1-1 By: Madla S.B. No. 1148
1-2 (In the Senate - Filed March 9, 1995; March 15, 1995, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 12, 1995, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 9, Nays 0;
1-6 April 12, 1995, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1148 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the retirement system for police officers and
1-11 firefighters in certain municipalities.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Sections 4.01 and 4.02, Chapter 824, Acts of the
1-14 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
1-15 Statutes), are amended to read as follows:
1-16 Sec. 4.01. Membership. (a) A person becomes a member of
1-17 the fund as a condition of employment if the person:
1-18 (1) has served eight months <been properly appointed
1-19 and enrolled> as a fire fighter or police officer or as a trainee
1-20 in a fire fighter or police officer training academy of a
1-21 municipality to which this Act applies <in a position or office
1-22 established and classified by municipal ordinance>;
1-23 (2) <has served the probationary period for the
1-24 position;>
1-25 <(3) has served for six months as a fire fighter or
1-26 police officer of the municipality; and>
1-27 <(4)> was not younger than 18 <and had not attained
1-28 the age of 36> at the time of appointment; and
1-29 (3) has provided an authorization for release of
1-30 medical information for any medical records dated on or after the
1-31 date of initial application for employment or has agreed in writing
1-32 to provide that authorization when requested by the board, or in
1-33 the alternative if required by the board, has submitted to a
1-34 physical examination by a physician selected by the board.
1-35 (b) Notwithstanding Subsection (a) of this section, a person
1-36 duly appointed and enrolled in a classified position in either the
1-37 fire department or police department who was barred from entry in
1-38 the fund solely because the person had attained the age of 36 on
1-39 the date that the person would have otherwise become eligible after
1-40 October 15, 1990, to be a member of the fund and for that reason
1-41 became a member of the Texas Municipal Retirement System and who is
1-42 otherwise eligible for and complies with each requirement for
1-43 membership in the fund shall become a member of the fund as a
1-44 condition of continued employment. The person must make
1-45 application to the fund not later than the 90th day after the date
1-46 on which the person receives notification of this provision.
1-47 (c) A person who becomes a member of the fund under
1-48 Subsection (b) of this section shall be given service credit from
1-49 the date the person would have become eligible to be a member of
1-50 the fund if not for the age requirement and must pay into the fund,
1-51 in accordance with procedures established by the board, pension
1-52 contributions for all service credit allowed based on amounts that
1-53 would have been deducted if the person had been allowed to enter
1-54 the fund on that date.
1-55 (d) A person who became a member of the Texas Municipal
1-56 Retirement System on or before October 15, 1990, may elect to
1-57 become a member of the fund on or before the 90th day after the
1-58 date the person receives notice of this provision. If the person
1-59 does not elect to become a member during that period, the person
1-60 may not become a member of the fund and waives any claim against
1-61 the fund. If the person elects to become a member of the fund, the
1-62 person must comply with each requirement for membership and must
1-63 pay into the fund, in accordance with procedures established by the
1-64 board, a sum of money equal to the amount of money that would have
1-65 been deducted from that person's salary during the period beginning
1-66 October 16, 1990, and ending on the date the person becomes a
1-67 member of the fund. The person also may purchase service credit
1-68 for the period beginning on the date the person would have
2-1 otherwise become eligible to be a member of the fund if not for the
2-2 age prohibition, through October 15, 1990. Service credit may be
2-3 obtained only in increments of full months, with the minimum being
2-4 one month.
2-5 (e) A person who becomes a member of the fund under
2-6 Subsection (b) or (d) of this section must, as a condition of
2-7 employment, provide an authorization for release of medical
2-8 information for any medical records dated on or after the date of
2-9 initial application for employment when requested by the board or
2-10 in the alternative, as required by the board, must submit to a
2-11 physical examination by a physician selected by the board.
2-12 (f) A municipality to which this Act applies shall match an
2-13 amount equal to twice the amount of each payment a member makes to
2-14 the fund under this section.
2-15 (g) <(b)> The drawing of compensation by an officer or
2-16 employee in the fire or police department for service in that
2-17 department does not of itself make that person a member of the
2-18 fund.
2-19 (h) <(c)> The regularity of an appointment as a fire fighter
2-20 or police officer of a municipality to which this Act applies may
2-21 not be presumed from the serving of the full probationary period,
2-22 if any. The service of the probationary period by an officer or
2-23 employee as a fire fighter or police officer of a municipality to
2-24 which this Act applies does not constitute the creation of a
2-25 position or office to which a proper appointment has been made for
2-26 purposes of this Act.
