1-1 By: Price (Senate Sponsor - Montford) H.B. No. 1476
1-2 (In the Senate - Received from the House April 5, 1993;
1-3 April 5, 1993, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 5, 1993, reported favorably by the
1-5 following vote: Yeas 9, Nays 0; May 5, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Armbrister x
1-9 Leedom x
1-10 Carriker x
1-11 Henderson x
1-12 Madla x
1-13 Moncrief x
1-14 Patterson x
1-15 Rosson x
1-16 Shapiro x
1-17 Wentworth x
1-18 Whitmire x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to administration of retirement systems supervised by the
1-22 fire fighters' pension commissioner.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Section 2, Texas Local Fire Fighters Retirement
1-25 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
1-26 adding Subdivision (9) to read as follows:
1-27 (9) "Compensation" includes amounts of workers'
1-28 compensation benefits received by an employee and by which the
1-29 employee's salary is reduced.
1-30 SECTION 2. Section 7, Texas Local Fire Fighters Retirement
1-31 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
1-32 amending Subsections (b) and (d) and adding Subsection (f) to read
1-33 as follows:
1-34 (b) Before a board of trustees chooses to adopt or change a
1-35 benefit or requirement for payment of benefits under this section,
1-36 the proposed addition or change must be approved by:
1-37 (1) an eligible actuary selected by the board; and
1-38 (2) a majority of the participating members of the
1-39 retirement system voting on the addition or change by secret ballot
1-40 at an election held for that purpose at which at least 50 percent
1-41 of all participating members of the retirement system vote.
1-42 (d) Except as provided by Subsection (e) of this section, if
1-43 a board chooses to adopt an addition or change after it has been
1-44 approved as provided by this section, the addition or change
1-45 applies to all persons who are participating members of the
1-46 retirement system on the effective date of the addition or change
1-47 <date of adoption> and all persons who became participating members
1-48 during the time the addition or change remains in effect. The
1-49 addition or change also may apply to:
1-50 (1) persons receiving monthly benefits; or
1-51 (2) former members of the fire department who meet an
1-52 applicable length-of-service requirement for service retirement.
1-53 (f) The effective date of a change or addition adopted under
1-54 this section is a date specified by the board of trustees that is
1-55 not earlier than the date of adoption by the board. A change or
1-56 addition may not be applied retroactive to its effective date.
1-57 SECTION 3. Section 9(a), Texas Local Fire Fighters
1-58 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
1-59 amended to read as follows:
1-60 (a) Except as otherwise provided by this section, a person
1-61 who is an employee of a fire department included within the
1-62 coverage of a retirement system is a member of the retirement
1-63 system if the person is younger than 36 years old on the date the
1-64 person is certified under civil service as eligible for a beginning
1-65 position with <at the time the person first becomes an employee of>
1-66 the department.
1-67 SECTION 4. Section 10(d), Texas Local Fire Fighters
1-68 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
2-1 amended to read as follows:
2-2 (d) Absence from service by an employee does not forfeit
2-3 service credit accrued before the absence begins, unless membership
2-4 is terminated. Absence from service by a volunteer does not
2-5 forfeit service credit accrued before the absence begins.
2-6 SECTION 5. Section 14(a), Texas Local Fire Fighters
2-7 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
2-8 amended to read as follows:
2-9 (a) A member of a retirement system is eligible for
2-10 retirement for disability if the member becomes physically or
2-11 mentally disabled, except as the result of a condition the member
2-12 had on the date the member became an employee or volunteer, in or
2-13 in consequence of the performance of the member's duties as an
2-14 employee or volunteer of the fire department included within the
2-15 coverage of the retirement system.
2-16 SECTION 6. Section 21(h), Texas Local Fire Fighters
2-17 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), as
2-18 added by Chapter 104, Acts of the 72nd Legislature, Regular
2-19 Session, 1991, is redesignated as Section 21(j) to read as follows:
2-20 (j) <(h)> The fire fighters' pension commissioner may
2-21 conduct seminars or workshops for persons interested in issues
2-22 pertaining to retirement systems under this Act. The commissioner
2-23 may impose and collect a fee for attendance at a seminar or
2-24 workshop in an amount that, in the aggregate, does not exceed the
2-25 estimated costs of preparing for and conducting the seminar or
2-26 workshop. Fees collected under this subsection shall be remitted
2-27 to the comptroller of public accounts for deposit in an account in
2-28 the general revenue fund to be known as the fire fighters' pension
2-29 commissioner account. Amounts in the account may be appropriated
2-30 only to the commissioner for the payment of administrative
2-31 expenses.
