H.B. No. 2711
    1-1                                AN ACT
    1-2  relating to the administration of, benefits payable by, eligibility
    1-3  for benefits payable by, and credit under programs administered by,
    1-4  the Teacher Retirement System of Texas; prohibiting certain
    1-5  interests in contracts; and providing for the sunset review of the
    1-6  system.
    1-7        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-8        SECTION 1.  Section 821.001, Government Code, is amended by
    1-9  adding Subdivisions (18) and (19) to read as follows:
   1-10              (18)  "Alternate payee" has the meaning assigned that
   1-11  term by Section 804.001.
   1-12              (19)  "Beneficiary" means the person or entity who,
   1-13  under a valid written designation or by law, is entitled to receive
   1-14  benefits payable by the retirement system on the death of a member
   1-15  or annuitant.
   1-16        SECTION 2.  Section 823.401, Government Code, is amended by
   1-17  amending Subsections (c) and (f) and adding Subsection (h) to read
   1-18  as follows:
   1-19        (c)  A member eligible to establish credit under this section
   1-20  is one who has at least five <10> years of service credit in the
   1-21  retirement system for actual service in public schools.
   1-22        (f)  The amount of service credit a member may establish
   1-23  under this section may not exceed the lesser of the number of years
    2-1  of membership service credit the member has in the retirement
    2-2  system for actual service in public schools or 10 years.
    2-3        (h)  A member purchasing out-of-state service credit does not
    2-4  qualify for insurance coverage until the member has 10 or more
    2-5  years of membership service credit for actual service in public
    2-6  schools.
    2-7        SECTION 3.  Section 823.402(e), Government Code, is amended
    2-8  to read as follows:
    2-9        (e)  A member may establish credit under this section by
   2-10  depositing with the retirement system for each year of
   2-11  developmental leave claimed an amount equal to the sum of:
   2-12              (1)  the rate of member contributions required during
   2-13  the <member's most recent> year of <service that preceded the
   2-14  developmental> leave, times the member's annual rate of
   2-15  compensation during the member's most recent year of creditable
   2-16  service that preceded the year of leave <that year>; plus
   2-17              (2)  the amount that the state would have contributed
   2-18  had the member performed membership service during the year of
   2-19  leave at the member's annual rate of compensation during the most
   2-20  recent year of service that preceded the leave; plus
   2-21              (3)  any membership fees in effect during the year of
   2-22  leave.
   2-23        SECTION 4.  Section 823.501(b), Government Code, is amended
   2-24  to read as follows:
   2-25        (b)  A person eligible to reinstate service credit under this
    3-1  section is one who resumes membership service in the retirement
    3-2  system <and subsequently performs membership service for the
    3-3  shorter of the following periods:>
    3-4              <(1)  two consecutive years; or>
    3-5              <(2)  a continuous period equal in duration to the
    3-6  period from the date of termination to the date of resumption of
    3-7  membership>.
    3-8        SECTION 5.  Sections 824.101(c) and (e), Government Code, are
    3-9  amended to read as follows:
   3-10        (c)  Only one person may be designated as beneficiary of an
   3-11  optional retirement annuity under Section 824.204(c)(1) or (c)(2),
   3-12  and a designation of beneficiary under either of those options may
   3-13  not be made, changed, or revoked after the later of the date on
   3-14  which the retirement system makes the first annuity payment to the
   3-15  retiree or the date the first payment becomes due.  For purposes of
   3-16  this section, the term "makes payment" includes the depositing in
   3-17  the mail of a payment warrant or the crediting of an account with
   3-18  payment through electronic funds transfer <of the member's
   3-19  retirement>.
   3-20        (e)  The retirement system by rule may provide for the
   3-21  designation of alternate beneficiaries and may adopt other rules to
   3-22  administer this section.
   3-23        SECTION 6.  Section 824.204(a), Government Code, is amended
   3-24  to read as follows:
   3-25        (a)  Instead of the standard service retirement annuity
    4-1  payable under Section 824.203 or an annuity reduced because of age
    4-2  under Section 824.202, a retiring member may elect to receive an
    4-3  optional service retirement annuity, reduced for early retirement
    4-4  if applicable, under this section.  An election to receive an
    4-5  optional service retirement annuity must be filed with the board of
    4-6  trustees not later than the effective date of retirement.
    4-7        SECTION 7.  Subchapter C, Chapter 824, Government Code, is
    4-8  amended by adding Section 824.206 to read as follows:
    4-9        Sec. 824.206.  CHANGE OF SERVICE RETIREMENT ANNUITY PAYMENT
   4-10  PLAN.  (a)  A retiree may change the retiree's choice of service
   4-11  retirement annuity payment plans after the retiree's effective date
   4-12  of retirement by filing written notice with the board of trustees
   4-13  before the later of the date on which the retirement system makes
   4-14  the first annuity payment or the date the first payment becomes
   4-15  due.  After the first payment has been made by the retirement
   4-16  system or has become due, a retiree may not change the annuity
   4-17  payment plan selected.
   4-18        (b)  For purposes of this section, the term "makes payment"
   4-19  includes the depositing in the mail of a payment warrant or the
   4-20  crediting of an account with payment through electronic funds
   4-21  transfer.
   4-22        (c)  The retirement system may adopt rules to administer this
   4-23  section.
   4-24        SECTION 8.  Section 824.304(d), Government Code, is
   4-25  redesignated as Section 824.304(c) to read as follows:
    5-1        (c) <(d)>  Before the 31st day after the date on which the
    5-2  medical board certifies a member's disability, the member may
    5-3  reinstate withdrawn contributions and make deposits for service
    5-4  previously waived, military service, and equivalent membership
    5-5  service and receive service credit as provided by this subtitle.
    5-6        SECTION 9.  Section 824.308(a), Government Code, is amended
    5-7  to read as follows:
    5-8        (a)  Instead of an annuity payable under Section 824.304(b),
    5-9  a member retiring under that section may elect to receive an
   5-10  optional disability retirement annuity under this section.  An
   5-11  election to receive an optional disability retirement annuity must
   5-12  be filed with the board of trustees not later than the effective
   5-13  date of retirement.
   5-14        SECTION 10.  Subchapter D, Chapter 824, Government Code, is
   5-15  amended by adding Section 824.309 to read as follows:
   5-16        Sec. 824.309.  CHANGE OF DISABILITY RETIREMENT PAYMENT PLAN.
   5-17  (a)  A retiree may change the retiree's choice of disability
   5-18  retirement payment plans after the retiree's effective date of
   5-19  retirement by filing written notice with the board of trustees
   5-20  before the later of the date on which the retirement system makes
   5-21  the first annuity payment or the date the first payment becomes
   5-22  due.  After the first payment has been made by the retirement
   5-23  system or has become due, a retiree may not change the annuity
   5-24  payment plan selected.
   5-25        (b)  For purposes of this section, the term "makes payment"
    6-1  includes the depositing in the mail of a payment warrant or the
    6-2  crediting of an account with payment through electronic funds
    6-3  transfer.
    6-4        (c)  The retirement system may adopt rules to administer this
    6-5  section.
    6-6        SECTION 11.  Sections 824.404(b), (c), and (d), Government
    6-7  Code, are amended to read as follows:
    6-8        (b)  If the designated beneficiary is the spouse or a
    6-9  dependent parent of the decedent, the beneficiary may elect to
   6-10  receive for life a monthly benefit of $150 <$100>, beginning
   6-11  immediately or on the date the beneficiary becomes 65 years old,
   6-12  whichever is later.
