1.1    .................... moves to amend H. F. No. 953, the delete everything amendment,
1.2as follows:
1.3Page 68, after line 2, insert:

1.4    "Section 100. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
1.5    Subdivision 1. Authorization; establishment. A political subdivision or other
1.6public entity that creates or has created an actuarial liability to pay postemployment
1.7benefits to employees or officers after their termination of service may establish a trust to
1.8pay those benefits. For purposes of this section, the term "postemployment benefits" means
1.9benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting
1.10Standards Board and the term "trust" means a trust, a trust account, or a custodial account
1.11or contract authorized under section 401(f) of the Internal Revenue Code.
1.12    Subd. 2. Purpose of trust. The trust established under this section may only be
1.13used to pay postemployment benefits and may be either revocable or irrevocable.
1.14    Subd. 3. Trust administrator. The trust administrator of a trust established under
1.15this section shall be either:
1.16    (1) the Public Employees Retirement Association;
1.17    (2) a bank or banking association incorporated under the laws of the United States or
1.18of any state and authorized by the laws under which it is organized to exercise corporate
1.19trust powers; or
1.20    (3) an insurance company or agency qualified to do business in Minnesota which has
1.21at least five years' experience in investment products and services for group retirement
1.22benefits and which has a specialized department dedicated to services for retirement
1.23investment products.
1.24    A political subdivision or public entity may, in its discretion and in compliance
1.25with any applicable trust document, change trust administrators and transfer trust assets
1.26accordingly.
2.1    Subd. 4. Account maintenance. A political subdivision or other public entity may
2.2establish a trust account to be held under the supervision of the trust administrator for the
2.3purposes of this section. A trust administrator shall establish a separate account for each
2.4participating political subdivision or public entity. The trust administrator may charge
2.5participating political subdivisions and public entities fees for reasonable administrative
2.6costs. The amount of any fees charged by the Public Employees Retirement Association
2.7is appropriated to the association from the account. A trust administrator may establish
2.8other reasonable terms and conditions for creation and maintenance of these accounts.
2.9The trust administrator must report electronically to the state auditor the portfolio and
2.10performance information specified in section 356.219, subdivision 3, in the manner
2.11prescribed by the state auditor.
2.12    Subd. 5. Investment. (a) The assets of a trust or trust account shall be invested and
2.13held as stipulated in paragraphs (b) to (e).
2.14    (b) The Public Employees Retirement Association must certify all money in the trust
2.15accounts for which it is trust administrator to the State Board of Investment for investment
2.16under section 11A.14, subject to the policies and procedures established by the State
2.17Board of Investment. Investment earnings must be credited to the trust account of the
2.18individual political subdivision or public entity.
2.19    (c) A trust administrator, other than the Public Employees Retirement Association,
2.20must ensure that all money in the trust accounts for which it is trust administrator is
2.21invested by a registered investment adviser, a bank investment trust department or an
2.22insurance company or agency retirement investment department. Investment earnings
2.23must be credited to the trust account of the individual political subdivision or public entity.
2.24    (d) For trust assets invested by the State Board of Investment, the investment
2.25restrictions shall be the same as those generally applicable to the State Board of
2.26Investment. For trust assets invested by a trust administrator other than the Public
2.27Employees Retirement Association, the assets may only be invested in investments
2.28authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified
2.29in the applicable trust document.
2.30    (e) A political subdivision or public entity may provide investment direction to a
2.31trust administrator in compliance with any applicable trust document.
2.32    Subd. 6. Limit on deposit. A political subdivision or public entity may not
2.33deposit money in a trust or trust account created pursuant to this section if the total
2.34amount invested by that political subdivision or public entity would exceed the political
2.35subdivision's or public entity's actuarially determined liabilities for postemployment
3.1benefits due to officers and employees, as determined under the applicable standards of the
3.2Governmental Accounting Standards Board.
3.3    Subd. 7. Withdrawal of funds and termination of account. (a) For a revocable
3.4account, a political subdivision or public entity may withdraw some or all of its money
3.5or terminate the trust account for any reason. Money and accrued investment earnings
3.6withdrawn from a revocable account must be deposited in a fund separate and distinct from
3.7any other funds of the political subdivision or public entity. This money, with accrued
3.8investment earnings, must be used to pay legally enforceable postemployment benefits
3.9to former officers and employees, unless (i) there has been a change in state or federal
3.10law affecting that political subdivision's or public entity's liabilities for postemployment
3.11benefits, or (ii) there has been a change in the demographic composition of that political
3.12subdivision's or public entity's employees eligible for postemployment benefits, or (iii)
3.13there has been a change in the provisions or terms of the postemployment benefits in that
3.14political subdivision or public entity including, but not limited to, the portion of the costs
3.15eligible employees must pay to receive the benefits, or (iv) other factors exist that have
3.16a material effect on that political subdivision's or public entity's actuarially determined
3.17liabilities for postemployment benefits, in which event any amount in excess of 100
3.18percent of that political subdivision's or public entity's actuarially determined liabilities for
3.19postemployment benefits, as determined under standards of the Government Accounting
3.20Standards Board, may be withdrawn and used for any purpose.
3.21    (b) For an irrevocable account, a political subdivision or public entity may withdraw
3.22money only:
3.23    (1) as needed to pay postemployment benefits owed to former officers and employees
3.24of the political subdivision or public entity; or
3.25    (2) when all postemployment benefit liability owed to former officers or employees
3.26of the political subdivision or public entity has been satisfied or otherwise defeased.
3.27    (c) A political subdivision or public entity requesting withdrawal of money from
3.28an account created under this section must do so at a time and in the manner required by
3.29the executive director of the Public Employees Retirement Association or specified in an
3.30applicable trust document. The political subdivision or public entity that created the trust
3.31must ensure that withdrawals comply with the requirements of this section.
3.32    (d) The legislature may not divert funds in these trusts or trust accounts for use
3.33for another purpose.
3.34    Subd. 8. Status of irrevocable trust. (a) All money in an irrevocable trust or
3.35trust account created in this section is held in trust for the exclusive benefit of former
3.36officers and employees of the participating political subdivision or public entity, and are
4.1not subject to claims by creditors of the state, the participating political subdivision or
4.2public entity, the current or former officers and employees of the political subdivision
4.3or public entity, or the trust administrator.
4.4    (b) An irrevocable trust fund or trust account created in this section shall be deemed
4.5an arrangement equivalent to a trust for all legal purposes.
4.6EFFECTIVE DATE.This section is effective the day following final enactment,
4.7and is applicable immediately to all political subdivisions or public entities subject to
4.8Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those
4.9political subdivisions or public entities whose trusts or trust accounts are validated
4.10by section .., and to those political subdivisions or public entities that have begun
4.11consideration of measures to implement Statement No. 45 in 2007. This section is
4.12applicable on July 1 ,2008 for all other political subdivisions or public entities."
4.13Page 71, after line 16, insert:

4.14    "Sec. 107. VALIDATION.
4.15    Any trust or trust account or other custodial account or contract authorized under
4.16section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay
4.17postemployment benefits to employees or officers after termination of service, is hereby
4.18validated, may continue in full force and effect, and shall have continuing authority
4.19to accept new funds; however, this section does not validate or correct defects in any
4.20previously created trust document. Any funds held by a validated trust or account
4.21under this section may be invested as provided in Minnesota Statutes section 471.6175,
4.22subdivision 5. A validated trust or account shall have until January 1, 2008, to bring its
4.23trust documents and procedures into compliance with section 471.6175.
4.24EFFECTIVE DATE.This section is effective the day following final enactment."