1-1  By:  Barrientos                                       S.B. No. 1181
    1-2        (In the Senate - Filed March 12, 1993; March 16, 1993, read
    1-3  first time and referred to Committee on State Affairs;
    1-4  April 21, 1993, reported adversely, with favorable Committee
    1-5  Substitute by the following vote:  Yeas 10, Nays 0; April 21, 1993,
    1-6  sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Harris of Dallas   x                               
   1-10        Rosson             x                               
   1-11        Carriker           x                               
   1-12        Henderson                                      x   
   1-13        Leedom             x                               
   1-14        Lucio              x                               
   1-15        Luna               x                               
   1-16        Nelson                                         x   
   1-17        Patterson          x                               
   1-18        Shelley            x                               
   1-19        Sibley             x                               
   1-20        West               x                               
   1-21        Whitmire                                       x   
   1-22  COMMITTEE SUBSTITUTE FOR S.B. No. 1181               By:  Henderson
   1-23                         A BILL TO BE ENTITLED
   1-24                                AN ACT
   1-25  relating to the powers and duties of and systems and programs under
   1-26  the Employees Retirement System of Texas.
   1-27        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-28        SECTION 1.  Section 803.202, Government Code, is amended to
   1-29  read as follows:
   1-30        Sec. 803.202.  SERVICE IN CERTAIN RETIREMENT SYSTEMS.
   1-31  (a)  The board of trustees of the Employees Retirement System of
   1-32  Texas by rule may:
   1-33              (1)  consider the classes of service in the Employees
   1-34  Retirement System of Texas as if they were, for purposes of this
   1-35  chapter, classes in separate statewide retirement systems; or
   1-36              (2)  permit a person who is retiring exclusively from
   1-37  retirement systems administered by the board to use the shortest
   1-38  length-of-service requirement provided for retirement in any class
   1-39  in which the person has service credit.
   1-40        (b)  A member of a retirement system administered by the
   1-41  board of trustees of the Employees Retirement System of Texas may
   1-42  reestablish service credit previously canceled in another
   1-43  retirement system administered by the board if the member holds a
   1-44  position included in the system of which the person is a member and
   1-45  has held the position for at least 12 months.  The method of
   1-46  reestablishment and the amount to be deposited are as provided by
   1-47  the applicable law providing for reestablishment of service credit
   1-48  generally in the particular retirement system.
   1-49        SECTION 2.  Subtitle A, Title 8, Government Code, is amended
   1-50  by adding Chapter 805 to read as follows:
   1-51      CHAPTER 805.  CREDIT TRANSFER BETWEEN EMPLOYEES RETIREMENT
   1-52        SYSTEM OF TEXAS AND TEACHER RETIREMENT SYSTEM OF TEXAS
   1-53        Sec. 805.001.  DEFINITIONS.  In this chapter:
   1-54              (1)  "Employees retirement system" means the Employees
   1-55  Retirement System of Texas.
   1-56              (2)  "Member" means a person having membership in the
   1-57  employees retirement system or the teacher retirement system under
   1-58  statutes and rules governing membership in the respective systems.
   1-59              (3)  "Service credit" has the meaning assigned, as
   1-60  applicable, by Section 811.001 or Section 821.001.
   1-61              (4)  "System" means the employees retirement system or
   1-62  the teacher retirement system.
   1-63              (5)  "Teacher retirement system" means the Teacher
   1-64  Retirement System of Texas.
   1-65        Sec. 805.002.  ELIGIBILITY TO TRANSFER SERVICE CREDIT.
   1-66  (a)  A member of both the employees retirement system and the
   1-67  teacher retirement system who applies for service or disability
   1-68  retirement from either system may transfer to that system service
    2-1  credit established in the other system if the member has at least
    2-2  three years of service credit in the system from which the member
    2-3  is retiring.
    2-4        (b)  A member of both the employees retirement system and the
    2-5  teacher retirement system who has less than three years of service
    2-6  credit in the system in which the person most recently received
    2-7  service credit may, at the time the person applies for service or
    2-8  disability retirement from the other system, transfer service
    2-9  credit to that system from the system in which the person most
   2-10  recently received service credit.
   2-11        (c)  Except as provided by Subsections (e) and (f), a member
   2-12  of the employees retirement system or the teacher retirement system
   2-13  who formerly was a member of the other system may reinstate or
   2-14  purchase service credit in the other system for the purpose of
   2-15  making a transfer under Subsection (a) if the member has at least
   2-16  three years of service credit in the system in which the person
   2-17  currently is a member.
   2-18        (d)  Except as provided by Subsections (e) and (f), the
   2-19  designated beneficiary of a member of the employees retirement
   2-20  system or the teacher retirement system who dies while holding a
   2-21  position included in the membership of the system may make a
   2-22  transfer under Subsection (a) and a reinstatement or purchase under
   2-23  Subsection (c) if the deceased member had at least three years of
   2-24  service credit in the system in which the member was performing
   2-25  service at the time of death.  The designated beneficiary may make
   2-26  a transfer under Subsection (b) if the deceased member had less
   2-27  than three years of service credit in the system in which the
   2-28  member was performing service at the time of death.  If a member is
   2-29  not survived by a designated beneficiary, the personal
   2-30  representative of the member's estate has the same right under this
   2-31  subsection as a designated beneficiary.
   2-32        (e)  Service credit that is canceled by a termination of
   2-33  membership that occurs after August 31, 1993, may be reinstated and
   2-34  other service purchased only by a member of the system in which the
   2-35  service is creditable who meets the general requirements for
   2-36  reinstatement or purchase of service credit in that system.
   2-37        (f)  A person who is receiving retirement benefits based on
   2-38  the person's service credited in one system and who applies for
   2-39  service or disability retirement from the other system is not
   2-40  eligible to transfer service credit under this chapter.  The
   2-41  designated beneficiary, or the personal representative of the
   2-42  estate, of a person who at the time of death was receiving benefits
   2-43  based on the person's service credited in one system and who held a
   2-44  position included in the other system is not eligible to transfer
   2-45  service credit under this chapter.
   2-46        Sec. 805.003.  PAYMENTS TO REINSTATE OR PURCHASE SERVICE
   2-47  CREDIT.  The cost of reinstating or purchasing service credit under
   2-48  Section 805.002 is determined according to the statutes that govern
   2-49  the reinstatement or purchase of the type of service credit in the
   2-50  system in which it is to be reinstated or purchased.  All payments
   2-51  for service credit reinstated or purchased under Section 805.002
   2-52  must be made before retirement or the first payment of a death
   2-53  benefit annuity, as applicable.
   2-54        Sec. 805.004.  TRANSFER OF SERVICE CREDIT.  (a)  A person who
   2-55  elects to transfer service credit under Section 805.002 shall
   2-56  notify, in the manner required by the system to which the credit
   2-57  will be transferred, the system of the election.  The system shall
   2-58  notify the other system of the election.
   2-59        (b)  The systems by rule or agreement shall determine the
   2-60  manner in which the service credit is transferred.
   2-61        (c)  A transfer of service credit under this chapter cancels
   2-62  service credit and, if applicable, membership in the system from
   2-63  which it is transferred.
   2-64        Sec. 805.005.  APPLICABILITY OF PROPORTIONATE RETIREMENT
   2-65  PROGRAM.  An election to transfer service credit under Section
   2-66  805.002 is an alternative to participation in the program provided
   2-67  by Chapter 803, except that a person having service credit in the
   2-68  employees retirement system, the teacher retirement system, and
   2-69  another public retirement system participating in that program may
   2-70  transfer service credit under this chapter, if eligible, and use
    3-1  the combined service credit for purposes of the program provided by
    3-2  Chapter 803.
    3-3        Sec. 805.006.  CREDITING OF TRANSFERRED SERVICE CREDIT;
    3-4  REFUND.  (a)  Except as provided by Subsections (b) and (c),
    3-5  service credit transferred under this chapter is credited in the
    3-6  system to which it is transferred according to rules of the teacher
    3-7  retirement system determining the amount of service creditable.
    3-8        (b)  Not more than one month of service credit may be granted
    3-9  for service during that month.
   3-10        (c)  A person who transfers service credit under this chapter
   3-11  may not receive service credit for all military service performed
   3-12  in an amount that exceeds the maximum amount creditable in the
   3-13  system to which credit is transferred.  A person is eligible for a
   3-14  refund from the system from which credit is transferred under this
   3-15  section of contributions made for military service credit, other
   3-16  than any amount that represents a fee, that exceeds the maximum
   3-17  amount creditable.
   3-18        Sec. 805.007.  EFFECT OF TRANSFER OF SERVICE CREDIT.  (a)  A
   3-19  person who transfers service credit under this chapter forfeits all
   3-20  rights to benefits payable by the system from which it is
   3-21  transferred and is not an annuitant of that system for any purpose,
   3-22  including the payment of postretirement increases to annuitants of
   3-23  that system.
   3-24        (b)  Service credit transferred under this chapter is
   3-25  considered as if it had been granted for service performed under
   3-26  the system to which it has been transferred and is used in
   3-27  satisfying minimum service requirements for retirement and in
   3-28  determining the amount of benefits that are based on the amount of
   3-29  a person's service credit:
   3-30              (1)  except that a person's average salary for the
   3-31  purpose of computing an annuity may be determined only from service
   3-32  credit that was originally established in one system and that
   3-33  results in the higher average salary; and
   3-34              (2)  except as provided by Section 805.006.
   3-35        Sec. 805.008.  RESPONSIBILITY FOR BENEFIT PAYMENTS.  (a)  The
   3-36  system from which a person's service credit is transferred under
   3-37  this chapter shall transfer to the other system, at the time the
   3-38  annuity based on the service credit becomes payable, an amount
   3-39  equal to the portion of the actuarial value of the annuity that
   3-40  represents the percentage of the total amount of the person's
   3-41  service credited in both systems that was credited in the system
   3-42  from which the credit is being transferred.
   3-43        (b)  The systems jointly by rule shall adopt actuarial tables
   3-44  and investment assumptions to be used in computing actuarial values
   3-45  under this section.
   3-46        (c)  For the purpose of computing an amount to be transferred
   3-47  under this section, service credit in either system must be
   3-48  considered as if it were credited under rules of the teacher
   3-49  retirement system determining the amount of service creditable.
   3-50        (d)  An amount transferred under this section is payable from
   3-51  amounts credited to the person's individual account and amounts
   3-52  credited to the account in which the system places state
   3-53  contributions.  An amount received under this section shall be
   3-54  deposited in the account from which the system receiving the amount
   3-55  pays annuities.
   3-56        (e)  The system to which a transfer is made under this
   3-57  section is responsible for paying the annuity for which the
   3-58  transfer was made, including the entire amount of any increase in
   3-59  the annuity granted after the transfer.
