By Armbrister S.B. No. 9
74R5029 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the functions and systems and programs administered by
1-3 the Teacher Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 821, Government Code, is
1-6 amended by adding Section 821.007 to read as follows:
1-7 Sec. 821.007. CONTROL OF HOME OFFICE FACILITIES. The
1-8 buildings comprising the home office of the retirement system are
1-9 under the control and custodianship of the retirement system, but
1-10 the retirement system shall:
1-11 (1) comply with space use regulations provided by
1-12 Section 6.021, State Purchasing and General Services Act (Article
1-13 601b, Vernon's Texas Civil Statutes); the General Appropriations
1-14 Act; or other state law; and
1-15 (2) lease to other persons at fair market value all
1-16 significant unused space in the buildings.
1-17 SECTION 2. Section 824.203, Government Code, is amended by
1-18 amending Subsection (a) and adding Subsection (e) to read as
1-19 follows:
1-20 (a) Except as provided by Subsections (c), <and> (d), and
1-21 (e), the standard service retirement annuity is an amount computed
1-22 on the basis of the member's average annual compensation for the
1-23 three years of service, whether or not consecutive, in which the
1-24 member received the highest annual compensation, times two percent
2-1 for each year of service credit in the retirement system.
2-2 (e) The standard service retirement annuity for a person who
2-3 immediately before retirement holds a position as a classroom
2-4 teacher or full-time librarian, or a death benefit annuity based on
2-5 the service of a member who at the time of death held a position as
2-6 a classroom teacher or full-time librarian, may not be less than an
2-7 amount computed on the basis of the minimum monthly salary,
2-8 converted to an annual salary, provided by the Education Code for a
2-9 classroom teacher or full-time librarian, multiplied by two percent
2-10 for each year of service credit in the retirement system.
2-11 SECTION 3. Section 824.304(b), Government Code, is amended
2-12 to read as follows:
2-13 (b) If a member has a total of at least 10 years of service
2-14 credit in the retirement system on the date of disability
2-15 retirement, the retirement system shall pay the person for the
2-16 duration of the disability a disability retirement annuity in an
2-17 amount equal to the greater of:
2-18 (1) a standard service retirement annuity computed
2-19 under Section 824.203 <824.203(a)>; or
2-20 (2) $6.50 a month for each year of service credit on
2-21 the date of retirement.
2-22 SECTION 4. Section 824.402(a), Government Code, is amended
2-23 to read as follows:
2-24 (a) Except as provided by Section 824.401, the designated
2-25 beneficiary of a member who dies during a school year in which the
2-26 member has performed service is eligible to receive at the
2-27 beneficiary's election the greatest of the following amounts:
3-1 (1) an amount equal to twice the member's annual
3-2 compensation for the school year immediately preceding the school
3-3 year in which the member dies, or $60,000, whichever is less;
3-4 (2) an amount equal to twice the member's rate of
3-5 annual compensation for the school year in which the member dies,
3-6 or $60,000, whichever is less;
3-7 (3) 60 monthly payments of a standard service
3-8 retirement annuity, computed as provided by Section 824.203
3-9 <824.203(a)>;
3-10 (4) an optional retirement annuity for the designated
3-11 beneficiary's life in an amount computed as provided by Section
3-12 824.204(c)(1) as if the member had retired on the last day of the
3-13 month immediately preceding the month in which the member dies; or
3-14 (5) an amount equal to the amount of accumulated
3-15 contributions in the member's individual account in the member
3-16 savings account.
3-17 SECTION 5. Section 825.002(b), Government Code, is amended
3-18 to read as follows:
3-19 (b) The governor shall appoint three members of the board to
3-20 hold office for staggered terms, with the term of one trustee
3-21 expiring on August 31 of each odd-numbered year. These <Two of
3-22 those three> members must be persons who have demonstrated
3-23 financial expertise, who have worked in private business or
3-24 industry, and who have broad investment experience, preferably in
3-25 investment of pension funds. One of these members must be
3-26 appointed from a list of nominees submitted by the speaker of the
3-27 house of representatives. None of the members appointed under this
4-1 subsection may be a member or annuitant of the retirement system.
4-2 SECTION 6. Section 825.003, Government Code, is amended to
4-3 read as follows:
4-4 Sec. 825.003. TRUSTEES APPOINTED BY LIEUTENANT GOVERNOR
4-5 <BOARD OF EDUCATION>. The lieutenant governor <State Board of
4-6 Education> shall appoint two members of the board of trustees
4-7 <subject to confirmation by two-thirds of the senate>. These
4-8 members must be persons who are related to a member of the
4-9 retirement system within the third degree by consanguinity or the
4-10 second degree by affinity, who have demonstrated financial
4-11 expertise, who have worked in private business or industry, and who
4-12 have broad investment experience, preferably in investment of
4-13 pension funds. One of these members must be appointed from a list
4-14 of nominees submitted by the speaker of the house of
4-15 representatives.
4-16 SECTION 7. Sections 825.0032(a) and (f), Government Code,
4-17 are amended to read as follows:
4-18 (a) Except as provided by Subsection (b), a person is not
4-19 eligible for appointment to the board if the person or the person's
4-20 spouse:
4-21 (1) is employed by or participates in the management
4-22 of a business entity or other organization receiving funds from the
4-23 retirement system; <or>
4-24 (2) owns or controls, directly or indirectly, more
4-25 than a 10 percent interest in a business entity or other
4-26 organization receiving funds from the retirement system; or
4-27 (3) uses or receives a substantial amount of tangible
5-1 goods, services, or funds from the retirement system, other than
5-2 compensation or reimbursement authorized by law for board
5-3 membership, attendance, or expenses.
