BILL ANALYSIS



C.S.S.B. 1231
By: Armbrister (Telford)
May 5, 1995
Committee Report (Substituted)


BACKGROUND

The Employees Retirement System of Texas (ERS) is a public
retirement system established by Section 67, Article XVI, Texas
Constitution.  Pursuant to the constitutional mandate, ERS provides
retirement benefits for state employees, elected state officials
and members of the judiciary.  Additionally, ERS administers the
Texas Employees Uniform Group Insurance Program which provides
group health coverage and optional disability, life, dental, and
accident insurance coverage to employees and retirees of state
agencies and certain institutions of higher education and their
dependents.  ERS also administers a cafeteria plan pursuant to
Section 125 of the Internal Revenue Code and deferred compensation
plan pursuant to Section 457 and 401(k) of the Internal Revenue
Code.

ERS board and staff, as well as state employees, retirees, judges,
and elected state officials continually review the programs
administered by ERS as well as the enabling legislation and make
recommendations resulting from this process.

PURPOSE

As proposed, C.S.S.B. 1231 revises the powers and duties of the
systems and programs under the Employees Retirement System of
Texas, including regulations for transferring credits between the
Employees Retirement System of Texas and the Teacher Retirement
System of Texas, for using sick leave to satisfy service
requirements for retirement, for beneficiary designations, and
adjustments for certain benefits and payments.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to the board of trustees of the Teacher Retirement System of Texas
or the Employees Retirement System of Texas in SECTION 4 (Section
805.008(c), Government Code), SECTION 7 (Section 813.305,
Government Code), SECTION 34 (Section 833.1031, Government Code),
and in SECTION 35 (Section 838.1031, Government Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 805.002, Government Code, by amending
Subsections (a), (b), and (d), and adding Subsections (g) and (h),
as follows:

     (a)  Provides that if a person whose membership was
     transferred from the Teacher Retirement System (TRS) to the
     Employees Retirement System (ERS) pursuant to Section 43(a),
     Chapter 812, Acts of the 73rd Legislature, 1993, ceases to
     hold any position included in the membership of ERS before the
     earlier of the date the person retires or dies, the person's
     service credit accrued in TRS before the date the membership
     was transferred remains credited in that system, unless the
     person has withdrawn contributions made for the service.
     
     (b)  Makes conforming and nonsubstantive changes.
     
     (d)  Provides that if a member is not survived by a designated
     beneficiary, an alternate beneficiary, or a beneficiary
     provided by law or has failed to designate a beneficiary after
     becoming a member or resuming membership, the personal
     representative of the member's estate has the same right under
     this subsection as the designated beneficiary.  Provides that
     a transfer of service by the beneficiary or personal
     representative of a deceased member's estate is not permitted
     unless the transfer will result in the payment of a death
     benefit annuity.
     
     (g)  Requires a person to be the designated beneficiary of the
     deceased member under both retirement systems to be eligible
     to make a transfer pursuant to Subsection (d).
     
     (h)  Authorizes a member applying for occupational disability
     retirement from ERS to transfer service credit from TRS only
     if the member was contributing to ERS at the time the
     disabling condition occurred.
     
SECTION 2. Amends Section 805.003, Government Code, to require all
payments for service credit reinstated or purchased under Section
805.002, to be made before retirement or the first payment of a
death benefit annuity, as applicable, or before a later date if
allowed for members of system in which the credit is to be
reinstated or purchased.

SECTION 3. Amends Sections 805.007(a) and (b), Government Code, as
follows:

     (a)  Provides that this subsection does not preclude a person
     from receiving benefits as a beneficiary of an account not
     related to the transferred service credit.
     
     (b)  Provides that service credit transferred under this
     chapter is considered as if it had been granted for service
     performed under the system to which it has been transferred
     and is used in satisfying minimum service requirements for
     retirements and in determining the amount of benefits that are
     based on the amount of a person's service credit except, among
     other exceptions, service credit transferred by a member
     applying for occupational disability retirement.
     
SECTION 4. Amends Section 805.008, Government Code, as follows:

     Sec. 805.008.  RESPONSIBILITY FOR BENEFIT PAYMENTS.  (a)-(b) 
     Make conforming changes.
     
     (c)  Authorizes TRS and ERS, by rule, to require the system
       from which service credit is transferred to pay monthly an
       amount equal to the portion of the actual value of the
       monthly payment of the annuity that represents the
       percentage of the total amount of service credit that is
       transferred.
       
