1-1 By: Armbrister S.B. No. 9
1-2 (In the Senate - Filed February 7, 1995; February 8, 1995,
1-3 read first time and referred to Committee on State Affairs;
1-4 March 6, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 12, Nays 0; March 6, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 9 By: Armbrister
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the functions and systems and programs administered by
1-11 the Teacher Retirement System of Texas.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subchapter A, Chapter 821, Government Code, is
1-14 amended by adding Section 821.007 to read as follows:
1-15 Sec. 821.007. CONTROL OF HOME OFFICE FACILITIES. The
1-16 buildings comprising the home office of the retirement system are
1-17 under the control and custodianship of the retirement system, but
1-18 the retirement system shall:
1-19 (1) comply with space use regulations provided by
1-20 Section 6.021, State Purchasing and General Services Act (Article
1-21 601b, Vernon's Texas Civil Statutes); the General Appropriations
1-22 Act; or other state law; and
1-23 (2) lease to other persons at fair market value all
1-24 significant unused space in the buildings.
1-25 SECTION 2. Subchapter A, Chapter 821, Government Code, is
1-26 amended by adding Section 821.008 to read as follows:
1-27 Sec. 821.008. PURPOSE OF RETIREMENT SYSTEM. The purpose of
1-28 the retirement system is to invest and protect funds of the
1-29 retirement system and to deliver the benefits provided by statute,
1-30 not to advocate or influence legislative action or inaction or to
1-31 advocate higher benefits.
1-32 SECTION 3. Section 824.203, Government Code, is amended by
1-33 amending Subsection (a) and adding Subsection (e) to read as
1-34 follows:
1-35 (a) Except as provided by Subsections (c), <and> (d), and
1-36 (e), the standard service retirement annuity is an amount computed
1-37 on the basis of the member's average annual compensation for the
1-38 three years of service, whether or not consecutive, in which the
1-39 member received the highest annual compensation, times two percent
1-40 for each year of service credit in the retirement system.
1-41 (e) The annual standard service retirement annuity for a
1-42 person who immediately before retirement holds a position as a
1-43 classroom teacher or full-time librarian, or the annual death
1-44 benefit annuity based on the service of a member who at the time of
1-45 death held a position as a classroom teacher or full-time
1-46 librarian, may not be less than an amount computed on the basis of
1-47 the minimum annual salary provided by the Education Code for a
1-48 classroom teacher or full-time librarian, multiplied by two percent
1-49 for each year of service credit in the retirement system.
1-50 SECTION 4. Subchapter C, Chapter 824, Government Code, is
1-51 amended by adding Section 824.2031 to read as follows:
1-52 Sec. 824.2031. BENEFIT IMPROVEMENTS. (a) Each regular
1-53 legislative session, the legislature shall determine whether the
1-54 performance of the retirement system trust fund makes the fund
1-55 capable of supporting improvements in the plan of benefits.
1-56 (b) A determination under this section shall be founded on
1-57 the information in the most recent report of an investment
1-58 performance audit conducted under Section 825.512 and the
1-59 application of that information to:
1-60 (1) the present amortization period for liabilities of
1-61 the retirement system;
1-62 (2) the rate of return on retirement system
1-63 investments over and above the rate of inflation;
1-64 (3) economic projections of market conditions and
1-65 future investment rates of return as reflected in the comptroller's
1-66 most recent economic forecast and revenue estimate;
1-67 (4) the costs, including changes in the amortization
1-68 period for liabilities of the retirement system, of providing
2-1 cost-of-living or other increases in benefits to current
2-2 annuitants; and
2-3 (5) an evaluation of the diversity of retirement
2-4 system investments and whether the portfolio provides low-risk,
2-5 long-term growth.
2-6 SECTION 5. Subsection (e), Section 824.204, Government Code,
2-7 is amended to read as follows:
2-8 (e) The increase in the annuity under Subsection (d)<:>
2-9 <(1)> begins with the payment due at the end of
2-10 September, 1995, or the first monthly payment made to the retiree
2-11 following the date of death of the person nominated, whichever is
2-12 later, and is payable to the retiree for the remainder of the
2-13 retiree's life<; and>
2-14 <(2) applies only to a member who retires after August
2-15 31, 1989>.
2-16 SECTION 6. Subsection (b), Section 824.304, Government Code,
2-17 is amended to read as follows:
2-18 (b) If a member has a total of at least 10 years of service
2-19 credit in the retirement system on the date of disability
2-20 retirement, the retirement system shall pay the person for the
2-21 duration of the disability a disability retirement annuity in an
2-22 amount equal to the greater of:
2-23 (1) a standard service retirement annuity computed
2-24 under Section 824.203 <824.203(a)>; or
2-25 (2) $6.50 a month for each year of service credit on
2-26 the date of retirement.
2-27 SECTION 7. Subsection (a), Section 824.402, Government Code,
2-28 is amended to read as follows:
2-29 (a) Except as provided by Section 824.401, the designated
2-30 beneficiary of a member who dies during a school year in which the
2-31 member has performed service is eligible to receive at the
2-32 beneficiary's election the greatest of the following amounts:
2-33 (1) an amount equal to twice the member's annual
2-34 compensation for the school year immediately preceding the school
2-35 year in which the member dies, or $60,000, whichever is less;
2-36 (2) an amount equal to twice the member's rate of
2-37 annual compensation for the school year in which the member dies,
2-38 or $60,000, whichever is less;
2-39 (3) 60 monthly payments of a standard service
2-40 retirement annuity, computed as provided by Section 824.203
2-41 <824.203(a)>;
2-42 (4) an optional retirement annuity for the designated
2-43 beneficiary's life in an amount computed as provided by Section
2-44 824.204(c)(1) as if the member had retired on the last day of the
2-45 month immediately preceding the month in which the member dies; or
2-46 (5) an amount equal to the amount of accumulated
2-47 contributions in the member's individual account in the member
2-48 savings account.