   6-13        (c)  If the designated beneficiary is the spouse of the
   6-14  decedent and has one or more children less than 18 years old or has
   6-15  custody of one or more children of the decedent who are less than
   6-16  18 years old, the designated beneficiary may elect to receive:
   6-17              (1)  a monthly benefit of $250 <$200> payable until the
   6-18  youngest child becomes 18 years old; and
   6-19              (2)  when the youngest child has attained the age of
   6-20  18, a monthly benefit for life of $150 <$100>, beginning on the
   6-21  date the beneficiary becomes 65 years old.
   6-22        (d)  If the designated beneficiary or beneficiaries are the
   6-23  decedent's dependent children who are less than 18 years old, their
   6-24  guardian may elect to receive for them:
   6-25              (1)  a monthly benefit of $250 <$200>, payable as long
    7-1  as two or more children are less than 18 years old; and
    7-2              (2)  a monthly benefit of $150 <$100>, payable as long
    7-3  as only one child is less than 18 years old.
    7-4        SECTION 12.  Subchapter A, Chapter 825, Government Code, is
    7-5  amended by adding Sections 825.0031 and 825.0032 to read as
    7-6  follows:
    7-7        Sec. 825.0031.  NONDISCRIMINATION IN APPOINTMENTS.
    7-8  Appointments to the board shall be made without regard to the race,
    7-9  color, disability, sex, religion, age, or national origin of the
   7-10  appointees.
   7-11        Sec. 825.0032.  INELIGIBILITY FOR BOARD AND OF CERTAIN
   7-12  EMPLOYEES.  (a)  Except as provided by Subsection (b), a person is
   7-13  not eligible for appointment to the board if the person or the
   7-14  person's spouse:
   7-15              (1)  is employed by or participates in the management
   7-16  of a business entity or other organization receiving funds from the
   7-17  retirement system; or
   7-18              (2)  owns or controls, directly or indirectly, more
   7-19  than a 10 percent interest in a business entity or other
   7-20  organization receiving funds from the retirement system.
   7-21        (b)  Subsection (a) does not apply to employment by,
   7-22  participation in the management of, or ownership or control of an
   7-23  interest in a business entity or other organization on behalf of
   7-24  the retirement system.
   7-25        (c)  A paid officer, employee, or consultant of a Texas trade
    8-1  association in the field of investment or insurance may not be a
    8-2  trustee or an employee of the retirement system who is exempt from
    8-3  the state's position classification plan or is compensated at or
    8-4  above the amount prescribed by the General Appropriations Act for
    8-5  step 1, salary group 17, of the position classification salary
    8-6  schedule.
    8-7        (d)  A person who is the spouse of a paid officer, manager,
    8-8  or consultant of a Texas trade association in the field of
    8-9  investment or insurance may not be a trustee and may not be an
   8-10  employee of the retirement system who is exempt from the state's
   8-11  position classification plan or is compensated at or above the
   8-12  amount prescribed by the General Appropriations Act for step 1,
   8-13  salary group 17, of the position classification salary schedule.
   8-14        (e)  For the purposes of this section, a Texas trade
   8-15  association is a nonprofit, cooperative, and voluntarily joined
   8-16  association of business or professional competitors in this state
   8-17  designed to assist its members and its industry or profession in
   8-18  dealing with mutual business or professional problems and in
   8-19  promoting their common interest.
   8-20        (f)  A person may not serve as a trustee or act as the
   8-21  general counsel to the board if the person is required to register
   8-22  as a lobbyist under Chapter 305 because of the person's activities
   8-23  for compensation on behalf of a business or an association related
   8-24  to the operation of the board.
   8-25        SECTION 13.  Section 825.006, Government Code, is amended to
    9-1  read as follows:
    9-2        Sec. 825.006.  SUNSET PROVISION.  The board of trustees of
    9-3  the Teacher Retirement System of Texas is subject to review under
    9-4  Chapter 325 (Texas Sunset Act), but is not abolished under that
    9-5  chapter.  The board shall be reviewed during the period in which
    9-6  state agencies abolished in 1995 <1993 and every 12th year after
    9-7  1993> are reviewed.  This section expires September 1, 1995.
    9-8        SECTION 14.  Subchapter A, Chapter 825, Government Code, is
    9-9  amended by adding Section 825.010 to read as follows:
   9-10        Sec. 825.010.  GROUNDS FOR REMOVAL OF TRUSTEE.  (a)  It is a
   9-11  ground for removal from the board if a trustee:
   9-12              (1)  violates a prohibition established by Section
   9-13  825.0032;
   9-14              (2)  cannot discharge the person's duties for a
   9-15  substantial part of the term for which the person is appointed
   9-16  because of illness or disability; or
   9-17              (3)  is absent from more than half of the regularly
   9-18  scheduled board meetings that the person is eligible to attend
   9-19  during a calendar year unless the absence is excused by majority
   9-20  vote of the board.
   9-21        (b)  The validity of an action of the board is not affected
   9-22  by the fact that it is taken when a ground for removal of a trustee
   9-23  exists.
   9-24        (c)  If the executive director has knowledge that a potential
   9-25  ground for removal exists, the executive director shall notify the
   10-1  chairman of the board of the ground.  The chairman shall then
   10-2  notify the appropriate appointing officer or body that a potential
   10-3  ground for removal exists.
   10-4        SECTION 15.  Subchapter B, Chapter 825, Government Code, is
   10-5  amended by adding Sections 825.113 and 825.114 to read as follows:
   10-6        Sec. 825.113.  MISCELLANEOUS BOARD DUTIES.  (a)  The board
   10-7  shall provide to its trustees and employees, as often as necessary,
   10-8  information regarding their qualification for office or employment
   10-9  under this chapter and their responsibilities under applicable laws
  10-10  relating to standards of conduct for state officers or employees.
  10-11        (b)  The board shall develop and implement policies that
  10-12  clearly define the respective responsibilities of the board and the
  10-13  staff of the retirement system.
  10-14        (c)  The board shall prepare information of interest to the
  10-15  retirement system's members describing the functions of the system
  10-16  and the system's procedures by which complaints are filed with and
  10-17  resolved by the system.  The system shall make the information
  10-18  available to the system's members and appropriate state agencies.
  10-19        (d)  The board by rule shall establish methods by which
  10-20  members are notified of the name, mailing address, and telephone
  10-21  number of the retirement system for the purpose of directing
  10-22  complaints to the system.
  10-23        (e)  The board shall develop and implement policies that
  10-24  provide the public with a reasonable opportunity to appear before
  10-25  the board and to speak on any issue under the jurisdiction of the
   11-1  board.
   11-2        (f)  The board shall prepare and maintain a written plan that
   11-3  describes how a person who does not speak English can be provided
   11-4  reasonable access to the board's programs.  The board shall also
   11-5  comply with federal and state laws for program and facility
   11-6  accessibility.
   11-7        Sec. 825.114.  ADVISORY COMMITTEES.  (a)  The board of
   11-8  trustees may establish advisory committees as it considers
   11-9  necessary to assist it in performing its duties.  Members of
  11-10  advisory committees established under this section serve at the
  11-11  pleasure of the board.
