1-1 By: Johnson (Senate Sponsor - Barrientos) H.B. No. 2711
1-2 (In the Senate - Received from the House May 17, 1993;
1-3 May 18, 1993, read first time and referred to Committee on Finance;
1-4 May 21, 1993, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; May 21, 1993,
1-6 sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Montford x
1-10 Turner x
1-11 Armbrister x
1-12 Barrientos x
1-13 Bivins x
1-14 Ellis x
1-15 Haley x
1-16 Moncrief x
1-17 Parker x
1-18 Ratliff x
1-19 Sims x
1-20 Truan x
1-21 Zaffirini x
1-22 COMMITTEE SUBSTITUTE FOR H.B. No. 2711 By: Barrientos
1-23 A BILL TO BE ENTITLED
1-24 AN ACT
1-25 relating to the administration of, benefits payable by, eligibility
1-26 for benefits payable by, and credit under programs administered by,
1-27 the Teacher Retirement System of Texas; prohibiting certain
1-28 interests in contracts; and providing for the sunset review of the
1-29 system.
1-30 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-31 SECTION 1. Section 821.001, Government Code, is amended by
1-32 adding Subdivisions (18) and (19) to read as follows:
1-33 (18) "Alternate payee" has the meaning assigned that
1-34 term by Section 804.001.
1-35 (19) "Beneficiary" means the person or entity who,
1-36 under a valid written designation or by law, is entitled to receive
1-37 benefits payable by the retirement system on the death of a member
1-38 or annuitant.
1-39 SECTION 2. Section 823.401, Government Code, is amended by
1-40 amending Subsections (c) and (f) and adding Subsection (h) to read
1-41 as follows:
1-42 (c) A member eligible to establish credit under this section
1-43 is one who has at least five <10> years of service credit in the
1-44 retirement system for actual service in public schools.
1-45 (f) The amount of service credit a member may establish
1-46 under this section may not exceed the lesser of the number of years
1-47 of membership service credit the member has in the retirement
1-48 system for actual service in public schools or 10 years.
1-49 (h) A member purchasing out-of-state service credit does not
1-50 qualify for insurance coverage until the member has 10 or more
1-51 years of membership service credit for actual service in public
1-52 schools.
1-53 SECTION 3. Section 823.402(e), Government Code, is amended
1-54 to read as follows:
1-55 (e) A member may establish credit under this section by
1-56 depositing with the retirement system for each year of
1-57 developmental leave claimed an amount equal to the sum of:
1-58 (1) the rate of member contributions required during
1-59 the <member's most recent> year of <service that preceded the
1-60 developmental> leave, times the member's annual rate of
1-61 compensation during the member's most recent year of creditable
1-62 service that preceded the year of leave <that year>; plus
1-63 (2) the amount that the state would have contributed
1-64 had the member performed membership service during the year of
1-65 leave at the member's annual rate of compensation during the most
1-66 recent year of service that preceded the leave; plus
1-67 (3) any membership fees in effect during the year of
1-68 leave.
2-1 SECTION 4. Section 823.501(b), Government Code, is amended
2-2 to read as follows:
2-3 (b) A person eligible to reinstate service credit under this
2-4 section is one who resumes membership service in the retirement
2-5 system <and subsequently performs membership service for the
2-6 shorter of the following periods:>
2-7 <(1) two consecutive years; or>
2-8 <(2) a continuous period equal in duration to the
2-9 period from the date of termination to the date of resumption of
2-10 membership>.
2-11 SECTION 5. Sections 824.101(c) and (e), Government Code, are
2-12 amended to read as follows:
2-13 (c) Only one person may be designated as beneficiary of an
2-14 optional retirement annuity under Section 824.204(c)(1) or (c)(2),
2-15 and a designation of beneficiary under either of those options may
2-16 not be made, changed, or revoked after the later of the date on
2-17 which the retirement system makes the first annuity payment to the
2-18 retiree or the date the first payment becomes due. For purposes of
2-19 this section, the term "makes payment" includes the depositing in
2-20 the mail of a payment warrant or the crediting of an account with
2-21 payment through electronic funds transfer <of the member's
2-22 retirement>.
2-23 (e) The retirement system by rule may provide for the
2-24 designation of alternate beneficiaries and may adopt other rules to
2-25 administer this section.
2-26 SECTION 6. Section 824.204(a), Government Code, is amended
2-27 to read as follows:
2-28 (a) Instead of the standard service retirement annuity
2-29 payable under Section 824.203 or an annuity reduced because of age
2-30 under Section 824.202, a retiring member may elect to receive an
2-31 optional service retirement annuity, reduced for early retirement
2-32 if applicable, under this section. An election to receive an
2-33 optional service retirement annuity must be filed with the board of
2-34 trustees not later than the effective date of retirement.
2-35 SECTION 7. Subchapter C, Chapter 824, Government Code, is
2-36 amended by adding Section 824.206 to read as follows:
2-37 Sec. 824.206. CHANGE OF SERVICE RETIREMENT ANNUITY PAYMENT
2-38 PLAN. (a) A retiree may change the retiree's choice of service
2-39 retirement annuity payment plans after the retiree's effective date
2-40 of retirement by filing written notice with the board of trustees
2-41 before the later of the date on which the retirement system makes
2-42 the first annuity payment or the date the first payment becomes
2-43 due. After the first payment has been made by the retirement
2-44 system or has become due, a retiree may not change the annuity
2-45 payment plan selected.
2-46 (b) For purposes of this section, the term "makes payment"
2-47 includes the depositing in the mail of a payment warrant or the
2-48 crediting of an account with payment through electronic funds
2-49 transfer.
2-50 (c) The retirement system may adopt rules to administer this
2-51 section.
2-52 SECTION 8. Section 824.304(d), Government Code, is
2-53 redesignated as Section 824.304(c) to read as follows:
2-54 (c) <(d)> Before the 31st day after the date on which the
2-55 medical board certifies a member's disability, the member may
2-56 reinstate withdrawn contributions and make deposits for service
2-57 previously waived, military service, and equivalent membership
2-58 service and receive service credit as provided by this subtitle.
2-59 SECTION 9. Section 824.308(a), Government Code, is amended
2-60 to read as follows:
2-61 (a) Instead of an annuity payable under Section 824.304(b),
2-62 a member retiring under that section may elect to receive an
2-63 optional disability retirement annuity under this section. An
2-64 election to receive an optional disability retirement annuity must
2-65 be filed with the board of trustees not later than the effective
2-66 date of retirement.
2-67 SECTION 10. Subchapter D, Chapter 824, Government Code, is
2-68 amended by adding Section 824.309 to read as follows:
2-69 Sec. 824.309. CHANGE OF DISABILITY RETIREMENT PAYMENT PLAN.
2-70 (a) A retiree may change the retiree's choice of disability
3-1 retirement payment plans after the retiree's effective date of
3-2 retirement by filing written notice with the board of trustees
3-3 before the later of the date on which the retirement system makes
3-4 the first annuity payment or the date the first payment becomes
3-5 due. After the first payment has been made by the retirement
3-6 system or has become due, a retiree may not change the annuity
3-7 payment plan selected.
3-8 (b) For purposes of this section, the term "makes payment"
3-9 includes the depositing in the mail of a payment warrant or the
3-10 crediting of an account with payment through electronic funds
3-11 transfer.
3-12 (c) The retirement system may adopt rules to administer this
3-13 section.
3-14 SECTION 11. Sections 824.404(b), (c), and (d), Government
3-15 Code, are amended to read as follows:
3-16 (b) If the designated beneficiary is the spouse or a
3-17 dependent parent of the decedent, the beneficiary may elect to
3-18 receive for life a monthly benefit of $150 <$100>, beginning
3-19 immediately or on the date the beneficiary becomes 65 years old,
3-20 whichever is later.