5-4 (f) A person may not serve as a trustee or act as the
5-5 general counsel to the board or the retirement system if the person
5-6 is required to register as a lobbyist under Chapter 305 because of
5-7 the person's activities for compensation on behalf of a business or
5-8 an association related to the operation of the board.
5-9 SECTION 8. Subchapter A, Chapter 825, Government Code, is
5-10 amended by adding Section 825.0041 to read as follows:
5-11 Sec. 825.0041. BOARD MEMBER TRAINING. (a) Before a member
5-12 of the board may assume the member's duties and, if applicable,
5-13 before the member may be confirmed by the senate the member must
5-14 complete at least one course of the training program established
5-15 under this section.
5-16 (b) A training program established under this section shall
5-17 provide information to the member regarding:
5-18 (1) the enabling legislation that created the
5-19 retirement system and its policy-making body to which the member is
5-20 appointed to serve;
5-21 (2) the programs operated by the system;
5-22 (3) the role and functions of the system;
5-23 (4) the rules of the system with an emphasis on the
5-24 rules that relate to disciplinary and investigatory authority;
5-25 (5) the current budget for the system;
5-26 (6) the results of the most recent formal audit of the
5-27 system;
6-1 (7) the requirements of the:
6-2 (A) open meetings law, Chapter 551;
6-3 (B) open records law, Chapter 552; and
6-4 (C) administrative procedure law, Chapter 2001;
6-5 (8) the requirements of the conflict of interest laws
6-6 and other laws relating to public officials; and
6-7 (9) any applicable ethics policies adopted by the
6-8 system or the Texas Ethics Commission.
6-9 SECTION 9. Section 825.006, Government Code, is amended to
6-10 read as follows:
6-11 Sec. 825.006. Sunset Provision. The board of trustees of
6-12 the Teacher Retirement System of Texas is subject to review under
6-13 Chapter 325 (Texas Sunset Act), but is not abolished under that
6-14 chapter. The board shall be reviewed during the period in which
6-15 state agencies abolished in 2007 <1995> are reviewed or, if the
6-16 retirement system's operating expenses are not subject to the
6-17 appropriations process on September 1, 1995, the board shall be
6-18 reviewed during the period in which state agencies abolished in
6-19 1997 are reviewed. This section expires September 1, 2007 <1995>.
6-20 SECTION 10. Sections 825.010(a) and (c), Government Code,
6-21 are amended to read as follows:
6-22 (a) It is a ground for removal from the board if a trustee:
6-23 (1) does not have at the time of appointment the
6-24 qualifications required for the trustee's position;
6-25 (2) does not maintain during service on the board the
6-26 qualifications required for the trustee's position;
6-27 (3) violates a prohibition established by Section
7-1 825.002(b) or 825.0032;
7-2 (4) <(2)> cannot because of illness or disability
7-3 discharge the trustee's <person's> duties for a substantial part of
7-4 the term for which the trustee <person> is appointed <because of
7-5 illness or disability>; or
7-6 (5) <(3)> is absent from more than half of the
7-7 regularly scheduled board meetings that the person is eligible to
7-8 attend during a calendar year unless the absence is excused by
7-9 majority vote of the board.
7-10 (c) If the executive director has knowledge that a potential
7-11 ground for removal exists, the executive director shall notify the
7-12 presiding officer <chairman> of the board of the ground. The
7-13 presiding officer <chairman> shall then notify the appropriate
7-14 appointing officer and the attorney general <or body> that a
7-15 potential ground for removal exists. If the potential ground for
7-16 removal involves the presiding officer, the executive director
7-17 shall notify the next highest officer of the board, who shall
7-18 notify the appropriate appointing officer and the attorney general
7-19 that a potential ground for removal exists.
7-20 SECTION 11. Section 825.108, Government Code, is amended by
7-21 adding Subsections (e) and (f) to read as follows:
7-22 (e) The board shall prepare annually a complete and detailed
7-23 written report accounting for all funds received and disbursed by
7-24 the retirement system during the preceding fiscal year. The annual
7-25 report must meet the reporting requirements applicable to financial
7-26 reporting provided in the General Appropriations Act.
7-27 (f) The board shall prepare biennially a complete and
8-1 detailed written report describing and explaining any use of
8-2 appropriated amounts, retirement system assets, or other resources
8-3 for governmental relations, member counseling, or official
8-4 publications. The report must be filed with the committees of the
8-5 senate and the house of representatives having jurisdiction over
8-6 appropriations, with the committees of the senate and the house of
8-7 representatives having principal jurisdiction over legislation
8-8 governing the retirement system, and with the Legislative Budget
8-9 Board at the time the retirement system submits its budget request
8-10 for the next state fiscal biennium.
8-11 SECTION 12. Sections 825.113(a), (b), and (f), Government
8-12 Code, are amended to read as follows:
8-13 (a) The executive director or the executive director's
8-14 designee <board> shall provide to its trustees and employees, as
8-15 often as necessary, information regarding their qualification for
8-16 office or employment under this chapter and their responsibilities
8-17 under applicable laws relating to standards of conduct for state
8-18 officers or employees.
