2section 122A.46 or 136F.43.
55.3    Subd. 4. Member who does not resume teaching. A member who pays employee
55.4contributions into makes the payments specified in subdivision 1, paragraph (b), or
55.5section 354.72, to the fund for the agreed maximum duration of an extended leave and
55.6who does not resume teaching in the first school year after that maximum duration has
55.7elapsed shall be is deemed to cease to render teaching services beginning in that year for
55.8purposes of this chapter.
55.9    Subd. 5. Discharge; layoff. The provisions of this section shall do not apply to a
55.10member who is discharged or placed on unrequested leave of absence or retrenchment
55.11or layoff or whose contract is terminated while the member is on an extended leave of
55.12absence pursuant to under section 122A.46 or 136F.43.
55.13    Subd. 6. Limits on other service credit. A member who pays employee
55.14contributions makes the payments required under subdivision 1, paragraph (b), or section
55.15354.72, and receives allowable and formula service credit in the association pursuant to
55.16under this section may not pay employee contributions or receive allowable or formula
55.17service credit for the same fiscal year in any other Minnesota public employee pension
55.18plan, except a volunteer firefighters' relief association governed by sections 69.771
55.19to 69.776. This subdivision shall must not be construed to prohibit a member who
55.20pays employee contributions and receives allowable and formula service credit in the
55.21association pursuant to under this section in any for a given year from being employed as
55.22a substitute teacher by any school district during that year. Notwithstanding the provisions
55.23of sections 354.091 and 354.42, a teacher may not pay retirement contributions or receive
55.24allowable or formula service credit in the association for teaching service rendered for any
55.25part of any year for which the teacher pays retirement contributions or receives allowable
55.26or formula service credit pursuant to under this section or section 354A.091 while on an
55.27extended leave of absence pursuant to under section 122A.46.
55.28EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
55.29authorized leaves of absence that commence on or after the effective date.

55.30    Sec. 34. Minnesota Statutes 2006, section 354.095, is amended to read:
55.31354.095 MEDICAL LEAVE; PAYMENT PROCEDURES.
55.32    Upon granting a medical leave, an employing unit must certify the leave to the
55.33association on a form specified by the executive director. A member of the association
55.34who is on an authorized medical leave of absence is entitled to receive allowable service
55.35credit, not to exceed one year, for the period of leave, upon making the prescribed payment
56.1to the fund under section 354.72. This payment must include the required employee and
56.2employer contributions at the rates specified in section 354.42, subdivisions 2, 3, and 5,
56.3as applied to the member's average full-time monthly salary rate on the date the leave of
56.4absence commenced plus compound annual interest at the rate of 8.5 percent from the end
56.5of the fiscal year during which the leave terminates to the end of the month during which
56.6payment is made. The member must pay the total amount required unless the employing
56.7unit, at its option, pays the employer contributions. The total amount required must be
56.8paid before the effective date of retirement or by the end of the fiscal year following the
56.9fiscal year in which the leave of absence terminated, whichever is earlier. A member
56.10may not receive more than one year of allowable service credit during any fiscal year by
56.11making payment under this section. A member may not receive disability benefits under
56.12section 354.48 and receive allowable service credit under this section for the same period
56.13of time. Notwithstanding the provisions of any agreement to the contrary, employee
56.14and employer contributions may not be made to receive allowable service credit under
56.15this section if the member does not retain the right to full reinstatement both during and
56.16at the end of the medical leave.
56.17EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
56.18authorized leaves of absence that commence on or after the effective date.

56.19    Sec. 35. Minnesota Statutes 2006, section 354.096, subdivision 2, is amended to read:
56.20    Subd. 2. Payment. (a) Notwithstanding any laws to the contrary, a member who
56.21is granted a family leave under United States Code, title 42, section 12631, may receive
56.22allowable service credit for the leave by making payment of the employee, employer, and
56.23additional employer contributions at the rates under section 354.42, during the leave
56.24period as applied to the member's average full-time monthly salary rate on the date the
56.25leave commenced.
56.26    (b) The member may make If payment, without interest, to the association by the
56.27end of the fiscal year following the fiscal year in which the leave terminated or before the
56.28effective date of the member's retirement, whichever is earlier is made after the leave
56.29terminates, section 354.72 applies.
56.30EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
56.31authorized leaves of absence that commence on or after the effective date.

56.32    Sec. 36. [354.105] PAYMENTS USING PRETAX TRANSFERS.
56.33    If a current or past member is making a payment to the Teachers Retirement
56.34Association to receive service credit under a provision of this chapter, chapter 356,
56.35or applicable special law, and this payment is to be made by a transfer of pretax assets
57.1authorized under section 356.441, payment is authorized after the due date, but not to
57.2exceed 90 days, provided that the authorization for the asset transfer has been received by
57.3the applicable third party administrator by the due date, and the payment must include
57.4interest at a rate of .708 percent per month from the due date through the end of the month
57.5in which the Teachers Retirement Association receives the payment.
57.6EFFECTIVE DATE.This section is effective July 1, 2007.

57.7    Sec. 37. Minnesota Statutes 2006, section 354.35, is amended to read:
57.8354.35 OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE
57.9NORMAL RETIREMENT AGE.
57.10    Subdivision 1. Normal retirement age definition. For purposes of this section,
57.11"normal retirement age" means normal retirement age as defined in United States Code,
57.12title 42, section 416(1), as amended.
57.13    Subd. 2. Election of accelerated annuity. (a) Any coordinated member who retires
57.14before normal retirement age 65 may elect to receive an optional accelerated retirement
57.15annuity from the association which provides for different annuity amounts over different
57.16periods of retirement. The optional accelerated retirement annuity must take the form of
57.17an annuity payable for the period before the member attains age 65, or normal retirement
57.18age, in a greater amount than the amount of the annuity calculated under section 354.44 on
57.19the basis of the age of the member at retirement, but the optional accelerated retirement
57.20annuity must be the actuarial equivalent of the member's annuity computed on the basis of
57.21the member's age at retirement. The greater amount must be paid until the retiree reaches
57.22age 65, or normal retirement age, and at that time the payment from the association must
57.23be reduced. For each year the retiree is under age 65, or normal retirement age, up to five
57.24percent of the total life annuity required reserves may be used to accelerate the optional
57.25retirement annuity under this section. At retirement,
57.26    (b) Members who retire before age 62 may elect to have the age specified in annuity
57.27under this section be subdivision accelerated to age 62 instead of 65 rather than normal
57.28retirement age or age 65.
57.29    (c) The method of computing the optional accelerated retirement annuity provided in
57.30this section subdivision is established by the board of trustees. In establishing the method
57.31of computing the optional accelerated retirement annuity or any modification of that
57.32procedure, the board of trustees must obtain the written approval of the actuary retained
57.33under section 356.214. The written approval must be a part of the permanent records
57.34of the board of trustees. The election of an optional accelerated retirement annuity is
57.35exercised by making an application on a form provided by the executive director.
58.1EFFECTIVE DATE.This section is effective July 1, 2007.

58.2    Sec. 38. Minnesota Statutes 2006, section 354.45, subdivision 1a, is amended to read:
58.3    Subd. 1a. Bounce-back annuity. (a) If a former member or disabilitant selects a
58.4joint and survivor annuity option under subdivision 1 after June 30, 1989, the former
58.5member or disabilitant must receive a normal single life annuity if the designated optional
58.6annuity beneficiary dies before the former member or disabilitant. Under this option, no
58.7reduction may be made in the person's annuity to provide for restoration of the normal
58.8single life annuity in the event of the death of the designated optional annuity beneficiary.
58.9    (b) The annuity adjustment specified in paragraph (a) also applies to joint and
58.10survivor annuity options under subdivision 1 elected before July 1, 1989. The annuity
58.11adjustment under this paragraph occurs on July 1, 1989, or on the first day of the first
58.12month following the death of the designated optional annuity beneficiary, whichever is
58.13later. This paragraph may not be interpreted as authorizing retroactive payments. The
58.14restoration of the normal single life annuity under this subdivision will take effect on July
58.151, 1989, or the first of the month following the date of death of the designated optional
58.16annuity beneficiary, or on the first of the month following one year before the date on
58.17which a certified copy of the death record of the designated optional annuity beneficiary is
58.18received in the office of the Teachers Retirement Association, whichever date is later.
58.19    (c) Except as stated in paragraph (b), this subdivision may not be interpreted as
58.20authorizing retroactive benefit payments.
58.21EFFECTIVE DATE.This section is effective July 1, 2007.

58.22    Sec. 39. Minnesota Statutes 2006, section 354.48, subdivision 3, is amended to read:
58.23    Subd. 3. Computation of benefits. (1) (a) The amount of the disability benefit
58.24granted to members covered under section 354.44, subdivision 2, clauses (1) and (2)
58.25paragraphs (b) and (c), is an amount equal to double the annuity which could be purchased
58.26by the member's accumulated deductions plus interest on the amount computed as though
58.27the teacher were at normal retirement age at the time the benefit begins to accrue and in
58.28accordance with the law in effect when the disability application is received on the last day
58.29for which salary is received. Any member who applies for a disability benefit after June
58.3030, 1974, and who failed to make an election pursuant to under Minnesota Statutes 1971,
58.31section 354.145, shall have the disability benefit computed under this clause paragraph, as
58.32further specified in paragraphs (b) and (c), or clause (2) paragraph (d), whichever is larger.
58.33    (b) The benefit granted shall be determined by the following:
58.34    (a) (1) the amount of the accumulated deductions;
59.1    (b) (2) interest actually earned on these accumulated deductions to the date the
59.2benefit begins to accrue;
59.3    (c) (3) interest for the years from the date the benefit begins to accrue to the date the
59.4member attains normal retirement age at the rate of three percent;
59.5    (d) (4) annuity purchase rates based on an appropriate annuity table of mortality
59.6established by the board as provided in section 354.07, subdivision 1, and using
59.7the applicable postretirement interest rate assumption specified in section 356.215,
59.8subdivision 8 .
59.9    (c) In addition, a supplementary monthly benefit of $25 to age 65 or the five-year
59.10anniversary of the effective date of the disability benefit, whichever is later, must be
59.11paid to basic members.
59.12    (2) (d) The disability benefit granted to members covered under section 354.44,
59.13subdivision 6 , shall be computed in the same manner as the annuity provided in section
59.14354.44, subdivision 6 . The disability benefit shall be the formula annuity without the
59.15reduction for each month the member is under normal retirement age when the benefit
59.16begins to accrue as defined by the law in effect on the last day for which salary is paid.
59.17    (3) (e) For the purposes of computing a retirement annuity when the member
59.18becomes eligible, the amounts paid for disability benefits shall not be deducted from the
59.19individual member's accumulated deductions. If the disability benefits provided in this
59.20subdivision exceed the monthly average salary of the disabled member, the disability
59.21benefits shall be reduced to an amount equal to the disabled member's average salary.
59.22EFFECTIVE DATE.This section is effective July 1, 2007.

59.23    Sec. 40. [354.471] ACCOUNT TERMINATION; RESTORATION.
59.24    Subdivision 1. Account termination. If an active or deferred member dies and
59.25there is no surviving spouse or other beneficiaries, or the spouse or beneficiaries cannot be
59.26located within five years of the date of death of the member, the accumulated employee
59.27and employer contributions and any other payments made to the Teachers Retirement
59.28Association fund by the individual or on behalf of the individual, and all investment
59.29earnings on these amounts, must be credited to and become part of the retirement fund.
59.30    Subd. 2. Restoration. Following a forfeiture under subdivision 1, if a surviving
59.31spouse or other beneficiary of the deceased contacts the Teachers Retirement Association
59.32and, based on documentation determined by the executive director to be valid and
59.33adequate, establishes a right to a survivor annuity, death refund, or other benefit provided
59.34by this chapter, the account forfeited under subdivision 1 must be fully or partially
59.35restored, as necessary.
60.1EFFECTIVE DATE.This section is effective July 1, 2007.

60.2    Sec. 41. [354.72] AUTHORIZED LEAVE OF ABSENCE AND STRIKE PERIOD
60.3SERVICE CREDIT PURCHASE PROCEDURE.
60.4    Subdivision 1. Application. This section applies to any strike period under section
60.5354.05, subdivision 13, clause (9), and to any period of authorized leave of absence
60.6without pay under sections 354.093, 354.094, 354.095, and 354.096 for which the teacher
60.7obtains credit for allowable service by making payment as specified in this section to the
60.8Teachers Retirement Association fund. Each year of an extended leave of absence under
60.9section 354.094 is considered to be a separate leave for purposes of this section.
60.10    Subd. 2. Purchase procedure. (a) A teacher may purchase credit for allowable and
60.11formula service in the plan for a period specified in subdivision 1 if the teacher makes
60.12a payment as specified in paragraph (b) or (c), whichever applies. The employing unit,
60.13at its option, may pay the employer portion of the amount specified in paragraph (b) on
60.14behalf of its employees.
60.15    (b) If payment is received by the executive director within one year from the end
60.16of the strike period or authorized leave under section 354.093, 354.095, or 354.096, or
60.17after June 30 and before the following June 30 for an extended leave of absence under
60.18section 354.094, the payment must equal the total employee and employer contributions,
60.19including amortization contributions if applicable, given the contribution rates in section
60.20354.42, multiplied by the member's average monthly salary rate on the commencement
60.21of the leave or period of strike, multiplied by the months and portions of a month of the
60.22leave of absence or period of strike for which the teacher seeks allowable service credit.
60.23Payments made under this paragraph must include compound interest at a monthly rate of
60.240.71 percent from the last day of the leave period or strike period, or from June 30 for
60.25an extended leave of absence under section 354.094, until the last day of the month in
60.26which payment is received.
60.27    (c) If payment is received by the executive director after the applicable last permitted
60.28date under paragraph (b), the payment amount is the amount determined under section
60.29356.551.
60.30EFFECTIVE DATE.This section is effective July 1, 2007, and applies to
60.31authorized leaves of absence that commence on or after the effective date.

60.32    Sec. 42. Minnesota Statutes 2006, section 356.195, subdivision 1, is amended to read:
60.33    Subdivision 1. Covered plans. This section applies to all defined benefit plans
60.34specified in section 356.30, subdivision 3, except clause (10).
61.1EFFECTIVE DATE.This section is effective the day after final enactment.

61.2    Sec. 43. Minnesota Statutes 2006, section 356.405, is amended to read:
61.3356.405 COMBINED PAYMENT OF RETIREMENT ANNUITIES.
61.4    (a) The Public Employees Retirement Association and the Minnesota State
61.5Retirement System are permitted to combine payments to retirees if one of the payments
61.6is less than $250 per month and if the individual elects the same joint and survivor
61.7annuity form from both systems, or if the individual elects straight life annuities from both
61.8systems. The total payment must be equal to the amount that is payable if payments were
61.9kept separate. The retiree must agree, in writing, to have the payment combined.
61.10    (b) Each plan must calculate the benefit amounts under the laws governing the plan
61.11and the required reserves and future mortality losses or gains must be paid or accrued to
61.12the plan making the combined payment from which the plan where the service was earned.
61.13Each plan must account for its portion of the payment separately, and there may be no
61.14additional actuarial liabilities realized by either plan.
61.15    (c) The plan making the payment would be responsible for issuing one payment and
61.16making address changes, tax withholding changes, and other administrative functions
61.17needed to process the payment.
61.18EFFECTIVE DATE.This section is effective July 1, 2007.

61.19    Sec. 44. Minnesota Statutes 2006, section 356.46, subdivision 3, is amended to read:
61.20    Subd. 3. Requirement of notice to member's spouse. (a) Except as specified in
61.21paragraph (c), if a public pension plan provides optional retirement annuity forms which
61.22include a joint and survivor optional retirement annuity form potentially applicable to the
61.23surviving spouse of a member, the executive director of the public pension plan shall send
61.24a copy of the written statement required by subdivision 2 to the spouse of the member
61.25before the member's election of an optional a retirement annuity.
61.26    (b) Following the election of a retirement annuity by the member, a copy of the
61.27completed retirement annuity application and retirement annuity beneficiary form, if
61.28applicable, must be sent by the executive director of the public pension plan to the
61.29spouse of the retiring member. A signed acknowledgment must be required from the
61.30spouse confirming receipt of a copy of the completed retirement annuity application and
61.31retirement annuity beneficiary form, unless the spouse's signature confirming the receipt is
61.32on the annuity application form. If the required signed acknowledgment is not received
61.33from the spouse within 30 days, the executive director of the public pension plan must
61.34send another copy of the completed retirement annuity application and retirement annuity
61.35beneficiary form, if applicable, to the spouse by certified mail with restricted delivery.
62.1    (c) For the Teachers Retirement Association, the statement to the spouse that is
62.2required under paragraph (a) must be sent before or upon the member's election of an
62.3annuity.
62.4EFFECTIVE DATE.This section is effective July 1, 2007.

62.5    Sec. 45. Minnesota Statutes 2006, section 356.87, is amended to read:
62.6356.87 HEALTH INSURANCE WITHHOLDING.
62.7    Subdivision 1. Public employees insurance program withholding. (a) Upon
62.8authorization of a person entitled to receive a retirement annuity, disability benefit or
62.9survivor benefit, the executive director of a public pension fund enumerated in section
62.10356.20, subdivision 2 , shall withhold health insurance premium amounts from the
62.11retirement annuity, disability benefit or survivor benefit, and shall pay the premium
62.12amounts to the public employees insurance program.
62.13    (b) The public employees insurance program shall reimburse a public pension fund
62.14for the administrative expense of withholding the premium amounts and shall assume
62.15liability for the failure of a public pension fund to properly withhold the premium amounts.
62.16    Subd. 2. Public safety retiree insurance withholding. (a) For purposes of this
62.17subdivision, "governing board" means the governing board or body that has been assigned
62.18the chief policy making powers and management duties of the applicable pension plan.
62.19    (b) The governing board may, for a pension plan providing monthly annuity
62.20payments and which is enumerated in section 356.20, subdivision 2, direct the plan's chief
62.21administrative officer to withhold health, accident, and long-term care insurance premiums
62.22from the retirement annuity or disability benefit and to transmit the amount to an approved
62.23insurance provider specified by the eligible person. A governing board which agrees to
62.24participate may revise or revoke that decision at a later date, providing reasonable notice
62.25is provided to the applicable parties.
62.26    (c) An eligible person is a person who:
62.27    (1) is a retiree or disabilitant from a participating plan;
62.28    (2) was a public safety officer as defined in United States Code, title 42, section
62.293796b;
62.30    (3) terminated service as a public safety officer upon attainment of normal retirement
62.31age and commences receipt of an annuity without any period of deferral, or is receiving
62.32a disability benefit; and
62.33    (4) satisfies any other requirements to have all or a portion of the health, accident,
62.34or long-term care insurance premiums excluded from income for taxation purposes, as
62.35specified in the Pension Protection Act of 2006, section 845.
63.1    (d) An approved insurance provider is:
63.2    (1) any regulated, licensed insurance company;
63.3    (2) a fraternal or any other organization sponsoring a regulated, licensed insurance
63.4program; or
63.5    (3) an employer-sponsored insurance program, whether directly through the
63.6employer or a third-party administrator.
63.7    (e) Using a form prescribed by the chief administrative officer of the applicable
63.8plan, an eligible person may elect to have the applicable plan administrator withhold and
63.9transmit the insurance amounts described in paragraph (b).
63.10    (f) A pension fund and the plan fiduciaries which authorize or administer
63.11withholding of insurance premiums under this subdivision are not liable for a failure to
63.12properly withhold or transmit the premium amounts.
63.13EFFECTIVE DATE.This section is effective January 1, 2007.

63.16    Sec. 46. [356.95] PURCHASE OF PRIOR COMPREHENSIVE EMPLOYMENT
63.17TRAINING ACT SERVICE.
63.18    Subdivision 1. Eligibility. An eligible person is a person who:
63.19    (1) is currently an active plan member in a plan included under section 356.30,
63.20subdivision 3, other than clause (3);
63.21    (2) was excluded from pension coverage under the provisions of Laws 1978, chapter
63.22720; and
63.23    (3) subsequently became employed in unsubsidized public employment covered by
63.24a pension plan included under section 356.30, subdivision 3, other than clause (3), with
63.25the same public employer which provided the subsidized employment or other public
63.26employer.
63.27    Subd. 2. Authorization. An eligible person under subdivision 1 is authorized to
63.28purchase service credit for that period of uncovered prior subsidized public employment,
63.29other than a period of prior subsidized public employment for which a repayment of a
63.30refund was made, with a public pension plan specified in subdivision 1, clause (3), which,
63.31except for the exclusion provided by Laws 1978, chapter 720, would have provided
63.32pension coverage for the subsidized employment.
63.33    Subd. 3. Procedures. Section 356.551 applies to purchases under this section,
63.34except that payment must be made before the expiration date of this section or termination
63.35from eligible employment covered by a pension plan under subdivision 1, clause (1),
63.36whichever is earlier.
64.1    Subd. 4. Restriction. (a) Pre-July 1, 1989, service credit purchased under this
64.2section does not extend eligibility to plan benefits applicable to individuals who became
64.3members prior to July 1, 1989, of a plan listed in section 356.30, subdivision 3.
64.4    (b) Service credit may not be purchased for any period for which the individual
64.5has service credit in a covered pension plan, as defined in section 356A.01, subdivision
64.68, other than a volunteer firefighter plan.
64.7    Subd. 5. Expiration. This section expires on June 30, 2009.
64.8EFFECTIVE DATE.This section is effective the day after final enactment.

64.10    Sec. 47. [356.98] ALLOCATION OF RECEIVABLES.
64.11    If an employing unit is dissolved or closed and amounts are owed to more than one
64.12Minnesota public pension plan, any amounts available to cover payments to the plans
64.13must be applied first to the employee contributions owed to the applicable plans, and
64.14next to the unpaid employer contributions, including any applicable employer additional
64.15contributions, and finally to the interest due on the employee and employer amounts. If, at
64.16any stage in this allocation process, the available amount is insufficient to fully cover the
64.17amount required, the remaining available payment amount must be prorated among the
64.18applicable plans based on each plan's share of combined covered payroll.
64.19EFFECTIVE DATE.This section is effective the day after final enactment.

64.20    Sec. 48. Minnesota Statutes 2006, section 490.121, subdivision 15a, is amended to
64.21read:
64.22    Subd. 15a. Early retirement date. "Early retirement date" means the last day of
64.23the month any date after a judge attains the age of 60 but before the judge reaches the
64.24normal retirement date.
64.25EFFECTIVE DATE.This section is effective the day after final enactment.

64.26    Sec. 49. Minnesota Statutes 2006, section 490.121, subdivision 21f, is amended to read:
64.27    Subd. 21f. Normal retirement date. "Normal retirement date" means the last day
64.28of the month in which date a judge attains the age of 65.
64.29EFFECTIVE DATE.This section is effective the day after final enactment.

64.30    Sec. 50. REPEALER.
64.31Minnesota Statutes 2006, sections 353.30, subdivision 1; 353.34, subdivision 7;
64.32353.69; 354.49, subdivision 5; and 356.90, are repealed.
65.1EFFECTIVE DATE.This section is effective the day after final enactment.

65.2    Sec. 51. REVISOR INSTRUCTION.
65.3    The revisor of statutes shall replace references to section 356.55, which was repealed
65.4in 2002, with references to section 356.551, wherever they appear in Minnesota Statutes
65.5or Minnesota Rules. The revisor shall also make related grammatical changes.
65.6EFFECTIVE DATE.This section is effective the day after final enactment.