   3-60        Sec. 805.009.  RULES.  In addition to the rules specifically
   3-61  required by this chapter, a system may adopt other rules for the
   3-62  administration of this chapter.
   3-63        SECTION 3.  Subchapter B, Chapter 813, Government Code, is
   3-64  amended by adding Section 813.104 to read as follows:
   3-65        Sec. 813.104.  Alternative Payments to Establish or
   3-66  Reestablish Service Credit.  (a)  A member who is otherwise
   3-67  eligible may establish or reestablish service creditable in the
   3-68  retirement system by making payments as provided by this section in
   3-69  lieu of lump-sum payments otherwise authorized or required by this
   3-70  subtitle.
    4-1        (b)  A payment authorized by this section consists of the
    4-2  contribution required to establish or reestablish at least one year
    4-3  of service credit, including any required interest and membership
    4-4  fees, except that a person's last in a series of payments under
    4-5  this section may be for a period of remaining service that is less
    4-6  than one year.
    4-7        (c)  The retirement system shall grant the applicable amount
    4-8  of service credit after each payment is made under this section.
    4-9        (d)  Payments may not be made under this section:
   4-10              (1)  to establish or reestablish service credit of a
   4-11  person who has retired or died; or
   4-12              (2)  to establish current service under Section
   4-13  813.201.
   4-14        (e)  The retirement system may adopt rules to administer this
   4-15  section.
   4-16        SECTION 4.  Subchapter B, Chapter 813, Government Code, is
   4-17  amended by adding Section 813.105 to read as follows:
   4-18        Sec. 813.105.  PAYROLL DEDUCTIONS TO ESTABLISH OR REESTABLISH
   4-19  SERVICE CREDIT.  (a)  A contributing member who is  otherwise
   4-20  eligible may establish or reestablish service creditable in the
   4-21  retirement system by making payments as provided by this section in
   4-22  lieu of lump-sum payments otherwise authorized or required by this
   4-23  subtitle.
   4-24        (b)  A payment authorized by this section consists of a
   4-25  monthly payroll deduction in an amount not less than one-twelfth of
   4-26  the contribution required to establish or reestablish at least one
   4-27  year of service credit, including any required interest and
   4-28  membership fee, except as provided by Subsection (c).
   4-29        (c)  Payments to establish or reestablish service credit of
   4-30  less than one year or to establish or reestablish service credit by
   4-31  a member who plans to retire in less than a year may be made by
   4-32  payroll deduction for a period determined by the retirement system.
   4-33        (d)  Payroll deductions for payments under this section shall
   4-34  be made and submitted to the retirement system at the times and in
   4-35  the manner provided for member contributions under Section 815.402.
   4-36        (e)  The retirement system shall credit a member's payments
   4-37  made under this section to a suspense account in the trust fund
   4-38  until the sum of the payments equals the amount required for one
   4-39  year of service credit or the amount required for credit under
   4-40  Subsection (c), at which time the retirement system shall deposit
   4-41  the payments in the appropriate accounts in the trust fund and
   4-42  grant the applicable amount of service credit.
   4-43        (f)  A member who, while making payments under this section,
   4-44  ceases to hold a position or withdraws the authority for payroll
   4-45  deductions may contract with the retirement system for an
   4-46  alternative method of continuing the payments.  The retirement
   4-47  system may refund payments credited to the suspense account and not
   4-48  transferred to trust fund accounts if a remaining payment becomes
   4-49  delinquent by more than 60 days.
   4-50        (g)  Payments may not be made under this section to establish
   4-51  or reestablish service credit of a person who has retired or died,
   4-52  except that a beneficiary may make payment in a lump sum for the
   4-53  remainder of service credit for which payments were begun before
   4-54  the member's death.
   4-55        (h)  The retirement system may adopt rules to administer this
   4-56  section.
   4-57        SECTION 5.  Subchapter B, Chapter 813, Government Code, is
   4-58  amended by adding Section 813.106 to read as follows:
   4-59        Sec. 813.106.  SERVICE NOT PREVIOUSLY ESTABLISHED.  The state
   4-60  shall make contributions for service not previously established
   4-61  that is established under Section 813.104 or 813.105 in the amount
   4-62  provided by Section 813.202(e) for membership service or the amount
   4-63  provided by Section 813.302(d) for military service, as applicable.
   4-64  The state contributions will be made at the time the service credit
   4-65  is granted.
   4-66        SECTION 6.  Subsection (b), Section 813.304, Government Code,
   4-67  is amended to read as follows:
   4-68        (b)  The retirement system shall use military service credit
   4-69  in computing service retirement or nonoccupational disability
   4-70  retirement benefits of a member of the employee class only if the
    5-1  member has, without military service credit, at least five <10>
    5-2  years of service credit in that class.
    5-3        SECTION 7.  Section 813.504, Government Code, is amended to
    5-4  read as follows:
    5-5        Sec. 813.504.  Eligibility for Service Credit Previously
    5-6  Canceled.  A member may reestablish service credit previously
    5-7  canceled in the retirement system if the member, after cancellation
    5-8  of the credit, holds a position for six <24> months that is
    5-9  included in the employee class.
   5-10        SECTION 8.  Subsection (a), Section 813.509, Government Code,
   5-11  is amended to read as follows:
   5-12        (a)  A member who retires based on service or a disability is
   5-13  entitled to service credit in the retirement system for the
   5-14  member's sick leave that has accumulated and is unused on the last
   5-15  day of employment.  Sick leave is creditable in the retirement
   5-16  system at the rate of one month of service credit for each 20 <40>
   5-17  days, or 160 <320> hours, of accumulated sick leave.  An increment
   5-18  of less than 20 <40> days is not creditable.
   5-19        SECTION 9.  Subchapter F, Chapter 813, Government Code, is
   5-20  amended by adding Section 813.510 to read as follows:
   5-21        Sec. 813.510.  CREDIT FOR COUNTY CHILD WELFARE BOARD SERVICE.
   5-22  (a)  An eligible member may, before September 1, 1994, claim
   5-23  service credit not otherwise creditable in the retirement system
   5-24  for service performed before September 1, 1980, for a county child
   5-25  welfare board.
   5-26        (b)  A member eligible to claim credit under this section is
   5-27  one who:
   5-28              (1)  was a contributing member on August 31, 1993,
   5-29  having performed at least 24 months of continuous state service as
   5-30  of that date; and
   5-31              (2)  was subject during the period of welfare board
   5-32  service to personnel rules of and direct supervision by the Texas
   5-33  Department of Human Services or its predecessor.
   5-34        (c)  A member may claim credit under this section by
   5-35  depositing with the retirement system in a lump sum:
   5-36              (1)  a contribution based on the member's monthly
   5-37  salary during the period of service for a county child welfare
   5-38  board and computed for the number of months for which credit is
   5-39  sought at the combined rates currently required of  the state and
   5-40  employee members of the system for new service;
   5-41              (2)  interest computed on the basis of the state fiscal
   5-42  year at an annual rate of 10 percent from the date the service was
   5-43  performed to the date of deposit; and
   5-44              (3)  any membership fees required of members of the
   5-45  system during the period beginning on the date the service began
   5-46  and ending on the date of deposit.
   5-47        (d)  The retirement system shall deposit the salary
   5-48  contribution in the member's individual account in the employees
   5-49  saving account, interest in the state accumulation account, and
   5-50  membership fees in the expense account.
   5-51        (e)  The retirement system shall determine the amount to be
   5-52  deposited in each case and may not grant service credit under this
   5-53  section until the required amount has been paid in full.
   5-54        (f)  Service credit may not be established under this section
   5-55  if the service is currently credited in another public retirement
   5-56  system.
   5-57        (g)  This section expires October 1, 1994.
   5-58        SECTION 10.  Subchapter G, Chapter 814, Government Code, is
   5-59  amended by adding Section 814.603 to read as follows:
   5-60        Sec. 814.603.  SUPPLEMENTAL ONE-TIME PAYMENT.  (a)  The
   5-61  retirement system shall make a supplemental payment to persons
   5-62  whose annuities are described by Section 814.107, 814.207, 814.305,
   5-63  or 814.601(a) and that are based on service retirements, disability
   5-64  retirements, or deaths.  This supplemental payment is in addition
   5-65  to the regular monthly annuity payment.  Each person who receives
   5-66  an annuity described by this subsection is entitled to receive one
   5-67  payment equal to 10 percent of one month's annuity payment for each
   5-68  fiscal year before the fiscal year beginning September 1, 1993, in
   5-69  which the annuity has been paid.  A supplemental payment may not
   5-70  exceed 350 percent of a monthly annuity.  Only a person whose
    6-1  annuity began in the fiscal year ending August 31, 1993, or earlier
    6-2  is eligible for the supplemental payment.  Supplemental payments
    6-3  under this subsection must comply with Section 811.006.
    6-4        (b)  The retirement system shall pay the supplemental payment
    6-5  provided by Subsection (a) from the retirement annuity reserve
    6-6  account and may transfer to that account from the state
    6-7  accumulation account any portion of the amount that exceeds the
    6-8  amount in the retirement annuity reserve account available to
    6-9  finance this supplemental payment and that is actuarially
   6-10  determined to be necessary to finance the supplemental payment.
   6-11        (c)  The board of trustees may adopt rules to implement the
   6-12  payment, including rules that govern the timing of the supplemental
   6-13  payment described by Subsection (a).
   6-14        (d)  The board of trustees may by rule authorize similar
   6-15  supplemental payments in the fiscal year ending August 31, 1995, if
   6-16  the payments are in compliance with Section 811.006.
   6-17        SECTION 11.  Section 815.002, Government Code, is amended by
   6-18  adding Subsection (d) to read as follows:
   6-19        (d)  Appointments to the board shall be made without regard
   6-20  to the race, color, disability, sex, religion, age, or national
   6-21  origin of the appointees.
   6-22        SECTION 12.  Subchapter A, Chapter 815, Government Code, is
   6-23  amended by adding Section 815.0031 to read as follows:
   6-24        Sec. 815.0031.  INELIGIBILITY FOR BOARD AND OF CERTAIN
   6-25  EMPLOYEES.  (a)  A person is not eligible for appointment or
   6-26  election to the board if the person or the person's spouse:
   6-27              (1)  is employed by or participates in the management
   6-28  of a business entity or other organization receiving funds from the
   6-29  retirement system; or
   6-30              (2)  owns or controls, directly or indirectly, more
   6-31  than a 10 percent interest in a business entity or other
   6-32  organization receiving funds from the retirement system.
   6-33        (b)  A paid officer, employee, or consultant of a Texas trade
   6-34  association in the field of insurance or investment may not be a
   6-35  trustee or an employee of the retirement system who is exempt from
   6-36  the state's position classification plan or is compensated at or
   6-37  above the amount prescribed by the General Appropriations Act for
   6-38  step 1, salary group 17, of the position classification salary
   6-39  schedule.