2-27 Sec. 4.02. FAMILY AND MEDICAL LEAVE <REINSTATEMENT>.
2-28 (a) If a member takes unpaid leave as provided by the Family and
2-29 Medical Leave Act (29 U.S.C. Section 2601 et seq.), that member is
2-30 entitled to make voluntary contributions for the leave period in
2-31 the same amount as the member would have paid if the member had not
2-32 taken the leave. Those payments must be made not later than the
2-33 30th day after the date the member returns from that leave. A
2-34 computation of contributions under this section shall be made in
2-35 the same manner as other computations under this Act. A
2-36 municipality to which this Act applies shall match an amount equal
2-37 to twice the amount of each payment a member makes to the fund
2-38 under this subsection.
2-39 (b) If the member does not comply with Subsection (a) of
2-40 this section, the member loses all credit toward the member's
2-41 retirement annuity for the period the member was on leave <A
2-42 former fund member who has reentered the fire or police department
2-43 may not be barred from membership in the fund because of age as
2-44 long as the member can qualify for a 30-year pension on or before
2-45 the member's 65th birthday>.
2-46 SECTION 2. Subsection (c), Section 4.03, Chapter 824, Acts
2-47 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
2-48 Statutes), is amended to read as follows:
2-49 (c) The member must make the payment described by Subsection
2-50 (b) of this section in full within an amount of time after the
2-51 member's return that is equal to three times <twice> the amount of
2-52 time the member was absent, except that the maximum period for
2-53 payment may not exceed five <four> years.
2-54 SECTION 3. Sections 4.04, 4.07, and 5.01, Chapter 824, Acts
2-55 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
2-56 Statutes), are amended to read as follows:
2-57 Sec. 4.04. MEMBER CONTRIBUTIONS. (a) There shall be
2-58 deducted from the wages of each fire fighter and police officer in
2-59 the employment of a municipality to which this Act applies a
2-60 percentage of the member's total salary, excluding overtime pay,
2-61 according to the following schedule:
2-62 (1) 11.16 percent for full pay periods after September
2-63 30, 1993, but before October 1, 1994;
2-64 (2) 11.32 percent for full pay periods after September
2-65 30, 1994, but before October 1, 1995;
2-66 (3) 11.50 percent for full pay periods after September
2-67 30, 1995, but before October 1, 1996;
2-68 (4) 11.66 percent for full pay periods after September
2-69 30, 1996, but before October 1, 1997;
2-70 (5) 11.82 percent for full pay periods after September
3-1 30, 1997, but before October 1, 1998;
3-2 (6) 12 percent for full pay periods after September
3-3 30, 1998, but before October 1, 1999;
3-4 (7) 12.16 percent for full pay periods after September
3-5 30, 1999, but before October 1, 2000;
3-6 (8) 12.32 percent for full pay periods after September
3-7 30, 2000, but before October 1, 2001; and
3-8 (9) 12.50 percent for full pay periods after September
3-9 30, 2001.
3-10 (b) The municipality has always picked up and shall continue
3-11 to pick up the member contributions that are required by Subsection
3-12 (a) of this section.
3-13 (c) Contributions picked up by the municipality shall be
3-14 treated as employer contributions in accordance with Section
3-15 414(h)(2) of the Internal Revenue Code of 1986 (26 U.S.C. Section
3-16 414) for the purpose of determining tax treatment of the amounts
3-17 under the Internal Revenue Code of 1986. Those contributions are
3-18 not included in the gross income of the employee until the time
3-19 they are distributed or made available to the employee.
3-20 Sec. 4.07. <NO> REFUND OF CONTRIBUTIONS. (a) During the
3-21 first five years of membership, a <A> member of the fund is not
3-22 entitled to any refund from the fund of any portion of the money
3-23 deducted from the member's pay for the benefit of the fund. That
3-24 money is <public money and> the property of the fund for the
3-25 benefit of the members qualifying for benefits and for their
3-26 beneficiaries.
3-27 (b) A member of the fund who terminates employment before
3-28 the member's right to benefits under the fund has vested but who
3-29 has contributed to the fund for at least five years is entitled to
3-30 a refund of the member's contributions that were picked up by the
3-31 municipality. That refund shall be paid without interest. A
3-32 refund under this section is not available to a member who
3-33 terminates employment to receive a disability pension or to a
3-34 survivor beneficiary under this Act. A person's acceptance of a
3-35 refund under this subsection precludes the person from any other
3-36 right or benefit under this Act.