65.9    Section 1. Minnesota Statutes 2006, section 352.91, subdivision 3d, is amended to read:
65.10    Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means
65.11service by a state employee in one of the employment positions at a correctional facility or
65.12at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
65.13employee's working time is spent in direct contact with inmates or patients and the fact of
65.14this direct contact is certified to the executive director by the appropriate commissioner.
65.15    (b) The employment positions are as follows: baker; central services administrative
65.16specialist, intermediate; central services administrative specialist, principal; chaplain;
65.17chemical dependency counselor supervisor; chief cook; cook; cook coordinator;
65.18corrections program therapist 1; corrections program therapist 2; corrections program
65.19therapist 3; corrections program therapist 4; corrections inmate program coordinator;
65.20corrections transitions program coordinator; corrections security caseworker; corrections
65.21security caseworker career; corrections teaching assistant; delivery van driver; dentist;
65.22electrician supervisor; general maintenance worker; general repair worker; laundry
65.23coordinator; library/information research services specialist; library/information research
65.24services specialist senior; library technician; plant maintenance engineer lead; plumber
65.25supervisor; psychologist 1; psychologist 3; recreation therapist; recreation therapist
65.26coordinator; recreation program assistant; recreation therapist senior; sports medicine
65.27specialist; water treatment plant operator; work therapy assistant; work therapy program
65.28coordinator; and work therapy technician.
65.29EFFECTIVE DATE.This section is effective the first day of the first payroll period
65.30next following June 15, 2007.

65.31    Sec. 2. Minnesota Statutes 2006, section 352.91, subdivision 3e, is amended to read:
65.32    Subd. 3e. Minnesota extended treatment options program. (a) "Covered
65.33correctional service" means service by a state employee in one of the employment positions
65.34with the Minnesota extended treatment options program specified in paragraph (b) if at
65.35least 75 percent of the employee's working time is spent in direct contact with patients
66.1who are in the Minnesota extended treatment options program and if service in such a
66.2position is certified to the executive director by the commissioner of human services .
66.3    (b) The employment positions are:
66.4    (1) behavior analyst 1;
66.5    (2) behavior analyst 2;
66.6    (3) behavior analyst 3;
66.7    (4) group supervisor;
66.8    (5) group supervisor assistant;
66.9    (6) human services support specialist;
66.10    (7) developmental disability residential program lead;
66.11    (8) psychologist 2;
66.12    (9) recreation program assistant;
66.13    (10) recreation therapist senior;
66.14    (11) registered nurse senior;
66.15    (12) skills development specialist;
66.16    (13) social worker senior;
66.17    (14) social worker specialist; and
66.18    (15) speech pathology specialist.
66.19EFFECTIVE DATE.This section is effective July 1, 2007.

66.20    Sec. 3. Minnesota Statutes 2006, section 352.91, subdivision 3f, is amended to read:
66.21    Subd. 3f. Additional Department of Human Services personnel. (a) "Covered
66.22correctional service" means service by a state employee in one of the employment
66.23positions specified in paragraph (b) at the Minnesota Security Hospital or in the Minnesota
66.24sex offender program if at least 75 percent of the employee's working time is spent in
66.25direct contact with patients and the determination of this direct contact is certified to the
66.26executive director by the commissioner of human services.
66.27    (b) The employment positions are:
66.28    (1) behavior analyst 2;
66.29    (2) behavior analyst 3;
66.30    (3) certified occupational therapy assistant 1;
66.31    (4) certified occupational therapy assistant 2;
66.32    (5) chemical dependency counselor senior;
66.33    (4) (6) client advocate;
66.34    (5) (7) customer services specialist principal;
66.35    (8) dental assistant registered;
67.1    (6) (9) group supervisor;
67.2    (7) (10) group supervisor assistant;
67.3    (8) (11) human services support specialist;
67.4    (12) licensed alcohol and drug counselor;
67.5    (13) licensed practical nurse 1;
67.6    (9) (14) management analyst 3;
67.7    (15) occupational therapist;
67.8    (10) (16) occupational therapist, senior;
67.9    (11) office and administrative specialist senior;
67.10    (12) (17) psychologist 1;
67.11    (13) (18) psychologist 2;
67.12    (14) (19) psychologist 3;
67.13    (15) (20) recreation program assistant;
67.14    (16) (21) recreation therapist lead;
67.15    (22) recreation therapist senior;
67.16    (17) (23) rehabilitation counselor senior;
67.17    (18) (24) security supervisor;
67.18    (25) skills development specialist;
67.19    (19) (26) social worker senior;
67.20    (20) (27) social worker specialist;
67.21    (21) (28) social worker specialist, senior;
67.22    (22) (29) special education program assistant;
67.23    (30) speech pathology clinician;
67.24    (23) (31) work therapy assistant; and
67.25    (24) (32) work therapy program coordinator.
67.26EFFECTIVE DATE.This section is effective the first day of the first payroll period
67.27next following June 15, 2007.

67.28    Sec. 4. Minnesota Statutes 2006, section 352.91, subdivision 4b, is amended to read:
67.29    Subd. 4b. Department of Corrections; procedure for coverage change
67.30considerations. (a) The commissioner of corrections shall appoint a standing review
67.31committee to review and determine positions that should be included in legislative
67.32requests for correctional employees retirement plan coverage under subdivision 4a.
67.33    (b) Periodically, the Department of Corrections will convene meetings of the
67.34review committee. The review committee must review all requests and the supporting
67.35documentation for coverage by the correctional employees retirement plan and must
68.1determine which classes or positions meet the statutory requirements for coverage. The
68.2review committee also must determine if incumbents of and recent retirees from classes or
68.3positions determined for inclusion in correctional employees retirement plan coverage
68.4have prior Department of Corrections employment which also qualified as correctional
68.5service and which should be transferred from the general state employees retirement plan
68.6to the plan and the initial date for each potential service credit transfer.
68.7    (c) The review committee must evaluate and determine the eligibility date for initial
68.8plan participation and all periods of eligibility in the correctional employees retirement
68.9plan.
68.10    (d) The department must provide a notice of each determination and of the
68.11employee's right to appeal from the review committee to each employee who requested
68.12inclusion. Appeals must be filed with the agency human resource manager within 30 days
68.13of the date of the notice of determination.
68.14    (d) (e) The commissioner of corrections shall appoint a standing appeals committee
68.15to hear appeals of determinations for coverage. The appeal committee must include
68.16relevant department employees and employee representatives. Appeal committee
68.17determinations are final.
68.18    (e) (f) All positions approved for inclusion must be forwarded to the commissioner
68.19of corrections for the preparation of legislation to implement the coverage change and
68.20submission. The commissioner will submit a written recommendation documenting
68.21classes or positions that should or should not be covered by the correctional employees
68.22retirement plan. Documentation of each request and the final determination must be
68.23retained in the Department of Corrections' Office of Human Resource Management.
68.24EFFECTIVE DATE.This section is effective the day after final enactment.

68.25    Sec. 5. [352.955] TRANSFER OF PRIOR MSRS-GENERAL SERVICE
68.26CREDIT FOR CERTAIN EMPLOYEES WITH TRANSFERRED RETIREMENT
68.27COVERAGE.
68.28    Subdivision 1. Election to transfer prior MSRS-general service credit. (a) An
68.29eligible employee described in paragraph (b) may elect to transfer service credit in the
68.30general state employees retirement plan of the Minnesota State Retirement System to the
68.31correctional state employees retirement plan for eligible prior correctional employment.
68.32    (b) An eligible employee is a person who is covered by section 6 or who became
68.33eligible for retirement coverage by the correctional state employees retirement plan of the
68.34Minnesota State Retirement System under Laws 2006, chapter 271, article 2, this article,
68.35or legislation implementing the recommendations under section 352.91, subdivision 4a.
69.1    (c) Eligible prior correctional employment is covered correctional service defined
69.2in section 6 or is employment by the Department of Corrections or by the Department
69.3of Human Services that preceded the effective date of the retirement coverage transfer
69.4under Laws 2006, chapter 271, article 2, this article, or legislation implementing the
69.5recommendations under section 352.91, subdivision 4, is continuous service, and is
69.6certified by the commissioner of corrections and the commissioner of human services,
69.7whichever applies, and by the commissioner of employee relations to the executive
69.8director of the Minnesota State Retirement System as service that would qualify for
69.9correctional state employees retirement plan coverage under Minnesota Statutes, section
69.10352.91, if the service was rendered after the date of coverage transfer.
69.11    (d) The election to transfer past service credit under this section must be made in
69.12writing by the applicable person on a form prescribed by the executive director of the
69.13Minnesota State Retirement System and must be filed with the executive director of the
69.14Minnesota State Retirement System on or before (1) January 1, 2008, or the one year
69.15anniversary of the coverage transfer, whichever is later, or(2) the date of the eligible
69.16employee's termination of state employment, whichever is earlier.
69.17    Subd. 2. Payment of additional equivalent contributions; pre-July 1, 2007,
69.18coverage transfers. (a) An eligible employee who was transferred to plan coverage
69.19before July 1, 2007, and who elects to transfer past service credit under this section must
69.20pay an additional member contribution for that prior service period. The additional
69.21member contribution is the difference between the member contribution rate or rates for
69.22the general state employees retirement plan of the Minnesota State Retirement System
69.23for the period of employment covered by the service credit to be transferred and the
69.24member contribution rate or rates for the correctional state employees retirement plan for
69.25the period of employment covered by the service credit to be transferred, plus annual
69.26compound interest at the rate of 8.5 percent.
69.27    (b) The additional equivalent member contribution under this subdivision must be
69.28paid in a lump sum. Payment must accompany the election to transfer the prior service
69.29credit. No transfer election or additional equivalent member contribution payment may be
69.30made by a person or accepted by the executive director after January 1, 2008, or the date
69.31on which the eligible employee terminates state employment, whichever is earlier.
69.32    (c) If an eligible employee elects to transfer past service credit under this section
69.33and pays the additional equivalent member contribution amount under paragraphs (a) and
69.34(b), the applicable department shall pay an additional equivalent employer contribution
69.35amount. The additional employer contribution is the difference between the employer
69.36contribution rate or rates for the general state employees retirement plan for the period of
70.1employment covered by the service credit to be transferred and the employer contribution
70.2rate or rates for the correctional state employees retirement plan for the period of
70.3employment covered by the service credit to be transferred, plus annual compound interest
70.4at the rate of 8.5 percent.
70.5    (d) The additional equivalent employer contribution under this subdivision must be
70.6paid in a lump sum and must be paid within 30 days of the date on which the executive
70.7director of the Minnesota State Retirement System certifies to the applicable department
70.8that the employee paid the additional equivalent member contribution.
70.9    Subd. 3. Payment of additional equivalent contributions; post-July 1, 2007,
70.10coverage transfers. (a) An eligible employee who was transferred to plan coverage after
70.11June 30, 2007, and who elects to transfer past service credit under this section must pay
70.12an additional member contribution for that prior service period. The additional member
70.13contribution is (1) the difference between the member contribution rate or rates for the
70.14general state employees retirement plan of the Minnesota State Retirement System for
70.15the period of employment covered by the service credit to be transferred and the member
70.16contribution rate or rates for the correctional state employees retirement plan for the most
70.17recent 12 month period of employment covered by the service credit to be transferred, plus
70.18annual compound interest at the rate of 8.5 percent, and (2) 40 percent of the unfunded
70.19actuarial accrued liability attributable to the past service credit transfer. The unfunded
70.20actuarial accrued liability attributable to the past service credit transfer is the present
70.21value of the benefit obtained by the transfer of the service credit to the correctional state
70.22employees retirement plan reduced by the amount of the asset transfer under subdivision 4,
70.23by the amount of the member contribution equivalent payment under clause (1), and by the
70.24amount of the employer contribution equivalent payment under paragraph (c), clause (1).
70.25    (b) The additional equivalent member contribution under this subdivision must be
70.26paid in a lump sum. Payment must accompany the election to transfer the prior service
70.27credit. No transfer election or additional equivalent member contribution payment may be
70.28made by a person or accepted by the executive director after the one year anniversary date
70.29of the effective date of the retirement coverage transfer, or the date on which the eligible
70.30employee terminates state employment, whichever is earlier.
70.31    (c) If an eligible employee elects to transfer past service credit under this section
70.32and pays the additional equivalent member contribution amount under subdivision 2,
70.33the applicable department shall pay an additional equivalent employer contribution
70.34amount. The additional employer contribution is (1) the difference between the employer
70.35contribution rate or rates for the general state employees retirement plan for the period of
70.36employment covered by the service credit to be transferred and the employer contribution
71.1rate or rates for the correctional state employees retirement plan for the period of
71.2employment covered by the service credit to be transferred, plus annual compound
71.3interest at the rate of 8.5 percent, and (2) 60 percent of the unfunded actuarial accrued
71.4liability attributable to the past service credit transfer calculated as provided in paragraph
71.5(a), clause (2).
71.6    (d) The additional equivalent employer contribution under this subdivision must be
71.7paid in a lump sum and must be paid within 30 days of the date on which the executive
71.8director of the Minnesota State Retirement System certifies to the applicable department
71.9that the employee paid the additional equivalent member contribution.
71.10    Subd. 4. Transfer of assets. Assets related to the transferred service credit of an
71.11eligible employee must be transferred from the general state employees retirement fund
71.12to the correctional state employees retirement fund in an amount equal to the present
71.13value of benefits earned under the general state employees retirement plan by the eligible
71.14employee transferring past service to the correctional state employees retirement plan, as
71.15determined by the actuary retained under Minnesota Statutes, section 356.214, multiplied
71.16by the accrued liability funding ratio of the active members of the general state employees
71.17retirement plan as derived from the most recent actuarial valuation prepared under
71.18Minnesota Statutes, section 356.215. The transfer of assets must be made within 45 days
71.19after the coverage transfer election is made.
71.20    Subd. 5. Effect of the asset transfer. Upon the transfer of assets under subdivision
71.214, the service credit in the general state employees retirement plan of the Minnesota State
71.22Retirement System is forfeited and may not be reinstated. The transferred service credit
71.23and the transferred assets must be credited to the correctional state employees retirement
71.24plan and fund, respectively.
71.25    Subd. 6. Cost of actuarial calculations. The applicable department shall pay the
71.26cost of the actuarial calculations required by this section as billed by the executive director
71.27of the Minnesota State Retirement System.
71.28EFFECTIVE DATE.This section is effective the day after final enactment.

71.29    Sec. 6. COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN PERSONS.
71.30    (a) An employee who has retirement coverage for past correctional service
71.31transferred to the correctional state employees retirement plan under paragraph (b) is
71.32entitled to elect to obtain prior service credit for eligible state service performed as a
71.33stores clerk after April 24, 1990, and before September 8, 1994, with the Department of
71.34Corrections. All eligible prior service credit must be purchased.
72.1    (b) "Covered correction service" means service between April 25, 1990, through
72.2September 7, 1994, as a stores clerk at the Minnesota Correctional Facility-St. Cloud.
72.3    (c) The commissioner of corrections shall certify the eligible state service as a
72.4stores clerk rendered by the employee to the executive director of the Minnesota State
72.5Retirement System.
72.6    (d) The covered correctional plan employee who has past service is entitled to
72.7purchase the past service under section 5 if the department certifies that the employee met
72.8the eligibility requirements for coverage.
72.9EFFECTIVE DATE.This section is effective the day after final enactment.


72.12    Section 1. Minnesota Statutes 2006, section 353.01, subdivision 37, is amended to read:
72.13    Subd. 37. Normal retirement age. (a) "Normal retirement age" means age 65
72.14for a person who first became a public employee or a member of a pension fund listed
72.15in section 356.30, subdivision 3, clause (7), before July 1, 1989. For a person who first
72.16becomes a public employee after June 30, 1989, "normal retirement age" means the higher
72.17of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as
72.18amended, but not to exceed age 66.
72.19    (b) "Normal retirement age" means age 55 for a person who is a member of a
72.20pension fund listed in section 356.30, subdivision 3, clauses (8) and (9).
72.21EFFECTIVE DATE.This section is effective July 1, 2007.

72.22    Sec. 2. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
72.23to read:
72.24    Subd. 41. Duty disability. "Duty disability," physical or psychological, means a
72.25condition that is expected to prevent a member, for a period of not less than 12 months,
72.26from performing the normal duties of the position held by a person who is a member
72.27of the public employees police and fire plan, and that is the direct result of an injury
72.28incurred during, or a disease arising out of, the performance of normal duties or the actual
72.29performance of less frequent duties, either of which are specific to protecting the property
72.30and personal safety of others and that present inherent dangers that are specific to the
72.31positions covered by the public employees police and fire plan.
72.32EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
72.33benefit applicants whose last day of public employment was after June 30, 2007.

73.1    Sec. 3. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
73.2to read:
73.3    Subd. 42. Less frequent duties. "Less frequent duties" means tasks which are
73.4designated in the applicant's job description as either required from time to time or as
73.5assigned, but which are not carried out as part of the normal routine of the applicant's job.
73.6EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
73.7benefit applicants whose last day of public employment was after June 30, 2007.

73.8    Sec. 4. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
73.9to read:
73.10    Subd. 43. Line of duty death. "Line of duty death" means a death that occurs while
73.11performing or as a direct result of performing normal or less frequent duties which are
73.12specific to protecting the property and personal safety of others and that present inherent
73.13dangers that are specific to the positions covered by the public employees police and
73.14fire plan.
73.15EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
73.16benefit applicants whose last day of public employment was after June 30, 2007.

73.17    Sec. 5. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
73.18to read:
73.19    Subd. 44. Normal duties. "Normal duties" means specific tasks which are
73.20designated in the applicant's job description and which the applicant performs on a
73.21day-to-day basis, but do not include less frequent duties which may be requested to be
73.22done by the employer from time to time.
73.23EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
73.24benefit applicants whose last day of public employment was after June 30, 2007.

73.25    Sec. 6. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
73.26to read:
73.27    Subd. 45. Not line of duty death. For purposes of survivor benefits under the
73.28public employees police and fire plan, a "not line of duty death" is any death not specified
73.29under subdivision 43.
73.30EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
73.31benefit applicants whose last day of public employment was after June 30, 2007.

73.32    Sec. 7. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
73.33to read:
74.1    Subd. 46. Regular disability. "Regular disability," physical or psychological,
74.2means a condition that is expected to prevent a member, for a period of not less than 12
74.3months, from performing the normal duties of the position held by a person who is a
74.4member of the public employees police and fire plan, and which results from a disease or
74.5an injury that arises from any activities while not at work, or while at work and performing
74.6those normal or less frequent duties that do not present inherent dangers that are specific
74.7to the occupations covered by the public employees police and fire plan.
74.8EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
74.9benefit applicants whose last day of public employment was after June 30, 2007.

74.10    Sec. 8. [353.031] DISABILITY DETERMINATION PROCEDURES.
74.11    Subdivision 1. Application. This section applies to all disability determinations for
74.12the public employees general fund, the public employees police and fire fund, and the local
74.13government correctional service retirement plan and any other disability determination
74.14subject to approval by the board, except as otherwise specified in section 353.33, 353.656,
74.15or 353E.05. These requirements and the requirements of section 353.03, subdivision 3,
74.16are in addition to the specific requirements of each plan and govern in the event there is
74.17any conflict between these sections and the procedures specific to any of those plans
74.18under section 353.33, 353.656, or 353E.06.
74.19    Subd. 2. Plan document policy statement. Disability determinations for the public
74.20employees general fund must be made subject to section 353.01, subdivision 19; and for
74.21the police and fire plan and the local government correctional service retirement plan must
74.22be made consistent with the legislative policy and intent set forth in section 353.63.
74.23    Subd. 3. Procedure to determine eligibility; generally. (a) Every claim for a
74.24disability benefit must be initiated in writing on an application form and in the manner
74.25prescribed by the executive director and filed with the executive director. An application
74.26for disability benefits must be made within 18 months next following termination of public
74.27service as defined under section 353.01, subdivision 11a.
74.28    (b) All medical reports must support a finding that disability arose before the
74.29employee was placed on any paid or unpaid leave of absence or terminated public service,
74.30as defined under section 353.01, subdivision 11a.
74.31    (c) An applicant for disability shall provide a detailed report signed by a licensed
74.32medical doctor and at least one additional report signed by a medical doctor, psychologist,
74.33or chiropractor. The applicant shall authorize the release of all medical and health care
74.34evidence, including all medical records and relevant information from any source, to
74.35support the application for initial, or the continuing payment of, disability benefits.
75.1    (d) All reports must contain an opinion regarding the claimant's prognosis, the
75.2duration of the disability, and the expectations for improvement. Any report that does not
75.3contain and support a finding that the disability will last for at least one year may not be
75.4relied upon to support eligibility for benefits.
75.5    (e) Where the medical evidence supports the expectation that at some point in time
75.6the claimant will no longer be disabled, any decision granting disability may provide
75.7for a termination date upon which disability can be expected to no longer exist. In the
75.8event a termination date is made part of the decision granting benefits, prior to the
75.9actual termination of benefits, the claimant shall have the opportunity to show that the
75.10disabling condition for which benefits were initially granted continues. In the event the
75.11benefits terminate in accordance with the original decision, the claimant may petition for a
75.12review by the board of trustees under section 353.03, subdivision 3, or may reapply for
75.13disability in accordance with these procedures and section 353.33, 353.656, or 353E.06,
75.14as applicable.
75.15    (f) Any claim to disability must be supported by a report from the employer
75.16indicating that there is no available work that the employee can perform in the employee's
75.17disabled condition and that all reasonable accommodations have been considered. Upon
75.18request of the executive director, an employer shall provide evidence of the steps the
75.19employer has taken to attempt to provide reasonable accommodations and continued
75.20employment to the claimant. The employer shall also provide a certification of the
75.21member's past public service; the dates of any paid sick leave, vacation, or any other
75.22employer-paid salary continuation plan beyond the last working day; and whether or not
75.23any sick or annual leave has been allowed.
75.24    (g) An employee who is placed on leave of absence without compensation because
75.25of a disability is not barred from receiving a disability benefit.
75.26    (h) An applicant for disability benefits may file a retirement annuity application
75.27under section 353.29, subdivision 4, simultaneously with an application for disability
75.28benefits. If the application for disability benefits is approved, the retirement annuity
75.29application is cancelled. If disability benefits are denied, the retirement annuity application
75.30must be processed upon the request of the applicant. No member of the public employees
75.31general plan, the public employees police and fire plan, or the local government
75.32correctional service retirement plan may receive a disability benefit and a retirement
75.33annuity simultaneously from the same plan.
75.34    Subd. 4. Additional requirements to determine eligibility for police and fire or
75.35local government correctional service plan disability benefits. (a) If an application for
75.36disability benefits is filed within two years of the date of the injury or the onset of the illness
76.1that gave rise to the disability application, the application must be supported by evidence
76.2that the applicant is unable to perform the duties of the position held by the applicant on
76.3the date of the injury or the onset of the illness causing the disability. The employer must
76.4provide evidence indicating whether the applicant is able or unable to perform the duties
76.5of the position held on the date of the injury or onset of the illness causing the disability
76.6and the specifications of any duties that the individual can or cannot perform.
76.7    (b) If an application for disability benefits is filed more than two years after the date
76.8of injury or the onset of an illness causing the disability, the application must be supported
76.9by evidence that the applicant is unable to perform the most recent duties that are expected
76.10to be performed by the applicant during the 90 days before the filing of the application.
76.11The employer must provide evidence of the duties that are expected to be performed by
76.12the applicant during the 90 days before the filing of the application, whether the applicant
76.13can or cannot perform those duties overall, and the specifications of any duties that the
76.14applicant can or cannot perform.
76.15    (c) Any report supporting a claim to disability benefits under section 353.656 or
76.16353E.06 must specifically relate the disability to its cause; and for any claim to duty
76.17disability from an injury or illness arising out of an act of duty, the report must relate
76.18the cause of disability to specific tasks or functions required to be performed by the
76.19employee in fulfilling the employee's duty-related acts which must be specific to the
76.20inherent dangers of the positions eligible for membership in the police and fire fund and
76.21the local government correctional service retirement plan. Any report that does not relate
76.22the cause of disability to specific acts or functions performed by the employee may not be
76.23relied upon as evidence to support eligibility for benefits and may be disregarded in the
76.24executive director's decision-making process.
76.25    (d) Any application for duty disability must be supported by a first report of injury as
76.26defined in section 176.231.
76.27    (e) If a member who has applied for and been approved for disability benefits before
76.28the termination of service does not terminate service or is not placed on an authorized
76.29leave of absence as certified by the governmental subdivision within 45 days following
76.30the date on which the application is approved, the application shall be canceled. If an
76.31approved application for disability benefits has been canceled, a subsequent application
76.32for disability benefits may not be filed on the basis of the same medical condition for a
76.33minimum of one year from the date on which the previous application was canceled.
76.34    Subd. 5. Medical adviser. The executive director may contract with licensed
76.35physicians or physicians on the staff of the state commissioner of health, as designated
76.36by the commissioner, to be the medical adviser of the association. The medical adviser
77.1shall review all medical reports submitted to the association, including the findings of
77.2an independent medical examination requested under this section, and shall advise the
77.3executive director.
77.4    Subd. 6. Independent medical examination. Any individual applying for
77.5or receiving disability benefits must submit to an independent medical examination
77.6if requested by the executive director. The medical examination must be paid for by
77.7the association.
77.8    Subd. 7. Refusal of examination or medical evidence. If a person applying
77.9for or receiving a disability benefit refuses to submit to a medical examination under
77.10subdivision 6, or fails to provide or to authorize the release of medical evidence under
77.11subdivision 3, the association shall cease the application process or shall discontinue the
77.12payment of a disability benefit, whichever is applicable. Upon the receipt of the requested
77.13medical evidence, the association shall resume the application process or the payment of a
77.14disability benefit upon approval for the continuation, whichever is applicable.
77.15    Subd. 8. Proof of continuing disability. (a) A disability benefit payment must not
77.16be made except upon adequate proof furnished to the executive director of the association
77.17that the person remains disabled.
77.18    (b) During the time when disability benefits are being paid, the executive director
77.19of the association has the right, at reasonable times, to require the disabled member to
77.20submit proof of the continuance of the disability claimed.
77.21    (c) Adequate proof of a disability must include a written expert report by a licensed
77.22physician, a licensed chiropractor, or, with respect to a mental impairment, a licensed
77.23psychologist.
77.24    Subd. 9. Application approval or denial; decision of executive director. Any
77.25decision of the executive director is final, except that a member whose application for
77.26disability benefits or whose continuation of disability benefits is denied may appeal the
77.27executive director's decision to the board of trustees within 60 days of receipt of a certified
77.28letter notifying the member of the decision to deny the application or continuation of
77.29benefits. In developing the record for review by the board when a decision is appealed,
77.30the executive director may direct that the applicant participate in a fact-finding session
77.31conducted by an administrative law judge assigned by the Office of Administrative
77.32Hearings, and, as applicable, a vocational assessment conducted by the qualified
77.33rehabilitation counselor on contract with the Public Employees Retirement Association.
77.34    Subd. 10. Restoring forfeited service. To restore forfeited service, a repayment of
77.35a refund must be made within six months after the effective date of disability benefits or
78.1within six months after the date of the filing of the disability application, whichever is
78.2later. No purchase of prior service or payment made in lieu of salary deductions otherwise
78.3authorized under section 353.01 may be made after the occurrence of the disability for
78.4which an application is filed under this section.
78.5EFFECTIVE DATE.This section is effective July 1, 2007.