   6-40        (c)  A person who is the spouse of a paid officer, manager,
   6-41  or consultant of a Texas trade association in the field of
   6-42  insurance or investment may not be a trustee and may not be an
   6-43  employee of the retirement system who is exempt from the state's
   6-44  position classification plan or is compensated at or above the
   6-45  amount prescribed by the General Appropriations Act for step 1,
   6-46  salary group 17, of the position classification salary schedule.
   6-47        (d)  For the purposes of this section, a Texas trade
   6-48  association is a nonprofit, cooperative, and voluntarily joined
   6-49  association of business or professional competitors in this state
   6-50  designed to assist its members and its industry or profession in
   6-51  dealing with mutual business or professional problems and in
   6-52  promoting their common interest.
   6-53        (e)  A person may not serve as a trustee or act as the
   6-54  general counsel to the board if the person is required to register
   6-55  as a lobbyist under Chapter 305 because of the person's activities
   6-56  for compensation on behalf of a business or an association related
   6-57  to the operation of the board.
   6-58        SECTION 13.  Subchapter A, Chapter 815, Government Code, is
   6-59  amended by adding Section 815.008 to read as follows:
   6-60        Sec. 815.008.  GROUNDS FOR REMOVAL OF TRUSTEE.  (a)  It is a
   6-61  ground for removal from the board if a trustee:
   6-62              (1)  violates a prohibition established by Section
   6-63  815.0031;
   6-64              (2)  cannot discharge the person's duties for a
   6-65  substantial part of the term for which the person is appointed or
   6-66  elected because of illness or disability; or
   6-67              (3)  is absent from more than half of the regularly
   6-68  scheduled board meetings that the person is eligible to attend
   6-69  during a calendar year unless the absence is excused by majority
   6-70  vote of the board.
    7-1        (b)  The validity of an action of the board is not affected
    7-2  by the fact that it is taken when a ground for removal of a trustee
    7-3  exists.
    7-4        (c)  If the executive director has knowledge that a potential
    7-5  ground for removal exists, the executive director shall notify the
    7-6  chairman of the board of the ground.  The chairman shall then
    7-7  notify the appropriate appointing officer, if any, that a potential
    7-8  ground for removal exists.
    7-9        SECTION 14.  Subchapter B, Chapter 815, Government Code, is
   7-10  amended by adding Section 815.111 to read as follows:
   7-11        Sec. 815.111.  MISCELLANEOUS BOARD DUTIES.  (a)  The board
   7-12  shall provide to its trustees and employees, as often as necessary,
   7-13  information regarding their qualification for office or employment
   7-14  under this chapter and their responsibilities under applicable laws
   7-15  relating to standards of conduct for state officers or employees.
   7-16        (b)  The board shall develop and implement policies that
   7-17  clearly define the respective responsibilities of the board and the
   7-18  staff of the retirement system.
   7-19        (c)  The board shall prepare information of interest to the
   7-20  retirement system's members describing the functions of the system
   7-21  and the system's procedures by which complaints are filed with and
   7-22  resolved by the system.  The system shall make the information
   7-23  available to the system's members and appropriate state agencies.
   7-24        (d)  The board by rule shall establish methods by which
   7-25  members are notified of the name, mailing address, and telephone
   7-26  number of the retirement system for the purpose of directing
   7-27  complaints to the system.
   7-28        (e)  The board shall develop and implement policies that
   7-29  provide the public with a reasonable opportunity to appear before
   7-30  the board and to speak on any issue under the jurisdiction of the
   7-31  board.
   7-32        (f)  The board shall prepare and maintain a written plan that
   7-33  describes how a person who does not speak English can be provided
   7-34  reasonable access to the board's programs.  The board shall also
   7-35  comply with federal and state laws for program and facility
   7-36  accessibility.
   7-37        SECTION 15.  Subchapter C, Chapter 815, Government Code, is
   7-38  amended by adding Section 815.212 to read as follows:
   7-39        Sec. 815.212.  EMPLOYMENT PRACTICES.  (a)  The executive
   7-40  director or the executive director's designee shall develop an
   7-41  intra-agency career ladder program.  The program shall require
   7-42  intra-agency posting of all non-entry-level positions concurrently
   7-43  with any public posting.
   7-44        (b)  The executive director or the executive director's
   7-45  designee shall develop a system of annual performance evaluations.
   7-46  All merit pay for retirement system employees must be based on the
   7-47  system established under this subsection.
   7-48        (c)  The executive director or the executive director's
   7-49  designee shall prepare and maintain a written policy statement to
   7-50  assure implementation of a program of equal employment opportunity
   7-51  under which all personnel transactions are made without regard to
   7-52  race, color, disability, sex, religion, age, or national origin.
   7-53  The policy statement must include:
   7-54              (1)  personnel policies, including policies relating to
   7-55  recruitment, evaluation, selection, appointment, training, and
   7-56  promotion of personnel;
   7-57              (2)  a comprehensive analysis of the retirement
   7-58  system's work force that meets federal and state guidelines;
   7-59              (3)  procedures by which a determination can be made of
   7-60  significant underuse in the retirement system's work force of all
   7-61  persons for whom federal or state guidelines encourage a more
   7-62  equitable balance; and
   7-63              (4)  reasonable methods to appropriately address those
   7-64  areas of significant underuse.
   7-65        (d)  A policy statement prepared under Subsection (c) must
   7-66  cover an annual period, be updated at least annually, and be filed
   7-67  with the governor's office.
   7-68        (e)  The governor's office shall deliver a biennial report to
   7-69  the legislature based on the information received under Subsection
   7-70  (d).  The report may be made separately or as a part of other
    8-1  biennial reports made to the legislature.
    8-2        SECTION 16.  Subsections (a) and (b), Section 815.301,
    8-3  Government Code, are amended to read as follows:
    8-4        (a)  The board of trustees shall:
    8-5              (1)  invest the assets of the retirement system<, other
    8-6  than assets of the law enforcement and custodial officer
    8-7  supplemental retirement fund,> as a single fund without distinction
    8-8  as to their source; and
    8-9              (2)  hold securities purchased with the assets
   8-10  described by Subsection (a)(1) collectively for the proportionate
   8-11  benefit of:
   8-12                    (A)  all accounts in the trust fund that are
   8-13  listed in Section 815.310(b); and
   8-14                    (B)  the law enforcement and custodial officer
   8-15  supplemental retirement fund.
   8-16        (b)  The <Except for assets of the law enforcement and
   8-17  custodial officer supplemental retirement fund, the> board of
   8-18  trustees may, under the standard of care provided by Section
   8-19  815.307, invest and reinvest any of the retirement system's assets
   8-20  and may commingle assets of the trust fund and the law enforcement
   8-21  and custodial officer supplemental retirement fund with the assets
   8-22  of the Judicial Retirement System of Texas Plan Two for investment
   8-23  purposes, as long as proportionate ownership records are maintained
   8-24  and credited.  Investments may include home office facilities,
   8-25  including land, equipment, and office building, used in
   8-26  administering the retirement system.
   8-27        SECTION 17.  Subsection (b), Section 815.310, Government
   8-28  Code, is amended to read as follows:
   8-29        (b)  All assets of the trust fund shall be credited,
   8-30  according to the purpose for which they are held, to one of the
   8-31  following accounts:
   8-32              (1)  employees saving account;
   8-33              (2)  state accumulation account;
   8-34              (3)  retirement annuity reserve account;
   8-35              (4)  interest account; or
   8-36              (5)  expense account<; or>
   8-37              <(6)  benefit increase reserve account>.
   8-38        SECTION 18.  Subsection (a), Section 815.313, Government
   8-39  Code, is amended to read as follows:
   8-40        (a)  The retirement system shall transfer to the retirement
   8-41  annuity reserve account money as required by Section 815.318,
   8-42  815.319, <815.320,> or 815.321.
   8-43        SECTION 19.  Subsection (a), Section 815.317, Government
   8-44  Code, is amended to read as follows:
   8-45        (a)  The retirement system shall deposit in the law
   8-46  enforcement and custodial officer supplemental retirement fund
   8-47  state contributions and other <payments made as provided by Section
   8-48  815.405, any> appropriations made by the legislature to the fund<,
   8-49  money collected under Section 2(l), Chapter 88, General Laws, Acts
   8-50  of the 41st Legislature, 2nd Called Session, 1929 (Article 6675a 2,
   8-51  Vernon's Texas Civil Statutes),> and proceeds from investment of
   8-52  the fund.
   8-53        SECTION 20.  Section 815.318, Government Code, is amended to
   8-54  read as follows:
   8-55        Sec. 815.318.  Transfer of Assets From Interest Account.
   8-56  (a)  The board of trustees shall transfer from the interest account
   8-57  to the employees saving account amounts of interest computed under
   8-58  Section 815.311 at the following times:
   8-59              (1)  as required during the fiscal year for a member's
   8-60  account in the retirement system that is closed before the last day
   8-61  of the fiscal year; and
   8-62              (2)  as of the last day of the fiscal year for a
   8-63  member's account that is not closed before the last day of the
   8-64  fiscal year.
   8-65        (b)  As required during the year, the board of trustees shall
   8-66  transfer from the interest account to the expense account amounts
   8-67  it determines necessary for the payment of the retirement system's
   8-68  expenses that exceed the amount of money available for those
   8-69  expenses.
   8-70        (c)  As of the last day of each fiscal year, the board of
    9-1  trustees shall transfer from the interest account to the retirement
    9-2  annuity reserve account an amount equal to:
    9-3              (1)  five percent of the mean amount in the retirement
    9-4  annuity reserve account for that fiscal year; or
    9-5              (2)  an amount computed at a greater rate if the
    9-6  actuary recommends the greater rate to finance adequately the
    9-7  annuities payable from the retirement annuity reserve account.
    9-8        (d)  <As of the last day of each fiscal year, the board of
    9-9  trustees shall transfer from the interest account to the benefit
   9-10  increase account an amount computed at the rate set by the board
   9-11  under Section 815.106.>
   9-12        <(e)>  After making the transfers required by this section,
   9-13  the board of trustees, as of the last day of each fiscal year,
   9-14  shall transfer the amount remaining in the interest account to the
   9-15  state accumulation account.
   9-16        SECTION 21.  Subsection (c), Section 815.401, Government
   9-17  Code, is amended to read as follows:
   9-18        (c)  If the legislature appropriates, on behalf of each
   9-19  contributing member for any fiscal year, a membership fee to be
   9-20  deposited in the expense account in an amount equal to or greater
   9-21  than the membership fee required by Subsection (a), the members are
   9-22  not required to pay the membership fee for that year.  The
   9-23  retirement system may apply the membership fee to the
   9-24  administration of any program administered by the board of
   9-25  trustees.
   9-26        SECTION 22.  Section 815.403, Government Code, is amended by
   9-27  amending Subsections (a) and (b) and by adding Subsection (g) to
   9-28  read as follows:
   9-29        (a)  During each fiscal year, the state shall contribute to
   9-30  the retirement system:
   9-31              (1)  an amount equal to 7.4 percent of the total
   9-32  compensation of all members of the retirement system for that year;
   9-33              (2)  money to pay lump-sum death benefits for retirees
   9-34  under Section 814.501;
   9-35              (3)  an amount for the law enforcement and custodial
   9-36  officer supplemental retirement fund equal to 2.13 percent of the
   9-37  aggregate state compensation of all custodial and law enforcement
   9-38  officers for that year;
   9-39              (4)  money necessary for the administration <and
   9-40  payment> of <benefits from> the law enforcement and custodial
   9-41  officer supplemental retirement fund; and
   9-42              (5) <(4)>  money for service credit not previously
   9-43  established, as provided by Section 813.202(e) or 813.302(d).
   9-44        (b)  Before November 2 of each even-numbered year, the
   9-45  retirement system shall certify to the Legislative Budget Board and
   9-46  to the budget division of the governor's office for review:
   9-47              (1)  an estimate of the amount necessary to pay the
   9-48  state's contribution under Subsections (a)(1), (a)(2), (a)(3), and
   9-49  (a)(5) <(a)(4)> for the following biennium;
   9-50              <(2)  the estimated amount, based on actuarial
   9-51  valuations, of appropriated funds required in addition to other
   9-52  available money to finance all benefits provided from the law
   9-53  enforcement and custodial officer supplemental retirement fund for
   9-54  the following biennium;>
   9-55              <(3)  the estimated amount, based on actuarial
   9-56  valuations, of appropriated funds required for the following
   9-57  biennium to fully finance, within a period of not more than 36
   9-58  years after September 1, 1979, liabilities of the law enforcement
   9-59  and custodial officer supplemental retirement fund accrued because
   9-60  of service performed before September 1, 1979;> and
   9-61              (2) <(4)>  as a separate item, an estimate of the
   9-62  amount required to administer the law enforcement and custodial
   9-63  officer supplemental retirement fund for the following biennium.
   9-64        (g)  The contributions from the state to the law enforcement
   9-65  and custodial officer supplemental retirement fund may be made only
   9-66  from the general revenue fund.
   9-67        SECTION 23.  Section 815.505, Government Code, is amended to
   9-68  read as follows:
   9-69        Sec. 815.505.  CERTIFICATION OF NAMES OF LAW ENFORCEMENT AND
   9-70  CUSTODIAL OFFICERS.  Not later than the 12th day of the month
   10-1  following the month in which a person begins or ceases employment
   10-2  as a law enforcement officer or custodial officer <As of the last
   10-3  day of each fiscal year>, the <Department of> Public Safety
   10-4  Commission, the Texas Alcoholic Beverage Commission, the Parks and
   10-5  Wildlife Commission <Department>, or <the State Purchasing and
   10-6  General Services Commission, and> the Texas Board <Department> of
   10-7  Criminal Justice, as applicable, <Corrections> shall certify to the
   10-8  retirement system, in the manner prescribed by the system, the name
   10-9  of the employee and such other information as the system determines
  10-10  is necessary for the crediting of service and financing of benefits
  10-11  under this subtitle <the names of employees and the amount of
  10-12  service each employee performed as a law enforcement officer or
  10-13  custodial officer during that fiscal year>.
  10-14        SECTION 24.  Subchapter F, Chapter 815, Government Code, is
  10-15  amended by adding Section 815.5071 to read as follows:
  10-16        Sec. 815.5071.  TRUSTEE-TO-TRUSTEE TRANSFER.  Notwithstanding
  10-17  Section 811.005 and to the extent required as a condition of plan
  10-18  qualification under Section 401(a) of the Internal Revenue Code of
  10-19  1986 (26 U.S.C. Section 401), the retirement system shall, in
  10-20  accordance with Section 401(a)(31) of the Internal Revenue Code of
  10-21  1986 (26 U.S.C. Section 401(a)(31)) and related regulations, permit
  10-22  the distributee of an eligible rollover distribution to elect to
  10-23  have the distribution paid directly to an eligible retirement plan
  10-24  specified by the distributee in the form of a direct
  10-25  trustee-to-trustee transfer.  The board of trustees may adopt rules
  10-26  to carry out this section.  Terms used in this section have the
  10-27  meanings assigned by the Internal Revenue Code of 1986 (Title 26,
  10-28  United States Code).
  10-29        SECTION 25.  Subchapter F, Chapter 815, Government Code, is
  10-30  amended by adding Section 815.508 to read as follows:
  10-31        Sec. 815.508.  COMPLAINT FILES.  (a)  The retirement system
  10-32  shall keep an information file about each complaint filed with the
  10-33  system that the system has authority to resolve.
  10-34        (b)  If a written complaint is filed with the retirement
  10-35  system that the system has authority to resolve, the system, at
  10-36  least quarterly and until final disposition of the complaint, shall
  10-37  notify the parties to the complaint of the status of the complaint
  10-38  unless the notice would jeopardize an undercover investigation.
  10-39        SECTION 26.  Subchapter F, Chapter 815, Government Code, is
  10-40  amended by adding Section 815.509 to read as follows:
  10-41        Sec. 815.509.  ADVISORY COMMITTEES.  (a)  The board of
  10-42  trustees may establish advisory committees as it considers
  10-43  necessary to assist it in performing its duties.  Members of
  10-44  advisory committees established under this section serve at the
  10-45  pleasure of the board.
  10-46        (b)  Notwithstanding any other law to the contrary, the board
  10-47  of trustees by rule shall determine the amount and manner of any
  10-48  compensation or expense reimbursement to be paid members of an
  10-49  advisory committee performing service for the retirement system for
  10-50  performing the work of the advisory committee.  All compensation
  10-51  and expense reimbursements for an advisory committee established
  10-52  under this section are payable from the expense account.
  10-53        SECTION 27.  Before October 1, 1995, the Public Safety
  10-54  Commission, the Texas Alcoholic Beverage Commission, the Parks and
  10-55  Wildlife Commission, and the Texas Board of Criminal Justice shall
  10-56  certify to the Employees Retirement System of Texas, in the manner
  10-57  prescribed by the retirement system, the name of each person
  10-58  employed on September 1, 1995, by the particular agency as a law
  10-59  enforcement officer, as defined by Section 811.001, Government
  10-60  Code, or a custodial officer, as defined by that section, and such
  10-61  other information as the system determines is necessary for the
  10-62  crediting of service and financing of benefits under Subtitle B,
  10-63  Title 8, Government Code.
  10-64        SECTION 28.  (a)  All persons who were employed by the Texas
  10-65  Rehabilitation Commission on August 31, 1993, who were contributing
  10-66  members of the Teacher Retirement System of Texas on that date, and
  10-67  who remain employees of the Texas Rehabilitation Commission on
  10-68  September 1, 1993, become members of the Employees Retirement
  10-69  System of Texas on the latter date.
  10-70        (b)  At the time of the retirement or death of a person
   11-1  described by Subsection (a) of this section, the Teacher Retirement
   11-2  System of Texas and the Employees Retirement System of Texas shall
   11-3  make a computation and transfer of money in the manner provided by
   11-4  Section 805.008, Government Code, as added by this Act, and the
   11-5  person's service credit in the Teacher Retirement System of Texas
   11-6  will be transferred to the Employees Retirement System of Texas.
   11-7  The Employees Retirement System of Texas has the same
   11-8  responsibility for payments after retirement or death as is
   11-9  provided by Section 805.008, Government Code, as added by this Act.
  11-10        (c)  Notwithstanding Chapter 805, Government Code, as added
  11-11  by this Act, a person who becomes a member of the Employees
  11-12  Retirement System of Texas under this section is not eligible to
  11-13  transfer service credit from the Employees Retirement System of
  11-14  Texas to the Teacher Retirement System of Texas.
  11-15        SECTION 29.  (a)  A retiree of the Employees Retirement
  11-16  System of Texas who at the time of retirement had at least 25 years
  11-17  of service credit in the retirement system and has served as the
  11-18  executive head of a legislative service agency is eligible to make
  11-19  an election under this section.
  11-20        (b)  A member of the Employees Retirement System of Texas who
  11-21  was an elected officer of the 73rd Senate of the State of Texas, as
  11-22  determined by the senate journal, and who has at least 28 years of
  11-23  service credit in the retirement system and has attained the age of
  11-24  50 is eligible to make an election under this section.
  11-25        (c)  An election under this section must be made in writing
  11-26  and filed with the Employees Retirement System of Texas and is
  11-27  irrevocable after filing.  An election under Subsection (a) of this
  11-28  section must be filed before January 1, 1994.  After the filing of
  11-29  an election under this section, the retirement system shall
  11-30  consider all the service credit established by the person who makes
  11-31  the election, including service credit established after the date
  11-32  the election is filed, as if it were performed as a member of the
  11-33  elected class of membership.
  11-34        SECTION 30.  Chapter 805, Government Code, as added by this
  11-35  Act, applies only to retirements and deaths that occur on or after
  11-36  August 31, 1993.
  11-37        SECTION 31.  Subchapter B, Chapter 833, Government Code, is
  11-38  amended by adding Section 833.105 to read as follows:
  11-39        Sec. 833.105.  Alternative Payments to Establish or
  11-40  Reestablish Service Credit.  (a)  A member who is otherwise
  11-41  eligible may establish or reestablish service creditable in the
  11-42  retirement system by making payments as provided by this section in
  11-43  lieu of lump-sum payments otherwise authorized or required by this
  11-44  subtitle.
  11-45        (b)  A payment authorized by this section consists of the
  11-46  contribution required to establish or reestablish at least one year
  11-47  of service credit, including any required interest and membership
  11-48  fees, except that a person's last in a series of payments under
  11-49  this section may be for a period of remaining service that is less
  11-50  than one year.
  11-51        (c)  The retirement system shall grant the applicable amount
  11-52  of service credit after each payment is made under this section.
  11-53        (d)  Payments may not be made under this section:
  11-54              (1)  to establish or reestablish service credit of a
  11-55  person who has retired or died; or
  11-56              (2)  to establish current service under Section
  11-57  833.101.
  11-58        (e)  The retirement system may adopt rules to administer this
  11-59  section.
  11-60        SECTION 32.  Subchapter B, Chapter 833, Government Code, is
  11-61  amended by adding Section 833.106 to read as follows:
  11-62        Sec. 833.106.  PAYROLL DEDUCTIONS TO ESTABLISH OR REESTABLISH
  11-63  SERVICE CREDIT.  (a)  A contributing member who is  otherwise
  11-64  eligible may establish or reestablish service creditable in the
  11-65  retirement system by making payments as provided by this section in
  11-66  lieu of lump-sum payments otherwise authorized or required by this
  11-67  subtitle.
  11-68        (b)  A payment authorized by this section consists of a
  11-69  monthly payroll deduction in an amount not less than one-twelfth of
  11-70  the contribution required to establish or reestablish at least one
   12-1  year of service credit, including any required interest and
   12-2  membership fee, except as provided by Subsection (c).
   12-3        (c)  Payments to establish or reestablish service credit of
   12-4  less than one year or to establish or reestablish service credit by
   12-5  a member who plans to retire in less than a year may be made by
   12-6  payroll deduction for a period determined by the retirement system.
   12-7        (d)  Payroll deductions for payments under this section shall
   12-8  be made and submitted to the retirement system at the times and in
   12-9  the manner provided for member contributions under Section 835.101.
  12-10        (e)  The retirement system shall credit a member's payments
  12-11  made under this section to a suspense account until the sum of the
  12-12  payments equals the amount required for one year of service credit
  12-13  or the amount required for credit under Subsection (c), at which
  12-14  time the retirement system shall deposit the payments in the
  12-15  general revenue fund and grant the applicable amount of service
  12-16  credit.
  12-17        (f)  A member who, while making payments under this section,
  12-18  ceases to be a judicial officer or withdraws the authority for
  12-19  payroll deductions may contract with the retirement system for an
  12-20  alternative method of continuing the payments.  The retirement
  12-21  system may refund payments credited to the suspense account and not
  12-22  transferred to the general revenue fund if a remaining payment
  12-23  becomes delinquent by more than 60 days.
  12-24        (g)  Payments may not be made under this section to establish
  12-25  or reestablish service credit of a person who has retired or died,
  12-26  except that a beneficiary may make payment in a lump sum for the
  12-27  remainder of service credit for which payments were begun before
  12-28  the member's death.
  12-29        (h)  The retirement system may adopt rules to administer this
  12-30  section.
  12-31        SECTION 33.  Subchapter B, Chapter 838, Government Code, is
  12-32  amended by adding Section 838.105 to read as follows:
  12-33        Sec. 838.105.  Alternative Payments to Establish or
  12-34  Reestablish Service Credit.  (a)  A member who is otherwise
  12-35  eligible may establish or reestablish service creditable in the
  12-36  retirement system by making payments as provided by this section in
  12-37  lieu of lump-sum payments otherwise authorized or required by this
  12-38  subtitle.
  12-39        (b)  A payment authorized by this section consists of the
  12-40  contribution required to establish or reestablish at least one year
  12-41  of service credit, including any required interest and membership
  12-42  fees, except that a person's last in a series of payments under
  12-43  this section may be for a period of remaining service that is less
  12-44  than one year.
  12-45        (c)  The retirement system shall grant the applicable amount
  12-46  of service credit after each payment is made under this section.
  12-47        (d)  Payments may not be made under this section:
  12-48              (1)  to establish or reestablish service credit of a
  12-49  person who has retired or died; or
  12-50              (2)  to establish current service under Section
  12-51  838.101.
  12-52        (e)  The retirement system may adopt rules to administer this
  12-53  section.
  12-54        SECTION 34.  Subchapter B, Chapter 838, Government Code, is
  12-55  amended by adding Section 838.106 to read as follows:
  12-56        Sec. 838.106.  PAYROLL DEDUCTIONS TO ESTABLISH OR REESTABLISH
  12-57  SERVICE CREDIT.  (a)  A contributing member who is  otherwise
  12-58  eligible may establish or reestablish service creditable in the
  12-59  retirement system by making payments as provided by this section in
  12-60  lieu of lump-sum payments otherwise authorized or required by this
  12-61  subtitle.
  12-62        (b)  A payment authorized by this section consists of a
  12-63  monthly payroll deduction in an amount not less than one-twelfth of
  12-64  the contribution required to establish or reestablish at least one
  12-65  year of service credit, including any required interest and
  12-66  membership fee, except as provided by Subsection (c).
  12-67        (c)  Payments to establish or reestablish service credit of
  12-68  less than one year or to establish or reestablish service credit by
  12-69  a member who plans to retire in less than a year may be made by
  12-70  payroll deduction for a period determined by the retirement system.
   13-1        (d)  Payroll deductions for payments under this section shall
   13-2  be made and submitted to the retirement system at the times and in
   13-3  the manner provided for member contributions under Section 840.102.
   13-4        (e)  The retirement system shall credit a member's payments
   13-5  made under this section to a suspense account in the trust fund
   13-6  until the sum of the payments equals the amount required for one
   13-7  year of service credit or the amount required for credit under
   13-8  Subsection (c), at which time the retirement system shall deposit
   13-9  the payments in the appropriate accounts in the trust fund and
  13-10  grant the applicable amount of service credit.
  13-11        (f)  A member who, while making payments under this section,
  13-12  ceases to be a judicial officer or withdraws the authority for
  13-13  payroll deductions may contract with the retirement system for an
  13-14  alternative method of continuing the payments.  The retirement
  13-15  system may refund payments credited to the suspense account and not
  13-16  transferred to trust fund accounts if a remaining payment becomes
  13-17  delinquent by more than 60 days.
  13-18        (g)  Payments may not be made under this section to establish
  13-19  or reestablish service credit of a person who has retired or died,
  13-20  except that a beneficiary may make payment in a lump sum for the
  13-21  remainder of service credit for which payments were begun before
  13-22  the member's death.
  13-23        (h)  The retirement system may adopt rules to administer this
  13-24  section.
  13-25        SECTION 35.  Subchapter B, Chapter 838, Government Code, is
  13-26  amended by adding Section 838.107 to read as follows:
  13-27        Sec. 838.107.  SERVICE NOT PREVIOUSLY ESTABLISHED.  The state
  13-28  shall make contributions for service not previously established
  13-29  that is established under Section 838.105 or 838.106 in the amount
  13-30  provided by Section 838.103(f) for military service.  The state
  13-31  contributions will be made at the time the service credit is
  13-32  granted.
  13-33        SECTION 36.  Section 839.101, Government Code, is amended to
  13-34  read as follows:
  13-35        Sec. 839.101.  Eligibility for Service Retirement Annuity.
  13-36  (a)  A member is eligible to retire and receive a service
  13-37  retirement annuity if the member:
  13-38              (1)  <is at least 65 years old, currently holds a
  13-39  judicial office, and has at least 10 years of service credited in
  13-40  the retirement system, the most recently performed of which was for
  13-41  a continuous period of at least one year;>
  13-42              <(2)>  is at least 65 years old and has at least 10
  13-43  <12> years of service<, continuous or otherwise,> credited in the
  13-44  retirement system, regardless of whether the member currently holds
  13-45  a judicial office; or
  13-46              (2) <(3)>  has at least 25 years of service credited in
  13-47  the retirement system, <the most recently performed of which was
  13-48  for a continuous period of at least 10 years,> regardless of
  13-49  whether the member currently holds a judicial office.
  13-50        (b)  A member who meets service requirements provided by
  13-51  Subsection (a)(1) <or (a)(2)> is eligible to retire and receive a
  13-52  service retirement annuity actuarially reduced as provided by
  13-53  Section 839.102(c) from the standard service retirement annuity, if
  13-54  the member is at least 60 years old.
  13-55        (c)  A member's resignation from a judicial office before
  13-56  applying for an annuity does not make the member ineligible for the
  13-57  annuity <unless the member applies for an annuity under Subsection
  13-58  (a)(1)>.
  13-59        SECTION 37.  Subsection (a), Section 839.102, Government
  13-60  Code, is amended to read as follows:
  13-61        (a)  Except as provided by Subsections (b) and (c), the
  13-62  standard service retirement annuity is an amount computed on the
  13-63  basis of the monthly state salary being paid at the time the member
  13-64  retires to a judge of a court of the same classification as the
  13-65  last court to which the retiring member was elected or appointed
  13-66  <member's average monthly compensation for the 36 highest months of
  13-67  compensation during the last 60 months of service>, multiplied by
  13-68  one-twelfth of three percent for each month of service that is
  13-69  credited in the retirement system.
  13-70        SECTION 38.  Subsection (b), Section 840.103, Government
   14-1  Code, is amended to read as follows:
   14-2        (b)  Before November 2 of each even-numbered year, the
   14-3  retirement system shall certify to the Legislative Budget Board and
   14-4  to the budget division of the governor's office for review:
   14-5              (1)  an actuarial valuation of the retirement system to
   14-6  determine the percentage of annual payroll required from the state
   14-7  to finance fully the retirement system as provided by Section
   14-8  840.106 <without any unfunded liability>;
   14-9              (2)  an estimate of the amount necessary to pay the
  14-10  state's contribution under Subdivision (1) for the following
  14-11  biennium; and
  14-12              (3)  as a separate item, an estimate of the amount, in
  14-13  addition to anticipated receipts from membership fees, required to
  14-14  administer the retirement system for the following biennium.
  14-15        SECTION 39.  Subchapter B, Chapter 840, Government Code, is
  14-16  amended by adding Section 840.106 to read as follows:
  14-17        Sec. 840.106.  ACTION INCREASING AMORTIZATION PERIOD.  (a)  A
  14-18  rate of member or state contributions to or a rate of interest
  14-19  required for the establishment of credit in the retirement system
  14-20  may not be reduced or eliminated, a type of service may not be made
  14-21  creditable in the retirement system, a limit on the maximum
  14-22  permissible amount of a type of creditable service may not be
  14-23  removed or raised, a new monetary benefit payable by the retirement
  14-24  system may not be established, and the determination of the amount
  14-25  of a monetary benefit from the system may not be increased, if, as
  14-26  a result of the particular action, the time, as determined by an
  14-27  actuarial valuation, required to amortize the unfunded actuarial
  14-28  liabilities of the retirement system would be increased to a period
  14-29  that exceeds 30 years by one or more years.
  14-30        (b)  If the amortization period for the unfunded actuarial
  14-31  liabilities of the retirement system exceeds 30 years by one or
  14-32  more years at the time an action described by Subsection (a) is
  14-33  proposed, the proposal may not be adopted if, as a result of the
  14-34  adoption, the amortization period would be increased, as determined
  14-35  by an actuarial valuation.
  14-36        SECTION 40.  Subsection (a), Section 840.301, Government
  14-37  Code, is amended to read as follows:
  14-38        (a)  The board of trustees may, under the standard of care
  14-39  provided by Section 840.303, invest and reinvest the retirement
  14-40  system's assets and may commingle assets of the trust fund with the
  14-41  assets of the Employees Retirement System of Texas, including its
  14-42  trust fund and the law enforcement and custodial officer
  14-43  supplemental retirement fund, for investment purposes, as long as
  14-44  proportionate ownership records are maintained and credited.
