1-1 AN ACT 1-2 relating to a firefighters' relief and retirement fund in certain 1-3 municipalities. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 109, Revised Statutes, is amended by adding 1-6 Article 6243e.2(1) to read as follows: 1-7 Art. 6243e.2(1). FIREFIGHTERS' RELIEF AND RETIREMENT FUND IN 1-8 MUNICIPALITIES OF AT LEAST 1,600,000 POPULATION 1-9 Sec. 1. DEFINITIONS. In this article: 1-10 (1) "Average monthly salary" means one thirty-sixth of 1-11 the member's salary as a firefighter for the member's highest 78 1-12 biweekly pay periods during the member's participation in the fund 1-13 or, if the member has participated in the fund for less than three 1-14 years, the total salary paid to the member for the periods the 1-15 member participated in the fund divided by the number of months the 1-16 member has participated in the fund. If a member is not paid on 1-17 the basis of biweekly pay periods, "average monthly salary" is 1-18 determined on the basis of the number of pay periods under the 1-19 payroll practices of the municipality sponsoring the fund that most 1-20 closely correspond to 78 biweekly pay periods. 1-21 (2) "Board" or "board of trustees" means the board of 1-22 trustees of a firefighters' relief and retirement fund established 1-23 under this article. 1-24 (3) "Code" means the federal Internal Revenue Code of 2-1 1986. 2-2 (4) "Deferred retiree" means a member who is eligible 2-3 for a benefit under Section 8(a) of this article. 2-4 (5) "Disabled child" means any individual who is the 2-5 child of a member by birth or adoption and who is totally disabled 2-6 as a result of a physical or mental illness or injury, including 2-7 retardation, at the time the member dies or who becomes so disabled 2-8 before reaching 18 years of age. The term includes a child the 2-9 board determines is unable to pursue any gainful employment. 2-10 (6) "DROP" means the deferred retirement option plan 2-11 under Section 5 of this article. 2-12 (7) "DROP account" means the notional account 2-13 established to reflect the credits, contributions, and earnings or 2-14 losses of a member who has made a DROP election in accordance with 2-15 Section 5 of this article. 2-16 (8) "Eligible child" means a child of a member by 2-17 birth or adoption who is unmarried and under 18 years of age, a 2-18 disabled child, or under 23 years of age, unmarried, and a 2-19 full-time student enrolled in an accredited college or university, 2-20 but only if the member executes an election permitting the child to 2-21 be treated as an eligible child in accordance with procedures 2-22 established by the board or if the member does not have an eligible 2-23 spouse. 2-24 (9) "Eligible parent" means a parent of a member, by 2-25 birth or by adoption while the member was a minor, who proves to 2-26 the satisfaction of the board that the parent was a dependent of 2-27 the member immediately before the member's death. 3-1 (10) "Eligible spouse" means: 3-2 (A) in the case of a member who dies after June 3-3 30, 1998, a spouse to whom the member was married at the time of 3-4 the member's death; or 3-5 (B) in the case of a member who dies before July 3-6 1, 1998, a spouse to whom the member was married at the time the 3-7 member's benefit under this article is scheduled to begin and at 3-8 the time of the member's death. 3-9 (11) "Firefighter" means a full-time, fully paid, 3-10 active, classified member of a regularly organized fire department 3-11 of an incorporated municipality with a fund established under this 3-12 article. 3-13 (12) "Fund" means a firefighters' relief and 3-14 retirement fund established under this article. 3-15 (13) "Member" means a firefighter or former 3-16 firefighter who has satisfied the eligibility requirements under 3-17 Section 13 of this article and who has not yet received a 3-18 distribution of the entire benefit to which the person is entitled 3-19 under this article. 3-20 (14) "Off-duty disability" means a physical or mental 3-21 disability that: 3-22 (A) is likely to be permanent; and 3-23 (B) results from a cause other than a bodily 3-24 injury received in, or illness caused by, the performance of a 3-25 member's duties as a firefighter. 3-26 (15) "On-duty disability" means a physical or mental 3-27 disability that: 4-1 (A) is likely to be permanent; and 4-2 (B) results from a bodily injury received in, or 4-3 illness caused by, the performance of the member's duties as a 4-4 firefighter. 4-5 (16) "Salary" means the amounts includable in gross 4-6 income of a member plus any amount not includable in gross income 4-7 under Section 125, Section 402(e)(3) or (h), Section 403(b), or 4-8 Section 414(h) of the code. 4-9 (17) "Years of participation" means the number of 4-10 years that a member has participated in the fund by making the 4-11 contributions required by this article, as determined under rules 4-12 established by the board. 4-13 Sec. 2. FUND AND BOARD OF TRUSTEES. (a) A firefighters' 4-14 relief and retirement fund is established in each incorporated 4-15 municipality that has a population of at least 1,600,000 and a 4-16 fully paid fire department. 