8-19 (b) The board shall develop and implement policies that
8-20 clearly separate the policy-making <define the respective>
8-21 responsibilities of the board and the management responsibilities
8-22 of the executive director and the staff of the retirement system.
8-23 (f) The retirement system shall comply with federal and
8-24 state laws related to program and facility accessibility. The
8-25 executive director <board> shall prepare and maintain a written
8-26 plan that describes how a person who does not speak English can be
8-27 provided reasonable access to the board's programs. The board
9-1 shall also comply with federal and state laws for program and
9-2 facility accessibility.
9-3 SECTION 13. Subchapter B, Chapter 825, Government Code, is
9-4 amended by adding Section 825.115 to read as follows:
9-5 Sec. 825.115. APPLICABILITY OF CERTAIN LAWS. The board is
9-6 subject to the open meetings law, Chapter 551, and the
9-7 administrative procedure law, Chapter 2001.
9-8 SECTION 14. Section 825.201, Government Code, is amended to
9-9 read as follows:
9-10 Sec. 825.201. PRESIDING OFFICER <Chairman>. The governor
9-11 shall designate a member of the board as the presiding officer of
9-12 the board to serve in that capacity at the pleasure of the
9-13 governor. <The board of trustees shall elect a chairman. The
9-14 chairman must be a member of the board.>
9-15 SECTION 15. Section 825.206, Government Code, is amended by
9-16 adding Subsections (d) and (e) to read as follows:
9-17 (d) Each actuarial experience study must include a review of
9-18 all actuarial assumptions in light of relevant experience,
9-19 important trends, and economic projections. Interrelated actuarial
9-20 assumptions shall be reviewed carefully to ensure that adjustments
9-21 in one assumption are reflected appropriately in related
9-22 assumptions.
9-23 (e) Each actuarial valuation must include a detailed
9-24 analysis comparing experience factors to their actuarial
9-25 assumptions. The analysis shall be developed and reported to
9-26 identify significant variations in actual experience from what was
9-27 assumed. A material variation should be the focus of an actuarial
10-1 experience study.
10-2 SECTION 16. Sections 825.213(a), (b), and (c), Government
10-3 Code, are amended to read as follows:
10-4 (a) The executive director or the executive director's
10-5 designee shall develop an intra-agency career ladder program that
10-6 addresses opportunities for mobility and advancement for employees
10-7 within the retirement system. The program shall require
10-8 intra-agency posting of all <nonentry level> positions concurrently
10-9 with any public posting.
10-10 (b) The executive director or the executive director's
10-11 designee shall develop a system of annual performance evaluations
10-12 that are based on documented employee performance. All merit pay
10-13 for system employees must be based on the system established under
10-14 this subsection.
10-15 (c) The executive director or the executive director's
10-16 designee shall prepare and maintain a written policy statement to
10-17 assure implementation of a program of equal employment opportunity
10-18 under which all personnel transactions are made without regard to
10-19 race, color, disability, sex, religion, age, or national origin.
10-20 The policy statement must include:
10-21 (1) personnel policies, including policies relating to
10-22 recruitment, evaluation, selection, appointment, training, and
10-23 promotion of personnel that are in compliance with requirements of
10-24 Chapter 21, Labor Code <the Commission on Human Rights Act (Article
10-25 5221k, Vernon's Texas Civil Statutes)>;
10-26 (2) a comprehensive analysis of the retirement
10-27 system's work force that meets federal and state guidelines;
11-1 (3) procedures by which a determination can be made
11-2 about the extent of <significant> underuse in the retirement
11-3 system's work force of all persons for whom federal or state
11-4 guidelines encourage a more equitable balance; and
11-5 (4) reasonable methods to appropriately address those
11-6 areas of <significant> underuse.
11-7 SECTION 17. Section 825.308, Government Code, is amended to
11-8 read as follows:
11-9 Sec. 825.308. State Contribution Account. The retirement
11-10 system shall deposit in the state contribution account:
11-11 (1) all state contributions to the retirement system
11-12 required by Section 825.404;
11-13 (2) amounts from the interest account as provided by
11-14 Section 825.313(b)(5);
11-15 (3) retirement annuities waived or forfeited in
11-16 accordance with Section 824.601 or 824.004;
11-17 (4) fees collected under Section 825.403(h);
11-18 (5) fees and interest for reinstatement of service
11-19 credit or establishment of membership service credit as provided by
11-20 Section 823.202, 823.501, or 823.502;
11-21 (6) the portion of a deposit required by Section
11-22 823.302 to establish military service credit that represents a fee;
11-23 <and>
11-24 (7) the portion of a deposit required by Section
11-25 823.401(e) to establish out-of-state service credit that represents
11-26 a fee; and
11-27 (8) all membership fees required by this subtitle,
12-1 including the fees under Section 823.3021(f)(2).
12-2 SECTION 18. Sections 825.312, 825.313, and 825.314,
12-3 Government Code, are amended to read as follows:
12-4 Sec. 825.312. Expense Account. (a) The retirement system
12-5 shall deposit in the expense account:
12-6 (1) money transferred from the interest account or the
12-7 state contribution account under Section 825.313(c) <all membership
12-8 fees required by this subtitle, including the fees under Section
12-9 823.3021(f)(2);>
12-10 <(2) money required to be deposited in the account by
12-11 Section 825.313(b)(3) or 825.313(c)>; and
12-12 (2) <(3)> money received from the Texas Public School
12-13 <Retired> Employees Group Insurance Program for service performed
12-14 for the program by the retirement system.