78.6    Sec. 9. Minnesota Statutes 2006, section 353.33, subdivision 1, is amended to read:
78.7    Subdivision 1. Age, service, and salary requirements. A coordinated member
78.8who has at least three years of allowable service and becomes totally and permanently
78.9disabled before normal retirement age, and a basic member who has at least three years of
78.10allowable service and who becomes totally and permanently disabled, upon application as
78.11defined under section 353.031, is entitled to a disability benefit in an amount determined
78.12under subdivision 3. If the disabled person's public service has terminated at any time,
78.13at least two of the required three years of allowable service must have been rendered
78.14after last becoming an active member. A repayment of a refund must be made within six
78.15months after the effective date of disability benefits under subdivision 2 or within six
78.16months after the date of the filing of the disability application, whichever is later. No
78.17purchase of prior service and no payment made in lieu of salary deductions otherwise
78.18authorized under section 353.01, subdivision 16, may be made after the occurrence of the
78.19disability for which an application under this section is filed.
78.20EFFECTIVE DATE.This section is effective July 1, 2007.

78.21    Sec. 10. Minnesota Statutes 2006, section 353.33, subdivision 2, is amended to read:
78.22    Subd. 2. Applications; Accrual of benefits. Every claim or demand for a total
78.23and permanent disability benefit must be initiated by written application in the manner
78.24and form prescribed by the executive director showing compliance with the statutory
78.25conditions qualifying the applicant for a total and permanent disability benefit and filed
78.26with the executive director. A member or former member who became totally and
78.27permanently disabled during a period of membership shall file application for total and
78.28permanent disability benefits within three years next following termination of public
78.29service. (a) Except for a total and permanent disability under section 353.656, subdivision
78.301a, this benefit begins to accrue the day following the commencement of disability,
78.31when the applicant is no longer receiving any form of compensation, whether salary or
78.32paid leave; 90 days preceding the filing of the application, or, if annual or sick leave or
78.33any other employer-paid salary continuation plan is paid for more than the 90-day period,
78.34from the date salary ceased, whichever is later. Except for a total and permanent disability
78.35under section 353.656, subdivision 1a, no member is entitled to receive a disability benefit
79.1payment when there remains to the member's credit any unused annual leave or, sick leave,
79.2or any other employer-paid salary continuation plan, or under any other circumstances
79.3when, during the period of disability, there has been no impairment of the person's salary.
79.4    (b) Payment must not accrue beyond the end of the month in which entitlement has
79.5terminated. If the disabilitant dies prior to negotiating the check for the month in which
79.6death occurs, payment is made to the surviving spouse, or if none, to the designated
79.7beneficiary, or if none, to the estate. An applicant for total and permanent disability
79.8benefits may file a retirement annuity application under section 353.29, subdivision 4,
79.9simultaneously with an application for total and permanent disability benefits. The
79.10retirement annuity application is void upon the determination of the entitlement for
79.11disability benefits by the executive director. If disability benefits are denied, the retirement
79.12annuity application must be initiated and processed.
79.13EFFECTIVE DATE.This section is effective July 1, 2007.

79.14    Sec. 11. Minnesota Statutes 2006, section 353.33, subdivision 4, is amended to read:
79.15    Subd. 4. Procedure to determine eligibility. (a) The applicant shall provide
79.16an expert report signed by a licensed physician, psychologist, or chiropractor and the
79.17applicant must authorize the release of medical and health care evidence, including all
79.18medical records and relevant information from any source, to support the application
79.19for total and permanent disability benefits. Eligibility for disability benefits must be
79.20determined following the procedures defined in section 353.031.
79.21    (b) The medical adviser shall verify the medical evidence and, if necessary for
79.22disability determination, suggest the referral of the applicant to specialized medical
79.23consultants.
79.24    (c) The association shall also obtain from the employer a certification of the
79.25member's past public service, the dates of any paid sick leave and vacation beyond the last
79.26working day and whether or not any sick leave or annual leave has been allowed.
79.27    (d) (b) If, after following the procedures for determining eligibility for benefits
79.28under section 353.031, and upon consideration of the medical evidence received and
79.29the recommendations of the medical adviser, it is determined by the executive director
79.30that the applicant is totally and permanently disabled within the meaning of the law, the
79.31association shall grant the person a disability benefit.
79.32    (e) An employee who is placed on leave of absence without compensation because
79.33of a disability is not barred from receiving a disability benefit.
79.34EFFECTIVE DATE.This section is effective July 1, 2007.

79.35    Sec. 12. Minnesota Statutes 2006, section 353.33, subdivision 6, is amended to read:
80.1    Subd. 6. Continuing eligibility for benefits. The association shall determine
80.2eligibility for continuation of disability benefits and require periodic examinations and
80.3evaluations of disabled members as frequently as deemed necessary. The association shall
80.4require the disabled member to provide an expert report signed by a licensed physician,
80.5psychologist, or chiropractor and the disabled member shall authorize the release of
80.6medical and health care evidence, including all medical and health care records and
80.7information from any source, relating to an application for continuation of disability
80.8benefits. Disability benefits are contingent upon a disabled person's participation in a
80.9vocational rehabilitation evaluation if the executive director determines that the disabled
80.10person may be able to return to a gainful occupation. If, after a review by the executive
80.11director under section 353.031, subdivision 8, a member is found to be no longer totally
80.12and permanently disabled, payments must cease the first of the month following the
80.13expiration of a 30-day period after the member receives a certified letter notifying the
80.14member that payments will cease.
80.15EFFECTIVE DATE.This section is effective July 1, 2007.

80.16    Sec. 13. Minnesota Statutes 2006, section 353.33, subdivision 7a, is amended to read:
80.17    Subd. 7a. Trial work period. (a) This subdivision applies only to the Public
80.18Employees Retirement Association general employees retirement plan.
80.19    (b) If, following a work or non-work-related injury or illness, a disabled member
80.20attempts to return to work for their previous public employer or attempts to return to a
80.21similar position with another public employer, on a full-time or less than full-time basis,
80.22the Public Employees Retirement Association shall continue paying the disability benefit
80.23for a period not to exceed six months. The disability benefit must continue in an amount
80.24that, when added to the subsequent employment earnings and workers' compensation
80.25benefit, does not exceed the salary at the date of disability or the salary currently paid
80.26for similar positions, whichever is higher.
80.27    (b) (c) No deductions for the general employees retirement fund plan may be taken
80.28from the salary of a disabled person who is attempting to return to work under this
80.29provision unless the member waives further disability benefits.
80.30    (c) (d) A member only may return to employment and continue disability benefit
80.31payments once while receiving disability benefits from a the general employees retirement
80.32plan administered by the Public Employees Retirement Association.
80.33EFFECTIVE DATE.This section is effective July 1, 2007.

80.34    Sec. 14. Minnesota Statutes 2006, section 353.651, subdivision 4, is amended to read:
81.1    Subd. 4. Early retirement. (a) A person who becomes a police and fire plan
81.2member after June 30, 2007, or a former member who is reinstated as a member of the
81.3plan after that date, who is at least 50 years of age with at least three years of allowable
81.4service, upon the termination of public service is entitled upon application to a retirement
81.5annuity equal to the normal annuity calculated under subdivision 3, reduced by two-tenths
81.6of one percent for each month that the member is under age 55 at the time of retirement.
81.7    (b) Upon the termination of public service, any police officer or firefighter and fire
81.8plan member who has become not specified in paragraph (a), upon attaining at least 50
81.9years old and who has of age with at least three years of allowable service is entitled
81.10upon application to a retirement annuity equal to the normal annuity calculated under
81.11subdivision 3, reduced by one-tenth of one percent for each month that the member is
81.12under age 55 at the time of retirement.
81.13EFFECTIVE DATE.This section is effective July 1, 2007.

81.14    Sec. 15. Minnesota Statutes 2006, section 353.656, is amended by adding a subdivision
81.15to read:
81.16    Subd. 1a. Total and permanent duty disability; computation of benefits. (a)
81.17A member of the police and fire plan whose disabling condition is determined to be a
81.18duty disability that is also a permanent and total disability as defined in section 353.01,
81.19subdivision 19, is entitled to receive, for life, disability benefits in an amount equal to
81.2060 percent of the average salary as defined in section 353.01, subdivision 17a, plus an
81.21additional percent specified in section 356.315, subdivision 6, of that average salary for
81.22each year of service in excess of 20 years.
81.23    (b) A disability benefit payable under paragraph (a) is subject to eligibility review
81.24under section 353.33, subdivision 6, but the review may be waived if the executive
81.25director receives a written statement from the association's medical advisor that no
81.26improvement can be expected in the member's disabling condition that was the basis for
81.27payment of the benefit under paragraph (a). A member receiving a disability benefit under
81.28this subdivision who is found to no longer be permanently and totally disabled as defined
81.29under section 353.01, subdivision 19, but continues to meet the definition for receipt of a
81.30duty disability under section 353.01, subdivision 41, is subject to subdivision 1 under this
81.31section upon written notice from the association's medical advisor that the person is no
81.32longer considered permanently and totally disabled.
81.33    (c) If a member approved for disability benefits under this subdivision dies before
81.34attaining normal retirement age as defined in section 353.01, subdivision 37, paragraph
81.35(b), or within 60 months of the effective date of the disability, whichever is later,
82.1the surviving spouse is entitled to receive a survivor benefit under section 353.657,
82.2subdivision 2, paragraph (a), clause (1), if the death is the direct result of the disabling
82.3condition for which disability benefits were approved, or section 353.657, subdivision
82.42, paragraph (a), clause (2) if the death is not directly related to the disabling condition
82.5for which benefits were approved under this subdivision.
82.6    If the election of an actuarial equivalent optional annuity is not made at the time
82.7the permanent and total disability benefit accrues, an election must be made within 90
82.8days before the member attains normal retirement age as defined under section 353.01,
82.9subdivision 37, paragraph(b) or having collected total and permanent disability benefits
82.10for 60 months, whichever is later. If a member receiving disability benefits who has
82.11dependent children dies, subdivision 6a, paragraph (c) applies.
82.12EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
82.13benefit applicants whose last day of public employment was after June 30, 2007.

82.14    Sec. 16. Minnesota Statutes 2006, section 353.656, subdivision 1a, is amended to read:
82.15    Subd. 1a 1b. Optional annuity election. (a) A disabled member of the police and
82.16fire fund may elect to receive the normal disability benefit or an actuarial equivalent
82.17optional annuity as provided in section 353.30, subdivision 3. If the election of an
82.18actuarial equivalent optional annuity may be is made prior to before the commencement of
82.19payment of the disability benefit or as specified under subdivision 6a., the optional annuity
82.20shall must begin to accrue on the same date as provided for the disability benefit covering
82.21only the disabilitant would have accrued.
82.22    (b) If an election of an optional annuity is not made before the commencement of the
82.23disability benefit, the disabilitant may elect an optional annuity:
82.24    (1) within 90 days before normal retirement age;
82.25    (2) upon the filing of an application to convert to an early retirement annuity, if
82.26electing to convert to an early retirement annuity before the normal retirement age; or
82.27    (3) within 90 days before the expiration of the 60-month period for which a disability
82.28benefit is paid, if the disability benefit is payable because the disabled member did not
82.29have at least 20 years of allowable service at normal retirement age.
82.30    (c) If the person a disabled member who is not the spouse of the member is
82.31has named as beneficiary of the a joint and survivor optional annuity, beneficiary dies
82.32before the disability benefit ceases and is recalculated under subdivision 5a, the person
82.33is beneficiary eligible to receive the joint and survivor annuity only if the spouse, on
82.34may elect to have the disability application form prescribed by annuity converted at the
82.35executive director, permanently waives times designated in paragraph (b), clause (1),
83.1(2), or (3), whichever allows for the surviving spouse benefits under section 353.657,
83.2subdivisions 2 and 2a earliest payment of a higher joint and survivor annuity option
83.3resulting from recalculation under subdivision 5a, paragraph (e).
83.4    (d) A disabled member may name a person other than the spouse as beneficiary
83.5of a joint and survivor annuity only if the spouse of the disabled member refuses to
83.6permanently waive the waives surviving spouse coverage, the selection of a person other
83.7than the spouse of the member as a joint annuitant is invalid on the disability application
83.8form prescribed by the executive director.
83.9    (2) (e) If the spouse of the member permanently waives survivor coverage, the
83.10dependent child or children, if any, continue to be eligible for survivor dependent child
83.11benefits, including the minimum benefit under section 353.657, subdivision 3., and the
83.12designated optional annuity beneficiary may draw the monthly benefit; however, the
83.13amount payable to the dependent child or children and joint annuitant must not exceed
83.14the 70 percent maximum family benefit under section 353.657, subdivision 3. If the
83.15maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount
83.16necessary so that the total family benefit does not exceed the 70 percent maximum family
83.17benefit amount.
83.18    (3) If the spouse is named as the beneficiary of the joint and survivor optional
83.19annuity, the spouse may draw the monthly benefit; however, the amount payable to
83.20the dependent child or children and the joint annuitant must not exceed the 70 percent
83.21maximum family benefit under section 353.657, subdivision 3. If the maximum is
83.22exceeded, each dependent child will receive ten percent of the member's specified average
83.23monthly salary, and the benefit to the joint annuitant must be reduced to the amount
83.24necessary so that the total family benefit does not exceed the 70 percent maximum family
83.25benefit amount. The joint and survivor optional annuity must be restored to the surviving
83.26spouse, plus applicable postretirement adjustments under section 356.41, as the dependent
83.27child or children become no longer dependent under section 353.01, subdivision 15.
83.28     (f) Any optional annuity under this subdivision, plus dependent child benefits, if
83.29applicable, are subject to the maximum and minimum family benefit amounts specified in
83.30section 353.657, subdivision 3a.
83.31EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
83.32benefit applicants whose last day of public employment was after June 30, 2007.

83.33    Sec. 17. Minnesota Statutes 2006, section 353.656, subdivision 3, is amended to read:
83.34    Subd. 3. Nonduty Regular disability benefit. (a) Any A member of the police
83.35and fire plan who:
84.1    (1) has not met the requirements for a retirement annuity under section 353.651,
84.2subdivision 1, or
84.3    (2) has met the requirements for a retirement annuity under section 353.651,
84.4subdivision 1, but who does not have 15 years of credited service; and who becomes
84.5disabled after not less than one year of allowable service because of sickness or injury
84.6occurring while not on duty as a police officer, firefighter, or paramedic as defined under
84.7section 353.64, subdivision 10, and by reason of that sickness or injury the member has
84.8been or is expected to be unable to perform the duties as a police officer, firefighter, or
84.9paramedic as defined under section 353.64, subdivision 10, for a period of at least one
84.10year, is entitled to qualifies for a regular disability benefit as defined in section 353.01,
84.11subdivision 46, is entitled to receive a disability benefit, after filing a valid application,
84.12in an amount equal to 45 percent of the average salary as defined in section 353.01,
84.13subdivision 17a.
84.14    (b) The benefit must be paid in the same manner as if the benefit were paid under
84.15section 353.651. If a disability under this subdivision occurs after one but in less than 15
84.16years of allowable service, the disability benefit must be the same as though the member
84.17had at least 15 years service. To be eligible for a benefit under paragraph (a), the member
84.18must have at least one year of allowable service credit and have:
84.19    (1) not met the requirements for a retirement annuity under section 353.651,
84.20subdivision 1, or
84.21    (2) met the requirements under that subdivision, but does not have at least 15 years
84.22of allowable service credit.
84.23    (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
84.24period, of 60 months from the disability benefit accrual date and, at the end of that period
84.25is subject to provisions of subdivision 5a.
84.26    (d) For a member who is employed as a full-time firefighter by the Department of
84.27Military Affairs of the state of Minnesota, allowable service as a full-time state Military
84.28Affairs Department firefighter credited by the Minnesota State Retirement System may be
84.29used in meeting the minimum allowable service requirement of this subdivision.
84.30EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
84.31benefit applicants whose last day of public employment was after June 30, 2007.

84.32    Sec. 18. Minnesota Statutes 2006, section 353.656, is amended by adding a subdivision
84.33to read:
84.34    Subd. 3a. Total and permanent regular disability; computation of benefits.
84.35    (a) A member of the police and fire plan whose disabling condition is determined to be
85.1a regular disability under section 353.01, subdivision 46 that is also a permanent and
85.2total disability as defined in section 353.01, subdivision 19, is entitled to a receive, for
85.3life, disability benefit in an amount equal to 45 percent of the average salary as defined in
85.4section 353.01, subdivision 17a, plus an additional percent specified in section 356.315,
85.5subdivision 6, of that average salary for each year of service in excess of 15 years.
85.6    (b) A disability benefit payable under paragraph (a) is subject to eligibility review
85.7under section 353.33, subdivision 6, but the review may be waived if the executive
85.8director receives a written statement from the association's medical advisor that no
85.9improvement can be expected in the member's disabling condition that was the basis for
85.10payment of the benefit under paragraph (a). A member receiving a disability benefit under
85.11this subdivision who is found to no longer be permanently and totally disabled as defined
85.12under section 353.01, subdivision 19, but continues to meet the definition for receipt of a
85.13regular disability under section 353.01, subdivision 46, is subject to subdivision 3 under
85.14this section upon written notice from the association's medical advisor that the person is
85.15no longer considered permanently and totally disabled.
85.16    (c) A member approved for disability benefits under this subdivision may elect
85.17to receive a normal disability benefit or an actuarial equivalent optional annuity. If the
85.18election of an actuarial equivalent optional annuity is not made at the time the total and
85.19permanent disability benefit accrues, an election must be made within 90 days before the
85.20member attains normal retirement age as defined in section 353.01, subdivision 37 (b), or
85.21having collected disability benefits for 60 months, whichever is later. No surviving spouse
85.22benefits are payable if the member dies during the period in which a normal total and
85.23permanent disability benefit is being paid. If a member receiving disability benefits who
85.24has dependent children dies, subdivision 6a, paragraph (c) applies.
85.25EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
85.26benefit applicants whose last day of public employment was after June 30, 2007.

85.27    Sec. 19. Minnesota Statutes 2006, section 353.656, subdivision 4, is amended to read:
85.28    Subd. 4. Limitation on disability benefit payments. (a) No member is entitled to
85.29receive a disability benefit payment when there remains to the member's credit unused
85.30annual leave or, sick leave, or any other employer-provided salary continuation plan, or
85.31under any other circumstances when, during the period of disability, there has been no
85.32impairment of the person's salary as a police officer, a firefighter, or a paramedic as defined
85.33in section 353.64, subdivision 10, whichever applies.
85.34    (b) If a disabled member resumes a gainful occupation with earnings that, when
85.35added to the normal disability benefit, and workers' compensation benefit if applicable,
86.1exceed the disabilitant reemployment earnings limit, the amount of the disability benefit
86.2must be reduced as provided in this paragraph. The disabilitant reemployment earnings
86.3limit is the greater of:
86.4    (1) the salary earned at the date of disability; or
86.5    (2) 125 percent of the base salary currently paid by the employing governmental
86.6subdivision for similar positions.
86.7    (c) The disability benefit must be reduced by one dollar for each three dollars by
86.8which the total amount of the current disability benefit, any workers' compensation
86.9benefits if applicable, and actual earnings exceed the greater disabilitant reemployment
86.10earnings limit. In no event may the disability benefit as adjusted under this subdivision
86.11exceed the disability benefit originally allowed.
86.12EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
86.13benefit applicants whose last day of public employment was after June 30, 2007.