4-17 (b) The board of trustees of the fund shall be known as the 4-18 "Board of Firefighters' Relief and Retirement Fund Trustees of 4-19 __________, Texas." The board consists of 10 trustees, including: 4-20 (1) the mayor or an appointed representative of the 4-21 mayor; 4-22 (2) the treasurer of the municipality or, if there is 4-23 not a treasurer, the secretary, clerk, or other person who by law, 4-24 charter provision, or ordinance performs the duty of treasurer of 4-25 the municipality; 4-26 (3) five firefighters who are members of the fund; 4-27 (4) one person who is a retired firefighter and a 5-1 member of the fund with at least 20 years of participation; and 5-2 (5) two persons, each of whom is a registered voter of 5-3 the municipality, has been a resident of the municipality for at 5-4 least three years preceding the date of initial appointment, and is 5-5 not a municipal officer or employee. 5-6 (c) To serve as a trustee under Subsection (b)(3) of this 5-7 section, a person must be elected by ballot of the firefighters who 5-8 are members of the fund. That election shall be held during the 5-9 last quarter of the year preceding the January in which the term of 5-10 a trustee occupying one of those positions expires. The trustee 5-11 serves a term of three years. Three of the trustees described 5-12 under Subsection (b)(3) of this section shall be elected from the 5-13 suppression division of the fire department. One of the trustees 5-14 from the suppression division must have the rank of firefighter or 5-15 engineer/operator, and the position on the board to which that 5-16 trustee is elected is designated as Position I. One of the 5-17 trustees from the suppression division must have the rank of 5-18 captain or senior captain, and the position on the board to which 5-19 that trustee is elected is designated as Position II. One of the 5-20 trustees from the suppression division must have the rank of 5-21 district chief, deputy chief, or assistant chief, and the position 5-22 on the board to which that trustee is elected is designated as 5-23 Position III. One of the trustees described under Subsection 5-24 (b)(3) of this section shall be elected from the fire prevention 5-25 division, and the position on the board to which that trustee is 5-26 elected is designated as Position IV. One of the trustees 5-27 described under Subsection (b)(3) of this section shall be elected 6-1 from the fire alarm operators division or the fire department 6-2 repair division, and the position on the board to which that 6-3 trustee is elected is designated as Position V. 6-4 (d) To serve as a trustee under Subsection (b)(4) of this 6-5 section, a person must be elected by ballot of those retired 6-6 members with at least 20 years of participation in the fund. The 6-7 election shall be held during the last quarter of every third year 6-8 starting in 1997. The trustee serves a three-year term, starting 6-9 in January after the trustee is elected. 6-10 (e) To serve as a trustee under Subsection (b)(5) of this 6-11 section, a person must be appointed by the elected members of the 6-12 board. Each of those trustees serves a staggered term of two 6-13 years. The appointment or reappointment of one of those trustees 6-14 shall take place in December of each year. 6-15 (f) If a vacancy occurs in an elected position on the board, 6-16 the vacancy shall be filled in the manner provided in this section 6-17 for the election of the trustee to that position. The election may 6-18 occur either at the next following regular election of trustees by 6-19 members of the fire department or in a special election called by 6-20 the board. If a vacancy occurs in a position appointed by the 6-21 elected trustees of the board, that position shall be filled by a 6-22 vote of the elected trustees of the board. A trustee who is 6-23 elected or selected to fill a vacancy holds office for the 6-24 unexpired term of the trustee who vacated that position. 6-25 (g) Each trustee of the board shall, at the first board 6-26 meeting following the trustee's most recent election or 6-27 appointment, take an oath of office that the trustee will 7-1 diligently and honestly administer the affairs of the fund and that 7-2 the trustee will not knowingly violate or willingly permit this 7-3 article to be violated. 7-4 (h) The board shall annually elect from among the trustees a 7-5 chair, a vice chair, and a secretary. The person described under 7-6 Subsection (b)(2) of this section serves as the treasurer of the 7-7 fund under penalty of that person's official bond and oath of 7-8 office. 7-9 (i) A trustee of the board may not receive compensation for 7-10 service on the board. 7-11 (j) A majority of the trustees of the board constitutes a 7-12 quorum to transact business. An order of the board must be made by 7-13 vote recorded in the minutes of the board's proceedings. Each 7-14 decision of the board in a matter under the board's jurisdiction is 7-15 final and binding as to each affected firefighter, member, and 7-16 beneficiary, subject only to the rights of appeal specified by this 7-17 article. 7-18 (k) The board shall receive, manage, and disburse the fund 7-19 for the municipality and shall hear and determine applications for 7-20 retirement and claims for disability and designate the 7-21 beneficiaries or persons entitled to participate as provided by 7-22 this article. 7-23 (l) The board shall hold regular monthly meetings at a time 7-24 and place as the board by resolution designates and may hold 7-25 special meetings on call of the chair as the chair determines is 7-26 necessary, keep accurate minutes of board meetings and records of 7-27 board proceedings, keep separate from all other municipal funds all 8-1 money for the use and benefit of the fund, and keep a record of 8-2 claims, receipts, and disbursements. A disbursement from the fund 8-3 may be made in accordance with procedures established by the board. 