12-15 (b) The retirement system shall pay from the account all
12-16 administrative expenses of <administration and maintenance of> the
12-17 retirement system that exceed the amounts appropriated under
12-18 Section 825.404(d) and that are required to perform the fiduciary
12-19 duties of the board.
12-20 Sec. 825.313. Transfers From Interest or State Contribution
12-21 Account. (a) Annually, the retirement system shall transfer from
12-22 the interest account to the state contribution account amounts
12-23 accumulated under Section 825.311(2).
12-24 (b) On August 31 of each year, the retirement system shall
12-25 make the following transfers from the interest account:
12-26 (1) to the member savings account, an amount computed
12-27 using the rate prescribed by Section 825.307(b);
13-1 (2) to the retired reserve account, an amount equal to
13-2 4 3/4 percent of the average balance of the retired reserve
13-3 account for that fiscal year or, if the transfer is authorized by
13-4 resolution of the board, an amount computed at a greater rate if
13-5 the actuary recommends the greater rate to adequately fund the
13-6 retired reserve account;
13-7 (3) <to the expense account, an amount designated by
13-8 the board of trustees in accordance with Subsection (c);>
13-9 <(4)> to the benefit increase reserve account, an
13-10 amount representing interest on the average annual balance of the
13-11 benefit increase reserve account at a rate set by the board of
13-12 trustees in accordance with Section 825.106; and
13-13 (4) <(5)> to the state contribution account, the
13-14 amount remaining in the interest account after the other transfers
13-15 required or authorized by this section are made.
13-16 (c) The board of trustees, by resolution recorded in its
13-17 minutes, may <shall> transfer from the interest account, or from
13-18 the state contribution account in an amount that does not exceed
13-19 the sum of membership fees deposited in the account the preceding
13-20 fiscal year, to the expense account an amount necessary to cover
13-21 the expenses of the retirement system for the fiscal year that
13-22 exceed the amount of operating expenses appropriated under Section
13-23 825.404(d) and that are required to perform the fiduciary duties of
13-24 the board, including the expense of servicing mortgages insured by
13-25 the Federal Housing Administration under the National Housing Act
13-26 (12 U.S.C. Section 1701 et seq.).
13-27 Sec. 825.314. Use And Reporting of State Contributions and
14-1 Other Appropriations and Assets. (a) The retirement system shall
14-2 use all assets contributed by the state, other than operating
14-3 expenses appropriated under Section 825.404(d), to pay benefits
14-4 authorized by this subtitle.
14-5 (b) The staff of the retirement system shall report to the
14-6 board at each board meeting the amounts and uses since the
14-7 preceding board meeting of any money expended by the system from
14-8 amounts transferred under Section 825.313(c) and include an
14-9 explanation of why the amounts were needed to perform the fiduciary
14-10 duties of the board. The retirement system annually shall prepare
14-11 and issue to each contributing member and annuitant and to the
14-12 governor, lieutenant governor, and speaker of the house of
14-13 representatives a summary of the reports presented during the
14-14 preceding year to the board.
14-15 SECTION 19. Subchapter D, Chapter 825, Government Code, is
14-16 amended by adding Section 825.315 to read as follows:
14-17 Sec. 825.315. PROHIBITED USE OF ASSETS AND APPROPRIATIONS.
14-18 A trustee or employee of the retirement system may not use an asset
14-19 of the retirement system, including facilities or utilities, or
14-20 amounts appropriated for operating expenses under Section
14-21 825.404(d), to advocate or influence legislative action or
14-22 inaction.
14-23 SECTION 20. Section 825.401(d), Government Code, is amended
14-24 to read as follows:
14-25 (d) The retirement system shall deposit all membership fees
14-26 in the state contribution <expense> account.
14-27 SECTION 21. The heading of Section 825.404, Government Code,
15-1 is amended to read as follows:
15-2 Sec. 825.404. COLLECTION OF STATE CONTRIBUTIONS AND
15-3 APPROPRIATED OPERATING EXPENSES.
15-4 SECTION 22. Section 825.404, Government Code, is amended by
15-5 redesignating and amending Subsection (d) as Subsection (e) and
15-6 adding a new Subsection (d) to read as follows:
15-7 (d) As a separate item of appropriation, the legislature
15-8 shall appropriate from the general revenue fund money to be used to
15-9 pay operating expenses of the retirement system for each fiscal
15-10 year.
15-11 (e) <(d)> All money appropriated by the state to the
15-12 retirement system shall be paid to the state contribution account
15-13 in equal monthly installments as provided by Section 403.093(c),
15-14 Government Code, except money appropriated under Subsection (d),
15-15 which remains in the general revenue fund until expenses are
15-16 approved under Chapter 2103.