86.14    Sec. 20. Minnesota Statutes 2006, section 353.656, subdivision 5a, is amended to read:
86.15    Subd. 5a. Cessation of disability benefit. (a) The association shall cease the
86.16payment of an in-line-of-duty or nonduty any disability benefit the first of the month
86.17following the reinstatement of a member to full time or less than full-time service in a
86.18position covered by the police and fire fund.
86.19    (b) A disability benefit paid to a disabled member of the police and fire plan, that
86.20was granted under laws in effect after June 30, 2007, terminates at the end of the month in
86.21which the member:
86.22    (1) reaches normal retirement age;
86.23    (2) if the disability benefit is payable for a 60-month period as determined under
86.24subdivisions 1 and 3, as applicable, the first of the month following the expiration of
86.25the 60-month period; or
86.26    (3) if the disabled member so chooses, the end of the month in which the member
86.27has elected to convert to an early retirement annuity under section 353.651, subdivision 4.
86.28    (c) If the police and fire member continues to be disabled when the disability benefit
86.29terminates under this subdivision, the member is deemed to be retired. The individual
86.30is entitled to receive a normal retirement annuity or an early retirement annuity under
86.31section 353.651, whichever is applicable, as further specified in paragraph (d) or (e). If the
86.32individual did not previously elect an optional annuity under subdivision 1a, paragraph
86.33(a), the individual may elect an optional annuity under subdivision 1a, paragraph (b).
86.34    (d) A member of the police and fire plan who is receiving a disability benefit under
86.35this section may, upon application, elect to receive an early retirement annuity under
87.1section 353.651, subdivision 4, at any time after attaining age 50, but must convert to a
87.2retirement annuity no later than the end of the month in which the disabled member attains
87.3normal retirement age. An early retirement annuity elected under this subdivision must be
87.4calculated on the disabled member's accrued years of service and average salary as defined
87.5in section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.
87.6    (e) When an individual's benefit is recalculated as a retirement annuity under this
87.7section, the annuity must be based on clause (1) or clause (2), whichever provides the
87.8greater amount:
87.9    (1) the benefit amount at the time of reclassification, including all prior adjustments
87.10provided under section 11A.18; or
87.11    (2) a benefit amount computed on the member's actual years of accrued allowable
87.12service credit and the law in effect at the time the disability benefit first accrued, plus any
87.13increases that would have applied since that date under section 11A.18.
87.14EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
87.15benefit applicants whose last day of public employment was after June 30, 2007.

87.16    Sec. 21. Minnesota Statutes 2006, section 353.656, subdivision 6a, is amended to read:
87.17    Subd. 6a. Disability survivor benefits for pre-July 1, 2007, disabilitants. (a) If a
87.18member who is receiving a disability benefit under subdivision 1 or 3:
87.19     (1) that was granted under the laws in effect before July 1, 2007, dies before
87.20attaining the normal retirement age required for receipt of a retirement annuity under
87.21section 353.651, subdivision 1 as defined under section 353.01, subdivision 37, paragraph
87.22(b), or within five years of the effective date of the disability, whichever is later, the
87.23surviving spouse shall receive a survivor benefit under section 353.657, subdivision 2,
87.24paragraph (a), clause (2); or 2a, unless the surviving spouse elected to receive a refund
87.25under section 353.32, subdivision 1. The joint and survivor optional annuity under
87.26subdivision 2a is based on the minimum disability benefit under subdivision 1 or 3, or the
87.27deceased member's allowable service, whichever is greater;.
87.28     (2) (b) If the disability benefit was granted under the laws in effect before July 1,
87.292007, and the disabilitant is living at the age required for receipt of a retirement annuity
87.30under section 353.651, subdivision 1, or five years after the effective date of the disability,
87.31whichever is later, the disabled member may continue to receive a normal disability
87.32benefit, or the member may elect a joint and survivor optional annuity under section
87.33353.30 . The optional annuity is based on the minimum disability benefit under subdivision
87.341 or 3, or the member's allowable service, whichever is greater. The election of this joint
87.35and survivor annuity must occur within 90 days of the before attaining normal retirement
88.1age required for receipt of a retirement annuity under section 353.651, subdivision 1 as
88.2defined under section 353.01, subdivision 37, paragraph (b), or within 90 days before the
88.3five-year anniversary of the effective date of the disability benefit, whichever is later. The
88.4optional annuity takes effect the first of the month following the month in which the
88.5person attains the age required for receipt of a retirement annuity under section 353.651,
88.6subdivision 1, or reaches the five-year anniversary of the effective date of the disability
88.7benefit, whichever is later; or.
88.8     (3) (c) If any disabled member dies while receiving a benefit and has a dependent
88.9child or children under clause (1) or (2), the association shall grant a dependent child
88.10benefit under section 353.657, subdivision 3.
88.11EFFECTIVE DATE.This section is effective July 1, 2007, and applies to survivor
88.12benefit applicants where the application is based on the death of a public employee that
88.13occurred after June 30, 2007.

88.14    Sec. 22. Minnesota Statutes 2006, section 353.656, subdivision 8, is amended to read:
88.15    Subd. 8. Application procedure to determine eligibility for police and fire plan
88.16disability benefits. (a) An application for disability benefits must be made in writing on a
88.17form or forms prescribed by the executive director.
88.18    (b) If an application for disability benefits is filed within two years of the date of the
88.19injury or the onset of the illness that gave rise to the disability application, the application
88.20must be supported by evidence that the applicant is unable to perform the duties of the
88.21position held by the applicant on the date of the injury or the onset of the illness causing
88.22the disability. The employer must provide evidence indicating whether the applicant is
88.23able or unable to perform the duties of the position held on the date of the injury or onset
88.24of illness causing the disability and the specifications of any duties that the individual can
88.25or cannot perform.
88.26    (c) If an application for disability benefits is filed more than two years after the date
88.27of the injury or the onset of an illness causing the disability, the application must be
88.28supported by evidence that the applicant is unable to perform the most recent duties that
88.29are expected to be performed by the applicant during the 90 days before the filing of the
88.30application. The employer must provide evidence of the duties that are expected to be
88.31performed by the applicant during the 90 days before the filing of the application, whether
88.32the applicant can or cannot perform those duties overall, and the specifications of any
88.33duties that the applicant can or cannot perform.
88.34    (d) Unless otherwise permitted by law, no application for disability benefits can be
88.35filed by a former member of the police and fire plan more than three years after the former
89.1member has terminated from Public Employees Retirement Association police and fire
89.2plan covered employment. If an application is filed within three years after the termination
89.3of public employment, the former member must provide evidence that the disability is the
89.4direct result of an injury or the contracting of an illness that occurred while the person was
89.5still actively employed and participating in the police and fire plan.
89.6    (e) Any application for duty-related disability must be supported by a first report of
89.7injury as defined in section 176.231.
89.8    (f) If a member who has applied for and been approved for disability benefits before
89.9the termination of service does not terminate service or is not placed on an authorized
89.10leave of absence as certified by the governmental subdivision within 45 days following
89.11the date on which the application is approved, the application shall be canceled. If an
89.12approved application for disability benefits has been canceled, a subsequent application
89.13for disability benefits may not be filed on the basis of the same medical condition for a
89.14minimum of one year from the date on which the previous application was canceled.
89.15    (g) An applicant may file a retirement application under section 353.29, subdivision
89.164 , at the same time as the disability application is filed. If the disability application is
89.17approved, the retirement application is canceled. If the disability application is denied, the
89.18retirement application must be initiated and processed upon the request of the applicant. A
89.19police and fire fund member may not receive a disability benefit and a retirement annuity
89.20from the police and fire fund at the same time.
89.21    (h) A repayment of a refund must be made within six months after the effective date
89.22of disability benefits or within six months after the date of the filing of the disability
89.23application, whichever is later. No purchase of prior service or payment made in lieu
89.24of salary deductions otherwise authorized under section 353.01 may be made after the
89.25occurrence of the disability for which an application is filed under this section.
89.26    The application procedures to determine eligibility for police and fire plan disability
89.27benefits are defined under section 353.031.
89.28EFFECTIVE DATE.This section is effective July 1, 2007.

89.29    Sec. 23. Minnesota Statutes 2006, section 353.656, subdivision 10, is amended to read:
89.30    Subd. 10. Accrual of benefits. (a) A disability benefit begins to accrue the day
89.31following the commencement of disability, when the applicant is no longer receiving any
89.32form of compensation, whether salary or paid leave 90 days preceding the filing of an
89.33application,; or, if annual or sick leave, or any other employer-paid salary continuation
89.34plan is paid for more than the 90-day period, from the date on which the payment of salary
89.35ceased, whichever is later. No member is entitled to receive a disability benefit payment
90.1when there remains to the member's credit any unused annual leave, sick leave, or any
90.2other employer-paid salary continuation benefit, or under any other circumstances when,
90.3during the period of disability, there has been no impairment of the person's salary.
90.4    (b) Payment of the disability benefit must not continue beyond the end of the month
90.5in which entitlement has terminated. If the disabilitant dies prior to negotiating the check
90.6for the month in which death occurs, payment must be made to the surviving spouse or, if
90.7none, to the designated beneficiary or, if none, to the estate.
90.8EFFECTIVE DATE.This section is effective July 1, 2007.

90.9    Sec. 24. Minnesota Statutes 2006, section 353.656, is amended by adding a subdivision
90.10to read:
90.11    Subd. 13. Chemical dependency limitations to disability benefit eligibility. (a)
90.12No benefits are payable for any disability resulting in whole or in part from the member's
90.13current use of illegal drugs. This exclusion does not apply to a member who:
90.14    (1) has successfully completed a supervised drug rehabilitation program or has
90.15otherwise been rehabilitated successfully and is no longer engaging in such use; or
90.16    (2) is participating in a supervised rehabilitation program and is no longer engaging
90.17in such use.
90.18    (b) "Illegal use of drugs" means the use of drugs, the possession or distribution of
90.19which is unlawful under United States Code, title 21, section 801. "Illegal use of drugs"
90.20does not include the use of a drug taken under the supervision of a licensed health care
90.21professional, or other uses authorized by United States Code, title 21, or other provisions
90.22of law.
90.23EFFECTIVE DATE.This section is effective July 1, 2007.

90.24    Sec. 25. Minnesota Statutes 2006, section 353.657, subdivision 1, is amended to read:
90.25    Subdivision 1. Generally. (a) In the event that a member of the police and fire fund
90.26dies from any cause before retirement or after before becoming disabled and receiving
90.27disability benefits, the association shall grant survivor benefits to a surviving spouse, as
90.28defined in section 353.01, subdivision 20, and who was married to the member for a
90.29period of at least one year, except that if death occurs in the line of duty no time limit is
90.30required and to a dependent child or children, as defined in section 353.01, subdivision 15,
90.31except that if the death is not a line of duty death, the member must have accrued at least
90.32three years of credited service.
90.33    For purposes of this section, line of duty also includes active military service, as
90.34defined in section 190.05, subdivision 5. The association shall also grant survivor benefits
90.35to a dependent child or children, as defined in section 353.01, subdivision 15.
91.1    (b) Notwithstanding the definition of surviving spouse, a former spouse of the
91.2member, if any, is entitled to a portion of the monthly surviving spouse benefit if
91.3stipulated under the terms of a marriage dissolution decree filed with the association. If
91.4there is no surviving spouse or child or children, a former spouse may be entitled to
91.5a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
91.6marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
91.7of a marriage dissolution decree filed with the association.
91.8    (c) The spouse and child or children are entitled to monthly benefits as provided in
91.9the following subdivisions 2 to 4.
91.10EFFECTIVE DATE.This section is effective July 1, 2007, and applies to survivor
91.11benefit applicants where the application is based on the death of a public employee that
91.12occurred after June 30, 2007.

91.13    Sec. 26. Minnesota Statutes 2006, section 353.657, subdivision 2, is amended to read:
91.14    Subd. 2. Benefit amount. (a) The spouse, for life, of a deceased member shall
91.15is entitled to receive receive a monthly benefit for life equal to 50 percent the following
91.16percentage of the member's average full-time monthly salary rate as a member of the
91.17police officer or firefighter and fire plan in effect over the last six months of allowable
91.18service preceding the month in which death occurred.:
91.19    (1) if the death was a line of duty death, 60 percent of the stated average salary
91.20is payable; and
91.21    (2) if the death was not a line of duty death or if death occurred while receiving
91.22disability benefits that accrued before July 1, 2007, 50 percent of the stated average salary
91.23is payable.
91.24    (b) If the member was a part-time employee in the position for which the employee
91.25qualified for participation in the police officer or firefighter and fire plan, the monthly
91.26survivor benefit is based on the salary rate in effect for that member's part-time service
91.27during the last six months of allowable service. If the member's status changed from full
91.28time to part time for health reasons during the last year of employment, the monthly
91.29survivor benefit is based on the full-time salary rate of a the position held as a member of
91.30the police officer or firefighter and fire plan in effect over the last six months of allowable
91.31service preceding the month in which the death occurred.
91.32EFFECTIVE DATE.This section is effective July 1, 2007, and applies to survivor
91.33benefit applicants where the application is based on the death of a public employee that
91.34occurred after June 30, 2007.

91.35    Sec. 27. Minnesota Statutes 2006, section 353.657, subdivision 2a, is amended to read:
92.1    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former
92.2member who has attained the age of at least 50 years and has credit for not less than
92.3three years allowable service or who has credit for at least 30 years of allowable service,
92.4regardless of age attained, dies before the annuity or disability benefit becomes payable,
92.5notwithstanding any designation of beneficiary to the contrary, the surviving spouse may
92.6elect to receive a death while eligible survivor benefit.
92.7    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
92.820 , a former spouse of the member, if any, is entitled to a portion of the death while
92.9eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
92.10filed with the association. If there is no surviving spouse or child or children, a former
92.11spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
92.121 , if provided for in a marriage dissolution decree but not a death while eligible survivor
92.13benefit despite the terms of a marriage dissolution decree filed with the association.
92.14    (c) The benefit may be elected instead of a refund with interest under section 353.32,
92.15subdivision 1 , or surviving spouse benefits otherwise payable under subdivisions 1 and
92.162. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
92.17which the member could have qualified for on the date of death, computed as provided in
92.18sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3. If there is a dependent
92.19child or children, and the 100 percent joint and survivor optional annuity for the surviving
92.20spouse, when added to the benefit of the dependent child or children under subdivision 3,
92.21exceeds an amount equal to 70 percent of the member's specified average monthly salary,
92.22the 100 percent joint and survivor annuity must be reduced by the amount necessary so
92.23that the total family benefit does not exceed the 70 percent maximum family benefit
92.24amount under subdivision 3. The 100 percent joint and survivor optional annuity must be
92.25restored to the surviving spouse, plus applicable postretirement fund adjustments under
92.26section 356.41, as the dependent child or children become no longer dependent under
92.27section 353.01, subdivision 15.
92.28    (d) The surviving spouse may apply for the annuity at any time after the date
92.29on which the deceased employee would have attained the required age for retirement
92.30based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
92.31subdivision 2 , apply to a deferred annuity payable under this subdivision.
92.32    (e) No payment shall accrue accrues beyond the end of the month in which
92.33entitlement to such annuity has terminated. An amount equal to the excess, if any, of the
92.34accumulated contributions which were credited to the account of the deceased employee
92.35over and above the total of the annuities paid and payable to the surviving spouse must
93.1be paid to the deceased member's last designated beneficiary or, if none, to the legal
93.2representative of the estate of such deceased member.
93.3    (f) Any member may request in writing that this subdivision not apply and that
93.4payment be made only to the designated beneficiary, as otherwise provided by this chapter.
93.5    (g) For a member who is employed as a full-time firefighter by the Department of
93.6Military Affairs of the state of Minnesota, allowable service as a full-time state Military
93.7Affairs Department firefighter credited by the Minnesota State Retirement System may be
93.8used in meeting the minimum allowable service requirement of this subdivision.
93.9EFFECTIVE DATE.This section is effective July 1, 2007.

93.10    Sec. 28. Minnesota Statutes 2006, section 353.657, subdivision 3, is amended to read:
93.11    Subd. 3. Dependent children. A dependent child, as defined in section 353.01,
93.12subdivision 15 , shall is entitled to receive receive a monthly benefit equal to ten percent of
93.13the member's average full-time monthly salary rate as a member of the police officer or
93.14firefighter and fire plan in effect over the last six months of allowable service preceding
93.15the month in which death occurred. Payments for the benefit of a dependent child must be
93.16made to the surviving parent, or to the legal guardian of the child or to any adult person
93.17with whom the child may at the time be living, provided only that the parent or other
93.18person to whom any amount is to be paid advises the board in writing that the amount will
93.19be held or used in trust for the benefit of the child.
93.20    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly
93.21benefit for one per family must not exceed an amount equal tothe following percentages of
93.22the member's average monthly salary as specified in subdivision 3:
93.23    (1) 80 percent, if the member's death was a line of duty death; or
93.24    (2) 70 percent of the member's specified average monthly salary, and , if the
93.25member's death is not a line of duty death or occurred while the member was receiving a
93.26disability benefit that accrued before July 1, 2007.
93.27    (b) The minimum monthly benefit per family, including the joint and survivor
93.28optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be
93.29less than the following percentage of the member's average monthly salary as specified in
93.30subdivision 3:
93.31    (1) 60 percent, if the death is a line of duty death; or
93.32    (2) 50 percent of the member's specified average monthly salary, if the death is
93.33not a line of duty death or occurred while the member was receiving a disability benefit
93.34that accrued before July 1, 2007.
94.1    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the joint
94.2annuitant must be reduced to the amount necessary so that the total family benefit does not
94.3exceed the applicable maximum. The joint and survivor optional annuity must be restored,
94.4plus applicable postretirement adjustments under section 356.41, as the dependent child or
94.5children become no longer dependent under section 353.01, subdivision 15.
94.6EFFECTIVE DATE.This section is effective July 1, 2007.

94.7    Sec. 29. Minnesota Statutes 2006, section 353B.08, subdivision 11, is amended to read:
94.8    Subd. 11. Subsequent medical reexaminations. Periodically, upon the
94.9recommendation of the medical adviser appointed as provided in section 353.33,
94.10subdivision 6a 353.031, based on the medical nature of the initial qualifying disability and
94.11its potential for improvement or recovery, the executive director of the Public Employees
94.12Retirement Association shall have a former member of a consolidating relief association
94.13who is receiving a disability benefit reexamined and reevaluated for continued entitlement
94.14to a disability benefit. If, upon the recommendation of the medical adviser, the executive
94.15director determines that the person is no longer entitled to receive a disability benefit, the
94.16disability benefit shall be discontinued effective as of the first day of the second month
94.17following that determination and the person shall be considered for reemployment as
94.18a police officer or a firefighter, whichever applies, by the municipality in which the
94.19consolidating relief association was located.
94.20EFFECTIVE DATE.This section is effective July 1, 2007.

94.21    Sec. 30. [353E.001] DEFINITIONS.
94.22    Subdivision 1. Duty disability. "Duty disability," physical or psychological, means
94.23a condition that is expected to prevent a member, for a period of not less than 12 months,
94.24from performing the normal duties of a local government correctional service employee as
94.25defined under section 353E.02 and that is the direct result of an injury incurred during, or
94.26a disease arising out of, the performance of normal duties or the actual performance of less
94.27frequent duties, either of which are specific to protecting the property and personal safety
94.28of others and that present inherent dangers that are specific to the positions covered by
94.29the local government correctional service retirement plan.
94.30    Subd. 2. Less frequent duties. "Less frequent duties" means tasks designated in the
94.31applicant's job description as either required from time to time or as assigned, but which
94.32are not carried out as part of the normal routine of the applicant's job.
94.33    Subd. 3. Normal duties. "Normal duties" means specific tasks designated in the
94.34applicant's job description and which the applicant performs on a day-to-day basis, but
95.1do not include less frequent duties which may be requested to be done by the employer
95.2from time to time.
95.3    Subd. 4. Regular disability. "Regular disability," physical or psychological, means
95.4a condition that is expected to prevent a member, for a period of not less than 12 months,
95.5from performing the normal duties of a local government correctional service employee as
95.6defined under section 353E.02 and that results from a disease or an injury that arises from
95.7any activities while not at work or while at work from performing those normal or less
95.8frequent duties that do not present inherent dangers that are specific to the occupations
95.9covered by the local government correctional service retirement plan.
95.10EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
95.11benefit applicants whose last day of public employment was after June 30, 2007.

95.12    Sec. 31. Minnesota Statutes 2006, section 353E.06, subdivision 1, is amended to read:
95.13    Subdivision 1. Duty disability qualification requirements. A local government
95.14correctional employee who becomes disabled and physically or mentally unfit to perform
95.15the duties of the position as a direct result of an injury, sickness, or other disability that
95.16is medically determinable, that was incurred in or arose out of any act of duty, and that
95.17renders the employee physically or mentally unable to perform the employee's duties is
95.18determined to qualify for a duty disability as defined in section 353E.001, subdivision 1, is
95.19entitled to a disability benefit. The disability benefit must be based on covered service
95.20under this chapter only and is an amount equal to 47.5 percent of the average salary
95.21defined in section 353E.04, subdivision 2, plus an additional percent equal to that specified
95.22in section 356.315, subdivision 5a, for each year of covered service under this chapter in
95.23excess of 25 years.
95.24EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
95.25benefit applicants whose last day of public employment was after June 30, 2007.

95.26    Sec. 32. Minnesota Statutes 2006, section 353E.06, subdivision 2, is amended to read:
95.27    Subd. 2. Nonduty Regular disability qualification requirements. A local
95.28government correctional employee who has at least one year of covered service under this
95.29chapter and becomes disabled and physically or mentally unfit to perform the duties of the
95.30position because of sickness or injury that is medically determinable and that occurs while
95.31not engaged in covered employment, who is determined to qualify for a regular disability
95.32benefit as defined in section 353E.001, subdivision 4, is entitled to a disability benefit
95.33based on covered service under this chapter. The disability benefit must be computed in
96.1the same manner as an annuity under section 353E.04, subdivision 3, and as though the
96.2employee had at least ten years of covered correctional service.
96.3EFFECTIVE DATE.This section is effective July 1, 2007, and applies to disability
96.4benefit applicants whose last day of public employment was after June 30, 2007.

96.5    Sec. 33. Minnesota Statutes 2006, section 353E.06, subdivision 4, is amended to read:
96.6    Subd. 4. Disability benefit application; accrual of benefits. A claim or demand
96.7for a disability benefit must be initiated by written application in the manner and form
96.8prescribed by the executive director, filed in the office of the association, showing
96.9compliance with the statutory conditions qualifying the applicant for a disability benefit.
96.10A member or former member who became disabled during a period of membership may
96.11file an application for disability benefits within three years following termination of local
96.12government correctional service, but not after that time has elapsed. (a) Procedures for
96.13the application process and determining eligibility for disability benefits are defined in
96.14section 353.031.
96.15    (b) The disability benefit begins to accrue the day following the commencement of
96.16disability, when the applicant is no longer receiving any form of compensation, whether
96.17salary or paid leave; 90 days preceding the filing of the application, or, if annual or sick
96.18leave, or any other employer-paid salary continuation plan is paid for more than the
96.1990-day period, from the date salary ceased, whichever is latest. No member is entitled
96.20to receive a disability benefit payment when there remains to the member's credit any
96.21unused annual leave, sick leave, or any other employer-paid salary continuation benefits or
96.22under any other circumstances when, during the period of disability, there has been no
96.23impairment of the person's salary.
96.24    (c) No payment may accrue beyond the end of the month in which entitlement has
96.25terminated. If the disabilitant dies before negotiating the check for the month in which
96.26death occurs, payment must be made to the optional annuitant or beneficiary.
96.27EFFECTIVE DATE.This section is effective July 1, 2007.