8-4 (m) The municipality shall provide full and timely 8-5 information to the board on matters relating to the hiring of new 8-6 firefighters, compensation of members, members' deaths or 8-7 terminations of service, and such other information concerning 8-8 firefighters as is reasonably required by the board, from time to 8-9 time, for the board to administer the fund and provide benefits 8-10 properly. 8-11 (n) The board shall not later than January 31 of each year 8-12 make and file with the treasurer of the municipality a detailed and 8-13 itemized report of all receipts and disbursements with respect to 8-14 the fund, together with a statement of fund administration, and 8-15 shall make and file other reports and statements or furnish further 8-16 information as from time to time may be required or requested by 8-17 the treasurer of the municipality. 8-18 (o) The secretary of the board shall, not later than the 8-19 seventh day after the date of each board meeting, forward true 8-20 copies of the minutes of the meeting to each fire station and to 8-21 each division of the fire department. 8-22 (p) The board shall manage the fund according to the terms 8-23 and purposes of this article and all applicable sections of the 8-24 code and has the powers necessary to accomplish that purpose, 8-25 including the power to: 8-26 (1) adopt for the administration of the fund written 8-27 rules and guidelines not inconsistent with this article; 9-1 (2) interpret and construe this article and any 9-2 summary plan descriptions or benefits procedures, except that each 9-3 construction must meet any qualification requirements established 9-4 under Section 401 of the code; 9-5 (3) correct any defect, supply any omission, and 9-6 reconcile any inconsistency that appears in this article in a 9-7 manner and to the extent that the board considers expedient to 9-8 administer this article for the greatest benefit of all members; 9-9 (4) select, employ, and compensate employees the board 9-10 considers necessary or advisable in the proper and efficient 9-11 administration of the fund; 9-12 (5) determine all questions, whether legal or factual, 9-13 relating to eligibility for participation, service, or benefits or 9-14 relating to the administration of the fund to promote the uniform 9-15 administration of the fund for the benefit of all members; 9-16 (6) establish and maintain records necessary or 9-17 appropriate to the proper administration of the fund; and 9-18 (7) compel witnesses to attend and testify before the 9-19 board concerning matters related to the operation of this article 9-20 in the same manner provided for taking of testimony before notaries 9-21 public. 9-22 (q) The chair may administer oaths to witnesses. 9-23 (r) The board shall maintain at the offices of the fund the 9-24 original of each rule or guideline adopted under this section and 9-25 shall deliver to the municipality a copy of each adopted rule or 9-26 guideline. 9-27 Sec. 3. OTHER POWERS OF THE BOARD. (a) If the board 10-1 determines that there is a surplus of funds in an amount exceeding 10-2 the current demands on the fund, the board may invest the surplus 10-3 in the manner provided by Chapter 802, Government Code. 10-4 (b) The board may employ persons to perform any investment, 10-5 administrative, legal, medical, accounting, clerical, or other 10-6 service the board considers appropriate, including: 10-7 (1) a certified public accountant or firm of certified 10-8 public accountants to perform an audit of the fund at times and 10-9 intervals the board considers necessary; 10-10 (2) a professional investment manager or firm of 10-11 managers as provided by Section 802.204, Government Code; 10-12 (3) an actuary or actuarial firm at times and for 10-13 purposes the board considers necessary or appropriate; 10-14 (4) an attorney or firm of attorneys to advise, 10-15 assist, or represent the board in any legal matter relating to the 10-16 fund, including litigation involving matters under this article; or 10-17 (5) a physician to examine a firefighter before the 10-18 firefighter becomes a member of the fund or to examine a member or 10-19 beneficiary applying for or receiving a disability pension or 10-20 survivor benefit. 10-21 (c) A fee incurred in connection with a service or person 10-22 employed under Subsection (b) of this section may be paid from the 10-23 fund, except that the costs of audits under Subsection (b)(1) of 10-24 this section may be paid from the fund only if the municipality 10-25 does not pay that cost. 10-26 (d) The board may have an actuarial valuation performed each 10-27 year, and for determining the municipality's contribution rate as 11-1 provided by Section 13(d) of this article, the board may adopt a 11-2 new actuarial valuation each year, except that an actuarial 11-3 valuation that will result in an increased municipal contribution 11-4 rate that is above the statutory minimum may be adopted only once 11-5 every three years, unless the governing body of the municipality 11-6 consents to a more frequent increase. 11-7 (e) In addition to any other remedy the board has, including 11-8 any right of set-off from future benefits, the board may recover by 11-9 civil action from any offending party or from the party's surety 11-10 money paid out or obtained from the fund through fraud, 11-11 misrepresentation, defalcation, theft, embezzlement, or 11-12 misapplication and may institute, conduct, and maintain the action 11-13 in the name of the board for the use and benefit of the fund. 11-14 (f) On written request from the chair, the municipal 11-15 attorney shall represent the board or the fund in any legal matter, 11-16 including litigation. The municipal attorney is not entitled to 11-17 compensation from the fund for providing that representation. 