2-49 SECTION 8. Subsection (b), Section 825.002, Government Code,
2-50 is amended to read as follows:
2-51 (b) The governor shall appoint three members of the board to
2-52 hold office for staggered terms, with the term of one trustee
2-53 expiring on August 31 of each odd-numbered year. These <Two of
2-54 those three> members must be persons who have demonstrated
2-55 financial expertise, who have worked in private business or
2-56 industry, and who have broad investment experience, preferably in
2-57 investment of pension funds. One of these members must be
2-58 appointed from a list of nominees submitted by the speaker of the
2-59 house of representatives. None of the members appointed under this
2-60 subsection may be a member or annuitant of the retirement system.
2-61 SECTION 9. Section 825.003, Government Code, is amended to
2-62 read as follows:
2-63 Sec. 825.003. TRUSTEES APPOINTED BY LIEUTENANT GOVERNOR
2-64 <BOARD OF EDUCATION>. The lieutenant governor <State Board of
2-65 Education> shall appoint two members of the board of trustees
2-66 <subject to confirmation by two-thirds of the senate>. These
2-67 members must be persons who have demonstrated financial expertise,
2-68 have worked in private business or industry, and have broad
2-69 investment experience, preferably in investment of pension funds.
2-70 One of these members must be appointed from a list of nominees
3-1 submitted by the speaker of the house of representatives.
3-2 SECTION 10. Subsections (a), (b), and (f), Section 825.0032,
3-3 Government Code, are amended to read as follows:
3-4 (a) Except as provided by Subsection (b), a person is not
3-5 eligible for appointment to the board if the person or the person's
3-6 spouse:
3-7 (1) is employed by or participates in the management
3-8 of a business entity or other organization receiving funds from the
3-9 retirement system; <or>
3-10 (2) owns or controls, directly or indirectly, more
3-11 than a 10 percent interest in a business entity or other
3-12 organization receiving funds from the retirement system; or
3-13 (3) uses or receives a substantial amount of tangible
3-14 goods, services, or funds from the retirement system, other than
3-15 compensation or reimbursement authorized by law for board
3-16 membership, attendance, or expenses.
3-17 (b) Subsection (a) does not apply to employment by,
3-18 participation in the management of, or ownership or control of an
3-19 interest in a business entity or other organization on behalf of
3-20 the retirement system. Subsection (a)(3) does not apply to a
3-21 person who is nominated for appointment under Section 825.002(c),
3-22 (d), or (e).
3-23 (f) A person may not serve as a trustee or act as the
3-24 general counsel to the board or the retirement system if the person
3-25 is required to register as a lobbyist under Chapter 305 because of
3-26 the person's activities for compensation on behalf of a business or
3-27 an association related to the operation of the board.
3-28 SECTION 11. Subchapter A, Chapter 825, Government Code, is
3-29 amended by adding Section 825.0041 to read as follows:
3-30 Sec. 825.0041. BOARD MEMBER TRAINING. (a) Before a member
3-31 of the board may assume the member's duties and, if applicable,
3-32 before the member may be confirmed by the senate the member must
3-33 complete at least one course of the training program established
3-34 under this section.
3-35 (b) A training program established under this section shall
3-36 provide information to the member regarding:
3-37 (1) the enabling legislation that created the
3-38 retirement system and its policy-making body to which the member is
3-39 appointed to serve;
3-40 (2) the programs operated by the system;
3-41 (3) the role and functions of the system;
3-42 (4) the rules of the system with an emphasis on the
3-43 rules that relate to disciplinary and investigatory authority;
3-44 (5) the current budget for the system;
3-45 (6) the results of the most recent formal audit of the
3-46 system;
3-47 (7) the requirements of the:
3-48 (A) open meetings law, Chapter 551;
3-49 (B) open records law, Chapter 552; and
3-50 (C) administrative procedure law, Chapter 2001;
3-51 (8) the requirements of the conflict of interest laws
3-52 and other laws relating to public officials; and
3-53 (9) any applicable ethics policies adopted by the
3-54 system or the Texas Ethics Commission.
3-55 SECTION 12. Section 825.006, Government Code, is amended to
3-56 read as follows:
3-57 Sec. 825.006. Sunset Provision. The board of trustees of
3-58 the Teacher Retirement System of Texas is subject to review under
3-59 Chapter 325 (Texas Sunset Act), but is not abolished under that
3-60 chapter. The board shall be reviewed during the period in which
3-61 state agencies abolished in 2007 <1995> are reviewed or, if the
3-62 retirement system's operating expenses are not subject to the
3-63 appropriations process on September 1, 1995, the board shall be
3-64 reviewed during the period in which state agencies abolished in
3-65 1997 are reviewed. This section expires September 1, 2007 <1995>.
3-66 SECTION 13. Subsections (a) and (c), Section 825.010,
3-67 Government Code, are amended to read as follows:
3-68 (a) It is a ground for removal from the board if a trustee:
3-69 (1) does not have at the time of appointment the
3-70 qualifications required for the trustee's position;
4-1 (2) does not maintain during service on the board the
4-2 qualifications required for the trustee's position;
4-3 (3) violates a prohibition established by Section
4-4 825.002(b) or 825.0032;
4-5 (4) <(2)> cannot because of illness or disability
4-6 discharge the trustee's <person's> duties for a substantial part of
4-7 the term for which the trustee <person> is appointed <because of
4-8 illness or disability>; or
4-9 (5) <(3)> is absent from more than half of the
4-10 regularly scheduled board meetings that the person is eligible to
4-11 attend during a calendar year unless the absence is excused by
4-12 majority vote of the board.
4-13 (c) If the executive director has knowledge that a potential
4-14 ground for removal exists, the executive director shall notify the
4-15 presiding officer <chairman> of the board of the ground. The
4-16 presiding officer <chairman> shall then notify the appropriate
4-17 appointing officer and the attorney general <or body> that a
4-18 potential ground for removal exists. If the potential ground for
4-19 removal involves the presiding officer, the executive director
4-20 shall notify the next highest officer of the board, who shall
4-21 notify the appropriate appointing officer and the attorney general
4-22 that a potential ground for removal exists.