  11-12        (b)  Notwithstanding any other law to the contrary, the board
  11-13  of trustees by rule shall determine the amount and manner of any
  11-14  compensation or expense reimbursement to be paid members of an
  11-15  advisory committee performing service for the retirement system for
  11-16  performing the work of the advisory committee.  All compensation
  11-17  and expense reimbursements for an advisory committee established
  11-18  under this section are payable from the expense account or the
  11-19  retired school employees group insurance fund, as applicable.
  11-20        (c)  Notwithstanding any other law to the contrary, the size
  11-21  and composition of advisory committees created by statute for the
  11-22  retirement system or required by statute to be created by the
  11-23  retirement system are as provided by the statute creating or
  11-24  providing for the creation of the particular committee.
  11-25        SECTION 16.  Section 825.202, Government Code, is amended to
   12-1  read as follows:
   12-2        Sec. 825.202.  EXECUTIVE DIRECTOR <SECRETARY>.  (a)  The
   12-3  board of trustees, by a majority vote of all members, shall appoint
   12-4  an executive director <secretary>.
   12-5        (b)  The executive director <secretary> may not be a member
   12-6  of the board of trustees.
   12-7        (c)  To be eligible to serve as the executive director
   12-8  <secretary>, a person must have been a citizen of this state for
   12-9  the three years immediately preceding the appointment.
  12-10        (d)  The executive director <secretary> shall recommend to
  12-11  the board actuarial and other services necessary to administer the
  12-12  retirement system.
  12-13        (e)  Annually, the executive director <secretary> shall
  12-14  prepare an itemized expense budget for the following fiscal year
  12-15  and shall submit the budget to the board for review and adoption.
  12-16        SECTION 17.  Section 825.206, Government Code, is amended by
  12-17  adding Subsection (c) to read as follows:
  12-18        (c)  The board of trustees annually shall evaluate the
  12-19  performance of the actuary during the previous year.  At least once
  12-20  every three years, the board shall redesignate its actuary after
  12-21  advertising for and reviewing proposals from providers of actuarial
  12-22  services.
  12-23        SECTION 18.  Section 825.207(b), Government Code, is amended
  12-24  to read as follows:
  12-25        (b)  The state treasurer shall pay money from the accounts of
   13-1  the retirement system on warrants drawn by the comptroller of
   13-2  public accounts and authorized by vouchers signed by the executive
   13-3  director <secretary> or other persons designated by the board of
   13-4  trustees.
   13-5        SECTION 19.  Sections 825.209(b) and (c), Government Code,
   13-6  are amended to read as follows:
   13-7        (b)  The executive director <secretary> shall give a surety
   13-8  bond in the amount of $25,000.
   13-9        (c)  The board of trustees may require any trustee or
  13-10  employee of the board, other than the executive director
  13-11  <secretary>, to give a surety bond in an amount determined by the
  13-12  board.
  13-13        SECTION 20.  Subchapter C, Chapter 825, Government Code, is
  13-14  amended by adding Sections 825.211, 825.212, 825.213, and 825.214
  13-15  to read as follows:
  13-16        Sec. 825.211.  CERTAIN INTERESTS IN LOANS, INVESTMENTS, OR
  13-17  CONTRACTS PROHIBITED.  (a)  Except as provided by Subsection (c), a
  13-18  person described by Subsection (b) may not participate in or be the
  13-19  beneficiary of, directly or indirectly, a loan, commitment to lend,
  13-20  a guarantee or endorsement to lend, or investment by the retirement
  13-21  system or a contract to advise the system or manage property or
  13-22  investments for the system.
  13-23        (b)  The prohibition provided by Subsection (a) applies to a
  13-24  trustee or employee of the retirement system, a consultant or
  13-25  advisor to the retirement system, and a person related within the
   14-1  second degree by consanguinity or affinity to a trustee, employee,
   14-2  consultant, or advisor.
   14-3        (c)  The prohibition provided by Subsection (a) does not
   14-4  apply to actions taken by a trustee or employee of the retirement
   14-5  system within the scope of that person's official duties for the
   14-6  system or actions taken by a consultant or advisor within the scope
   14-7  of the services for which the person is being compensated by the
   14-8  retirement system, if the actions do not involve a relationship
   14-9  required to be disclosed under Section 825.212.  The prohibition
  14-10  provided by Subsection (a) does not apply to an indirect benefit
  14-11  received resulting from retirement system membership.
  14-12        Sec. 825.212.  RETIREMENT SYSTEM ETHICS POLICY.  (a)  In
  14-13  addition to any other requirements provided by law, the board of
  14-14  trustees shall enforce an ethics policy as provided by this section
  14-15  for employees of and consultants and advisors to the retirement
  14-16  system.
  14-17        (b)  Each employee of the retirement system who exercises
  14-18  significant decisionmaking or fiduciary authority, as determined by
  14-19  the board, shall file financial disclosure statements with a person
  14-20  designated by the board.  The content of a financial disclosure
  14-21  statement must comply substantially with the requirements of
  14-22  Section 4, Chapter 421, Acts of the 63rd Legislature, Regular
  14-23  Session, 1973 (Article 6252-9b, Vernon's Texas Civil Statutes).  A
  14-24  statement must be filed not later than the 30th day after the date
  14-25  a person is employed in a significant decisionmaking or fiduciary
   15-1  position and annually after employment not later than April 30.
   15-2  The filing deadline may be postponed by the executive director for
   15-3  not more than 60 days on written request or for an additional
   15-4  period for good cause, as determined by the chairman of the board.
   15-5  The retirement system shall maintain a financial disclosure
   15-6  statement for at least five years after the date of its filing.
   15-7        (c)  An employee who has a business or commercial
   15-8  relationship that could reasonably be expected to diminish the
   15-9  employee's independence of judgment in the performance of the
  15-10  employee's responsibilities to the retirement system shall disclose
  15-11  that relationship in writing to a person designated by the board.
  15-12        (d)  An employee who files a disclosure statement under
  15-13  Subsection (c) shall refrain from giving advice or making decisions
  15-14  about matters affected by the conflict of interest unless the
  15-15  board, after consultation with the general counsel of the
  15-16  retirement system, expressly waives this prohibition.  The
  15-17  retirement system shall maintain a written record of each waiver
  15-18  and the reasons for it.  The board may delegate the authority to
  15-19  waive prohibitions under this subsection to one or more designated
  15-20  employees on a vote of a majority of the members of the board at an
  15-21  open meeting called and held in compliance with Chapter 271, Acts
  15-22  of the 60th Legislature, Regular Session, 1967 (Article 6252-17,
  15-23  Vernon's Texas Civil Statutes).  The board shall have any order
  15-24  delegating authority to waive prohibitions under this section
  15-25  entered into the minutes of the meeting.  The board may adopt
   16-1  criteria for designated employees to use to determine the kinds of
   16-2  relationships that do not constitute a material conflict of
   16-3  interest for purposes of this subsection.
   16-4        (e)  The board by rule shall adopt standards of conduct
   16-5  applicable to consultants and advisors to the retirement system who
   16-6  may reasonably be expected to receive more than $10,000
   16-7  compensation from the system for a fiscal year or who render
   16-8  important investment advice to the retirement system.