96.28    Sec. 34. Minnesota Statutes 2006, section 353E.06, subdivision 8, is amended to read:
96.29    Subd. 8. Continuing benefit eligibility. Continuing eligibility for a disability
96.30benefit is subject to section 353.33, subdivision 6 353.031, subdivision 8.
96.31EFFECTIVE DATE.This section is effective July 1, 2007.

96.32    Sec. 35. REPEALER.
96.33Minnesota Statutes 2006, sections 353.33, subdivisions 6a, 6b, and 8; and 353.656,
96.34subdivisions 5, 9, 11, and 12, are repealed.
97.1EFFECTIVE DATE.This section is effective July 1, 2007.


97.4    Section 1. Minnesota Statutes 2006, section 353F.02, subdivision 4, is amended to read:
97.5    Subd. 4. Medical facility. "Medical facility" means:
97.6    (1) Bridges Medical Services;
97.7    (2) the City of Cannon Falls Hospital;
97.8    (3) Clearwater County Memorial Hospital doing business as Clearwater Health
97.9Services in Bagley;
97.10    (4) the Dassel Lakeside Community Home;
97.11    (5) the Fair Oaks Lodge, Wadena;
97.12    (6) the Glencoe Area Health Center;
97.13    (7) the Hutchinson Area Health Care;
97.14    (8) the Kanabec Hospital;
97.15    (9) the Lakefield Nursing Home;
97.16    (10) the Lakeview Nursing Home in Gaylord;
97.17    (11) the Luverne Public Hospital;
97.18    (10) (12) the Northfield Hospital;
97.19    (13) the Oakland Park Nursing Home;
97.20    (11) (14) the RenVilla Nursing Home;
97.21    (12) (15) the Renville County Hospital in Olivia;
97.22    (13) (16) the St. Peter Community Healthcare Center; and
97.23    (14) (17) the Waconia-Ridgeview Medical Center.
97.24EFFECTIVE DATE; LOCAL APPROVAL.This section is effective upon the
97.25latter of:
97.26    (a) for the Lakefield Nursing Home,
97.27    (1) the day after the governing body of the city of Lakefield and its chief clerical
97.28officer timely comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
97.29    (2) the first day of the month next following certification to the Lakefield City
97.30Council by the executive director of the Public Employees Retirement Association that
97.31the actuarial accrued liability of the special benefit coverage proposed for extension to
97.32the privatized Lakefield Nursing Home employees under section 1 does not exceed the
97.33actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as
97.34calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
97.35The cost of the actuarial calculations must be borne by the current employer or by the entity
98.1which is the employer following the privatization, and the date of the actuarial calculations
98.2must be within one year of the date the Lakefield Nursing Home is sold or leased;
98.3    (b) for the Lakeview Nursing Home in Gaylord,
98.4    (1) the day after the governing body of the city of Gaylord and its chief clerical
98.5officer timely comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
98.6    (2) the first day of the month next following certification to the Gaylord City Council
98.7by the executive director of the Public Employees Retirement Association that the actuarial
98.8accrued liability of the special benefit coverage proposed for extension to the privatized
98.9Lakeview Nursing Home employees under section 1 does not exceed the actuarial gain
98.10otherwise to be accrued by the Public Employees Retirement Association, as calculated by
98.11the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of the
98.12actuarial calculations must be borne by the current employer or by the entity which is the
98.13employer following the privatization, and the date of the actuarial calculations must be
98.14within one year of the date the Lakeview Nursing Home is sold or leased; and
98.15    (c) for the Oakland Park Nursing Home,
98.16    (1) the day after the governing body of Pennington County and its chief clerical
98.17officer timely comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
98.18    (2) the first day of the month next following certification to Pennington County by
98.19the executive director of the Public Employees Retirement Association that the actuarial
98.20accrued liability of the special benefit coverage proposed for extension to the privatized
98.21Oakland Park Nursing Home employees under this section does not exceed the actuarial
98.22gain otherwise to be accrued by the Public Employees Retirement Association, as
98.23calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
98.24The cost of the actuarial calculations must be borne by the current employer or by the entity
98.25which is the employer following the privatization, and the date of the actuarial calculations
98.26must be within one year of the date the Oakland Park Nursing Home is sold or leased.

98.27    Sec. 2. Minnesota Statutes 2006, section 353F.04, subdivision 1, is amended to read:
98.28    Subdivision 1. Enhanced augmentation rates. (a) The deferred annuity of
98.29a terminated medical facility or other public employing unit employee is subject to
98.30augmentation under section 353.71, subdivision 2, of the edition of Minnesota Statutes
98.31published in the year in which the privatization occurred, except that the rate of
98.32augmentation is as specified in paragraph (b) or (c), whichever is applicable.
98.33    (b) This paragraph applies if the legislation adding the medical facility or other
98.34employing unit to section 353F.02, subdivision 4 or 5, as applicable, was enacted before
98.35July 26, 2005, and became effective before January 1, 2008, for the Hutchinson Area
98.36Health Care or before January 1, 2007, for all other medical facilities and all other
99.1employing units. For a terminated medical facility or other public employing unit
99.2employee, the augmentation rate is 5.5 percent compounded annually until January 1
99.3following the year in which the person attains age 55. From that date to the effective date
99.4of retirement, the augmentation rate is 7.5 percent compounded annually.
99.5    (c) If paragraph (b) is not applicable, the augmentation rate is four percent
99.6compounded annually until January 1, following the year in which the person attains age
99.755. From that date to the effective date of retirement, the augmentation rate is six percent
99.8compounded annually.
99.9EFFECTIVE DATE.This section is effective the day following final enactment.


99.12    Section 1. Minnesota Statutes 2006, section 353.03, subdivision 3, is amended to read:
99.13    Subd. 3. Duties and powers of the board. (a) The board shall elect a president and
99.14vice-president. The board shall approve the staffing complement necessary to administer
99.15the fund. The cost of administering this chapter must be paid by the fund.
99.16    (b) The board shall adopt bylaws for its own government and for the management of
99.17the fund consistent with the laws of the state and may modify them at pleasure. It shall
99.18adopt, alter, and enforce reasonable rules consistent with the laws of the state for the
99.19administration and management of the fund, for the payment and collection of payments
99.20from members, and for the payment of withdrawals and benefits. It shall pass upon and
99.21allow or disallow all applications for membership in the fund and shall allow or disallow
99.22claims for withdrawals, pensions, or benefits payable from the fund. It shall adopt an
99.23appropriate mortality table based on experience of the fund as recommended by the
99.24association actuary, with interest set at the rate specified in section 356.215, subdivision
99.258 . It shall provide for the payment out of the fund of all necessary expenses for the
99.26administration of the fund and of all claims for withdrawals, pensions, or benefits allowed.
99.27The board shall approve or disapprove all recommendations and actions of the executive
99.28director made subject to its approval or disapproval by subdivision 3a.
99.29    (c) In passing upon all applications and claims, the board may summon, swear, hear,
99.30and examine witnesses and, in the case of claims for disability benefits, may require the
99.31claimant to submit to a medical examination by a physician of the board's choice, at the
99.32expense of the fund, as a condition precedent to the passing on the claim, and, in the case
99.33of all applications and claims, may conduct investigations necessary to determine their
99.34validity and merit. The board shall establish procedures to assure that a benefit applicant
99.35and recipient may have a review of a benefit eligibility or benefit amount determination
99.36affecting the applicant or recipient. The review procedure may afford the benefit applicant
100.1or benefit recipient an opportunity to present views at any review proceeding conducted,
100.2but is not a contested case under chapter 14.
100.3    (d) The board may continue to authorize the sale of life insurance to members under
100.4the insurance program in effect on January 1, 1985, but must not change that program
100.5without the approval of the commissioner of finance. The association shall not receive
100.6any financial benefit from the life insurance program beyond the amount necessary to
100.7reimburse the association for costs incurred in administering the program. The association
100.8shall not engage directly or indirectly in any other activity involving the sale or promotion
100.9of goods or services, or both, whether to members or nonmembers.
100.10    (e) The board shall establish procedures governing reimbursement of expenses to
100.11board members. These procedures shall define the types of activities and expenses that
100.12qualify for reimbursement, shall provide that all out-of-state travel must be authorized
100.13by the board, and shall provide for independent verification of claims for expense
100.14reimbursement. The procedures must comply with applicable rules and policies of the
100.15Department of Finance, the Department of Administration, and the Department of
100.16Employee Relations.
100.17    (f) The board may purchase fiduciary liability insurance and official bonds for the
100.18officers and members of the board of trustees and employees of the association and may
100.19purchase property insurance or may establish a self-insurance risk reserve including, but
100.20not limited to, data processing insurance and "extra-expense" coverage.
100.21EFFECTIVE DATE.This section is effective the day after final enactment.

100.22    Sec. 2. [356.95] PENSION PLAN APPEAL PROCEDURES.
100.23    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that
100.24a different meaning is intended, for the purpose of this section, the terms in paragraphs
100.25(b) to (e) have the meanings given them.
100.26    (b) "Chief administrative officer" means the executive director of a covered pension
100.27plan or the executive director's designee or representative.
100.28    (c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision
100.292, clauses (1) to (4), (10), and (12) to (14), but does not mean the deferred compensation
100.30plan administered under sections 352.96 and 352.97 or to the postretirement health care
100.31savings plan administered under section 352.98.
100.32    (d) "Governing board" means the Board of Trustees of the Public Employees
100.33Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
100.34the Board of Directors of the Minnesota State Retirement System.
101.1    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
101.2a covered pension plan or a beneficiary of a participant, or an individual who has applied
101.3to be a participant or who is or may be a survivor of a participant, or a state agency or
101.4other governmental unit that employs active participants in a covered pension plan.
101.5    Subd. 2. Right to review. A determination made by the administration of a covered
101.6pension plan regarding a person's eligibility, benefits, or other rights under the plan with
101.7which the person does not agree is subject to review under this section.
101.8    Subd. 3. Notice of determination. If the applicable chief administrative officer
101.9denies an application or a written request, modifies a benefit, or terminates a benefit of
101.10a person claiming a right or potential rights under a covered pension plan, the chief
101.11administrative officer shall notify that person through a written notice containing:
101.12    (1) a statement of the reasons for the determination;
101.13    (2) a notice that the person may petition the governing board of the covered pension
101.14plan for a review of the determination and that a person's petition for review must be filed
101.15in the administrative office of the covered pension plan within 60 days of the receipt
101.16of the written notice of the determination;
101.17    (3) a statement indicating that a failure to petition for review within 60 days
101.18precludes the person from contesting in any other administrative review or court procedure
101.19the issues determined by the chief administrative officer;
101.20    (4) a statement indicating that all relevant materials, documents, affidavits, and other
101.21records that the person wishes to be reviewed in support of the petition must be filed with
101.22and received in the administrative office of the covered pension plan at least 30 days
101.23before the date of the hearing under subdivision 10; and
101.24    (5) a copy of this section.
101.25    Subd. 4. Termination of benefits. (a) If a covered pension plan decides to
101.26terminate a benefit that is being paid to a person, before terminating the benefit, the chief
101.27administrative officer must, in addition to the other procedures prescribed in this section,
101.28provide the individual with written notice of the pending benefit termination by certified
101.29mail. The notice must explain the reason for the pending benefit termination. The person
101.30must be given an opportunity to explain, in writing, in person, by telephone, or by e-mail,
101.31the reasons that the benefit should not be terminated.
101.32    (b) If the chief administrative officer is unable to contact the person and determines
101.33that a failure to terminate the benefit will result in unauthorized payment by a covered
101.34pension plan, the chief administrative officer may terminate the benefit immediately upon
101.35mailing a written notice containing the information required by subdivision 3 to the
102.1address to which the most recent benefit payment was sent and, if that address is that of a
102.2financial institution, to the last known address of the person.
102.3    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2
102.4may petition for a review of that decision by the governing board of the covered pension
102.5plan.
102.6    (b) A petition under this section must be sent to the chief administrative officer by
102.7mail and must be postmarked no later than 60 days after the person received the notice
102.8required by subdivision 3. The petition must include the person's statement of the reason
102.9or reasons that the person believes the decision of the chief administrative officer should
102.10be reversed or modified. The petition may include all documentation and written materials
102.11that the petitioner deems to be relevant.
102.12    Subd. 6. Failure to petition. If a timely petition for review under subdivision 5 is
102.13not filed with the chief administrative officer, the covered pension plan's determination is
102.14final and is not subject to further administrative or judicial review.
102.15    Subd. 7. Notice of hearing. (a) After receiving a petition, and not less than 30
102.16calendar days from the date of the next regular board meeting, the chief administrative
102.17officer must schedule a timely review of the petition before the governing board of the
102.18covered pension plan. The review must be scheduled to take into consideration any
102.19necessary accommodations to allow the petitioner to participate in the governing board's
102.20review.
102.21    (b) Not less than 15 calendar days before the scheduled hearing date, the chief
102.22administrative officer must provide by mail to the petitioner an acknowledgment of the
102.23receipt of the person's petition and a follow-up notice of the time and place of the meeting
102.24at which the governing board is scheduled to consider the petition and must provide a copy
102.25of all relevant documents, evidence, summaries, and recommendations assembled by or
102.26on behalf of the plan administration to be considered by the governing board.
102.27    (c) Except as provided in subdivision 8, paragraph (c), all documents and materials
102.28that the petitioner wishes to be part of the record for review must be filed with the chief
102.29administrative officer and must be received in the offices of the covered pension plan at
102.30least 30 days before the date of the meeting at which the petition is scheduled to be heard.
102.31    (d) A petitioner, within ten calendar days of the scheduled date of the applicable
102.32board meeting, may request a continuance on a scheduled petition. The chief
102.33administrative officer must reschedule the review within 60 days of the date of the
102.34continuance request. Only one continuance may be granted to any petitioner.
103.1    Subd. 8. Record for review. (a) All evidence, including all records, documents, and
103.2affidavits in the possession of the covered pension plan of which the covered pension plan
103.3desires to avail itself and be considered by the governing board, and all evidence which the
103.4petitioner wishes to present to the governing board, including any evidence which would
103.5otherwise be classified by law as "private," must be made part of the hearing record.
103.6    (b) Not later than seven days before the scheduled hearing date, the chief
103.7administrative officer must provide a copy of the record to each member of the governing
103.8board.
103.9    (c) At least five days before the hearing, the petitioner may submit to the chief
103.10administrative officer, for submission to the governing board, any additional document,
103.11affidavit, or other relevant information that was not initially submitted with the petition.
103.12    Subd. 9. Amended determination. At any time before the hearing before the
103.13governing board, for good cause shown and made part of the records of the plan, the chief
103.14administrative officer may reverse, alter, amend, or modify the prior decision which is
103.15subject to review under this section by issuing an amended decision. Upon doing so, the
103.16chief administrative officer may cancel the governing board's scheduled review of the
103.17person's petition and shall so notify the petitioner.
103.18    Subd. 10. Hearing. (a) The governing board shall hold a timely hearing on a petition
103.19for review as part of a regularly scheduled board meeting, or as part of a special meeting
103.20if so scheduled. All governing board members who participate in the decision-making
103.21process must be familiar with the record. The governing board shall make its decision
103.22on a petition solely on the record as submitted and on the proceedings of the hearing. At
103.23the hearing, the petitioner, the petitioner's attorney, and the chief administrative officer
103.24may state and discuss with the governing board their positions with respect to the petition.
103.25The governing board may allow further documentation to be placed in the record at the
103.26board meeting only with the agreement of both the chief administrative officer and the
103.27petitioner. The chief administrative officer may not otherwise participate in the board's
103.28decision-making process.
103.29    (b) When a petition presents a contested issue of law, an assistant attorney general
103.30may participate and may argue on behalf of the legal position taken by the chief
103.31administrative officer if that assistant attorney general does not also serve as the governing
103.32board's legal advisor during the board's decision-making process.
103.33    (c) A motion by a board member, supported by a summary of the relevant facts,
103.34conclusions and reasons, as properly amended and approved by a majority of the
103.35governing board, constitutes the board's final decision. A verbatim statement of the
103.36board's final decision must be served upon the petitioner. If the decision is contrary to the
104.1petitioner's desired outcome, the notice shall inform the petitioner of the appeal rights set
104.2forth in subdivision 13.
104.3    (d) If a petitioner who received timely notice of a scheduled hearing fails to appear,
104.4the governing board may nevertheless hear the petition and issue a decision.
104.5    Subd. 11. Disability medical issues. (a) If a person petitions the governing board
104.6to reverse or modify a determination which found that there exists no medical data
104.7supporting an application for disability benefits, the board may reverse that determination
104.8only if there is in fact medical evidence supporting the application. The board has the
104.9discretion to resubmit a disability benefit application at any time to a medical advisor for
104.10reconsideration, and the resubmission may include an instruction that further medical
104.11examinations be obtained.
104.12    (b) The governing board may make a determination contrary to the recommendation
104.13of the medical advisor only if there is expert medical evidence in the record to support
104.14its contrary decision. If there is no medical evidence contrary to the opinion of the
104.15medical advisor in the record and the medical advisor attests that the decision was made in
104.16accordance with the applicable disability standard, the board must follow the decision of
104.17the medical advisor regarding the cause of the disability.
104.18    (c) The obligation of the governing board to follow the decision of the medical
104.19advisor under paragraph (b) does not apply to instances when the governing board makes
104.20a determination different from the recommendation of the medical advisor on issues
104.21that do not involve medical issues.
104.22    Subd. 12. Referral for administrative hearing. (a) Notwithstanding any provision
104.23of sections 14.03, 14.06, and 14.57 to 14.69 to the contrary, a challenge to a determination
104.24of the chief administrative officer of a covered pension plan must be conducted exclusively
104.25under the procedures set forth in this section and is not a contested case under chapter 14.
104.26    (b) Notwithstanding the provisions of paragraph (a), a governing board, in its sole
104.27discretion, may refer a petition brought under this section to the Office of Administrative
104.28Hearings for a contested case hearing under sections 14.57 to 14.69.
104.29    Subd. 13. Appeal of the governing board's decision; judicial review. Within
104.3060 days of the date of the mailing of the notice of the governing board's decision,
104.31the petitioner may appeal the decision by filing a writ of certiorari with the Court of
104.32Appeals under section 606.01 and Rule 115 of the Minnesota Rules of Civil Appellate
104.33Procedure. Failure by a person to appeal to the Court of Appeals within the 60-day
104.34period precludes the person from later raising, in any subsequent administrative hearing
105.1or court proceeding, those substantive and procedural issues that reasonably should have
105.2been raised upon a timely appeal.
105.3    Subd. 14. Petitions without notice. Notwithstanding the petition notice and
105.4requirements under this section, a person who believes that the person's rights have been
105.5affected by a decision made by the administration of a covered pension plan may request
105.6a review under this section by the appropriate governing board. The petition under this
105.7subdivision must be made within 45 days of the time that the person knew or should have
105.8known of the disputed decision.
105.9    Subd. 15. Governing board review panel. Any covered pension plan subject
105.10to this section, by motion duly made and adopted, may appoint a panel of governing
105.11board members to hear and determine any or all petitions brought under this section.
105.12The governing board review panel must contain a minimum number of board members
105.13that would otherwise constitute a quorum of board members under the governing body's
105.14rules and procedures.
105.15EFFECTIVE DATE.This section is effective the day after final enactment.

105.16    Sec. 3. REPEALER.
105.17Minnesota Statutes 2006, sections 352.031; and 354.071, are repealed.
105.18EFFECTIVE DATE.This section is effective the day after final enactment.


105.22    Section 1. Minnesota Statutes 2006, section 354A.29, subdivision 3, is amended to
105.23read:
105.24    Subd. 3. Postretirement adjustment eligibility. (a) The postretirement adjustment
105.25described in the articles and bylaws of the St. Paul Teachers Retirement Fund Association
105.26must be determined by the executive director and approved by the board annually after
105.27June 30 using the procedures under this section.
105.28    (b) On January 1, each eligible person who has been receiving accrued or received an
105.29annuity or benefit under the articles of incorporation, the bylaws, or this chapter for at least
105.3012 three full calendar months as of the end of the fiscal calendar year is eligible to receive
105.31a postretirement adjustment of 2.0 percent that is payable each the following January 1.

105.32    Sec. 2. Minnesota Statutes 2006, section 354A.29, subdivision 4, is amended to read:
105.33    Subd. 4. Additional investment percentage Cost-of-living adjustment. (a)
105.34An excess investment earnings A percentage adjustment must be computed and paid
106.1under this subdivision to those annuitants and eligible benefit recipients who have been
106.2receiving an annuity or benefit for at least 12 months as determined each June 30 by the
106.3board of trustees eligible persons as defined under subdivision 3. This adjustment is
106.4determined by reference to the Consumer Price Index for urban wage earners and clerical
106.5workers all items index as reported by the Bureau of Labor Statistics within the United
106.6States Department of Labor each year as part of the determination of annual cost-of-living
106.7adjustments to recipients of federal old-age, survivors, and disability insurance. For
106.8calculations of the cost-of-living adjustment under paragraph (b), the term "average third
106.9quarter Consumer Price Index value" means the sum of the monthly index values as
106.10initially reported by the Bureau of Labor Statistics for the months of July, August, and
106.11September, divided by 3.
106.12    (b) The board shall also determine the five-year annualized rate of return attributable
106.13to the assets of the St. Paul Teachers Retirement Fund Association under the formula
106.14specified in section 11A.04, clause (11), and the amount of the excess five-year annualized
106.15rate of return over the preretirement interest assumption specified in section 356.215.
106.16    (c) The excess investment percentage adjustment must be determined by multiplying
106.17the quantity one minus the rate of contribution deficiency, as specified in the most recent
106.18actuarial report of the actuary retained under sections 356.214 and 356.215, by the rate of
106.19return excess as determined in paragraph (b).
106.20    (d) The excess investment percentage adjustment is payable to all annuitants and
106.21benefit recipients on the following January 1.
106.22    (b) Before January 1 of each year, the executive director must calculate the amount
106.23of the cost-of-living adjustment by dividing the most recent average third quarter index
106.24value by the same average third quarter index value from the previous year, subtract one
106.25from the resulting quotient, and express the result as a percentage amount, which must be
106.26rounded to the nearest one-tenth of one percent. The final amount may not be negative
106.27and may not exceed 5.0 percent.
106.28    (c) The amount calculated under paragraph (b) is the full cost-of-living adjustment
106.29to be applied as a permanent increase to the regular payment of each eligible member
106.30under subdivision 3 on January 1 of the next calendar year. For any eligible member
106.31whose effective date of benefit commencement occurred during the calendar year before
106.32the cost-of-living adjustment is applied, the full increase amount must be prorated on the
106.33basis of whole calendar quarters in benefit payment status in the calendar year prior to
106.34the January 1 on which the cost-of-living adjustment is applied, calculated to the third
106.35decimal place.