3-21 (c) If the designated beneficiary is the spouse of the
3-22 decedent and has one or more children less than 18 years old or has
3-23 custody of one or more children of the decedent who are less than
3-24 18 years old, the designated beneficiary may elect to receive:
3-25 (1) a monthly benefit of $250 <$200> payable until the
3-26 youngest child becomes 18 years old; and
3-27 (2) when the youngest child has attained the age of
3-28 18, a monthly benefit for life of $150 <$100>, beginning on the
3-29 date the beneficiary becomes 65 years old.
3-30 (d) If the designated beneficiary or beneficiaries are the
3-31 decedent's dependent children who are less than 18 years old, their
3-32 guardian may elect to receive for them:
3-33 (1) a monthly benefit of $250 <$200>, payable as long
3-34 as two or more children are less than 18 years old; and
3-35 (2) a monthly benefit of $150 <$100>, payable as long
3-36 as only one child is less than 18 years old.
3-37 SECTION 12. Subchapter A, Chapter 825, Government Code, is
3-38 amended by adding Sections 825.0031 and 825.0032 to read as
3-39 follows:
3-40 Sec. 825.0031. NONDISCRIMINATION IN APPOINTMENTS.
3-41 Appointments to the board shall be made without regard to the race,
3-42 color, disability, sex, religion, age, or national origin of the
3-43 appointees.
3-44 Sec. 825.0032. INELIGIBILITY FOR BOARD AND OF CERTAIN
3-45 EMPLOYEES. (a) Except as provided by Subsection (b), a person is
3-46 not eligible for appointment to the board if the person or the
3-47 person's spouse:
3-48 (1) is employed by or participates in the management
3-49 of a business entity or other organization receiving funds from the
3-50 retirement system; or
3-51 (2) owns or controls, directly or indirectly, more
3-52 than a 10 percent interest in a business entity or other
3-53 organization receiving funds from the retirement system.
3-54 (b) Subsection (a) does not apply to employment by,
3-55 participation in the management of, or ownership or control of an
3-56 interest in a business entity or other organization on behalf of
3-57 the retirement system.
3-58 (c) A paid officer, employee, or consultant of a Texas trade
3-59 association in the field of investment or insurance may not be a
3-60 trustee or an employee of the retirement system who is exempt from
3-61 the state's position classification plan or is compensated at or
3-62 above the amount prescribed by the General Appropriations Act for
3-63 step 1, salary group 17, of the position classification salary
3-64 schedule.
3-65 (d) A person who is the spouse of a paid officer, manager,
3-66 or consultant of a Texas trade association in the field of
3-67 investment or insurance may not be a trustee and may not be an
3-68 employee of the retirement system who is exempt from the state's
3-69 position classification plan or is compensated at or above the
3-70 amount prescribed by the General Appropriations Act for step 1,
4-1 salary group 17, of the position classification salary schedule.
4-2 (e) For the purposes of this section, a Texas trade
4-3 association is a nonprofit, cooperative, and voluntarily joined
4-4 association of business or professional competitors in this state
4-5 designed to assist its members and its industry or profession in
4-6 dealing with mutual business or professional problems and in
4-7 promoting their common interest.
4-8 (f) A person may not serve as a trustee or act as the
4-9 general counsel to the board if the person is required to register
4-10 as a lobbyist under Chapter 305 because of the person's activities
4-11 for compensation on behalf of a business or an association related
4-12 to the operation of the board.
4-13 SECTION 13. Section 825.006, Government Code, is amended to
4-14 read as follows:
4-15 Sec. 825.006. SUNSET PROVISION. The board of trustees of
4-16 the Teacher Retirement System of Texas is subject to review under
4-17 Chapter 325 (Texas Sunset Act), but is not abolished under that
4-18 chapter. The board shall be reviewed during the period in which
4-19 state agencies abolished in 1995 <1993 and every 12th year after
4-20 1993> are reviewed. This section expires September 1, 1995.
4-21 SECTION 14. Subchapter A, Chapter 825, Government Code, is
4-22 amended by adding Section 825.010 to read as follows:
4-23 Sec. 825.010. GROUNDS FOR REMOVAL OF TRUSTEE. (a) It is a
4-24 ground for removal from the board if a trustee:
4-25 (1) violates a prohibition established by Section
4-26 825.0032;
4-27 (2) cannot discharge the person's duties for a
4-28 substantial part of the term for which the person is appointed
4-29 because of illness or disability; or
4-30 (3) is absent from more than half of the regularly
4-31 scheduled board meetings that the person is eligible to attend
4-32 during a calendar year unless the absence is excused by majority
4-33 vote of the board.
4-34 (b) The validity of an action of the board is not affected
4-35 by the fact that it is taken when a ground for removal of a trustee
4-36 exists.
4-37 (c) If the executive director has knowledge that a potential
4-38 ground for removal exists, the executive director shall notify the
4-39 chairman of the board of the ground. The chairman shall then
4-40 notify the appropriate appointing officer or body that a potential
4-41 ground for removal exists.
4-42 SECTION 15. Subchapter B, Chapter 825, Government Code, is
4-43 amended by adding Sections 825.113 and 825.114 to read as follows:
4-44 Sec. 825.113. MISCELLANEOUS BOARD DUTIES. (a) The board
4-45 shall provide to its trustees and employees, as often as necessary,
4-46 information regarding their qualification for office or employment
4-47 under this chapter and their responsibilities under applicable laws
4-48 relating to standards of conduct for state officers or employees.
4-49 (b) The board shall develop and implement policies that
4-50 clearly define the respective responsibilities of the board and the
4-51 staff of the retirement system.
4-52 (c) The board shall prepare information of interest to the
4-53 retirement system's members describing the functions of the system
4-54 and the system's procedures by which complaints are filed with and
4-55 resolved by the system. The system shall make the information
4-56 available to the system's members and appropriate state agencies.
4-57 (d) The board by rule shall establish methods by which
4-58 members are notified of the name, mailing address, and telephone
4-59 number of the retirement system for the purpose of directing
4-60 complaints to the system.
4-61 (e) The board shall develop and implement policies that
4-62 provide the public with a reasonable opportunity to appear before
4-63 the board and to speak on any issue under the jurisdiction of the
4-64 board.
4-65 (f) The board shall prepare and maintain a written plan that
4-66 describes how a person who does not speak English can be provided
4-67 reasonable access to the board's programs. The board shall also
4-68 comply with federal and state laws for program and facility
4-69 accessibility.
4-70 Sec. 825.114. ADVISORY COMMITTEES. (a) The board of
5-1 trustees may establish advisory committees as it considers
5-2 necessary to assist it in performing its duties. Members of
5-3 advisory committees established under this section serve at the
5-4 pleasure of the board.
5-5 (b) Notwithstanding any other law to the contrary, the board
5-6 of trustees by rule shall determine the amount and manner of any
5-7 compensation or expense reimbursement to be paid members of an
5-8 advisory committee performing service for the retirement system for
5-9 performing the work of the advisory committee. All compensation
5-10 and expense reimbursements for an advisory committee established
5-11 under this section are payable from the expense account or the
5-12 retired school employees group insurance fund, as applicable.
5-13 (c) Notwithstanding any other law to the contrary, the size
5-14 and composition of advisory committees created by statute for the
5-15 retirement system or required by statute to be created by the
5-16 retirement system are as provided by the statute creating or
5-17 providing for the creation of the particular committee.
5-18 SECTION 16. Section 825.202, Government Code, is amended to
5-19 read as follows:
5-20 Sec. 825.202. EXECUTIVE DIRECTOR <SECRETARY>. (a) The
5-21 board of trustees, by a majority vote of all members, shall appoint
5-22 an executive director <secretary>.
5-23 (b) The executive director <secretary> may not be a member
5-24 of the board of trustees.
5-25 (c) To be eligible to serve as the executive director
5-26 <secretary>, a person must have been a citizen of this state for
5-27 the three years immediately preceding the appointment.
5-28 (d) The executive director <secretary> shall recommend to
5-29 the board actuarial and other services necessary to administer the
5-30 retirement system.