   16-9        (f)  A consultant or advisor who, directly or indirectly, has
  16-10  a personal or private commercial or business relationship,
  16-11  unrelated to the services that the consultant or advisor performs
  16-12  for the retirement system, with any other party to a transaction
  16-13  with the system that could reasonably be expected to diminish the
  16-14  person's independence of judgment in the performance of the
  16-15  person's responsibilities to the system shall disclose that
  16-16  relationship in writing to the executive director.
  16-17        (g)  The board by rule shall require consultants and advisors
  16-18  to the retirement system and brokers to file regularly with the
  16-19  system a report detailing any expenditure of more than $50 made on
  16-20  behalf of a trustee or employee of the system.
  16-21        (h)  The board shall prescribe forms for financial disclosure
  16-22  statements, disclosure statements of conflicts of interest, and
  16-23  waivers of the prohibition against involvement in a matter affected
  16-24  by a conflict of interest.  The statements and waivers are open
  16-25  records.  The board shall designate an employee to be the custodian
   17-1  of the statements and waivers for purposes of public disclosure.
   17-2        Sec. 825.213.  EMPLOYMENT PRACTICES.  (a)  The executive
   17-3  director or the executive director's designee shall develop an
   17-4  intra-agency career ladder program.  The program shall require
   17-5  intra-agency posting of all nonentry level positions concurrently
   17-6  with any public posting.
   17-7        (b)  The executive director or the executive director's
   17-8  designee shall develop a system of annual performance evaluations.
   17-9  All merit pay for system employees must be based on the system
  17-10  established under this subsection.
  17-11        (c)  The executive director or the executive director's
  17-12  designee shall prepare and maintain a written policy statement to
  17-13  assure implementation of a program of equal employment opportunity
  17-14  under which all personnel transactions are made without regard to
  17-15  race, color, disability, sex, religion, age, or national origin.
  17-16  The policy statement must include:
  17-17              (1)  personnel policies, including policies relating to
  17-18  recruitment, evaluation, selection, appointment, training, and
  17-19  promotion of personnel that are in compliance with requirements of
  17-20  the Commission on Human Rights Act (Article 5221k, Vernon's Texas
  17-21  Civil Statutes);
  17-22              (2)  a comprehensive analysis of the retirement
  17-23  system's work force that meets federal and state guidelines;
  17-24              (3)  procedures by which a determination can be made of
  17-25  significant underuse in the retirement system's work force of all
   18-1  persons for whom federal or state guidelines encourage a more
   18-2  equitable balance; and
   18-3              (4)  reasonable methods to appropriately address those
   18-4  areas of significant underuse.
   18-5        (d)  A policy statement prepared under Subsection (c) must
   18-6  cover an annual period, be updated annually and reviewed by the
   18-7  Commission on Human Rights for compliance with Subsection (c), and
   18-8  be filed with the governor's office.
   18-9        (e)  The governor's office shall deliver a biennial report to
  18-10  the legislature based on the information received under Subsection
  18-11  (d).  The report may be made separately or as a part of other
  18-12  biennial reports made to the legislature.
  18-13        Sec. 825.214.  FINANCIAL AUDITOR.  A person employed to
  18-14  perform a financial audit of the retirement system must be selected
  18-15  by and report to the board of trustees.
  18-16        SECTION 21.  Subchapter D, Chapter 825, Government Code, is
  18-17  amended by adding Section 825.3021 to read as follows:
  18-18        Sec. 825.3021.  APPRAISAL AND SALE OF REAL PROPERTY.  If the
  18-19  retirement system acquires, through foreclosure or conveyance of
  18-20  deed in lieu of foreclosure, real property assets or stock in an
  18-21  entity the major asset of which is real property, the retirement
  18-22  system shall, not later than the 90th day after the date of
  18-23  acquisition:
  18-24              (1)  have the real property appraised by an appraiser
  18-25  who is not a trustee or employee of the retirement system and who
   19-1  has received MAI or SRA;
   19-2              (2)  acquire a foreclosure endorsement to the
   19-3  mortgagee's title insurance policy; and
   19-4              (3)  if the real property contains improvements, employ
   19-5  an individual who is not, or a property management company that is
   19-6  not owned by, a trustee or employee of the retirement system and
   19-7  who is, or that employs, a CPM, CAM, or RAM to manage the property.
   19-8        SECTION 22.  Section 825.303(b), Government Code, is amended
   19-9  to read as follows:
  19-10        (b)  To be eligible to lend securities under this section, a
  19-11  bank or brokerage firm must:
  19-12              (1)  be experienced in the operation of a fully secured
  19-13  securities loan program;
  19-14              (2)  maintain adequate capital in the prudent judgment
  19-15  of the retirement system to assure the safety of the securities;
  19-16              (3)  execute an indemnification agreement satisfactory
  19-17  in form and content to the retirement system fully indemnifying the
  19-18  retirement system against loss resulting from borrower default or
  19-19  the failure of the bank or brokerage firm to properly execute the
  19-20  responsibilities of the bank or brokerage firm under the applicable
  19-21  securities lending agreement <its operation of a securities loan
  19-22  program for the system's securities>; <and>
  19-23              (4)  require any securities broker or dealer to whom it
  19-24  lends securities belonging to the retirement system to deliver to
  19-25  and maintain with the custodian collateral in the form of cash or
   20-1  <United States> government securities eligible for book entry in
   20-2  either the Federal Reserve System or the Participants Trust
   20-3  Company, in an amount equal to not less than 100 percent of the
   20-4  market value, from time to time, of the loaned securities; and
   20-5              (5)  comply with guidelines the board of trustees may
   20-6  adopt concerning the investment of cash collateral, borrower
   20-7  limits, and other items.
   20-8        SECTION 23.  Section 825.311, Government Code, is amended to
   20-9  read as follows:
  20-10        Sec. 825.311.  INTEREST ACCOUNT.  In the interest account the
  20-11  retirement system shall:
  20-12              (1)  deposit all income, interest, and dividends from
  20-13  deposits and investments of assets of the retirement system; <and>
  20-14              (2)  accumulate net capital gains and losses resulting
  20-15  from the sale, call, maturity, <or> conversion, or recognition of
  20-16  changes in carrying values of investments of the retirement system;
  20-17  and
  20-18              (3)  accumulate net income or losses from other
  20-19  investments <of securities>.
  20-20        SECTION 24.  Section 825.312(a), Government Code, is amended
  20-21  to read as follows:
  20-22        (a)  The retirement system shall deposit in the expense
  20-23  account:
  20-24              (1)  all membership fees required by this subtitle;
  20-25  <and>
   21-1              (2)  money required to be deposited in the account by
   21-2  Section 825.313(b)(3) or 825.313(c); and
   21-3              (3)  money received from the Texas Public School
   21-4  Retired Employees Group Insurance Program for service performed for
   21-5  the program by the retirement system.
   21-6        SECTION 25.  Sections 825.403(b) and (c), Government Code,
   21-7  are amended to read as follows:
   21-8        (b)  Each employer or the employer's designated disbursing
   21-9  officer, at a time and in a form prescribed by the retirement
  21-10  system, shall send to the executive director <secretary> all
  21-11  deductions and a certification of earnings of each member employed
  21-12  by the employer.
  21-13        (c)  The executive director <secretary> shall deposit with
  21-14  the state treasurer all deductions received by the executive
  21-15  director <secretary>.
  21-16        SECTION 26.  Section 825.405(d), Government Code, is amended
  21-17  to read as follows:
  21-18        (d)  The employer must remit the amount required under this
  21-19  section to the executive director <secretary> at the same time that
  21-20  the employer remits the member's contribution.