       (d)-(f)  Created from existing Subsections (c)-(e).  Make
       conforming changes.
       
       (g)  Requires TRS to transfer to ERS the person's service
       credit in TRS and, if employment with the transferring
       agency was continuous from the date of transfer to the date
       of death certain specified amounts at the time of death of
       a person whose membership was transferred from TRS to ERS.
       
SECTION 5. Amends Section 805.002(c), Government Code, to authorize
a member of ERS or TRS who formerly was a member of the other
system, who before September 1, 1993, transferred at least three
years of service credit to the system in which the person currently
is a member, and who has at least three years of service credit
other than the transferred credit in the system in which the person
currently is a member to reinstate or purchase service credit in
the other system for the purpose of making a transfer of all
service credit to that other system.

SECTION 6. Amends Section 813.104, Government Code, by amending
Subsection (d), relettering Subsection (e) as Subsection (g), and
adding Subsections (e) and (f), as follows:

     (d)  Makes a conforming change.
     
     (e)  Authorizes the designated beneficiary of a deceased
     member, or the personal representative of the decedent's
     estate to establish or reestablish service for which the
     member was eligible at the time of death if the establishment
     of the service would result in the payment of a death benefit
     annuity or an increase in the amount of a death benefit
     annuity.
     
     (f)  Requires the payment for the establishment or
     reestablishment of service under Subsection (e) to be made in
     a lump sum and completed before the first payment of a death
     benefit annuity or an increase in the amount of a death
     benefit annuity, but not later than the 60th day after the
     date the system receives notice of the death.
     
     (g)  Redesignated from existing Subsection (e).
     
SECTION 7. Amends Chapter 813D, Government Code, by adding Section
813.305, as follows:

     Sec. 813.305.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
     SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  Authorizes
     the retirement system to adopt rules to comply with 38 U.S.C.
     Section 4301 et seq. (Uniformed Services Employment and
     Reemployment Rights Act) and other federal laws affecting the
     crediting of military service.
     
SECTION 8. Amends Section 813.506, Government Code, as follows:

     Sec. 813.506.  CUSTODIAL OFFICER SERVICE.  (a)  Makes
     conforming and nonsubstantive changes.
     
     (c)  Makes no change.
       
       (d)  Redesignated from existing Subsection (e).  Requires
       the state auditor to review biennially the standards adopted
       by the department under Subsection (a).  Makes a conforming
       change.
       
SECTION 9.     Amends Section 813.509.  CREDIT FOR ACCUMULATED SICK
LEAVE.  (a)  Provides that a member who holds a position included
in the employee class of membership during the month that including
the effective date of the member's retirement and who retires based
on service or a disability is entitled to service credit in the
retirement system for the member's sick leave that has accumulated
and is unused on the last day of employment.

     (b)  Authorizes a member who holds a position included in the
     employee class to use sick leave creditable under this section
     to satisfy service requirements for retirement under Section
     814.104 or 814.107 if the sick leave attributed to the
     eligibility requirements remains otherwise unused on the last
     day of employment.
     
     (c)  Requires the disbursing officer of each department or
     agency to certify to the retirement system before the 11th day
     after the effective date of retirement of one or more
     employees of the department or agency.
     
     (d)  Requires the disbursing officer of a department or agency
     that employs a member who applies for retirement under
     Subsection (b) to certify to the system the amount of the
     member's accumulated and unused sick leave not more than 90 or
     less than 30 days before the effective date of the member's
     retirement.  Requires the officer to immediately notify the
     system if the member uses sick leave after the date of
     certification.
     
     (e)  Redesignated from existing Subsection (c).  Makes
     conforming changes.
     
     (f)  Requires the system to cancel the retirement of a person
     who used sick leave creditable under this section to qualify
     for service retirement if the sick leave is otherwise used by
     the person before the effective date of retirement.
     
     (g)  Defines "sick leave."
     
SECTION 10.    Amends Chapter 813F, Government Code, by adding
Section 813.510, as follows:

     Sec. 813.510.  CREDIT FOR CERTAIN AGRICULTURAL SERVICE.  (a) 
     Authorizes an eligible member to elect to establish service
     credit in the retirement system for service performed for the
     Department of Agriculture (TDA) as an employee of the Federal
     State Inspection Service of Texas.
     
     (b)  Provides that a member eligible to establish credit
       under this section is one who became an employee of or
       resumed employment with the TDA in May 1992 on the creation
       of the Texas Cooperative Inspection Program.
       
