By: Montford S.B. No. 492
73R1517 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to administration of retirement systems supervised by the
1-3 fire fighters' pension commissioner.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Texas Local Fire Fighters Retirement
1-6 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
1-7 adding Subdivision (9) to read as follows:
1-8 (9) "Compensation" includes amounts of workers'
1-9 compensation benefits received by an employee and by which the
1-10 employee's salary is reduced.
1-11 SECTION 2. Section 7, Texas Local Fire Fighters Retirement
1-12 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
1-13 amending Subsections (b) and (d) and adding Subsection (f) to read
1-14 as follows:
1-15 (b) Before a board of trustees chooses to adopt or change a
1-16 benefit or requirement for payment of benefits under this section,
1-17 the proposed addition or change must be approved by:
1-18 (1) an eligible actuary selected by the board; and
1-19 (2) a majority of the participating members of the
1-20 retirement system voting on the addition or change by secret ballot
1-21 at an election held for that purpose at which at least 50 percent
1-22 of all participating members of the retirement system vote.
1-23 (d) Except as provided by Subsection (e) of this section, if
1-24 a board chooses to adopt an addition or change after it has been
2-1 approved as provided by this section, the addition or change
2-2 applies to all persons who are participating members of the
2-3 retirement system on the effective date of the addition or change
2-4 <date of adoption> and all persons who became participating members
2-5 during the time the addition or change remains in effect. The
2-6 addition or change also may apply to:
2-7 (1) persons receiving monthly benefits; or
2-8 (2) former members of the fire department who meet an
2-9 applicable length-of-service requirement for service retirement.
2-10 (f) The effective date of a change or addition adopted under
2-11 this section is a date specified by the board of trustees that is
2-12 not earlier than the date of adoption by the board. A change or
2-13 addition may not be applied retroactive to its effective date.
2-14 SECTION 3. Section 9(a), Texas Local Fire Fighters
2-15 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
2-16 amended to read as follows:
2-17 (a) Except as otherwise provided by this section, a person
2-18 who is an employee of a fire department included within the
2-19 coverage of a retirement system is a member of the retirement
2-20 system if the person is younger than 36 years old on the date the
2-21 person is certified under civil service as eligible for a beginning
2-22 position with <at the time the person first becomes an employee of>
2-23 the department.
2-24 SECTION 4. Section 10(d), Texas Local Fire Fighters
2-25 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
2-26 amended to read as follows:
2-27 (d) Absence from service by an employee does not forfeit
3-1 service credit accrued before the absence begins, unless membership
3-2 is terminated. Absence from service by a volunteer does not
3-3 forfeit service credit accrued before the absence begins.
3-4 SECTION 5. Section 14(a), Texas Local Fire Fighters
3-5 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
3-6 amended to read as follows:
3-7 (a) A member of a retirement system is eligible for
3-8 retirement for disability if the member becomes physically or
3-9 mentally disabled, except as the result of a condition the member
3-10 had on the date the member became an employee or volunteer, in or
3-11 in consequence of the performance of the member's duties as an
3-12 employee or volunteer of the fire department included within the
3-13 coverage of the retirement system.
3-14 SECTION 6. Section 21(h), Texas Local Fire Fighters
3-15 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), as
3-16 added by Chapter 104, Acts of the 72nd Legislature, Regular
3-17 Session, 1991, is redesignated as Section 21(j) to read as follows:
3-18 (j) <(h)> The fire fighters' pension commissioner may
3-19 conduct seminars or workshops for persons interested in issues
3-20 pertaining to retirement systems under this Act. The commissioner
3-21 may impose and collect a fee for attendance at a seminar or
3-22 workshop in an amount that, in the aggregate, does not exceed the
3-23 estimated costs of preparing for and conducting the seminar or
3-24 workshop. Fees collected under this subsection shall be remitted
3-25 to the comptroller of public accounts for deposit in an account in
3-26 the general revenue fund to be known as the fire fighters' pension
3-27 commissioner account. Amounts in the account may be appropriated
4-1 only to the commissioner for the payment of administrative
4-2 expenses.
4-3 SECTION 7. Section 22, Texas Local Fire Fighters Retirement
4-4 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended to
4-5 read as follows:
4-6 Sec. 22. Appeals from local board decisions. (a) A person
4-7 aggrieved by a decision of a board of trustees relating to
4-8 eligibility for or amount of benefits payable by a retirement
4-9 system may appeal the decision to the fire fighters' pension
4-10 commissioner.