11-18 (g) The board may, from fund assets, purchase from an 11-19 insurer licensed to do business in this state insurance to cover 11-20 liabilities and losses of the fund and to indemnify and hold the 11-21 trustees of the board and employees of the board, individually and 11-22 collectively, harmless from the effects and consequences of their 11-23 acts, omissions, and conduct within the scope of their official 11-24 capacity as fiduciaries or cofiduciaries or within the scope of 11-25 what the board trustee or employee believes in good faith, at the 11-26 time, to be the board trustee's or employee's official capacity. 11-27 An insurance company through which insurance is purchased under 12-1 this subsection has a cause of action against a board trustee or 12-2 employee to the extent that a loss results from the board trustee's 12-3 or employee's wilful and malicious misconduct or gross negligence. 12-4 If insurance is unavailable, insufficient, inadequate, or not in 12-5 effect, the board may indemnify a board trustee or employee for 12-6 liability imposed as damages and for reasonable costs and expenses 12-7 incurred by that individual in defense of an alleged act, error, or 12-8 omission committed in the individual's official capacity or within 12-9 the scope of what the board trustee or employee believed in good 12-10 faith, at the time, to be the board trustee's or employee's 12-11 official capacity. The board may not indemnify a board trustee or 12-12 employee for the amount of a loss that results from the board 12-13 trustee's or employee's wilful and malicious misconduct or gross 12-14 negligence. The board may establish a self-insurance fund to pay 12-15 claims for the indemnification. The board shall provide that the 12-16 self-insurance fund must be limited to an amount not to exceed the 12-17 greater of three percent of the fund assets or $5 million. The 12-18 self-insurance fund shall be invested in the same manner as other 12-19 assets of the fund, and all earnings and losses from investing the 12-20 self-insurance fund shall be credited to the self-insurance fund 12-21 unless that credit exceeds the limit on the self-insurance fund set 12-22 by the board or this subsection. Amounts held in the 12-23 self-insurance fund may not be included in the actuarial valuation 12-24 for purposes of determining the municipal contribution rate or the 12-25 assets available to satisfy the actuarial liabilities of the fund 12-26 to pay service, disability, or death benefits provided by this 12-27 article. A decision to indemnify or make a reimbursement out of 13-1 the self-insurance fund must be made by a majority vote of board 13-2 trustees eligible to vote on the matter. If the proposed 13-3 indemnification or reimbursement is of a trustee, that trustee may 13-4 not vote on the matter. 13-5 Sec. 4. SERVICE PENSION BENEFITS. (a) A member with at 13-6 least 20 years of participation who terminates active service for 13-7 any reason other than death is entitled to receive a service 13-8 pension provided by this section. 13-9 (b) A member who terminates active service on or after 13-10 November 1, 1997, and who has completed at least 20 years of 13-11 participation in the fund on the effective date of termination of 13-12 service is entitled to a monthly service pension, beginning on the 13-13 effective date of termination of active service, in an amount equal 13-14 to 50 percent of the member's average monthly salary, plus three 13-15 percent of the member's average monthly salary for each year of 13-16 participation in excess of 20 years, but not in excess of 30 years 13-17 of participation, for a maximum total benefit of 80 percent of the 13-18 member's average monthly salary. 13-19 (c) A member who terminated active service before November 13-20 1, 1997, and who had completed at least 20 years of participation 13-21 on the effective date of termination of service is entitled on 13-22 retirement to receive a monthly service pension in the amount 13-23 provided under the law in effect on the effective date of that 13-24 retirement, unless a subsequent benefit increase is expressly made 13-25 applicable to that member. 13-26 (d) A member with a service or disability pension, other 13-27 than a deferred retiree or an active member who has elected the 14-1 DROP under Section 5(b) of this article, who began receiving 14-2 benefits from the fund before November 1, 1997, or a member's 14-3 beneficiary who began receiving benefits from the fund before 14-4 November 1, 1997, shall be paid a one-time additional benefit of 14-5 $5,000 from the fund, payable in a lump sum as soon as 14-6 administratively practicable after November 1, 1997. 14-7 (e) The total monthly benefit payable to a retired or 14-8 disabled member, other than a deferred retiree or active member who 14-9 has elected the DROP under Section 5(b) of this article, or each 14-10 eligible survivor of a deceased member, shall be increased by $100, 14-11 beginning with the monthly payment made for July 1999. That 14-12 additional benefit may not be increased under Section 11(c) of this 14-13 article. 14-14 (f) The benefit under Subsection (d) of this section shall 14-15 be paid to the member or to the eligible spouse of a deceased 14-16 member. If the member is deceased and there is no eligible spouse, 14-17 the benefit shall be divided equally among and paid to each 14-18 eligible child of the member, or, if there is no eligible child, 14-19 the benefit shall be divided among the eligible parents of the 14-20 member. 