5-31 (e) Annually, the executive director <secretary> shall
5-32 prepare an itemized expense budget for the following fiscal year
5-33 and shall submit the budget to the board for review and adoption.
5-34 SECTION 17. Section 825.206, Government Code, is amended by
5-35 adding Subsection (c) to read as follows:
5-36 (c) The board of trustees annually shall evaluate the
5-37 performance of the actuary during the previous year. At least once
5-38 every three years, the board shall redesignate its actuary after
5-39 advertising for and reviewing proposals from providers of actuarial
5-40 services.
5-41 SECTION 18. Section 825.207(b), Government Code, is amended
5-42 to read as follows:
5-43 (b) The state treasurer shall pay money from the accounts of
5-44 the retirement system on warrants drawn by the comptroller of
5-45 public accounts and authorized by vouchers signed by the executive
5-46 director <secretary> or other persons designated by the board of
5-47 trustees.
5-48 SECTION 19. Sections 825.209(b) and (c), Government Code,
5-49 are amended to read as follows:
5-50 (b) The executive director <secretary> shall give a surety
5-51 bond in the amount of $25,000.
5-52 (c) The board of trustees may require any trustee or
5-53 employee of the board, other than the executive director
5-54 <secretary>, to give a surety bond in an amount determined by the
5-55 board.
5-56 SECTION 20. Subchapter C, Chapter 825, Government Code, is
5-57 amended by adding Sections 825.211, 825.212, 825.213, and 825.214
5-58 to read as follows:
5-59 Sec. 825.211. CERTAIN INTERESTS IN LOANS, INVESTMENTS, OR
5-60 CONTRACTS PROHIBITED. (a) Except as provided by Subsection (c), a
5-61 person described by Subsection (b) may not participate in or be the
5-62 beneficiary of, directly or indirectly, a loan, commitment to lend,
5-63 a guarantee or endorsement to lend, or investment by the retirement
5-64 system or a contract to advise the system or manage property or
5-65 investments for the system.
5-66 (b) The prohibition provided by Subsection (a) applies to a
5-67 trustee or employee of the retirement system, a consultant or
5-68 advisor to the retirement system, and a person related within the
5-69 second degree by consanguinity or affinity to a trustee, employee,
5-70 consultant, or advisor.
6-1 (c) The prohibition provided by Subsection (a) does not
6-2 apply to actions taken by a trustee or employee of the retirement
6-3 system within the scope of that person's official duties for the
6-4 system or actions taken by a consultant or advisor within the scope
6-5 of the services for which the person is being compensated by the
6-6 retirement system, if the actions do not involve a relationship
6-7 required to be disclosed under Section 825.212. The prohibition
6-8 provided by Subsection (a) does not apply to an indirect benefit
6-9 received resulting from retirement system membership.
6-10 Sec. 825.212. RETIREMENT SYSTEM ETHICS POLICY. (a) In
6-11 addition to any other requirements provided by law, the board of
6-12 trustees shall enforce an ethics policy as provided by this section
6-13 for employees of and consultants and advisors to the retirement
6-14 system.
6-15 (b) Each employee of the retirement system who exercises
6-16 significant decisionmaking or fiduciary authority, as determined by
6-17 the board, shall file financial disclosure statements with a person
6-18 designated by the board. The content of a financial disclosure
6-19 statement must comply substantially with the requirements of
6-20 Section 4, Chapter 421, Acts of the 63rd Legislature, Regular
6-21 Session, 1973 (Article 6252-9b, Vernon's Texas Civil Statutes). A
6-22 statement must be filed not later than the 30th day after the date
6-23 a person is employed in a significant decisionmaking or fiduciary
6-24 position and annually after employment not later than April 30.
6-25 The filing deadline may be postponed by the executive director for
6-26 not more than 60 days on written request or for an additional
6-27 period for good cause, as determined by the chairman of the board.
6-28 The retirement system shall maintain a financial disclosure
6-29 statement for at least five years after the date of its filing.
6-30 (c) An employee who has a business or commercial
6-31 relationship that could reasonably be expected to diminish the
6-32 employee's independence of judgment in the performance of the
6-33 employee's responsibilities to the retirement system shall disclose
6-34 that relationship in writing to a person designated by the board.
6-35 (d) An employee who files a disclosure statement under
6-36 Subsection (c) shall refrain from giving advice or making decisions
6-37 about matters affected by the conflict of interest unless the
6-38 board, after consultation with the general counsel of the
6-39 retirement system, expressly waives this prohibition. The
6-40 retirement system shall maintain a written record of each waiver
6-41 and the reasons for it. The board may delegate the authority to
6-42 waive prohibitions under this subsection to one or more designated
6-43 employees on a vote of a majority of the members of the board at an
6-44 open meeting called and held in compliance with Chapter 271, Acts
6-45 of the 60th Legislature, Regular Session, 1967 (Article 6252-17,
6-46 Vernon's Texas Civil Statutes). The board shall have any order
6-47 delegating authority to waive prohibitions under this section
6-48 entered into the minutes of the meeting. The board may adopt
6-49 criteria for designated employees to use to determine the kinds of
6-50 relationships that do not constitute a material conflict of
6-51 interest for purposes of this subsection.
6-52 (e) The board by rule shall adopt standards of conduct
6-53 applicable to consultants and advisors to the retirement system who
6-54 may reasonably be expected to receive more than $10,000
6-55 compensation from the system for a fiscal year or who render
6-56 important investment advice to the retirement system.
6-57 (f) A consultant or advisor who, directly or indirectly, has
6-58 a personal or private commercial or business relationship,
6-59 unrelated to the services that the consultant or advisor performs
6-60 for the retirement system, with any other party to a transaction
6-61 with the system that could reasonably be expected to diminish the
6-62 person's independence of judgment in the performance of the
6-63 person's responsibilities to the system shall disclose that
6-64 relationship in writing to the executive director.
6-65 (g) The board by rule shall require consultants and advisors
6-66 to the retirement system and brokers to file regularly with the
6-67 system a report detailing any expenditure of more than $50 made on
6-68 behalf of a trustee or employee of the system.
6-69 (h) The board shall prescribe forms for financial disclosure
6-70 statements, disclosure statements of conflicts of interest, and
7-1 waivers of the prohibition against involvement in a matter affected
7-2 by a conflict of interest. The statements and waivers are open
7-3 records. The board shall designate an employee to be the custodian
7-4 of the statements and waivers for purposes of public disclosure.
7-5 Sec. 825.213. EMPLOYMENT PRACTICES. (a) The executive
7-6 director or the executive director's designee shall develop an
7-7 intra-agency career ladder program. The program shall require
7-8 intra-agency posting of all nonentry level positions concurrently
7-9 with any public posting.
7-10 (b) The executive director or the executive director's
7-11 designee shall develop a system of annual performance evaluations.
7-12 All merit pay for system employees must be based on the system
7-13 established under this subsection.
7-14 (c) The executive director or the executive director's
7-15 designee shall prepare and maintain a written policy statement to
7-16 assure implementation of a program of equal employment opportunity
7-17 under which all personnel transactions are made without regard to
7-18 race, color, disability, sex, religion, age, or national origin.
7-19 The policy statement must include:
7-20 (1) personnel policies, including policies relating to
7-21 recruitment, evaluation, selection, appointment, training, and
7-22 promotion of personnel that are in compliance with requirements of
7-23 the Commission on Human Rights Act (Article 5221k, Vernon's Texas
7-24 Civil Statutes);
7-25 (2) a comprehensive analysis of the retirement
7-26 system's work force that meets federal and state guidelines;
7-27 (3) procedures by which a determination can be made of
7-28 significant underuse in the retirement system's work force of all
7-29 persons for whom federal or state guidelines encourage a more
7-30 equitable balance; and
7-31 (4) reasonable methods to appropriately address those
7-32 areas of significant underuse.