3-37 Sec. 5.01. Retirement benefits. (a) If a member of the
3-38 fund has contributed a portion of that member's salary as provided
3-39 by this Act and has contributed and served for 20 years or more in
3-40 the fire or police department, the board shall, on the application
3-41 of the member for a retirement annuity, authorize a retirement
3-42 annuity to the member.
3-43 (b) The board shall compute the retirement annuity of a
3-44 member who retires after September 30, 1991, but before October 1,
3-45 1995, on the basis of the average of the member's total salary,
3-46 excluding overtime pay, for the highest three years of the last
3-47 five years, computed from the date of retirement, of the member's
3-48 pay at the rate of two percent for each of the first 20 years
3-49 served, plus 3 1/2 percent for each of the next 10 years served,
3-50 plus one percent for each of the next five years served, with
3-51 fractional years prorated based on full months served as a
3-52 contributing member, but the annuity may not exceed, as of the date
3-53 of retirement, 80 percent of the average so determined.
3-54 (c) The board shall compute the retirement annuity of a
3-55 member who retires after September 30, 1995, on the basis of the
3-56 average of the member's total salary, excluding overtime pay, for
3-57 the highest three years of the last five years, computed from the
3-58 date of retirement, of the member's pay at the rate of two percent
3-59 for each of the first 20 years served, plus four percent for each
3-60 of the next five years served, plus 3 1/2 percent for each of the
3-61 next five years served, plus one percent for each of the next five
3-62 years served, with fractional years prorated based on full months
3-63 served as a contributing member. In making the computation for a
3-64 year, the year is considered to begin on the first day a
3-65 contribution is made. An annuity under this subsection may not
3-66 exceed, as of the date of retirement, 82.5 percent of the average
3-67 determined under this subsection.
3-68 (d) A member may not receive an award from the fund for
3-69 service retirement until the member has served at least 20 years in
3-70 the fire or police department and has also contributed the required
4-1 amount of money for at least 20 years. In determining the number
4-2 of years of service in a department, the member shall be given full
4-3 credit for the time the member was actively engaged in military
4-4 service in accordance with Section 4.03 of this Act and for
4-5 absences taken under the Family and Medical Leave Act (29 U.S.C.
4-6 Section 2601 et seq.), in accordance with Section 4.02 of this Act.
4-7 Disciplinary suspensions of 15 days or less may not be subtracted
4-8 from a member's service credit under this Act if the member has
4-9 paid into the fund within 30 days after the termination date of
4-10 each suspension a sum of money equal to the amount of money that
4-11 would have been deducted from that person's salary during that
4-12 period of suspension if it had not been for that suspension. A
4-13 municipality to which this Act applies shall double-match a payment
4-14 made under this subsection.
4-15 (e) <(d) If a member of the fire or police department has
4-16 served for 30 years or more in either department and has
4-17 contributed a portion of that member's salary as provided by this
4-18 Act for the same period, that member is retired automatically from
4-19 service on the member's 65th birthday.>
4-20 <(e) If, on a member's 65th birthday, the member has served
4-21 less than 30 years in either department and has not contributed a
4-22 portion of that member's salary as provided by this Act for that
4-23 period, the member may continue service and contributions until the
4-24 total service equals and the contributions have been made for 30
4-25 years.>
4-26 <(f)> Except as provided by Subsection (f) <(g)> of this
4-27 section, members of the fund at the time of their retirement shall
4-28 receive service credit for all unused sick leave accumulated by
4-29 them under Chapter 143, Local Government Code, and its subsequent
4-30 amendments, with fractional years prorated based on full months of
4-31 sick leave.
4-32 (f) <(g)> The retirement annuity for a member under
4-33 Subsection (e) <(f)> of this section may not exceed, as of the date
4-34 of retirement, 82.5 <80> percent of the average, determined under
4-35 that subsection and under the ordinances of a municipality to which
4-36 this Act applies, that exceeds 90 days of accumulated sick leave.
4-37 SECTION 4. Article 5, Chapter 824, Acts of the 73rd
4-38 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
4-39 is amended by adding Section 5.015 to read as follows:
4-40 Sec. 5.015. BACKWARD DEFERRED RETIREMENT OPTION PLAN (BACK
4-41 DROP). (a) At the time a member applies for retirement benefits
4-42 under Section 5.01 of this Act, the member may elect a Backward
4-43 Deferred Retirement Option Plan (Back DROP) with a lump-sum payment
4-44 and a reduced annuity benefit as provided by this section.