14-21 Sec. 5. DEFERRED RETIREMENT OPTION PLAN. (a) A member who 14-22 is eligible to receive a service pension under Section 4 of this 14-23 article and who remains in active service may elect to participate 14-24 in the deferred retirement option plan provided by this section. 14-25 On subsequently terminating active service, a member who elected 14-26 the DROP may apply for a monthly service pension under Section 4 of 14-27 this article, except that the effective date of the member's 15-1 election to participate in the DROP will be considered the member's 15-2 retirement date for determining the amount of the member's monthly 15-3 service pension. The member may also apply for any DROP benefit 15-4 provided under this section on terminating active service. Except 15-5 as provided by Subsection (n) of this section, an election to 15-6 participate in the DROP, once approved by the board, is 15-7 irrevocable. 15-8 (b) A member may elect to participate in the DROP by 15-9 complying with the election process established by the board. The 15-10 member's election may be made at any time beginning on the date the 15-11 member has completed 20 years of participation in the fund and is 15-12 otherwise eligible for a service pension under Section 4 of this 15-13 article. The election becomes effective on the first day of the 15-14 month following the month in which the board approves the member's 15-15 DROP election. Beginning on the effective date of the member's 15-16 DROP election, amounts equal to the deductions made from the 15-17 member's salary under Section 13(c) of this article shall be 15-18 credited to the member's DROP account. If a DROP participant 15-19 remains in active service after the fifth anniversary of the 15-20 effective date of the member's DROP election, subsequent deductions 15-21 from the member's salary under Section 13(c) of this article may 15-22 not be credited to the member's DROP account and may not otherwise 15-23 increase any benefit payable from the fund for the member's 15-24 service. 15-25 (c) Beginning in the month a member's DROP election becomes 15-26 effective, an amount equal to the monthly service pension the 15-27 member would have received under Section 4 of this article and 16-1 Section 11(c) of this article, if applicable, had the member 16-2 terminated active service on the effective date of the member's 16-3 DROP election shall be credited to a DROP account maintained for 16-4 the member. That monthly credit to the member's DROP account shall 16-5 continue until the earlier of the date the member terminates active 16-6 service or the fifth anniversary of the effective date of the 16-7 member's DROP election. 16-8 (d) A member's DROP account shall be credited with earnings 16-9 or losses at an annual rate equal to the average annual return 16-10 earned by the fund over the five years preceding, but not 16-11 including, the year during which the credit is given. Those 16-12 earnings or losses shall be computed and credited at a time and in 16-13 a manner determined by the board, except that earnings or losses 16-14 shall be credited not less frequently than once in each 13-month 16-15 period and shall take into account partial years of participation 16-16 in the DROP. If the member has not terminated active service, the 16-17 member's DROP account may not be credited with earnings or losses 16-18 after the fifth anniversary of the effective date of the member's 16-19 DROP election. 16-20 (e) A member who terminates active service after 16-21 participating in the DROP is entitled to receive, in addition to 16-22 the member's service pension under Section 4 of this article, a 16-23 benefit equal to the balance of the member's DROP account. Unless 16-24 the member elects to receive installment or partial distributions 16-25 in accordance with Subsection (f) or (h) of this section, the 16-26 balance of a member's DROP account shall be paid to the member in a 16-27 single lump-sum payment as soon as is administratively practicable 17-1 after the member's termination of active service. 17-2 (f) In lieu of a single lump-sum payment, a member may elect 17-3 to receive the balance of the member's DROP account in three 17-4 substantially equal installments. A member electing the installment 17-5 form of distribution is entitled to receive the first installment 17-6 within a reasonable period after terminating active service. The 17-7 second and third installments shall be paid to the member on the 17-8 first and second anniversaries of the date of the first 17-9 installment. A member electing to receive the member's DROP 17-10 account balance in installments may convert that election at any 17-11 time after receipt of the first installment to an election to 17-12 receive the remainder of the member's DROP account balance in a 17-13 lump-sum payment. If a member elects to receive installments, the 17-14 member's DROP account may not be credited with earnings or losses 17-15 occurring after the member leaves active service. The DROP account 17-16 balance of a member who elects to receive the member's DROP account 17-17 balance in installments may not be credited with interest after the 17-18 date of payment of the first installment. 17-19 (g) The board may adopt by a majority vote the provisions of 17-20 Subsections (h) and (i) of this section. 