2-32 SECTION 7. Section 22, Texas Local Fire Fighters Retirement
2-33 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended to
2-34 read as follows:
2-35 Sec. 22. Appeals from local board decisions. (a) A person
2-36 aggrieved by a decision of a board of trustees relating to
2-37 eligibility for or amount of benefits payable by a retirement
2-38 system may appeal the decision to the fire fighters' pension
2-39 commissioner.
2-40 (b) An appeal under this section is begun by delivering a
2-41 notice of appeal with the chairman, secretary, or
2-42 secretary-treasurer of the board of trustees that made the
2-43 decision. The notice must be delivered not later than the 20th day
2-44 after the date of the decision and contain a brief description of
2-45 the reasons or grounds for appeal. The aggrieved person must file
2-46 a copy of the notice with the fire fighters' pension commissioner.
2-47 <The secretary or secretary-treasurer of the board of trustees that
2-48 made the decision from which an appeal is taken shall file a
2-49 transcript of all proceedings and papers relating to the matter
2-50 with the fire fighters' pension commissioner not later than the
2-51 30th day after the date the officer of the board to whom the notice
2-52 of appeal was delivered received the notice.>
2-53 (c) An appeal under this section to <before> the fire
2-54 fighters' pension commissioner is held in Austin and is a contested
2-55 case under the Administrative Procedure and Texas Register Act
2-56 (Article 6252-13a, Vernon's Texas Civil Statutes) conducted as a de
2-57 novo hearing by the State Office of Administrative Hearings.
2-58 <(d) A board of trustees from whose decision an appeal is
2-59 taken under this section may choose an attorney to represent the
2-60 board before the fire fighters' pension commissioner. At the
2-61 request of a board of trustees, the city attorney of the
2-62 municipality of which the board is a part shall, without additional
2-63 compensation, represent the board before the fire fighters' pension
2-64 commissioner.>
2-65 SECTION 8. The Texas Local Fire Fighters Retirement Act
2-66 (Article 6243e, Vernon's Texas Civil Statutes) is amended by adding
2-67 Section 22A to read as follows:
2-68 Sec. 22A. ATTORNEY. A board of trustees may employ an
2-69 attorney to represent the board in one or all legal matters,
2-70 including a hearing on appeal to the fire fighters' pension
3-1 commissioner. At the request of a board of trustees, the city
3-2 attorney of the municipality of which the board is a part shall,
3-3 without additional compensation, represent the board in one or all
3-4 legal matters.
3-5 SECTION 9. Section 23(b), Texas Local Fire Fighters
3-6 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
3-7 amended to read as follows:
3-8 (b) The cost of actuarial services may be paid from assets
3-9 of the fund<, except that costs for actuarial valuations and
3-10 special actuarial studies under Section 7 of this Act may be paid
3-11 from the fund not more than once every two years>.
3-12 SECTION 10. Section 25(c), Texas Local Fire Fighters
3-13 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
3-14 amended to read as follows:
3-15 (c) The annual amount of payments from a fund under
3-16 Subsections (a) and (b) of this section, excluding legal and
3-17 medical fees, may not exceed:
3-18 (1) 1 percent of the book value of the assets of the
3-19 fund for the first $1 million in book value; and
3-20 (2) 1/4 of 1 percent of the book value of the assets
3-21 of the fund that exceeds $1 million.
3-22 SECTION 11. Section 27, Texas Local Fire Fighters Retirement
3-23 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
3-24 amending Subsection (a) and adding Subsection (e) to read as
3-25 follows:
3-26 (a) A board of trustees established under this Act shall
3-27 keep a sufficient amount of cash on hand to make payments as they
3-28 become due under the retirement system. If a board determines that
3-29 the fund of its retirement system contains an amount in excess of
3-30 the amount needed to make payments as they become due, the board
3-31 may invest any portion of the excess in:
3-32 (1) bonds or other interest-bearing obligations and
3-33 securities of the United States, the state, or a political
3-34 subdivision of the state;
3-35 (2) shares and share accounts of savings and loan
3-36 associations to the extent that the shares and share accounts are
3-37 insured by the Federal Savings and Loan Insurance Corporation;
3-38 (3) first-lien real estate mortgage securities insured
3-39 by the Federal Housing Administration;
3-40 (4) bonds of companies incorporated within the United
3-41 States;
3-42 (5) common and preferred stocks of companies
3-43 incorporated within the United States that, unless the stocks are
3-44 bank or insurance stocks, are listed on an exchange registered with
3-45 the Securities and Exchange Commission or its successor;
3-46 (6) guaranteed investment contracts offered by
3-47 insurance companies;
3-48 (7) money market funds;
3-49 (8) mutual funds and other pooled funds;
3-50 (9) international stocks traded as American depository
3-51 receipts; and
3-52 (10) over-the-counter stocks.
