House Bill No. 173
Introduced By squires
By Request of the Public Employees' Retirement Board
A Bill for an Act entitled: "An Act providing actuarial funding mechanisms for minimum benefit adjustments under the municipal police officers' and the firefighters' unified retirement systems; eliminating direct reimbursement of supplemental benefit payments; increasing contributions; amending sections 17-7-502, 19-9-702, 19-9-1007, 19-13-604, 19-13-1007, and 19-18-606, MCA; repealing sections 19-13-615, 19-13-1006, and 19-13-1009, MCA; and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 17-7-502, MCA, is amended to read:
"17-7-502. Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.
(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:
(a) The law containing the statutory authority must be listed in subsection (3).
(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.
(3) The following laws are the only laws containing statutory appropriations: 2-9-202; 2-17-105; 2-18-812; 3-5-901;
5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; 15-23-706; 15-30-195; 15-31-702; 15-37-117;
15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-410; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-5-404; 17-5-424;
17-5-804; 17-6-101; 17-6-201; 17-7-304; 18-11-112; 19-2-502; 19-6-709; 19-9-1007; 19-17-301; 19-18-512; 19-18-513;
19-18-606; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-9-361; 20-26-1503; 23-5-136; 23-5-306; 23-5-409;
23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321;
39-71-2504; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206; 60-2-220; 67-3-205;
75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 76-12-123; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-136; 82-11-161;
85-1-220; 85-20-402; 90-3-301; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.
(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; and pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001.)"
Section 2. Section 19-9-702, MCA, is amended to read:
"19-9-702. State contribution. The state of Montana shall make its contributions through the state auditor out of the
premium tax on motor vehicle property and casualty insurance policies. The payments must be made annually after the end
of each fiscal year but no later than November 1 from the gross premium tax after deduction for cancellations and returned
premiums. The division shall notify the auditor by September 1 of each fiscal year of the annual compensation paid to all
active members during the preceding fiscal year. The state's contribution is 15.66% 29.61% 29.02% of compensation paid
to members."
Section 3. Section 19-9-1007, MCA, is amended to read:
"19-9-1007. Supplement to certain benefits Minimum benefit adjustment. (1) The benefits paid in each fiscal year to
a retired member or the member's survivors may not be less than one-half of the compensation that will be paid to newly
confirmed police officers in the current fiscal year in the appropriate city or town to newly confirmed police officers from
which the member retired.
(2) On or before October 1 of each year, the division shall make a report including the following information:
(a) the names of all retired members who are receiving benefits from the retirement system as of the date of the report;
(b) the names of all surviving spouses or dependent children who are receiving benefits from the retirement system
because of the death of an active or retired member of this or a prior plan;
(c) for the purpose of determining the base retirement, disability, or survivorship benefits for the computations set forth in
subsection (3), the following information relating to the base fiscal year commencing July 1, 1976:
(i) the amount of the benefits paid in the base fiscal year to each retired member described in subsection (2)(a);
(ii) the amount of the benefits paid in the base fiscal year to each surviving spouse or dependent child described in
subsection (2)(b);
(iii) upon the death after the base fiscal year of any retired member who was receiving benefits, the amount of benefits that
would have been paid to an eligible surviving spouse of the retired member if the surviving spouse had been receiving
benefits in the base fiscal year;
(d) the original amount of retirement, disability, or survivorship benefits paid to retired members or their eligible survivors
as of the original retirement dates after July 1, 1975;
(e) the compensation that will be paid during the current fiscal year to a newly confirmed police officer of each city or
town participating in the retirement system.
(3) The division shall compute the difference between each amount reported under subsections (2)(c) through (2)(e) and
one-half the compensation to be paid during the current fiscal year to a newly confirmed police officer of the appropriate
city or town. The difference must be reported to the state auditor who shall pay the difference to the pension trust fund out
of the premium tax collected on insurance sold in this state to insure against the risks enumerated in 19-18-512(3) no later
than November 1. If the compensation of a newly confirmed police officer has not been set for the current fiscal year in
time to be included in the October 1 report to the state auditor make minimum benefit adjustments effective July 1, the
division shall make any retroactive adjustments necessary to individual supplemental minimum benefits after the current
compensation has been determined and shall include these amounts in the next year's report for reimbursement at that time.
(4) The premium tax amount paid by the state auditor is statutorily appropriated, as provided in 17-7-502, for the payment
of supplemental retirement benefits to eligible retired members and their survivors. This payment is in addition to the
payment to be made by the state auditor under 19-9-702.
(5)(3) If more than one dependent child is entitled to supplementary benefits under this section by virtue of the death of a
common parent, the minimum benefit paid to the dependent children under this section must be determined as if there were
one dependent child and the supplementary benefits must be paid to the dependent children collectively."
Section 4. Section 19-13-604, MCA, is amended to read:
"19-13-604. State contribution. The state shall make its contributions through the state auditor from the premium taxes
on the insurance risks enumerated in 19-18-512. These payments must be made annually to the pension trust fund after the
end of each fiscal year but no later than November 1 from the gross premium taxes after deduction for cancellations and
returned premiums. The division shall notify the auditor of the annual compensation, excluding overtime, holiday
payments, shift differential payments, compensatory time payments, and payments in lieu of sick leave, paid to all active
members during the preceding fiscal year. The state's contribution is 24.21% 31.96% 31.02% of this total compensation. As
soon as practicable after receipt of the state contribution, the division shall deposit it in the pension trust fund."