17-21 (h) In lieu of a single lump-sum payment, a member may elect 17-22 to receive partial payments from the member's DROP account for each 17-23 calendar year, in an amount elected by the member. The board may 17-24 establish procedures concerning partial payments, including 17-25 limitations on timing and frequency of those payments. A member 17-26 who elects partial payments may, at any time, elect to receive the 17-27 member's entire remaining DROP account balance in a single lump-sum 18-1 payment. 18-2 (i) If a member elects partial payments, for periods after a 18-3 member terminates active service and before the member's DROP 18-4 account is completely distributed, the member's DROP account shall 18-5 be credited with earnings or losses of the fund as computed under 18-6 Subsection (d) of this section and reduced by an administrative fee 18-7 of one percent of the account balance each year, determined before 18-8 adjustment for earnings or losses for the year. 18-9 (j) An election by a member concerning installment or 18-10 partial payments as provided by Subsections (f)-(i) of this section 18-11 must satisfy the requirements of Section 401(a)(9) of the code. 18-12 All distributions and changes in form of distribution must be made 18-13 in a manner and at a time that comply with that provision. 18-14 (k) A member who elects to participate in the DROP is 18-15 considered to have terminated active service on the effective date 18-16 of the member's DROP election for purposes of computing and 18-17 providing service pension benefits under Section 4 of this article 18-18 and for purposes of computing and providing death benefits under 18-19 Section 7 of this article. A salary earned or additional years of 18-20 participation completed after the member's DROP election becomes 18-21 effective may not be considered in the computation of retirement, 18-22 disability, or death benefits unless a DROP revocation is made as 18-23 prescribed by Subsection (n) of this section. 18-24 (l) If a DROP participant dies before complete distribution 18-25 of the member's DROP account has been made, the member's DROP 18-26 account balance shall be distributed to the member's eligible 18-27 beneficiaries, determined as follows: 19-1 (1) if the member is survived by a person who was the 19-2 member's spouse on the member's last day of active service and one 19-3 or more eligible children, one-half of the member's DROP account 19-4 balance shall be paid to that eligible spouse, and the remaining 19-5 one-half shall be divided equally among the member's eligible 19-6 children; 19-7 (2) if the member is survived by a spouse described by 19-8 Subdivision (1) of this subsection, but not by an eligible child, 19-9 the member's entire DROP account balance shall be paid to the 19-10 surviving spouse; 19-11 (3) if the member is survived by one or more eligible 19-12 children, but not by a spouse described by Subdivision (1) of this 19-13 subsection, the member's DROP account balance shall be divided 19-14 equally among the eligible children; 19-15 (4) if the member is not survived by a spouse 19-16 described by Subdivision (1) of this subsection or an eligible 19-17 child, the member's DROP account balance shall be divided equally 19-18 among the member's eligible parents; 19-19 (5) if the member is not survived by a spouse 19-20 described by Subdivision (1) of this subsection, an eligible child, 19-21 or an eligible parent, the member's DROP account balance shall be 19-22 distributed in accordance with the member's beneficiary designation 19-23 filed with the board or, if the member has failed to file a valid 19-24 beneficiary designation, to the member's estate; and 19-25 (6) if a member's spouse described by Subdivision (1) 19-26 of this subsection was not married to the member on the date the 19-27 member's DROP election became effective, the spouse shall receive a 20-1 reduced benefit equal to the benefit otherwise payable to the 20-2 surviving spouse under this subsection, multiplied by the 20-3 percentage of the period between the member's DROP election and the 20-4 date the member left active service during which the spouse and the 20-5 member were married, and the amount by which the spouse's benefit 20-6 is reduced shall be divided among any other eligible survivors as 20-7 if the member did not have an eligible spouse. 20-8 (m) An eligible beneficiary's share of a deceased member's 20-9 DROP account shall be distributed as soon as administratively 20-10 practicable after the member's death in the form of a single 20-11 lump-sum payment. All distributions to beneficiaries under this 20-12 subsection must be made in a manner and at a time that comply with 20-13 Section 401(a)(9) of the code. 20-14 (n) Except as otherwise provided by this subsection, a 20-15 member who participates in the DROP is ineligible for disability 20-16 benefits described by Section 6 of this article, and the member's 20-17 survivors are ineligible to receive enhanced death benefits 20-18 described by Section 7(c) of this article. A DROP participant who 20-19 is determined under Section 6(c) of this article to be incapable of 20-20 performing any substantial gainful employment because of an on-duty 20-21 disability may retroactively revoke the member's DROP election if 20-22 the revocation occurs before the member receives a distribution 20-23 from the member's DROP account or retirement benefits. If a DROP 20-24 participant dies in the course of the performance of the member's 20-25 duty or dies as a result of an on-duty disability described by 20-26 Section 6(c) of this article, the DROP participant's eligible 20-27 survivors under