4-23 SECTION 14. Section 825.108, Government Code, is amended by
4-24 adding Subsections (e) and (f) to read as follows:
4-25 (e) The board shall prepare annually a complete and detailed
4-26 written report accounting for all funds received and disbursed by
4-27 the retirement system during the preceding fiscal year. The annual
4-28 report must meet the reporting requirements applicable to financial
4-29 reporting provided in the General Appropriations Act.
4-30 (f) The board shall prepare biennially a complete and
4-31 detailed written report describing and explaining any use of
4-32 appropriated amounts, retirement system assets, or other resources
4-33 for governmental relations, member counseling, or official
4-34 publications. The report must be filed with the committees of the
4-35 senate and the house of representatives having jurisdiction over
4-36 appropriations, with the committees of the senate and the house of
4-37 representatives having principal jurisdiction over legislation
4-38 governing the retirement system, and with the Legislative Budget
4-39 Board at the time the retirement system submits its budget request
4-40 for the next state fiscal biennium.
4-41 SECTION 15. Subsections (a), (b), and (f), Section 825.113,
4-42 Government Code, are amended to read as follows:
4-43 (a) The executive director or the executive director's
4-44 designee <board> shall provide to its trustees and employees, as
4-45 often as necessary, information regarding their qualification for
4-46 office or employment under this chapter and their responsibilities
4-47 under applicable laws relating to standards of conduct for state
4-48 officers or employees.
4-49 (b) The board shall develop and implement policies that
4-50 clearly separate the policy-making <define the respective>
4-51 responsibilities of the board and the management responsibilities
4-52 of the executive director and the staff of the retirement system.
4-53 (f) The retirement system shall comply with federal and
4-54 state laws related to program and facility accessibility. The
4-55 executive director <board> shall prepare and maintain a written
4-56 plan that describes how a person who does not speak English can be
4-57 provided reasonable access to the board's programs. The board
4-58 shall also comply with federal and state laws for program and
4-59 facility accessibility.
4-60 SECTION 16. Subchapter B, Chapter 825, Government Code, is
4-61 amended by adding Section 825.115 to read as follows:
4-62 Sec. 825.115. APPLICABILITY OF CERTAIN LAWS. The board is
4-63 subject to the open meetings law, Chapter 551, and the
4-64 administrative procedure law, Chapter 2001.
4-65 SECTION 17. Section 825.201, Government Code, is amended to
4-66 read as follows:
4-67 Sec. 825.201. PRESIDING OFFICER <Chairman>. The governor
4-68 shall designate a member of the board as the presiding officer of
4-69 the board to serve in that capacity at the pleasure of the
4-70 governor. <The board of trustees shall elect a chairman. The
5-1 chairman must be a member of the board.>
5-2 SECTION 18. Section 825.206, Government Code, is amended by
5-3 adding Subsections (d) and (e) to read as follows:
5-4 (d) Each actuarial experience study must include a review of
5-5 all actuarial assumptions in light of relevant experience,
5-6 important trends, and economic projections. Interrelated actuarial
5-7 assumptions shall be reviewed carefully to ensure that adjustments
5-8 in one assumption are reflected appropriately in related
5-9 assumptions.
5-10 (e) Each actuarial valuation must include a detailed
5-11 analysis comparing experience factors to their actuarial
5-12 assumptions. The analysis shall be developed and reported to
5-13 identify significant variations in actual experience from what was
5-14 assumed. A material variation should be the focus of an actuarial
5-15 experience study.
5-16 SECTION 19. Subsections (a), (b), and (c), Section 825.213,
5-17 Government Code, are amended to read as follows:
5-18 (a) The executive director or the executive director's
5-19 designee shall develop an intra-agency career ladder program that
5-20 addresses opportunities for mobility and advancement for employees
5-21 within the retirement system. The program shall require
5-22 intra-agency posting of all <nonentry level> positions concurrently
5-23 with any public posting.
5-24 (b) The executive director or the executive director's
5-25 designee shall develop a system of annual performance evaluations
5-26 that are based on documented employee performance. All merit pay
5-27 for system employees must be based on the system established under
5-28 this subsection.
5-29 (c) The executive director or the executive director's
5-30 designee shall prepare and maintain a written policy statement to
5-31 assure implementation of a program of equal employment opportunity
5-32 under which all personnel transactions are made without regard to
5-33 race, color, disability, sex, religion, age, or national origin.
5-34 The policy statement must include:
5-35 (1) personnel policies, including policies relating to
5-36 recruitment, evaluation, selection, appointment, training, and
5-37 promotion of personnel that are in compliance with requirements of
5-38 Chapter 21, Labor Code <the Commission on Human Rights Act (Article
5-39 5221k, Vernon's Texas Civil Statutes)>;
5-40 (2) a comprehensive analysis of the retirement
5-41 system's work force that meets federal and state guidelines;
5-42 (3) procedures by which a determination can be made
5-43 about the extent of <significant> underuse in the retirement
5-44 system's work force of all persons for whom federal or state
5-45 guidelines encourage a more equitable balance; and
5-46 (4) reasonable methods to appropriately address those
5-47 areas of <significant> underuse.
5-48 SECTION 20. Subchapter C, Chapter 825, Government Code, is
5-49 amended by adding Section 825.215 to read as follows:
5-50 Sec. 825.215. ADVOCACY PROHIBITED. An employee of the
5-51 retirement system may not advocate increased benefits or engage in
5-52 activities to advocate or influence legislative action or inaction.
5-53 Advocacy or activity of this nature is grounds for dismissal of an
5-54 employee.
5-55 SECTION 21. Section 825.301, Government Code, is amended by
5-56 adding Subsection (f) to read as follows:
5-57 (f) The legislature finds that economically targeted
5-58 investments assist in the improvement of the economic well-being of
5-59 the State of Texas and its communities and residents. Economic
5-60 stimulation includes job creation, development and savings,
5-61 business creation, increases or improvements in the stock of
5-62 affordable housing, and improvements in infrastructure. Therefore,
5-63 the board of trustees may invest assets of the retirement system in
5-64 prudent investments to finance projects or businesses in areas
5-65 designated as distressed communities as provided by Section
5-66 481.195.