4-45 (b) The Back DROP election:
4-46 (1) results in a lump-sum payment for a number of full
4-47 months of service elected by the member that does not exceed the
4-48 lesser of the number of months of service credit the member has in
4-49 excess of 20 years or 24 months; and
4-50 (2) must be made at the time of application for
4-51 retirement.
4-52 (c) To be eligible to make a Back DROP election under this
4-53 section, a member of the fund must have contributed a portion of
4-54 that member's salary, as provided by this Act, and have contributed
4-55 and served at least 20 years and one month in the fire or police
4-56 department.
4-57 (d) The amount of a lump-sum payment to which a member
4-58 making a Back DROP election is entitled shall be computed in the
4-59 manner provided by this subsection. The member's average annual
4-60 salary shall be computed in the manner provided by Section 5.01(c)
4-61 of this Act, except that the retirement date used in making that
4-62 computation is the retirement date computed as provided by this
4-63 subsection. The member's average annual salary shall be divided by
4-64 12 to compute the member's average monthly salary. The member's
4-65 average monthly salary multiplied by the number of full months
4-66 elected by the member under Subsection (b)(1) of this section is
4-67 the amount of the lump-sum payment to which the member is entitled.
4-68 In computing the member's average annual salary under this
4-69 subsection, the member's retirement date is the member's Back DROP
4-70 retirement date, which is the member's actual retirement date less
5-1 the amount of time for:
5-2 (1) any service in excess of 35 years of service;
5-3 (2) any service credit given for sick leave unused on
5-4 the date of actual retirement; and
5-5 (3) service credit, for service in excess of 20 years
5-6 but not in excess of the amount permitted under Subsection (b)(1)
5-7 of this section, the member elects for computing the amount of the
5-8 lump-sum payment.
5-9 (e) For purposes of computing the monthly annuity of a
5-10 member making a Back DROP election, the member's average annual
5-11 salary shall be computed in the manner provided by Section 5.01(c)
5-12 of this Act, except that the retirement date used in making that
5-13 computation is the member's actual retirement date, plus time
5-14 representing any service credit given for sick leave unused on the
5-15 actual retirement date, less the amount of time the member elects
5-16 under Subsection (b)(1) of this section. The annuity may not
5-17 exceed the limitation provided by Section 5.01(c) of this Act. The
5-18 member's average annual salary shall be divided by 12 to compute
5-19 the member's monthly annuity.
5-20 (f) A member may defer receiving the lump-sum payment under
5-21 this section for a period of not longer than 12 months after the
5-22 member's retirement date. Interest may not be paid on the deferred
5-23 amount at the time of distribution.
5-24 (g) The board by administrative rule shall implement this
5-25 section in a manner that preserves the eligibility of the tax
5-26 qualification under the Internal Revenue Code of 1986 and may
5-27 revise the program as necessary to retain tax qualification.
5-28 SECTION 5. Subsection (a), Section 5.09, Chapter 824, Acts
5-29 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
5-30 Statutes), is amended to read as follows:
5-31 (a) At or before its regular meeting in the month of March,
5-32 the board annually shall review the Consumer's Price Index for
5-33 Moderate Income Families in Large Cities--All Items or the nearest
5-34 equivalent published by the United States Bureau of Labor
5-35 Statistics for the preceding calendar year. If that index shows an
5-36 increase during the preceding calendar year in the cost of living
5-37 as compared with that index at the close of the previous year, the
5-38 board shall order an increase of all retirement annuities by the
5-39 number of full percentage points closest to the exact amount of the
5-40 increase of that index, except that any increased retirement
5-41 annuities are payable only at the rate of 75 percent of the
5-42 applicable cost-of-living percentage for those retirees, and the
5-43 beneficiaries of those retirees, who were retired on and after
5-44 August 30, 1971. The annual cost-of-living adjustment for a
5-45 retiree or a beneficiary of a retiree who retired on or after
5-46 September 1, 1971, but before October 1, 1989, shall be computed at
5-47 the rate of 87.5 percent of the consumer price index specified by
5-48 this subsection if the index is eight percent or less, with the
5-49 maximum cost-of-living adjustment capped at the rate of six
5-50 percent, but at the rate of 75 percent of the index if the index is
5-51 greater than eight percent for those retirees, with no cap on the
5-52 rate of the cost-of-living adjustment.