  14-45        SECTION 41.  Subchapter E, Chapter 840, Government Code, is
  14-46  amended by adding Section 840.405 to read as follows:
  14-47        Sec. 840.405.  TRUSTEE-TO-TRUSTEE TRANSFER.  Notwithstanding
  14-48  Section 836.004 and to the extent required as a condition of plan
  14-49  qualification under Section 401(a) of the Internal Revenue Code of
  14-50  1986 (26 U.S.C. Section 401), the retirement system shall, in
  14-51  accordance with Section 401(a)(31) of the Internal Revenue Code of
  14-52  1986 (26 U.S.C. Section 401(a)(31)) and related regulations, permit
  14-53  the distributee of an eligible rollover distribution to elect to
  14-54  have the distribution paid directly to an eligible retirement plan
  14-55  specified by the distributee in the form of a direct
  14-56  trustee-to-trustee transfer.  The board of trustees may adopt rules
  14-57  to carry out this section.  Terms used in this section have the
  14-58  meanings assigned by the Internal Revenue Code of 1986 (Title 26,
  14-59  United States Code).
  14-60        SECTION 42.  Subchapter E, Chapter 840, Government Code, is
  14-61  amended by adding Section 840.406 to read as follows:
  14-62        Sec. 840.406.  PLAN QUALIFICATION.  (a)  The provisions of
  14-63  this subtitle shall be interpreted and administered in a manner
  14-64  that permits the retirement system's benefit plan to be considered
  14-65  a qualified plan under Section 401, Internal Revenue Code of 1986
  14-66  (26 U.S.C. Section 401).  The board of trustees may adopt rules
  14-67  necessary to accomplish that purpose, and those rules are
  14-68  considered a part of the plan.
  14-69        (b)  The retirement system's benefit plan shall be considered
  14-70  the primary retirement plan for members of the retirement system in
   15-1  determining qualification status under Section 401(a), Internal
   15-2  Revenue Code of 1986 (26 U.S.C. Section 401(a)).
   15-3        SECTION 43.  Subparagraph (A), Paragraph (5), Subsection (a),
   15-4  Section 3, Texas Employees Uniform Group Insurance Benefits Act
   15-5  (Article 3.50-2, Vernon's Texas Insurance Code), as amended by
   15-6  Chapters 242 and 391, Acts of the 72nd Legislature, Regular
   15-7  Session, 1991, is amended to read as follows:
   15-8                    (A)  "Employee" <"State-employee"> shall mean any
   15-9  appointive or elective state officer or employee in the service of
  15-10  the State of Texas, including an employee of an institution of
  15-11  higher education:
  15-12                          (i)  who is retired or retires and is an
  15-13  annuitant under the jurisdiction of the Employees Retirement System
  15-14  of Texas, pursuant to Subtitle B, D, or E, or Chapter 803, Title 8,
  15-15  Government Code, who is retired or retires and is an annuitant
  15-16  under the jurisdiction of the Teacher Retirement System of Texas,
  15-17  pursuant to Subtitle C, Title 8, Government Code, whose last
  15-18  employment with the state prior to retirement was as an employee of
  15-19  the Teacher Retirement System of Texas, school districts
  15-20  established within state eleemosynary institutions, the Texas
  15-21  Rehabilitation Commission, the Central Education Agency, the Texas
  15-22  Higher Education Coordinating Board, or an institution of higher
  15-23  education, or who is retired or retires and is an annuitant under
  15-24  the optional retirement program established by Chapter 830,
  15-25  Government Code, if the person's last state employment before
  15-26  retirement, including employment by a public community/junior
  15-27  college, was as an officer or employee of the Texas Higher
  15-28  Education Coordinating Board, or an institution of higher
  15-29  education, and if the person either:
  15-30                                (a)  would have been eligible to
  15-31  retire and receive a service retirement annuity from the Teacher
  15-32  Retirement System of Texas had the person not elected to
  15-33  participate in the optional retirement program; or
  15-34                                (b)  is disabled;
  15-35                          (ii)  who receives his compensation for
  15-36  services rendered to the State of Texas on a warrant issued
  15-37  pursuant to a payroll certified by a department or by an elected or
  15-38  duly appointed officer of this state;
  15-39                          (iii)  who receives payment for the
  15-40  performance of personal services on a warrant issued pursuant to a
  15-41  payroll certified by a department and drawn by the State
  15-42  Comptroller of Public Accounts upon the State Treasurer against
  15-43  appropriations made by the Texas Legislature from any state funds
  15-44  or against any trust funds held by the State Treasurer or who is
  15-45  paid from funds of an official budget of a state department, rather
  15-46  than from funds of the General Appropriations Act;
  15-47                          (iv)  who is appointed, subject to
  15-48  confirmation of the senate, as a member of a board or commission
  15-49  with administrative responsibility over a statutory agency having
  15-50  statewide jurisdiction whose employees are covered by this Act;
  15-51                          (v)  who is a member of the governing body
  15-52  of an institution of higher education, as that term is defined by
  15-53  Section 61.003, Education Code, including subsequent amendments to
  15-54  that section;
  15-55                          (vi)  who is a member of the State Board of
  15-56  Education;
  15-57                          (vii)  who receives compensation for
  15-58  services rendered to an institution of higher education on a
  15-59  warrant or check issued pursuant to a payroll certified by an
  15-60  institution of higher education or by an elected or duly appointed
  15-61  officer of this state, and who is eligible for participation in the
  15-62  Teacher Retirement System of Texas; or
  15-63                          (viii) <(vi)>  who receives compensation
  15-64  for services rendered to an institution of higher education as
  15-65  provided by this subdivision but is not permitted to be a member of
  15-66  the Teacher Retirement System of Texas because the person is solely
  15-67  employed by an institution of higher education that as a condition
  15-68  of employment requires the person to be enrolled as a student in an
  15-69  institution of higher education in graduate-level courses and who
  15-70  is employed by the institution at least 20 hours a week.
   16-1        SECTION 44.  Paragraphs (6), (14), and (15), Subsection (a),
   16-2  Section 3, Texas Employees Uniform Group Insurance Benefits Act
   16-3  (Article 3.50-2, Vernon's Texas Insurance Code), are amended to
   16-4  read as follows:
   16-5              (6)  "Employer" shall mean the State of Texas and<,>
   16-6  all its departments<, and any participating school district>.
   16-7              (14)  "Part-time employee" shall mean, for purposes of
   16-8  this Act, an employee designated by his employing agency as working
   16-9  less than 20 hours per week.  A part-time <state> employee shall
  16-10  receive the benefits of one-half the amount of the state's
  16-11  contribution received by full-time employees.
  16-12              (15)  "Full-time employee" shall mean, for purposes of
  16-13  this Act, an employee designated by his employing agency as working
  16-14  20 or more hours per week.  A full-time <state> employee shall
  16-15  receive the benefits of a full state contribution for coverage
  16-16  under this Act.
  16-17        SECTION 45.  Subsection (e), Section 5, Texas Employees
  16-18  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  16-19  Texas Insurance Code), as amended by Chapters 391 and 850, Acts of
  16-20  the 72nd Legislature, Regular Session, 1991, is amended to read as
  16-21  follows:
  16-22        (e)  The trustee is authorized to select, contract for, and
  16-23  make available to eligible employees and annuitants in a specific
  16-24  area of the state, services performed by health maintenance
  16-25  organizations which are approved by the federal government or the
  16-26  State of Texas to offer health care services in that area.
  16-27  Eligible employees and annuitants may participate in a selected
  16-28  health maintenance organization in lieu of participation in the
  16-29  health insurance benefits in the Employees Uniform Group Insurance
  16-30  Program<, and the employer contributions provided by Section 14(a)
  16-31  or (b) of this Act for health care coverage shall be paid to the
  16-32  selected health maintenance organizations on behalf of the
  16-33  participants>.
  16-34        SECTION 46.  Subsection (a), Section 13B, Texas Employees
  16-35  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  16-36  Texas Insurance Code), is amended to read as follows:
  16-37        (a)  The trustee may study the feasibility of establishing a
  16-38  cafeteria plan and may design, develop, adopt, implement, and
  16-39  administer a cafeteria plan if the trustee determines that the
  16-40  establishment of a cafeteria plan is feasible, would be beneficial
  16-41  to the state and to the <state> employees who would be eligible to
  16-42  participate in the cafeteria plan, and would not adversely affect
  16-43  the insurance program established under this Act.  The trustee may
  16-44  include in the cafeteria plan any benefit that may be included in a
  16-45  cafeteria plan under federal law.
  16-46        SECTION 47.  Section 14, Texas Employees Uniform Group
  16-47  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  16-48  Code), as amended by Chapters 391 and 850, Acts of the 72nd
  16-49  Legislature, Regular Session, 1991, is amended to read as follows:
  16-50        Sec. 14.  Payment of Contributions.  (a)  The trustee shall
  16-51  use the amount appropriated for employer contributions in
  16-52  accordance with Section 15 of this Act to fund the basic coverage.
  16-53  The trustee may equitably allocate to each health benefits plan the
  16-54  employer contributions that would be required to fund basic health
  16-55  coverage for participants in the plans to the extent funds are
  16-56  available.  In allocating the employer contributions among plans,
  16-57  the trustee shall consider the relevant risk characteristics of
  16-58  each plan's enrollment, including demographic variations in the use
  16-59  and cost of health care and the prevailing cost patterns in the
  16-60  area in which the plan operates.  The allocation must be reasonable
  16-61  and set in a manner which assures employees a fair choice among
  16-62  health benefit plans providing a basic plan.  The contribution set
  16-63  for each employee shall be within the total amount appropriated in
  16-64  the General Appropriations Act.