5-67 SECTION 22. Section 825.308, Government Code, is amended to
5-68 read as follows:
5-69 Sec. 825.308. State Contribution Account. The retirement
5-70 system shall deposit in the state contribution account:
6-1 (1) all state contributions to the retirement system
6-2 required by Section 825.404;
6-3 (2) amounts from the interest account as provided by
6-4 Section 825.313(b)(5);
6-5 (3) retirement annuities waived or forfeited in
6-6 accordance with Section 824.601 or 824.004;
6-7 (4) fees collected under Section 825.403(h);
6-8 (5) fees and interest for reinstatement of service
6-9 credit or establishment of membership service credit as provided by
6-10 Section 823.202, 823.501, or 823.502;
6-11 (6) the portion of a deposit required by Section
6-12 823.302 to establish military service credit that represents a fee;
6-13 <and>
6-14 (7) the portion of a deposit required by Section
6-15 823.401(e) to establish out-of-state service credit that represents
6-16 a fee; and
6-17 (8) all membership fees required by this subtitle,
6-18 including the fees under Section 823.3021(f)(2).
6-19 SECTION 23. Sections 825.312, 825.313, and 825.314,
6-20 Government Code, are amended to read as follows:
6-21 Sec. 825.312. Expense Account. (a) The retirement system
6-22 shall deposit in the expense account:
6-23 (1) money transferred from the interest account or the
6-24 state contribution account under Section 825.313(c) <all membership
6-25 fees required by this subtitle, including the fees under Section
6-26 823.3021(f)(2);>
6-27 <(2) money required to be deposited in the account by
6-28 Section 825.313(b)(3) or 825.313(c)>; and
6-29 (2) <(3)> money received from the Texas Public School
6-30 <Retired> Employees Group Insurance Program for service performed
6-31 for the program by the retirement system.
6-32 (b) The retirement system shall pay from the account all
6-33 administrative expenses of <administration and maintenance of> the
6-34 retirement system that exceed the amounts appropriated under
6-35 Section 825.404(d) and that are required to perform the fiduciary
6-36 duties of the board.
6-37 Sec. 825.313. Transfers From Interest or State Contribution
6-38 Account. (a) Annually, the retirement system shall transfer from
6-39 the interest account to the state contribution account amounts
6-40 accumulated under Section 825.311(2).
6-41 (b) On August 31 of each year, the retirement system shall
6-42 make the following transfers from the interest account:
6-43 (1) to the member savings account, an amount computed
6-44 using the rate prescribed by Section 825.307(b);
6-45 (2) to the retired reserve account, an amount equal to
6-46 4 3/4 percent of the average balance of the retired reserve
6-47 account for that fiscal year or, if the transfer is authorized by
6-48 resolution of the board, an amount computed at a greater rate if
6-49 the actuary recommends the greater rate to adequately fund the
6-50 retired reserve account;
6-51 (3) <to the expense account, an amount designated by
6-52 the board of trustees in accordance with Subsection (c);>
6-53 <(4)> to the benefit increase reserve account, an
6-54 amount representing interest on the average annual balance of the
6-55 benefit increase reserve account at a rate set by the board of
6-56 trustees in accordance with Section 825.106; and
6-57 (4) <(5)> to the state contribution account, the
6-58 amount remaining in the interest account after the other transfers
6-59 required or authorized by this section are made.
6-60 (c) The board of trustees, by resolution recorded in its
6-61 minutes, may <shall> transfer from the interest account, or from
6-62 the state contribution account in an amount that does not exceed
6-63 the sum of membership fees deposited in the account the preceding
6-64 fiscal year, to the expense account an amount necessary to cover
6-65 the expenses of the retirement system for the fiscal year that
6-66 exceed the amount of operating expenses appropriated under Section
6-67 825.404(d) and that are required to perform the fiduciary duties of
6-68 the board, including the expense of servicing mortgages insured by
6-69 the Federal Housing Administration under the National Housing Act
6-70 (12 U.S.C. Section 1701 et seq.).
7-1 Sec. 825.314. Use And Reporting of State Contributions and
7-2 Other Appropriations and Assets. (a) The retirement system shall
7-3 use all assets contributed by the state, other than operating
7-4 expenses appropriated under Section 825.404(d), to pay benefits
7-5 authorized by this subtitle.
7-6 (b) The staff of the retirement system shall report to the
7-7 board at each board meeting the amounts and uses since the
7-8 preceding board meeting of any money expended by the system from
7-9 amounts transferred under Section 825.313(c) and include an
7-10 explanation of why the amounts were needed to perform the fiduciary
7-11 duties of the board. The retirement system annually shall prepare
7-12 and issue to each contributing member and annuitant and to the
7-13 governor, lieutenant governor, and speaker of the house of
7-14 representatives a summary of the reports presented during the
7-15 preceding year to the board.
7-16 SECTION 24. Subchapter D, Chapter 825, Government Code, is
7-17 amended by adding Section 825.315 to read as follows:
7-18 Sec. 825.315. PROHIBITED USE OF ASSETS AND APPROPRIATIONS.
7-19 A trustee or employee of the retirement system may not use an asset
7-20 of the retirement system, including facilities or utilities, or
7-21 amounts appropriated for operating expenses under Section
7-22 825.404(d), to advocate or influence legislative action or
7-23 inaction.
7-24 SECTION 25. Subsection (d), Section 825.401, Government
7-25 Code, is amended to read as follows:
7-26 (d) The retirement system shall deposit all membership fees
7-27 in the state contribution <expense> account.
7-28 SECTION 26. The heading of Section 825.404, Government Code,
7-29 is amended to read as follows:
7-30 Sec. 825.404. COLLECTION OF STATE CONTRIBUTIONS AND
7-31 APPROPRIATED OPERATING EXPENSES.
7-32 SECTION 27. Section 825.404, Government Code, is amended by
7-33 redesignating and amending Subsection (d) as Subsection (e) and
7-34 adding a new Subsection (d) to read as follows:
7-35 (d) The legislature shall appropriate from the general
7-36 revenue fund a specified amount of money to be used to pay
7-37 operating expenses of the retirement system for each fiscal year.
7-38 (e) <(d)> All money appropriated by the state to the
7-39 retirement system shall be paid to the state contribution account
7-40 in equal monthly installments as provided by Section 403.093(c),
7-41 Government Code, except money appropriated under Subsection (d),
7-42 which remains in the general revenue fund until expenses are
7-43 approved under Chapter 2103.
7-44 SECTION 28. Section 825.511, Government Code, is amended to
7-45 read as follows:
7-46 Sec. 825.511. Complaint Files. (a) The retirement system
7-47 shall keep an information file about each complaint filed with the
7-48 system that the system has authority to resolve. The system shall
7-49 provide to the person filing the complaint and the persons or
7-50 entities complained about the system's policies and procedures
7-51 pertaining to complaint investigation and resolution. The system,
7-52 at least quarterly and until final disposition of the complaint,
7-53 shall notify the person filing the complaint and the persons or
7-54 entities complained about of the status of the complaint unless the
7-55 notice would jeopardize an undercover investigation.
7-56 (b) The retirement system shall keep information about each
7-57 complaint filed with the system. The information shall include:
7-58 (1) the date the complaint is received;
7-59 (2) the name of the complainant;
7-60 (3) the subject matter of the complaint;
7-61 (4) a record of all persons contacted in relation to
7-62 the complaint;
7-63 (5) a summary of the results of the review or
7-64 investigation of the complaint; and
7-65 (6) for complaints for which the system took no
7-66 action, an explanation of the reason the complaint was closed
7-67 without action. <If a written complaint is filed with the
7-68 retirement system that the system has authority to resolve, the
7-69 system, at least quarterly and until final disposition of the
7-70 complaint, shall notify the parties to the complaint of the status
8-1 of the complaint unless the notice would jeopardize an undercover
8-2 investigation.>
8-3 SECTION 29. Subchapter F, Chapter 825, Government Code, is
8-4 amended by adding Sections 825.512, 825.513, 825.514, and 825.515
8-5 to read as follows:
8-6 Sec. 825.512. INVESTMENT PERFORMANCE AUDIT. (a) The
8-7 legislative audit committee biennially shall select an independent
8-8 firm with substantial experience in evaluating institutional
8-9 investment practices and performance to evaluate the retirement
8-10 system's investment practices and performance.
8-11 (b) The legislative audit committee shall determine specific
8-12 areas to be evaluated, but the first evaluation must be a
8-13 comprehensive analysis of the retirement system's investment
8-14 program.
8-15 (c) A report of an evaluation under this section shall be
8-16 filed with the legislative audit committee not later than December
8-17 1 of each even-numbered year.
8-18 (d) The retirement system shall pay the costs of each
8-19 evaluation under this section.
8-20 (e) The retirement system shall submit an annual investment
8-21 performance report not later than the 25th day of the month
8-22 following each fiscal year to the governor, the lieutenant
8-23 governor, the speaker of the house of representatives, the
8-24 executive director of the State Pension Review Board, the
8-25 legislative audit committee, the committees of the senate and the
8-26 house of representatives having jurisdiction over appropriations,
8-27 the committees of the senate and the house of representatives
8-28 having principal jurisdiction over legislation governing the
8-29 retirement system, and the Legislative Budget Board. The report
8-30 shall include a listing of all commissions and fees paid by the
8-31 system during the reporting period for the sale, purchase, or
8-32 management of system assets. The report shall be in a form
8-33 recommended by the evaluating firm.
8-34 Sec. 825.513. INFORMATION FOR PUBLICATION. The retirement
8-35 system shall verify with the State Pension Review Board the
8-36 accuracy of information about the effects of proposed legislation
8-37 on benefits and the trust fund before including the information in
8-38 an official publication of the retirement system.
8-39 Sec. 825.514. HISTORICALLY UNDERUTILIZED BUSINESSES. The
8-40 retirement system is subject to the provisions, including Sections
8-41 1.03 and 3.10, of the State Purchasing and General Services Act
8-42 (Article 601b, Vernon's Texas Civil Statutes), that relate to
8-43 historically underutilized businesses.
8-44 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) The
8-45 retirement system shall compile and maintain records identifying
8-46 members and the types of positions they have held as members, the
8-47 length of service in each type of position, and whether service in
8-48 each type of position is or was as a full-time employee. The
8-49 retirement system by rule may require employers to certify
8-50 information compiled under this section.
8-51 (b) Information contained in records compiled and maintained
8-52 under this section is confidential within the limits prescribed by
8-53 Section 825.507.
8-54 SECTION 30. Section 1, Article 3.50-4, Insurance Code, is
8-55 amended to read as follows:
8-56 Sec. 1. Short Title. This article may be cited as the Texas
8-57 Public School <Retired> Employees Group Insurance Act.
8-58 SECTION 31. Subdivisions (3) and (4), Section 2, Article
8-59 3.50-4, Insurance Code, are amended to read as follows:
8-60 (3) "Dependent" means:
8-61 (A) a spouse of a retiree or active member;
8-62 (B) a retiree's, an active member's, or a
8-63 deceased active member's unmarried child who is younger than 25
8-64 years of age including:
8-65 (i) an adopted child;
8-66 (ii) a foster child, a stepchild, or other
8-67 child who is in a regular parent-child relationship; and
8-68 (iii) a recognized natural child; and
8-69 (C) a retiree's or active member's recognized
8-70 natural child, adopted child, foster child, stepchild, or other
9-1 child who is in a regular parent-child relationship and who lives
9-2 with or whose care is provided by the retiree, active member, or
9-3 surviving spouse on a regular basis, regardless of the child's age,
9-4 if the child is mentally retarded or physically incapacitated to
9-5 such an extent as to be dependent on the retiree, active member, or
9-6 surviving spouse for care or support, as determined by the trustee,
9-7 or in the case of a deceased active member, a recognized natural
9-8 child, adopted child, foster child, stepchild, or other child who
9-9 was in a regular parent-child relationship and who lived with or
9-10 whose care was provided by the deceased active member on a regular
9-11 basis, regardless of the child's age, if the child is mentally
9-12 retarded or physically incapacitated to such an extent as to have
9-13 been dependent on the deceased active member or surviving spouse
9-14 for care or support, as determined by the trustee.
