Bill Summary – FastDemocracy

0372.01000
     Sixty-eighth
     Legislative Assembly                    HOUSE BILL NO. 1486
     of North Dakota
     Introduced by
       Representatives Kasper, Dockter, Kempenich, Koppelman, D. Ruby, M. Ruby
       Senators Clemens, Larsen, Paulson
  A BILL for an Act to create and enact sections 54-52-02.15, 54-52.2-09, 54-52.6-02.1,
  54-52.6-05.1, 54-52.6-09.5, 54-52.6-09.6, and 54-52.6-22 of the North Dakota Century Code,
  relating to the closure of the public employees retirement system main plan, the deferred
  compensation program, and expansion of the defined contribution retirement plan; to amend
  and reenact section 6-09.4-10.1, paragraph 1 of subdivision a of subsection 1 of section
  15-39.1-10.3, sections 21-10-13, 54-52-01, 54-52-02.5, 54-52-02.9, 54-52-02.11, and
  54-52-02.12, subsection 2 of section 54-52-05, sections 54-52-06 and 54-52-14.3, subdivision b
  of subsection 1 of section 54-52-17.2, and sections 54-52.6-01, 54-52.6-02, 54-52.6-03,
  54-52.6-05, 54-52.6-08, 54-52.6-09, 54-52.6-10, 54-52.6-13, 54-52.6-15, and 54-52.6-19 of the
 North Dakota Century Code, relating to a transfer from the legacy earnings fund to the public
 employees retirement system main plan and the public employees retirement system defined
 benefit and defined contribution retirement plans; to repeal section 54-52-06.5 of the North
 Dakota Century Code, relating to public employees retirement system retirement plan
 contribution rates upon reaching full funding; to provide an appropriation; to provide for a
 transfer; to provide for application; and to provide an effective date.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. AMENDMENT. Section 6-09.4-10.1 of the North Dakota Century Code is
 amended and reenacted as follows:
     6-09.4-10.1. Legacy sinking and interest fund - Debt service requirements - Public
 finance authority.
     There is created in the state treasury the legacy sinking and interest fund. The fund consists
 of all moneys deposited in the fund under section 21-10-13. Moneys in the fund may be spent
 by the public finance authority pursuant to legislative appropriations to meet the debt service
 requirements for evidences of indebtedness issued by the authority for transfer to the Bank of
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  North Dakota for allocations to infrastructure projects and programs. Any moneys in the fund in
  excess of the amounts appropriated from the fund to meet the debt service requirements for a
  biennium must be transferred by the state treasurer to the public employees retirement system
  main system plan under chapter 54-52, but only if the public employees retirement system main
  system plan's actuarial funded ratio as reported for the most recently completed even-
  numbered fiscal year is less than ninety percent. If the public employees retirement system
  main system plan's actuarial funded ratio is ninety percent or more and then subsequently
  decreases below ninety percent, the state treasurer may not resume the transfers under this
  subdivision unless the main system plan's actuarial funded ratio is less than seventy percent.
     SECTION 2. AMENDMENT. Paragraph 1 of subdivision a of subsection 1 of section
 15-39.1-10.3 of the North Dakota Century Code is amended and reenacted as follows:
               (1)   The public employees retirement system, except an "eligible employee" as
                     that term is defined under section 54-52-02.15.
     SECTION 3. AMENDMENT. Section 21-10-13 of the North Dakota Century Code is
 amended and reenacted as follows:
     21-10-13. Legacy earnings fund - State treasurer - Transfers.
     1.   There is created in the state treasury the legacy earnings fund. The fund consists of all
          moneys transferred to the fund under subsection 2 and all interest and earnings upon
          moneys in the fund.
     2.   Any legacy fund earnings transferred to the general fund at the end of each biennium
          in accordance with section 26 of article X of the Constitution of North Dakota must be
          immediately transferred by the state treasurer to the legacy earnings fund.
     3.   For each biennium subsequent to the biennium in which the legacy fund earnings are
          transferred under subsection 2, the amount available for appropriation from the legacy
          earnings fund is seven percent of the five-year average value of the legacy fund
          assets as reported by the state investment board. The average value of the legacy
          fund assets must be calculated using the value of the assets at the end of each fiscal
          year for the five-year period ending with the most recently completed even-numbered
          fiscal year.