7-33 (d) A policy statement prepared under Subsection (c) must
7-34 cover an annual period, be updated annually and reviewed by the
7-35 Commission on Human Rights for compliance with Subsection (c), and
7-36 be filed with the governor's office.
7-37 (e) The governor's office shall deliver a biennial report to
7-38 the legislature based on the information received under Subsection
7-39 (d). The report may be made separately or as a part of other
7-40 biennial reports made to the legislature.
7-41 Sec. 825.214. FINANCIAL AUDITOR. A person employed to
7-42 perform a financial audit of the retirement system must be selected
7-43 by and report to the board of trustees.
7-44 SECTION 21. Subchapter D, Chapter 825, Government Code, is
7-45 amended by adding Section 825.3021 to read as follows:
7-46 Sec. 825.3021. APPRAISAL AND SALE OF REAL PROPERTY. If the
7-47 retirement system acquires, through foreclosure or conveyance of
7-48 deed in lieu of foreclosure, real property assets or stock in an
7-49 entity the major asset of which is real property, the retirement
7-50 system shall, not later than the 90th day after the date of
7-51 acquisition:
7-52 (1) have the real property appraised by an appraiser
7-53 who is not a trustee or employee of the retirement system and who
7-54 is certified as MAI or SRA;
7-55 (2) acquire a foreclosure endorsement to the
7-56 mortgagee's title insurance policy; and
7-57 (3) if the real property contains improvements, employ
7-58 an individual who is not, or a property management company that is
7-59 not owned by, a trustee or employee of the retirement system and
7-60 who is, or that employs, a CPM, CAM, or RAM to manage the property.
7-61 SECTION 22. Section 825.303(b), Government Code, is amended
7-62 to read as follows:
7-63 (b) To be eligible to lend securities under this section, a
7-64 bank or brokerage firm must:
7-65 (1) be experienced in the operation of a fully secured
7-66 securities loan program;
7-67 (2) maintain adequate capital in the prudent judgment
7-68 of the retirement system to assure the safety of the securities;
7-69 (3) execute an indemnification agreement satisfactory
7-70 in form and content to the retirement system fully indemnifying the
8-1 retirement system against loss resulting from borrower default or
8-2 the failure of the bank or brokerage firm to properly execute the
8-3 responsibilities of the bank or brokerage firm under the applicable
8-4 securities lending agreement <its operation of a securities loan
8-5 program for the system's securities>; <and>
8-6 (4) require any securities broker or dealer to whom it
8-7 lends securities belonging to the retirement system to deliver to
8-8 and maintain with the custodian collateral in the form of cash or
8-9 <United States> government securities eligible for book entry in
8-10 either the Federal Reserve System or the Participants Trust
8-11 Company, in an amount equal to not less than 100 percent of the
8-12 market value, from time to time, of the loaned securities; and
8-13 (5) comply with guidelines the board of trustees may
8-14 adopt concerning the investment of cash collateral, borrower
8-15 limits, and other items.
8-16 SECTION 23. Section 825.311, Government Code, is amended to
8-17 read as follows:
8-18 Sec. 825.311. INTEREST ACCOUNT. In the interest account the
8-19 retirement system shall:
8-20 (1) deposit all income, interest, and dividends from
8-21 deposits and investments of assets of the retirement system; <and>
8-22 (2) accumulate net capital gains and losses resulting
8-23 from the sale, call, maturity, <or> conversion, or recognition of
8-24 changes in carrying values of investments of the retirement system;
8-25 and
8-26 (3) accumulate net income or losses from other
8-27 investments <of securities>.
8-28 SECTION 24. Section 825.312(a), Government Code, is amended
8-29 to read as follows:
8-30 (a) The retirement system shall deposit in the expense
8-31 account:
8-32 (1) all membership fees required by this subtitle;
8-33 <and>
8-34 (2) money required to be deposited in the account by
8-35 Section 825.313(b)(3) or 825.313(c); and
8-36 (3) money received from the Texas Public School
8-37 Retired Employees Group Insurance Program for service performed for
8-38 the program by the retirement system.
8-39 SECTION 25. Sections 825.403(b) and (c), Government Code,
8-40 are amended to read as follows:
8-41 (b) Each employer or the employer's designated disbursing
8-42 officer, at a time and in a form prescribed by the retirement
8-43 system, shall send to the executive director <secretary> all
8-44 deductions and a certification of earnings of each member employed
8-45 by the employer.
8-46 (c) The executive director <secretary> shall deposit with
8-47 the state treasurer all deductions received by the executive
8-48 director <secretary>.
8-49 SECTION 26. Section 825.405(d), Government Code, is amended
8-50 to read as follows:
8-51 (d) The employer must remit the amount required under this
8-52 section to the executive director <secretary> at the same time that
8-53 the employer remits the member's contribution.
8-54 SECTION 27. Sections 825.410(a) and (g), Government Code,
8-55 are amended to read as follows:
8-56 (a) Payments to establish special service credit as
8-57 authorized in Sections 805.002, 823.202, 823.302, 823.304, 823.401,
8-58 823.402, 823.501, and 825.403 may be made in a lump sum or in equal
8-59 monthly installments over a period not to exceed the lesser of the
8-60 number of years of credit to be purchased or 60 months.
8-61 Installment payments are due on the first day of each calendar
8-62 month in the payment period. If an installment payment is not made
8-63 in full within 60 days after the due date, the retirement system
8-64 may refund all installment payments less fees paid on the lump sum
8-65 due when installment payments began. Partial payment of an
8-66 installment payment may be treated as nonpayment. A check returned
8-67 for insufficient funds or a closed account shall be treated as
8-68 nonpayment. When two or more consecutive monthly payments have a
8-69 returned check, a refund may be made. If the retirement system
8-70 refunds payments pursuant to this subsection, the member is not
9-1 permitted to use the installment method of payment for a period of
9-2 three years from the date of the refund.
9-3 (g) A member seeking to establish service credit by using
9-4 the installment payment method shall pay an additional fee of nine
9-5 percent per annum calculated on a declining balance method on the
9-6 lump sum due at the time the installment payment process begins.
9-7 For purposes of this subsection, the installment payment process
9-8 begins on the first business day of the month in which the first
9-9 installment payment becomes due. None of the additional fees shall
9-10 be returned to the member or a beneficiary.
9-11 SECTION 28. Section 825.503(d), Government Code, is amended
9-12 to read as follows:
9-13 (d) The executive director <secretary> or an authorized
9-14 representative may certify the authenticity of a photograph,
9-15 microphotograph, or film of a record reproduced under this section
9-16 and shall charge a fee for the certified photograph,
9-17 microphotograph, or film as provided by law.
9-18 SECTION 29. Section 825.507, Government Code, as added by
9-19 Chapter 16, Acts of the 72nd Legislature, Regular Session, 1991, is
9-20 amended to read as follows:
9-21 Sec. 825.507. Confidentiality of Information About Members,
9-22 Retirees, Annuitants, <or> Beneficiaries, OR ALTERNATE PAYEES.
9-23 (a) Information contained in records that are in the custody of
9-24 the retirement system concerning an individual member, retiree,
9-25 annuitant, <or> beneficiary, or alternate payee is confidential
9-26 under Section 3(a)(1), Chapter 424, Acts of the 63rd Legislature,
9-27 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
9-28 Statutes), and may not be disclosed in a form identifiable with a
9-29 specific individual unless:
9-30 (1) the information is disclosed to:
9-31 (A) the individual or the individual's attorney,
9-32 guardian, executor, administrator, conservator, or other person who
9-33 the executive director <secretary> determines is acting in the
9-34 interest of the individual or the individual's estate;
9-35 (B) a spouse or former spouse of the individual
9-36 if the executive director <secretary> determines that the
9-37 information is relevant to the spouse's or former spouse's interest
9-38 in member accounts, benefits, or other amounts payable by the
9-39 retirement system;
9-40 (C) a governmental official or employee if the
9-41 executive director <secretary> determines that disclosure of the
9-42 information requested is reasonably necessary to the performance of
9-43 the duties of the official or employee; or
9-44 (D) a person authorized by the individual in
9-45 writing to receive the information; or
9-46 (2) the information is disclosed pursuant to a
9-47 subpoena and the executive director <secretary> determines that the
9-48 individual will have a reasonable opportunity to contest the
9-49 subpoena.