  16-65        (b)  Any employer contributions remaining after the basic
  16-66  coverage has been funded may be allocated by the trustee to fund
  16-67  optional coverages in any manner the trustee determines is
  16-68  appropriate.  <Each participating school district shall contribute,
  16-69  for each school district employee covered by the program, an amount
  16-70  equal to the employee only cost of the plans of group coverages
   17-1  authorized by the trustee for school district employees, provided
   17-2  that the school district's contribution may not exceed the amount
   17-3  contributed for each state employee in accordance with Subsection
   17-4  (a) of this section.  If the cost of the plan authorized by the
   17-5  trustee for school district employees exceeds the amount of the
   17-6  district's contribution, the district shall deduct from the monthly
   17-7  compensation of the employee an amount sufficient to pay the amount
   17-8  of the premiums not covered by the district's contribution.>
   17-9        (c)  The trustee may not allocate any employer contributions
  17-10  to fund voluntary coverages.  Voluntary coverages must be funded
  17-11  solely by employee contributions.  <If an employee or annuitant
  17-12  refuses in writing the coverages, benefits, or services provided by
  17-13  this Act by a statement in writing satisfactory to the trustee,
  17-14  then in no event shall the State of Texas, the employee's
  17-15  department, or the participating school district make any
  17-16  contribution to the cost of any other coverages, services, or
  17-17  benefits on such employee or annuitant.>
  17-18        (d)  If the cost of the basic coverage exceeds the amount of
  17-19  employer contributions allocated to fund the basic coverage, the
  17-20  state shall deduct from or reduce the monthly compensation of the
  17-21  employee and shall deduct from the retirement benefits of the
  17-22  annuitant an amount sufficient to pay the cost of the basic
  17-23  coverage.  <Except as provided by Subsection (e) of this section,
  17-24  if any employee or annuitant applies for coverages for which the
  17-25  cost exceeds the state's, the employing department's, or the
  17-26  participating school district's contribution under this Act, he
  17-27  shall authorize in writing and in a form satisfactory to the
  17-28  trustee a deduction from his monthly compensation or annuity the
  17-29  difference between the cost of coverages under the said group
  17-30  programs and the amount contributed therefor by the State of Texas
  17-31  or the employing department.>
  17-32        (e)  The trustee shall apply the amount of any employer
  17-33  contribution allocated to fund optional coverages to the excess of
  17-34  the cost of the basic and optional coverages for which the employee
  17-35  or annuitant has applied over the basic coverage contribution.
  17-36  Except as provided by Subsection (h) of this section, if an
  17-37  employee or annuitant applies for basic and optional coverages for
  17-38  which the cost exceeds the contributions for those coverages under
  17-39  this Act, the employee or annuitant shall authorize in writing in a
  17-40  form satisfactory to the trustee a deduction from the employee's or
  17-41  annuitant's monthly compensation or annuity equal to the difference
  17-42  between the cost of basic and optional coverages for which the
  17-43  employee or annuitant has applied and the employer contributions
  17-44  for basic and optional coverage.  <If an employee elects to
  17-45  participate in the cafeteria plan, he shall execute a salary
  17-46  reduction agreement under which his monthly compensation will be
  17-47  reduced in an amount that is equal to the difference between the
  17-48  amount contributed for the coverages by the State of Texas, the
  17-49  employing department, or the participating school district and the
  17-50  cost of the coverages for which the employee is eligible to pay
  17-51  under the cafeteria plan.  An employee who executes a salary
  17-52  reduction agreement for insurance coverages included in the
  17-53  cafeteria plan is considered to have elected to participate in the
  17-54  cafeteria plan and agreed to a salary reduction for the insurance
  17-55  coverages for subsequent plan years unless the participant, during
  17-56  an annual enrollment period specified by the trustee, explicitly
  17-57  elects not to participate for the next plan year in the insurance
  17-58  coverages.  After electing not to participate in insurance
  17-59  coverages included in the cafeteria plan, an employee must, to
  17-60  reestablish participation for subsequent plan years in insurance
  17-61  coverages included in the cafeteria plan, execute a new salary
  17-62  reduction agreement.  A salary reduction agreement for other
  17-63  benefits of the cafeteria plan must be executed annually, during
  17-64  the annual enrollment period specified by the trustee, for each
  17-65  plan year.  The employee shall pay any remaining portion of the
  17-66  cost of benefits that is not covered by the state's, department's,
  17-67  or district's contributions and the salary reductions under the
  17-68  cafeteria plan by executing a payroll deduction agreement.>
  17-69        (f)  Except as provided by Subsection (h) of this section, if
  17-70  an employee or annuitant applies for voluntary coverages, the
   18-1  employee shall authorize in writing in a form satisfactory to the
   18-2  trustee a deduction from the employee's monthly compensation or
   18-3  annuity equal to the cost of the voluntary coverages.
   18-4        (g)  If an employee or annuitant refuses the coverages or
   18-5  benefits provided under this Act in writing in a form satisfactory
   18-6  to the trustee, the state and the employee's department may not
   18-7  make any contribution to the cost of any coverages or benefits for
   18-8  the employee or annuitant.
   18-9        (h)  If an employee elects to participate in the cafeteria
  18-10  plan, the employee must execute a salary reduction agreement under
  18-11  which the employee's monthly compensation will be reduced in an
  18-12  amount that is equal to the difference between the employer
  18-13  contributions for basic and optional coverages and the cost of the
  18-14  cafeteria plan coverages identified by the trustee as comparable to
  18-15  the basic and optional coverages for which the employee is
  18-16  eligible.  The salary reduction agreement must also provide for an
  18-17  additional reduction in the employee's compensation equal to the
  18-18  cost of voluntary coverages for which the employee has applied.  An
  18-19  employee who executes a salary reduction agreement for insurance
  18-20  coverage included in the cafeteria plan has elected to participate
  18-21  in the cafeteria plan and agreed to a salary reduction for the
  18-22  insurance coverages for subsequent plan years unless the
  18-23  participant, during an annual enrollment period specified by the
  18-24  trustee, elects in writing not to participate for the next plan
  18-25  year in the insurance coverages.  An employee who has elected not
  18-26  to participate in the cafeteria plan insurance coverages may
  18-27  re-enroll by executing a new salary reduction agreement during a
  18-28  subsequent annual enrollment period.  A salary reduction agreement
  18-29  for cafeteria plan benefits other than insurance coverages must be
  18-30  executed annually, during the annual enrollment period.  The
  18-31  employee shall pay any remaining portion of the cost of benefits
  18-32  that is not covered by the contributions for basic and optional
  18-33  coverages and the salary reduction under the cafeteria plan by
  18-34  executing a payroll deduction agreement.
  18-35        SECTION 48.  Subsection (a), Section 15, Texas Employees
  18-36  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  18-37  Texas Insurance Code), is amended to read as follows:
  18-38        (a)  On or before the first day of November next preceding
  18-39  each regular session of the legislature, the trustee shall certify
  18-40  to the Legislative Budget Board and budget division of the
  18-41  governor's office for information and review the amount necessary
  18-42  to pay the contributions of the State of Texas to the trustee for
  18-43  the coverages provided under this Act during the ensuing biennium.
  18-44  A state contribution may not be made for coverages under this Act
  18-45  selected by a person who receives a state contribution, other than
  18-46  as a spouse, dependent, or beneficiary, for coverages under a group
  18-47  benefits program provided by an institution of higher education, as
  18-48  that term is defined by Section 61.003, Education Code.  This
  18-49  amount shall be included in the budget of the state which the
  18-50  governor submits to the legislature.
  18-51        SECTION 49.  Subsections (a) and (b), Section 16, Texas
  18-52  Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
  18-53  Vernon's Texas Insurance Code), are amended to read as follows:
  18-54        (a)  There is hereby created with the treasury of the State
  18-55  of Texas an Employees Life, Accident, and Health Insurance and
  18-56  Benefits Fund which shall be administered by the trustee.  The
  18-57  <Except as provided by Subsection (d) of this section, the>
  18-58  contributions of employees, annuitants, <participating school
  18-59  districts,> and the state provided for under this Act shall be paid
  18-60  into the fund.  The fund is available:
  18-61              (1)  without fiscal year limitation for all payments
  18-62  for any coverages provided for under this Act; and
  18-63              (2)  to pay expenses for administering this Act within
  18-64  the limitations that may be specified annually by the legislature.
  18-65        (b)  Portions <Except as provided by Subsection (d) of this
  18-66  section, portions> of the contributions made by employees,
  18-67  annuitants, <participating school districts,> and the state shall
  18-68  be regularly set aside in the fund as follows:  a percentage
  18-69  determined by the trustee to be reasonably adequate to pay the
  18-70  administrative expenses made available by Subsection (a) of this
   19-1  section.  The trustee, from time to time and in amounts it
   19-2  considers appropriate, may transfer unused funds for administrative
   19-3  expenses to the contingency reserves to be used by the trustee only
   19-4  for charges, claims, costs, and expenses under the program.
   19-5        SECTION 50.  Subsection (c), Section 17, Texas Employees
   19-6  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
   19-7  Texas Insurance Code), is amended to read as follows:
   19-8        (c)  Each state department <and each participating school
   19-9  district> shall keep such records, make such certifications, and
  19-10  furnish the trustee with such information and reports as may be
  19-11  necessary to enable the trustee to carry out its functions under
  19-12  this Act.
  19-13        SECTION 51.  Subsection (a), Section 18, Texas Employees
  19-14  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  19-15  Texas Insurance Code), as amended by Chapters 242 and 391, Acts of
  19-16  the 72nd Legislature, Regular Session, 1991, is amended to read as
  19-17  follows:
  19-18        (a)  The group benefits advisory committee is composed of 27
  19-19  <25> voting members as provided by this section.  The office of the
  19-20  attorney general, the office of the state treasurer, the office of
  19-21  the comptroller, the Railroad Commission of Texas, the General Land
  19-22  Office, and the Department of Agriculture are entitled to be
  19-23  represented by one member each on the committee, who may be
  19-24  appointed by the governing body of the state agency or elected by
  19-25  and from the employees of the agency, as determined by rule by the
  19-26  governing body of the agency.  One employee shall be elected from
  19-27  each of the remaining eight <seven> largest state agencies that are
  19-28  governed by appointed officers by and from the employees of those
  19-29  agencies.  One nonvoting member shall be the executive director of
  19-30  the Employees Retirement System of Texas.  One member shall be an
  19-31  expert in employee benefit issues from the private sector,
  19-32  appointed by the governor.  One member shall be an expert in
  19-33  employee benefits issues from the private sector, appointed by the
  19-34  lieutenant governor.  One member shall be a retired state employee
  19-35  appointed by the trustee.  One member shall be a state employee of
  19-36  a state agency other than one of the eight <seven> largest state
  19-37  agencies, appointed by the trustee.  Not more than one employee
  19-38  from a particular state agency may serve on the committee.  Each of
  19-39  the seven largest institutions of higher education, as determined
  19-40  by the number of employees on the payroll of an institution, shall
  19-41  elect one member of the committee from among persons who have each
  19-42  been nominated by a petition signed by at least 300 employees.  Two
  19-43  <members shall be employees of institutions of higher education
  19-44  appointed by the Texas Higher Education Coordinating Board.  Five>
  19-45  members shall be employees of institutions of higher education,
  19-46  other than the seven largest institutions of higher education, who
  19-47  are appointed by the Texas Higher Education Coordinating Board
  19-48  <elected by and from the institutions of higher education>, but not
  19-49  more than one employee shall be from any one institution.  <The
  19-50  remaining members shall be elected by and from the employees of the
  19-51  other state agencies, excluding institutions of higher education,
  19-52  and from the employees of participating school districts in a
  19-53  manner consonant with the election for membership to the board of
  19-54  the Employees Retirement System of Texas, but not more than one
  19-55  employee shall be from any one agency or district.>  The members
  19-56  shall elect a presiding officer from their membership to serve a
  19-57  one-year term.
