By Marchant, Patterson H.B. No. 1822
74R6923 RJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the change of the name of the State Pension Review
1-3 Board to the State Investments Review Board, to the change of the
1-4 name of the State Pension Review Board fund to the State
1-5 Investments Review Board fund, and to the monitoring of certain
1-6 public investments by the board.
1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-8 SECTION 1. The heading of Chapter 801, Government Code, is
1-9 amended to read as follows:
1-10 CHAPTER 801. STATE INVESTMENTS <PENSION> REVIEW BOARD
1-11 SECTION 2. Section 801.001(1), Government Code, is amended
1-12 to read as follows:
1-13 (1) "Board" means the State Investments <Pension>
1-14 Review Board.
1-15 SECTION 3. Section 801.101, Government Code, is amended to
1-16 read as follows:
1-17 Sec. 801.101. INVESTMENTS <PENSION> REVIEW BOARD. The State
1-18 Investments <Pension> Review Board is an agency of the state.
1-19 SECTION 4. Section 801.107, Government Code, is amended to
1-20 read as follows:
1-21 Sec. 801.107. Sunset Provision. The State Investments
1-22 <Pension> Review Board is subject to Chapter 325 (Texas Sunset
1-23 Act). Unless continued in existence as provided by that chapter,
1-24 the board is abolished and this chapter expires September 1, 2001.
2-1 SECTION 5. Sections 801.113(a), (c), (d), (e), and (f),
2-2 Government Code, are amended to read as follows:
2-3 (a) The State Investments <Pension> Review Board fund is
2-4 created in the state treasury. Money in the fund may be
2-5 appropriated only to assist in paying staff salaries, operating and
2-6 actuarial expenses of the board, and for such activities as defined
2-7 by Subsection (e) of this section.
2-8 (c) The governing board of any public retirement system may
2-9 vote to make an annual contribution to the State Investments
2-10 <Pension> Review Board not to exceed 50 cents for each active
2-11 member and annuitant of the retirement system as of September 1 of
2-12 the year for which the contribution is made. The contribution is
2-13 payable in a lump sum.
2-14 (d) Each public retirement system shall certify to the board
2-15 and to the comptroller of public accounts the amount of the annual
2-16 contribution to be made under Subsection (c) of this section. The
2-17 comptroller by rule may prescribe the form and content of
2-18 certifications. The comptroller shall deposit remittances received
2-19 under this subsection in the State Investments <Pension> Review
2-20 Board fund.
2-21 (e) The board is authorized to conduct training sessions,
2-22 schools, or other educational activities for trustees and
2-23 administrators of public retirement systems. The board may also
2-24 furnish other appropriate services such as actuarial studies or
2-25 other requirements of systems and may establish appropriate fees
2-26 for these activities and services. The fees may be based on
2-27 whether or not the trustees, administrators, or systems contribute
3-1 to the State Investments <Pension> Review Board fund under
3-2 Subsection (c) of this section. The net proceeds of these fees
3-3 shall be deposited in the fund.
3-4 (f) Under the provisions of Sections 403.094 and 403.095,
3-5 the dedication of the State Investments <Pension> Review Board fund
3-6 is reenacted, and the fund is established as a special account
3-7 within the state treasury dedicated for the purposes defined by
3-8 Subsections (a) and (e).
3-9 SECTION 6. Chapter 801, Government Code, is amended by
3-10 adding Subchapter D to read as follows:
3-11 SUBCHAPTER D. BOARD INVESTMENT MONITORING
3-12 Sec. 801.221. DEFINITIONS. In this subchapter:
3-13 (1) "Institution of higher education" has the meaning
3-14 assigned by Section 61.003, Education Code.
3-15 (2) "Public funds investment pool" means a pool
3-16 created under Chapter 791.
3-17 (3) "Public retirement system" has the meaning
3-18 assigned by Section 802.001.