       (c)  Sets forth the necessary amount of deposit in which a
       member is authorized to establish credit under this section.
       
       (d)  Requires an election under this section to be filed
       with the retirement system on a form provided by the system. 
       Authorizes credit to be established under this section by
       lump-sum payment or by payments authorized by Section
       813.104 or 813.105.
       
       (e)  Requires the retirement system to deposit the
       compensation contribution in the member's individual account
       in the employees savings account, interest in the state
       accumulation account, and membership fees in the expense
       account.
       
       (f)  Requires the retirement system to determine the amount
       to be deposited in each case and may not grant service
       credit to a member under this section until the member
       provides proof of eligibility for the credit that is
       satisfactory to the retirement system.
SECTION 11.    Amends Section 814.003, Government Code, by adding
Subsection (e) to provide that if a person elects to receive a
standard disability retirement annuity and dies during the first
calendar month that begins after the effective date of the person's
requirement, the person is considered to have been a contributing
member at the time of death.

SECTION 12.    Amends Section 814.004, Government Code, as follows:

     Sec. 814.004.  WHEN BENEFITS ARE PAYABLE.  Provides that a
     monthly annuity payable to a retiree or beneficiary is payable
     to that person through the month in which the person dies. 
     Provides that a continuation of an optional annuity or the
     payment of a death or survivor benefit annuity begins with the
     payment for the month following the month in which the death
     occurs.  Deletes existing text.
SECTION 13.    Amends Chapter 814A, Government Code, by adding
Sections 814.006 and 814.007, as follows:

     Sec. 814.006.  SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY. 
     Provides that when a member or annuitant (member) and the
     beneficiary have died within a period of less than 120 hours,
     the member is considered to have survived the beneficiary for
     the purpose of determining the rights to amounts payable under
     this subtitle on the death of the member.
     
     Sec. 814.007.  BENEFICIARY CAUSING DEATH OF MEMBER OR
     ANNUITANT.  (a)  Prohibits a benefit payable on the death of
     a member from being paid to a person convicted of causing the
     death of the member but instead is payable as if the convicted
     person had predeceased the defendant.
     
     (b)  Authorizes a person who becomes eligible under this
       section to select death or survivor benefits to select
       benefits as if the person were the designated beneficiary.
       
       (c)  Requires the system to reduce any annuity computed in
       part on the age of the convicted person to a lump sum equal
       to the present value of the remainder of the annuity. 
       Provides that the reduced amount is payable to a person
       entitled as provided by this section to receive the benefit.
       
       (d)  Provides that the system is not required to change the
       recipient of benefits under this section unless it receives
       actual notice of the conviction of a beneficiary. 
       Authorizes the system to delay payment of a benefit payable
       on the death of a member pending the results of a criminal
       investigation and of legal proceedings relating to the cause
       of death.
       
       (e)  Sets forth the conditions in which a person is
       considered to have been convicted of causing the death of a
       member.
       
SECTION 14.    Amends Sections 814.107(b) and (f), Government Code,
as follows:

     (b)  Sets forth the method of calculating the compensation for
     a standard service retirement annuity.  Deletes the previous
     table of calculation.
     
     (f)  Prohibits the standard combined service retirement
     annuity payable for at least 20 years of service credit as a
     law enforcement or custodial officer from exceeding 100
     percent, rather than 80 percent, of the higher of the average
     compensation computed under Section 814.105 or the average
     compensation computed under Subsection (b).
     
SECTION 15.    Amends Section 814.108, Government Code, by adding
Subsection (g), to prohibit a person who selected an optional
service retirement annuity approved by the board of trustees
(board) or an optional service retirement annuity described by
Subsection (c)(1) or (c)(2) from changing or revoking a beneficiary
designation after the person's effective date of retirement, except
as provided by Section 814.1081.

SECTION 16.    Amends Sections 814.207(b), (d), and (e), Government
Code, to require the retirement system to increase the person's
occupational disability retirement annuity to 100 percent of the
officer's monthly compensation at the time of the disabling injury
or disease if a retiring member or retiree presents evidence that
the person's condition makes the person incapable of gainful
occupation.  Makes conforming changes.

SECTION 17.    Amends Section 814.301, Government Code, by adding
Subsection (e), to provide that a beneficiary designation that
names a former spouse as beneficiary is invalid unless the
designation is made after the divorce.