4-11 (b) An appeal under this section is begun by delivering a
4-12 notice of appeal with the chairman, secretary, or
4-13 secretary-treasurer of the board of trustees that made the
4-14 decision. The notice must be delivered not later than the 20th day
4-15 after the date of the decision and contain a brief description of
4-16 the reasons or grounds for appeal. The aggrieved person must file
4-17 a copy of the notice with the fire fighters' pension commissioner.
4-18 <The secretary or secretary-treasurer of the board of trustees that
4-19 made the decision from which an appeal is taken shall file a
4-20 transcript of all proceedings and papers relating to the matter
4-21 with the fire fighters' pension commissioner not later than the
4-22 30th day after the date the officer of the board to whom the notice
4-23 of appeal was delivered received the notice.>
4-24 (c) An appeal under this section to <before> the fire
4-25 fighters' pension commissioner is held in Austin and is a contested
4-26 case under the Administrative Procedure and Texas Register Act
4-27 (Article 6252-13a, Vernon's Texas Civil Statutes) conducted as a de
5-1 novo hearing by the State Office of Administrative Hearings.
5-2 <(d) A board of trustees from whose decision an appeal is
5-3 taken under this section may choose an attorney to represent the
5-4 board before the fire fighters' pension commissioner. At the
5-5 request of a board of trustees, the city attorney of the
5-6 municipality of which the board is a part shall, without additional
5-7 compensation, represent the board before the fire fighters' pension
5-8 commissioner.>
5-9 SECTION 8. The Texas Local Fire Fighters Retirement Act
5-10 (Article 6243e, Vernon's Texas Civil Statutes) is amended by adding
5-11 Section 22A to read as follows:
5-12 Sec. 22A. ATTORNEY. A board of trustees may employ an
5-13 attorney to represent the board in one or all legal matters,
5-14 including a hearing on appeal to the fire fighters' pension
5-15 commissioner. At the request of a board of trustees, the city
5-16 attorney of the municipality of which the board is a part shall,
5-17 without additional compensation, represent the board in one or all
5-18 legal matters.
5-19 SECTION 9. Section 23(b), Texas Local Fire Fighters
5-20 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
5-21 amended to read as follows:
5-22 (b) The cost of actuarial services may be paid from assets
5-23 of the fund<, except that costs for actuarial valuations and
5-24 special actuarial studies under Section 7 of this Act may be paid
5-25 from the fund not more than once every two years>.
5-26 SECTION 10. Section 25(c), Texas Local Fire Fighters
5-27 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
6-1 amended to read as follows:
6-2 (c) The annual amount of payments from a fund under
6-3 Subsections (a) and (b) of this section, excluding legal and
6-4 medical fees, may not exceed:
6-5 (1) 1 percent of the book value of the assets of the
6-6 fund for the first $1 million in book value; and
6-7 (2) 1/4 of 1 percent of the book value of the assets
6-8 of the fund that exceeds $1 million.
6-9 SECTION 11. Section 27, Texas Local Fire Fighters Retirement
6-10 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
6-11 amending Subsection (a) and adding Subsection (e) to read as
6-12 follows:
6-13 (a) A board of trustees established under this Act shall
6-14 keep a sufficient amount of cash on hand to make payments as they
6-15 become due under the retirement system. If a board determines that
6-16 the fund of its retirement system contains an amount in excess of
6-17 the amount needed to make payments as they become due, the board
6-18 may invest any portion of the excess in:
6-19 (1) bonds or other interest-bearing obligations and
6-20 securities of the United States, the state, or a political
6-21 subdivision of the state;
6-22 (2) shares and share accounts of savings and loan
6-23 associations to the extent that the shares and share accounts are
6-24 insured by the Federal Savings and Loan Insurance Corporation;
6-25 (3) first-lien real estate mortgage securities insured
6-26 by the Federal Housing Administration;
6-27 (4) bonds of companies incorporated within the United
7-1 States;
7-2 (5) common and preferred stocks of companies
7-3 incorporated within the United States that, unless the stocks are
7-4 bank or insurance stocks, are listed on an exchange registered with
7-5 the Securities and Exchange Commission or its successor;
7-6 (6) guaranteed investment contracts offered by
7-7 insurance companies;
7-8 (7) money market funds;
7-9 (8) mutual funds and other pooled funds;
7-10 (9) international stocks traded as American depository
7-11 receipts; and
7-12 (10) over-the-counter stocks.