15-17 SECTION 23. Section 825.511, Government Code, is amended to
15-18 read as follows:
15-19 Sec. 825.511. Complaint Files. (a) The retirement system
15-20 shall keep an information file about each complaint filed with the
15-21 system that the system has authority to resolve. The system shall
15-22 provide to the person filing the complaint and the persons or
15-23 entities complained about the system's policies and procedures
15-24 pertaining to complaint investigation and resolution. The system,
15-25 at least quarterly and until final disposition of the complaint,
15-26 shall notify the person filing the complaint and the persons or
15-27 entities complained about of the status of the complaint unless the
16-1 notice would jeopardize an undercover investigation.
16-2 (b) The retirement system shall keep information about each
16-3 complaint filed with the system. The information shall include:
16-4 (1) the date the complaint is received;
16-5 (2) the name of the complainant;
16-6 (3) the subject matter of the complaint;
16-7 (4) a record of all persons contacted in relation to
16-8 the complaint;
16-9 (5) a summary of the results of the review or
16-10 investigation of the complaint; and
16-11 (6) for complaints for which the system took no
16-12 action, an explanation of the reason the complaint was closed
16-13 without action. <If a written complaint is filed with the
16-14 retirement system that the system has authority to resolve, the
16-15 system, at least quarterly and until final disposition of the
16-16 complaint, shall notify the parties to the complaint of the status
16-17 of the complaint unless the notice would jeopardize an undercover
16-18 investigation.>
16-19 SECTION 24. Subchapter F, Chapter 825, Government Code, is
16-20 amended by adding Sections 825.512, 825.513, 825.514, and 825.515
16-21 to read as follows:
16-22 Sec. 825.512. INVESTMENT PERFORMANCE AUDIT. (a) The
16-23 legislative audit committee biennially shall select an independent
16-24 firm with substantial experience in evaluating institutional
16-25 investment practices and performance to evaluate the retirement
16-26 system's investment practices and performance.
16-27 (b) The legislative audit committee shall determine specific
17-1 areas to be evaluated, but the first evaluation must be a
17-2 comprehensive analysis of the retirement system's investment
17-3 program.
17-4 (c) A report of an evaluation under this section shall be
17-5 filed with the legislative audit committee not later than December
17-6 1 of each even-numbered year.
17-7 (d) The retirement system shall pay the costs of each
17-8 evaluation under this section.
17-9 (e) The retirement system shall submit an annual investment
17-10 performance report not later than the 25th day of the month
17-11 following each fiscal year to the governor, the lieutenant
17-12 governor, the speaker of the house of representatives, the
17-13 executive director of the State Pension Review Board, the
17-14 legislative audit committee, the committees of the senate and the
17-15 house of representatives having jurisdiction over appropriations,
17-16 the committees of the senate and the house of representatives
17-17 having principal jurisdiction over legislation governing the
17-18 retirement system, and the Legislative Budget Board. The report
17-19 shall include a listing of all commissions and fees paid by the
17-20 system during the reporting period for the sale, purchase, or
17-21 management of system assets. The report shall be in a form
17-22 recommended by the evaluating firm.
17-23 Sec. 825.513. INFORMATION FOR PUBLICATION. The retirement
17-24 system shall verify with the State Pension Review Board the
17-25 accuracy of information about the effects of proposed legislation
17-26 on benefits and the trust fund before including the information in
17-27 an official publication of the retirement system.
18-1 Sec. 825.514. HISTORICALLY UNDERUTILIZED BUSINESSES. The
18-2 retirement system is subject to the provisions, including Sections
18-3 1.03 and 3.10, of the State Purchasing and General Services Act
18-4 (Article 601b, Vernon's Texas Civil Statutes), that relate to
18-5 historically underutilized businesses.
18-6 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) The
18-7 retirement system shall compile and maintain records identifying
18-8 members and the types of positions they have held as members, the
18-9 length of service in each type of position, and whether service in
18-10 each type of position is or was as a full-time employee. The
18-11 retirement system by rule may require employers to certify
18-12 information compiled under this section.
18-13 (b) Information contained in records compiled and maintained
18-14 under this section is confidential within the limits prescribed by
18-15 Section 825.507.
18-16 SECTION 25. Section 1, Article 3.50-4, Insurance Code, is
18-17 amended to read as follows:
18-18 Sec. 1. Short Title. This article may be cited as the Texas
18-19 Public School <Retired> Employees Group Insurance Act.
18-20 SECTION 26. Sections 2(3) and (4), Article 3.50-4, Insurance
18-21 Code, are amended to read as follows:
18-22 (3) "Dependent" means:
18-23 (A) a spouse of a retiree or active member;
18-24 (B) a retiree's, an active member's, or a
18-25 deceased active member's unmarried child who is younger than 25
18-26 years of age including:
18-27 (i) an adopted child;
19-1 (ii) a foster child, a stepchild, or other
19-2 child who is in a regular parent-child relationship; and
19-3 (iii) a recognized natural child; and
19-4 (C) a retiree's or active member's recognized
19-5 natural child, adopted child, foster child, stepchild, or other
19-6 child who is in a regular parent-child relationship and who lives
19-7 with or whose care is provided by the retiree, active member, or
19-8 surviving spouse on a regular basis, regardless of the child's age,
19-9 if the child is mentally retarded or physically incapacitated to
19-10 such an extent as to be dependent on the retiree, active member, or
19-11 surviving spouse for care or support, as determined by the trustee,
19-12 or in the case of a deceased active member, a recognized natural
19-13 child, adopted child, foster child, stepchild, or other child who
19-14 was in a regular parent-child relationship and who lived with or
19-15 whose care was provided by the deceased active member on a regular
19-16 basis, regardless of the child's age, if the child is mentally
19-17 retarded or physically incapacitated to such an extent as to have
19-18 been dependent on the deceased active member or surviving spouse
19-19 for care or support, as determined by the trustee.