SECTION 18.    Amends Section 814.302(a), Government Code, to
authorize a member's designated beneficiary, rather than surviving
spouse, to select a plan in the same manner as if the member had
made the selection if a member eligible to select a death benefit
plan dies without having made a selection.  Deletes a provision
prohibiting an annuity from being paid if Section 815.405 is held
to be invalid by a court of competent jurisdiction and the decision
becomes final.  Makes conforming changes.

SECTION 19.    Amends Sections 814.401(b) and (d), Government Code,
to  provide that the benefit is payable to the beneficiary
designated by the member under Section 814.403(b), rather than the
person designated by the member in a signed document filed with the
retirement system.  Provides that the benefit is payable to the
member's estate if the member does not designate a beneficiary or
if the beneficiary designation cannot be made effective, rather
than if the beneficiary does not survive the member.  Makes
conforming changes.

SECTION 20.    Amends Section 814.403, Government Code, to provide
that the benefit provided is payable to a person designated by the
member in a signed and witnessed document filed with the retirement
system before the member's death, except as provided by Subsection
(c).  Provides that a designation, change, or revocation of a
beneficiary in a will or other document not filed with the
retirement system is not effective.  Makes conforming changes.

SECTION 21.    Amends Section 814.501, Government Code, by amending
Subsection (b) and adding Subsection (c), to make conforming
changes.

SECTION 22.    Amends Sections 814.603(a) and (d), Government Code, 
     
     (a) Entitles each person who receives an annuity described by
     this subsection to receive one payment equal to 10 percent of
     one month's annuity payment for each fiscal year that preceded
     or includes the effective date of the requirement or
     authorization under Subsection (d) and in which the annuity
     has been paid, rather than before the fiscal year beginning
     September 1, 1993. 
     
     (d) Requires the retirement system to make a supplemental
     payment under this section in the fiscal year ending August
     31, 1997.  Authorizes the board, by rule, to authorize similar
     supplemental payments in succeeding fiscal years, rather than
     the fiscal year ending August 31, 1995, if the payments are in
     compliance with Section 811.006. 
SECTION 23.    Amends Section 815.006, Government Code, to make
conforming and nonsubstantive changes.

SECTION 24.    Amends the heading of Section 815.110, Government
Code, as follows:

     Sec. 815.110.  New heading:  AUDITS.
SECTION 25.    Amends Section 815.110, Government Code, by adding
Subsection (e), to require the board annually to select an
independent auditor to perform a financial audit of the retirement
system.  Requires the selection to be made under a competitive
bidding process in which the state auditor is eligible to bid.

SECTION 26.    Amends Section 815.301(b), Government Code, to
authorize the board to delegate its authority under Subsection (a)
to the executive director.  Authorizes the executive director to
perform certain actions relating to the investment of the
retirement system's assets.

SECTION 27.    Amends Chapter 815F, Government Code, by adding
Section 815.511, as follows:

     Sec. 815.511.  APPEAL OF ADMINISTRATIVE DECISION.  Authorizes
     a person aggrieved by a decision of any retirement system
     administered by the board of trustees denying or limiting
     membership, service credit, or eligibility for or the amount
     of benefits payable by a system to appeal the decision to the
     board.  Provides that the appeal is a contested case under the
     administrative procedure law, Chapter 2001, Government Code. 
     Provides that on judicial appeal, the standard of review is by
     substantial evidence.
     
SECTION 28.    (a) Provides that annuities that are described by
Section 814.107, 814.207, 814.305, or 814.601(a), Government Code,
and are based on service retirements, disability retirements, or
deaths that occurred before September 1, 1995, are increased by
12.5 percent, with exceptions.

     (b) Provides that annuities are increased under Subsection (a)
     only if the actuary for ERS certifies, based on an August 31,
     1995, actuarial valuation that all annuity increases and
     recomputations required or authorized by this Act, together
     with all other actuarial liabilities resulting from
     legislation enacted by the 74th Legislature before August 31
     that has or will become law, will not cause the time required
     to amortize the unfunded actuarial liabilities of the
     retirement system to be increased to a period that exceeds 31
     years.  Sets forth circumstances under which a bill will
     become law.  Provides that the increase in annuities under
     Subsection (a) is payable beginning with the first monthly
     payments of the annuities that become due after the month in
     which the actuarial certification required by this subsection
     is made to the board.
     
     (c) Provides that retirements that occurred under the
     provisions of Section 814.1051 or 814.1071, Government Code,
     are not increased by this section.
     