7-13 (e) A board of trustees established under this Act shall
7-14 adopt a written investment policy stating how assets of the
7-15 retirement system that it administers may be invested.
7-16 SECTION 12. Section 28, Texas Local Fire Fighters Retirement
7-17 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended to
7-18 read as follows:
7-19 Sec. 28. INVESTMENT MANAGER AND COUNSELING SERVICE.
7-20 (a) The board of trustees of a retirement system established under
7-21 this Act may appoint investment managers for the system by
7-22 contracting for professional investment management services with
7-23 one or more organizations, which may include a bank if it has a
7-24 trust department, that are in the business of managing investments.
7-25 (b) To be eligible for appointment under Subsection (a) of
7-26 this section, an investment manager must be:
7-27 (1) registered under the Investment Advisors Act of
8-1 1940 (15 U.S.C. Section 80b-1 et seq.);
8-2 (2) a bank as defined by that Act; or
8-3 (3) an insurance company qualified to perform
8-4 investment services under the laws of more than one state.
8-5 (c) In a contract made under this section, the board of
8-6 trustees shall specify policies, requirements, and restrictions,
8-7 including criteria for determining the quality of investments and
8-8 for the use of standard rating services, that the board of trustees
8-9 adopts for investments of the system.
8-10 (d) In choosing and contracting for professional investment
8-11 management services and in continuing the use of an investment
8-12 manager, the board of trustees must act prudently and in the
8-13 interest of the participants and beneficiaries of the retirement
8-14 system.
8-15 (e) A trustee is not liable for the acts or omissions of an
8-16 investment manager appointed under this section, nor is a trustee
8-17 obligated to invest or otherwise manage any asset of the system
8-18 subject to management by the investment manager.
8-19 (f) A board of trustees established under this Act may
8-20 employ professional investment counselors to assist and advise the
8-21 board in the investment of the assets of the fund or to evaluate
8-22 the performance of an investment manager appointed under this
8-23 section. The investment counseling service must be provided by an
8-24 organization whose business functions include performing continuous
8-25 investment advisory service to public retirement systems.
8-26 (g) <(b)> The cost of investment managing or counseling
8-27 services may be paid by the municipality or from the assets of the
9-1 fund.
9-2 (h) A retirement system established under this Act is exempt
9-3 from Subchapter C, Chapter 802, Government Code.
9-4 SECTION 13. Section 29(e), Texas Local Fire Fighters
9-5 Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
9-6 amended to read as follows:
9-7 (e) Each person who is a member of a retirement system as a
9-8 current fire department volunteer shall contribute to the system an
9-9 annual amount of not less than $3 nor more than $5. The amount
9-10 must be determined by majority vote by secret ballot of the
9-11 volunteers of the department who are participating members of the
9-12 retirement system. A municipality may at any time make the member
9-13 contributions required under this subsection on behalf of its
9-14 volunteers and any other contributions the municipality chooses to
9-15 make to the retirement system.
9-16 SECTION 14. Section 30, Texas Local Fire Fighters Retirement
9-17 Act (Article 6243e, Vernon's Texas Civil Statutes), is amended by
9-18 adding Subsection (d) to read as follows:
9-19 (d) A pick up of employee contributions is terminated in a
9-20 municipality on January 1 of the year following the year in which:
9-21 (1) the termination has been approved by a two-thirds
9-22 vote of the participating members of the retirement system at an
9-23 election by secret ballot at which at least 50 percent of the
9-24 participating members vote; and
9-25 (2) the governing body of the municipality has
9-26 repealed the ordinance that adopted the pick up of employee
9-27 contributions.