  21-21        SECTION 27.  Sections 825.410(a) and (g), Government Code,
  21-22  are amended to read as follows:
  21-23        (a)  Payments to establish special service credit as
  21-24  authorized in Sections 805.002, 823.202, 823.302, 823.304, 823.401,
  21-25  823.402, 823.501, and 825.403 may be made in a lump sum or in equal
   22-1  monthly installments over a period not to exceed the lesser of the
   22-2  number of years of credit to be purchased or 60 months.
   22-3  Installment payments are due on the first day of each calendar
   22-4  month in the payment period.  If an installment payment is not made
   22-5  in full within 60 days after the due date, the retirement system
   22-6  may refund all installment payments less fees paid on the lump sum
   22-7  due when installment payments began.  Partial payment of an
   22-8  installment payment may be treated as nonpayment.  A check returned
   22-9  for insufficient funds or a closed account shall be treated as
  22-10  nonpayment.  When two or more consecutive monthly payments have a
  22-11  returned check, a refund may be made.  If the retirement system
  22-12  refunds payments pursuant to this subsection, the member is not
  22-13  permitted to use the installment method of payment for a period of
  22-14  three years from the date of the refund.
  22-15        (g)  A member seeking to establish service credit by using
  22-16  the installment payment method shall pay an additional fee of nine
  22-17  percent per annum calculated on a declining balance method on the
  22-18  lump sum due at the time the installment payment process begins.
  22-19  For purposes of this subsection, the installment payment process
  22-20  begins on the first business day of the month in which the first
  22-21  installment payment becomes due.  None of the additional fees shall
  22-22  be returned to the member or a beneficiary.
  22-23        SECTION 28.  Section 825.503(d), Government Code, is amended
  22-24  to read as follows:
  22-25        (d)  The executive director <secretary> or an authorized
   23-1  representative may certify the authenticity of a photograph,
   23-2  microphotograph, or film of a record reproduced under this section
   23-3  and shall charge a fee for the certified photograph,
   23-4  microphotograph, or film as provided by law.
   23-5        SECTION 29.  Section 825.507, Government Code, as added by
   23-6  Chapter 16, Acts of the 72nd Legislature, Regular Session, 1991, is
   23-7  amended to read as follows:
   23-8        Sec. 825.507.  Confidentiality of Information About Members,
   23-9  Retirees, Annuitants, <or> Beneficiaries, OR ALTERNATE PAYEES.
  23-10  (a)  Information contained in records that are in the custody of
  23-11  the retirement system concerning an individual member, retiree,
  23-12  annuitant, <or> beneficiary, or alternate payee is confidential
  23-13  under Section 3(a)(1), Chapter 424, Acts of the 63rd Legislature,
  23-14  Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
  23-15  Statutes), and may not be disclosed in a form identifiable with a
  23-16  specific individual unless:
  23-17              (1)  the information is disclosed to:
  23-18                    (A)  the individual or the individual's attorney,
  23-19  guardian, executor, administrator, conservator, or other person who
  23-20  the executive director <secretary> determines is acting in the
  23-21  interest of the individual or the individual's estate;
  23-22                    (B)  a spouse or former spouse of the individual
  23-23  if the executive director <secretary> determines that the
  23-24  information is relevant to the spouse's or former spouse's interest
  23-25  in member accounts, benefits, or other amounts payable by the
   24-1  retirement system;
   24-2                    (C)  a governmental official or employee if the
   24-3  executive director <secretary> determines that disclosure of the
   24-4  information requested is reasonably necessary to the performance of
   24-5  the duties of the official or employee; or
   24-6                    (D)  a person authorized by the individual in
   24-7  writing to receive the information; or
   24-8              (2)  the information is disclosed pursuant to a
   24-9  subpoena and the executive director <secretary> determines that the
  24-10  individual will have a reasonable opportunity to contest the
  24-11  subpoena.
  24-12        (b)  This section does not prevent the disclosure of the
  24-13  status or identity of an individual as a member, former member,
  24-14  retiree, deceased member or retiree, <or> beneficiary, or alternate
  24-15  payee of the retirement system.
  24-16        (c)  The executive director <secretary> may designate other
  24-17  employees of the retirement system to make the necessary
  24-18  determinations under Subsection (a).
  24-19        (d)  A determination and disclosure under Subsection (a) may
  24-20  be made without notice to the individual member, retiree,
  24-21  annuitant, <or> beneficiary, or alternate payee.
  24-22        (e)  The retirement system may make not more than two
  24-23  mailings a year on behalf of a nonprofit association of active or
  24-24  retired school employees, for purposes of association membership
  24-25  and research only, to persons identified in information contained
   25-1  in records that are in the custody of the retirement system.  The
   25-2  nonprofit association requesting a mailing shall pay the expenses
   25-3  of the mailing.
   25-4        SECTION 30.  Section 825.507, Government Code, as added by
   25-5  Chapter 13, Acts of the 72nd Legislature, 1st Called Session, 1991,
   25-6  is redesignated as Section 825.508 to read as follows:
   25-7        Sec. 825.508 <825.507>.  Powers of Attorney.  (a)  A person
   25-8  entitled to payment of an annuity or other benefits administered by
   25-9  the retirement system may direct the retirement system to treat as
  25-10  the authorized representative of the person concerning the
  25-11  disposition of the benefits an attorney-in-fact under a power of
  25-12  attorney that complies with Subsection (b).
  25-13        (b)  The system must honor a power of attorney executed in
  25-14  accordance with Chapter 1, Section 36A, Texas Probate Code.
  25-15        (c)  If the power of attorney is revoked, the retirement
  25-16  system is not liable for payments made to or actions taken at the
  25-17  request of the attorney-in-fact before the date the system receives
  25-18  written notice that the power of attorney has been revoked.
  25-19        SECTION 31.  Subchapter F, Chapter 825, Government Code, is
  25-20  amended by adding Sections 825.509, 825.510, and 825.511 to read as
  25-21  follows:
  25-22        Sec. 825.509.  DIRECT ROLLOVERS.  (a)  This section applies
  25-23  to distributions made on or after January 1, 1993.  Notwithstanding
  25-24  any law governing the retirement system that would otherwise limit
  25-25  a distributee's election under this section, a distributee may
   26-1  elect, at the time and in the manner prescribed by the executive
   26-2  director or the executive director's designee, to have any portion
   26-3  of an eligible rollover distribution from the retirement system
   26-4  paid directly to an eligible retirement plan specified by the
   26-5  distributee in a direct rollover.
   26-6        (b)  An eligible rollover distribution under this section is
   26-7  any distribution of all or a portion of the balance to the credit
   26-8  of the distributee, other than:
   26-9              (1)  a distribution that is one of a series of
  26-10  substantially equal periodic payments made not less frequently than
  26-11  annually for:
  26-12                    (A)  the life or life expectancy of the
  26-13  distributee;
  26-14                    (B)  the joint lives or joint life expectancies
  26-15  of the distributee and the distributee's designated beneficiary; or
  26-16                    (C)  a specified period of 10 years or more;
  26-17              (2)  a distribution to the extent the distribution is
  26-18  required under Section 401(a)(9), Internal Revenue Code of 1986; or
  26-19              (3)  the portion of a distribution that is not
  26-20  includable in gross income for federal income tax purposes.