19-20 (4) "Fund" means the Texas public school <retired>
19-21 employees group insurance fund.
19-22 SECTION 27. Section 3(a), Article 3.50-4, Insurance Code, is
19-23 amended to read as follows:
19-24 (a) The Texas Public School <Retired> Employees Group
19-25 Insurance Program is established to provide for an insurance plan
19-26 or plans under this article.
19-27 SECTION 28. Section 5(a), Article 3.50-4, Insurance Code, is
20-1 amended to read as follows:
20-2 (a) The trustee may adopt rules, plans, procedures, and
20-3 orders reasonably necessary to implement this article, including:
20-4 (1) establishment of minimum benefit and financing
20-5 standards for group insurance coverage to be provided to all
20-6 retirees, active employees, dependents, surviving spouses, and
20-7 surviving dependent children;
20-8 (2) establishment of basic and optional group coverage
20-9 to be provided to retirees, active employees, dependents, surviving
20-10 spouses, and surviving dependent children;
20-11 (3) establishment of the procedures for contributions
20-12 and deductions;
20-13 (4) establishment of periods for enrollment and
20-14 selection of optional coverage and procedures for enrolling and
20-15 exercising options under the plan;
20-16 (5) determination of methods and procedures for claims
20-17 administration;
20-18 (6) study of the operation of all insurance coverage
20-19 provided under this article;
20-20 (7) administration of the fund;
20-21 (8) adoption of a timetable for the development of
20-22 minimum benefit and financial standards for group insurance
20-23 coverage, establishment of group insurance plans, and the taking of
20-24 bids for and awarding of contracts for insurance plans; and
20-25 (9) contracting with an independent and experienced
20-26 group insurance consultant or actuary, who does not receive
20-27 insurance commissions from any insurance company, for advice and
21-1 counsel in implementing and administering this program.
21-2 SECTION 29. Article 3.50-4, Insurance Code, is amended by
21-3 adding Section 7A to read as follows:
21-4 Sec. 7A. PARTICIPATION BY ACTIVE EMPLOYEES. (a) A public
21-5 school district may elect to participate in the program provided
21-6 under this article. A district that elects to participate must
21-7 accept the schedule of costs adopted by the trustee and may not
21-8 offer an alternative health benefit plan to its active employees
21-9 during the period of its participation in the program.
21-10 (b) The trustee by rule shall provide:
21-11 (1) eligibility requirements for participation by a
21-12 school district, which may include criteria based on size;
21-13 (2) restrictions on the ability of a school district
21-14 to begin or discontinue participation, which may include a minimum
21-15 period of participation and limited periods for elections to begin
21-16 or discontinue participation;
21-17 (3) administrative fees to be paid by participating
21-18 school districts to cover the trustee's administrative costs in
21-19 extending the program to active employees; and
21-20 (4) requirements to minimize the effects of adverse
21-21 selection on the program.
21-22 (c) The trustee shall provide optional group coverages for
21-23 active employees participating in the program. The coverages may
21-24 be combined with or similar to, but separate from, coverages
21-25 provided to retirees. The sum of premiums and administrative fees
21-26 received from participating school districts and active employees
21-27 must cover all expenses of school district employee participation
22-1 in the program.
22-2 (d) Participation by an active employee of a participating
22-3 school district is optional with the employee. A school district
22-4 may not offer a financial incentive to an active employee for
22-5 declining to participate in the program. An active employee is
22-6 entitled to obtain coverage for dependents in the same manner as a
22-7 participating retiree.
22-8 (e) Each participating school district shall contribute for
22-9 each district employee covered by the program an amount equal to
22-10 the cost for the employee only of the plans of group coverages
22-11 authorized by the trustee for active employees, except that the
22-12 school district's contribution may not exceed the amount
22-13 contributed for each state employee by the state under the Texas
22-14 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
22-15 Vernon's Texas Insurance Code).
22-16 (f) Each employee covered by the program shall pay that
22-17 portion of the cost of coverage selected by the employee that
22-18 exceeds the amount of employer contributions.
22-19 (g) The trustee shall deposit in the fund all fees collected
22-20 under Section 44(d), Chapter 812, Acts of the 73rd Legislature,
22-21 1993, except that portion used to conduct the survey required by
22-22 Section 44. The trustee shall continue to collect the fee through
22-23 the 1996-97 school year, after which time the fee expires.
22-24 (h) The state may make contributions to the fund in addition
22-25 to those required by Section 16(b) of this article for the purpose
22-26 of assisting in the expansion of the program to active employees.
22-27 (i) The trustee shall begin enrollment in the program for
23-1 active employees to be effective beginning with the 1996-97 school
23-2 year.
