By Armbrister                                         S.B. No. 1231
       74R1460 GCH-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the powers and duties of and systems and programs under
    1-3  the Employees Retirement System of Texas.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 805.002, Government Code, is amended by
    1-6  amending Subsections (a), (b), (c), and (d) and adding Subsections
    1-7  (g) and (h) to read as follows:
    1-8        (a)  Except as provided by Subsection (h), a <A> member of
    1-9  both the employees retirement system and the teacher retirement
   1-10  system who applies for service or disability retirement from either
   1-11  system may transfer to that system service credit established in
   1-12  the other system if the member has at least three years of service
   1-13  credit in the system from which the member is retiring.  A person
   1-14  whose membership was transferred from the teacher retirement system
   1-15  to the employees retirement system pursuant to Section 43(a),
   1-16  Chapter 812, Acts of the 73rd Legislature, 1993, and who later
   1-17  resumes membership in the teacher retirement system is eligible to
   1-18  transfer service credit from the employees retirement system to the
   1-19  teacher retirement system if the sum of the member's service credit
   1-20  in the teacher retirement system and the service credit that was
   1-21  transferred to the employees retirement system at the time of the
   1-22  transfer of membership is at least three years.
   1-23        (b)  Except as provided by Subsection (h), a <A> member of
   1-24  both the employees retirement system and the teacher retirement
    2-1  system who has less than three years of service credit in the
    2-2  system in which the person most recently received service credit
    2-3  and at least three years of service credit in the other system may,
    2-4  at the time the person applies for service or disability retirement
    2-5  <from the other system>, transfer service credit to the other
    2-6  <that> system from the system in which the person most recently
    2-7  received service credit.
    2-8        (c)  Except as provided by Subsections (e) and (f), a member
    2-9  of the employees retirement system or the teacher retirement system
   2-10  who formerly was a member of the other system may reinstate or
   2-11  purchase service credit in the other system for the purpose of
   2-12  making a transfer under Subsection (a) if the member has at least
   2-13  three years of service credit in the system in which the person
   2-14  currently is a member.  Except as provided by Subsections (e) and
   2-15  (f), a member of the employees retirement system or the teacher
   2-16  retirement system who formerly was a member of the other system,
   2-17  who before September 1, 1993, transferred at least three years of
   2-18  service credit to the system in which the person currently is a
   2-19  member, and who has at least three years of service credit other
   2-20  than the transferred credit in the system in which the person
   2-21  currently is a member may reinstate or purchase service credit in
   2-22  the other system for the purpose of making a transfer of all
   2-23  service credit to that other system.
   2-24        (d)  Except as provided by Subsections (e) and (f), the
   2-25  designated beneficiary of a member of the employees retirement
   2-26  system or the teacher retirement system who dies while holding a
   2-27  position included in the membership of the system may make a
    3-1  transfer under Subsection (a) and a reinstatement or purchase under
    3-2  Subsection (c) if the deceased member had at least three years of
    3-3  service credit in the system in which the member was performing
    3-4  service at the time of death.  The designated beneficiary may make
    3-5  a transfer under Subsection (b) if the deceased member had less
    3-6  than three years of service credit in the system in which the
    3-7  member was performing service at the time of death.  If a member is
    3-8  not survived by a designated beneficiary, an alternate beneficiary,
    3-9  or a beneficiary provided by law or has failed to designate a
   3-10  beneficiary after becoming a member or resuming membership, the
   3-11  personal representative of the member's estate has the same right
   3-12  under this subsection as a designated beneficiary.  A transfer of
   3-13  service by the beneficiary or personal representative of a deceased
   3-14  member's estate is not permitted unless the transfer will result in
   3-15  the payment of a death benefit annuity.
   3-16        (g)  To be eligible to make a transfer pursuant to Subsection
   3-17  (d), a person must be the designated beneficiary of the deceased
   3-18  member under both retirement systems.
   3-19        (h)  A member applying for occupational disability retirement
   3-20  from the employees retirement system may transfer service credit
   3-21  from the teacher retirement system only if the member was
   3-22  contributing to the employees retirement system at the time the
   3-23  disabling condition occurred.
   3-24        SECTION 2.  Section 805.003, Government Code, is amended to
   3-25  read as follows:
   3-26        Sec. 805.003.  Payments to Reinstate or Purchase Service
   3-27  Credit.  The cost of reinstating or purchasing service credit under
    4-1  Section 805.002 is determined according to the statutes that govern
    4-2  the reinstatement or purchase of the type of service credit in the
    4-3  system in which it is to be reinstated or purchased.  All payments
    4-4  for service credit reinstated or purchased under Section 805.002
    4-5  must be made before retirement or the first payment of a death
    4-6  benefit annuity, as applicable, or before a later date if allowed
    4-7  for members of the retirement system in which the credit is to be
    4-8  reinstated or purchased.
    4-9        SECTION 3.  Sections 805.007(a) and (b), Government Code, are
   4-10  amended to read as follows:
   4-11        (a)  A person who transfers service credit under this chapter
   4-12  forfeits all rights to benefits payable by the system from which it
   4-13  is transferred and is not an annuitant of that system for any
   4-14  purpose, including the payment of postretirement increases to
   4-15  annuitants of that system.  This subsection does not preclude a
   4-16  person from receiving benefits as a beneficiary of an account not
   4-17  related to the transferred service credit.
   4-18        (b)  Service credit transferred under this chapter is
   4-19  considered as if it had been granted for service performed under
   4-20  the system to which it has been transferred and is used in
   4-21  satisfying minimum service requirements for retirement and in
   4-22  determining the amount of benefits that are based on the amount of
   4-23  a person's service credit:
   4-24              (1)  except that a person's average salary for the
   4-25  purpose of computing an annuity may be determined only from service
   4-26  credit that was originally established in one system and that
   4-27  results in the higher average salary; <and>
    5-1              (2)  except as provided by Section 805.006; and
    5-2              (3)  except service credit transferred by a member
    5-3  applying for occupational disability retirement.
    5-4        SECTION 4.  Section 805.008, Government Code, is amended to
    5-5  read as follows:
    5-6        Sec. 805.008.  RESPONSIBILITY FOR BENEFIT PAYMENTS.