3-19 (4) "State agency" means a board, commission,
3-20 department, office, or other agency in the executive, judicial, or
3-21 legislative branch of state government.
3-22 Sec. 801.222. APPLICABILITY. This subchapter applies only
3-23 to the investment of public funds by:
3-24 (1) the state treasurer;
3-25 (2) a state agency;
3-26 (3) a public retirement system;
3-27 (4) an institution of higher education; or
4-1 (5) a public funds investment pool.
4-2 Sec. 801.223. BOARD RULES. The board shall adopt rules to
4-3 administer this subchapter.
4-4 Sec. 801.224. REPORT TO BOARD. Each subject entity shall at
4-5 least quarterly report the details of its investments and
4-6 investment policies to the board.
4-7 Sec. 801.225. BOARD REVIEW OF INVESTMENTS. (a) The board
4-8 shall review the investment practices and policies of each subject
4-9 entity. In its review the board shall consider whether the
4-10 investments yield an acceptable rate of return and whether the
4-11 risks the investments are subject to are reasonable for a public
4-12 entity.
4-13 (b) The board shall determine whether an entity is:
4-14 (1) exercising prudent business judgment in its
4-15 investments; and
4-16 (2) investing funds in compliance with the entity's
4-17 investment policies and constitutional and statutory provisions
4-18 governing the entity's investments.
4-19 (c) The board shall notify the entity, the legislature, and
4-20 the governor of any investments the board considers not authorized
4-21 or not prudent.
4-22 Sec. 801.226. DEVELOPMENT OF INVESTMENT POLICIES. On
4-23 request of a subject entity, the board shall assist the entity in
4-24 developing an investment policy for the entity.
4-25 Sec. 801.227. CONTINUING EDUCATION. The board shall
4-26 coordinate and assist governing bodies of subject entities and
4-27 public investment pools in continuing education training in
5-1 investment controls, associated risks, and potential liability for
5-2 the entities.
5-3 Sec. 801.228. INVESTMENT ADVISORS AND SERVICES. The board
5-4 shall assist governing bodies of subject entities in securing,
5-5 selecting, and monitoring outside investment advisors and
5-6 investment services.
5-7 Sec. 801.229. ATTORNEY GENERAL INVESTIGATION. (a) The
5-8 board shall report to the attorney general any irregularity the
5-9 board discovers in the investments of a subject entity.
5-10 (b) The attorney general shall investigate investment
5-11 irregularities reported under this section.
5-12 Sec. 801.230. REPORT TO LEGISLATURE. The board shall report
5-13 to the legislature any statutory changes it considers necessary
5-14 because of the board's investment recommendations to subject
5-15 entities.
5-16 Sec. 801.231. STAFF. The board may employ staff to perform
5-17 the duties required by this subchapter.
5-18 SECTION 7. Section 802.001(1), Government Code, is amended
5-19 to read as follows:
5-20 (1) "Board" means the State Investments <Pension>
5-21 Review Board.
5-22 SECTION 8. Section 802.003(d), Government Code, is amended
5-23 to read as follows:
5-24 (d) The State Investments <Pension> Review Board may file an
5-25 appropriate pleading, in the manner provided by this section for
5-26 filing by an individual, for the purpose of enforcing a requirement
5-27 of Subchapter B or C, other than a requirement of Section
6-1 802.101(a), 802.101(d), 802.102, 802.103(a), or 802.104.
6-2 SECTION 9. Section 802.101(c), Government Code, is amended
6-3 to read as follows:
6-4 (c) The governing body of a public retirement system shall
6-5 file with the State Investments <Pension> Review Board a copy of
6-6 each actuarial study and each separate report made as required by
6-7 law.
6-8 SECTION 10. Sections 802.103(b) and (c), Government Code,
6-9 are amended to read as follows:
6-10 (b) The governing body of a public retirement system shall,
6-11 before the 211th day after the last day of the fiscal year under
6-12 which the system operates, file with the State Investments
6-13 <Pension> Review Board a copy of each annual financial report it
6-14 makes as required by law.