     (d) Requires the board to pay the increased annuities provided
     by this section from the retirement annuity reserve account of
     the retirement system and authorizes the board to transfer to
     that account from the state accumulation account of the
     retirement system any portion of the amount that exceeds the
     amount in the reserve account available to finance the
     increases in benefits, and that is actuarially determined to
     be necessary to finance the increases, for the duration of the
     annuities to which the increases apply.
SECTION 29.    (a)  Provides that a member of ERS who is an
appointed officer of the 74th House of Representatives of the State
of Texas, who has at least 28 years of service credit in the
retirement system, and who has attained the age of 50 is eligible
to make an election under this section.

     (b)  Provides that a member of ERS who has at least 18 years
     of service creditable in the retirement system, who has served
     as the executive head of a legislative service agency, and who
     has attained the age of 50 is eligible to make an election
     under this section.
     
     (c)  Requires an election under this section to be made in
     writing and filed with ERS before January 1, 1996, and is
     irrevocable after filing.  Requires a person who makes an
     election under Subsection (a) to retire on the first effective
     retirement date that occurs after the date of filing. 
     Requires the retirement system, after the filing of an
     election under this section, to consider all the service
     credit established by the person who makes the election,
     including service credit established after the date the
     election is filed, as if it were performed as a member of the
     elected class of membership.
     
SECTION 30:  Provides for an ad hoc increase for employees retiring
in Fiscal Year 1996.  Authorizes a postretirement increase of not
more than 12.5 percent for employees who retire during the next
fiscal year.  The increase could not be paid until the retiree has
been retired one year.

SECTION 31.    Amends Chapter 830A, Government Code, by adding
Section 830.0011, as follows:

     Sec. 830.0011.  DEFINITION.  Defines "retirement system."
     
SECTION 32.    Amends Section 830.106, Government Code, to make a
conforming change.

SECTION 33. Amends Chapter 832B, Government Code by adding Section
832.102 as follows:

     Sec. 832.102.  RESUMPTION OF FULL-TIME JUDICIAL SERVICE. 
Prohibits a retired judge to resume service as a judicial officer
other than by appointment or assignment as described to rejoin or
receive credit in the retirement system for the resumed service. 
The judicial retiree as described, shall have his annuity payments
suspended beginning the date he/she takes the oath of office and
ends on a date when the retiree no longer holds the office or the
retiree's beneficiary has applied for resumption of payments upon
the retiree's death.   The suspension of payments does not reduce
the number of months payments are to be made.  The retiree as
specified is required to notify the retirement system in writing of
the resumption of office and the projected dates of service before
the oath is taken.

SECTION 34.    Amends Chapter 833B, Government Code, by adding
Section 833.1031, as follows:

     Sec. 833.1031.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
     SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  Authorizes
     the retirement system to adopt rules to comply with the
     Uniformed Services Employment and Reemployment Rights Act and
     other federal laws affecting the crediting of military
     service.
SECTION 35.    Amends Chapter 838B, Government Code, by adding
Section 838.1031, as follows:

     Sec. 838.1031.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
     SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  Makes
     conforming changes. 
SECTION 36.    Amends Sections 3(a)(2) and (5), Article 3.50-2,
Insurance Code (Texas Employees Uniform Group Insurance Benefits
Act), to redefine "annuitant" and "employee."

SECTION 37.    Amends Section 4B, Article 3.50-2, Insurance Code,
by adding Subsection (a-1) and amending Subsection (c), as follows:

     (a-1) Authorizes the executive director to rescind the
     coverage to the date of the inception of the coverage or to
     the date of the fraudulent act or material misrepresentation,
     deny any claim arising out of the fraudulently induced
     coverage, or both, if a participant has obtained coverage
     under any program through the authority of this Act through
     the use of any material misrepresentation or fraud on any
     application or in any communication regarding coverage. 
     Provides that remedies available to the executive director are
     in addition to and independent of any expulsion action that
     may be instituted.  Authorizes a decision of the executive
     director to be appealed to the trustee.
     
     (c) Provides that standing to pursue an administrative appeal
     is limited to employees, annuitants, and covered dependents
     participating in the Texas employees uniform group insurance
     program or, after the death of a participant, to the
     participant's estate, personal representative, heirs at law,
     or designated beneficiary.  Makes conforming changes.
SECTION 38.    Amends Section 5(f), Article 3.50-2, Insurance Code,
to exempt any plan of overages for which the trustee does not
purchase insurance but provides on a self-funded basis from any
other insurance law unless the law expressly applies to this plan
or this Act.

SECTION 39.    Amends Section 13A, Article 3.50-2, Insurance Code,
to make conforming changes.