    5-7  (a)  Except as provided by Subsection (c), the <The> system from
    5-8  which a person's service credit is transferred under this chapter
    5-9  shall transfer to the other system, at the time the annuity based
   5-10  on the service credit becomes payable, an amount equal to the
   5-11  portion of the actuarial value of the annuity that represents the
   5-12  percentage of the total amount of the person's service credited in
   5-13  both systems that was credited in the system from which the credit
   5-14  is being transferred.
   5-15        (b)  Except as provided by Subsection (c), the <The> systems
   5-16  jointly by rule shall adopt actuarial tables and investment
   5-17  assumptions to be used in computing actuarial values under this
   5-18  section.
   5-19        (c)  As an alternative to Subsections (a) and (b), the
   5-20  systems by rule may require the system from which service credit is
   5-21  transferred to pay monthly an amount equal to the portion of the
   5-22  actual value of the monthly payment of the annuity that represents
   5-23  the percentage of the total amount of service credit that is
   5-24  transferred.
   5-25        (d)  For the purpose of computing an amount to be transferred
   5-26  under this section, service credit in either system must be
   5-27  considered as if it were credited under rules of the teacher
    6-1  retirement system determining the amount of service creditable.
    6-2        (e) <(d)>  An amount transferred under this section is
    6-3  payable from amounts credited to the person's individual account
    6-4  and amounts credited to the account in which the system places
    6-5  state contributions.  Except as provided by Subsection (g), an <An>
    6-6  amount received under this section shall be deposited in the
    6-7  account from which the system receiving the amount pays annuities.
    6-8        (f) <(e)>  The system to which a transfer is made under this
    6-9  section is responsible for paying the annuity for which the
   6-10  transfer was made, including the entire amount of any increase in
   6-11  the annuity granted after the transfer.
   6-12        (g)  At the time of the death of a person whose membership
   6-13  was transferred from the teacher retirement system to the employees
   6-14  retirement system pursuant to Section 43(a), Chapter 812, Acts of
   6-15  the 73rd Legislature, 1993, the teacher retirement system shall
   6-16  transfer to the employees retirement system the person's service
   6-17  credit in the teacher retirement system and, if employment with the
   6-18  transferring agency was continuous from the date of transfer to the
   6-19  date of death:
   6-20              (1)  an amount determined under Subsections (a) and (b)
   6-21  or under Subsection (c), if an annuity is paid under Chapter 814;
   6-22  or
   6-23              (2)  the amount of money in the member savings account
   6-24  plus an amount equal to five percent of the person's account
   6-25  balance for each full year of service credited in the teacher
   6-26  retirement system, if a death benefit other than an annuity is paid
   6-27  under Chapter 814.
    7-1        SECTION 5.  Section 811.001(8), Government Code, is amended
    7-2  to read as follows:
    7-3              (8)  "Custodial officer" means a member of the
    7-4  retirement system who is employed by the institutional division or
    7-5  the state jail division of the Texas Department of Criminal Justice
    7-6  and is certified by the department and accepted by the retirement
    7-7  system as eligible to receive service credit as a custodial officer
    7-8  <as having a normal job assignment that requires frequent or
    7-9  infrequent regularly planned contact with, and in close proximity
   7-10  to, inmates of the institutional division or inmates or defendants
   7-11  confined in the state jail division without the protection of bars,
   7-12  doors, security screens, or similar devices and includes
   7-13  assignments normally involving supervision or the potential for
   7-14  supervision of inmates in inmate housing areas, educational or
   7-15  recreational facilities, industrial shops, kitchens, laundries,
   7-16  medical areas, agricultural shops or fields, or in other areas on
   7-17  or away from property of the institutional division or the state
   7-18  jail division>.
   7-19        SECTION 6.  Section 813.104, Government Code, is amended by
   7-20  amending Subsection (d), relettering Subsection (e) as Subsection
   7-21  (g), and adding new Subsections (e) and (f) to read as follows:
   7-22        (d)  Except as provided by Subsection (e), payments
   7-23  <Payments> may not be made under this section:
   7-24              (1)  to establish or reestablish service credit of a
   7-25  person who has retired or died; or
   7-26              (2)  to establish current service under Section
   7-27  813.201.
    8-1        (e)  The designated beneficiary of a deceased member, or if
    8-2  none exists, the personal representative of the decedent's estate,
    8-3  may establish or reestablish service for which the member was
    8-4  eligible at the time of death if the establishment of the service
    8-5  would result in the payment of a death benefit annuity.
    8-6        (f)  The payment for the establishment or reestablishment of
    8-7  service under Subsection (e) must be made in a lump sum and
    8-8  completed before the first payment of a death benefit annuity, but
    8-9  not later than the 60th day after the date the retirement system
   8-10  receives notice of the death.
   8-11        (g) <(e)>  The retirement system may adopt rules to
   8-12  administer this section.
   8-13        SECTION 7.  Subchapter D, Chapter 813, Government Code, is
   8-14  amended by adding Section 813.305 to read as follows:
   8-15        Sec. 813.305.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
   8-16  SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  The retirement
   8-17  system may adopt rules to comply with the Uniformed Services
   8-18  Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
   8-19  seq.) and other federal laws affecting the crediting of military
   8-20  service.
   8-21        SECTION 8.  Section 813.506, Government Code, is amended to
   8-22  read as follows:
   8-23        Sec. 813.506.  Custodial Officer Service.  (a)  The Texas
   8-24  Department of Criminal Justice <Corrections> by rule shall adopt
   8-25  standards for determining eligibility for service credit as a
   8-26  custodial officer, based on the need to encourage early retirement
   8-27  of persons whose duties are hazardous and require them to have
    9-1  routine contact with inmates of or defendants confined in the state
    9-2  jail division of the Texas Department of Criminal Justice
    9-3  <Corrections> on a regular basis.