9-50 (b) This section does not prevent the disclosure of the
9-51 status or identity of an individual as a member, former member,
9-52 retiree, deceased member or retiree, <or> beneficiary, or alternate
9-53 payee of the retirement system.
9-54 (c) The executive director <secretary> may designate other
9-55 employees of the retirement system to make the necessary
9-56 determinations under Subsection (a).
9-57 (d) A determination and disclosure under Subsection (a) may
9-58 be made without notice to the individual member, retiree,
9-59 annuitant, <or> beneficiary, or alternate payee.
9-60 SECTION 30. Section 825.507, Government Code, as added by
9-61 Chapter 13, Acts of the 72nd Legislature, 1st Called Session, 1991,
9-62 is redesignated as Section 825.508 to read as follows:
9-63 Sec. 825.508 <825.507>. Powers of Attorney. (a) A person
9-64 entitled to payment of an annuity or other benefits administered by
9-65 the retirement system may direct the retirement system to treat as
9-66 the authorized representative of the person concerning the
9-67 disposition of the benefits an attorney-in-fact under a power of
9-68 attorney that complies with Subsection (b).
9-69 (b) The system must honor a power of attorney executed in
9-70 accordance with Chapter 1, Section 36A, Texas Probate Code.
10-1 (c) If the power of attorney is revoked, the retirement
10-2 system is not liable for payments made to or actions taken at the
10-3 request of the attorney-in-fact before the date the system receives
10-4 written notice that the power of attorney has been revoked.
10-5 SECTION 31. Subchapter F, Chapter 825, Government Code, is
10-6 amended by adding Sections 825.509, 825.510, and 825.511 to read as
10-7 follows:
10-8 Sec. 825.509. DIRECT ROLLOVERS. (a) This section applies
10-9 to distributions made on or after January 1, 1993. Notwithstanding
10-10 any law governing the retirement system that would otherwise limit
10-11 a distributee's election under this section, a distributee may
10-12 elect, at the time and in the manner prescribed by the executive
10-13 director or the executive director's designee, to have any portion
10-14 of an eligible rollover distribution from the retirement system
10-15 paid directly to an eligible retirement plan specified by the
10-16 distributee in a direct rollover.
10-17 (b) An eligible rollover distribution under this section is
10-18 any distribution of all or a portion of the balance to the credit
10-19 of the distributee, other than:
10-20 (1) a distribution that is one of a series of
10-21 substantially equal periodic payments made not less frequently than
10-22 annually for:
10-23 (A) the life or life expectancy of the
10-24 distributee;
10-25 (B) the joint lives or joint life expectancies
10-26 of the distributee and the distributee's designated beneficiary; or
10-27 (C) a specified period of 10 years or more;
10-28 (2) a distribution to the extent the distribution is
10-29 required under Section 401(a)(9), Internal Revenue Code of 1986; or
10-30 (3) the portion of a distribution that is not
10-31 includable in gross income for federal income tax purposes.
10-32 (c) An eligible retirement plan under this section is an
10-33 individual retirement account described by Section 408(a), Internal
10-34 Revenue Code of 1986, an individual retirement annuity described by
10-35 Section 408(b), Internal Revenue Code of 1986, an annuity plan
10-36 described by Section 403(a), Internal Revenue Code of 1986, or a
10-37 qualified trust described by Section 401(a), Internal Revenue Code
10-38 of 1986, that accepts the distributee's eligible rollover
10-39 distribution. However, in the case of an eligible rollover
10-40 distribution to a surviving spouse, an eligible retirement plan
10-41 under this section is an individual retirement account or
10-42 individual retirement annuity.
10-43 (d) In this section:
10-44 (1) "Direct rollover" means a payment by the
10-45 retirement system to the eligible retirement plan specified by a
10-46 distributee.
10-47 (2) "Distributee" means a person who receives an
10-48 eligible rollover distribution from the retirement system and
10-49 includes an employee or former employee and, regarding the interest
10-50 of an employee or former employee, the person's surviving spouse or
10-51 alternate payee.
10-52 Sec. 825.510. BUDGET AND INVESTMENT INFORMATION. (a) The
10-53 retirement system annually shall file with the Legislative Budget
10-54 Board a report showing investments of the retirement system as of
10-55 the last day of the preceding fiscal year, investments made or
10-56 disposed of during that year, income or losses in the various kinds
10-57 of investments, and a comparison of investment performance to
10-58 nationally recognized indexes.
10-59 (b) The retirement system shall file with the Legislative
10-60 Budget Board for review and comment a copy of each proposed annual
10-61 budget of the retirement system.
10-62 Sec. 825.511. COMPLAINT FILES. (a) The retirement system
10-63 shall keep an information file about each complaint filed with the
10-64 system that the system has authority to resolve.
10-65 (b) If a written complaint is filed with the retirement
10-66 system that the system has authority to resolve, the system, at
10-67 least quarterly and until final disposition of the complaint, shall
10-68 notify the parties to the complaint of the status of the complaint
10-69 unless the notice would jeopardize an undercover investigation.
10-70 SECTION 32. Section 13.913(a), Education Code, is amended
11-1 to read as follows:
11-2 (a) Each district shall make available to its employees
11-3 group health coverage provided by a risk pool established by one or
11-4 more school districts under Chapter 172, Local Government Code, or
11-5 under a policy of insurance or group contract issued by an insurer,
11-6 a company subject to Chapter 20, Insurance Code, or a health
11-7 maintenance organization under the Texas Health Maintenance
11-8 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
11-9 coverage must meet the substantive coverage requirements of Article
11-10 3.51-6, Insurance Code, and any other law applicable to group
11-11 health insurance policies or contracts issued in this state. The
11-12 coverage must include major medical treatment. In this subsection,
11-13 "major medical treatment" means a medical, surgical, or diagnostic
11-14 procedure or intervention that has a significant recovery period,
11-15 presents a significant risk, employs a general anesthetic, or, in
11-16 the opinion of the primary physician, involves a significant
11-17 invasion of bodily integrity that requires the extraction of bodily
11-18 fluids or an incision or that produces substantial pain,
11-19 discomfort, or debilitation. The coverage may include managed care
11-20 or preventive care. The cost of the coverage <and> must be
11-21 comparable to the basic health coverage provided under the Texas
11-22 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
11-23 Vernon's Texas Insurance Code). The cost of the coverage may be
11-24 shared by the employees and the district. Each district shall
11-25 certify the district's compliance with this subsection to the
11-26 executive director of the Teacher <Employees> Retirement System of
11-27 Texas in the manner required by the board of trustees of the
11-28 Teacher <Employees> Retirement System of Texas.
11-29 SECTION 33. Section 2(10), Article 3.50-4, Insurance Code,
11-30 is amended to read as follows:
11-31 (10) "Retiree" means:
11-32 (A) a person who has retired under the Teacher
11-33 Retirement System of Texas, as provided by Subtitle C, Title 8,
11-34 Government Code, with at least 10 <or more> years of service credit
11-35 in the retirement system for actual service in Texas public schools
11-36 and who is not eligible to be covered by a plan provided under the
11-37 Texas Employees Uniform Group Insurance Benefits Act (Article
11-38 3.50-2, Vernon's Texas Insurance Code), or under the Texas State
11-39 College and University Employees Uniform Insurance Benefits Act
11-40 (Article 3.50-3, Vernon's Texas Insurance Code); or
11-41 (B) a person who has retired as a disability
11-42 retiree under Subtitle C, Title 8, Government Code, and is entitled
11-43 to receive monthly benefits from the retirement system.