  26-21        (c)  An eligible retirement plan under this section is an
  26-22  individual retirement account described by Section 408(a), Internal
  26-23  Revenue Code of 1986, an individual retirement annuity described by
  26-24  Section 408(b), Internal Revenue Code of 1986, an annuity plan
  26-25  described by Section 403(a), Internal Revenue Code of 1986, or a
   27-1  qualified trust described by Section 401(a), Internal Revenue Code
   27-2  of 1986, that accepts the distributee's eligible rollover
   27-3  distribution.  However, in the case of an eligible rollover
   27-4  distribution to a surviving spouse, an eligible retirement plan
   27-5  under this section is an individual retirement account or
   27-6  individual retirement annuity.
   27-7        (d)  In this section:
   27-8              (1)  "Direct rollover" means a payment by the
   27-9  retirement system to the eligible retirement plan specified by a
  27-10  distributee.
  27-11              (2)  "Distributee" means a person who receives an
  27-12  eligible rollover distribution from the retirement system and
  27-13  includes an employee or former employee and, regarding the interest
  27-14  of an employee or former employee, the person's surviving spouse or
  27-15  alternate payee.
  27-16        Sec. 825.510.  BUDGET AND INVESTMENT INFORMATION.  (a)  The
  27-17  retirement system annually shall file with the Legislative Budget
  27-18  Board a report showing investments of the retirement system as of
  27-19  the last day of the preceding fiscal year, investments made or
  27-20  disposed of during that year, income or losses in the various kinds
  27-21  of investments, and a comparison of investment performance to
  27-22  nationally recognized indexes.  The report required by this
  27-23  subsection is the only periodic report of investments required to
  27-24  be made by the retirement system other than a report required by
  27-25  Section 802.106 or a report required by the state auditor.
   28-1        (b)  The retirement system shall file with the Legislative
   28-2  Budget Board for review and comment a copy of each proposed annual
   28-3  budget of the retirement system.
   28-4        Sec. 825.511.  COMPLAINT FILES.  (a)  The retirement system
   28-5  shall keep an information file about each complaint filed with the
   28-6  system that the system has authority to resolve.
   28-7        (b)  If a written complaint is filed with the retirement
   28-8  system that the system has authority to resolve, the system, at
   28-9  least quarterly and until final disposition of the complaint, shall
  28-10  notify the parties to the complaint of the status of the complaint
  28-11  unless the notice would jeopardize an undercover investigation.
  28-12        SECTION 32.  Section 13.913(a),  Education Code, is amended
  28-13  to read as follows:
  28-14        (a)  Each district shall make available to its employees
  28-15  group health coverage provided by a risk pool established by one or
  28-16  more school districts under Chapter 172, Local Government Code, or
  28-17  under a policy of insurance or group contract issued by an insurer,
  28-18  a company subject to Chapter 20, Insurance Code, or a health
  28-19  maintenance organization under the Texas Health Maintenance
  28-20  Organization Act (Chapter 20A, Vernon's Texas Insurance Code).  The
  28-21  coverage must meet the substantive coverage requirements of Article
  28-22  3.51-6, Insurance Code, and any other law applicable to group
  28-23  health insurance policies or contracts issued in this state.  The
  28-24  coverage must include major medical treatment but may exclude
  28-25  experimental procedures.  In this subsection, "major medical
   29-1  treatment" means a medical, surgical, or diagnostic procedure or
   29-2  intervention that has a significant recovery period, presents a
   29-3  significant risk, employs a general anesthetic, or, in the opinion
   29-4  of the primary physician, involves a significant invasion of bodily
   29-5  integrity that requires the extraction of bodily fluids or an
   29-6  incision or that produces substantial pain, discomfort, or
   29-7  debilitation.  The coverage may include managed care or preventive
   29-8  care and must be comparable to the basic health coverage provided
   29-9  under the Texas Employees Uniform Group Insurance Benefits Act
  29-10  (Article 3.50-2, Vernon's Texas Insurance Code).  The cost of the
  29-11  coverage may be shared by the employees and the district.  Each
  29-12  district shall certify the district's compliance with this
  29-13  subsection to the executive director of the Teacher <Employees>
  29-14  Retirement System of Texas in the manner required by the board of
  29-15  trustees of the Teacher <Employees> Retirement System of Texas.
  29-16  The certification must include a copy of the district's current
  29-17  contract for group health coverage.
  29-18        SECTION 33.  Section 2(10), Article 3.50-4, Insurance Code,
  29-19  is amended to read as follows:
  29-20              (10)  "Retiree" means:
  29-21                    (A)  a person who has retired under the Teacher
  29-22  Retirement System of Texas, as provided by Subtitle C, Title 8,
  29-23  Government Code, with at least 10 <or more> years of service credit
  29-24  in the retirement system for actual service in Texas public schools
  29-25  and who is not eligible to be covered by a plan provided under the
   30-1  Texas Employees Uniform Group Insurance Benefits Act (Article
   30-2  3.50-2, Vernon's Texas Insurance Code), or under the Texas State
   30-3  College and University Employees Uniform Insurance Benefits Act
   30-4  (Article 3.50-3, Vernon's Texas Insurance Code); or
   30-5                    (B)  a person who has retired as a disability
   30-6  retiree under Subtitle C, Title 8, Government Code, and is entitled
   30-7  to receive monthly benefits from the retirement system.
   30-8        SECTION 34.  Section 8, Article 3.50-4, Insurance Code, is
   30-9  amended by adding Subsection (l) to read as follows:
  30-10        (l)  The trustee may contract directly with health care
  30-11  providers to provide benefits to participants in the program.
  30-12  Those benefits may include dental care, eye care, hospital care,
  30-13  surgical care and treatment, medical care and treatment,
  30-14  obstetrical care, and prescription drugs, medicines, and prosthetic
  30-15  devices.
  30-16        SECTION 35.  Article 3.50-4, Insurance Code, is amended by
  30-17  adding Section 18C to read as follows:
  30-18        Sec. 18C.  COORDINATED CARE NETWORK.  (a)  The trustee may
  30-19  take action as it determines to be necessary to implement and
  30-20  administer a coordinated care network for the program.  The trustee
  30-21  may contract with health care practitioners or facilities and may
  30-22  establish credentialing committees to evaluate the qualifications
  30-23  of those practitioners and facilities.
  30-24        (b)  The trustee may contract with additional individuals or
  30-25  entities as the trustee determines to be necessary to implement and
   31-1  administer the network.
   31-2        (c)  The trustee, the Texas public school retired employees
   31-3  group insurance program, the retired school employees group
   31-4  insurance fund, and the board of trustees, officers, advisory
   31-5  committee members, and employees of the trustee are not liable for
   31-6  damages arising from the acts or omissions of health care providers
   31-7  who are participating health care providers in the coordinated care
   31-8  network established by the trustee.  Those health care providers
   31-9  are independent contractors and are responsible for their own acts
  31-10  and omissions.
  31-11        (d)  The trustee, the Texas public school retired employees
  31-12  group insurance program, the retired school employees group
  31-13  insurance fund, or a member of a credentialing committee, or the
  31-14  board of trustees, officers, advisory committee members, or
  31-15  employees of the trustee are not liable for damages arising from
  31-16  any act, statement, determination, recommendation made, or act
  31-17  reported, without malice, in the course of the evaluation of the
  31-18  qualifications of health care providers or of the patient care
  31-19  rendered by those providers.