    9-4        (b)  To be creditable as custodial officer service, service
    9-5  performed must meet the requirements of the rules adopted under
    9-6  Subsection (a) and must <may> be performed by persons <in one of
    9-7  the following job categories:>
    9-8              <(1)  all persons> classified as Correctional Officer I
    9-9  through warden, including training officers and special operations
   9-10  reaction team officers<;>
   9-11              <(2)  all other employees assigned to work on a unit
   9-12  and whose jobs require routine contact with inmates, including but
   9-13  not limited to farm managers, livestock supervisors, maintenance
   9-14  foremen, shop foremen, medical assistants, food service
   9-15  supervisors, stewards, education consultants, commodity
   9-16  specialists, and correctional counselors;>
   9-17              <(3)  employees assigned to administrative offices
   9-18  whose jobs require routine contact with inmates, including but not
   9-19  limited to investigators, compliance monitors, accountants
   9-20  routinely required to audit unit operations, sociologists,
   9-21  interviewers, classification officers, and supervising counselors;
   9-22  and>
   9-23              <(4)  administrative positions whose jobs require
   9-24  response to emergency situations involving inmates, including but
   9-25  except as specified not limited to the director, deputy directors,
   9-26  assistant directors, and not more than 25 administrative duty
   9-27  officers>.  An employee of the department on September 1, 1995, who
   10-1  before that date was certified as eligible to receive service
   10-2  credit as a custodial officer continues to accrue service credit as
   10-3  a custodial officer for service performed on or after that date for
   10-4  the department in a position for which employees were eligible for
   10-5  certification under this section before September 1, 1995.
   10-6        (c)  The institutional division of the Texas Department of
   10-7  Criminal Justice shall determine a person's eligibility to receive
   10-8  credit as a custodial officer.  A determination of the division may
   10-9  not be appealed by an employee but is subject to change by the
  10-10  retirement system.
  10-11        (d) <(e)>  As part of the audit of the institutional division
  10-12  of the Texas Department of Criminal Justice by the state auditor in
  10-13  accordance with Chapter 321, the state auditor <State Auditor> may
  10-14  verify the accuracy of reports submitted to the retirement system
  10-15  under this section.  The state auditor shall review biennially the
  10-16  standards adopted by the department under Subsection (a).
  10-17        SECTION 9.  Section 813.509, Government Code, is amended to
  10-18  read as follows:
  10-19        Sec. 813.509.  Credit for Accumulated Sick Leave.  (a)  A
  10-20  member who holds a position included in the employee class of
  10-21  membership during the month that includes the effective date of the
  10-22  member's retirement and who retires based on service or a
  10-23  disability is entitled to service credit in the retirement system
  10-24  for the member's sick leave that has accumulated and is unused on
  10-25  the last day of employment.  Sick leave is creditable in the
  10-26  retirement system at the rate of one month of service credit for
  10-27  each 20  days, or 160 hours, of accumulated sick leave.  An
   11-1  increment of less than 20 days is not creditable.
   11-2        (b)  A member who holds a position included in the employee
   11-3  class may use sick leave creditable under this section to satisfy
   11-4  service requirements for retirement under Section 814.104 or
   11-5  814.107 if the sick leave attributed to the eligibility
   11-6  requirements remains otherwise unused on the last day of
   11-7  employment.
   11-8        (c)  Except as provided by Subsection (d), the <The>
   11-9  disbursing officer of each department or agency shall, before the
  11-10  11th day after the effective date of retirement of one or more
  11-11  employees of the department or agency <of each month>, certify to
  11-12  the retirement system:
  11-13              (1)  the name of each person whose retirement from the
  11-14  department or agency, and from state service, became effective
  11-15  during the preceding month; and
  11-16              (2)  the amount of the person's accumulated sick leave
  11-17  on the last day of employment.
  11-18        (d)  The disbursing officer of a department or agency that
  11-19  employs a member who applies for retirement under Subsection (b)
  11-20  shall, not more than 90 or less than 30 days before the effective
  11-21  date of the member's retirement, certify to the retirement system
  11-22  the amount of the member's accumulated and unused sick leave.  The
  11-23  officer shall immediately notify the retirement system if the
  11-24  member uses sick leave after the date of certification.
  11-25        (e) <(c)>  On receipt of a certification under Subsection (c)
  11-26  or (d) <(b)>, the retirement system shall grant any credit to which
  11-27  a retiring member or retiree who is a subject of the certification
   12-1  is entitled.  An increase in the computation of an annuity because
   12-2  of credit provided by this section after a certification under
   12-3  Subsection (c) begins with the first payment that becomes due after
   12-4  certification.
   12-5        (f)  The retirement system shall cancel the retirement of a
   12-6  person who used sick leave creditable under this section to qualify
   12-7  for service retirement if the sick leave is otherwise used by the
   12-8  person before the effective date of retirement.
   12-9        (g)  In this section, "sick leave" does not include credit
  12-10  granted under an agency sick-leave pool or under the Family and
  12-11  Medical Leave Act of 1993 (Pub. L. 103-3).
  12-12        SECTION 10.  Section 814.003, Government Code, is amended by
  12-13  adding Subsection (e) to read as follows:
  12-14        (e)  If a person elects to receive a standard disability
  12-15  retirement annuity and dies during the first calendar month that
  12-16  begins after the effective date of the person's retirement, the
  12-17  person is considered to have been a contributing member at the time
  12-18  of death.
  12-19        SECTION 11.  Subchapter A, Chapter 814, Government Code, is
  12-20  amended by adding Sections 814.006 and 814.007 to read as follows:
  12-21        Sec. 814.006.  SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY.
  12-22  When a member or annuitant and the beneficiary of the member or
  12-23  annuitant have died within a period of less than 120 hours, the
  12-24  member or annuitant is considered to have survived the beneficiary
  12-25  for the purpose of determining the rights to amounts payable under
  12-26  this subtitle on the death of the member or annuitant.
  12-27        Sec. 814.007.  BENEFICIARY CAUSING DEATH OF MEMBER OR
   13-1  ANNUITANT.  (a)  A benefit payable on the death of a member or
   13-2  annuitant may not be paid to a person convicted of causing that
   13-3  death but instead is payable as if the convicted person had
   13-4  predeceased the decedent.
   13-5        (b)  A person who becomes eligible under this section to
   13-6  select death or survivor benefits may select benefits as if the
   13-7  person were the designated beneficiary.
   13-8        (c)  The retirement system shall reduce any annuity computed
   13-9  in part on the age of the convicted person to a lump sum equal to
  13-10  the present value of the remainder of the annuity.  The reduced
  13-11  amount is payable to a person entitled as provided by this section
  13-12  to receive the benefit.
  13-13        (d)  The retirement system is not required to change the
  13-14  recipient of benefits under this section unless it receives actual
  13-15  notice of the conviction of a beneficiary.  However, the retirement
  13-16  system may delay payment of a benefit payable on the death of a
  13-17  member or annuitant pending the results of a criminal investigation
  13-18  and of legal proceedings relating to the cause of death.
  13-19        (e)  For the purposes of this section, a person has been
  13-20  convicted of causing the death of a member or annuitant if the
  13-21  person:
  13-22              (1)  pleads guilty or nolo contendere to, or is found
  13-23  guilty by a court of, causing the death of the member or annuitant,
  13-24  regardless of whether sentence is imposed or probated; and
  13-25              (2)  has no appeal of the conviction pending and the
  13-26  time provided for appeal has expired.
  13-27        SECTION 12.  Section 814.105, Government Code, is amended by
   14-1  adding Subsection (c) to read as follows:
   14-2        (c)  The computation of a standard service retirement annuity
   14-3  for a retiring member or retiree who receives sick leave credit
   14-4  under Section 813.509 shall, at the time the credit is granted,
   14-5  include a projection of the person's compensation being paid
   14-6  immediately before retirement to a period after retirement equal to
   14-7  the number of months of sick leave credit.
   14-8        SECTION 13.  Sections 814.107(b) and (f), Government Code,
   14-9  are amended to read as follows:
  14-10        (b)  The standard service retirement annuity payable for at
  14-11  least 20 years of service credit as a law enforcement or custodial
  14-12  officer is an amount computed on the basis of the member's average
  14-13  monthly compensation for that service for the 36 highest months of
  14-14  compensation, projected, if applicable, as provided by Section
  14-15  814.105(c), times the sum of the percentage factor used in the
  14-16  computation of a standard service retirement annuity under Section
  14-17  814.105 plus .5 percent. <a percentage derived from the following
  14-18  table:>
  14-19        <Years of Law Enforcement or       Percentage of Average>
  14-20        <Custodial Officer Service Credit  Monthly Compensation>
  14-21        <at least 20 but less than 21           50 percent>
  14-22        <at least 21 but less than 22           52 percent>
  14-23        <at least 22 but less than 23           54 percent>
  14-24        <at least 23 but less than 24           56 percent>
  14-25        <at least 24 but less than 25           58 percent>
  14-26        <at least 25 but less than 26           60 percent>
  14-27        <at least 26 but less than 27           62 percent>
   15-1        <at least 27 but less than 28           64 percent>
   15-2        <at least 28 but less than 29           66 percent>
   15-3        <at least 29 but less than 30           68 percent>
   15-4        <at least 30 but less than 31           70 percent>
   15-5        <at least 31 but less than 32           71 percent>
   15-6        <at least 32 but less than 33           72 percent>
   15-7        <at least 33 but less than 34           73 percent>
   15-8        <at least 34 but less than 35           74 percent>
   15-9        <at least 35 but less than 36           75 percent>
  15-10        <at least 36 but less than 37           76 percent>
  15-11        <at least 37 but less than 38           77 percent>
  15-12        <at least 38 but less than 39           78 percent>
  15-13        <at least 39 but less than 40           79 percent>
  15-14        <40 or more                             80 percent>
  15-15        (f)  The standard combined service retirement annuity payable
  15-16  for at least 20 years of service credit as a law enforcement or
  15-17  custodial officer may not exceed 100 <80> percent of the higher of
  15-18  the average compensation computed under Section 814.105 or the
  15-19  average compensation computed under Subsection (b).
  15-20        SECTION 14.  Section 814.108, Government Code, is amended by
  15-21  adding Subsection (g) to read as follows:
  15-22        (g)  Except as provided by Section 814.1081, a person who
  15-23  selected an optional service retirement annuity approved by the
  15-24  board of trustees or an optional service retirement annuity
  15-25  described by Subsection (c)(1) or (c)(2) may not change or revoke a
  15-26  beneficiary designation after the person's effective date of
  15-27  retirement.
   16-1        SECTION 15.  Sections 814.207(b), (d), and (e), Government
   16-2  Code, are amended to read as follows:
   16-3        (b)  Except as provided by Subsection (c), an occupational
   16-4  disability retirement annuity under this section is an amount, but
   16-5  not more than 100 <80> percent, computed on the basis of the
   16-6  officer's monthly compensation at the time of the disabling injury
   16-7  or disease, times a percentage derived by application of <the table
   16-8  provided by> Section 814.107(b).
   16-9        (d)  The portions <portion> of the annuity under this section
  16-10  payable from the law enforcement and custodial officer supplemental
  16-11  retirement fund are <is> the amount remaining after deduction of
  16-12  any amount payable under Section 814.206, except the portion of an
  16-13  amount that exceeds the minimum payments provided by Section
  16-14  814.206(b) and that is made for service other than as a law
  16-15  enforcement or custodial officer and any amount by which an annuity
  16-16  is increased under Subsection (e).
  16-17        (e)  If a retiring member or retiree under this section
  16-18  presents evidence satisfactory to the retirement system that the
  16-19  person's condition makes the person incapable of gainful occupation
  16-20  and is considered a total disability under federal social security
  16-21  law, the retirement system shall increase the person's occupational
  16-22  disability retirement annuity to 100 percent of the officer's
  16-23  monthly compensation at the time of the disabling injury or
  16-24  disease.  <If Section 815.405 is held to be invalid by a court of
  16-25  competent jurisdiction and the decision becomes final, an annuity
  16-26  may not be paid under this section.>
  16-27        SECTION 16.  Section 814.301, Government Code, is amended by
   17-1  adding Subsection (e) to read as follows:
   17-2        (e)  A beneficiary designation that names a former spouse as
   17-3  beneficiary is invalid for purposes of this section unless the
   17-4  designation is made after the date of the divorce.
   17-5        SECTION 17.  Section 814.302(a), Government Code, is amended
   17-6  to read as follows:
   17-7        (a)  If a member eligible to select a death benefit plan
   17-8  under Section 814.301 dies without having made a selection, or if a
   17-9  selection cannot be made effective, the member's designated
  17-10  beneficiary <surviving spouse> may select a plan in the same manner
  17-11  as if the member had made the selection.  If there is no designated
  17-12  beneficiary <surviving spouse>, the personal representative of the
  17-13  decedent's estate may make the selection for the benefit of the
  17-14  decedent's heirs or devisees. In lieu of selecting a death benefit
  17-15  plan, the designated beneficiary <surviving spouse> or, if there is
  17-16  none, the personal representative of the decedent's estate, may
  17-17  elect to receive a refund of contributions and any applicable
  17-18  payment under Section 814.401.