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      4.    On July first of each odd-numbered year, from the amount available for appropriation
            or transfer from the legacy earnings fund for the biennium, the state treasurer shall
            transfer funding in the following order:
            a.    The lesser of the first one hundred fifty million dollars or an amount equal to any
                  legislative appropriations to meet the debt service requirements for a biennium
                  for evidences of indebtedness issued by the public finance authority for transfer
                  to the Bank of North Dakota for allocations to infrastructure projects and
                  programs to the legacy sinking and interest fund under section 6-09.4-10.1.
            b.    The next seventy million dollars to the public employees retirement system for
                 administrative expenses for chapters 54-52 and 54-52.6 and for the unfunded
                 liability of the main system plan under chapter 54-52, but only if the public
                 employees retirement system main system plan's actuarial funded ratio as
                 reported for the most recently completed even-numbered fiscal year is less than
                 ninety percent. If the public employees retirement system main system plan's
                 actuarial funded ratio is ninety percent or more and subsequently decreases
                 below ninety percent, the state treasurer may not resume the transfers under this
                 subdivision unless the main system plan's actuarial funded ratio is less than
                 seventy percent as reported for the most recently completed even-numbered
                 fiscal year.
            c.   The next sixty million dollars to the highway tax distribution fund for allocations
                 under section 54-27-19.
          c.d.   Any remaining funds for other purposes as designated by the legislative
                 assembly, including:
                 (1)   Up to fifty million dollars for tax relief pursuant to appropriations or transfers
                       authorized by the legislative assembly;
                 (2)   Up to thirty million dollars to the clean sustainable energy fund pursuant to
                       appropriations or transfers authorized by the legislative assembly; and
                 (3)   Up to thirty million dollars for university research programs, the innovation
                       loan fund to support technology advancement, and workforce enrichment
                       initiatives pursuant to appropriations or transfers authorized by the
                       legislative assembly.
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      5.   If the amounts transferred under subsection 2 exceed the amount available for
           appropriation under subsection 3, an amount equal to any appropriations from the
           legacy sinking and interest fund for bond payments under section 6-09.4-10.1 must be
           retained in the legacy earnings fund through June 30, 2025, after which an amount
           equal to twice any appropriations from the legacy sinking and interest fund under
           section 6-09.4-10.1 for bond payments, but not more than one hundred fifty million
           dollars, must be retained in the legacy earnings fund. After deducting any amounts to
           be retained in the legacy earnings fund, the state treasurer shall transfer, within thirty
           days, any remaining amounts under this subsection in the following order:
          a.   The first one hundred million dollars to the legacy fund to become part of the
               principal.
          b.   Any remaining amount to the strategic investment and improvements fund to be
               used in accordance with the provisions of section 15-08.1-08.
    SECTION 4. AMENDMENT. Section 54-52-01 of the North Dakota Century Code is
 amended and reenacted as follows:
    54-52-01. Definition of terms.
    As used in this chapter, unless the context otherwise requires:
     1.   "Account balance" means the total contributions made by the employee, vested
          employer contributions under section 54-52-11.1, the vested portion of the vesting
          fund as of June 30, 1977, and interest credited thereon at the rate established by the
          board.
     2.   "Beneficiary" means any person in receipt of a benefit provided by this plan or any
          person designated by a participating member to receive benefits.
     3.   "Correctional officer" means a participating member who is employed as a correctional
          officer by a political subdivision.
     4.   "Deferred member" means a participating member who is not actively participating in
          the main plan under this chapter and who has an account intact in the main plan under
          this chapter.
     5.   "Eligible employee", except as otherwise provided under section 54-52-02.15, means
          alla permanent employeesemployee who meetmeets all of the eligibility requirements
          set by this chapter and who areis eighteen years or more of age, and. The term
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           includes appointive and elective officials under sections 54-52-02.5, 54-52-02.11, and
           54-52-02.12, and nonteaching employees of the superintendent of public instruction,
           including the superintendent of public instruction, who elect to transfer from the
           teachers' fund for retirement to the public employees retirement system under section
           54-52-02.13, and employees of the state board for career and technical education who
           elect to transfer from the teachers' fund for retirement to the public employees
           retirement system under section 54-52-02.14. Eligible employeeThe term does not
           include nonclassified state employees who electelected under section 54-52.6-02 to
           become members of the retirement plan established under chapter 54-52.6 but. The
          term does include employees of the judicial branch and employees of the board of
          higher education and state institutions under the jurisdiction of the board of higher
          education.