6-15 (c) A public retirement system that is subject to Chapter
6-16 125, Acts of the 45th Legislature, Regular Session, 1937 (Article
6-17 6243e, Vernon's Texas Civil Statutes), and that has total assets
6-18 with a book value, as of the last day of the fiscal year, of less
6-19 than $50,000, may submit to the State Investments <Pension> Review
6-20 Board for that year, instead of the financial report otherwise
6-21 required by this section to be published and submitted, a copy of
6-22 the financial report it submits to the firemen's pension
6-23 commissioner.
6-24 SECTION 11. Section 802.105(a), Government Code, is amended
6-25 to read as follows:
6-26 (a) Each public retirement system shall, before the 91st day
6-27 after the date of its creation, register with the State Investments
7-1 <Pension> Review Board.
7-2 SECTION 12. Section 802.106(h), Government Code, is amended
7-3 to read as follows:
7-4 (h) A public retirement system shall submit to the State
7-5 Investments <Pension> Review Board copies of the summarized
7-6 information required by Subsections (a) and (b). A system shall
7-7 submit a copy of the information required by Subsection (a) before
7-8 the 31st day after the date of publication and a copy of the
7-9 information required by Subsection (b) before the 271st day after
7-10 the date a change is adopted.
7-11 SECTION 13. Section 802.107, Government Code, is amended to
7-12 read as follows:
7-13 Sec. 802.107. General Provisions Relating to Reports.
7-14 (a) A public retirement system shall maintain for public review at
7-15 its main office and at such other locations as the retirement
7-16 system considers appropriate copies of the most recent edition of
7-17 each type of report or other information required by this chapter
7-18 to be submitted to the State Investments <Pension> Review Board.
7-19 (b) Information required by this chapter to be submitted to
7-20 the State Investments <Pension> Review Board may be contained in
7-21 one or more documents but must be submitted within the period
7-22 provided by the provision requiring the information.
7-23 SECTION 14. Section 802.202(d), Government Code, is amended
7-24 to read as follows:
7-25 (d) The governing body of a public retirement system shall:
7-26 (1) develop and adopt a written investment policy;
7-27 (2) maintain for public review at its main office a
8-1 copy of the policy;
8-2 (3) file a copy of the policy with the State
8-3 Investments <Pension> Review Board not later than the 90th day
8-4 after the date the policy is adopted; and
8-5 (4) file a copy of each change to the policy with the
8-6 State Investments <Pension> Review Board not later than the 90th
8-7 day after the change is adopted.
8-8 SECTION 15. Section 802.3021, Government Code, is amended to
8-9 read as follows:
8-10 Sec. 802.3021. State INVESTMENTS <Pension> Review Board
8-11 Actuary. An actuary who reviews or prepares an actuarial analysis
8-12 for the board must have at least five years of experience as an
8-13 actuary working with one or more public retirement systems and must
8-14 be a fellow of the Society of Actuaries, a member of the American
8-15 Academy of Actuaries, or an enrolled actuary under the Employees
8-16 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
8-17 seq.).
8-18 SECTION 16. Section 810.001(f), Government Code, is amended
8-19 to read as follows:
8-20 (f) Every political entity which establishes or maintains a
8-21 public retirement system covered under this Act shall file all
8-22 reports with the State Investments <Pension> Review Board required
8-23 by Chapter 802. If a political subdivision establishes a retirement
8-24 program that would be a "public retirement system" within the
8-25 meaning ascribed to that term by Section 801.001, but for the fact
8-26 that the program is administered by a life insurance company, the
8-27 subdivision shall notify the State Investments <Pension> Review
9-1 Board of the establishment of the program and the name of the
9-2 administering company.
