SBW H.B. 724 75(R)BILL ANALYSIS


PENSIONS & INVESTMENTS
H.B. 724
By: Serna
3-5-97
Committee Report (Unamended)



BACKGROUND 

Over the years, Texas Faculty Association has received complaints from
faculty members at different public colleges and universities that their
Optional Retirement Program (ORP) contributions were being transmitted to
their annuity companies in an untimely manner.  Since ORP is a defined
contribution plan (unlike the Teacher's Retirement System, which is a
defined benefit plan), untimely payments can mean a loss of retirement
income for individual faculty members. 

Institutions of higher education are neither required to transfer
retirement funds electronically nor to pay a penalty for transmitting the
money in an untimely manner for ORP participants. 


PURPOSE

This bill decreases the amount of time colleges and universities have to
remit ORP contributions from ten to three days. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 830.202, Government Code, by amending
Subsection (c) and adding Subsections (e) and (f). 

(c) is amended by clarifying the time limit in which the disbursing
officer has to pay contributions to a company providing an ORP to be no
later than three days after the funds become legally available.  The
disbursing officer, if possible, should send the state and participants'
contributions together, but, if it is not possible, the participants'
contributions shall be sent at the time of withholding, and the state's
will be sent upon receipt from the comptroller. 

(e) is amended by adding language to define the duties of the disbursing
officer of an institution of higher learning, or of the TEA, to include
sending contributions to a company providing an ORP for that institution
by electronic transfer, or send contributions by paper check if the
company is not able to receive funds by electronic transfer. 

(f) is amended by adding language to clarify that the institution of
higher learning or the TEA must give notice to each participant in the
ORP, at least once every fiscal year, to indicate which companies cannot
receive funds electronically. 

SECTION 3.  Effective date is September 1,1997.

SECTION 4.  Emergency Clause.