23-3 SECTION 30. Section 9, Article 3.50-4, Insurance Code, is
23-4 amended to read as follows:
23-5 Sec. 9. Benefit Certificates. At such times, or upon such
23-6 events, as designated by the trustee, each insurance carrier shall
23-7 issue to each retiree, active employee, surviving spouse, or
23-8 surviving dependent child insured under this article a certificate
23-9 of insurance that:
23-10 (1) states the benefits to which the person <retiree,
23-11 surviving spouse, or surviving dependent child> is entitled;
23-12 (2) states to whom the benefits are payable;
23-13 (3) states to whom the claims must be submitted; and
23-14 (4) summarizes the provisions of the policy
23-15 principally affecting the person <retiree, surviving spouse, or
23-16 surviving dependent child>.
23-17 SECTION 31. Section 10(a), Article 3.50-4, Insurance Code,
23-18 is amended to read as follows:
23-19 (a) Not later than the 180th day after the end of each state
23-20 fiscal year, the trustee shall make a written report to the State
23-21 Board of Insurance concerning the insurance coverages provided and
23-22 the benefits and services being received by persons <retirees,
23-23 surviving spouses, dependents, and surviving dependent children>
23-24 insured under this article.
23-25 SECTION 32. Sections 12 and 13, Article 3.50-4, Insurance
23-26 Code, are amended to read as follows:
23-27 Sec. 12. Death Claims: Beneficiaries. The amount of group
24-1 life insurance and group accidental death and dismemberment
24-2 insurance covering a retiree, active employee, surviving spouse,
24-3 dependent, or surviving dependent child at the date of death shall
24-4 be paid, on the establishment of a valid claim, only:
24-5 (1) to the beneficiary or beneficiaries designated by
24-6 the person <retiree, surviving spouse, dependent, or surviving
24-7 dependent child> in a signed and witnessed written document
24-8 received before death in the trustee's office; or
24-9 (2) if no beneficiary is properly designated or in
24-10 existence, to persons in accordance with the trustee's death
24-11 benefit provisions in Subsection (b), Section 824.103, Government
24-12 Code.
24-13 Sec. 13. Automatic Coverage. A retiree or active employee
24-14 who applies during an enrollment period may not be denied any of
24-15 the group insurance basic coverage provided under this article
24-16 unless the person <retiree> has been found under Section 18A of
24-17 this article to have defrauded or attempted to defraud the Texas
24-18 Public School <Retired> Employees Group Insurance Program.
24-19 SECTION 33. The heading of Section 15, Article 3.50-4,
24-20 Insurance Code, is amended to read as follows:
24-21 Sec. 15. <RETIRED> SCHOOL EMPLOYEES GROUP INSURANCE FUND.
24-22 SECTION 34. Section 15(a), Article 3.50-4, Insurance Code,
24-23 is amended to read as follows:
24-24 (a) The <retired> school employees group insurance fund is
24-25 created. The State Treasurer is the custodian of the fund, and the
24-26 trustee shall administer the fund. All contributions from active
24-27 employees, retirees, and the state, contributions for optional
25-1 coverages, investment income, appropriations for implementation of
25-2 this program, and other money required or authorized to be paid
25-3 into the fund shall be paid into the fund. From the fund shall be
25-4 paid, without state fiscal year limitation, the appropriate
25-5 premiums to the carrier or carriers providing group coverage under
25-6 the plan or plans under this article, claims for benefits under the
25-7 group coverage, and the amounts expended by the trustee for
25-8 administration of the program. The appropriate portion of the
25-9 contributions to the fund to provide for incurred but unreported
25-10 claim reserves and contingency reserves, as determined by the
25-11 trustee, shall be retained in the fund.
25-12 SECTION 35. Sections 18A(a), (b), (d), and (f), Article
25-13 3.50-4, Insurance Code, are amended to read as follows:
25-14 (a) After notice and hearing as provided by this section,
25-15 the trustee may expel from participation in the Texas Public School
25-16 <Retired> Employees Group Insurance Program any retiree, active
25-17 employee, surviving spouse, dependent, or surviving dependent child
25-18 who submits a fraudulent claim under, or has defrauded or attempted
25-19 to defraud, any health benefits plan offered under the program.
25-20 (b) On its motion or on the receipt of a complaint, the
25-21 trustee may call and hold a hearing to determine whether a person
25-22 <retiree, surviving spouse, dependent, or surviving dependent
25-23 child> has submitted a fraudulent claim under, or has defrauded or
25-24 attempted to defraud, any health benefits plan offered under the
25-25 Texas Public School <Retired> Employees Group Insurance Program.
25-26 (d) If the trustee, at the conclusion of the hearing, issues
25-27 a decision that finds that the accused <retiree, surviving spouse,
26-1 dependent, or surviving dependent child> submitted a fraudulent
26-2 claim or has defrauded or attempted to defraud any health benefits
26-3 plan offered under the Texas Public School <Retired> Employees
26-4 Group Insurance Program, the trustee shall expel the person
26-5 <retiree, surviving spouse, dependent, or surviving dependent
26-6 child> from participation in the program.
26-7 (f) A person <retiree, surviving spouse, dependent, or
26-8 surviving dependent child> expelled from the Texas Public School
26-9 <Retired> Employees Group Insurance Program may not be insured by
26-10 any health insurance plan offered by the program for a period, to
26-11 be determined by the trustee, of up to five years from the date the
26-12 expulsion takes effect.
