1-1 By: Whitmire S.B. No. 594
1-2 (In the Senate - Filed March 3, 1993; March 4, 1993, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 15, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 8, Nays 0;
1-6 April 15, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Armbrister x
1-10 Leedom x
1-11 Carriker x
1-12 Henderson x
1-13 Madla x
1-14 Moncrief x
1-15 Patterson x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 Whitmire x
1-20 COMMITTEE SUBSTITUTE FOR S.B. No. 594 By: Whitmire
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the firemen's relief and retirement fund in certain
1-24 municipalities.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Subsection (l), Section 2, Chapter 432, Acts of
1-27 the 64th Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil
1-28 Statutes), is amended to read as follows:
1-29 (l)(1) The board may, from fund assets, purchase from an
1-30 insurer licensed to do business in this state insurance to cover
1-31 liabilities and losses of the fund and to indemnify and hold the
1-32 members of the board and employees of the board, individually and
1-33 collectively, harmless from the effects and consequences of their
1-34 acts, omissions, and conduct within the scope of their official
1-35 capacity as fiduciaries or cofiduciaries or within the scope of
1-36 what the board member or employee believed in good faith, at the
1-37 time, to be the board member's or employee's official capacity.
1-38 However, an insurance company through which insurance is purchased
1-39 under this subsection has a cause of action against a board member
1-40 or employee to the extent that a loss results from the board
1-41 member's or employee's wilful and malicious misconduct or gross
1-42 negligence.
1-43 (2) If insurance under Subdivision (1) of this
1-44 subsection is unavailable, insufficient, inadequate, or not in
1-45 effect, the board may indemnify board members or employees of the
1-46 board for liability imposed as damages and for reasonable costs and
1-47 expenses incurred by those individuals in defense of an alleged
1-48 act, error, or omission committed in the individual's official
1-49 capacity or within the scope of what the board member or employee
1-50 believed in good faith, at the time, to be the board member's or
1-51 employee's official capacity. The board may not indemnify a board
1-52 member or an employee for the amount of a loss that results from
1-53 the board member's or the employee's wilful and malicious
1-54 misconduct or gross negligence.
1-55 (3) The board may establish a self-insurance fund to
1-56 pay claims for indemnification as provided by Subdivision (2) of
1-57 this subsection. The board shall provide that the self-insurance
1-58 fund must be limited to an amount not to exceed the greater of
1-59 three percent of the fund assets or $5 million. The self-insurance
1-60 fund shall be invested in the same manner as other assets of the
1-61 fund, and all earnings and losses from investing the self-insurance
1-62 fund shall be credited to the self-insurance fund unless that
1-63 credit exceeds the limit on the self-insurance fund set by the
1-64 board or this subdivision. Amounts held in the self-insurance fund
1-65 may not be included in the actuarial valuation for purposes of
1-66 determining:
1-67 (A) the city contribution rate; or
1-68 (B) the assets available to satisfy the
2-1 actuarial liabilities of the fund to pay service, disability, or
2-2 death benefits provided by this Act.
2-3 (4) A decision to indemnify or make a reimbursement
2-4 out of the self-insurance fund must be made by a majority vote of
2-5 board members eligible to vote on the matter. If the proposed
2-6 indemnification or reimbursement is of a board member, that board
2-7 member may not vote on the matter.
2-8 SECTION 2. Section 4, Chapter 432, Acts of the 64th
2-9 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
2-10 is amended by adding Subsection (o) to read as follows:
2-11 (o) Notwithstanding any other provision of this Act, a
2-12 member or survivor receiving pension or survivor benefits may make
2-13 a one-time election to receive a smaller pension or survivor
2-14 benefit and may make a one-time election not to receive any future
2-15 cost-of-living increases in the pension or survivor benefits
2-16 received by the person or the person's beneficiary. An election
2-17 under this subsection must be made in writing and submitted to the
2-18 board of trustees for approval. On the date the board grants
2-19 approval of an election under this subsection, the election is
2-20 irrevocable.
