IMF S.B. 631 75(R)BILL ANALYSIS


STATE AFFAIRS
S.B. 631
By: Haywood (Junell)
5-20-97
Committee Report (Unamended)


BACKGROUND 
 
Currently, certain state retirees are allowed to resume service with the
state at a level of compensation equal to their previous level of pay.
This practice usually occurs after a senior employee has retired under a
retirement incentive program. There are concerns that the practice of
allowing the retirees to return to work at a level of pay equal to their
previous salary is not realizing as much cost savings as originally
intended. This bill will reduce the level of salary for a reemployed state
retiree. 

PURPOSE

As proposed, S.B. 631 prohibits certain state retirees from being paid a
salary at a certain annualized rate. 

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 Chapter 659B, Government Code, by adding Section
659.0115, as follows: 

Sec. 659.0115. SALARIES OF RETIRED STATE EMPLOYEES WHO RESUME STATE
EMPLOYMENT. Prohibits a retiree of the employee class of membership of the
Employees Retirement System of Texas (ERS), who is reemployed by the
state, from being paid a salary at a certain annualized rate. Provides
that a retiree of the Teacher Retirement System of Texas (TRS), the
majority of whose service was credited in that system in a position as an
officer or employee of a state agency, who is reemployed by the state, is
subject to the salary restriction described by Subsection (a). Defines
"retired agency employee" and "state agency." 

SECTION 2. Amends Chapter 2252, Government Code, by adding Subchapter Z,
as follows: 

Sec. 2252.901. CONTRACTS WITH RETIRED STATE EMPLOYEES. Prohibits a state
agency that contracts with a retiree of the employee class of membership
of ERS or TRS, the majority of whose service was credited in that system
in a position as an officer or employee of a state agency, from paying for
personal services under the contract that are substantially similar to the
services the retiree performed as a state officer or employee at an
annualized rate exceeding the lesser of 50 percent of the rate of
compensation over the last year before retirement; or 50 percent of the
highest rate of compensation for any consecutive 12-month period; or that,
when added to the retiree's annual retirement benefit, exceeds the salary
the retiree received during the last 12 months of service before
retirement. Defines "retired agency employee" and "state agency." 

SECTION 3. Makes this Act prospective.

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause