By Turner                                             S.B. No. 1072
       74R6573 GCH-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to participation and credit in, contributions to, and
    1-3  benefits and administration of the Texas Municipal Retirement
    1-4  System.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Section 851.001(6), Government Code, is amended
    1-7  to read as follows:
    1-8              (6)  "Compensation" means the sum of payments made to
    1-9  an employee for performance of personal services, as certified on a
   1-10  written payroll of an employing department, that does not exceed
   1-11  any rate of compensation fixed by a governing body as the maximum
   1-12  salary on which member contributions to the retirement system may
   1-13  be based and does not exceed $150,000 for a calendar year, indexed
   1-14  in the same manner and for the same periods as provided by Section
   1-15  401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C. Section
   1-16  401), and includes amounts by which payment for earnings is reduced
   1-17  by reason of:
   1-18                    (A)  employer pick-up of employee contributions
   1-19  to the retirement system under Section 855.402(j);
   1-20                    (B)  deferral of compensation under benefit plans
   1-21  adopted by the employer pursuant to Section 401(k) or 457 of the
   1-22  Internal Revenue Code of 1986 (26 U.S.C. Sections 401, 457);
   1-23                    (C)  cost of benefits furnished under qualified
   1-24  cafeteria plans adopted by the employer pursuant to Section 125 of
    2-1  the Internal Revenue Code of 1986 (26 U.S.C. Section 125);
    2-2                    (D)  cost of tax-sheltered annuities acquired for
    2-3  the employee under Section 403(b) of the Internal Revenue Code of
    2-4  1986 (26 U.S.C. Section 403); and
    2-5                    (E)  deductions for Federal Insurance
    2-6  Contribution Act taxes, federal income taxes, or other obligations
    2-7  of the employee.
    2-8        SECTION 2.  Section 852.004(c), Government Code, is amended
    2-9  to read as follows:
   2-10        (c)  Before a municipality that has fewer than 10 employees
   2-11  who are members of the retirement system is permitted to
   2-12  participate in the fund, the board of trustees may require the
   2-13  municipality to provide evidence that is satisfactory to the board
   2-14  that the members are in good health.  The board of trustees may
   2-15  allow participation in the fund by those municipal employees who
   2-16  are in good health on the effective date of participation and
   2-17  exclude those municipal employees who are not in good health at
   2-18  that time.
   2-19        SECTION 3.  Section 852.108, Government Code, is amended to
   2-20  read as follows:
   2-21        Sec. 852.108.  RESUMPTION OF SERVICE WITH SAME EMPLOYER BY
   2-22  RETIREE.  (a)  In this section and Section 852.109, a person's
   2-23  reemploying municipality is the municipality for which the person
   2-24  was performing creditable service at the time of the person's
   2-25  retirement under this subtitle.
   2-26        (b)  A person who has retired with a service retirement
   2-27  benefit under this subtitle and later becomes an employee of the
    3-1  person's reemploying municipality also becomes a member of the
    3-2  system on the date of employment, but credits and benefits
    3-3  allowable to the person under this subtitle are limited as provided
    3-4  by this section.  <Except as provided by this section, a retiree is
    3-5  not entitled to be paid a service retirement benefit for any month
    3-6  in which the retiree is regularly employed by any participating
    3-7  municipality.  If a retiree is paid a retirement benefit for any
    3-8  month during which the retiree is ineligible as provided by this
    3-9  section, the benefit otherwise payable to the retiree for
   3-10  subsequent months shall be suspended for an equivalent period.
   3-11  Loss of benefits pursuant to this section does not extend any
   3-12  period of guaranteed benefits elected pursuant to any provision of
   3-13  this subtitle.>
   3-14        (c) <(b)>  The retirement system shall discontinue and
   3-15  suspend payments of each service retirement annuity that is allowed
   3-16  because of the person's previous service with the reemploying
   3-17  municipality beginning with the month the retirement system
   3-18  determines that the person has again become an employee of the
   3-19  reemploying municipality.  After the suspension, the retirement
   3-20  system may not make payments of the annuity for any month during
   3-21  which the person remains an employee of the reemploying
   3-22  municipality.  The suspension of a benefit under this section does
   3-23  not suspend payment of a benefit to an alternate payee under a
   3-24  qualified domestic relations order.  <For purposes of this section,
   3-25  a retiree is not considered regularly employed by a participating
   3-26  municipality if the retiree is employed for 700 hours or less
   3-27  during any calendar year.>
    4-1        (d) <(c)>  Member contributions under Section 855.402 shall
    4-2  be made on all compensation paid to the employee by the reemploying
    4-3  municipality at the same rate as is required of other employees of
    4-4  the department.  The retirement system shall deposit the
    4-5  contributions on receipt in an individual account for the member in
    4-6  the employees saving fund and shall credit the account with
    4-7  interest annually at the same rate and manner as the accounts of
    4-8  other members are credited.  The compensation paid to the employee
    4-9  by the reemploying municipality shall be included in computing the
   4-10  monthly contributions the municipality makes to the municipality
   4-11  accumulation fund.  <Each participating municipality that employs a
   4-12  retiree shall report the fact and terms of employment and payment
   4-13  of the retiree on a form prescribed by the board.>
   4-14        (e) <(d)>  After termination of employment with the
   4-15  reemploying municipality and after filing of an application for
   4-16  resumption of retirement with the board of trustees, a person
   4-17  described by Subsection (b) is entitled to receive future payments
   4-18  of the suspended annuity, as provided by Subsection (f), and to the
   4-19  additional benefits as provided by Subsections (g), (h), and (i).
   4-20  <A person who has retired under this subtitle because of service
   4-21  may not rejoin the retirement system.>
   4-22        (f)  Monthly payments of a suspended annuity shall be resumed
   4-23  in the month following the month in which employment is terminated
   4-24  with the reemploying municipality, without change in the amount
   4-25  except for any increase allowed under Section 854.203 or the
   4-26  duration of or another condition pertaining to the suspended
   4-27  benefit.  Payment of the resumed benefit may not be made for any
    5-1  month during which the payment was suspended under this section.
    5-2        (g)  If a person with credited service under this section
    5-3  dies before a payment under Subsection (i) is made, the person's
    5-4  beneficiary, or if there is no beneficiary surviving, the executor
    5-5  or administrator of the person's estate, may elect payment as
    5-6  provided by Section 854.105(c).
    5-7        (h)  The additional service retirement benefit allowable to a
    5-8  person to whom this section applies is, at the option of that
    5-9  person, either:
   5-10              (1)  a refund of accumulated contributions made since
   5-11  reemployment plus any accrued interest on the accumulated
   5-12  contributions allowed by the retirement system; or
   5-13              (2)  a benefit consisting of:
   5-14                    (A)  a basic annuity actuarially determined from
   5-15  the sum of the member's deposits made and accumulated since the
   5-16  date the person last became a member, together with interest
   5-17  accumulated on that amount since the person last became a member;
   5-18  or
   5-19                    (B)  a greater amount authorized by the
   5-20  municipality under Section 855.501.
   5-21        (i)  The additional benefit described by Subsection (h) is
   5-22  payable as a standard service retirement benefit or, at the
   5-23  election of the member, any optional benefit authorized under this
   5-24  subtitle that is the actuarial equivalent of the standard
   5-25  retirement benefit.  The first benefit payment date under this
   5-26  subsection is the later of the end of the month following the last
   5-27  month of employment or the end of the month following the month in
    6-1  which the person files an application for payment.  The first
    6-2  payment may not be made if the person has resumed employment with
    6-3  the reemploying municipality in a position that would make the
    6-4  person an employee.
    6-5        SECTION 4.  Subchapter B, Chapter 852, Government Code, is
    6-6  amended by adding Section 852.109 to read as follows:
    6-7        Sec. 852.109.  RESUMPTION OF SERVICE WITH DIFFERENT EMPLOYER
    6-8  BY RETIREE.  (a)  If a person becomes an employee of a municipality
    6-9  after beginning to receive a retirement benefit, and the
   6-10  municipality is not the person's reemploying municipality, the
   6-11  person again becomes a member of the retirement system, and the
   6-12  person's retirement annuity is not suspended.
   6-13        (b)  Member contributions under Section 855.402 shall be made
   6-14  on all compensation paid to the employee by the municipality at the
   6-15  same rate as is required of other employees of the department.  The
   6-16  retirement system shall deposit the contributions on receipt in an
   6-17  individual account for the member in the employees saving fund and
   6-18  shall credit the account with interest at the same rate and in the
   6-19  same manner as the accounts of other members are credited.  The
   6-20  compensation paid to the employee by the municipality shall be
   6-21  included in computing the monthly contributions the municipality
   6-22  makes to the municipality accumulation fund.
   6-23        (c)  If a person with credited service under this section
   6-24  dies before a payment under Subsection (e) is made, the person's
   6-25  beneficiary, or if there is no beneficiary surviving, the executor
   6-26  or administrator of the person's estate, may elect payment as
   6-27  provided by Section 854.105(c).
    7-1        (d)  The additional service retirement benefit allowable to a
    7-2  person to whom this section applies is, at the option of that
    7-3  person, either:
    7-4              (1)  a refund of accumulated contributions made since
    7-5  reemployment plus any accrued interest on the accumulated
    7-6  contributions allowed by the retirement system; or
    7-7              (2)  a benefit consisting of:
    7-8                    (A)  a basic annuity actuarially determined from
    7-9  the sum of the member's deposits made and accumulated since the
   7-10  date the person last became a member together with interest
   7-11  accumulated on that amount since the person last became a member
   7-12  and an amount from the municipality accumulation fund equal to the
   7-13  amount of the deposits credited to the  member's individual account
   7-14  since the person last became a member together with interest
   7-15  accumulated on that amount since the person last became a member;
   7-16  or
   7-17                    (B)  a greater amount authorized by the
   7-18  municipality under Section 855.501.
   7-19        (e)  The additional benefit described by Subsection (d) is
   7-20  payable as a standard service retirement benefit or, at the
   7-21  election of the member, any optional benefit authorized under this
   7-22  subtitle that is the actuarial equivalent of the standard
   7-23  retirement benefit.  The first benefit payment date under this
   7-24  subsection is the later of the end of the month following the last
   7-25  month of employment or the end of the month following the month in
   7-26  which the person files an application for payment.  The first
   7-27  payment may not be made if the person has resumed employment that
    8-1  would result in suspension of a benefit.
    8-2        (f)  If a person became an employee of a municipality other
    8-3  than the person's reemploying municipality after beginning to
    8-4  receive a retirement benefit, and the person's service retirement
    8-5  annuity was suspended under Section 852.108 as it existed at the
    8-6  time of reemployment, the person may, on written application to the
    8-7  retirement system, resume receiving the suspended annuity.
    8-8        SECTION 5.  The section heading to Section 853.305,
    8-9  Government Code, is amended to read as follows:
   8-10        Sec. 853.305.  CREDIT FOR SERVICE WITH NONPARTICIPATING
   8-11  MUNICIPALITY, AIRPORT AUTHORITY, OR COUNCIL OF GOVERNMENTS, OR
   8-12  CERTAIN SERVICE PREVIOUSLY CANCELED <MUNICIPALITY OR WITH COUNCIL
   8-13  OF GOVERNMENTS>.
   8-14        SECTION 6.  Sections 853.305(a), (c), and (e), Government
   8-15  Code, are amended to read as follows:
   8-16        (a)  The governing body of a participating municipality by
   8-17  ordinance may authorize the granting of restricted prior service
   8-18  credit to an employee who is a member of the retirement system for
   8-19  service previously performed:
   8-20              (1)  as an employee of any incorporated city or town in
   8-21  the United States, <or of> any council of governments in this
   8-22  state, or an airport board or authority governing an airport for
   8-23  two cities having a combined population greater than 1,000,000, and
   8-24  for which the person has not otherwise received credited service in
   8-25  this system, including combined service credit under Chapter 803;
   8-26  or
   8-27              (2)  as an employee of the state or any branch, agency,
    9-1  or subdivision of the state for which the person received credited
    9-2  service under the Employees Retirement System of Texas, the Teacher
    9-3  Retirement System of Texas, the Judicial Retirement System of Texas
    9-4  Plan One, the Judicial Retirement System of Texas Plan Two, the
    9-5  Texas County and District Retirement System, or this retirement
    9-6  system, and the credit for which was canceled because of withdrawal
    9-7  of contributions and has not been reinstated.
    9-8        (c)  A member seeking to establish restricted prior service
    9-9  credit under Subsection (a)(1) <this section> must obtain from the
   9-10  clerk or secretary of the city or town, or from the similar
   9-11  official of a council of governments or airport board or authority,
   9-12  <governments,> for which the previous service was performed a
   9-13  detailed statement of the service, verified by that official, and
   9-14  file the statement with the clerk or secretary of the participating
   9-15  municipality by which the member is employed.  A member seeking to
   9-16  establish restricted prior service credit under Subsection (a)(2)
   9-17  must obtain from the public retirement system in which the canceled
   9-18  service was credited a detailed statement of the service, verified
   9-19  by an official of that retirement system, and file that statement
   9-20  with the clerk or secretary of the participating municipality by
   9-21  which the member is employed.
   9-22        (e)  On receipt of a certified copy of an approved claim, the
   9-23  retirement system, if satisfied that credit for <the> service
   9-24  claimed under Subsection (a)(1) has not previously been granted the
   9-25  member, or that credit claimed under Subsection (a)(2) previously
   9-26  existed but has been canceled and not reinstated, shall enter the
   9-27  credit in the member's records.
   10-1        SECTION 7.  Section 853.404(d), Government Code, is amended
   10-2  to read as follows:
   10-3        (d)  Except as provided by Subsection (e), an ordinance under
   10-4  this section continues in effect for each year that the actuary
   10-5  determines that all obligations charged against the municipality's
   10-6  account in the municipality accumulation fund, including the
   10-7  obligations to become effective the next January 1, can be funded
   10-8  by the municipality within its maximum contribution rate before the
   10-9  25th anniversary of the next January 1. An ordinance under this
  10-10  section will cease to be in effect for future years if the actuary
  10-11  cannot make that determination, but shall again take effect for
  10-12  future years beginning January 1 of the first year after the
  10-13  actuary can make that determination.
  10-14        SECTION 8.  Section 854.003, Government Code, is amended by
  10-15  amending Subsections (a), (c), and (d) and adding Subsections (e),
  10-16  (f), and (g) to read as follows:
  10-17        (a)  Except as provided by Subsections (b) and (e) <(d)>, the
  10-18  effective date of a member's service retirement is the date the
  10-19  member designates at the time the member applies for retirement
  10-20  under Section 854.101, but the date must be the last day of a
  10-21  calendar month and may not precede the date the member terminates
  10-22  employment with all participating municipalities.
  10-23        (c)  Except as provided by Subsections (b) and (e), the <The>
  10-24  effective date of a member's disability retirement is the date
  10-25  designated on the application for retirement filed by or for the
  10-26  member as provided by Section 854.301, but the date may not precede
  10-27  the date the member terminates employment with all participating
   11-1  municipalities.
   11-2        (d)  If a person who has attained age 70-1/2 terminates or
   11-3  has terminated covered employment without applying for retirement
   11-4  or a refund of accumulated contributions, the retirement system
   11-5  shall attempt to send to that person the written notice described
   11-6  by Subsection (e) as soon as is practical after the last to occur
   11-7  of:
   11-8              (1)  the date the person attains age 70-1/2;
   11-9              (2)  the date the person terminates all covered
  11-10  employment; or
  11-11              (3)  the date the person first becomes eligible for
  11-12  retirement under this chapter.  <If a person who has attained age
  11-13  70-1/2 terminates covered employment without applying for
  11-14  retirement, the retirement system shall attempt to notify that
  11-15  person in writing and advise the person that the person is required
  11-16  to retire.  If, before the 91st day after the date the retirement
  11-17  system sends the notice, the person has not filed an application
  11-18  with the board for retirement, the person is considered to have
  11-19  retired on the last day of the month in which the person terminated
  11-20  employment with all participating municipalities and:>
  11-21              <(1)  to have elected to receive an annuity under
  11-22  Section 854.103, if the person did not have a spouse on the date of
  11-23  employment termination; or>
  11-24              <(2)  if the person had a spouse on the date of
  11-25  employment termination, to have elected to receive an annuity under
  11-26  Section 854.104(c)(1) and to have designated the person's spouse as
  11-27  the beneficiary under the annuity.>
   12-1        (e)  The written notice shall advise the person that the
   12-2  person is required to retire.  If, before the 91st day after the
   12-3  date the retirement system sends the notice, the person has not
   12-4  filed an application for refund or retirement with the board of
   12-5  trustees, the person is considered to have retired on the last day
   12-6  of the month following the last to occur of the three dates listed
   12-7  in Subsection (d).
   12-8        (f)  If a person is considered by the retirement system to
   12-9  have retired as a result of Subsection (e), the person also shall
  12-10  be considered:
  12-11              (1)  to have elected to receive an annuity under
  12-12  Section 854.103, if the person did not have a spouse on the date of
  12-13  employment termination; or
  12-14              (2)  if the person had a spouse on the date of
  12-15  employment termination, to have elected to receive an annuity under
  12-16  Section 854.104(c)(1) and to have designated the person's spouse as
  12-17  the beneficiary under the annuity.
  12-18        (g)  If a person who has less than 10 years of creditable
  12-19  service and who has attained age 70-1/2 has terminated covered
  12-20  employment without applying for a refund of accumulated
  12-21  contributions and is not eligible to retire without additional
  12-22  service or age, the retirement system shall attempt to send that
  12-23  person written notice in accordance with this subsection as soon as
  12-24  is practical after the person has been absent from covered
  12-25  employment for five consecutive years.  The written notice shall
  12-26  advise the person that the person is required to receive a refund
  12-27  of accumulated contributions in order to avoid a tax penalty
   13-1  according to the Internal Revenue Code of 1986 (Title 26, United
   13-2  States Code).  If, before the 91st day after the date the
   13-3  retirement system sends the notice, the person has not filed an
   13-4  application for refund with the board of trustees, the person is
   13-5  considered to have filed an application for refund and to have
   13-6  elected to have withholding taxes withheld on that refund.
   13-7        SECTION 9.  Section 854.004, Government Code, is amended to
   13-8  read as follows:
   13-9        Sec. 854.004.  WHEN ANNUITY IS PAYABLE; CHANGES BEFORE FIRST
  13-10  PAYMENT.  (a)  A retiree may change the retiree's choice of
  13-11  retirement annuity payment plans or the designation of beneficiary
  13-12  after the retiree's effective date of retirement by filing written
  13-13  notice with the board of trustees before the later of the date on
  13-14  which the retirement system makes the first payment or the date the
  13-15  first annuity payment becomes due.  After the first payment has
  13-16  been made by the retirement system or has become due, a retiree may
  13-17  not change the annuity payment plan selected and may not change the
  13-18  designated beneficiary except under Section 854.006.
  13-19        (b)  For purposes of this section, the term "makes payment"
  13-20  includes the depositing in the mail of a payment or the crediting
  13-21  of an account with payment through electronic funds transfer.
  13-22        (c)  An annuity under this subtitle is payable for a period
  13-23  beginning on the last day of the first month following the month in
  13-24  which retirement occurs and ending, except as otherwise provided by
  13-25  this subtitle, on the last day of the month immediately preceding
  13-26  the month in which death occurs.
  13-27        SECTION 10.  Section 854.005(a), Government Code, is amended
   14-1  to read as follows:
   14-2        (a)  An annuitant by written request may authorize the
   14-3  retirement system to cease the annuitant's monthly payment or
   14-4  reduce the annuitant's monthly payment to an amount specified in
   14-5  the request.  In writing, the annuitant may subsequently request
   14-6  the retirement system to reinitiate or increase the annuitant's
   14-7  monthly payment at or to any specified amount that does not exceed
   14-8  the amount originally payable.
   14-9        SECTION 11.  Section 854.007(a)(1), Government Code, is
  14-10  amended to read as follows:
  14-11              (1)  "Annual benefit" means the total of all annuity
  14-12  payments by the retirement system on behalf of a person who has
  14-13  retired under this Subtitle <to an annuitant> during a calendar
  14-14  year, including any distributive benefit payments.
  14-15        SECTION 12.  Section 854.007(d), Government Code, is amended
  14-16  to read as follows:
  14-17        (d)  Except as provided by Subsections (f), (h), and (i), an
  14-18  annual benefit payable by the retirement system may not exceed the
  14-19  lesser of:
  14-20              (1)  $115,641, or another amount as adjusted each
  14-21  January 1 by the secretary of the treasury under Section 415 of the
  14-22  Internal Revenue Code of 1986 (26 U.S.C. Section 415) for
  14-23  cost-of-living increases after January 1, 1993; or
  14-24              (2)  100 percent of the former member's highest average
  14-25  annual compensation, including annual cost-of-living increases
  14-26  after separation from service.
  14-27        SECTION 13.  Section 854.007, Government Code, is amended by
   15-1  adding Subsections (l) and (m) to read as follows:
   15-2        (l)  The annual benefit payable by the retirement system that
   15-3  is otherwise limited by Subsection (d) may be increased each year
   15-4  in accordance with cost-of-living adjustments by the secretary of
   15-5  the treasury of the dollar limitation or the compensation
   15-6  limitation, as long as the benefit does not exceed the amount that
   15-7  would be payable without the limitation of Section 415 of the
   15-8  Internal Revenue Code of 1986 (26 U.S.C. Section 415).
   15-9        (m)  The limitations provided by this section may not be
  15-10  applied to reduce the benefit of any person whose retirement
  15-11  benefits payable under this and all other defined benefit plans of
  15-12  the member's employer do not exceed $10,000, plus the benefit
  15-13  provided under Subsection (h), for the plan year or for any
  15-14  previous plan year and who has not at any time participated in a
  15-15  defined contribution plan maintained by the person's employer.
  15-16        SECTION 14.  Subchapter B, Chapter 854, Government Code, is
  15-17  amended by adding Section 854.106 to read as follows:
  15-18        Sec. 854.106.  NO SURVIVING SPOUSE, EXECUTOR, OR
  15-19  ADMINISTRATOR.  (a)  If a surviving spouse, or the executor or
  15-20  administrator of a member's estate, would be entitled to make an
  15-21  election under Section 854.105(c) because of the death of the
  15-22  member, the heirs of the deceased member may make that election if:
  15-23              (1)  no surviving spouse exists;
  15-24              (2)  no petition for the appointment of a personal
  15-25  representative of the member is pending or has been granted;
  15-26              (3)  30 days have elapsed since the death of the
  15-27  member;
   16-1              (4)  the value of the entire assets of the member's
   16-2  estate, excluding homestead and exempt property, does not exceed
   16-3  $50,000;
   16-4              (5)  there are not more than three heirs; and
   16-5              (6)  on file with the retirement system is a certified
   16-6  copy of a small estates affidavit that has been approved and filed
   16-7  in accordance with Section 137, Texas Probate Code, or an original
   16-8  affidavit as described by Subsection (b).
   16-9        (b)  If no affidavit has been filed with the clerk of the
  16-10  court having jurisdiction and venue as provided by Section 137 of
  16-11  the Texas Probate Code, the retirement system may accept instead an
  16-12  affidavit sworn to by two disinterested witnesses, by the heirs who
  16-13  have legal capacity, and, if the facts warrant, by the natural
  16-14  guardian or next of kin of any minor or incompetent who is also an
  16-15  heir.  The affidavit shall include the names and addresses of the
  16-16  heirs and witnesses, establish the facts listed in Subsection (a),
  16-17  include a list of the assets and liabilities of the estate, show
  16-18  the facts that constitute the basis for the right of the heirs to
  16-19  receive the estate, and show the fractional interests of the heirs
  16-20  in the estate as a result of those facts.
  16-21        (c)  If the retirement system, acting through the director or
  16-22  a person designated by the director, approves the affidavit, the
  16-23  heirs can make the election if each heir agrees to the election.
  16-24        (d)  In this section, "heirs" has the meaning assigned by
  16-25  Section 3, Texas Probate Code, except that the term excludes any
  16-26  persons who have filed with the retirement system a proper
  16-27  disclaimer or renunciation.
   17-1        SECTION 15.  Subchapter F, Chapter 854, Government Code, is
   17-2  amended by adding Section 854.503 to read as follows:
   17-3        Sec. 854.503.  TRUST AS BENEFICIARY.  (a)  Except as provided
   17-4  by Subsection (b), a member or retiree may designate a trust as
   17-5  beneficiary for the payment of benefits from the retirement system.
   17-6  If a trust is designated beneficiary, the beneficiary of the trust
   17-7  is considered the designated beneficiary for the purpose of
   17-8  determining eligibility for and the amount and duration of
   17-9  benefits.  The trustee is entitled to exercise any rights to elect
  17-10  benefit options and name subsequent beneficiaries.
  17-11        (b)  A trust having more than one beneficiary may not receive
  17-12  benefits to which multiple designated beneficiaries are not
  17-13  eligible under this chapter.
  17-14        SECTION 16.  Subchapter F, Chapter 854, Government Code, is
  17-15  amended by adding Section 854.504 to read as follows:
  17-16        Sec. 854.504.  PERSON CAUSING DEATH OF MEMBER OR ANNUITANT.
  17-17  (a)  A benefit payable on the death of a member or annuitant may
  17-18  not be paid to a person convicted of causing that death but instead
  17-19  is payable to a person who would be entitled to the benefit had the
  17-20  convicted person predeceased the decedent.  If no person would be
  17-21  entitled to the benefit, the benefit is payable to the decedent's
  17-22  estate.
  17-23        (b)  The retirement system is not required to pay a benefit
  17-24  under Subsection (a) of this section unless it receives actual
  17-25  notice of the conviction of the person who would have been entitled
  17-26  to the benefits.  However, the retirement system may delay payment
  17-27  of a benefit payable on the death of a member or annuitant pending
   18-1  the results of a criminal investigation and of legal proceedings
   18-2  relating to the cause of death.
   18-3        (c)  The retirement system shall convert the remainder of any
   18-4  annuity that would otherwise have been payable throughout the life
   18-5  of the convicted person to an actuarially equivalent annuity
   18-6  payable to the decedent's estate in 60 monthly annuity payments.
   18-7  The time of the actuarial equivalence is the earlier of the time
   18-8  the retirement system receives the notice of the conviction under
   18-9  Subsection (b) or the time the retirement system begins the delay
  18-10  in payment of a benefit according to Subsection (b).
  18-11        (d)  For the purposes of this section, a person has been
  18-12  convicted of causing the death of a member or annuitant if the
  18-13  person:
  18-14              (1)  has pleaded guilty or nolo contendere to or has
  18-15  been found guilty by a court of an offense at the trial of which it
  18-16  is established that the person's intentional, knowing, or reckless
  18-17  act or omission resulted in the death of a person who was a member
  18-18  or annuitant, regardless of whether sentence is imposed or
  18-19  probated; and
  18-20              (2)  has no appeal of the conviction pending and the
  18-21  time provided for appeal has expired.
  18-22        SECTION 17.  Subchapter F, Chapter 854, Government Code, is
  18-23  amended by adding Section 854.505 to read as follows:
  18-24        Sec. 854.505.  SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY.
  18-25  When a member or retiree and the spouse or beneficiary of the
  18-26  member or retiree have died within a period of less than 120 hours
  18-27  of each other, the member or retiree is considered to have survived
   19-1  the spouse or beneficiary for the purpose of determining the rights
   19-2  to amounts payable under this subtitle on the death of the member
   19-3  or retiree.
   19-4        SECTION 18.  Section 854.602, Government Code, is amended by
   19-5  adding Subsection (f) to read as follows:
   19-6        (f)  If a member included in the coverage of the supplemental
   19-7  death benefit program becomes eligible to apply for the extended
   19-8  coverage but fails to comply with Subsections (b) and (c) before
   19-9  the member's death, the member will be considered to have had the
  19-10  extended coverage if proof is furnished that the member could have
  19-11  qualified for extended coverage if application for the coverage had
  19-12  been made according to Subsections (b) and (c) and that the death
  19-13  occurred within six months after the date the coverage of the
  19-14  supplemental death benefit program was discontinued under Section
  19-15  854.601.