3-53 (e) A board of trustees established under this Act shall
3-54 adopt a written investment policy stating how assets of the
3-55 retirement system that it administers may be invested.
3-56 SECTION 12. Section 28, Texas Local Fire Fighters Retirement
3-57 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended to
3-58 read as follows:
3-59 Sec. 28. INVESTMENT MANAGER AND COUNSELING SERVICE.
3-60 (a) The board of trustees of a retirement system established under
3-61 this Act may appoint investment managers for the system by
3-62 contracting for professional investment management services with
3-63 one or more organizations, which may include a bank if it has a
3-64 trust department, that are in the business of managing investments.
3-65 (b) To be eligible for appointment under Subsection (a) of
3-66 this section, an investment manager must be:
3-67 (1) registered under the Investment Advisors Act of
3-68 1940 (15 U.S.C. Section 80b-1 et seq.);
3-69 (2) a bank as defined by that Act; or
3-70 (3) an insurance company qualified to perform
4-1 investment services under the laws of more than one state.
4-2 (c) In a contract made under this section, the board of
4-3 trustees shall specify policies, requirements, and restrictions,
4-4 including criteria for determining the quality of investments and
4-5 for the use of standard rating services, that the board of trustees
4-6 adopts for investments of the system.
4-7 (d) In choosing and contracting for professional investment
4-8 management services and in continuing the use of an investment
4-9 manager, the board of trustees must act prudently and in the
4-10 interest of the participants and beneficiaries of the retirement
4-11 system.
4-12 (e) A trustee is not liable for the acts or omissions of an
4-13 investment manager appointed under this section, nor is a trustee
4-14 obligated to invest or otherwise manage any asset of the system
4-15 subject to management by the investment manager.
4-16 (f) A board of trustees established under this Act may
4-17 employ professional investment counselors to assist and advise the
4-18 board in the investment of the assets of the fund or to evaluate
4-19 the performance of an investment manager appointed under this
4-20 section. The investment counseling service must be provided by an
4-21 organization whose business functions include performing continuous
4-22 investment advisory service to public retirement systems.
4-23 (g) <(b)> The cost of investment managing or counseling
4-24 services may be paid by the municipality or from the assets of the
4-25 fund.
4-26 (h) A retirement system established under this Act is exempt
4-27 from Subchapter C, Chapter 802, Government Code, except Sections
4-28 802.205 and 802.207.
4-29 SECTION 13. Section 29(e), Texas Local Fire Fighters
4-30 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
4-31 amended to read as follows:
4-32 (e) Each person who is a member of a retirement system as a
4-33 current fire department volunteer shall contribute to the system an
4-34 annual amount of not less than $3 nor more than $5. The amount
4-35 must be determined by majority vote by secret ballot of the
4-36 volunteers of the department who are participating members of the
4-37 retirement system. A municipality may at any time make the member
4-38 contributions required under this subsection on behalf of its
4-39 volunteers and any other contributions the municipality chooses to
4-40 make to the retirement system.
4-41 SECTION 14. Section 30, Texas Local Fire Fighters Retirement
4-42 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
4-43 adding Subsection (d) to read as follows:
4-44 (d) A pick up of employee contributions is terminated in a
4-45 municipality on January 1 of the year following the year in which:
4-46 (1) the termination has been approved by a two-thirds
4-47 vote of the participating members of the retirement system at an
4-48 election by secret ballot at which at least 50 percent of the
4-49 participating members vote; and
4-50 (2) the governing body of the municipality has
4-51 repealed the ordinance that adopted the pick up of employee
4-52 contributions.
4-53 SECTION 15. The Texas Local Fire Fighters Retirement Act
4-54 (Article 6243e, Vernon's Texas Civil Statutes) is amended by adding
4-55 Section 32 to read as follows:
4-56 Sec. 32. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,
4-57 RETIREES, ANNUITANTS, OR BENEFICIARIES. (a) Information contained
4-58 in records that are in the custody of a retirement system
4-59 established under this Act concerning an individual member,
4-60 retiree, annuitant, or beneficiary is confidential under Section
4-61 3(a)(1), Chapter 424, Acts of the 63rd Legislature, Regular
4-62 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes),
4-63 and may not be disclosed in a form identifiable with a specific
4-64 individual unless:
4-65 (1) the information is disclosed to:
4-66 (A) the individual;
4-67 (B) the individual's attorney, guardian,
4-68 executor, administrator, conservator, or other person who the board
4-69 of trustees of the retirement system determines is acting in the
4-70 interest of the individual or the individual's estate;
5-1 (C) a spouse or former spouse of the individual
5-2 if the board of trustees determines that the information is
5-3 relevant to the spouse's or former spouse's interest in member
5-4 accounts, benefits, or other amounts payable by the retirement
5-5 system; or
5-6 (D) a person authorized by the individual in
5-7 writing to receive the information; or
5-8 (2) the information is disclosed under an
5-9 authorization of the board of trustees that specifies the reason
5-10 for the disclosure.