9-3 SECTION 17. Sections 815.108(c) and (d), Government Code,
9-4 are amended to read as follows:
9-5 (c) A copy of the report required by Subsection (a) must be
9-6 filed with the governor, the lieutenant governor, the speaker of
9-7 the house of representatives, the State Investments <Pension>
9-8 Review Board, the legislative audit committee, and the state
9-9 auditor no later than December 15 of each year.
9-10 (d) A copy of the report required by Subsection (b) must be
9-11 filed with the governor, the lieutenant governor, the speaker of
9-12 the house of representatives, the State Investments <Pension>
9-13 Review Board, the legislative audit committee, and the state
9-14 auditor no later than March 1 of each year.
9-15 SECTION 18. Section 815.110(d), Government Code, is amended
9-16 to read as follows:
9-17 (d) No later than 30 days after the legislative audit
9-18 committee receives an audit report, the committee shall file a copy
9-19 of the report with the retirement system, the governor, the
9-20 lieutenant governor, the speaker of the house of representatives,
9-21 the State Investments <Pension> Review Board, the state auditor,
9-22 and the secretary of state for publication in the Texas Register.
9-23 SECTION 19. Section 815.510(a), Government Code, is amended
9-24 to read as follows:
9-25 (a) The Employees Retirement System of Texas shall submit a
9-26 report not later than the 25th day of the month following the end
9-27 of each fiscal year to the governor, the lieutenant governor, the
10-1 speaker of the house of representatives, the executive director of
10-2 the State Investments <Pension> Review Board, the appropriate
10-3 oversight committees of the house and senate, and the Legislative
10-4 Budget Board. The report shall include the following:
10-5 (1) the current end-of-fiscal-year market value of the
10-6 trust fund;
10-7 (2) the current book value of the trust fund;
10-8 (3) the asset allocations of the trust fund expressed
10-9 in percentages of stocks, fixed income, cash, or other financial
10-10 investments; and
10-11 (4) the investment performance of the trust fund
10-12 utilizing accepted industry measurement standards.
10-13 SECTION 20. Sections 825.108(c) and (d), Government Code,
10-14 are amended to read as follows:
10-15 (c) A copy of the report required by Subsection (a) must be
10-16 filed with the governor, the lieutenant governor, the speaker of
10-17 the house of representatives, the State Investments <Pension>
10-18 Review Board, the legislative audit committee, and the state
10-19 auditor no later than December 15 of each year.
10-20 (d) A copy of the report required by Subsection (b) must be
10-21 filed with the governor, the lieutenant governor, the speaker of
10-22 the house of representatives, the State Investments <Pension>
10-23 Review Board, the legislative audit committee, and the state
10-24 auditor no later than March 1 of each year.
10-25 SECTION 21. Section 825.111(d), Government Code, is amended
10-26 to read as follows:
10-27 (d) No later than 30 days after the legislative audit
11-1 committee receives an audit report, the committee shall file a copy
11-2 of the report with the retirement system, the governor, the
11-3 lieutenant governor, the speaker of the house of representatives,
11-4 the State Investments <Pension> Review Board, the state auditor,
11-5 and the secretary of state for publication in the Texas Register.
11-6 SECTION 22. Sections 12G(d) and (f), Chapter 141, Acts of
11-7 the 63rd Legislature, Regular Session, 1973 (Article 1118x,
11-8 Vernon's Texas Civil Statutes), as added by Section 3, Chapter 138,
11-9 Acts of the 72nd Legislature, Regular Session, 1991, are amended to
11-10 read as follows:
11-11 (d) An authority shall, for each of the authority's
11-12 retirement programs, file all reports with the State Investments
11-13 <Pension> Review Board required by Chapter 802, Government Code.
11-14 (f) If an authority establishes a retirement program that
11-15 would be a "public retirement system" within the meaning ascribed
11-16 to that term by Section 801.001, Government Code, but for the fact
11-17 that the program is administered by a life insurance company, the
11-18 authority shall notify the State Investments <Pension> Review Board
11-19 of the establishment of the program and the name of the
11-20 administering company.