  19-16        SECTION 19.  Section 855.301, Government Code, is amended to
  19-17  read as follows:
  19-18        Sec. 855.301.  INVESTMENT OF ASSETS.  (a)  The board of
  19-19  trustees shall invest and reinvest the assets of the retirement
  19-20  system without distinction as to their source in:
  19-21              (1)  interest-bearing bonds or other evidences of
  19-22  indebtedness of this state, a county, school district, city, or
  19-23  other municipal corporation of this state, the United States, or an
  19-24  authority or agency of the United States;
  19-25              (2)  securities on which the United States or any
  19-26  authority or agency of the United States guarantees the payment of
  19-27  principal and interest;
   20-1              (3)  corporate bonds or debentures that are issued by a
   20-2  company:
   20-3                    (A)  incorporated in the United States and that
   20-4  are rated "A" or better by one or more nationally recognized rating
   20-5  agencies approved by the board; or
   20-6                    (B)  in whose stock the retirement system may
   20-7  invest as provided by Subdivision (4);
   20-8              (4)  common or preferred stocks of a company
   20-9  incorporated in the United States that has paid cash dividends on
  20-10  its stock for 10 consecutive years immediately before the date of
  20-11  purchase and, unless the stocks are bank or insurance stocks, that
  20-12  is listed on an exchange registered with the Securities and
  20-13  Exchange Commission or its successor;
  20-14              (5)  obligations issued, assumed, or guaranteed by the
  20-15  Inter-American Development Bank, the International Bank for
  20-16  Reconstruction and Development (the World Bank), the African
  20-17  Development Bank, the Asian Development Bank, and the International
  20-18  Finance Corporation; or
  20-19              (6)  bonds issued, assumed, or guaranteed by the State
  20-20  of Israel.
  20-21        (b)  The assets of the retirement system may be held in the
  20-22  name of agents, nominees, depository trust companies, or other
  20-23  entities designated by the board of trustees.  The records and all
  20-24  relevant reports or accounts of the retirement system must show the
  20-25  ownership interests of the retirement system in these assets and
  20-26  the facts regarding the system's holdings.
  20-27        SECTION 20.  Section 855.501, Government Code, is amended by
   21-1  adding Subsections (i) and (j) to read as follows:
   21-2        (i)  A participating municipality electing to provide an
   21-3  increased service annuity reserve and electing a contribution rate
   21-4  of 150 percent for a year may, by ordinance, agree to be liable for
   21-5  total contributions at a rate that does not exceed a rate equal to
   21-6  the maximum rate prescribed for the municipality by Section 855.407
   21-7  plus two and one-half percent if the contribution rate for its
   21-8  employees is six percent, or a rate that does not exceed a rate
   21-9  equal to the maximum rate prescribed for the municipality by
  21-10  Section 855.407 plus three percent if the contribution rate for its
  21-11  employees is seven percent.
  21-12        (j)  A participating municipality electing to provide an
  21-13  increased service annuity reserve and electing a contribution rate
  21-14  of 200 percent for a year may, by ordinance, agree to be liable for
  21-15  total contributions at a rate that does not exceed a rate equal to
  21-16  the maximum rate prescribed for the municipality by Section 855.407
  21-17  plus five percent if the contribution rate for its employees is six
  21-18  percent, or a rate that does not exceed a rate equal to the maximum
  21-19  rate prescribed for the municipality by Section 855.407 plus six
  21-20  percent if the contribution rate for its employees is seven
  21-21  percent.
  21-22        SECTION 21.  This Act takes effect September 1, 1995.
  21-23        SECTION 22.  The importance of this legislation and the
  21-24  crowded condition of the calendars in both houses create an
  21-25  emergency and an imperative public necessity that the
  21-26  constitutional rule requiring bills to be read on three several
  21-27  days in each house be suspended, and this rule is hereby suspended.