5-11 (b) This section does not prevent the disclosure of the
5-12 status or identity of an individual as a member, former member,
5-13 retiree, deceased member or retiree, or beneficiary of the
5-14 retirement system.
5-15 (c) A determination and disclosure under Subsection (a) of
5-16 this section may be made without notice to the individual member,
5-17 retiree, annuitant, or beneficiary.
5-18 SECTION 16. The Texas Statewide Volunteer Fire Fighters
5-19 Retirement Act (Article 6243e.3, Vernon's Texas Civil Statutes) is
5-20 amended by adding Section 12A to read as follows:
5-21 Sec. 12A. BENEFITS FOR MEMBER OF DEPARTMENT THAT CEASES TO
5-22 EXIST. (a) The commissioner shall continue to administer
5-23 benefits of the pension system for members and retirees who
5-24 performed service for a former member fire department that has not
5-25 withdrawn from the pension system under Section 12 of this Act and
5-26 has ceased to exist.
5-27 (b) The governing body of a political subdivision in which a
5-28 former member fire department described by Subsection (a) of this
5-29 section was located shall perform the duties provided by Section 23
5-30 of this Act for the members and retirees who performed service for
5-31 the former member fire department.
5-32 SECTION 17. Section 14(b), Texas Statewide Volunteer Fire
5-33 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
5-34 Statutes), is amended to read as follows:
5-35 (b) The surplus may be invested in:
5-36 (1) bonds or other interest-bearing obligations and
5-37 securities issued by governmental entities;
5-38 (2) shares or share accounts of savings and loan
5-39 associations insured by the Federal Savings and Loan Insurance
5-40 Corporation;
5-41 (3) shares and share accounts of banks insured by the
5-42 Federal Deposit Insurance Corporation;
5-43 (4) first lien real estate mortgage securities insured
5-44 by the Federal Housing Administration under the National Housing
5-45 Act, as amended;
5-46 (5) investments made by a life insurance company in
5-47 order to effect a group annuity contract; <or>
5-48 (6) corporation bonds, preferred stocks, and common
5-49 stocks;
5-50 (7) mutual funds; and
5-51 (8) international stocks traded as American depository
5-52 receipts.
5-53 SECTION 18. Section 19(o), Texas Statewide Volunteer Fire
5-54 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
5-55 Statutes), is amended to read as follows:
5-56 (o) After a hearing conducted by the State Office of
5-57 Administrative Hearings, the <The> commissioner shall determine
5-58 each appeal <hear all appeals> from a local board <boards> of
5-59 trustees decision <trustees' decisions> and issue a written opinion
5-60 <opinions> in compliance with the procedures required by this Act.
5-61 SECTION 19. Section 21(c), Texas Statewide Volunteer Fire
5-62 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
5-63 Statutes), is amended to read as follows:
5-64 (c) After a hearing conducted by the State Office of
5-65 Administrative Hearings, the <The> board shall determine each
5-66 appeal <hear appeals> from a <the> commissioner's decision
5-67 <decisions>.
5-68 SECTION 20. This Act takes effect September 1, 1993.
5-69 SECTION 21. The importance of this legislation and the
5-70 crowded condition of the calendars in both houses create an
6-1 emergency and an imperative public necessity that the
6-2 constitutional rule requiring bills to be read on three several
6-3 days in each house be suspended, and this rule is hereby suspended.
6-4 * * * * *
6-5 Austin,
6-6 Texas
6-7 May 5, 1993
6-8 Hon. Bob Bullock
6-9 President of the Senate
6-10 Sir:
6-11 We, your Committee on Intergovernmental Relations to which was
6-12 referred H.B. No. 1476, have had the same under consideration, and
6-13 I am instructed to report it back to the Senate with the
6-14 recommendation that it do pass and be printed.
6-15 Armbrister,
6-16 Chairman
6-17 * * * * *
6-18 WITNESSES
6-19 FOR AGAINST ON
6-20 ___________________________________________________________________
6-21 Name: Helen L. Campbell x
6-22 Representing: Fire Fighters Pension Comm.
6-23 City: Austin
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