9-15 (4) "Fund" means the Texas public school <retired>
9-16 employees group insurance fund.
9-17 SECTION 32. Subsection (a), Section 3, Article 3.50-4,
9-18 Insurance Code, is amended to read as follows:
9-19 (a) The Texas Public School <Retired> Employees Group
9-20 Insurance Program is established to provide for an insurance plan
9-21 or plans under this article.
9-22 SECTION 33. Subsection (a), Section 5, Article 3.50-4,
9-23 Insurance Code, is amended to read as follows:
9-24 (a) The trustee may adopt rules, plans, procedures, and
9-25 orders reasonably necessary to implement this article, including:
9-26 (1) establishment of minimum benefit and financing
9-27 standards for group insurance coverage to be provided to all
9-28 retirees, active employees, dependents, surviving spouses, and
9-29 surviving dependent children;
9-30 (2) establishment of basic and optional group coverage
9-31 to be provided to retirees, active employees, dependents, surviving
9-32 spouses, and surviving dependent children;
9-33 (3) establishment of the procedures for contributions
9-34 and deductions;
9-35 (4) establishment of periods for enrollment and
9-36 selection of optional coverage and procedures for enrolling and
9-37 exercising options under the plan;
9-38 (5) determination of methods and procedures for claims
9-39 administration;
9-40 (6) study of the operation of all insurance coverage
9-41 provided under this article;
9-42 (7) administration of the fund;
9-43 (8) adoption of a timetable for the development of
9-44 minimum benefit and financial standards for group insurance
9-45 coverage, establishment of group insurance plans, and the taking of
9-46 bids for and awarding of contracts for insurance plans; and
9-47 (9) contracting with an independent and experienced
9-48 group insurance consultant or actuary, who does not receive
9-49 insurance commissions from any insurance company, for advice and
9-50 counsel in implementing and administering this program.
9-51 SECTION 34. Article 3.50-4, Insurance Code, is amended by
9-52 adding Section 7A to read as follows:
9-53 Sec. 7A. PARTICIPATION BY ACTIVE EMPLOYEES. (a) A public
9-54 school district may elect to participate in the program provided
9-55 under this article. A district that elects to participate must
9-56 accept the schedule of costs adopted by the trustee and may not
9-57 offer an alternative health benefit plan to its active employees
9-58 during the period of its participation in the program.
9-59 (b) The trustee by rule shall provide:
9-60 (1) eligibility requirements for participation by a
9-61 school district, which may include criteria based on size;
9-62 (2) restrictions on the ability of a school district
9-63 to begin or discontinue participation, which may include a minimum
9-64 period of participation and limited periods for elections to begin
9-65 or discontinue participation;
9-66 (3) administrative fees to be paid by participating
9-67 school districts to cover the trustee's administrative costs in
9-68 extending the program to active employees; and
9-69 (4) requirements to minimize the effects of adverse
9-70 selection on the program.
10-1 (c) The trustee shall provide optional group coverages for
10-2 active employees participating in the program. The coverages may
10-3 be combined with or similar to, but separate from, coverages
10-4 provided to retirees. The sum of premiums and administrative fees
10-5 received from participating school districts and active employees
10-6 must cover all expenses of school district employee participation
10-7 in the program.
10-8 (d) Participation by an active employee of a participating
10-9 school district is optional with the employee. A school district
10-10 may not offer a financial incentive to an active employee for
10-11 declining to participate in the program. An active employee is
10-12 entitled to obtain coverage for dependents in the same manner as a
10-13 participating retiree.
10-14 (e) Each participating school district shall contribute for
10-15 each district employee covered by the program an amount equal to
10-16 the cost for the employee only of the plans of group coverages
10-17 authorized by the trustee for active employees, except that the
10-18 school district's contribution may not exceed the amount
10-19 contributed for each state employee by the state under the Texas
10-20 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
10-21 Vernon's Texas Insurance Code).
10-22 (f) Each employee covered by the program shall pay that
10-23 portion of the cost of coverage selected by the employee that
10-24 exceeds the amount of employer contributions.
10-25 (g) The trustee shall deposit in the fund all fees collected
10-26 under Section 44(d), Chapter 812, Acts of the 73rd Legislature,
10-27 1993, except that portion used to conduct the survey required by
10-28 Section 44. The trustee shall continue to collect the fee through
10-29 the 1996-97 school year, after which time the fee expires.
10-30 (h) The state may make contributions to the fund in addition
10-31 to those required by Section 16(b) of this article for the purpose
10-32 of assisting in the expansion of the program to active employees.
10-33 (i) The trustee shall begin enrollment in the program for
10-34 active employees to be effective beginning with the 1996-97 school
10-35 year.
10-36 SECTION 35. Section 9, Article 3.50-4, Insurance Code, is
10-37 amended to read as follows:
10-38 Sec. 9. Benefit Certificates. At such times, or upon such
10-39 events, as designated by the trustee, each insurance carrier shall
10-40 issue to each retiree, active employee, surviving spouse, or
10-41 surviving dependent child insured under this article a certificate
10-42 of insurance that:
10-43 (1) states the benefits to which the person <retiree,
10-44 surviving spouse, or surviving dependent child> is entitled;
10-45 (2) states to whom the benefits are payable;
10-46 (3) states to whom the claims must be submitted; and
10-47 (4) summarizes the provisions of the policy
10-48 principally affecting the person <retiree, surviving spouse, or
10-49 surviving dependent child>.