  17-19        SECTION 18.  Sections 814.401(b) and (d), Government Code,
  17-20  are amended to read as follows:
  17-21        (b)  The benefit provided by this section is payable to the
  17-22  beneficiary designated by the member under Section 814.403(b) <a
  17-23  person designated by the member in a signed document filed with the
  17-24  retirement system>.  If a member does not designate a beneficiary
  17-25  or if the beneficiary designation cannot be made effective <does
  17-26  not survive the member>, the benefit is payable to the member's
  17-27  estate.
   18-1        (d)  A death benefit may not be paid under this section if,
   18-2  at the time of death, a death benefit annuity <under Section
   18-3  814.301> became effective.
   18-4        SECTION 19.  Section 814.403, Government Code, is amended to
   18-5  read as follows:
   18-6        Sec. 814.403.  Return of Contributions.  (a)  Except as
   18-7  provided by Subsection (d) <(c)>, if a member dies before
   18-8  retirement, the amount in the member's individual account in the
   18-9  employees saving account at the time of death is payable as a
  18-10  lump-sum death benefit.
  18-11        (b)  Except as provided by Subsection (c), the <The> benefit
  18-12  provided by this section is payable to a person designated by the
  18-13  member in a signed and witnessed document filed with the retirement
  18-14  system before the member's death.  A designation, change, or
  18-15  revocation of a beneficiary in a will or other document not filed
  18-16  with the retirement system is not effective.  If a member does not
  18-17  designate a beneficiary or if the beneficiary designation cannot be
  18-18  made effective <does not survive the member>, the benefit is
  18-19  payable to the member's estate.
  18-20        (c)  A beneficiary designation that names a former spouse as
  18-21  beneficiary is invalid for purposes of this section unless the
  18-22  designation is made after the date of the divorce.
  18-23        (d)  A death benefit may not be paid under this section if,
  18-24  at the time of death, a death benefit annuity <under Section
  18-25  814.301> became effective.
  18-26        SECTION 20.  Section 814.501, Government Code, is amended by
  18-27  amending Subsection (b) and adding Subsection (c) to read as
   19-1  follows:
   19-2        (b)  The benefit provided by this section is payable to the
   19-3  beneficiary designated by the member under Section 814.403(b) <a
   19-4  person designated by the retiree in a signed and witnessed document
   19-5  filed with the retirement system>.  If a retiree does not designate
   19-6  a beneficiary or if the beneficiary designation cannot be made
   19-7  effective <does not survive the retiree>, the benefit is payable to
   19-8  the retiree's estate.
   19-9        (c)  A beneficiary designation that names a former spouse as
  19-10  beneficiary is invalid for purposes of this section unless the
  19-11  designation is made after the date of the divorce.
  19-12        SECTION 21.  Sections 814.603(a) and (d), Government Code,
  19-13  are amended to read as follows:
  19-14        (a)  The retirement system shall make a supplemental payment
  19-15  as provided by Subsection (d) to persons whose annuities are
  19-16  described by Section 814.107, 814.207, 814.305, or 814.601(a) and
  19-17  that are based on service retirements, disability retirements, or
  19-18  deaths.  This supplemental payment is in addition to the regular
  19-19  monthly annuity payment.  Each person who receives an annuity
  19-20  described by this subsection is entitled to receive one payment
  19-21  equal to 10 percent of one month's annuity payment for each fiscal
  19-22  year that preceded or includes the effective date of the
  19-23  requirement or authorization under Subsection (d) and <before the
  19-24  fiscal year beginning September 1, 1993,> in which the annuity has
  19-25  been paid.  A supplemental payment may not exceed 350 percent of a
  19-26  monthly annuity.  <Only a person whose annuity began in the fiscal
  19-27  year ending August 31, 1993, or earlier is eligible for the
   20-1  supplemental payment.>  Supplemental payments under this subsection
   20-2  must comply with Section 811.006.
   20-3        (d)  The retirement system shall make a supplemental payment
   20-4  under this section in the fiscal year ending August 31, 1997.  The
   20-5  board of trustees may by rule authorize similar supplemental
   20-6  payments in succeeding <the> fiscal years <year ending August 31,
   20-7  1995>, if the payments are in compliance with Section 811.006.
   20-8        SECTION 22.  Section 815.006, Government Code, is amended to
   20-9  read as follows:
  20-10        Sec. 815.006.  Compensation; Expenses.  (a)  Notwithstanding
  20-11  Subchapter C of Chapter 659, trustees <Trustees> who are
  20-12  contributing members of the retirement system serve without
  20-13  compensation but are entitled to reimbursement for all actual and
  20-14  necessary expenses that they incur in the performance of official
  20-15  board duties.
  20-16        (b)  Notwithstanding Subchapter C of Chapter 659, subject
  20-17  <Subject> to the approval of the board of trustees, trustees who
  20-18  are not contributing members of the retirement system may receive:
  20-19              (1)  compensation; and
  20-20              (2)  reimbursement for all actual and necessary
  20-21  expenses that they incur in the performance of official board
  20-22  duties.
  20-23        SECTION 23.  The heading of Section 815.110, Government Code,
  20-24  is amended to read as follows:
  20-25        Sec. 815.110.  AUDITS <MANAGEMENT AUDIT>.
  20-26        SECTION 24.  Section 815.110, Government Code, is amended by
  20-27  adding Subsection (e) to read as follows:
   21-1        (e)  The board of trustees annually shall select an
   21-2  independent auditor to perform a financial audit of the retirement
   21-3  system.  The selection shall be made under a competitive bidding
   21-4  process in which the state auditor is eligible to bid.
   21-5        SECTION 25.  Section 815.301(b), Government Code, is amended
   21-6  to read as follows:
   21-7        (b)  The board of trustees may delegate its authority under
   21-8  Subsection (a) to the executive director.  The board of trustees or
   21-9  the executive director may, under the standard of care provided by
  21-10  Section 815.307, invest and reinvest any of the retirement system's
  21-11  assets and may commingle assets of the trust fund and the law
  21-12  enforcement and custodial officer supplemental retirement fund with
  21-13  the assets of the Judicial Retirement System of Texas Plan Two for
  21-14  investment purposes, as long as proportionate ownership records are
  21-15  maintained and credited.  Investments may include home office
  21-16  facilities, including land, equipment, and office building, used in
  21-17  administering the retirement system.