106.36    Sec. 3. Minnesota Statutes 2006, section 356.215, subdivision 11, is amended to read:
107.1    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the
107.2level normal cost, the actuarial valuation must contain an exhibit indicating the additional
107.3annual contribution sufficient to amortize the unfunded actuarial accrued liability. For
107.4funds governed by chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the additional
107.5contribution must be calculated on a level percentage of covered payroll basis by the
107.6established date for full funding in effect when the valuation is prepared. For funds
107.7governed by chapter 3A, sections 352.90 through 352.951, chapters 352B, 352C, sections
107.8353.63 through 353.68, and chapters 353C, 354A, and 490, the level percent additional
107.9contribution must be calculated assuming annual payroll growth of 6.5 percent. For funds
107.10governed by sections 352.01 through 352.86 and chapter 354, the level percent additional
107.11contribution must be calculated assuming an annual payroll growth of five percent. For the
107.12fund governed by sections 353.01 through 353.46, the level percent additional contribution
107.13must be calculated assuming an annual payroll growth of six percent. For all other funds,
107.14the additional annual contribution must be calculated on a level annual dollar amount basis.
107.15    (b) For any fund other than the Minneapolis Employees Retirement Fund and,
107.16the Public Employees Retirement Association general plan, and the St. Paul Teachers
107.17Retirement Fund Association, if there has not been a change in the actuarial assumptions
107.18used for calculating the actuarial accrued liability of the fund, a change in the benefit
107.19plan governing annuities and benefits payable from the fund, a change in the actuarial
107.20cost method used in calculating the actuarial accrued liability of all or a portion of the
107.21fund, or a combination of the three, which change or changes by itself or by themselves
107.22without inclusion of any other items of increase or decrease produce a net increase in the
107.23unfunded actuarial accrued liability of the fund, the established date for full funding is the
107.24first actuarial valuation date occurring after June 1, 2020.
107.25    (c) For any fund or plan other than the Minneapolis Employees Retirement Fund and
107.26the Public Employees Retirement Association general plan, if there has been a change in
107.27any or all of the actuarial assumptions used for calculating the actuarial accrued liability
107.28of the fund, a change in the benefit plan governing annuities and benefits payable from
107.29the fund, a change in the actuarial cost method used in calculating the actuarial accrued
107.30liability of all or a portion of the fund, or a combination of the three, and the change or
107.31changes, by itself or by themselves and without inclusion of any other items of increase or
107.32decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the
107.33established date for full funding must be determined using the following procedure:
107.34    (i) the unfunded actuarial accrued liability of the fund must be determined in
107.35accordance with the plan provisions governing annuities and retirement benefits and the
107.36actuarial assumptions in effect before an applicable change;
108.1    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
108.2needed to amortize the unfunded actuarial accrued liability amount determined under item
108.3(i) by the established date for full funding in effect before the change must be calculated
108.4using the interest assumption specified in subdivision 8 in effect before the change;
108.5    (iii) the unfunded actuarial accrued liability of the fund must be determined in
108.6accordance with any new plan provisions governing annuities and benefits payable from
108.7the fund and any new actuarial assumptions and the remaining plan provisions governing
108.8annuities and benefits payable from the fund and actuarial assumptions in effect before
108.9the change;
108.10    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
108.11needed to amortize the difference between the unfunded actuarial accrued liability amount
108.12calculated under item (i) and the unfunded actuarial accrued liability amount calculated
108.13under item (iii) over a period of 30 years from the end of the plan year in which the
108.14applicable change is effective must be calculated using the applicable interest assumption
108.15specified in subdivision 8 in effect after any applicable change;
108.16    (v) the level annual dollar or level percentage amortization contribution under item
108.17(iv) must be added to the level annual dollar amortization contribution or level percentage
108.18calculated under item (ii);
108.19    (vi) the period in which the unfunded actuarial accrued liability amount determined
108.20in item (iii) is amortized by the total level annual dollar or level percentage amortization
108.21contribution computed under item (v) must be calculated using the interest assumption
108.22specified in subdivision 8 in effect after any applicable change, rounded to the nearest
108.23integral number of years, but not to exceed 30 years from the end of the plan year in
108.24which the determination of the established date for full funding using the procedure set
108.25forth in this clause is made and not to be less than the period of years beginning in the
108.26plan year in which the determination of the established date for full funding using the
108.27procedure set forth in this clause is made and ending by the date for full funding in effect
108.28before the change; and
108.29    (vii) the period determined under item (vi) must be added to the date as of which
108.30the actuarial valuation was prepared and the date obtained is the new established date
108.31for full funding.
108.32    (d) For the Minneapolis Employees Retirement Fund, the established date for full
108.33funding is June 30, 2020.
108.34    (e) For the general employees retirement plan of the Public Employees Retirement
108.35Association, the established date for full funding is June 30, 2031.
109.1    (f) For the Teachers Retirement Association, the established date for full funding is
109.2June 30, 2037.
109.3    (g) For the St. Paul Teachers Retirement Fund Association, the established date for
109.4full funding is June 30, 2038. In addition to other requirements of this chapter, the annual
109.5actuarial valuation shall contain an exhibit indicating the funded ratio and the deficiency
109.6or sufficiency in annual contributions when comparing liabilities to the market value of
109.7the assets of the fund as of the close of the most recent fiscal year.
109.8    (h) For the retirement plans for which the annual actuarial valuation indicates an
109.9excess of valuation assets over the actuarial accrued liability, the valuation assets in
109.10excess of the actuarial accrued liability must be recognized as a reduction in the current
109.11contribution requirements by an amount equal to the amortization of the excess expressed
109.12as a level percentage of pay over a 30-year period beginning anew with each annual
109.13actuarial valuation of the plan.

109.14    Sec. 4. REPEALER.
109.15Minnesota Statutes 2006, sections 354A.12, subdivision 3d; and 354A.29,
109.16subdivision 6, are repealed.


109.20    Section 1. Minnesota Statutes 2006, section 422A.01, subdivision 13a, is amended to
109.21read:
109.22    Subd. 13a. Covered salary. (a) "Salary" is subject to the limitations of section
109.23356.611 .
109.24    (b) "Salary" also includes the contributions to a supplemental retirement plan under
109.25section 356.24, subdivision 1, clause (8), (9), or (10), for an employee who is covered by a
109.26supplemental retirement plan which requires that all plan contributions be made by the
109.27person's employer from mandatory withholdings from the employee's wages.

109.28    Sec. 2. Minnesota Statutes 2006, section 422A.05, subdivision 2c, is amended to read:
109.29    Subd. 2c. Minneapolis Employees Retirement Fund investment authority.
109.30    (a) For investments made on or after July 1, 1991, the board shall invest funds only in
109.31investments authorized by section 356A.06, subdivision 7.
109.32    (b) However, in addition to real estate investments authorized under paragraph (a),
109.33the board may also make loans to purchasers of Minnesota situs nonfarm residential real
109.34estate that is owned by the Minneapolis Employees Retirement Fund. The loans must
109.35be secured by mortgages or deeds of trust.
110.1    (c) For investments made before July 1, 1991, the board may, but is not required to,
110.2comply with paragraph (a). However, with respect to these investments, the board shall
110.3act in accordance with subdivision 2a and chapter 356A.
110.4    (d) The board may certify assets for investment by the State Board of Investment
110.5under section 11A.17. Alternatively or in addition, the board may certify assets for
110.6investment by the State Board of Investment in fixed income pools or in a separately
110.7managed account at the discretion of the State Board of Investment as provided in section
110.811A.14.

110.9    Sec. 3. Minnesota Statutes 2006, section 422A.06, subdivision 3, is amended to read:
110.10    Subd. 3. Deposit accumulation fund. (a) The deposit accumulation fund consists
110.11of the assets held in the fund, including amounts contributed by or for employees, amounts
110.12contributed by the city, amounts contributed by municipal activities supported in whole or
110.13in part by revenues other than taxes and amounts contributed by any public corporation,
110.14amounts paid by the state, and by income from investments.
110.15    (b) There must be paid from the fund the amounts required to be transferred to the
110.16retirement benefit fund, or the disability benefit fund, refunds of contributions, including
110.17the death-while-active refund specified in section 422A.22, subdivision 4, postretirement
110.18increases in retirement allowances granted under Laws 1965, chapter 688, or Laws 1969,
110.19chapter 859, and expenses of the administration of the retirement fund which were not
110.20charged by the retirement board against the income of the retirement benefit fund from
110.21investments as the cost of handling the investments of the retirement benefit fund.
110.22     (c) To the extent that the deposit accumulation fund has insufficient assets to transfer
110.23the total value of the required reserves for retirement annuities to either the disability
110.24benefit fund under subdivisions 5 and 7 or the retirement benefit fund under subdivisions 5
110.25and 8 as required, the deposit accumulation fund has a transfer amount payable on which
110.26an interest charge accrues. The executive director must determine the interest charge for
110.27the period that the transfer amount payable remains unpaid at an annual rate equal to five
110.28percent plus the percentage increase in the amount of the annual Consumer Price Index for
110.29urban wage earners and clerical workers as calculated by the Bureau of Labor Statistics of
110.30the United States Department of Labor from the previous June 30. The interest charge
110.31must be reflected in the books of the Minneapolis Employees Retirement Fund and
110.32assessed against the deposit accumulation fund based on the average quarterly transfer
110.33amount payable balance outstanding. Any revenue received by the deposit accumulation
110.34fund subsequent to unpaid transfers must be transferred from the deposit accumulation
110.35fund to the disability benefit fund or to the retirement fund, whichever applies, and must
111.1first be applied to any remaining interest charge and then must be applied to the principal
111.2amount of transfer amount payable outstanding.

111.3    Sec. 4. Minnesota Statutes 2006, section 422A.06, subdivision 5, is amended to read:
111.4    Subd. 5. Transfer of reserves to retirement benefit fund; adjustments of
111.5annuities and benefits. (a) Assets equal to the required reserves for retirement annuities
111.6as determined in accordance with the appropriate mortality table adopted by the board
111.7of trustees based on the experience of the fund as recommended by the actuary retained
111.8under section 356.214 and using the postretirement interest assumption specified in
111.9section 356.215, subdivision 8, shall must be transferred to the disability benefit fund as
111.10provided in subdivision 7, or the retirement benefit fund, except for any amounts payable
111.11from the survivor benefit fund, as of date of retirement.
111.12    (b) To the extent that the deposit accumulation fund has insufficient assets to cover a
111.13full required transfer amount, the applicable fund must be credited with an interest-bearing
111.14transfer amount payable.
111.15    (c) Annuity payments shall must be adjusted in accordance with this chapter, except
111.16that no minimum retirement payments described in this chapter shall must include
111.17any amounts payable from the survivors' benefit fund or disability benefit fund and
111.18supplemented benefits specifically financed by statute.
111.19    (c) (d) Increases in annuity payments pursuant to under this section shall be made
111.20automatically unless written notice on a form prescribed by the board is filed with the
111.21retirement board requesting that the increase not be made.
111.22    (d) (e) Any additional annuity which began to accrue on July 1, 1973, or which
111.23began to accrue on January 1, 1974, pursuant to under Laws 1973, chapter 770, section
111.241, shall must be considered as part of the base amount to be used in determining any
111.25postretirement adjustments payable pursuant to under the provisions of subdivision 8.

111.26    Sec. 5. Minnesota Statutes 2006, section 422A.06, subdivision 7, is amended to read:
111.27    Subd. 7. Disability benefit fund. (a) A disability benefit fund is established,
111.28containing the required reserves for disability allowances under this chapter. A
111.29proportionate share of income from investments must be allocated to this fund and any
111.30interest charge under subdivision 3, paragraph (c), must be credited to the fund. There
111.31must be paid from this fund The disability allowances payable under this chapter must be
111.32paid from this fund.
111.33    (b) In the event of the termination of any disability allowance for any reason other
111.34than the death of the recipient, the balance of the required reserves for the disability
111.35allowance as of the date of the termination must be transferred from the disability benefit
111.36fund to the deposit accumulation fund.
112.1    (c) At the end of each fiscal year, as part of the annual actuarial valuation, a
112.2determination must be made of the required reserves for all disability allowances being
112.3paid from the disability benefit fund. Any excess of assets over actuarial required reserves
112.4in the disability benefit fund must be transferred to the deposit accumulation fund. Unless
112.5subdivision 3, paragraph (c), applies, any excess of actuarial reserves over assets in the
112.6disability benefit fund must be funded by a transfer of the appropriate amount of assets
112.7from the deposit accumulation fund.

112.8    Sec. 6. Minnesota Statutes 2006, section 422A.06, subdivision 8, is amended to read:
112.9    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund shall consist
112.10consists of amounts held for payment of retirement allowances for members retired
112.11pursuant to under this chapter, including any transfer amount payable under subdivision 3,
112.12paragraph (c).
112.13    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required reserves
112.14for retirement allowances pursuant to under this chapter determined in accordance with
112.15the appropriate mortality table adopted by the board of trustees based on the experience of
112.16the fund as recommended by the actuary retained under section 356.214 shall must be
112.17transferred from the deposit accumulation fund to the retirement benefit fund as of the last
112.18business day of the month in which the retirement allowance begins. The income from
112.19investments of these assets shall must be allocated to this fund and any interest charge
112.20under subdivision 3, paragraph (c), must be credited to the fund. There shall must be paid
112.21from this fund the retirement annuities authorized by law. A required reserve calculation
112.22for the retirement benefit fund must be made by the actuary retained under section 356.214
112.23and must be certified to the retirement board by the actuary retained under section 356.214.
112.24    (c) The retirement benefit fund shall must be governed by the applicable laws
112.25governing the accounting and audit procedures, investment, actuarial requirements,
112.26calculation and payment of postretirement benefit adjustments, discharge of any deficiency
112.27in the assets of the fund when compared to the actuarially determined required reserves,
112.28and other applicable operations and procedures regarding the Minnesota postretirement
112.29investment fund in effect on June 30, 1997, established under Minnesota Statutes 1996,
112.30section 11A.18, and any legal or administrative interpretations of those laws of the State
112.31Board of Investment, the legal advisor to the Board of Investment and the executive
112.32director of the State Board of Investment in effect on June 30, 1997. If a deferred yield
112.33adjustment account is established for the Minnesota postretirement investment fund
112.34before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the
112.35retirement board shall also establish and maintain a deferred yield adjustment account
112.36within this fund.
113.1    (d) Annually, following the calculation of any postretirement adjustment payable
113.2from the retirement benefit fund, the board of trustees shall submit a report to the
113.3executive director of the Legislative Commission on Pensions and Retirement and to the
113.4commissioner of finance indicating the amount of any postretirement adjustment and
113.5the underlying calculations on which that postretirement adjustment amount is based,
113.6including the amount of dividends, the amount of interest, and the amount of net realized
113.7capital gains or losses utilized in the calculations.
113.8    (e) With respect to a former contributing member who began receiving a retirement
113.9annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June
113.1030, 1997, or with respect to a survivor of a former contributing member who began
113.11receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June
113.1230, 1997, the reserves attributable to the one percent lower amount of the cost-of-living
113.13adjustment payable to those annuity or benefit recipients annually must be transferred back
113.14to the deposit accumulation fund to the credit of the Metropolitan Airports Commission.
113.15The calculation of this annual reduced cost-of-living adjustment reserve transfer must be
113.16reviewed by the actuary retained under section 356.214.

113.17    Sec. 7. Minnesota Statutes 2006, section 422A.101, subdivision 3, is amended to read:
113.18    Subd. 3. State contributions. (a) Subject to the limitation set forth in paragraph (c),
113.19the state shall pay to the Minneapolis Employees Retirement Fund annually an amount
113.20equal to the amount calculated under paragraph (b).
113.21    (b) The payment amount is an amount equal to the financial requirements of the
113.22Minneapolis Employees Retirement Fund reported in the actuarial valuation of the fund
113.23prepared by the actuary retained under section 356.214 pursuant to consistent with section
113.24356.215 for the most recent year but based on a target date for full amortization of the
113.25unfunded actuarial accrued liabilities by June 30, 2020, less the amount of employee
113.26contributions required pursuant to under section 422A.10, and the amount of employer
113.27contributions required pursuant to under subdivisions 1a, 2, and 2a. Payments shall be
113.28made September 15 annually.
113.29    (c) The annual state contribution under this subdivision may not exceed $9,000,000,
113.30plus the cost of the annual supplemental benefit determined under section 356.43.
113.31    (d) If the amount determined under paragraph (b) exceeds $11,910,000 $9,000,000,
113.32the excess must be allocated to and paid to the fund by the employers identified in
113.33subdivisions 1a and 2, other than units of metropolitan government. Each employer's
113.34share of the excess is proportionate to the employer's share of the fund's unfunded
113.35actuarial accrued liability as disclosed in the annual actuarial valuation prepared by the
113.36actuary retained under section 356.214 compared to the total unfunded actuarial accrued
114.1liability attributed to all employers identified in subdivisions 1a and 2, other than units of
114.2metropolitan government. Payments must be made in equal installments as set forth in
114.3paragraph (b).

114.4    Sec. 8. REPEALER.
114.5Minnesota Statutes 2006, section 422A.101, subdivision 4, is repealed.

114.6    Sec. 9. EFFECTIVE DATE; LOCAL APPROVAL.
114.7    Sections 1 to 8 are effective the day after the city council of the city of Minneapolis
114.8and its chief clerical officer timely complete their compliance with Minnesota Statutes,
114.9section 645.021, subdivisions 2 and 3.


114.13    Section 1. Minnesota Statutes 2006, section 423B.10, subdivision 1, is amended to read:
114.14    Subdivision 1. Entitlement; benefit amount. (a) The surviving spouse of a
114.15deceased service pensioner, disability pensioner, deferred pensioner, superannuation
114.16pensioner, or active member, who was the legally married spouse of the decedent, residing
114.17with the decedent, and who was married while or before the time the decedent was on
114.18the payroll of the police department, and who, if the deceased member was a service or
114.19deferred pensioner, was legally married to the member for a period of at least one year
114.20before retirement from the police department, is entitled to a surviving spouse benefit. The
114.21surviving spouse benefit is equal to 22.5 units per month until December 31, 2005, and 23
114.22units per month beginning on January 1, 2006, if the person is the surviving spouse of a
114.23deceased active member or disabilitant. The surviving spouse benefit is equal to six eight
114.24units per month, plus an additional one unit for each year of service to the credit of the
114.25decedent in excess of five years, to a maximum of 22.5 units per month until December 31,
114.262005, and 23 units per month beginning on January 1, 2006, if the person is the surviving
114.27spouse of a deceased service pensioner, deferred pensioner, or superannuation pensioner.
114.28The surviving spouse benefit is payable for the life of the surviving spouse.
114.29    (b) A surviving child of a deceased service pensioner, disability pensioner, deferred
114.30pensioner, superannuation pensioner, or active member, who was living while the decedent
114.31was an active member of the police department or was born within nine months after the
114.32decedent terminated active service in the police department, is entitled to a surviving child
114.33benefit. The surviving child benefit is equal to eight units per month if the person is the
114.34surviving child of a deceased active member or disabilitant. The surviving child benefit
114.35is equal to two units per month, plus an additional four-tenths of one unit per month for
114.36each year of service to the credit of the decedent in excess of five years, to a maximum of
115.1eight units, if the person is the surviving child of a deceased service pensioner, deferred
115.2pensioner, or superannuation pensioner. The surviving child benefit is payable until the
115.3person attains age 18, or, if in full-time attendance during the normal school year, in a
115.4school approved by the board of directors, until the person receives a bachelor's degree or
115.5attains the age of 22 years, whichever occurs first. In the event of the death of both parents
115.6leaving a surviving child or children entitled to a surviving child benefit as determined in
115.7this paragraph, the surviving child is, or the surviving children are, entitled to a surviving
115.8child benefit in such sums as determined by the board of directors to be necessary for
115.9the care and education of such surviving child or children, but not to exceed the family
115.10maximum benefit per month, to the children of any one family.
115.11    (c) The surviving spouse and surviving child benefits are subject to a family
115.12maximum benefit. The family maximum benefit is 41 units per month.
115.13    (d) A surviving spouse who is otherwise not qualified may receive a benefit if the
115.14surviving spouse was married to the decedent for a period of five years and was residing
115.15with the decedent at the time of death. The surviving spouse benefit is the same as that
115.16provided in paragraph (a), except that if the surviving spouse is younger than the decedent,
115.17the surviving spouse benefit must be actuarially equivalent to a surviving spouse benefit
115.18that would have been paid to the member's spouse had the member been married to a
115.19person of the same age or a greater age than the member's age before retirement.
115.20    (e) For any surviving spouse who began receiving survivor benefits before January 1,
115.212005, the half-unit increase under paragraph (a) is effective retroactive to January 1, 2005.
115.22EFFECTIVE DATE.This section is effective retroactively from the effective date
115.23of Laws 1997, chapter 233, article 4, section 7, and Laws 2005, First Special Session
115.24chapter 8, article 11, section 12. Benefit amounts paid to surviving spouse members
115.25previously paid that are consistent with this section are hereby ratified and confirmed.

115.26    Sec. 2. Minnesota Statutes 2006, section 423C.06, subdivision 2, is amended to read:
115.27    Subd. 2. Actuarial assets of special fund less than 102 percent. (a) When
115.28the actuarial assets of the special fund in any year are less than 102 percent of its
115.29accrued liabilities according to the most recent annual actuarial valuation of the special
115.30fund prepared in accordance with sections 356.215 and 356.216, investment-related
115.31postretirement adjustments shall be determined and paid pursuant to this subdivision.
115.32Payment of the annual postretirement adjustment may be made only if there is excess
115.33investment income.
115.34    (b) The board shall determine by May 1 of each year whether or not the special
115.35fund has excess investment income. The amount of excess investment income, if any,
116.1must be stated as a dollar amount and reported by the executive secretary to the mayor
116.2and governing body of the city, the state auditor, the commissioner of finance, and the
116.3executive director of the Legislative Commission on Pensions and Retirement. The dollar
116.4amount of excess investment income up to one percent of the assets of the special fund
116.5must be applied for the purpose specified in paragraph (c). Excess investment income
116.6must not be considered as income to or assets of the special fund for actuarial valuations
116.7of the special fund for that year under this section and sections 69.77, 356.215, and
116.8356.216 , except to offset the annual postretirement adjustment. Additional investment
116.9income is any realized or unrealized investment income other than the excess investment
116.10income and must be included in the actuarial valuations performed under this section
116.11and sections 69.77, 356.215, and 356.216.
116.12    (c) The amount determined under paragraph (b) must be applied as follows:
116.13the association shall apply the first one-half of one percent of assets that constitute
116.14excess investment income to the payment of an annual postretirement adjustment to
116.15eligible members and the second one-half of one percent of assets which constitute
116.16excess investment income shall be applied to reduce the state amortization state aid or
116.17supplementary amortization state aid payments otherwise due the association under
116.18section 423A.02 for the current calendar year. The amounts of all payments to eligible
116.19members shall not exceed one-half of one percent of the assets of the fund. The amount
116.20of each eligible member's postretirement adjustment shall be calculated by dividing the
116.21total number of units to which eligible members are entitled into the excess investment
116.22income available for distribution to eligible members, and then multiplying that result by
116.23the number of units to which each eligible member is entitled. If this amount exceeds the
116.24total monthly benefit that the eligible member was entitled to in the prior year under the
116.25terms of this chapter, the association shall pay the eligible member the lesser amount.
116.26Payment of the annual postretirement adjustment must be in a lump-sum amount on June
116.271 following the determination date in any year. In the event an eligible member dies prior
116.28to the payment of the annual postretirement adjustment, the executive secretary shall pay
116.29the eligible member's estate the amount to which the member was entitled.
116.30EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
116.31the city council of the city of Minneapolis and its chief clerical officer timely complete
116.32their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.