11-21 SECTION 23. Section 12G(d), Chapter 141, Acts of the 63rd
11-22 Legislature, Regular Session, 1973 (Article 1118x, Vernon's Texas
11-23 Civil Statutes), as added by Section 12, Chapter 503, Acts of the
11-24 72nd Legislature, Regular Session, 1991, is amended to read as
11-25 follows:
11-26 (d) The authority shall, for each of the authority's
11-27 retirement programs, file all reports with the State Investments
12-1 <Pension> Review Board required by Chapter 802, Government Code.
12-2 SECTION 24. Section 2, Chapter 817, Acts of the 73rd
12-3 Legislature, Regular Session, 1993 (Article 4413(34e), Vernon's
12-4 Texas Civil Statutes), is amended to read as follows:
12-5 Sec. 2. The manager of each state trust fund shall submit to
12-6 the governor, the lieutenant governor, the speaker of the house of
12-7 representatives, and the executive director of the State
12-8 Investments <Pension> Review Board:
12-9 (1) not later than January 25 of each year, a report
12-10 with the information required by Section 3 of this Act covering the
12-11 last six months of the previous calendar year; and
12-12 (2) not later than June 25 of each year, a report with
12-13 the information required by Section 3 of this Act covering the
12-14 first six months of that calendar year.
12-15 SECTION 25. Section 19(d), Chapter 183, Acts of the 64th
12-16 Legislature, 1975 (Article 6243e.1, Vernon's Texas Civil Statutes),
12-17 is amended to read as follows:
12-18 (d) The board shall file with the State Investments
12-19 <Pension> Review Board a copy of each actuarial study and each
12-20 separate report made as required by law.
12-21 SECTION 26. Section 29, Chapter 432, Acts of the 64th
12-22 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),
12-23 is amended to read as follows:
12-24 Sec. 29. Benefit or allowance adjustments. The pension
12-25 benefit or allowance provided by any section of this Act may be
12-26 increased if:
12-27 (1) the increase is first approved by a qualified
13-1 actuary selected by the board of trustees of the firemen's relief
13-2 and retirement fund; the qualified actuary shall, if an individual,
13-3 be a Fellow of the Society of Actuaries or a Fellow of the
13-4 Conference of Actuaries in Public Practice or a Member of the
13-5 American Academy of Actuaries;
13-6 (2) a majority of the participating members of the
13-7 pension fund vote for the increase by a secret ballot;
13-8 (3) the increase does not deprive a member, without
13-9 his written consent, of a right to receive benefits which have
13-10 already become fully vested and matured in a member; and
13-11 (4) the State Investments <Pension> Review Board
13-12 approves the increase, which approval may not be unreasonably
13-13 withheld.
13-14 SECTION 27. (a) The name of the State Pension Review Board
13-15 is changed to the State Investments Review Board, and the name of
13-16 the State Pension Review Board fund is changed to the State
13-17 Investments Review Board fund. A reference in law to the agency or
13-18 fund by its former name is considered to be a reference to the
13-19 agency or fund under its new name.
13-20 (b) An appropriation for the use and benefit of the State
13-21 Pension Review Board is available for the use and benefit of the
13-22 State Investments Review Board.
13-23 SECTION 28. This Act takes effect September 1, 1995. The
13-24 provisions of Subchapter D, Chapter 801, Government Code, as added
13-25 by this Act, relating to State Investments Review Board monitoring
13-26 of investment practices, apply regardless of whether the
13-27 investments were made before, on, or after that date.
14-1 SECTION 29. The importance of this legislation and the
14-2 crowded condition of the calendars in both houses create an
14-3 emergency and an imperative public necessity that the
14-4 constitutional rule requiring bills to be read on three several
14-5 days in each house be suspended, and this rule is hereby suspended.