26-13 SECTION 36. Section 18B(a), Article 3.50-4, Insurance Code,
26-14 is amended to read as follows:
26-15 (a) Section 825.507, Government Code <35.507, Title 110B,
26-16 Revised Statutes>, concerning the confidentiality of information in
26-17 records that are in the custody of the Teacher Retirement System of
26-18 Texas, applies to information in records that are in the custody of
26-19 the retirement system regarding retirees, active employees,
26-20 annuitants, or beneficiaries under the Texas Public School
26-21 <Retired> Employees Group Insurance Program.
26-22 SECTION 37. Sections 18C(c), (d), and (i), Article 3.50-4,
26-23 Insurance Code, are amended to read as follows:
26-24 (c) The trustee, the Texas public school <retired> employees
26-25 group insurance program, the <retired> school employees group
26-26 insurance fund, and the board of trustees, officers, advisory
26-27 committee members, and employees of the trustee are not liable for
27-1 damages arising from the acts or omissions of health care providers
27-2 who are participating health care providers in the coordinated care
27-3 network established by the trustee. Those health care providers
27-4 are independent contractors and are responsible for their own acts
27-5 and omissions.
27-6 (d) The trustee, the Texas public school <retired> employees
27-7 group insurance program, the <retired> school employees group
27-8 insurance fund, or a member of a credentialing committee, or the
27-9 board of trustees, officers, advisory committee members, or
27-10 employees of the trustee are not liable for damages arising from
27-11 any act, statement, determination, recommendation made, or act
27-12 reported, without malice, in the course of the evaluation of the
27-13 qualifications of health care providers or of the patient care
27-14 rendered by those providers.
27-15 (i) A credentialing committee, a person participating in a
27-16 credentialing review, a health care provider, the trustee, the
27-17 Texas public school <retired> employees group insurance program, or
27-18 the board of trustees, officers, advisory committee members, or
27-19 employees of the trustee that are named as defendants in any civil
27-20 action filed as a result of participation in the credentialing
27-21 process may use otherwise confidential information obtained for
27-22 legitimate internal business and professional purposes, including
27-23 use in their own defense. Use of information under this subsection
27-24 does not constitute a waiver of the confidential and privileged
27-25 nature of the information.
27-26 SECTION 38. (a) Monthly payments of a death or retirement
27-27 benefit annuity by the Teacher Retirement System of Texas are
28-1 increased beginning with the payment due at the end of September
28-2 1995.
28-3 (b) Except as provided by Subsection (c) of this section,
28-4 the amount of the monthly increase is computed by multiplying the
28-5 previous monthly benefit by a percentage determined in accordance
28-6 with the following table:
28-7 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
28-8 Before September 1, 1973 11%
28-9 On or after September 1, 1973, but before September 1, 1974 13%
28-10 On or after September 1, 1974, but before September 1, 1975 11%
28-11 On or after September 1, 1975, but before September 1, 1976 10%
28-12 On or after September 1, 1976, but before September 1, 1977 12%
28-13 On or after September 1, 1977, but before September 1, 1978 11%
28-14 On or after September 1, 1978, but before September 1, 1979 10%
28-15 On or after September 1, 1979, but before September 1, 1980 9%
28-16 On or after September 1, 1980, but before September 1, 1981 7%
28-17 On or after September 1, 1981, but before September 1, 1987 6%
28-18 On or after September 1, 1987, but before September 1, 1989 5%
28-19 On or after September 1, 1989, but before September 1, 1990 4%
28-20 On or after September 1, 1990, but before September 1, 1993 2%
28-21 (c) An annuitant is entitled to the greater of:
28-22 (1) the monthly benefit annuity to which the annuitant
28-23 is entitled, including the increase computed in accordance with
28-24 Subsection (b) of this section; or
28-25 (2) the monthly benefit annuity option selected at the
28-26 time of retirement or death:
28-27 (A) recomputed on the basis of the minimum
29-1 monthly salary, converted to an annual salary, provided by the
29-2 Education Code for a classroom teacher or full-time librarian,
29-3 multiplied by two percent for each year of service credit in the
29-4 retirement system;
29-5 (B) actuarially reduced, if applicable, for
29-6 early retirement; and
29-7 (C) excluding the increase provided by
29-8 Subsection (b) of this section.
29-9 SECTION 39. The changes in the qualifications and methods of
29-10 appointment of members of the Board of Trustees of the Teacher
29-11 Retirement System of Texas made by this Act apply only to members
29-12 appointed for terms that begin on or after the effective date of
29-13 this section. In implementing the changes, the governor shall
29-14 appoint a member of the board of trustees from a list of nominees
29-15 submitted by the speaker of the house of representatives to a term
29-16 expiring August 31, 2001, and the lieutenant governor shall appoint
29-17 a member of the board without the necessity of consultation with
29-18 the speaker to a term expiring August 31, 2001.
29-19 SECTION 40. The Teacher Retirement System of Texas shall
29-20 develop an initial space allocation plan as defined in rules of the
29-21 General Services Commission and submit the plan to the commission
29-22 for approval not later than March 1, 1996. The retirement system
29-23 shall implement an approved plan not later than September 1, 1996.
29-24 SECTION 41. This Act takes effect September 1, 1995, except
29-25 Section 39 and this section, which take effect August 31, 1995.
29-26 SECTION 42. The importance of this legislation and the
29-27 crowded condition of the calendars in both houses create an
30-1 emergency and an imperative public necessity that the
30-2 constitutional rule requiring bills to be read on three several
30-3 days in each house be suspended, and this rule is hereby suspended.