BILL ANALYSIS H.B. 2166 By: Walker April 11, 1995 Committee Report (Unamended) BACKGROUND Current law is unclear on the authority of the Teacher Retirement System (TRS) to accept an eligible rollover distribution under the Internal Revenue Code as payment for service credit that a member is permitted to purchase. An eligible rollover distribution is an amount accumulated from in a retirement plan other than with TRS which can be transferred without triggering income tax liability for the employee. Under the bill, an eligible rollover distribution includes a direct trustee-to-trustee transfer under Sec. 401(a) of the Internal Revenue Code of 1986. PURPOSE The bill clarifies that an eligible rollover distribution is a permissible method of payment for the purchase of service credit in TRS. RULEMAKING AUTHORITY The bill grants rulemaking authority to the Teacher Retirement System in SECTION 1: Section 823.004 of the Government Code. SECTION BY SECTION ANALYSIS SECTION 1: Amends Subchapter A, Chapter 823, Government Code, to require the TRS board of trustees to adopt rules to permit TRS to accept an eligible rollover distribution as payment for the purchase of service credit. SECTION 2: Emergency clause SUMMARY OF COMMITTEE ACTION HB 2166 was considered by the committee in a public hearing on April 10, 1995. Rep. Walker testified as the bill's author. The following persons testified for the bill: Patricia Hays representing the Texas Classroom Teachers Assoc. G.D. (Rip) Lasator representing himself Doyle Chandler representing himself Randy Mercer representing the Texas Teacher Retirement System testified neutrally on the bill. The bill was reported favorably without amendment with the recommendation that it do pass and be printed, by a record vote of 6 ayes, 0 nays, 0 pnv & 3 absent.