  31-20        (e)  Except as otherwise provided by this article, all
  31-21  proceedings and records of a credentialing committee are
  31-22  confidential, and all communications made to a credentialing
  31-23  committee are privileged.  The proceedings of a credentialing
  31-24  committee are not subject to the open meetings law, Chapter 271,
  31-25  Acts of the 60th Legislature, Regular Session, 1967 (Article
   32-1  6252-17, Vernon's Texas Civil Statutes), and its subsequent
   32-2  amendments.  Except to the extent required by the constitution of
   32-3  this state or the United States, the records and proceedings of a
   32-4  credentialing committee and a communication made to a credentialing
   32-5  committee are not subject to court subpoena.
   32-6        (f)  An individual, a health care provider, or a medical peer
   32-7  review committee that, without malice, participates in a
   32-8  credentialing committee activity or furnishes records, information,
   32-9  or assistance to a credentialing committee is not liable for
  32-10  damages arising from that act.
  32-11        (g)  Disclosure of confidential credentialing committee
  32-12  information to the affected health care provider that is relevant
  32-13  to the matter under review does not constitute a waiver of the
  32-14  confidentiality requirements imposed under this article.
  32-15        (h)  A written or oral communication made to a credentialing
  32-16  committee, and the records and proceedings of such a committee, may
  32-17  be disclosed to appropriate state or federal agencies, national
  32-18  accreditation bodies, state boards of registration or licensure, or
  32-19  medical peer review committees.  A disclosure under this subsection
  32-20  does not constitute a waiver of the confidential and privileged
  32-21  nature of the information.
  32-22        (i)  A credentialing committee, a person participating in a
  32-23  credentialing review, a health care provider, the trustee, the
  32-24  Texas public school retired employees group insurance program, or
  32-25  the board of trustees, officers, advisory committee members, or
   33-1  employees of the trustee that are named as defendants in any civil
   33-2  action filed as a result of participation in the credentialing
   33-3  process may use otherwise confidential information obtained for
   33-4  legitimate internal business and professional purposes, including
   33-5  use in their own defense.  Use of information under this subsection
   33-6  does not constitute a waiver of the confidential and privileged
   33-7  nature of the information.
   33-8        (j)  In this section, "health care provider" means an
   33-9  individual licensed as a health care practitioner, or a health care
  33-10  facility.
  33-11        SECTION 36.  Section 2, Article 21.24-1, Insurance Code, is
  33-12  amended by adding Subsection (c) to read as follows:
  33-13        (c)  This article applies to insurance coverage provided
  33-14  under the Texas Public School Retired Employees Group Insurance Act
  33-15  (Article 3.50-4, Insurance Code).
  33-16        SECTION 37.  (a)  Monthly payments of a death or retirement
  33-17  benefit annuity by the Teacher Retirement System of Texas are
  33-18  increased beginning with the payment due at the end of January
  33-19  1994.
  33-20        (b)  The increase applies only if the latest effective date
  33-21  of retirement of the person on whose account the benefit is based,
  33-22  or the date of death in the case of a death benefit annuity,
  33-23  occurred before September 1, 1991.  The increase does not apply to
  33-24  payments received under Section 824.304(a), 824.404, or 824.501,
  33-25  Government Code.
   34-1        (c)  The amount of the monthly increase is computed by
   34-2  multiplying the previous monthly benefit by a percentage determined
   34-3  in accordance with the following table:
   34-4  Retirement Date or, if applicable, Date of Death           Increase
   34-5  Before September 1, 1968                                       5 %
   34-6  On or after September 1, 1968, but before September 1, 1969    7 %
   34-7  On or after September 1, 1969, but before September 1, 1970    6 %
   34-8  On or after September 1, 1970, but before September 1, 1971   13 %
   34-9  On or after September 1, 1971, but before September 1, 1972   12 %
  34-10  On or after September 1, 1972, but before September 1, 1973   13 %
  34-11  On or after September 1, 1973, but before September 1, 1974   15 %
  34-12  On or after September 1, 1974, but before September 1, 1975   12 %
  34-13  On or after September 1, 1975, but before September 1, 1976   10 %
  34-14  On or after September 1, 1976, but before September 1, 1977   14 %
  34-15  On or after September 1, 1977, but before September 1, 1978   13 %
  34-16  On or after September 1, 1978, but before September 1, 1979   11 %
  34-17  On or after September 1, 1979, but before September 1, 1980   10 %
  34-18  On or after September 1, 1980, but before September 1, 1981    7 %
  34-19  On or after September 1, 1981, but before September 1, 1991    5 %
  34-20        (d)  The increase for a monthly retirement annuity to a
  34-21  retiree is based on the retiree's latest effective retirement date.
  34-22  The increase for a monthly retirement annuity being continued to a
  34-23  beneficiary after the death of the retiree is based on the
  34-24  retiree's retirement date.  The increase for a death benefit amount
  34-25  is based on the date of death of the person on whose account the
   35-1  benefit is based.
   35-2        (e)  The percentage increases provided for in this section
   35-3  apply to monthly payments of a minimum benefit increased elsewhere
   35-4  in this Act, but apply only to the amount of the monthly annuity as
   35-5  of August 1, 1993.  No additional increase shall be paid to an
   35-6  annuitant under this section if the increase provided for elsewhere
   35-7  in this Act is greater than the increase provided for in this
   35-8  section.  If the increase provided for in this section is less than
   35-9  the increase provided for elsewhere in this Act, an annuitant shall
  35-10  receive the difference as an additional increase under this
  35-11  section.
  35-12        SECTION 38.  Section 824.304(c), Government Code, as it was
  35-13  designated immediately before the effective date of this Act, is
  35-14  repealed.
  35-15        SECTION 39.  Monthly payments of a standard service
  35-16  retirement annuity made after September 1, 1993, under Section
  35-17  824.203, Government Code, to persons or the beneficiaries of
  35-18  persons who retired before November 1, 1991, may not be less than
  35-19  $6.50 a month for each year of service credit or, for a member who
  35-20  was at least 65 years old at the time of retirement, not less than
  35-21  the greater of $6.50 a month for each year of service credit, or
  35-22  $150 a month.  The minimum benefits provided by this section are
  35-23  subject to reduction in the same manner as other benefits because
  35-24  of early retirement or selection of an optional retirement annuity.
  35-25        SECTION 40.  The Teacher Retirement System of Texas may
   36-1  restore monthly payments of a survivor benefit under Section
   36-2  824.404, Government Code, or its predecessor statute, to a spouse
   36-3  of a deceased member or retiree that were terminated because of
   36-4  remarriage before the effective date of Section 5, Chapter 570,
   36-5  Acts of the 66th Legislature, 1979, on application for the benefits
   36-6  by the beneficiary.  Retroactive payments of the benefits may not
   36-7  be made.  Payments of the benefits resume beginning with the month
   36-8  after the month in which the beneficiary applies for restoration of
   36-9  benefits under this section.
  36-10        SECTION 41.  (a)  A retiree who is subject to loss of
  36-11  benefits under Section 824.601, Government Code, for months to
  36-12  which the exception provided by Section 824.602(a)(3), Government
  36-13  Code, could have applied if the retiree had executed the required
  36-14  form within the time provided by Section 824.602(a)(3) before its
  36-15  amendment by Chapter 13, Acts of the 72nd Legislature, 1st Called
  36-16  Session, 1991, is eligible to avoid loss of the benefits or to have
  36-17  any lost benefits restored by the Teacher Retirement System of
  36-18  Texas.