10-1 SECTION 15. The Texas Local Fire Fighters Retirement Act
10-2 (Article 6243e, Vernon's Texas Civil Statutes) is amended by adding
10-3 Section 32 to read as follows:
10-4 Sec. 32. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,
10-5 RETIREES, ANNUITANTS, OR BENEFICIARIES. (a) Information contained
10-6 in records that are in the custody of a retirement system
10-7 established under this Act concerning an individual member,
10-8 retiree, annuitant, or beneficiary is confidential under Section
10-9 3(a)(1), Chapter 424, Acts of the 63rd Legislature, Regular
10-10 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes),
10-11 and may not be disclosed in a form identifiable with a specific
10-12 individual unless:
10-13 (1) the information is disclosed to:
10-14 (A) the individual;
10-15 (B) the individual's attorney, guardian,
10-16 executor, administrator, conservator, or other person who the board
10-17 of trustees of the retirement system determines is acting in the
10-18 interest of the individual or the individual's estate;
10-19 (C) a spouse or former spouse of the individual
10-20 if the board of trustees determines that the information is
10-21 relevant to the spouse's or former spouse's interest in member
10-22 accounts, benefits, or other amounts payable by the retirement
10-23 system; or
10-24 (D) a person authorized by the individual in
10-25 writing to receive the information; or
10-26 (2) the information is disclosed under an
10-27 authorization of the board of trustees that specifies the reason
11-1 for the disclosure.
11-2 (b) This section does not prevent the disclosure of the
11-3 status or identity of an individual as a member, former member,
11-4 retiree, deceased member or retiree, or beneficiary of the
11-5 retirement system.
11-6 (c) A determination and disclosure under Subsection (a) of
11-7 this section may be made without notice to the individual member,
11-8 retiree, annuitant, or beneficiary.
11-9 SECTION 16. The Texas Statewide Volunteer Fire Fighters
11-10 Retirement Act (Article 6243e.3, Vernon's Texas Civil Statutes) is
11-11 amended by adding Section 12A to read as follows:
11-12 Sec. 12A. BENEFITS FOR MEMBER OF DEPARTMENT THAT CEASES TO
11-13 EXIST. (a) The commissioner shall continue to administer
11-14 benefits of the pension system for members and retirees who
11-15 performed service for a former member fire department that has not
11-16 withdrawn from the pension system under Section 12 of this Act and
11-17 has ceased to exist.
11-18 (b) The governing body of a political subdivision in which a
11-19 former member fire department described by Subsection (a) of this
11-20 section was located shall perform the duties provided by Section 23
11-21 of this Act for the members and retirees who performed service for
11-22 the former member fire department.
11-23 SECTION 17. Section 14(b), Texas Statewide Volunteer Fire
11-24 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
11-25 Statutes), is amended to read as follows:
11-26 (b) The surplus may be invested in:
11-27 (1) bonds or other interest-bearing obligations and
12-1 securities issued by governmental entities;
12-2 (2) shares or share accounts of savings and loan
12-3 associations insured by the Federal Savings and Loan Insurance
12-4 Corporation;
12-5 (3) shares and share accounts of banks insured by the
12-6 Federal Deposit Insurance Corporation;
12-7 (4) first lien real estate mortgage securities insured
12-8 by the Federal Housing Administration under the National Housing
12-9 Act, as amended;
12-10 (5) investments made by a life insurance company in
12-11 order to effect a group annuity contract; <or>
12-12 (6) corporation bonds, preferred stocks, and common
12-13 stocks;
12-14 (7) mutual funds; and
12-15 (8) international stocks traded as American depository
12-16 receipts.
12-17 SECTION 18. Section 19(o), Texas Statewide Volunteer Fire
12-18 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
12-19 Statutes), is amended to read as follows:
12-20 (o) After a hearing conducted by the State Office of
12-21 Administrative Hearings, the <The> commissioner shall determine
12-22 each appeal <hear all appeals> from a local board <boards> of
12-23 trustees decision <trustees' decisions> and issue a written opinion
12-24 <opinions> in compliance with the procedures required by this Act.
12-25 SECTION 19. Section 21(c), Texas Statewide Volunteer Fire
12-26 Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil
12-27 Statutes), is amended to read as follows:
13-1 (c) After a hearing conducted by the State Office of
13-2 Administrative Hearings, the <The> board shall determine each
13-3 appeal <hear appeals> from a <the> commissioner's decision
13-4 <decisions>.
13-5 SECTION 20. This Act takes effect September 1, 1993.
13-6 SECTION 21. The importance of this legislation and the
13-7 crowded condition of the calendars in both houses create an
13-8 emergency and an imperative public necessity that the
13-9 constitutional rule requiring bills to be read on three several
13-10 days in each house be suspended, and this rule is hereby suspended.