  21-18        SECTION 26.  (a)  Except as provided by Subsections (b) and
  21-19  (c) of this section, annuities that are described by Section
  21-20  814.107, 814.207, 814.305, or 814.601(a), Government Code, and are
  21-21  based on service retirements, disability retirements, or deaths
  21-22  that occurred before September 1, 1995, are increased by 12.5
  21-23  percent.
  21-24        (b)  Annuities are increased under Subsection (a) of this
  21-25  section only if the actuary for the Employees Retirement System of
  21-26  Texas certifies, based on an August 31, 1995, actuarial valuation,
  21-27  that all annuity increases and annuity recomputations required or
   22-1  authorized by this Act, together with all other actuarial
   22-2  liabilities resulting from legislation that is enacted by the 74th
   22-3  Legislature in 1995 before August 31 and that has or will become
   22-4  law, will not cause the time required to amortize the unfunded
   22-5  actuarial liabilities of the retirement system to be increased to a
   22-6  period that exceeds 31 years.  For purposes of this subsection, a
   22-7  bill will become law if it has not taken effect but either has been
   22-8  signed by the governor or the time provided for gubernatorial
   22-9  action under Section 14, Article IV, Texas Constitution, has
  22-10  expired without the governor having vetoed the bill.  The increase
  22-11  in annuities under Subsection (a) of this section is payable
  22-12  beginning with the first monthly payments of the annuities that
  22-13  become due after the month in which the actuarial certification
  22-14  required by this subsection is made to the board of trustees of the
  22-15  retirement system.
  22-16        (c)  Retirements that occurred under the provisions of
  22-17  Section 814.1051 or 814.1071, Government Code, are not increased by
  22-18  this section.
  22-19        (d)  The board of trustees of the retirement system shall pay
  22-20  the increased annuities provided by this section from the
  22-21  retirement annuity reserve account of the retirement system and may
  22-22  transfer to that account from the state accumulation account of the
  22-23  retirement system any portion of the amount that exceeds the amount
  22-24  in the retirement reserve account available to finance the
  22-25  increases in benefits, and that is actuarially determined to be
  22-26  necessary to finance the increases, for the duration of the
  22-27  annuities to which the increases apply.
   23-1        SECTION 27.  Subchapter A, Chapter 830, Government Code, is
   23-2  amended by adding Section 830.0011 to read as follows:
   23-3        Sec. 830.0011.  DEFINITION.  Notwithstanding Section 821.001,
   23-4  in this chapter "retirement system" means the Teacher Retirement
   23-5  System of Texas or the Employees Retirement System of Texas, as the
   23-6  context requires.
   23-7        SECTION 28.  Subchapter B, Chapter 833, Government Code, is
   23-8  amended by adding Section 833.1031 to read as follows:
   23-9        Sec. 833.1031.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
  23-10  SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  The retirement
  23-11  system may adopt rules to comply with the Uniformed Services
  23-12  Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
  23-13  seq.) and other federal laws affecting the crediting of military
  23-14  service.
  23-15        SECTION 29.  Subchapter B, Chapter 838, Government Code, is
  23-16  amended by adding Section 838.1031 to read as follows:
  23-17        Sec. 838.1031.  MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
  23-18  SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT.  The retirement
  23-19  system may adopt rules to comply with the Uniformed Services
  23-20  Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
  23-21  seq.) and other federal laws affecting the crediting of military
  23-22  service.
  23-23        SECTION 30.  Sections 3(a)(2) and (5), Texas Employees
  23-24  Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
  23-25  Texas Insurance Code), are amended to read as follows:
  23-26              (2)  "Annuitant" shall mean an officer or employee who
  23-27  retires under:
   24-1                    (A)  the jurisdiction of the Employees Retirement
   24-2  System of Texas and either receives an annuity or is eligible to
   24-3  receive an annuity, pursuant to Subtitle B, D, or E of Title 8,
   24-4  Government Code, or Chapter 803, Government Code, that is based on
   24-5  at least 10 years of service credit or eligibility under Section
   24-6  814.002 or 814.102, Government Code;
   24-7                    (B)  the jurisdiction of the Teacher Retirement
   24-8  System of Texas and either receives an annuity or is eligible to
   24-9  receive an annuity, pursuant to Subtitle C, Title 8, Government
  24-10  Code, or Chapter 803, Government Code, that is based on at least 10
  24-11  years of service credit, whose last state employment prior to
  24-12  retirement, including employment by a public community/junior
  24-13  college, was as an employee of a department whose employees are
  24-14  authorized to participate in the Texas employees uniform group
  24-15  insurance program <the Teacher Retirement System of Texas, school
  24-16  districts established within state eleemosynary institutions, the
  24-17  Texas Rehabilitation Commission, the Central Education Agency, the
  24-18  Texas Higher Education Coordinating Board, or an institution of
  24-19  higher education>;
  24-20                    (C)  the optional retirement program established
  24-21  by Chapter 830, Government Code, and either receives an annuity or
  24-22  is eligible to receive an annuity under that program, if the
  24-23  person's last state employment before retirement, including
  24-24  employment by a public community/junior college, was as an <officer
  24-25  or> employee of  a department whose employees are authorized to
  24-26  participate in the Texas employees uniform group insurance program
  24-27  and if the person either:
   25-1                          (i)  would have been eligible to retire and
   25-2  receive a service retirement annuity from the Teacher Retirement
   25-3  System of Texas or the Employees Retirement System of Texas based
   25-4  on at least 10 years of service credit had the person not elected
   25-5  to participate in the optional retirement program; or
   25-6                          (ii)  is disabled as determined by the
   25-7  Employees Retirement System of Texas <the Texas Higher Education
   25-8  Coordinating Board or an institution of higher education>; or
   25-9                    (D)  any other federal or state statutory
  25-10  retirement program to which an institution of higher education has
  25-11  made employer contributions, if the employee has met service
  25-12  requirements, age requirements, and other applicable requirements
  25-13  comparable to the requirements for retirement under the Teacher
  25-14  Retirement System of Texas, based on at least 10 years of service
  25-15  credit<, and if the person either:>
  25-16                          <(i)  would have been eligible to retire
  25-17  and receive a service retirement annuity from the Teacher
  25-18  Retirement System of Texas based on at least 10 years of service
  25-19  credit had the person not elected to participate in the optional
  25-20  retirement program; or>
  25-21                          <(ii)  is disabled>.