2-21 SECTION 3. Section 6, Chapter 432, Acts of the 64th
2-22 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
2-23 is amended to read as follows:
2-24 Sec. 6. Disability. (a)(1) A member is eligible for an
2-25 on-duty disability allowance under Subdivision (2) or (3) of this
2-26 subsection on:
2-27 (A) application to the board of trustees for
2-28 disability benefits by the member or the member's legal
2-29 representative;
2-30 (B) a finding by the board of trustees that the
2-31 member is physically or mentally disabled because of a bodily
2-32 injury received in or illness caused by the performance of the
2-33 member's duties; and
2-34 (C) a finding by the board of trustees that the
2-35 disability of the member is likely to be permanent.
2-36 (2) If the board of trustees finds that an eligible
2-37 member is not capable of performing the usual and customary duties
2-38 of the member's classification or position because of the member's
2-39 disability, the board shall retire the member on a monthly
2-40 disability allowance in an amount equal to the greater of:
2-41 (A) 50 percent of the member's average monthly
2-42 salary; or
2-43 (B) the benefit the member would have been
2-44 entitled to receive based on years of service under Section 4 of
2-45 this Act if the member had retired from service on the effective
2-46 date of the member's disability retirement.
2-47 (3) If the board of trustees finds that an eligible
2-48 member is not capable of performing any substantial gainful
2-49 activity because of the member's disability, the board shall retire
2-50 the member on a monthly disability allowance in an amount equal to
2-51 the greater of:
2-52 (A) 75 percent of the member's average monthly
2-53 salary; or
2-54 (B) the benefit the member would have been
2-55 entitled to receive based on years of service under Section 4 of
2-56 this Act if the member had retired from service on the effective
2-57 date of the member's disability retirement <Whenever a member
2-58 becomes physically or mentally disabled while in or as a
2-59 consequence of the performance of his duty or becomes physically or
2-60 mentally disabled from any cause whatsoever after he has
2-61 participated in a fund for a period of 20 years or more, the board
2-62 of trustees shall, on his request, or without a request, if they
2-63 determine that the member is not capable of performing the usual
2-64 and customary duties of his classification or position, retire the
2-65 member on a monthly disability allowance of an amount equal to 50
2-66 percent of his average monthly salary for the highest 36 months
2-67 during his participation, or so much thereof as he may have
2-68 served>.
2-69 (b)(1) A member is eligible for an off-duty disability
2-70 allowance under Subdivision (2) of this subsection on:
3-1 (A) application to the board of trustees for
3-2 disability benefits by the member or the member's legal
3-3 representative;
3-4 (B) a finding by the board of trustees that:
3-5 (i) the member is physically or mentally
3-6 disabled from any cause other than an injury received in or illness
3-7 caused by the performance of the member's duties; and
3-8 (ii) the member is not capable of
3-9 performing the usual and customary duties of the member's
3-10 classification or position; and
3-11 (C) a finding by the board of trustees that the
3-12 disability of the member is likely to be permanent.
3-13 (2) The board of trustees shall retire the member on a
3-14 monthly disability allowance in an amount equal to the greater of:
3-15 (A) 25 percent of the member's average monthly
3-16 salary, plus 2-1/2 percent of the member's average monthly salary
3-17 for each full year of service and participation in the fund, except
3-18 that the total monthly disability allowance under this paragraph
3-19 may not exceed 50 percent of the member's average monthly salary;
3-20 or
3-21 (B) the benefit the member would have been
3-22 entitled to receive based on years of service under Section 4 of
3-23 this Act if the member had retired from service on the effective
3-24 date of the member's disability retirement <Whenever a member
3-25 becomes disabled from any cause other than a disability acquired in
3-26 the performance of his duty as a fire fighter, a monthly pension
3-27 allowance shall be paid to the member. Such monthly pension
3-28 allowance shall be equal to 25 percent of the average monthly
3-29 salary of the member, plus two and one-half percent of the average
3-30 monthly salary for each full year of service and of participation
3-31 in a fund, except that the monthly pension allowance shall not
3-32 exceed 50 percent of the average monthly salary. The average
3-33 monthly salary shall be based on the monthly average of the
3-34 member's salary for the highest 36 months during his participation
3-35 or so much as he may have served preceding the date of the
3-36 retirement>.