5-53 SECTION 6. Section 5.11, Chapter 824, Acts of the 73rd
5-54 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
5-55 is amended by amending Subsection (c) and by adding Subsection (j)
5-56 to read as follows:
5-57 (c) Accrued benefits under this Act become 100 percent
5-58 vested for all members on termination of the fund or on occurrence
5-59 of another event described in Section 401(a)(17) of the code and
5-60 become 100 percent vested for a member on the date the member
5-61 <becomes 65 years of age and> has completed 20 years of service.
5-62 (j) To the extent permitted by law, the board may adjust the
5-63 benefits of retired members and beneficiaries by increasing any
5-64 retirement benefit that was reduced as inflationary indexing under
5-65 Section 415 of the code. If the definition of compensation is
5-66 amended to include amounts previously excluded as compensation, the
5-67 board may adjust the benefits of retired members and beneficiaries,
5-68 including the payment of benefits previously excluded. Benefits
5-69 paid under this subsection are not considered as extra compensation
5-70 earned after retirement but as the delayed payment of benefits
6-1 earned before retirement.
6-2 SECTION 7. Subsections (c) and (d), Section 6.02, Chapter
6-3 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
6-4 Texas Civil Statutes), are amended to read as follows:
6-5 (c) If there are no children, the surviving spouse is
6-6 entitled to receive an amount not to exceed 60 <57.50> percent of
6-7 the average total salary, excluding overtime pay, of the deceased
6-8 member computed as provided under Subsection (a) of this section.
6-9 (d) If there is no surviving spouse, the children are
6-10 entitled to receive not more than 30 <28.75> percent of the average
6-11 total salary computed as provided under Subsection (a) of this
6-12 section, except that if the board determines on investigation that
6-13 the eligible children are destitute, the board may increase the
6-14 death benefit annuity to an amount not to exceed 40 percent of that
6-15 average total salary. The amount awarded under this subsection to
6-16 any child shall be paid by the board to the legal guardian of the
6-17 child.
6-18 SECTION 8. Section 6.04, Chapter 824, Acts of the 73rd
6-19 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
6-20 is amended to read as follows:
6-21 Sec. 6.04. Remarriage; benefits after termination of
6-22 marriage. (a) If a surviving spouse remarries or a dependent
6-23 child marries before October 1, 1995, the <The> right of a
6-24 surviving spouse or dependent child to annuity payments under this
6-25 Act terminates on the remarriage of the surviving spouse<, either
6-26 statutory or common law,> or on the marriage of the child, as
6-27 applicable, under either statutory law or under common law as
6-28 prescribed by Section 6.06 of this Act.
6-29 (b) The right of a <If the remarried> surviving spouse or
6-30 <married> dependent child to annuity payments under this Act is not
6-31 affected by the surviving spouse's remarriage or dependent child's
6-32 marriage under either statutory or common law if the marriage or
6-33 remarriage takes place on or after October 1, 1995 <becomes
6-34 unmarried, that person is entitled, on application, to the greater
6-35 of 75 percent of the annuity that was in effect on the date of
6-36 termination or a minimum annuity of $800 each month for as long as
6-37 that person remains unmarried>.
6-38 (c) If after October 1, 1995, there is a termination of the
6-39 remarriage of a surviving spouse or of the marriage of a dependent
6-40 child, that person is entitled, on application, to 100 percent of
6-41 the annuity that was in effect on the date of termination of
6-42 benefits.
6-43 (d) A surviving spouse or dependent child who is unmarried
6-44 but receiving reduced benefits because of a prior marriage that
6-45 caused the benefits to be terminated is entitled to 100 percent of
6-46 the annuity that was in effect on the original date of termination
6-47 of benefits.
6-48 (e) The benefit provided under Subsections (c) and (d) of
6-49 this section shall be applied prospectively beginning October 1,
6-50 1995, and the surviving spouse or dependent child is not entitled
6-51 to receive any benefits or increases in benefits relating to any
6-52 period before October 1, 1995.
6-53 SECTION 9. Subsection (b), Section 6.05, Chapter 824, Acts
6-54 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
6-55 Statutes), is amended to read as follows:
6-56 (b) If the <surviving spouse,> dependent beneficiary<,> or
6-57 guardian fails or refuses to file an affidavit required under
6-58 Subsection (a) of this section or if an incomplete, incorrect, or
6-59 false affidavit is filed, the board may suspend annuity payments to
6-60 that person indefinitely until the person complies with the
6-61 requests and orders of the board.