116.35    Section 1. Minnesota Statutes 2006, section 424A.10, subdivision 1, is amended to
116.36read:
117.1    Subdivision 1. Definitions. For purposes of this section:
117.2    (1) "qualified recipient" means an individual who receives a lump sum distribution
117.3of pension or retirement benefits from a firefighters' relief association for service that the
117.4individual has performed as a volunteer firefighter;
117.5    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
117.6married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or
117.7minor children of a deceased volunteer firefighter;
117.8    (3) "active volunteer firefighter" means a person who regularly renders fire
117.9suppression service for a municipal fire department or an independent nonprofit firefighting
117.10corporation, who has met the statutory and other requirements for relief association
117.11membership, and who has been a fully qualified member of the relief association for
117.12at least one month; and
117.13    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who
117.14terminated active firefighting service, has sufficient service credit from the applicable
117.15relief association to be entitled to a service pension, but has not applied for or has not
117.16received the service pension.
117.17EFFECTIVE DATE.This section is effective for supplemental benefits paid after
117.18July 1, 2007.

117.19    Sec. 2. Minnesota Statutes 2006, section 424A.10, subdivision 2, is amended to read:
117.20    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a firefighters'
117.21relief association of a lump sum distribution to a qualified recipient, the association must
117.22pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the
117.23contrary, the relief association may must pay the supplemental benefit out of its special
117.24fund. The amount of this benefit equals ten percent of the regular lump sum distribution
117.25that is paid on the basis of the recipient's service as a volunteer firefighter. In no case may
117.26the amount of the supplemental benefit exceed $1,000 $1,695. A supplemental benefit
117.27under this paragraph may not be paid to a survivor of a deceased active or deferred
117.28volunteer firefighter in that capacity.
117.29    (b) Upon the payment by a relief association of a lump sum survivor benefit or
117.30funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased
117.31deferred volunteer firefighter, the association may pay a supplemental survivor benefit
117.32to the survivor of the deceased active or deferred volunteer firefighter from the special
117.33fund of the relief association if its articles of incorporation or bylaws so provide. The
117.34amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral
117.35benefit, but not to exceed $2,000.
118.1    (c) An individual may receive a supplemental benefit under paragraph (a) or under
118.2paragraph (b), but not under both paragraphs with respect to one lump sum volunteer
118.3firefighter benefit.
118.4EFFECTIVE DATE.This section is effective for supplemental benefits paid after
118.5July 1, 2007.

118.6    Sec. 3. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
118.7    Subd. 3. State reimbursement. (a) By February 15 of each year, the treasurer of
118.8the relief association shall apply to the commissioner of revenue for state reimbursement
118.9of the amount of supplemental benefits paid under subdivision 2 during the preceding
118.10calendar year. By March 15, the commissioner shall reimburse the relief association for
118.11the amount of the supplemental benefits paid to qualified recipients and to survivors of
118.12deceased active or deferred volunteer firefighters.
118.13    (b) The commissioner of revenue shall prescribe the form of and supporting
118.14information that must be supplied as part of the application for state reimbursement.
118.15    (c) The reimbursement payment must be deposited in the special fund of the relief
118.16association.
118.17    (d) A sum sufficient to make the payments is appropriated from the general fund
118.18to the commissioner of revenue.
118.19EFFECTIVE DATE.This section is effective retroactively to July 1, 2006.


118.22    Section 1. Minnesota Statutes 2006, section 3A.02, subdivision 5, is amended to read:
118.23    Subd. 5. Optional annuities. (a) The board of directors shall establish an optional
118.24retirement annuity in the form of a joint and survivor annuity and an optional retirement
118.25annuity in the form of a period certain and life thereafter. Except as provided in paragraph
118.26(b), these optional annuity forms must be actuarially equivalent to the normal allowance
118.27computed under this section, plus the actuarial value of any surviving spouse benefit
118.28otherwise potentially payable at the time of retirement under section 3A.04, subdivision 1.
118.29An individual selecting an optional annuity under this subdivision and the person's spouse
118.30waive any rights to surviving spouse benefits under section 3A.04, subdivision 1.
118.31    (b) If a retired legislator selects the joint and survivor annuity option, the retired
118.32legislator must receive a normal single-life allowance if the designated optional annuity
118.33beneficiary dies before the retired legislator and no reduction may be made in the annuity
118.34to provide for restoration of the normal single-life allowance in the event of the death of
118.35the designated optional annuity beneficiary.
119.1    (c) The surviving spouse of a legislator who has attained at least age 55 and who dies
119.2while a member of the legislature may elect an optional joint and survivor annuity under
119.3paragraph (a), in lieu of surviving spouse benefits under section 3A.04, subdivision 1.
119.4    (d) The surviving spouse of a deceased former legislator may elect an optional joint
119.5and survivor annuity under paragraph (a) in lieu of surviving spouse benefits under section
119.63A.04, subdivision 1, on or after the date the former legislator would have reached age 55.
119.7EFFECTIVE DATE.This section is effective the day after final enactment and also
119.8applies to the surviving spouse of a former legislator who died on March 5, 2007.

119.9    Sec. 2. [3A.021] OPTIONAL DIVISION OF RETIREMENT ALLOWANCE.
119.10    Subdivision 1. Election of division. Notwithstanding section 518.58, subdivision 4,
119.11paragraph (a), clause (5), a former legislator or the former spouse of a former legislator, if
119.12a portion of the former legislator's retirement allowance is awarded to the former spouse
119.13under a marriage dissolution property division decree by a court of competent jurisdiction,
119.14may elect to have payment of the portion of the legislator's retirement allowance
119.15designated in the decree as payable to the former spouse beginning as of the first day of
119.16the month next following the date on which the former legislator attains the age of 62,
119.17even if the former legislator has not applied for the receipt of retirement allowance as of
119.18that date. In all other respects, the optional retirement allowance division is governed
119.19by section 518.58, subdivision 4.
119.20    Subd. 2. Calculation of subsequent portion of the retirement allowance.
119.21    Upon the eventual application for a retirement allowance under this chapter by a former
119.22legislator who elected or was affected by the election of a benefit under subdivision 1,
119.23the subsequent retirement allowance must be adjusted to be the actuarial equivalent of
119.24the balance of the present value of the retirement allowance of the former legislator upon
119.25the effective date of the application remaining after a reduction equal to the present value
119.26of the partial benefit previously paid and subsequently payable to the former spouse,
119.27as calculated by the actuary retained under section 356.214 or as calculated under a
119.28procedure specified by the actuary. The retirement allowance present value calculations
119.29must include the effect of section 356.30.
119.30    Subd. 3. No optional annuity form. Section 3A.02, subdivision 5, does not apply
119.31to a partial retirement allowance payable under subdivision 1.
119.32EFFECTIVE DATE.This section is effective the day following final enactment
119.33and applies to any retirement allowance affected by a marriage dissolution decree rendered
119.34after September 2003.

120.1    Sec. 3. Minnesota Statutes 2006, section 43A.346, subdivision 1, is amended to read:
120.2    Subdivision 1. Definition. For purposes of this section, "state employee" means
120.3a person currently occupying a civil service position in the executive branch of state
120.4government, the Minnesota State Retirement System, the Public Employees Retirement
120.5Association, or the Office of the Legislative Auditor, or a person employed by the
120.6Metropolitan Council.
120.7EFFECTIVE DATE.This section is effective the day after final enactment.

120.8    Sec. 4. Minnesota Statutes 2006, section 43A.346, subdivision 2, is amended to read:
120.9    Subd. 2. Eligibility. (a) This section applies to a state or Metropolitan Council
120.10employee who:
120.11    (1) for at least the five years immediately preceding separation under clause (2), has
120.12been regularly scheduled to work 1,044 or more hours per year in a position covered by
120.13a pension plan administered by the Minnesota State Retirement System or the Public
120.14Employees Retirement Association;
120.15    (2) terminates state or Metropolitan Council employment;
120.16    (3) at the time of termination under clause (2), meets the age and service
120.17requirements necessary to receive an unreduced retirement annuity from the plan and
120.18satisfies requirements for the commencement of the retirement annuity or, for an
120.19employee under the unclassified employees retirement plan, meets the age and service
120.20requirements necessary to receive an unreduced retirement annuity from the plan and
120.21satisfies requirements for the commencement of the retirement annuity or elects a
120.22lump-sum payment; and
120.23    (4) agrees to accept a postretirement option position with the same or a different
120.24appointing authority, working a reduced schedule that is both (i) a reduction of at least 25
120.25percent from the employee's number of regularly scheduled work hours; and (ii) 1,044
120.26hours or less in state or Metropolitan Council service.
120.27    (b) For purposes of this section, an unreduced retirement annuity includes a
120.28retirement annuity computed under a provision of law which permits retirement, without
120.29application of an earlier retirement reduction factor, whenever age plus years of allowable
120.30service total at least 90.
120.31EFFECTIVE DATE.This section is effective the day after final enactment.

120.32    Sec. 5. Minnesota Statutes 2006, section 352.01, subdivision 2a, is amended to read:
120.33    Subd. 2a. Included employees. (a) "State employee" includes:
120.34    (1) employees of the Minnesota Historical Society;
120.35    (2) employees of the State Horticultural Society;
121.1    (3) employees of the Disabled American Veterans, Department of Minnesota,
121.2Veterans of Foreign Wars, Department of Minnesota, if employed before July 1, 1963;
121.3    (4) employees of the Minnesota Crop Improvement Association;
121.4    (5) employees of the adjutant general who are paid from federal funds and who are
121.5not covered by any federal civilian employees retirement system;
121.6    (6) employees of the Minnesota State Colleges and Universities employed under the
121.7university or college activities program;
121.8    (7) currently contributing employees covered by the system who are temporarily
121.9employed by the legislature during a legislative session or any currently contributing
121.10employee employed for any special service as defined in subdivision 2b, clause (8);
121.11    (8) employees of the Armory Building Commission;
121.12    (9) employees of the legislature appointed without a limit on the duration of their
121.13employment and persons employed or designated by the legislature or by a legislative
121.14committee or commission or other competent authority to conduct a special inquiry,
121.15investigation, examination, or installation;
121.16    (10) trainees who are employed on a full-time established training program
121.17performing the duties of the classified position for which they will be eligible to receive
121.18immediate appointment at the completion of the training period;
121.19    (11) employees of the Minnesota Safety Council;
121.20    (12) any employees on authorized leave of absence from the Transit Operating
121.21Division of the former Metropolitan Transit Commission who are employed by the
121.22labor organization which is the exclusive bargaining agent representing employees of
121.23the Transit Operating Division;
121.24    (13) employees of the Metropolitan Council, Metropolitan Parks and Open Space
121.25Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control
121.26Commission, or Metropolitan Radio Board unless excluded or covered by another public
121.27pension fund or plan under section 473.415, subdivision 3;
121.28    (14) judges of the Tax Court;
121.29    (15) personnel employed on June 30, 1992, by the University of Minnesota in the
121.30management, operation, or maintenance of its heating plant facilities, whose employment
121.31transfers to an employer assuming operation of the heating plant facilities, so long as the
121.32person is employed at the University of Minnesota heating plant by that employer or by its
121.33successor organization;
121.34    (16) seasonal help in the classified service employed by the Department of Revenue;
121.35and
122.1    (17) persons employed by the Department of Commerce as a peace officer in
122.2the Insurance Fraud Prevention Division under section 45.0135 who have attained the
122.3mandatory retirement age specified in section 43A.34, subdivision 4; and
122.4    (18) employees of the Middle Management Association whose employment began
122.5after July 1, 2007, and to whom section 352.029 does not apply.
122.6    (b) Employees specified in paragraph (a), clause (15), are included employees under
122.7paragraph (a) if employer and employee contributions are made in a timely manner in the
122.8amounts required by section 352.04. Employee contributions must be deducted from
122.9salary. Employer contributions are the sole obligation of the employer assuming operation
122.10of the University of Minnesota heating plant facilities or any successor organizations to
122.11that employer.
122.12EFFECTIVE DATE.This section is effective the day following final enactment.

122.13    Sec. 6. Minnesota Statutes 2006, section 352B.01, subdivision 2, is amended to read:
122.14    Subd. 2. Member. "Member" means:
122.15    (1) a State Patrol member currently employed under section 299D.03 by the state,
122.16who is a peace officer under section 626.84, and whose salary or compensation is paid
122.17out of state funds;
122.18    (2) a conservation officer employed under section 97A.201, currently employed by
122.19the state, whose salary or compensation is paid out of state funds;
122.20    (3) a crime bureau officer who was employed by the crime bureau and was a member
122.21of the Highway Patrolmen's retirement fund on July 1, 1978, whether or not that person
122.22has the power of arrest by warrant after that date, or who is employed as police personnel,
122.23with powers of arrest by warrant under section 299C.04, and who is currently employed
122.24by the state, and whose salary or compensation is paid out of state funds;
122.25    (4) a person who is employed by the state in the Department of Public Safety in a
122.26data processing management position with salary or compensation paid from state funds,
122.27who was a crime bureau officer covered by the State Patrol retirement plan on August
122.2815, 1987, and who was initially hired in the data processing management position within
122.29the department during September 1987, or January 1988, with membership continuing
122.30for the duration of the person's employment in that position, whether or not the person
122.31has the power of arrest by warrant after August 15, 1987;
122.32    (5) a public safety employee who is a peace officer under section 626.84, subdivision
122.331 , paragraph (c), and who is employed by the Division of Alcohol and Gambling
122.34Enforcement under section 299L.01;
123.1    (6) a Fugitive Apprehension Unit officer after October 31, 2000, who is employed by
123.2the Office of Special Investigations of the Department of Corrections and who is a peace
123.3officer under section 626.84; and
123.4    (7) an employee of the Department of Commerce defined as a peace officer in section
123.5626.84, subdivision 1 , paragraph (c), who is employed by the Division of Insurance Fraud
123.6Prevention under section 45.0135 after January 1, 2005, and who has not attained the
123.7mandatory retirement age specified in section 43A.34, subdivision 4.; and
123.8    (8) an employee of the Department of Public Safety, who is a licensed peace officer
123.9under Section 626.84, subdivision 1, paragraph (c), and is employed as the statewide
123.10coordinator of the Gang and Drug Oversight Council.
123.11EFFECTIVE DATE.This section is effective the day following final enactment
123.12and applies retroactive to April 1, 2007.

123.13    Sec. 7. Minnesota Statutes 2006, section 356.87, is amended to read:
123.14356.87 HEALTH INSURANCE WITHHOLDING.
123.15    Subdivision. 1. Public employees insurance program withholding. (a) Upon
123.16authorization of a person entitled to receive a retirement annuity, disability benefit or
123.17survivor benefit, the executive director of a public pension fund enumerated in section
123.18356.20, subdivision 2 , shall withhold health insurance premium amounts from the
123.19retirement annuity, disability benefit or survivor benefit, and shall pay the premium
123.20amounts to the public employees insurance program.
123.21    (b) The public employees insurance program shall reimburse a public pension fund
123.22for the administrative expense of withholding the premium amounts and shall assume
123.23liability for the failure of a public pension fund to properly withhold the premium amounts.
123.24    Subd. 2. Public safety retiree insurance withholding. (a) For purposes of this
123.25subdivision, "governing board" means the governing board or body that has been assigned
123.26the chief policy-making powers and management duties of the applicable pension plan.
123.27    (b) For a pension plan covered under section 356.20, subdivision 2, that provides
123.28monthly annuity payments, the governing board may direct the plan's chief administrative
123.29officer to withhold health, accident, and long-term care insurance premiums from the
123.30retirement annuity or disability benefit and to transmit the amount to an approved
123.31insurance provider specified by the eligible person. A governing board which agrees
123.32to participate may revise or revoke that decision at a later date if the board provides
123.33reasonable notice to the applicable parties.
123.34    (c) An eligible person is a person who:
123.35    (1) is a retiree or disabilitant from a participating plan;
124.1    (2) was a public safety officer as defined in United States Code, title 42, section
124.23796b;
124.3    (3) terminated service as a public safety officer due to disability or attainment
124.4of normal retirement age and commences receipt of an annuity without any period of
124.5deferral; and
124.6    (4) satisfies any other requirements to have all or a portion of the health, accident,
124.7or long-term care insurance premiums excluded from income for taxation purposes, as
124.8specified in section 845 of Public Law 109-28, the Pension Protection Act of 2006.
124.9    (d) An approved insurance provider is:
124.10    (1) any regulated, licensed insurance company;
124.11    (2) a fraternal or any other organization sponsoring a regulated, licensed insurance
124.12program; or
124.13    (3) an employer-sponsored insurance program, whether directly through the
124.14employer or a third-party administrator.
124.15    (e) An eligible person may elect to have the applicable plan administrator withhold
124.16and transmit the insurance amounts described in paragraph (b). The eligible person
124.17must make this election on a form prescribed by the chief administrative officer of the
124.18applicable plan.
124.19    (f) A pension fund and the plan fiduciaries which authorize or administer
124.20withholding of insurance premiums under this subdivision is not liable for failure to
124.21properly withhold or transmit the premium amounts.
124.22EFFECTIVE DATE.This section is effective retroactive to January 1, 2007.

124.23    Sec. 8. Minnesota Statutes 2006, section 626.84, subdivision 1, is amended to read:
124.24    Subdivision 1. Definitions. For purposes of sections 626.84 to 626.863, the
124.25following terms have the meanings given them:
124.26    (a) "Board" means the Board of Peace Officer Standards and Training.
124.27    (b) "Director" means the executive director of the board.
124.28    (c) "Peace officer" means:
124.29    (1) an employee or an elected or appointed official of a political subdivision or
124.30law enforcement agency who is licensed by the board, charged with the prevention and
124.31detection of crime and the enforcement of the general criminal laws of the state and who
124.32has the full power of arrest, and shall also include the Minnesota State Patrol, agents of the
124.33Division of Alcohol and Gambling Enforcement, state conservation officers, Metropolitan
124.34Transit police officers, Department of Corrections' Fugitive Apprehension Unit officers,
125.1and Department of Commerce Insurance Fraud Unit officers, and the statewide coordinator
125.2of the Gang and Drug Oversight Council; and
125.3    (2) a peace officer who is employed by a law enforcement agency of a federally
125.4recognized tribe, as defined in United States Code, title 25, section 450b(e), and who
125.5is licensed by the board.
125.6    (d) "Part-time peace officer" means an individual licensed by the board whose
125.7services are utilized by law enforcement agencies no more than an average of 20 hours per
125.8week, not including time spent on call when no call to active duty is received, calculated
125.9on an annual basis, who has either full powers of arrest or authorization to carry a
125.10firearm while on active duty. The term shall apply even though the individual receives
125.11no compensation for time spent on active duty, and shall apply irrespective of the title
125.12conferred upon the individual by any law enforcement agency.
125.13    (e) "Reserve officer" means an individual whose services are utilized by a law
125.14enforcement agency to provide supplementary assistance at special events, traffic or crowd
125.15control, and administrative or clerical assistance. A reserve officer's duties do not include
125.16enforcement of the general criminal laws of the state, and the officer does not have full
125.17powers of arrest or authorization to carry a firearm on duty.
125.18    (f) "Law enforcement agency" means:
125.19    (1) a unit of state or local government that is authorized by law to grant full powers
125.20of arrest and to charge a person with the duties of preventing and detecting crime and
125.21enforcing the general criminal laws of the state; and
125.22    (2) subject to the limitations in section 626.93, a law enforcement agency of a
125.23federally recognized tribe, as defined in United States Code, title 25, section 450b(e).
125.24    (g) "Professional peace officer education" means a postsecondary degree program,
125.25or a nondegree program for persons who already have a college degree, that is offered by
125.26a college or university in Minnesota, designed for persons seeking licensure as a peace
125.27officer, and approved by the board.
125.28EFFECTIVE DATE.This section is effective the day after final enactment and
125.29applies retroactive to April 1, 2007.

