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.