   5.6.   "Employee" means any individual employed by a governmental unit, whose
          compensation is paid out of the governmental unit's funds, or funds controlled or
          administered by a governmental unit, or paid by the federal government through any of
          its executive or administrative officials; licensed employees of a school district means
          those employees eligible to participate in the teachers' fund for retirement who, except
          under subsection 2 of section 54-52-17.2, are not eligible employees under this
          chapter.
   6.7.   "Employer" means a governmental unit.
   7.8.   "Firefighter" means a participating member who is employed as a firefighter by a
          political subdivision and, notwithstanding subsection 13, for an individual employed
          after July 31, 2017, is employed at least thirty-two hours per week and at least twenty
          weeks each year of employment. A firefighter who is a participating member of the law
          enforcement retirement plan created by this chapter who begins employment after
          July 31, 2017, is ineligible to participate concurrently in any other retirement plan
          administered by the public employees retirement system. The term does not include a
          firefighter employee of the North Dakota national guard.
   8.9.   "Funding agent" or "agents" means an investment firm, trust bank, or other financial
          institution which the retirement board may select to hold and invest the employers' and
          members' contributions.
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   9.10.   "Governmental unit" means the state of North Dakota, except the highway patrol for
           members of the retirement plan created under chapter 39-03.1, or a participating
           political subdivision thereofof the state.
  10.11.   "National guard security officer or firefighter" means a participating member who is:
           a.   A security police employee of the North Dakota national guard; or
           b.   A firefighter employee of the North Dakota national guard.
  11.12.   "Participating member" means an eligible employee who through payment into the
           plan has established a claim against the plan.
  12.13.   "Peace officer" means a participating member who is a peace officer as defined in
          section 12-63-01 and is employed as a peace officer by the bureau of criminal
          investigation or by a political subdivision and, notwithstanding subsection 13, for
          persons employed after August 1, 2005, is employed thirty-two hours or more per
          week and at least twenty weeks each year of employment. A peace officer who is a
          participating member of the law enforcement retirement plan created by this chapter
          who begins employment after August 1, 2005, is ineligible to participate concurrently in
          any other retirement plan administered by the public employees retirement system.
 13.14.   "Permanent employee" means a governmental unitan employee whose services are
          not limited in duration and who is filling an approved and regularly funded position in
          an eligible governmental unit, and is employed twenty hours or more per week and at
          least twenty weeks each year of employment.
 14.15.   "Prior service" means service or employment before July 1, 1966.
 15.16.   "Prior service credit" means such credit toward a retirement benefit as the retirement
          board may determine under the provisions of this chapter.
 16.17.   "Public employees retirement system" means the retirement plan and program
          established by this chapter.
 17.18.   "Retirement" means the acceptance of a retirement allowance under this chapter upon
          either termination of employment or termination of participation in the retirement plan.
 18.19.   "Retirement board" or "board" means the governing authority created under section
          54-52-03.
 19.20.   "Seasonal employee" means a participating member who does not work twelve
          months a year.
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  20.21.   "Service" means employment on or after July 1, 1966.
  21.22.   "Service benefit" means the credit toward retirement benefits as determined by the
           retirement board under the provisions of this chapter.
  22.23.   "Temporary employee" means a governmental unitan employee who is not eligible to
           participate as a permanent employee, who is at least eighteen years old and not
           actively contributing to another employer-sponsored pension fund, and, if employed by
           a school district, occupies a noncertified teacher's position.
  23.24.   "Wages" and "salaries" means the member's earnings in eligible employment under
           this chapter reported as salary on the member's federal income tax withholding
          statements plus any salary reduction or salary deferral amounts under 26 U.S.C. 125,
          401(k), 403(b), 414(h), or 457. "Salary" does not include fringe benefits such as
          payments for unused sick leave, personal leave, vacation leave paid in a lump sum,
          overtime, housing allowances, transportation expenses, early retirement incentive pay,
          severance pay, medical insurance, workforce safety and insurance benefits, disability
          insurance premiums or benefits, or salary received by a member in lieu of previously
          employer-provided fringe benefits under an agreement between the member and
          participating employer. Bonuses may be considered as salary under this section if
          reported and annualized pursuant to rules adopted by the board.
    SECTION 5. AMENDMENT. Section 54-52-02.5 of the North Dakota Century Code is
 amended and reenacted as follows:
    54-52-02.5. Newly elected and appointed state officials.
     1.   After December 31, 1999, a personbut before January 1, 2025, an individual elected
          or appointed to a state office for the first time must, from and after the date that
          personindividual qualifies and takes office, be a participating member of the public
          employees retire