Section 7 of this article and the member's eligible 21-1 DROP beneficiaries under Subsection (l) of this section may, by 21-2 unanimous agreement, retroactively revoke the member's DROP 21-3 election if the revocation occurs before receipt of a distribution 21-4 from the member's DROP account, service pension benefits under 21-5 Section 4 of this article, or death benefits under Section 7 of 21-6 this article. For purposes of this subsection, an on-duty 21-7 disability must have occurred after the effective date of a 21-8 member's election to participate in the DROP. If a DROP election 21-9 revocation is made as prescribed by this subsection, the member's 21-10 DROP account is not distributed, and the member or the member's 21-11 beneficiary, as applicable, is entitled to benefits under this 21-12 article as if a DROP election had not been made. 21-13 (o) A retired member who previously participated in the DROP 21-14 and who returns to active service is subject to the terms of this 21-15 section in effect at the time of the member's return to active 21-16 service. 21-17 (p) After August 31, 2000, the board may set a date after 21-18 which additional members will not be allowed to elect to 21-19 participate in the DROP. A member whose election to participate in 21-20 the DROP becomes effective before a deadline established by the 21-21 board is entitled to continue participating in the DROP. 21-22 Sec. 6. DISABILITY PENSION BENEFITS. (a) If the board 21-23 determines that a member has suffered an on-duty disability, the 21-24 member is entitled to an on-duty disability pension as provided by 21-25 this section in lieu of any other benefit under this article. 21-26 (b) If the board determines that a member is not capable of 21-27 performing the usual and customary duties of the member's 22-1 classification or position because of the member's on-duty 22-2 disability, the member is entitled to receive a monthly disability 22-3 pension, beginning on the effective date of the member's 22-4 termination of active service, in an amount equal to the greater 22-5 of: 22-6 (1) 50 percent of the member's average monthly salary; 22-7 or 22-8 (2) the service pension the member would have been 22-9 entitled to receive under Section 4 of this article based on years 22-10 of participation as of the effective date of the member's 22-11 termination of active service. 22-12 (c) If the board determines that a member is not capable of 22-13 performing any substantial gainful activity because of the member's 22-14 on-duty disability, the member is entitled to receive a monthly 22-15 disability pension, beginning on the effective date of the member's 22-16 termination of active service, in an amount equal to the greater 22-17 of: 22-18 (1) 75 percent of the member's average monthly salary; 22-19 or 22-20 (2) the service pension the member would have been 22-21 entitled to receive under Section 4 of this article based on years 22-22 of participation on the effective date of the member's termination 22-23 of active service. 22-24 (d) If a full-time active member with at least six years of 22-25 service becomes disabled or dies from heart or lung disease or 22-26 cancer, and the member successfully passed a physical examination 22-27 before the claimed disability or death or on beginning employment 23-1 as a firefighter, and the examination failed to reveal any evidence 23-2 of the heart or lung disease or cancer, that condition will be 23-3 presumed to have caused an on-duty disability for purposes of 23-4 determining eligibility for disability benefits under this section, 23-5 and the amount of the disability benefit constitutes the pension 23-6 amount that shall be used to determine the death benefit payable 23-7 with respect to that member. Another statutory presumption 23-8 regarding the cause of illnesses or conditions does not affect any 23-9 benefit payable under this article. 23-10 (e) If the board determines that a member is not capable of 23-11 performing the usual and customary duties of the member's 23-12 classification or position because of the member's off-duty 23-13 disability, the member is entitled to an off-duty disability 23-14 pension in lieu of any other benefit under this article. If the 23-15 board makes that determination, the member is entitled to receive a 23-16 monthly disability pension, beginning on the effective date of the 23-17 member's termination of active service, in an amount equal to the 23-18 greater of: 23-19 (1) 25 percent of the member's average monthly salary, 23-20 plus 2-1/2 percent of the member's average monthly salary for each 23-21 full year of participation in the fund, except that the total 23-22 monthly disability pension under this subdivision may not exceed 50 23-23 percent of the member's average monthly salary; or 23-24 (2) the service pension the member would have been 23-25 entitled to receive under Section 4 of this article based on years 23-26 of participation on the effective date of the member's termination 23-27 of active service. 