  36-19        (b)  To apply under this section to have lost benefits
  36-20  restored or to avoid loss of benefits, a retiree must submit a
  36-21  written request to the retirement system not later than March 1,
  36-22  1994.
  36-23        (c)  Benefits eligible to be paid under this section are
  36-24  those that would have been payable between September 1, 1985, and
  36-25  August 31, 1991, if the retiree had not failed to execute the
   37-1  required form in a timely manner.
   37-2        (d)  A retiree may not apply for payment of benefits under
   37-3  this section for months of employment credited under Section
   37-4  823.502, Government Code.  Months of employment in which a retiree
   37-5  receives a monthly benefit payment under this section may not be
   37-6  considered in applying Section 823.502, Government Code.  Only a
   37-7  retiree who is surviving on the effective date of this Act is
   37-8  eligible to apply for benefits under this section.
   37-9        SECTION 42.  A supplemental service retirement benefit
  37-10  provided for by Chapter 14, Acts of the 60th Legislature, Regular
  37-11  Session, 1969, that is being paid on the effective date of this Act
  37-12  to a retiree who is still living is payable to the beneficiary of
  37-13  the retiree if retirement benefits will be payable to the
  37-14  beneficiary on the death of the retiree.
  37-15        SECTION 43.  (a)  All employees of the Central Education
  37-16  Agency and the Texas Higher Education Coordinating Board, and
  37-17  employees of the Texas Youth Commission, the Texas Department of
  37-18  Criminal Justice, the Texas School for the Blind and Visually
  37-19  Impaired, the Texas School for the Deaf, and any other state agency
  37-20  the majority of employees of which are members of the Employees
  37-21  Retirement System of Texas are subject to an election made under
  37-22  this section, if the employees are contributing members of the
  37-23  Teacher Retirement System of Texas on the day before the effective
  37-24  date of the transfer made under the election and remain employees
  37-25  of the same agency on the effective date of the transfer.
   38-1        (b)  An election may be made under this section to transfer
   38-2  membership of all affected employees from the Teacher Retirement
   38-3  System of Texas to the Employees Retirement System of Texas if the
   38-4  transfer would be in the best interests of the agency and the
   38-5  employees.  The commissioner of education, after consultation with
   38-6  the State Board of Education, may make the election for employees
   38-7  of the Central Education Agency.  The commissioner of higher
   38-8  education, after consultation with the Texas Higher Education
   38-9  Coordinating Board, may make the election for employees of that
  38-10  board.  The governing boards of the other agencies described by
  38-11  Subsection (a) of this section may make the election for affected
  38-12  employees of those agencies.
  38-13        (c)  Notice of an election made under this section must be
  38-14  filed with the Employees Retirement System of Texas not later than
  38-15  the 60th day preceding the effective date of the transfer of
  38-16  membership.  The effective date of a transfer of membership is
  38-17  September 1, 1994, except that for employees of the Central
  38-18  Education Agency, the effective date is September 1, 1993.
  38-19        (d)  A person who becomes employed by a state agency for
  38-20  which an election is made under this section on or after the
  38-21  effective date of the transfer of membership of agency employees
  38-22  becomes a member of the Employees Retirement System of Texas on the
  38-23  first day of employment, unless prohibited as provided by Chapter
  38-24  812, Government Code.
  38-25        (e)  At the time of the retirement or death of a person whose
   39-1  membership is transferred from the Teacher Retirement System of
   39-2  Texas to the Employees Retirement System of Texas pursuant to
   39-3  legislation enacted by the 73rd Legislature, Regular Session, 1993,
   39-4  the Teacher Retirement System of Texas shall transfer to the
   39-5  Employees Retirement System of Texas the person's service credit in
   39-6  the Teacher Retirement System of Texas and an amount of money equal
   39-7  to the portion of the actuarial value of any annuity that becomes
   39-8  payable under Chapter 814, Government Code, that represents the
   39-9  percentage of the total amount of the person's service credited in
  39-10  both systems that was credited in the Teacher Retirement System of
  39-11  Texas.
  39-12        SECTION 44.  (a)  The Teacher Retirement System of Texas
  39-13  shall conduct a study of coverage under and participation in the
  39-14  Texas Public School Retired Employees Group Insurance Program and
  39-15  potential coverage under and participation in a statewide health
  39-16  insurance program for school district employees.
  39-17        (b)  The study shall include a survey of public school
  39-18  districts to assess interest in changes to the program for retired
  39-19  school employees and participation in a statewide health insurance
  39-20  program for school district employees.  The survey shall include
  39-21  one or more proposals under which the employer would pay the major
  39-22  portion of the cost of coverage for only the employee.  The survey
  39-23  shall elicit responses to proposals that vary some or all of the
  39-24  following factors:
  39-25              (1)  cost to a district;
   40-1              (2)  cost to the employee or retiree;
   40-2              (3)  restrictions on a district's offering of other
   40-3  health plans, including health maintenance organizations;
   40-4              (4)  controls on a district's ability to leave the
   40-5  program, once enrolled; and
   40-6              (5)  cost containment features.
   40-7        (c)  The retirement system shall report its recommendations
   40-8  and the results of its survey to the Legislative Budget Board and
   40-9  the governor not later than June 30, 1994.  The report shall
  40-10  include recommendations on the necessary size of and methods of
  40-11  financing the contingency reserves for the programs, necessary cost
  40-12  containment features, and at least three options to minimize
  40-13  adverse selection against the programs.
  40-14        (d)  Each person who is employed full-time by a public school
  40-15  district in this state shall pay an annual fee of $10 to the
  40-16  Teacher Retirement System of Texas in addition to any other fee
  40-17  required by law.  The retirement system may adopt rules for
  40-18  collection of the fee.  The retirement system may use a portion of
  40-19  the fees collected under this subsection for the purposes of
  40-20  conducting the study required by this section and also may spend
  40-21  for these purposes amounts from the retired school employees group
  40-22  insurance fund that are designated for administrative expenses.
  40-23  The total expenditures for the study may not exceed $100,000 unless
  40-24  approved by the Legislative Budget Board.   Fees collected under
  40-25  this subsection that are not spent for purposes of the study must
   41-1  be held in trust by the retirement system to provide contingency
   41-2  reserves for a statewide program for school district employees.  If
   41-3  a statewide program is not created by the 74th Legislature, the
   41-4  legislature shall provide for a refund of the remaining fees or an
   41-5  offset against other fees required.
   41-6        SECTION 45.  The change in law made by Section 11 of this Act
   41-7  applies to benefits paid after the effective date of this Act even
   41-8  if the beneficiary elected to receive the monthly benefits before
   41-9  that date.
  41-10        SECTION 46.  This Act takes effect September 1, 1993, except
  41-11  Sections 35 and 43 and this section, which take effect immediately.
  41-12        SECTION 47.  The importance of this legislation and the
  41-13  crowded condition of the calendars in both houses create an
  41-14  emergency and an imperative public necessity that the
  41-15  constitutional rule requiring bills to be read on three several
  41-16  days in each house be suspended, and this rule is hereby suspended,
  41-17  and that this Act take effect and be in force according to its
  41-18  terms, and it is so enacted.