11-44 SECTION 34. Section 8, Article 3.50-4, Insurance Code, is
11-45 amended by adding Subsection (l) to read as follows:
11-46 (l) The trustee may contract directly with health care
11-47 providers to provide benefits to participants in the program.
11-48 Those benefits may include dental care, eye care, hospital care,
11-49 surgical care and treatment, medical care and treatment,
11-50 obstetrical care, and prescription drugs, medicines, and prosthetic
11-51 devices.
11-52 SECTION 35. Article 3.50-4, Insurance Code, is amended by
11-53 adding Section 18C to read as follows:
11-54 Sec. 18C. COORDINATED CARE NETWORK. (a) The trustee may
11-55 take action as it determines to be necessary to implement and
11-56 administer a coordinated care network for the program. The trustee
11-57 may contract with health care practitioners or facilities and may
11-58 establish credentialing committees to evaluate the qualifications
11-59 of those practitioners and facilities.
11-60 (b) The trustee may contract with additional individuals or
11-61 entities as the trustee determines to be necessary to implement and
11-62 administer the network.
11-63 (c) The trustee, the Texas public school retired employees
11-64 group insurance program, the retired school employees group
11-65 insurance fund, and the board of trustees, officers, advisory
11-66 committee members, and employees of the trustee are not liable for
11-67 damages arising from the acts or omissions of health care providers
11-68 who are participating health care providers in the coordinated care
11-69 network established by the trustee. Those health care providers
11-70 are independent contractors and are responsible for their own acts
12-1 and omissions.
12-2 (d) The trustee, the Texas public school retired employees
12-3 group insurance program, the retired school employees group
12-4 insurance fund, or a member of a credentialing committee, or the
12-5 board of trustees, officers, advisory committee members, or
12-6 employees of the trustee are not liable for damages arising from
12-7 any act, statement, determination, recommendation made, or act
12-8 reported, without malice, in the course of the evaluation of the
12-9 qualifications of health care providers or of the patient care
12-10 rendered by those providers.
12-11 (e) Except as otherwise provided by this article, all
12-12 proceedings and records of a credentialing committee are
12-13 confidential, and all communications made to a credentialing
12-14 committee are privileged. The proceedings of a credentialing
12-15 committee are not subject to the open meetings law, Chapter 271,
12-16 Acts of the 60th Legislature, Regular Session, 1967 (Article
12-17 6252-17, Vernon's Texas Civil Statutes), and its subsequent
12-18 amendments. Except to the extent required by the constitution of
12-19 this state or the United States, the records and proceedings of a
12-20 credentialing committee and a communication made to a credentialing
12-21 committee are not subject to court subpoena.
12-22 (f) An individual, a health care provider, or a medical peer
12-23 review committee that, without malice, participates in a
12-24 credentialing committee activity or furnishes records, information,
12-25 or assistance to a credentialing committee is not liable for
12-26 damages arising from that act.
12-27 (g) Disclosure of confidential credentialing committee
12-28 information to the affected health care provider that is relevant
12-29 to the matter under review does not constitute a waiver of the
12-30 confidentiality requirements imposed under this article.
12-31 (h) A written or oral communication made to a credentialing
12-32 committee, and the records and proceedings of such a committee, may
12-33 be disclosed to appropriate state or federal agencies, national
12-34 accreditation bodies, state boards of registration or licensure, or
12-35 medical peer review committees. A disclosure under this subsection
12-36 does not constitute a waiver of the confidential and privileged
12-37 nature of the information.
12-38 (i) A credentialing committee, a person participating in a
12-39 credentialing review, a health care provider, the trustee, the
12-40 Texas public school retired employees group insurance program, or
12-41 the board of trustees, officers, advisory committee members, or
12-42 employees of the trustee that are named as defendants in any civil
12-43 action filed as a result of participation in the credentialing
12-44 process may use otherwise confidential information obtained for
12-45 legitimate internal business and professional purposes, including
12-46 use in their own defense. Use of information under this subsection
12-47 does not constitute a waiver of the confidential and privileged
12-48 nature of the information.
12-49 (j) In this section, "health care provider" means an
12-50 individual licensed as a health care practitioner, or a health care
12-51 facility.
12-52 SECTION 36. Subchapter E, Chapter 3, Insurance Code, is
12-53 amended by adding Article 3.50-7 to read as follows:
12-54 Art. 3.50-7. SCHOOL DISTRICT EMPLOYEES UNIFORM GROUP
12-55 INSURANCE ACT
12-56 Sec. 1. SHORT TITLE. This article may be cited as the
12-57 School District Employees Uniform Group Insurance Act.
12-58 Sec. 2. DEFINITIONS. In this article:
12-59 (1) "Administering firm" means any firm designated by
12-60 the trustee to administer any coverages, services, benefits, or
12-61 requirements under this article and the trustee's rules adopted
12-62 under this article.
12-63 (2) "Basic coverage" means the programs of group
12-64 coverages determined by the trustee in which every full-time
12-65 employee participates automatically unless participation is
12-66 specifically waived.
12-67 (3) "Cafeteria plan" means a plan as defined and
12-68 authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C.
12-69 Section 125).
12-70 (4) "Employee" means a participating member of the
13-1 Teacher Retirement System who is employed by a participating school
13-2 district and who is not covered by a group insurance program under
13-3 the Texas Employees Uniform Group Insurance Benefits Act (Article
13-4 3.50-2, Vernon's Texas Insurance Code) or Chapter 32, Acts of the
13-5 65th Legislature, Regular Session, 1977 (Article 3.50-3, Vernon's
13-6 Texas Insurance Code), but does not include a person performing
13-7 personal services for a school district as an independent
13-8 contractor.
13-9 (5) "Employer" means a participating school district.
13-10 (6) "Health benefits plan" means any group policy or
13-11 contract, medical, dental, or hospital service agreement,
13-12 membership or subscription contract, salary continuation plan,
13-13 health maintenance organization agreement, preferred provider
13-14 arrangement, or any similar group arrangement or any combination of
13-15 those policies, plans, contracts, agreements, or arrangements
13-16 provided for the purpose of providing, paying for, or reimbursing
13-17 expenses for health care services, including comparable health care
13-18 services for employees who rely solely on spiritual means through
13-19 prayer for healing in accordance with the teaching of a recognized
13-20 church or denomination.
13-21 (7) "Participating school district" means a public
13-22 school district that elects under Section 4 of this article to
13-23 participate in the program provided under this article.
13-24 (8) "Trustee" means the Teacher Retirement System of
13-25 Texas.
13-26 Sec. 3. ADMINISTRATION. (a) The administration and
13-27 implementation of this article are vested solely in the trustee.
13-28 (b) The trustee may hire and compensate employees.
13-29 (c) The trustee may, on a competitive bid basis, contract
13-30 with a qualified, experienced firm of group insurance specialists
13-31 or an administering firm who will act for the trustee in a capacity
13-32 as independent administrators and managers of the programs
13-33 authorized under this article. The independent administrator
13-34 selected by the trustee shall assist the trustee to ensure the
13-35 proper administration of this article and the coverages, services,
13-36 and benefits provided for or authorized by this article and shall
13-37 be paid by the trustee.
13-38 (d) The trustee may enter into interagency contracts with
13-39 any agency of the state, including the Employees Retirement System
13-40 of Texas, for the purpose of assistance in implementing the
13-41 programs provided by this article.
13-42 (e) The trustee may adopt rules to administer this article.
13-43 Sec. 4. PARTICIPATION IN PROGRAM. (a) A public school
13-44 district having fewer than 1,000 students enrolled as of March 1 of
13-45 the previous school year shall participate in the programs provided
13-46 under this article unless the district contracts for a health
13-47 benefits plan with a nonprofit association that provides similar
13-48 services for 10 or more public school districts.
13-49 (b) Except as provided by Subsection (a) of this section, a
13-50 public school district may elect to participate in the programs
13-51 provided under this article.
13-52 (c) A district that participates must accept the schedule of
13-53 costs adopted by the trustee.