6-62 SECTION 10. Section 6.07, Chapter 824, Acts of the 73rd
6-63 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
6-64 is amended to read as follows:
6-65 Sec. 6.07. Surviving spouse's right to single entitlement.
6-66 A <Unless otherwise provided by law, a> surviving spouse who is not
6-67 a member of the fund is not entitled to more than one annuity from
6-68 the fund.
6-69 SECTION 11. Subsection (a), Section 6.11, Chapter 824, Acts
6-70 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
7-1 Statutes), is amended to read as follows:
7-2 (a) If a member of the fire or police department in active
7-3 service dies and does not leave an eligible surviving spouse, a
7-4 child under 17 years of age, a child under 19 years of age who is
7-5 attending school, a mentally or physically disabled child, or a
7-6 dependent father or mother, the estate of the deceased member is
7-7 entitled to a death benefit payment in the amount of $10,000 from
7-8 the fund or the refund of contributions as provided by Section 4.07
7-9 of this Act, whichever amount is greater.
7-10 SECTION 12. Subsections (a) and (b), Section 7.04, Chapter
7-11 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
7-12 Texas Civil Statutes), are amended to read as follows:
7-13 (a) The board shall cause the reserve retirement funds to be
7-14 invested in a manner that a prudent investor would invest,
7-15 considering the purposes, terms, distribution requirements, and
7-16 other circumstances <consistent with the care, skill, and diligence
7-17 under the prevailing circumstances that a prudent person acting in
7-18 a like capacity and familiar with matters of the type would use in
7-19 the conduct> of an enterprise with a like character and like aims.
7-20 (b) The board shall diversify the investment of the fund to
7-21 minimize the risk of large losses unless under the circumstances it
7-22 is clearly prudent not to do so. In determining whether the board
7-23 has exercised prudence concerning an investment decision, the
7-24 investment of all assets of the fund, rather than the prudence of a
7-25 single investment of <investing the assets of the fund, the board
7-26 shall be bound by the documents and instruments governing> the
7-27 fund, shall be considered.
7-28 SECTION 13. Chapter 824, Acts of the 73rd Legislature, 1993
7-29 (Article 6243o, Vernon's Texas Civil Statutes), is amended by
7-30 adding Article 7A to read as follows:
7-31 ARTICLE 7A. STANDARDS OF CONDUCT AND FINANCIAL
7-32 DISCLOSURE REQUIREMENTS
7-33 Sec. 7.51. POLICY. (a) A member of the board or the
7-34 executive director may not have a direct or indirect interest,
7-35 including a financial interest, engage in a business transaction or
7-36 professional activity, or incur an obligation of any nature that is
7-37 in substantial conflict with the proper discharge of the member's
7-38 or the executive director's fiduciary duties.
7-39 (b) To implement Subsection (a) of this section and to
7-40 strengthen the faith and confidence of the members and
7-41 beneficiaries of the fund, the board shall develop standards of
7-42 conduct and financial disclosure requirements to be observed by
7-43 each member of the board and by the executive director in the
7-44 performance of official duties.
7-45 (c) The standards of conduct and financial disclosure
7-46 requirements must provide for:
7-47 (1) general definitions;
7-48 (2) the manner of determining substantial conflict;
7-49 (3) the manner of determining who is considered a
7-50 dependent child of a board member or the executive director;
7-51 (4) each member of the board and the executive
7-52 director to file a financial disclosure statement;
7-53 (5) a review board to be appointed;
7-54 (6) the composition of the review board;
7-55 (7) a custodian of records to be designated;
7-56 (8) the manner in which records must be retained;
7-57 (9) the information, generally, that must be included
7-58 in a financial statement;
7-59 (10) the time for filing a financial statement;
7-60 (11) the form in which a financial statement must be
7-61 presented;
7-62 (12) compliance with this section;
7-63 (13) public access to financial statements;
7-64 (14) sanctions for a violation of this section that
7-65 must include removal of a member of the board or the executive
7-66 director in the case of a serious violation;
7-67 (15) standards of conduct for board members and the
7-68 executive director; and
7-69 (16) other matters relating to conduct of board
7-70 members and the executive director and financial disclosure the
8-1 board considers appropriate.
8-2 SECTION 14. This Act takes effect October 1, 1995.
8-3 SECTION 15. The importance of this legislation and the
8-4 crowded condition of the calendars in both houses create an
8-5 emergency and an imperative public necessity that the
8-6 constitutional rule requiring bills to be read on three several
8-7 days in each house be suspended, and this rule is hereby suspended.
8-8 * * * * *