10-50 SECTION 36. Subsection (a), Section 10, Article 3.50-4,
10-51 Insurance Code, is amended to read as follows:
10-52 (a) Not later than the 180th day after the end of each state
10-53 fiscal year, the trustee shall make a written report to the State
10-54 Board of Insurance concerning the insurance coverages provided and
10-55 the benefits and services being received by persons <retirees,
10-56 surviving spouses, dependents, and surviving dependent children>
10-57 insured under this article.
10-58 SECTION 37. Sections 12 and 13, Article 3.50-4, Insurance
10-59 Code, are amended to read as follows:
10-60 Sec. 12. Death Claims: Beneficiaries. The amount of group
10-61 life insurance and group accidental death and dismemberment
10-62 insurance covering a retiree, active employee, surviving spouse,
10-63 dependent, or surviving dependent child at the date of death shall
10-64 be paid, on the establishment of a valid claim, only:
10-65 (1) to the beneficiary or beneficiaries designated by
10-66 the person <retiree, surviving spouse, dependent, or surviving
10-67 dependent child> in a signed and witnessed written document
10-68 received before death in the trustee's office; or
10-69 (2) if no beneficiary is properly designated or in
10-70 existence, to persons in accordance with the trustee's death
11-1 benefit provisions in Subsection (b), Section 824.103, Government
11-2 Code.
11-3 Sec. 13. Automatic Coverage. A retiree or active employee
11-4 who applies during an enrollment period may not be denied any of
11-5 the group insurance basic coverage provided under this article
11-6 unless the person <retiree> has been found under Section 18A of
11-7 this article to have defrauded or attempted to defraud the Texas
11-8 Public School <Retired> Employees Group Insurance Program.
11-9 SECTION 38. The heading of Section 15, Article 3.50-4,
11-10 Insurance Code, is amended to read as follows:
11-11 Sec. 15. <RETIRED> SCHOOL EMPLOYEES GROUP INSURANCE FUND.
11-12 SECTION 39. Subsection (a), Section 15, Article 3.50-4,
11-13 Insurance Code, is amended to read as follows:
11-14 (a) The <retired> school employees group insurance fund is
11-15 created. The State Treasurer is the custodian of the fund, and the
11-16 trustee shall administer the fund. All contributions from active
11-17 employees, retirees, and the state, contributions for optional
11-18 coverages, investment income, appropriations for implementation of
11-19 this program, and other money required or authorized to be paid
11-20 into the fund shall be paid into the fund. From the fund shall be
11-21 paid, without state fiscal year limitation, the appropriate
11-22 premiums to the carrier or carriers providing group coverage under
11-23 the plan or plans under this article, claims for benefits under the
11-24 group coverage, and the amounts expended by the trustee for
11-25 administration of the program. The appropriate portion of the
11-26 contributions to the fund to provide for incurred but unreported
11-27 claim reserves and contingency reserves, as determined by the
11-28 trustee, shall be retained in the fund.
11-29 SECTION 40. Article 3.50-4, Insurance Code, is amended by
11-30 adding Section 15A to read as follows:
11-31 Sec. 15A. FUNDING STUDY. (a) The legislative audit
11-32 committee shall select an independent firm with substantial
11-33 experience in evaluating group insurance plans to conduct a study
11-34 and make recommendations to the legislature and the trustee
11-35 concerning the funding of the plan provided by this article for the
11-36 benefit of and participation by active employees and retirees of
11-37 public school districts. In its study of funding alternatives, the
11-38 evaluating firm may consider and recommend procedures having an
11-39 effect on funding, including procedures to control costs and
11-40 minimize adverse selection.
11-41 (b) A report of the study under this section, including
11-42 recommendations resulting from the study, shall be filed not later
11-43 than December 1, 1996, with the legislative audit committee, the
11-44 lieutenant governor, the speaker of the house of representatives,
11-45 and the trustee.
11-46 (c) The trustee shall pay the costs of the study from the
11-47 fund.
11-48 (d) This section expires January 1, 1997.
11-49 SECTION 41. Subsections (a), (b), (d), and (f), Section 18A,
11-50 Article 3.50-4, Insurance Code, are amended to read as follows:
11-51 (a) After notice and hearing as provided by this section,
11-52 the trustee may expel from participation in the Texas Public School
11-53 <Retired> Employees Group Insurance Program any retiree, active
11-54 employee, surviving spouse, dependent, or surviving dependent child
11-55 who submits a fraudulent claim under, or has defrauded or attempted
11-56 to defraud, any health benefits plan offered under the program.
11-57 (b) On its motion or on the receipt of a complaint, the
11-58 trustee may call and hold a hearing to determine whether a person
11-59 <retiree, surviving spouse, dependent, or surviving dependent
11-60 child> has submitted a fraudulent claim under, or has defrauded or
11-61 attempted to defraud, any health benefits plan offered under the
11-62 Texas Public School <Retired> Employees Group Insurance Program.
11-63 (d) If the trustee, at the conclusion of the hearing, issues
11-64 a decision that finds that the accused <retiree, surviving spouse,
11-65 dependent, or surviving dependent child> submitted a fraudulent
11-66 claim or has defrauded or attempted to defraud any health benefits
11-67 plan offered under the Texas Public School <Retired> Employees
11-68 Group Insurance Program, the trustee shall expel the person
11-69 <retiree, surviving spouse, dependent, or surviving dependent
11-70 child> from participation in the program.
12-1 (f) A person <retiree, surviving spouse, dependent, or
12-2 surviving dependent child> expelled from the Texas Public School
12-3 <Retired> Employees Group Insurance Program may not be insured by
12-4 any health insurance plan offered by the program for a period, to
12-5 be determined by the trustee, of up to five years from the date the
12-6 expulsion takes effect.
12-7 SECTION 42. Subsection (a), Section 18B, Article 3.50-4,
12-8 Insurance Code, is amended to read as follows:
12-9 (a) Section 825.507, Government Code <35.507, Title 110B,
12-10 Revised Statutes>, concerning the confidentiality of information in
12-11 records that are in the custody of the Teacher Retirement System of
12-12 Texas, applies to information in records that are in the custody of
12-13 the retirement system regarding retirees, active employees,
12-14 annuitants, or beneficiaries under the Texas Public School
12-15 <Retired> Employees Group Insurance Program.