13-54 (d) The trustee by rule may provide for a minimum period of
13-55 participation of not less than two years applicable to each school
13-56 district that makes an election under this section.
13-57 (e) The trustee may assess a participating school district a
13-58 fee to cover administrative costs if state funds are not
13-59 appropriated for this purpose.
13-60 Sec. 5. GROUP COVERAGES. (a) The trustee shall establish
13-61 plans of group coverages for employees of participating school
13-62 districts. The coverages may include group life coverages, health
13-63 benefit plans, accidental death and dismemberment coverages,
13-64 coverages against short-term or long-term loss of salary, and other
13-65 coverages considered advisable by the trustee. Comparable plans of
13-66 each type of coverage established must be offered to employees of
13-67 all participating school districts.
13-68 (b) The trustee by rule may define the basic coverage in
13-69 which each full-time employee participates unless specifically
13-70 waived. Basic coverage must include a health benefits plan. The
14-1 trustee also by rule may define optional coverage for which the
14-2 trustee may make available employer contributions and voluntary
14-3 coverage for which the employee is responsible for all
14-4 contributions.
14-5 (c) The trustee may provide a cafeteria plan for employees
14-6 of participating school districts.
14-7 Sec. 6. PAYMENT OF CONTRIBUTIONS. (a) Each participating
14-8 school district shall contribute for each district employee covered
14-9 by the program an amount equal to the cost for the employee only of
14-10 the plans of group coverages authorized by the trustee for school
14-11 district employees, except that the school district's contribution
14-12 may not exceed the amount contributed for each state employee by
14-13 the state under the Texas Employees Uniform Group Insurance
14-14 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).
14-15 (b) Each employee covered by the program shall pay that
14-16 portion of the cost of coverage selected by the employee that
14-17 exceeds the amount of employer contributions.
14-18 (c) Each person who is employed full-time by a public school
14-19 district in this state, including employees within the meaning of
14-20 this article, shall pay an annual fee of $12 to the trustee for the
14-21 support of the program provided by this article. The fee expires
14-22 when the trustee determines that the contingency reserves in the
14-23 fund are sufficient to support the program. The trustee shall file
14-24 a determination made under this subsection with the secretary of
14-25 state for publication in the Texas Register.
14-26 Sec. 7. FUND. (a) Contributions and fees collected under
14-27 Section 6 of this article shall be deposited in the school district
14-28 employees uniform group insurance trust fund. The fund is created
14-29 outside the state treasury. The state treasurer is custodian of
14-30 the fund. The trustee may use amounts in the fund only to provide
14-31 group coverages under this article and to pay the expenses of
14-32 administering the program.
14-33 (b) The trustee may invest assets of the fund in the manner
14-34 provided by Article XVI, Section 67(a)(3), of the Texas
14-35 Constitution.
14-36 SECTION 37. Section 2, Article 21.24-1, Insurance Code, is
14-37 amended by adding Subsection (c) to read as follows:
14-38 (c) This article applies to insurance coverage provided
14-39 under the Texas Public School Retired Employees Group Insurance Act
14-40 (Article 3.50-4, Insurance Code).
14-41 SECTION 38. (a) Monthly payments of a death or retirement
14-42 benefit annuity by the Teacher Retirement System of Texas are
14-43 increased beginning with the payment due at the end of January
14-44 1994.
14-45 (b) The increase applies only if the latest effective date
14-46 of retirement of the person on whose account the benefit is based,
14-47 or the date of death in the case of a death benefit annuity,
14-48 occurred before September 1, 1991. The increase does not apply to
14-49 payments received under Section 824.304(a), 824.404, or 824.501,
14-50 Government Code.
14-51 (c) The amount of the monthly increase is computed by
14-52 multiplying the previous monthly benefit by a percentage determined
14-53 in accordance with the following table:
14-54 Retirement Date or, if applicable, Date of Death Increase
14-55 Before September 1, 1968 5 %
14-56 On or after September 1, 1968, but before September 1, 1969 7 %
14-57 On or after September 1, 1969, but before September 1, 1970 6 %
14-58 On or after September 1, 1970, but before September 1, 1971 13 %
14-59 On or after September 1, 1971, but before September 1, 1972 12 %
14-60 On or after September 1, 1972, but before September 1, 1973 13 %
14-61 On or after September 1, 1973, but before September 1, 1974 15 %
14-62 On or after September 1, 1974, but before September 1, 1975 12 %
14-63 On or after September 1, 1975, but before September 1, 1976 10 %
14-64 On or after September 1, 1976, but before September 1, 1977 14 %
14-65 On or after September 1, 1977, but before September 1, 1978 13 %
14-66 On or after September 1, 1978, but before September 1, 1979 11 %
14-67 On or after September 1, 1979, but before September 1, 1980 10 %
14-68 On or after September 1, 1980, but before September 1, 1981 7 %
14-69 On or after September 1, 1981, but before September 1, 1991 5 %
14-70 (d) The increase for a monthly retirement annuity to a
15-1 retiree is based on the retiree's latest effective retirement date.
15-2 The increase for a monthly retirement annuity being continued to a
15-3 beneficiary after the death of the retiree is based on the
15-4 retiree's retirement date. The increase for a death benefit amount
15-5 is based on the date of death of the person on whose account the
15-6 benefit is based.
15-7 (e) The percentage increases provided for in this section
15-8 apply to monthly payments of a minimum benefit increased elsewhere
15-9 in this Act, but apply only to the amount of the monthly annuity as
15-10 of August 1, 1993. No additional increase shall be paid to an
15-11 annuitant under this section if the increase provided for elsewhere
15-12 in this Act is greater than the increase provided for in this
15-13 section. If the increase provided for in this section is less than
15-14 the increase provided for elsewhere in this Act, an annuitant shall
15-15 receive the difference as an additional increase under this
15-16 section.
15-17 SECTION 39. Section 824.304(c), Government Code, as it was
15-18 designated immediately before the effective date of this Act, is
15-19 repealed.
15-20 SECTION 40. Monthly payments of a standard service
15-21 retirement annuity made after September 1, 1993, under Section
15-22 824.203, Government Code, to persons or the beneficiaries of
15-23 persons who retired before November 1, 1991, may not be less than
15-24 $6.50 a month for each year of service credit or, for a member who
15-25 was at least 65 years old at the time of retirement, not less than
15-26 the greater of $6.50 a month for each year of service credit, or
15-27 $150 a month. The minimum benefits provided by this section are
15-28 subject to reduction in the same manner as other benefits because
15-29 of early retirement or selection of an optional retirement annuity.
15-30 SECTION 41. The Teacher Retirement System of Texas may
15-31 restore monthly payments of a survivor benefit under Section
15-32 824.404, Government Code, or its predecessor statute, to a spouse
15-33 of a deceased member or retiree that were terminated because of
15-34 remarriage before the effective date of Section 5, Chapter 570,
15-35 Acts of the 66th Legislature, 1979, on application for the benefits
15-36 by the beneficiary. Retroactive payments of the benefits may not
15-37 be made. Payments of the benefits resume beginning with the month
15-38 after the month in which the beneficiary applies for restoration of
15-39 benefits under this section.
15-40 SECTION 42. (a) A retiree who is subject to loss of
15-41 benefits under Section 824.601, Government Code, for months to
15-42 which the exception provided by Section 824.602(a)(3), Government
15-43 Code, could have applied if the retiree had executed the required
15-44 form within the time provided by Section 824.602(a)(3) before its
15-45 amendment by Chapter 13, Acts of the 72nd Legislature, 1st Called
15-46 Session, 1991, is eligible to avoid loss of the benefits or to have
15-47 any lost benefits restored by the Teacher Retirement System of
15-48 Texas.
15-49 (b) To apply under this section to have lost benefits
15-50 restored or to avoid loss of benefits, a retiree must submit a
15-51 written request to the retirement system not later than March 1,
15-52 1994.