  25-22              (5)(A)  "Employee" shall mean any appointive or
  25-23  elective <state> officer or employee in the service of the State of
  25-24  Texas, including an employee of an institution of higher education:
  25-25                          (i)  who is retired or retires and is an
  25-26  annuitant under either the jurisdiction of the Employees Retirement
  25-27  System of Texas, pursuant to Subtitle B, D, or E, or <Chapter 803,
   26-1  Title 8, Government Code, who is retired or retires and is an
   26-2  annuitant> under the jurisdiction of the Teacher Retirement System
   26-3  of Texas, pursuant to Subtitle C, Title 8, Government Code, or
   26-4  pursuant to Chapter 803, Government Code, and whose last employment
   26-5  with the state prior to retirement, including employment by a
   26-6  public community/junior college, was as an employee of  a
   26-7  department whose employees are authorized to participate in the
   26-8  Texas employees uniform group insurance program <the Teacher
   26-9  Retirement System of Texas, school districts established within
  26-10  state eleemosynary institutions, the Texas Rehabilitation
  26-11  Commission, the Central Education Agency, the Texas Higher
  26-12  Education Coordinating Board, or an institution of higher
  26-13  education, or who is retired or retires and is an annuitant under
  26-14  the optional retirement program established by Chapter 830,
  26-15  Government Code, if the person's last state employment before
  26-16  retirement, including employment by a public community/junior
  26-17  college, was as an officer or employee of the Texas Higher
  26-18  Education Coordinating Board, or an institution of higher
  26-19  education, and if the person either:>
  26-20                                <(a)  would have been eligible to
  26-21  retire and receive a service retirement annuity from the Teacher
  26-22  Retirement System of Texas had the person not elected to
  26-23  participate in the optional retirement program; or>
  26-24                                <(b)  is disabled>;
  26-25                          (ii)  who is retired or retires and is an
  26-26  annuitant under the optional retirement program established by
  26-27  Chapter 830, Government Code, if the person's last state employment
   27-1  before retirement, including employment by a public
   27-2  community/junior college, was as an employee of a department whose
   27-3  employees are authorized to participate in the Texas employees
   27-4  uniform group insurance program, and if the person either:
   27-5                                (a)  would have been eligible to
   27-6  retire and receive a service retirement annuity from the Teacher
   27-7  Retirement System of Texas or the Employees Retirement System of
   27-8  Texas had the person not elected to participate in the optional
   27-9  retirement program; or
  27-10                                (b)  is disabled as determined by the
  27-11  Employees Retirement System of Texas;
  27-12                          (iii)  who receives <his> compensation for
  27-13  services rendered to the State of Texas, other than an employee of
  27-14  an institution of higher education described by this subdivision,
  27-15  on a warrant issued pursuant to a payroll certified by a department
  27-16  or by an elected or duly appointed officer of this state;
  27-17                          (iv) <(iii)>  who receives payment for the
  27-18  performance of personal services on a warrant issued pursuant to a
  27-19  payroll certified by a department and drawn by the State
  27-20  Comptroller of Public Accounts upon the State Treasurer against
  27-21  appropriations made by the Texas Legislature from any state funds
  27-22  or against any trust funds held by the State Treasurer or who is
  27-23  paid from funds of an official budget of a state department, rather
  27-24  than from funds of the General Appropriations Act;
  27-25                          (v) <(iv)>  who is appointed, subject to
  27-26  confirmation of the senate, as a member of a board or commission
  27-27  with administrative responsibility over a statutory agency having
   28-1  statewide jurisdiction whose employees are covered by this Act;
   28-2                          (vi) <(v)>  who is a member of the
   28-3  governing body of an institution of higher education, as that term
   28-4  is defined by this Act <Section 61.003, Education Code, including
   28-5  subsequent amendments to that section>;
   28-6                          (vii) <(vi)>  who is a member of the State
   28-7  Board of Education;
   28-8                          (viii) <(vii)>  who receives compensation
   28-9  for services rendered to an institution of higher education on a
  28-10  warrant or check issued pursuant to a payroll certified by an
  28-11  institution of higher education or by an elected or duly appointed
  28-12  officer of this state, and who is eligible for participation in the
  28-13  Teacher Retirement System of Texas; or
  28-14                          (ix) <(viii)>  who receives compensation
  28-15  for services rendered to an institution of higher education as
  28-16  provided by this subdivision but is not permitted to be a member of
  28-17  the Teacher Retirement System of Texas because the person is solely
  28-18  employed by an institution of higher education that as a condition
  28-19  of employment requires the person to be enrolled as a student in an
  28-20  institution of higher education in graduate-level courses and who
  28-21  is employed by the institution at least 20 hours a week.
  28-22                    (B)  Persons performing personal services for the
  28-23  State of Texas as independent contractors shall never be considered
  28-24  employees of the state for purposes of this Act.
  28-25        SECTION 31.  Section 4B, Texas Employees Uniform Group
  28-26  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  28-27  Code), is amended by adding Subsection (a-1) and amending
   29-1  Subsection (c) to read as follows:
   29-2        (a-1)  If the executive director determines that a
   29-3  participant has obtained coverage under any program provided under
   29-4  the authority of this Act through the use of any material
   29-5  misrepresentation or fraud or has fraudulently induced the
   29-6  extension of coverage by making a material misrepresentation or by
   29-7  supplying false information on any application for coverage or
   29-8  related documentation or in any communication, the executive
   29-9  director may rescind the coverage to the date of the inception of
  29-10  the coverage or to the date of the fraudulent act or material
  29-11  misrepresentation, deny any claim arising out of the fraudulently
  29-12  induced coverage, or both.  Remedies available to the executive
  29-13  director under this subsection are in addition to and independent
  29-14  of any expulsion action that may be instituted under Section 13A of
  29-15  this Act.  A decision of the executive director under this
  29-16  subsection may be appealed to the trustee as provided by Subsection
  29-17  (c) of this section.
  29-18        (c)  A decision by the executive director under Subsection
  29-19  (a) or (a-1) of this section may be appealed only to the trustee.
  29-20  An appeal to the trustee is a contested case under the
  29-21  administrative procedure law, Chapter 2001, Government Code.
  29-22  Standing to pursue an administrative appeal under this section is
  29-23  limited to employees, annuitants, and covered dependents
  29-24  participating in the Texas employees uniform group insurance
  29-25  program or, after the death of a participant, to the participant's
  29-26  estate, personal representative, heirs at law, or designated
  29-27  beneficiary <Administrative Procedure and Texas Register Act
   30-1  (Article 6252-13a, Vernon's Texas Civil Statutes)>.