3-37 (c) A member is not eligible for an on-duty or off-duty
3-38 disability allowance as provided by Subsection (a) or (b) of this
3-39 section if the member becomes disabled as a direct and proximate
3-40 result of a condition that existed on the date the member began
3-41 membership in the fund. If the member is not eligible to retire
3-42 under Section 4 of this Act, the member may elect a refund of
3-43 benefits or, if eligible, a deferred pension under Section 5 of
3-44 this Act. A member has a preexisting condition under this
3-45 subsection if the member has:
3-46 (1) symptoms that would cause an ordinarily prudent
3-47 person to seek diagnosis, care, or treatment within a five-year
3-48 period before the effective date of the member's membership in the
3-49 fund; or
3-50 (2) a condition for which medical advice or treatment
3-51 was recommended by or received from a physician within a five-year
3-52 period before the effective date of the member's membership in the
3-53 fund.
3-54 (d) The board of trustees shall determine the disability of
3-55 a member in accordance with uniform principles consistently applied
3-56 on the basis of medical or other evidence that the board determines
3-57 is necessary or desirable.
3-58 (e) In this section, "average monthly salary" means the
3-59 monthly average of the member's salary for the highest 36 months
3-60 during the member's participation in the fund or, if the member
3-61 participated in the fund for less than 36 months, the monthly
3-62 average of the member's salary for the number of months the member
3-63 participated in the fund <If the member is eligible to be retired
3-64 under the provisions of Section 4 of this Act, he may elect to have
3-65 his monthly pension allowance calculated under that section>.
3-66 SECTION 4. Subsection (e), Section 7, Chapter 432, Acts of
3-67 the 64th Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil
3-68 Statutes), is amended to read as follows:
3-69 (e) Any member may designate one or more beneficiaries <a
3-70 beneficiary> to receive the total contribution made by the member
4-1 to the fund if the member has no eligible survivors prescribed in
4-2 Section 11 of this Act. The member shall file a written
4-3 designation of beneficiary with the board of trustees of the
4-4 Firemen's Relief and Retirement Fund <stating his beneficiary>.
4-5 Such designation shall include the name and the address of each
4-6 <the> beneficiary. The board shall upon the death of the member
4-7 pay only a total amount equal to the amount contributed by the
4-8 member to the stated beneficiary or beneficiaries except that the
4-9 designated beneficiary or beneficiaries of a member dying after
4-10 August 31, 1987, are <if the board of trustees adopts Section 5(b)
4-11 of this Act by majority vote, a designated beneficiary entitled to
4-12 a distribution because of the death of a member after the date of
4-13 the adoption is> entitled to receive a total amount equal to the
4-14 amount, if any, payable pursuant to Section 5(b) of this Act as if
4-15 the member terminated employment on the date of death. On
4-16 application of a member's estate, the board shall pay the estate an
4-17 amount equal to the amount contributed by the member if the member
4-18 failed to designate a beneficiary. An amount payable under this
4-19 subsection may not escheat to the state.
4-20 SECTION 5. Section 8, Chapter 432, Acts of the 64th
4-21 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
4-22 is amended by amending Subsection (a) and adding Subsection (d) to
4-23 read as follows:
4-24 (a) No person may be retired <either> for <total or
4-25 temporary> disability, except as provided in this Act, nor receive
4-26 any allowance from the fund, unless and until there has been filed
4-27 with the board of trustees certificates of his disability or
4-28 eligibility signed and sworn to by that person and his physician or
4-29 by any physician selected by the board of trustees. The board of
4-30 trustees, in its discretion, may require other or additional
4-31 evidence of disability before ordering retirement or payment.
4-32 (d)(1) A benefit payable on the death of a member or
4-33 eligible beneficiary may not be paid to a person convicted of
4-34 causing that death but instead is payable to a person who would
4-35 have been entitled to the benefit had the convicted person
4-36 predeceased the decedent. If no person is entitled to the benefit
4-37 under this subdivision, the benefit is payable to the decedent's
4-38 estate.