15-53 (c) Benefits eligible to be paid under this section are
15-54 those that would have been payable between September 1, 1985, and
15-55 August 31, 1991, if the retiree had not failed to execute the
15-56 required form in a timely manner.
15-57 (d) A retiree may not apply for payment of benefits under
15-58 this section for months of employment credited under Section
15-59 823.502, Government Code. Months of employment in which a retiree
15-60 receives a monthly benefit payment under this section may not be
15-61 considered in applying Section 823.502, Government Code. Only a
15-62 retiree who is surviving on the effective date of this Act is
15-63 eligible to apply for benefits under this section.
15-64 SECTION 43. A supplemental service retirement benefit
15-65 provided for by Chapter 14, Acts of the 60th Legislature, Regular
15-66 Session, 1969, that is being paid on the effective date of this Act
15-67 to a retiree who is still living is payable to the beneficiary of
15-68 the retiree if retirement benefits will be payable to the
15-69 beneficiary on the death of the retiree.
15-70 SECTION 44. (a) All persons who were employed by the
16-1 Central Education Agency on August 31, 1993, who were contributing
16-2 members of the Teacher Retirement System of Texas on that date, and
16-3 who remain employees of the Central Education Agency on September
16-4 1, 1993, become members of the Employees Retirement System of Texas
16-5 on the latter date. A person may not remain an employee of the
16-6 Central Education Agency on September 1, 1993, if the person
16-7 retires under the Teacher Retirement System of Texas on August 31,
16-8 1993.
16-9 (b) At the time of the retirement or death of a person
16-10 described by Subsection (a) of this section, the Teacher Retirement
16-11 System of Texas shall make a computation and transfer of money in
16-12 the manner provided by Section 805.008, Government Code, as added
16-13 by S.B. No. 1181, 73rd Legislature, Regular Session, 1993, and the
16-14 person's service credit in the Teacher Retirement System of Texas
16-15 will be transferred to the Employees Retirement System of Texas.
16-16 The Employees Retirement System of Texas has the same
16-17 responsibility for payments after retirement or death as is
16-18 provided by Section 805.008, Government Code, as added by S.B.
16-19 No. 1181. After retirement, a person described by Subsection (a)
16-20 of this section is considered a retiree of the Employees Retirement
16-21 System of Texas for all purposes.
16-22 (c) Notwithstanding Chapter 805, Government Code, as added
16-23 by S.B. No. 1181, 73rd Legislature, Regular Session, 1993, a
16-24 person who becomes a member of the Employees Retirement System of
16-25 Texas under this section is not eligible to transfer service credit
16-26 based on service performed for the Central Education Agency from
16-27 the Employees Retirement System of Texas to the Teacher Retirement
16-28 System of Texas.
16-29 SECTION 45. If legislation is enacted by the 73rd
16-30 Legislature, Regular Session, 1993, that becomes law and that
16-31 transfers employees of the Texas Rehabilitation Commission from the
16-32 Teacher Retirement System of Texas to the Employees Retirement
16-33 System of Texas, those persons may not remain employees of the
16-34 Texas Rehabilitation Commission on September 1, 1993, if they
16-35 retire under the Teacher Retirement System of Texas on August 31,
16-36 1993. After retirement from the Employees Retirement System of
16-37 Texas, those persons are considered retirees of the Employees
16-38 Retirement System of Texas for all purposes.
16-39 SECTION 46. (a) The Teacher Retirement System of Texas
16-40 shall conduct a study of coverage under and participation in the
16-41 Texas Public School Retired Employees Group Insurance Program and
16-42 potential coverage under and participation in the program provided
16-43 under the School District Employees Uniform Group Insurance Act
16-44 (Article 3.50-7, Insurance Code), as added by this Act.
16-45 (b) The study shall include a survey of public school
16-46 districts to assess interest in changes to the program for retired
16-47 school employees and participation in the program to be provided
16-48 under Article 3.50-4, Insurance Code. The survey shall elicit
16-49 responses to proposals that vary some or all of the following
16-50 factors:
16-51 (1) cost to a district;
16-52 (2) cost to the employee;
16-53 (3) restrictions on a district's offering of other
16-54 health plans, including health maintenance organizations;
16-55 (4) controls on a district's ability to leave the
16-56 program, once enrolled; and
16-57 (5) cost containment features.
16-58 (c) The retirement system shall report its recommendations
16-59 and the results of its survey to the Legislative Budget Board and
16-60 the governor not later than June 30, 1994. The report shall
16-61 include recommendations on the necessary size of and methods of
16-62 financing the contingency reserves for the programs, necessary cost
16-63 containment features, and at least three options to minimize
16-64 adverse selection against the programs.
16-65 (d) The retirement system may spend not more than 1/24 of
16-66 the fees collected under Section 6(a), Article 3.50-7, Insurance
16-67 Code, as added by this Act, during the fiscal year beginning
16-68 September 1, 1993, for purposes of conducting the study required by
16-69 this section.
16-70 SECTION 47. (a) The Teacher Retirement System of Texas
17-1 shall implement the program provided by Article 3.50-7, Insurance
17-2 Code, as added by this Act, not later than September 1, 1995. The
17-3 fee required by Section 6(c) of that article, as added by this Act,
17-4 becomes payable in the fiscal year beginning September 1, 1993.
17-5 (b) The retirement system may spend not more than 50 percent
17-6 of the fees collected under Section 6(a), Article 3.50-7, Insurance
17-7 Code, as added by this Act, during the fiscal year beginning
17-8 September 1, 1994, for purposes of preparing to implement the
17-9 program provided by that article.
17-10 SECTION 48. The change in law made by Section 11 of this Act
17-11 applies to benefits paid after the effective date of this Act even
17-12 if the beneficiary elected to receive the monthly benefits before
17-13 that date.
17-14 SECTION 49. This Act takes effect September 1, 1993, except
17-15 Section 35 and this section, which take effect immediately.
17-16 SECTION 50. The importance of this legislation and the
17-17 crowded condition of the calendars in both houses create an
17-18 emergency and an imperative public necessity that the
17-19 constitutional rule requiring bills to be read on three several
17-20 days in each house be suspended, and this rule is hereby suspended,
17-21 and that this Act take effect and be in force according to its
17-22 terms, and it is so enacted.
17-23 * * * * *
17-24 Austin,
17-25 Texas
17-26 May 21, 1993
17-27 Hon. Bob Bullock
17-28 President of the Senate
17-29 Sir:
17-30 We, your Committee on Finance to which was referred H.B. No. 2711,
17-31 have had the same under consideration, and I am instructed to
17-32 report it back to the Senate with the recommendation that it do not
17-33 pass, but that the Committee Substitute adopted in lieu thereof do
17-34 pass and be printed.
17-35 Montford,
17-36 Chairman
17-37 * * * * *
17-38 WITNESSES
17-39 FOR AGAINST ON
17-40 ___________________________________________________________________
17-41 Name: Bob Keck x
17-42 Representing: Teacher Retirement System
17-43 City: Austin
17-44 -------------------------------------------------------------------
17-45 Name: Gary Thompson x
17-46 Representing: Teacher Retirement System
17-47 City: Austin
17-48 -------------------------------------------------------------------
17-49 Name: Jack Kelly x
17-50 Representing: Tx. State Teachers Assoc.
17-51 City: Austin
17-52 -------------------------------------------------------------------
17-53 Name: Bill Warren x
17-54 Representing: Tx. Public Employees Assoc.
17-55 City: Austin
17-56 -------------------------------------------------------------------
17-57 Name: Allison Gadbois x
17-58 Representing: Assoc. of Tx Profess Ed.
17-59 City: Austin
17-60 -------------------------------------------------------------------
17-61 Name: Michael Lehr x
17-62 Representing: Tx. Retired Teachers Assoc.
17-63 City: Austin
17-64 -------------------------------------------------------------------
17-65 Name: James F. Jeffrey x
17-66 Representing: Tx. Retired Teachers Assoc.
17-67 City: Austin
17-68 -------------------------------------------------------------------