SECTION 40.    Amends Section 14(a), Article 3.50-2, Insurance
Code, to make a conforming change.

SECTION 41.    Amends Section 609.507, Government Code, to provide
that each bank or savings and loan association that is a qualified
vendor is not required to comply with Chapter 404 with regard to
deferrals and investment income, but is required to comply with
plan rules that deal with investment products.  Deletes provisions
requiring the state treasurer to monitor each bank or savings and
loan that is a qualified vendor for compliance with Chapter 404. 
Makes conforming changes.

SECTION 42.    Repealer:  Sections 814.107(h), 815.108, and
815.403(g), Government Code (relating to Service Retirement
Benefits for Certain Peace Officers-Reports-relating to Collection
of State Contributions).

     Repealer:  Section 14(a-1), Article 3.50-2, Insurance Code
     (relating to Payment of Contributions).
SECTION 43.    (a)  Requires ERS to recompute each annuity that is
based on the service of a person who has retired under Section
814.1071, Government Code, to include the amount, proportional to
the amount authorized for each year of credit under Section
814.107, Government Code, for each whole month of credit as a law
enforcement or custodial officer that was not used in the original
computation of the annuity.

     (b)  Provides that the increases in annuities provided by this
     Act are payable, from the law enforcement and custodial
     officer supplemental retirement fund, and these annuities are
     to be recomputed at the same time the ad hoc increase for
     current retirees is recomputed.
SECTION 44.  Requires the Judicial Retirement System of Texas Plan
One to suspend payments of an annuity to any retiree who before the
effective date of this Act resumed service for which a suspension
is required by Sec. 832.102, Government Code.  Stipulates when the
suspension of payments is to begin.

SECTION 45.      Effective date is August 28, 1995, except for
Section 8, which takes effect September 1, 1995.

SECTION 46.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute bill makes a technical change in Section 21 by
restating the prohibition on beneficiary changes by will or other
document.

Section 30 of the original bill was deleted which would have
allowed a previously retired elected class member to designate a
beneficiary without spousal consent.

The committee substitute removes the provision to allow former
elected officials to make the one-time election to have credit
considered as elected class in SECTION 29.

A new SECTION 30 provides for an ad hoc increase for employees
retiring in Fiscal Year 1996.  It authorizes a postretirement
increase of not more than 12.5 percent for employees who retire
during the next fiscal year.  The increase could not be paid until
the retiree had been retired one year.

SECTION 33 and SECTION 44 apply to the Judicial Retirement System
One retirees who resume office.  The committee substitute adds
provisions to ensure that retired judges who return to office have
their annuities suspended until the end of their service. 
Suspension of the annuity of a retiree who resumed office before
the effective date of the bill would begin with the September 1995
payment.

SECTION 43 adds a technical amendment which would have annuities of
law enforcement or custodial officers  under the CPO supplemental
benefits program to be recomputed at the same time the ad hoc
increase for current retirees is recomputed.

SECTION 45 changes the effective date to August 28, 1995 except for
SECTION 8, which takes effect September 1, 1995.

SUMMARY OF COMMITTEE ACTION

SB 1231 was considered by the committee in a public hearing on May
1, 1995.  

The following persons testified for the bill:
     Billy D. Ivey representing himself and the D.P.S.O.A.
     Lane Zivley representing the Texas Public Employees Assoc.

Charles D. Travis representing the Employees Retirement System to
speak neutrally on the bill.

The committee considered 3 amendments to the bill.  All of those
amendments were adopted without objection.
     Amendment 1 returned the custodial officer supplemental
retirement fund section of the bill back to current law.
     Amendment 2 increased the optional life insurance benefits
package for state employees and required the ERS to seek requests
for proposal for the program.
     Amendment 3 struck SECTION 30 of the bill.

The bill was left pending before the committee.

SB 1231 was again considered by the committee in a public hearing
on May 5, 1995.

The vote by which Amendment 1 was adopted was reconsidered without
objection.  Amendment #1 was withdrawn.
The vote by which Amendment 2 was adopted was reconsidered without
objection.  Amendment #2 was withdrawn.

The vote by which Amendment 3 was adopted was reconsidered without
objection.  Amendment #3 was withdrawn.

The committee considered a complete substitute for the bill.  The
substitute was adopted without objection.

The bill was reported favorably as substituted with the
recommendation that it do pass and be printed by a record vote of
7 ayes, 0 nays, 0 pnv & 2 absent.