125.30    Sec. 9. Laws 1981, chapter 68, section 42, subdivision 1, as amended by Laws 1985,
125.31chapter 261, section 14, is amended to read:
125.32    Sec. 42. THIEF RIVER FALLS POLICE; SURVIVOR BENEFITS.
125.33    Subdivision 1. Benefits. Notwithstanding Minnesota Statutes, section 423.58, when
125.34a service pensioner, disability pensioner, deferred pensioner, or an active member of the
125.35Thief River Falls police relief association dies, leaving a surviving spouse, one or more
126.1surviving children, or both, the surviving spouse and child or children shall be entitled to a
126.2pension or pensions as follows:
126.3    (1) To the surviving spouse a pension in an amount not to exceed $300 per month
126.4payable for life; provided, however, that if the surviving spouse shall remarry, the pension
126.5shall terminate as of the date of remarriage.
126.6    (2) To the child or children, until the child reaches the age of 18 years, a monthly
126.7benefit in an amount not to exceed $125 per month. Payments for the benefit of any
126.8qualified dependent child under the age of 18 years shall be made to the surviving parent
126.9or if none, to the legal guardian of the child. The maximum monthly benefit for any
126.10one family shall not exceed $750. If the member shall die under circumstances which
126.11entitle his surviving spouse and dependent children to receive benefits under the workers'
126.12compensation law, the amounts so received by them shall not be deducted from the
126.13benefits payable under this section.
126.14    (3) Pensions payable to a surviving spouse pursuant to paragraph (1) shall be
126.15adjusted annually on January 1, 1986, and January 1 of each year thereafter in proportion
126.16to salary increases paid to active patrolmen by the city during the preceding calendar year,
126.17to a maximum of three and one-half percent in any calendar year. In no event shall the
126.18pension of a surviving spouse exceed $600 per month.
126.19    (4) Notwithstanding any provision of paragraph (3) to the contrary, a surviving
126.20spouse benefit under paragraph (1) must be increased on January 1, 2008, by an amount
126.21equal to 3.5 percent of the benefit payable during the preceding month, but not to exceed
126.22$640 per month. The adjustment under this paragraph is in lieu of the adjustment under
126.23paragraph (3).
126.24EFFECTIVE DATE.This section is effective on the day after the governing
126.25body of the city of Thief River Falls and its chief clerical officer timely complete their
126.26compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

126.27    Sec. 10. Laws 2006, chapter 271, article 3, section 43, is amended to read:
126.28    Sec. 43. EARLY [356.351] RETIREMENT INCENTIVE.
126.29    Subdivision 1. Eligibility. (a) An eligible appointing authority in the executive or
126.30legislative branch of state government or the Board of Public Defense or the Minnesota
126.31Historical Society or the Minnesota State Colleges and Universities or any school district
126.32may offer the early retirement incentive in this section to an employee who:
126.33    (1) has at least 15 years of allowable service in one or more of the funds listed in
126.34Minnesota Statutes, section 356.30, subdivision 3, or has at least five 15 years of coverage
126.35by the individual retirement account plan governed by Minnesota Statutes, chapter 354B,
127.1and upon retirement is immediately eligible for a retirement annuity or benefit from one or
127.2more of these funds; and
127.3    (2) terminates state or teaching service after the effective date of this section and
127.4before September 1, 2006 July 15, 2009; and
127.5    (3) is not in receipt of a public retirement plan retirement annuity, retirement
127.6allowance, or service pension during the month preceding the termination of qualified
127.7employment.
127.8    (b) An eligible appointing authority is any Minnesota governmental employing unit
127.9which employs one or more employees with retirement coverage by a retirement plan
127.10listed in Minnesota Statutes, section 356.30, by virtue of that employment.
127.11    (c) An elected official is not eligible to receive an incentive under this section.
127.12    Subd. 2. Incentive. (a) For an employee eligible under subdivision 1, if approved
127.13under paragraph (b), the employer may provide an amount up to $17,000, to an employee
127.14who terminates service, to be used:
127.15    (1) for an employee who terminates state service after the effective date of this
127.16section and on or before July 15, 2006, unless the appointing authority has designated
127.17the use under clause (2) or the use under clause (3) for the initial retirement incentive
127.18applicable to that employing entity under this enactment after the effective date of this
127.19section, for deposit in the employee's account in the health care savings plan established
127.20by Minnesota Statutes, section 352.98; or
127.21    (2) for an employee who terminates state service after July 15, 2006, and before
127.22September 1, 2006:
127.23    (i) notwithstanding Minnesota Statutes, section 352.01, subdivision 11, or 354.05,
127.24subdivision 13 , whichever applies, if the appointing authority has designated the use under
127.25this clause for the initial retirement incentive applicable to that employing entity under
127.26this enactment after the effective date of this section, for purchase of service credit for
127.27unperformed service sufficient to enable the employee to retire under Minnesota Statutes,
127.28section 352.116, subdivision 1, paragraph (b); 353.30; or 354.44, subdivision 6, paragraph
127.29(b), or 354A.31, subdivision 6, paragraph (b), whichever applies; or
127.30    (ii) (3) if the appointing authority has designated the use under this clause for the
127.31initial retirement incentive applicable to the employing entity under this enactment after
127.32the effective date of this section, for purchase of a lifetime annuity or an annuity for a
127.33specific number of years from the state unclassified applicable retirement program plan
127.34to provide additional benefits under Minnesota Statutes, section 352D.06, subdivision
127.351 , as provided in paragraph (d).
128.1    (b) Approval to provide the incentive must be obtained from the commissioner
128.2of finance if the eligible employee is a state employee and must be obtained from the
128.3applicable governing board with respect to any other employing entity. An employee
128.4is eligible for the payment under paragraph (a), clause (2), item (i), if the employee
128.5uses money from a deferred compensation account that, combined with the payment
128.6under paragraph (a), clause (2), item (i), would be sufficient to purchase enough service
128.7credit to qualify for retirement under Minnesota Statutes, section 352.116, subdivision
128.81 , paragraph (b); 353.30, subdivision 1a; or 354.44, subdivision 6, paragraph (b), or
128.9354A.31, subdivision 6, paragraph (b), whichever applies.
128.10    (c) The cost to purchase service credit under this section paragraph (a), clause (2),
128.11must be made in accordance with Minnesota Statutes, section 356.551.
128.12    (d) The annuity purchase under paragraph (a), clause (3), must be made using
128.13annuity factors derived from the applicable factors used by the applicable retirement plan
128.14to transfer amounts to the Minnesota post retirement investment fund and to calculate
128.15optional annuity forms. The purchased annuity must be the actuarial equivalent of the
128.16incentive amount.
128.17    Subd. 3. Designation of positions; employer discretion. (a) Before offering an
128.18incentive under this section, an appointing authority must be experiencing employee
128.19layoffs due to budget shortfalls or a reorganization that would be offset by offering the
128.20incentive. The appointing authority must document that the incentive payment is equal
128.21to or less than the cost of the employee layoff. The appointing authority must designate
128.22the job classifications or positions within the job classifications that qualify for the
128.23incentive. The appointing authority may modify this designation at any time. Designation
128.24of positions eligible for the incentive under this section, participation of individual
128.25employees, and the amount of the payment under this section are at the sole discretion of
128.26the appointing authority. Unilateral implementation of this section by the employer is not
128.27an unfair labor practice under Minnesota Statutes, chapter 179A.
128.28    (b) An employee who is eligible for an incentive under this section, who is offered
128.29an incentive by the appointing authority, and who accepts the incentive offer must do so in
128.30writing. A copy of the acceptance document must be provided by the appointing authority
128.31to the applicable retirement plan within 15 days of its execution.
128.32    Subd. 4. Reemployment prohibition. No appointing authority referenced in
128.33subdivision 1 is permitted to employ or retain as a consultant an individual who received
128.34an early retirement incentive under this section for a period of three years after the receipt
128.35of the incentive. This provision does not prohibit a school district from employing as a
129.1substitute teacher an individual who received an early retirement incentive under this
129.2section.
129.3    Subd. 4. Utilization report. On August 1, 2008, and annually thereafter, the
129.4commissioner of employee relations, with respect to the executive branch of state
129.5government, the commissioner of education, with respect to school districts, and the
129.6chancellor of the Minnesota State Colleges and Universities System, with respect to the
129.7system, shall report to the chair of the House Finance Committee, the chair of the House
129.8Governmental Operations, Reform, Technology and Elections Committee, the chair of
129.9the Senate Finance Committee, the chair of the State and Local Government Operations
129.10and Oversight Committee, and the executive director of the Legislative Commission on
129.11Pensions and Retirement on the utilization of the early retirement incentive. The report
129.12must include the total number of employees who utilized the incentive, the age of each
129.13retiring employee, the length of service of each retiring employee, the incentive amount
129.14paid to each retiring employee, the amount of salary savings through the previous June 30
129.15obtained for each retiring employee, and the amount of any other financial or budgetary
129.16impact related to each retiring employee.
129.17EFFECTIVE DATE.(a) This section is effective the day after final enactment.
129.18    (b) This section expires on July 15, 2009.


129.21    Section 1. PERA-GENERAL; CITY OF ST. PAUL EMPLOYEE SERVICE
129.22CREDIT PURCHASE.
129.23    (a) An eligible person described in paragraph (b) is entitled to purchase allowable
129.24service credit from the general employees retirement plan of the Public Employees
129.25Retirement Association for the period of employment by the city of St. Paul between
129.26November 11, 1988, and September 30, 1989, that qualified as employment by a public
129.27employee under Minnesota Statutes 1988, section 353.01, subdivision 2b, that was not
129.28previously credited by the retirement plan.
129.29    (b) An eligible person is a person who:
129.30    (1) was born on December 29, 1958;
129.31    (2) was first employed by the city of St. Paul as a part-time or seasonal employee
129.32in 1985;
129.33    (3) qualified for Public Employees Retirement Association general plan coverage
129.34in November 1988 but was not reported by the city of St. Paul to the Public Employees
129.35Retirement Association for coverage until October 1989; and
130.1    (4) became a member of the general employees retirement plan of the Public
130.2Employees Retirement Association in October 1989.
130.3    (c) The eligible person described in paragraph (b) is authorized to apply with the
130.4executive director of the Public Employees Retirement Association to make the service
130.5credit purchase under this section. The application must be in writing and must include
130.6all necessary documentation of the applicability of this section and any other relevant
130.7information that the executive director may require.
130.8    (d) Allowable service credit under Minnesota Statutes, section 353.01, subdivision
130.916, must be granted by the general employees retirement plan of the Public Employees
130.10Retirement Association to the account of the eligible person upon the receipt of the prior
130.11service credit purchase payment amount required under Minnesota Statutes, section
130.12356.551.
130.13    (e) Of the prior service credit purchase payment amount under Minnesota Statutes,
130.14section 356.551, the eligible person must pay an amount equal to the employee
130.15contribution rate or rates in effect during the uncredited employment period applied to the
130.16actual salary rates in effect during the period, plus annual compound interest at the rate
130.17of 8.5 percent from the date the member contribution payment should have been made
130.18if made in a timely fashion until the date on which the contribution is actually made. If
130.19the equivalent member contribution payment, plus interest, is made, the city of St. Paul
130.20shall pay the balance of the total prior service credit purchase payment amount under
130.21Minnesota Statutes, section 356.551, within 60 days of notification by the executive
130.22director of the Public Employees Retirement Association that the member contribution
130.23equivalent payment has been received by the association.
130.24    (f) Authority for an eligible person to make a prior service credit purchase under this
130.25section expires June 30, 2009, or upon termination of employment covered by the Public
130.26Employees Retirement Association, whichever is earlier.
130.27    (g) If the city of St. Paul fails to pay its portion of the prior service credit purchase
130.28payment amount under paragraph (e), the executive director of the Public Employees
130.29Retirement Association must notify the commissioners of finance and revenue of that fact
130.30and the commissioners shall order the deduction of the required payment amount from
130.31the next payment of any state aid to the city of St. Paul and the commissioners shall
130.32transmit the applicable amount to the general employees retirement fund of the Public
130.33Employees Retirement Association.
130.34EFFECTIVE DATE.This section is effective the day after final enactment.

131.1    Sec. 2. PERA-POLICE AND FIRE PLAN; EXEMPTING CERTAIN ANOKA
131.2COUNTY FIELD INVESTIGATORS FROM REEMPLOYED ANNUITANT
131.3EARNINGS LIMITATIONS.
131.4    Notwithstanding any provision of Minnesota Statutes, section 353.37, to the
131.5contrary, a person who is receiving a retirement annuity from the Public Employees
131.6Retirement Association police and fire plan and who was employed by Midwest Pathology,
131.7Incorporated, as of December 31, 2006, who became employed by Anoka County on
131.8January 1, 2007, as a field investigator, when the functions of Midwest Pathology,
131.9Incorporated, transferred to the county, is exempt from the limitation on reemployed
131.10annuitant earnings under Minnesota Statutes, section 353.37, for the duration of that
131.11employment as a field investigator.
131.12EFFECTIVE DATE.This section is effective retroactive to January 1, 2007.

131.13    Sec. 3. MSRS-GENERAL AND PERA-GENERAL; ANNUITY BACK
131.14PAYMENTS.
131.15    (a) Notwithstanding any provision of Minnesota Statutes, sections 352.115,
131.16subdivision 8, and 353.29, subdivision 7, to the contrary, an eligible annuitant described in
131.17paragraph (b) is entitled to a back payment of annuities from the general state employees
131.18retirement plan of the Minnesota State Retirement System and from the general employees
131.19retirement plan of the Public Employees Retirement Association as provided in paragraph
131.20(c). The back payments are intended to correct the consequences of any negligence or
131.21error of the retirement plans in failing to promptly implement a combined service annuity.
131.22    (b) An eligible annuitant is a person who:
131.23    (1) was born on April 1, 1947;
131.24    (2) was employed by Clearwater County and was covered by the general employees
131.25retirement plan of the Public Employees Retirement Association in 1968, 1969, and 1970;
131.26    (3) was employed by the Rural Minnesota Concentrated Employment Program
131.27in 1970;
131.28    (4) was employed by the state of Minnesota by the Department of Human Services
131.29or its predecessor from 1970 to 2004; and
131.30    (5) retired from state employment under the rule of 90 on April 20, 2004.
131.31    (c) The back payments are the amount of the annuity of the eligible annuitant from
131.32the general employees retirement plan of the Public Employees Retirement Association
131.33for eight months, representing the period May 1, 2004, to December 31, 2004, and the
131.34amount of the increase in the annuity of the eligible annuitant from the general state
131.35employees retirement plan of the Minnesota State Retirement System on account of
132.1Minnesota Statutes, section 356.30, for 20 months, representing the period May 1, 2004,
132.2to December 31, 2005.
132.3EFFECTIVE DATE.This section is effective the day after final enactment.

132.4    Sec. 4. TEACHERS RETIREMENT ASSOCIATION; SABBATICAL LEAVE
132.5SALARY CREDIT PURCHASE.
132.6    (a) Notwithstanding any provisions to the contrary of Minnesota Statutes, chapter
132.7354 or 354A, an eligible person described in paragraph (b) is entitled to purchase credit
132.8for the salary amount specified in paragraph (c) by making the payment required by
132.9paragraph (d).
132.10    (b) An eligible person is a person who:
132.11    (1) was born on August 2, 1948;
132.12    (2) has 2.95 years of service credit from the Teachers Retirement Association for
132.13teaching service rendered in the early 1970s;
132.14    (3) has 26 years of service credit from the former Minneapolis Teachers Retirement
132.15Fund Association transferred to the Teachers Retirement Association under Laws 2006,
132.16chapter 277, article 3, sections 5 and 9, subdivision 3;
132.17    (4) took a sabbatical leave from Special School District No. 1, Minneapolis, for the
132.182004-2005 school year;
132.19    (5) obtained full salary credit from the former Minneapolis Teachers Retirement
132.20Fund Association for the 2004-2005 school year under the applicable law and benefit
132.21plan provisions; and
132.22    (6) has uncredited full-time equivalent salary from the 2005-2006 school year based
132.23on a reduced salary figure related to the sabbatical leave arrangement.
132.24    (c) The salary amount is an amount equal to the difference between the salary credit
132.25the eligible person received from the former Minneapolis Teachers Retirement Fund
132.26Association for the 2005-2006 school year and the full-time equivalent salary of the
132.27eligible person for the 2005-2006 school year.
132.28    (d) The required payment amount is an amount equal to 13.64 percent of the salary
132.29amount determined under paragraph (c), plus interest at an 8.5 percent compound rate
132.30from the date on which the contribution amounts would have been made if made in a
132.31timely fashion and the date on which the amount is actually paid. The amount is payable
132.32only in a lump sum.
132.33    (e) The eligible person shall provide any relevant documentation related to the
132.34eligibility to make this purchase that is required by the executive director of the Teachers
132.35Retirement Association.
133.1    (f) Authority for an eligible person to make the purchase under this section expires
133.2June 30, 2008.
133.3EFFECTIVE DATE.This section is effective the day following final enactment.

133.4    Sec. 5. COMMUNITY EDUCATION TEACHER; PRIOR SERVICE
133.5PURCHASE.
133.6    (a) An eligible person described in paragraph (b) is entitled to purchase prior
133.7uncredited service rendered as a community education teacher for Independent School
133.8District No. 535, Rochester, from the general employees retirement plan of the Public
133.9Employees Retirement Association.
133.10    (b) An eligible person is a person who:
133.11    (1) was born on March 4, 1939;
133.12    (2) began teaching Independent School District No. 535, Rochester, in 1962 and
133.13retired June 1997;
133.14    (3) was a contributing member of the Teachers Retirement Association until
133.15retirement;
133.16    (4) subsequent to retirement began teaching for community education; and
133.17    (5) because of an error, no deductions were taken from the person's pay and no
133.18contributions were made on the person's behalf by the school district to the Public
133.19Employees Retirement Association for the community education service.
133.20    (c) The purchase payment amount for the uncredited community education service
133.21must be determined under Minnesota Statutes, section 356.551. Notwithstanding
133.22Minnesota Statutes, section 356.551, subdivision 2, paragraphs (d) and (e), the purchase
133.23payment amount must be allocated on the basis of one-third of the total by the eligible
133.24person and of the balance of the total by Independent School District No. 535, Rochester.
133.25If the eligible person pays the person's required portion, Independent School District
133.26No. 535, Rochester, shall make its payment within 30 days of notification by the Public
133.27Employees Retirement Association of its payment obligation. If Independent School
133.28District No. 535, Rochester, does not pay the balance within 30 days of notification by the
133.29executive director of the Public Employees Retirement Association of the payment of the
133.30member contribution payment by the eligible person under paragraph (a), the executive
133.31director shall notify the commissioner of finance of that fact and the commissioner shall
133.32deduct from any state aid payable to Independent School District No. 535, Rochester, that
133.33amount, plus interest on that amount of 1.5 percent per month for each month or portion of
133.34a month that has elapsed from the effective date of this section.
134.1    (d) This authority expires on May 31, 2009, or on the first day of the month next
134.2following the conclusion of the eligible member's elected public service, whichever
134.3occurs earlier.
134.4EFFECTIVE DATE.This section is effective the day after final enactment.

134.5    Sec. 6. PERA-GENERAL; LATE DISABILITY BENEFIT APPLICATION
134.6AUTHORIZED.
134.7    (a) Notwithstanding any provision of Minnesota Statutes, section 353.33, subdivision
134.82, to the contrary, a person described in paragraph (b) is authorized to apply for a disability
134.9benefit from the general employees retirement plan of the Public Employees Retirement
134.10Association under Minnesota Statutes, section 353.33.
134.11    (b) An eligible person is a person who:
134.12    (1) was born on February 1, 1956;
134.13    (2) became a Public Employees Retirement Association general plan member on
134.14December 18, 1994, until January 31, 1996, while employed by the city of Benson;
134.15    (3) was employed by Independent School District No. 777, Benson, with Public
134.16Employees Retirement Association general plan coverage, from October 1, 1996, until
134.17July 31, 2003;
134.18    (4) is disabled within the meaning of Minnesota Statutes, section 353.01, subdivision
134.1919; and
134.20    (5) failed to apply for disability benefits under Minnesota Statutes, section 353.33,
134.21within the three-year time period permitted in that statute following termination of covered
134.22employment.
134.23    (c) The eligible person under paragraph (b) must provide, in conjunction with the
134.24disability application, any relevant evidence that the executive director of the Public
134.25Employees Retirement Association requires about the existence of a total and permanent
134.26disability as defined in Minnesota Statutes, section 353.01, subdivision 19, and about the
134.27date on which the disability occurred and its relationship to the termination of active
134.28service in July 2003.
134.29    (d) If the eligible person files a disability benefit application and if the eligible
134.30person provides sufficient evidence of disability and the occurrence of the disability under
134.31paragraph (c), to qualify for a disability benefit under Minnesota Statutes, section 353.33,
134.32the disability benefit becomes payable on the first day of the first month next following the
134.33approval of the application. The disability benefit must be calculated under the laws in
134.34effect at the time the eligible person terminated active service in July 2003. The disability
135.1benefit must include any applicable deferred annuities augmentation under Minnesota
135.2Statutes, section 353.71, subdivision 2.
135.3    (e) Nothing in this section may be deemed to exempt the eligible person from the
135.4partial reemployment of a disabilitant provision under Minnesota Statutes, section 353.33,
135.5subdivision 7, or from the trial work period provision under Minnesota Statutes, section
135.6353.33, subdivision 7a.
135.7EFFECTIVE DATE.(a) This section is effective the day following final enactment.
135.8    (b) This section expires, if not utilized, on December 31, 2007."
135.9Delete the title and insert:
135.11relating to retirement; various retirement plans; authorizing an optional
135.12annuity election for the surviving spouse of a deceased former legislator;
135.13permitting the optional early division of legislators retirement plan retirement
135.14allowances upon a marriage dissolution; expanding the membership of the
135.15general state employees retirement plan and the State Patrol retirement plan;
135.16permitting withholding of insurance premiums from public safety employee
135.17annuities; providing special coverage to privatized employees of Lakefield
135.18Nursing Home, Lakeview Nursing Home, Oakland Park Nursing Home,
135.19and Hutchinson Area Health Care; permitting various prior service credit
135.20purchases; exempting certain Anoka County employees from reemployed
135.21annuitant earnings limitations, permitting certain combined service annuity
135.22back payments; permitting a delayed disability benefit application; making
135.23various administrative changes in various statewide retirement plans; modifying
135.24disability determination procedures and disability benefits in various plans
135.25administered by the Public Employees Retirement Association; authorizing
135.26investment in the State Board of Investment by the Minneapolis Employees
135.27Retirement Fund; relaxing certain Minneapolis Employees Retirement Fund
135.28liquidity transfer requirements; expanding the coverage group of the state
135.29employees correctional retirement plan to include various Department of
135.30Corrections and Department of Human Services employees; modifying various
135.31aspects of the volunteer fire supplemental benefit coverage; correcting various
135.322006 drafting errors; replacing the investment-related postretirement adjustment
135.33mechanism for the St. Paul Teachers Retirement Fund Association with a cost
135.34of living adjustment mechanism; extending the St. Paul Teachers Retirement
135.35Fund Association amortization target date; modifying certain Minneapolis
135.36Police Relief Association surviving spouse benefit amounts and validating prior
135.37payments; increasing the amount available for distribution by the Minneapolis
135.38Firefighters Relief Association as a postretirement adjustment; including the
135.39Public Employees Retirement Association staff in the state's postretirement
135.40option; extending the 2006 special retirement incentive to 2009 and making
135.41certain modifications; authorizing an additional postretirement adjustment for
135.42surviving spouses receiving benefits from the Thief River Falls Police Trust
135.43Fund;amending Minnesota Statutes 2006, sections 3A.02, subdivisions 1, 5;
135.443A.05; 13.632, subdivision 1; 43A.346, subdivisions 1, 2; 126C.41, subdivision
135.454; 352.01, subdivisions 2a, 2b, 11; 352.12, subdivision 2a; 352.27; 352.91,
135.46subdivisions 3d, 3e, 3f, 4b; 352.951; 352.98, by adding a subdivision; 352B.01,
135.47subdivision 2; 352D.02, subdivisions 1, 3; 352D.06, subdivision 3; 353.01,
135.48subdivisions 2a, 2b, 6, 16, 28, 37, by adding subdivisions; 353.03, subdivisions
135.493, 3a, 4; 353.27, by adding a subdivision; 353.28, subdivision 6; 353.29,
135.50subdivision 3; 353.30, subdivisions 1a, 1b, 1c; 353.32, subdivisions 1a, 1b;
135.51353.33, subdivisions 1, 2, 4, 6, 7a; 353.34, subdivision 3; 353.651, subdivision 4;
136.1353.656, subdivisions 1a, 3, 4, 5a, 6a, 8, 10, by adding subdivisions; 353.657,
136.2subdivisions 1, 2, 2a, 3; 353B.08, subdivision 11; 353E.06, subdivisions 1, 2,
136.34, 8; 353F.02, subdivision 4; 353F.04, subdivision 1; 354.05, subdivision 13;
136.4354.093; 354.094; 354.095; 354.096, subdivision 2; 354.35; 354.44, subdivision
136.56; 354.45, subdivision 1a; 354.48, subdivision 3; 354A.12, subdivisions 3b, 3c,
136.63d; 354A.29, subdivisions 3, 4; 354B.21, subdivision 3; 355.01, subdivision 3h;
136.7356.195, subdivision 1; 356.215, subdivision 11; 356.405; 356.46, subdivision 3;
136.8356.87; 356A.06, subdivision 6; 422A.01, subdivision 13a; 422A.05, subdivision
136.92c; 422A.06, subdivisions 3, 5, 7, 8; 422A.101, subdivision 3; 423A.02,
136.10subdivisions 3, 5; 423B.10, subdivision 1; 423C.06, subdivision 2; 424A.10,
136.11subdivisions 1, 2, 3; 490.121, subdivisions 15a, 21f; 626.84, subdivision 1; Laws
136.121981, chapter 68, section 42, subdivision 1, as amended; Laws 2006, chapter
136.13271, article 2, sections 12, subdivision 1; 13, subdivision 3; article 3, section 43;
136.14article 14, section 2, subdivision 3; proposing coding for new law in Minnesota
136.15Statutes, chapters 3A; 352; 353; 353E; 354; 356; repealing Minnesota Statutes
136.162006, sections 352.031; 353.30, subdivision 1; 353.33, subdivisions 6a, 6b,
136.178; 353.34, subdivision 7; 353.656, subdivisions 5, 9, 11, 12; 353.69; 354.071;
136.18354.49, subdivision 5; 354A.12, subdivision 3d; 354A.29, subdivision 6; 356.90;
136.19422A.101, subdivision 4."