   30-2        SECTION 32.  Section 5(f), Texas Employees Uniform Group
   30-3  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
   30-4  Code), is amended to read as follows:
   30-5        (f)  The trustee, in its sole discretion and in accordance
   30-6  with the requirements of this section, shall determine those plans
   30-7  of coverages for which the trustee does not intend to purchase
   30-8  insurance and which it intends to provide directly from the
   30-9  Employees Life, Accident, and Health Insurance and Benefits Fund.
  30-10  Any plan of coverages for which the trustee does not purchase
  30-11  insurance but provides under this Act on a self-funded basis is
  30-12  exempt from any other insurance law unless the law expressly
  30-13  applies to this plan or this Act.  The trustee shall make an
  30-14  estimate of the unrestricted balance of the fund.  Unless such
  30-15  estimated unrestricted balance is equal to at least 10 percent of
  30-16  the total benefits expected to be provided directly from the fund
  30-17  as a result of claims incurred during the fiscal year, the trustee
  30-18  shall include in the contributions required the amount necessary to
  30-19  establish an unrestricted balance in the fund of not less than 10
  30-20  percent.  The unrestricted balance shall be placed in a contingency
  30-21  reserve fund to provide for adverse fluctuations in future charges,
  30-22  claims, costs, or expenses of the program.
  30-23        SECTION 33.  Section 13A, Texas Employees Uniform Group
  30-24  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  30-25  Code), is amended to read as follows:
  30-26        Sec. 13A.  Expulsion From Group Insurance Program.
  30-27  (a)  After notice and hearing as provided by this section, the
   31-1  trustee may expel from participation in the Texas employees uniform
   31-2  group insurance program any employee, annuitant, or dependent who
   31-3  submits a fraudulent claim or application for coverage under or has
   31-4  defrauded or attempted to defraud any health maintenance
   31-5  organization or insurance or benefits plan offered under the
   31-6  program.
   31-7        (b)  On receipt of a complaint or on its own motion, the
   31-8  trustee may call and hold a hearing to determine whether <or not>
   31-9  an employee, annuitant, or dependent has submitted a fraudulent
  31-10  claim or application for coverage under or has defrauded or
  31-11  attempted to defraud any health maintenance organization or
  31-12  insurance or benefits plan offered under the Texas employees
  31-13  uniform group insurance program.
  31-14        (c)  A proceeding under this section is a contested case
  31-15  under the administrative procedure law, Chapter 2001, Government
  31-16  Code <Administrative Procedure and Texas Register Act (Article
  31-17  6252-13a, Vernon's Texas Civil Statutes)>.
  31-18        (d)  At the conclusion of the hearing, if the trustee issues
  31-19  a decision that finds that the accused employee, annuitant, or
  31-20  dependent submitted a fraudulent claim or application for coverage
  31-21  or has defrauded or attempted to defraud any health maintenance
  31-22  organization or insurance or benefits plan offered under the Texas
  31-23  employees uniform group insurance program, the trustee shall expel
  31-24  the employee, annuitant, or dependent from participation in the
  31-25  program.
  31-26        (e)  An appeal of a decision of the trustee under this
  31-27  section is under the substantial evidence rule.
   32-1        (f)  An employee, annuitant, or dependent expelled from the
   32-2  Texas employees uniform group insurance program may not participate
   32-3  in a health maintenance organization or be insured under <by> any
   32-4  <health> insurance or benefits plan offered by the program for a
   32-5  period determined by the trustee of not more than five years from
   32-6  the date the expulsion from the program takes effect.
   32-7        SECTION 34.  Section 14(a), Texas Employees Uniform Group
   32-8  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
   32-9  Code), is amended to read as follows:
  32-10        (a)  The trustee shall use the amount appropriated for
  32-11  employer contributions in accordance with Section 15 of this Act
  32-12  <and Subsection (a-1) of this section> to fund the basic coverage.
  32-13  The trustee may equitably allocate to each health benefits plan the
  32-14  employer contributions that would be required to fund basic health
  32-15  coverage for participants in the plans to the extent funds are
  32-16  available.   In allocating the employer contributions among plans,
  32-17  the trustee shall consider the relevant risk characteristics of
  32-18  each plan's enrollment, including demographic variations in the use
  32-19  and cost of health care and the prevailing cost patterns in the
  32-20  area in which the plan operates.  The allocation must be reasonable
  32-21  and set in a manner which assures employees a fair choice among
  32-22  health benefit plans providing a basic plan.  The contribution set
  32-23  for each employee shall be within the total amount appropriated in
  32-24  the General Appropriations Act.
  32-25        SECTION 35.  Section 609.507, Government Code, is amended to
  32-26  read as follows:
  32-27        Sec. 609.507.  Financial Institution as Qualified Vendor.
   33-1  <(a)>  Each bank or savings and loan association that is a
   33-2  qualified vendor is not required to comply with Chapter 404 with
   33-3  regard to deferrals and investment income, but shall comply with
   33-4  plan rules that deal with vendors and investment products <shall:>
   33-5              <(1)  treat deferred amounts and investment income as
   33-6  state funds; and>
   33-7              <(2)  comply with Chapter 404.>
   33-8        <(b)  The state treasurer shall monitor each bank or savings
   33-9  and loan association that is a qualified vendor for compliance with
  33-10  Chapter 404.  The state treasurer shall immediately notify the
  33-11  board of trustees of a violation of that chapter that the treasurer
  33-12  observes.>
  33-13        <(c)  The board of trustees is entitled to rely on the
  33-14  supervision of the state treasurer>.
  33-15        SECTION 36.  The following provisions are repealed:
  33-16              (1)  Section 814.107(h), Government Code;
  33-17              (2)  Section 815.108, Government Code;
  33-18              (3)  Section 815.403(g), Government Code; and
  33-19              (4)  Section 14(a-1), Texas Employees Uniform Group
  33-20  Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
  33-21  Code).
  33-22        SECTION 37.  This Act takes effect September 1, 1995.
  33-23        SECTION 38.  The importance of this legislation and the
  33-24  crowded condition of the calendars in both houses create an
  33-25  emergency and an imperative public necessity that the
  33-26  constitutional rule requiring bills to be read on three several
  33-27  days in each house be suspended, and this rule is hereby suspended.