  19-58        SECTION 52.  Subsections (b) and (c), Section 19, Texas
  19-59  Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
  19-60  Vernon's Texas Insurance Code), are amended to read as follows:
  19-61        (b)  A surviving spouse of an employee or a retiree who is
  19-62  entitled to monthly benefits paid by a retirement system named in
  19-63  this Act may, following the death of the employee or retiree, elect
  19-64  to retain the spouse's authorized coverages and also retain
  19-65  authorized coverages for any dependent of the spouse, at the group
  19-66  rate for employees, provided such coverage was previously secured
  19-67  by the employee or retiree for the spouse or dependent, and the
  19-68  spouse directs the applicable retirement system to deduct required
  19-69  contributions from the monthly benefits paid the surviving spouse
  19-70  by the retirement system.  A surviving dependent of a retiree who
   20-1  was receiving monthly benefits paid by a retirement system named in
   20-2  this Act may, after the death of the retiree and if the retiree
   20-3  leaves no surviving spouse, elect to retain any coverage previously
   20-4  secured by the retiree, at the group rate for employees, until the
   20-5  dependent becomes ineligible for coverage for a reason other than
   20-6  the death of the member of the group.  A dependent who makes an
   20-7  election under this subsection and who is entitled to monthly
   20-8  benefits from a retirement system named in this Act based on the
   20-9  service of the deceased retiree must direct the applicable
  20-10  retirement system to deduct required contributions for the coverage
  20-11  from the monthly benefits paid the surviving dependent by the
  20-12  retirement system.
  20-13        (c)  The surviving spouse of an employee or a retiree who
  20-14  designated or selected a time certain annuity option or a surviving
  20-15  dependent of a retiree who designated or selected a time certain
  20-16  annuity option, upon expiration of the annuity option may retain
  20-17  authorized coverages by advance payment of contributions to the
  20-18  Employees Retirement System of Texas under rules and regulations
  20-19  adopted by the trustee.
  20-20        SECTION 53.  Chapter 22, Acts of the 57th Legislature, 3rd
  20-21  Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
  20-22  Statutes), is amended by adding Section 3 to read as follows:
  20-23        Sec. 3.  (a)  A state agency may permit some or all of the
  20-24  employees of the agency to participate in an employer-sponsored
  20-25  program described by Section 457(f) of the Internal Revenue Code of
  20-26  1986, including subsequent amendments of that law.
  20-27        (b)  Before a state agency begins sponsorship of a program
  20-28  under Subsection (a) of this section, the agency shall submit a
  20-29  proposal for the program to the Employees Retirement System of
  20-30  Texas for its review and comment.
  20-31        (c)  In this section, "state agency" means a board, office,
  20-32  commission, department, institution, court, or other agency in any
  20-33  branch of state government.
  20-34        SECTION 54.  Subsection (c), Section 141, Uniform Act
  20-35  Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
  20-36  Statutes), is amended to read as follows:
  20-37        (c)  The fee for compulsory inspection of a motor vehicle
  20-38  other than a moped, to be made under this Section, shall be Ten
  20-39  Dollars and Fifty Cents ($10.50).  The fee for compulsory
  20-40  inspection of a moped, to be made under this Section, shall be Five
  20-41  Dollars and Seventy-five Cents ($5.75).  Five Dollars and Fifty
  20-42  Cents ($5.50) of each fee shall be paid to the Department and
  20-43  shall, except as provided by <Section 815.405, Government Code, or>
  20-44  Section 382.0622, Health and Safety Code, be deposited <placed> in
  20-45  the Motor Vehicle Inspection Fund for the purpose of paying the
  20-46  expense of the administration of this law, after the deduction of
  20-47  Two Dollars and Twenty-five Cents ($2.25) of each fee, which shall
  20-48  be deposited by the Department in the general revenue fund.  The
  20-49  Department may require each official inspection station to make an
  20-50  advance payment of Five Dollars and Fifty Cents ($5.50) for each
  20-51  inspection certificate furnished to it.  No<, and the money so
  20-52  received shall, except as provided by Section 815.405, Government
  20-53  Code, be placed in the Motor Vehicle Inspection Fund, and no>
  20-54  further payment to the Department shall be required upon issuance
  20-55  of the certificate.  If such advance payment has been made, the
  20-56  Department shall refund to the inspection station the amount of
  20-57  Five Dollars and Fifty Cents ($5.50) for each unissued certificate
  20-58  which the inspection station returns to the Department in
  20-59  accordance with rules and regulations promulgated by the
  20-60  Department.  The Texas Natural Resource Conservation Commission
  20-61  shall refund to the Department Two Dollars ($2.00) for each unused
  20-62  certificate returned to the Department by inspection stations
  20-63  licensed by the Department.  An inspection station may waive the
  20-64  fee otherwise due from the owner of a vehicle inspected under this
  20-65  Section if the inspection station has rendered in advance to the
  20-66  Department the payment of Five Dollars and Fifty Cents ($5.50) for
  20-67  the certificate applied to a vehicle with respect to which the
  20-68  owner's fee has been so waived.
  20-69        SECTION 55.  Subsection (c-4), Section 10, Chapter 88,
  20-70  General Laws, Acts of the 41st Legislature, 2nd Called Session,
   21-1  1929 (Article 6675a-10, Vernon's Texas Civil Statutes), is amended
   21-2  to read as follows:
   21-3        (c-4)  On Monday of each week each County Tax Collector shall
   21-4  submit to the State Department of Highways and Public
   21-5  Transportation a carbon copy of the receipt issued for payment of
   21-6  each fee received in the preceding week for registration of a log
   21-7  loader vehicle under Section 2(l) of this Act and all<.  On Monday
   21-8  of each week the County Tax Collector shall send to the Employees
   21-9  Retirement System of Texas an amount equal to four percent (4%)> of
  21-10  the registration fees collected under Section 2(l) of this Act <and
  21-11  shall remit the remaining ninety-six percent (96%) to the
  21-12  Department.  Money sent to the retirement system under this
  21-13  subsection shall be deposited in the law enforcement and custodial
  21-14  officer supplemental retirement fund>.
  21-15        SECTION 56.  The following provisions are repealed:
  21-16              (1)  Subsection (d), Section 813.509, and Sections
  21-17  815.005, 815.106, 815.305, 815.316, 815.320, 815.405, 839.104, and
  21-18  840.009, Government Code;
  21-19              (2)  Paragraphs (19), (20), (21), and (22), Subsection
  21-20  (a), Section 3, Texas Employees Uniform Group Insurance Benefits
  21-21  Act (Article 3.50-2, Vernon's Texas Insurance Code), as added by
  21-22  Chapter 391, Acts of the 72nd Legislature, Regular Session, 1991;
  21-23              (3)  Section 3A, Texas Employees Uniform Group
  21-24  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  21-25  Code), as added by Chapter 391, Acts of the 72nd Legislature,
  21-26  Regular Session, 1991;
  21-27              (4)  Section 13C, Texas Employees Uniform Group
  21-28  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  21-29  Code);
  21-30              (5)  Subsection (e), Section 15, Texas Employees
  21-31  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  21-32  Texas Insurance Code);
  21-33              (6)  Subsection (d), Section 16, Texas Employees
  21-34  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  21-35  Texas Insurance Code); and
  21-36              (7)  effective September 1, 1995, Subsection (d),
  21-37  Section 813.506, Government Code.
  21-38        SECTION 57.  The Employees Retirement System of Texas may
  21-39  adopt rules to implement the changes in law made by this Act in the
  21-40  composition of the group benefits advisory committee under the
  21-41  Texas Employees Uniform Group Insurance Benefits Act (Article
  21-42  3.50-2, Vernon's Texas Insurance Code).
  21-43        SECTION 58.  The Legislative Budget Board shall perform a
  21-44  study of the law enforcement and custodial officer supplemental
  21-45  retirement fund and the program supported by that fund.  The study
  21-46  shall include an examination of the membership in the program,
  21-47  including its potential for growth, and an examination of
  21-48  appropriate methods of financing the program.  The board shall
  21-49  include its findings and recommendations as a result of the study
  21-50  in a report to the 74th Legislature.
  21-51        SECTION 59.  (a)  Except as provided by Subsection (b) of
  21-52  this section, this Act takes effect September 1, 1993.
  21-53        (b)  This section and Sections 2 and 30 of this Act take
  21-54  effect immediately.  Sections 22 and 23 of this Act take effect
  21-55  September 1, 1995.
  21-56        SECTION 60.  The importance of this legislation and the
  21-57  crowded condition of the calendars in both houses create an
  21-58  emergency and an imperative public necessity that the
  21-59  constitutional rule requiring bills to be read on three several
  21-60  days in each house be suspended, and this rule is hereby suspended,
  21-61  and that this Act take effect and be in force according to its
  21-62  terms, and it is so enacted.
  21-63                               * * * * *
  21-64                                                         Austin,
  21-65  Texas
  21-66                                                         April 21, 1993
  21-67  Hon. Bob Bullock
  21-68  President of the Senate
  21-69  Sir:
  21-70  We, your Committee on State Affairs to which was referred S.B. No.
   22-1  1181, have had the same under consideration, and I am instructed to
   22-2  report it back to the Senate with the recommendation that it do not
   22-3  pass, but that the Committee Substitute adopted in lieu thereof do
   22-4  pass and be printed.
   22-5                                                         Harris of
   22-6  Dallas, Chairman
   22-7                               * * * * *
   22-8                               WITNESSES
   22-9                                                  FOR   AGAINST  ON
  22-10  ___________________________________________________________________
  22-11  Name:  Ken Levine                                              x
  22-12  Representing:  Sunset Commission
  22-13  City:  Austin
  22-14  -------------------------------------------------------------------
  22-15  Name:  Billy Don Ivey                            x
  22-16  Representing:  DPS
  22-17  City:  Austin
  22-18  -------------------------------------------------------------------
  22-19  Name:  Lane A. Zivley                            x
  22-20  Representing:  Tx Public Employees Assn
  22-21  City:  Austin
  22-22  -------------------------------------------------------------------
  22-23  Name:  Travis Donoho                             x
  22-24  Representing:  Tx State Employees Union
  22-25  City:  Austin
  22-26  -------------------------------------------------------------------
  22-27  Name:  Walter O'Dell                             x
  22-28  Representing:  Retired State Employees Assn
  22-29  City:  Austin
  22-30  -------------------------------------------------------------------
  22-31  Name:  Farland Bundy                             x
  22-32  Representing:  Retired State Employees Assn
  22-33  City:  Austin
  22-34  -------------------------------------------------------------------
  22-35                                                  FOR   AGAINST  ON
  22-36  ___________________________________________________________________
  22-37  Name:  Charles Travis                                          x
  22-38  Representing:  Employees Retirement System
  22-39  City:  Austin
  22-40  -------------------------------------------------------------------