Section 5. Section 19-13-1007, MCA, is amended to read:
"19-13-1007. Benefit adjustment. (1) For a member retiring on or after July 1, 1973, who was hired before July 1, 1981,
or the member's surviving spouse or dependent children, the The service retirement benefit provided in 19-13-704(1)(a), the
disability retirement benefit provided in 19-13-803(1), and, or the survivorship benefit provided in 19-13-902(1) paid to a
retired member or the member's surviving spouse or dependent children may not be less than one-half the monthly
compensation paid to a newly confirmed, active firefighter of a city that last employed the member as a firefighter, as
provided each year in the budget of that city.
(2) For a member hired on or after July 1, 1981, or the member's surviving spouse or dependent children, the disability
retirement benefit provided in 19-13-803(2) and the survivorship benefit provided in 19-13-902(2) may not be less than
one-half the monthly compensation paid to a newly confirmed, active firefighter of a city that last employed the member as
a firefighter, as provided each year in the budget of that city.
(3) If after a member retires, the city that last employed the member no longer employs a full-paid firefighter, the member's
or survivor's benefit under subsections subsection (1) and (2) must be adjusted on the basis of the average monthly
compensation paid to all newly confirmed full-paid firefighters, as provided each year in the budgets of those cities that
participate in the retirement system and employ a full-paid firefighter.
(4)(3) If the employment of a vested member hired before July 1, 1981, is involuntarily discontinued because of the
termination of employment of all full-paid firefighters in the city that employed the member, the member's service
retirement benefit provided in 19-13-704(1)(b) and or the member's spouse's or dependent child's survivorship benefit
provided in 19-13-902(1) may not be less than:
(a) if the member has earned 20 years or more of membership service, one-half the average monthly compensation paid to all newly confirmed, full-paid firefighters, as provided each year in the budgets of those cities that participate in the retirement system and employ a full-paid firefighter; or
(b) if the member has earned more than 10 but less than 20 years of membership service, 2% of the average monthly compensation paid to all newly confirmed, full-paid firefighters, as provided each year in the budgets of those cities that participate in the retirement system and employ a full-paid firefighter, for each year of the member's service."
Section 6. Section 19-18-606, MCA, is amended to read:
"19-18-606. Supplement to certain pensions. (1) In addition to the taxes on premiums required by law to be paid by
each insurer doing business in this state that is authorized to effect insurance on risks enumerated in 19-18-512, there is a
tax of 1 1/2% on the fire portion of the direct premiums received during the calendar year of 1989 and each succeeding
calendar year, with allowance for cancellations and returned premiums. The insurance commissioner shall collect the tax
during March of each year and deposit the moneys money in the state special revenue fund. The proceeds of such the tax
are statutorily appropriated, as provided in 17-7-502, to the auditor, who shall pay claims as provided in subsection (2) of
this section and 19-13-1006. If sufficient cash remains in the fund each year after the payment of claims as provided in
subsection (2) of this section and 19-13-1006, the state auditor shall deposit any excess amount in the account provided for
in 19-13-615 general fund.
(2) Effective January 1, 1976, each Each association shall pay to the firefighters retired before July 1, 1973, or their
surviving spouses and children a monthly pension of not less than one-half the regular monthly salary paid to a confirmed
active firefighter of that city, as provided each year in the budget of that city. In the case of volunteer firefighters, the
pension may not exceed $75 per month. Distribution of the funds provided for this purpose under subsection (1) shall must
be made as follows:
(a) At the beginning of each fiscal year the treasurer of each association shall request and the state auditor shall issue from the state special revenue fund and deliver to the treasurer of the respective city or town an amount certified to be equal to the total annual dollar difference between what the retirees or their surviving spouses and children received from the fund and one-half of the salary paid by the respective city or town to a confirmed active firefighter for the fiscal year just preceding. The state auditor shall, at the same time, report to the treasurer of the appropriate association the amount of any payment delivered to the board of investments.
(b) The treasurer of a city or town receiving funds shall immediately disburse them to the treasurer of the respective association.
(c) The treasurer of the association shall utilize use these funds to increase the monthly pension of retirees or their
surviving spouses and children to an amount equal to one-half of the salary that was paid to a confirmed active firefighter in
the city or town for the preceding year."
NEW SECTION. Section 7. Repealer. Sections 19-13-615, 19-13-1006, and 19-13-1009, MCA, are repealed.
NEW SECTION. Section 8. Coordination instruction. (1) If ___ Bill No. ____ [LC 0063] is passed and approved and if it amends 19-9-1007, then [section 22] of ___ Bill No. ____ [LC 0063], amending 19-9-1007, is void.
(2) IF HOUSE BILL NO. 430 IS PASSED AND APPROVED, THEN THE FOLLOWING SECTIONS OF [THIS ACT] ARE VOID:
(A) [SECTION 4], AMENDING 19-13-604;
(B) [SECTION 5], AMENDING 19-13-1007;
(C) [SECTION 6], AMENDING 19-18-606; AND
(D) [SECTION 7], REPEALING 19-13-615, 19-13-1006, AND 19-13-1009.
NEW SECTION. Section 9. Effective date. [This act] is effective July 1, 1997.
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