12-16 SECTION 43. Subsections (c), (d), and (i), Section 18C,
12-17 Article 3.50-4, Insurance Code, are amended to read as follows:
12-18 (c) The trustee, the Texas public school <retired> employees
12-19 group insurance program, the <retired> school employees group
12-20 insurance fund, and the board of trustees, officers, advisory
12-21 committee members, and employees of the trustee are not liable for
12-22 damages arising from the acts or omissions of health care providers
12-23 who are participating health care providers in the coordinated care
12-24 network established by the trustee. Those health care providers
12-25 are independent contractors and are responsible for their own acts
12-26 and omissions.
12-27 (d) The trustee, the Texas public school <retired> employees
12-28 group insurance program, the <retired> school employees group
12-29 insurance fund, or a member of a credentialing committee, or the
12-30 board of trustees, officers, advisory committee members, or
12-31 employees of the trustee are not liable for damages arising from
12-32 any act, statement, determination, recommendation made, or act
12-33 reported, without malice, in the course of the evaluation of the
12-34 qualifications of health care providers or of the patient care
12-35 rendered by those providers.
12-36 (i) A credentialing committee, a person participating in a
12-37 credentialing review, a health care provider, the trustee, the
12-38 Texas public school <retired> employees group insurance program, or
12-39 the board of trustees, officers, advisory committee members, or
12-40 employees of the trustee that are named as defendants in any civil
12-41 action filed as a result of participation in the credentialing
12-42 process may use otherwise confidential information obtained for
12-43 legitimate internal business and professional purposes, including
12-44 use in their own defense. Use of information under this subsection
12-45 does not constitute a waiver of the confidential and privileged
12-46 nature of the information.
12-47 SECTION 44. (a) Monthly payments of a death or retirement
12-48 benefit annuity by the Teacher Retirement System of Texas are
12-49 increased beginning with the payment due at the end of September,
12-50 1995.
12-51 (b) Except as provided by Subsection (c) of this section,
12-52 the amount of the monthly increase is computed by multiplying the
12-53 previous monthly benefit by a percentage determined in accordance
12-54 with the following table:
12-55 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
12-56 Before September 1, 1972 14%
12-57 On or after September 1, 1972, but before September 1, 1973 15%
12-58 On or after September 1, 1973, but before September 1, 1974 17%
12-59 On or after September 1, 1974, but before September 1, 1975 14%
12-60 On or after September 1, 1975, but before September 1, 1976 13%
12-61 On or after September 1, 1976, but before September 1, 1977 16%
12-62 On or after September 1, 1977, but before September 1, 1978 14%
12-63 On or after September 1, 1978, but before September 1, 1979 13%
12-64 On or after September 1, 1979, but before September 1, 1980 12%
12-65 On or after September 1, 1980, but before September 1, 1981 9%
12-66 On or after September 1, 1981, but before September 1, 1982 8%
12-67 On or after September 1, 1982, but before September 1, 1983 7%
12-68 On or after September 1, 1983, but before September 1, 1985 8%
12-69 On or after September 1, 1985, but before September 1, 1986 7%
12-70 On or after September 1, 1986, but before September 1, 1987 8%
13-1 On or after September 1, 1987, but before September 1, 1989 7%
13-2 On or after September 1, 1989, but before September 1, 1990 5%
13-3 On or after September 1, 1990, but before September 1, 1992 3%
13-4 On or after September 1, 1992, but before September 1, 1993 2%
13-5 (c) An annuitant is entitled to the greater of:
13-6 (1) a monthly benefit annuity computed as if:
13-7 (A) Subtitle C, Title 8, Government Code, as it
13-8 existed on January 1, 1995, had been in effect on the date of
13-9 retirement or on the date of death, as applicable; and
13-10 (B) all benefits increases, including that
13-11 provided by Subsection (b) of this section, were included that are
13-12 applicable to the annuity and were provided after the date the
13-13 annuity began; or
13-14 (2) the monthly benefit annuity option selected at the
13-15 time of retirement or death:
13-16 (A) recomputed on the basis of one-twelfth of
13-17 the minimum annual salary provided by the Education Code for a
13-18 classroom teacher or full-time librarian, multiplied by two percent
13-19 for each year of service credit in the retirement system;
13-20 (B) actuarially reduced, if applicable, for
13-21 early retirement; and
13-22 (C) excluding the increase provided by
13-23 Subsection (b) of this section.
13-24 SECTION 45. The terms of members of the Board of Trustees of
13-25 the Teacher Retirement System of Texas appointed under Section
13-26 825.003, Government Code, as it existed before the effective date
13-27 of this section, expire on the effective date of this section. The
13-28 changes in the qualifications and methods of appointment of other
13-29 members of the board of trustees made by this Act apply only to
13-30 members appointed for terms that begin on or after the effective
13-31 date of this section. In implementing the changes, the governor
13-32 shall appoint a member of the board of trustees from a list of
13-33 nominees submitted by the speaker of the house of representatives
13-34 to a term expiring August 31, 2001, and the lieutenant governor
13-35 shall appoint a member of the board from a list of nominees
13-36 submitted by the speaker to a term expiring August 31, 1997, and
13-37 another member of the board without the necessity of consultation
13-38 with the speaker to a term expiring August 31, 2001.
13-39 SECTION 46. The Teacher Retirement System of Texas shall
13-40 develop an initial space allocation plan as defined in rules of the
13-41 General Services Commission and submit the plan to the commission
13-42 for approval not later than March 1, 1996. The retirement system
13-43 shall implement an approved plan not later than September 1, 1996.
13-44 SECTION 47. This Act takes effect September 1, 1995, except
13-45 Section 45 and this section, which take effect August 31, 1995.
13-46 SECTION 48. The importance of this legislation and the
13-47 crowded condition of the calendars in both houses create an
13-48 emergency and an imperative public necessity that the
13-49 constitutional rule requiring bills to be read on three several
13-50 days in each house be suspended, and this rule is hereby suspended.
13-51 * * * * *