4-39 (2) Except as provided by Subdivision (3) of this
4-40 subsection, the board is not required to pay a benefit in the
4-41 manner provided by Subdivision (1) of this subsection unless the
4-42 board receives actual notice of the conviction of the person who
4-43 would have been entitled to the benefit.
4-44 (3) The board may suspend payment of a benefit payable
4-45 on the death of a member or an eligible beneficiary on indictment
4-46 of the person who would have been entitled to the benefits, and the
4-47 suspension shall remain in effect until final disposition of the
4-48 charges relating to the cause of death. If the benefit payment is
4-49 suspended under this subdivision and the person is not convicted,
4-50 the benefit is payable with interest computed at the rate earned by
4-51 the fund during the time the benefit payment was suspended.
4-52 (4) For purposes of this subsection, a person has been
4-53 convicted of causing the death of a member or eligible beneficiary
4-54 if the person:
4-55 (A) has pleaded guilty or nolo contendere to or
4-56 the person has been found guilty by a court of an offense at the
4-57 trial of which it is established that the person's intentional or
4-58 knowing act or omission caused the death of the member or eligible
4-59 beneficiary, regardless of whether sentence is imposed or probated;
4-60 and
4-61 (B) has no appeal of the conviction pending and
4-62 the time provided for appeal has expired.
4-63 SECTION 6. Subdivision (2), Subsection (d), Section 10,
4-64 Chapter 432, Acts of the 64th Legislature, 1975 (Article 6243e.2,
4-65 Vernon's Texas Civil Statutes), is amended to read as follows:
4-66 (2) The board of trustees shall establish minimum
4-67 physical requirements which shall not exceed the physical
4-68 requirements established by the Commission pursuant to Section
4-69 143.022, Local Government Code, and its subsequent amendments <9,
4-70 Chapter 325, Acts of the 50th Legislature, 1947 (Article 1269m,
5-1 Vernon's Texas Civil Statutes)>, for membership in the fund, which
5-2 physical requirements shall be the same for all applicants. At the
5-3 time that physical examinations are administered on behalf of the
5-4 city, each applicant shall be provided written notice that a copy
5-5 of the results of the examination will be forwarded to the board of
5-6 trustees of the fund to determine eligibility for membership in the
5-7 fund and the existence of any preexisting conditions. Within 10
5-8 days after the date of a physical examination performed on an
5-9 applicant for a beginning position in the fire department as
5-10 required by Section 143.022, Local Government Code, and its
5-11 subsequent amendments <9, Chapter 325, Acts of the 50th
5-12 Legislature, 1947 (Article 1269m, Vernon's Texas Civil Statutes)>,
5-13 the city shall provide to the board of trustees <shall obtain> a
5-14 copy of all documents resulting from the physical examination. The
5-15 board of trustees may require additional physical examinations if
5-16 necessary to determine whether the applicant meets the minimum
5-17 physical requirements for membership in the fund. The fund
5-18 <applicant> shall pay the cost of any additional physical
5-19 examination required by the board of trustees. Within a reasonable
5-20 time after receiving the examination reports of an applicant, the
5-21 <The> board of trustees shall, on the basis of one or more physical
5-22 examinations, determine whether the applicant meets the minimum
5-23 physical requirements for membership in the fund. The board of
5-24 trustees shall notify the applicant and the chief of the fire
5-25 department not later than 10 calendar days after the date of the
5-26 board decision on the applicant's satisfaction of the minimum
5-27 physical requirements <before the first day of cadet training of
5-28 their acceptance or rejection of the applicant>. If the board of
5-29 trustees rejects the applicant, the applicant may request further
5-30 examination by a board of three physicians appointed by the board
5-31 of trustees at the expense of the applicant. If a physician board
5-32 finds that an applicant meets the minimum physical requirements for
5-33 membership in the fund, the board of trustees shall accept the
5-34 applicant for membership. If accepted by the board of trustees,
5-35 the applicant's membership is effective on being appointed to the
5-36 position of probationary fire fighter.
5-37 SECTION 7. Section 15, Chapter 432, Acts of the 64th
5-38 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
5-39 is amended to read as follows:
5-40 Sec. 15. Medical examination of member retiring for
5-41 disability or person claiming survivor benefits as disabled child.
5-42 (a) The board of trustees, in its discretion, at any time may
5-43 cause any person retired for disability or receiving survivor
5-44 benefits as a disabled child under the provisions of this Act to
5-45 appear and undergo a medical examination by any physician appointed
5-46 or selected by the board of trustees for the purpose.
5-47 (b) A person retired for disability under Section 6(a)(3) of
5-48 this Act or a person receiving survivor benefits as a disabled
5-49 child under this Act shall file an annual report of employment
5-50 activities and earnings with the board of trustees. The board of
5-51 trustees shall establish the form of the report and the time for
5-52 filing the report.
5-53 (c) The<, and the> result of the examination, the <and>
5-54 report by the physician, and the report of employment activities
5-55 and earnings shall be considered by the board of trustees in
5-56 determining whether the relief in the case shall be continued,
5-57 increased (if less than the maximum provided), decreased, or
5-58 discontinued. Should any person receiving relief under the
5-59 provisions of this Act, after due notice from the board of
5-60 trustees, fail to appear and be reexamined or fail to file the
5-61 report of employment activities and earnings, unless excused by the
5-62 board, <fail to appear or refuse to submit to reexamination,> the
5-63 board of trustees may in its discretion reduce or entirely
5-64 discontinue relief.
5-65 SECTION 8. Section 22, Chapter 432, Acts of the 64th
5-66 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
5-67 is amended to read as follows:
5-68 Sec. 22. EMPLOYMENT OF PROFESSIONAL INVESTMENT MANAGERS
5-69 <COUNSELING SERVICE>. The board of trustees may engage and employ
5-70 professional investment managers as provided by Section 802.204,
6-1 Government Code, and its subsequent amendments <counselors to
6-2 advise and assist the board in the investment of the assets of the
6-3 fund. The investment counseling service must be provided by a
6-4 nationally known organization whose business functions include
6-5 rendering continuous investment advisory service to public pension
6-6 and retirement funds. The city may pay the entire cost of this
6-7 counseling service; if not paid by the city the cost may be paid
6-8 from the assets of the fund>.
6-9 SECTION 9. The importance of this legislation and the
6-10 crowded condition of the calendars in both houses create an
6-11 emergency and an imperative public necessity that the
6-12 constitutional rule requiring bills to be read on three several
6-13 days in each house be suspended, and this rule is hereby suspended,
6-14 and that this Act take effect and be in force from and after its
6-15 passage, and it is so enacted.
6-16 * * * * *
6-17 Austin,
6-18 Texas
6-19 April 15, 1993
6-20 Hon. Bob Bullock
6-21 President of the Senate
6-22 Sir:
6-23 We, your Committee on Intergovernmental Relations to which was
6-24 referred S.B. No. 594, have had the same under consideration, and I
6-25 am instructed to report it back to the Senate with the
6-26 recommendation that it do not pass, but that the Committee
6-27 Substitute adopted in lieu thereof do pass and be printed.
6-28 Armbrister,
6-29 Chairman
6-30 * * * * *
6-31 WITNESSES
6-32 FOR AGAINST ON
6-33 ___________________________________________________________________
6-34 Name: Max Patterson x
6-35 Representing: Mayor of City of Houston
6-36 City: Spring
6-37 -------------------------------------------------------------------
6-38 Name: Jennifer C. Morales x
6-39 Representing: Houston Firemen's Relief
6-40 City: Houston
6-41 -------------------------------------------------------------------
6-42 Name: Dennis W. Holder x
6-43 Representing: Houston Firemen's Relief
6-44 City: Houston
6-45 -------------------------------------------------------------------
6-46 Name: Rick Mumey x
6-47 Representing: Houston Professional Firefigh
6-48 City: Houston
6-49 -------------------------------------------------------------------