24-1 (f) A member is not eligible for an on-duty or off-duty 24-2 disability pension as provided by this section if the member's 24-3 on-duty or off-duty disability is a direct and proximate result of 24-4 a condition that existed on the date the member began membership in 24-5 the fund. In that event, if the member is not eligible to receive 24-6 a service pension under Section 4 of this article, the member may 24-7 elect any deferred pension or refund of contributions for which the 24-8 member is eligible under Section 8 of this article. A member has a 24-9 preexisting condition under this subsection if the board determines 24-10 that the member had: 24-11 (1) symptoms that would cause an ordinarily prudent 24-12 person to seek diagnosis, care, or treatment during the five-year 24-13 period before the effective date of the member's membership in the 24-14 fund; or 24-15 (2) a condition for which medical advice or treatment 24-16 was recommended by or received from a physician during the 24-17 five-year period before the effective date of the member's 24-18 membership in the fund. 24-19 (g) A person may not receive an on-duty or off-duty 24-20 disability pension from the fund unless the person or the person's 24-21 legal representative files with the board an application for 24-22 disability benefits, in the form approved by the board, and 24-23 certificates of the member's disability signed and sworn to by the 24-24 member and the member's physician or by a physician selected by the 24-25 board. The board may require other or additional evidence of 24-26 disability before authorizing payment of disability pension 24-27 benefits. 25-1 (h) The board shall make all determinations concerning 25-2 benefits under this section in accordance with uniform principles 25-3 consistently applied on the basis of medical or other evidence that 25-4 the board determines is necessary or desirable. 25-5 Sec. 7. DEATH BENEFITS. (a) If a member dies who is 25-6 eligible to receive a service pension under Section 4 of this 25-7 article, a disability pension under Section 6 of this article, or a 25-8 deferred pension under Section 8(a) of this article, or who is 25-9 receiving those benefits, the member's eligible survivors are 25-10 entitled to death benefits as follows: 25-11 (1) if the member is survived by both an eligible 25-12 spouse and one or more eligible children, the eligible spouse is 25-13 entitled to receive a monthly death benefit equal to one-half of 25-14 the amount the member would have been entitled to receive, and the 25-15 surviving eligible children are entitled to receive a monthly death 25-16 benefit equal to the remainder of the amount the member would have 25-17 been entitled to receive, divided equally among the eligible 25-18 children; 25-19 (2) if the member is not survived by an eligible 25-20 child, or if at any time after the death of the member an eligible 25-21 child is not entitled to a benefit, the monthly death benefit to be 25-22 paid the eligible spouse is equal to the full amount the member 25-23 would have been entitled to receive; 25-24 (3) if the member is not survived by an eligible 25-25 spouse, or if the member's eligible spouse dies after being 25-26 entitled to a death benefit under this section, the surviving 25-27 eligible children are entitled to receive a monthly death benefit 26-1 equal to the full monthly pension benefit the member would have 26-2 been entitled to receive, divided equally among the member's 26-3 eligible children then living; and 26-4 (4) if the member is not survived by an eligible 26-5 spouse or an eligible child, a monthly death benefit equal to the 26-6 full monthly pension benefit the member would have been entitled to 26-7 receive shall be divided among the eligible parents of the deceased 26-8 member. 26-9 (b) If a member's eligible spouse was married to the member 26-10 for less than five years and was not married to the member at the 26-11 time the member left active service, the eligible spouse shall be 26-12 paid a reduced benefit equal to the benefit otherwise payable to 26-13 the eligible spouse under this section, multiplied by the time the 26-14 eligible spouse was married to the member, and divided by five 26-15 years. The amount by which the eligible spouse's benefit is 26-16 reduced shall be divided among any other eligible survivors as if 26-17 the member did not have an eligible spouse. 26-18 (c) Notwithstanding any other provision of this section, if 26-19 a member dies in the course of the performance of the member's 26-20 duties as a firefighter or suffers an on-duty disability and dies 26-21 as a result of the bodily injuries that caused the on-duty 26-22 disability, death benefits based on the member's service shall be 26-23 computed on the basis of a benefit equal to 100 percent of the 26-24 deceased member's average monthly salary. 26-25 (d) If a member dies after benefit payments have begun or at 26-26 a time the member could have terminated active service and elected 26-27 to receive a service pension or deferred pension immediately, the 27-1 death benefits payable under this section shall begin or continue 27-2 effective as of the member's date of death. If a member who is not 27-3 entitled to receive any monthly pension benefit under this article 27-4 other than a deferred pension under Section 8(a) of this article 27-5 dies before age 50, any monthly death benefits payable under this 27-6 section shall begin on the date the deceased member would have 27-7 reached age 50. 27-8 (e) In addition to the monthly death benefit provided under 27-9 Subsection (a) of this section, if an active member or a member 27-10 receiving a service pension under Section 4 of this article or a 27-11 disability pension under Section 6 of this article dies on or after 27-12 July 1, 1998, the member's eligible survivors are entitled to a 27-13 one-time $5,000 death benefit, payable as a lump sum as follows: 27-14 (1) if the member is survived by an eligible spouse, 27-15 the eligible spouse is entitled to receive $5,000; 27-16 (2) if the member is not survived by an eligible 27-17 spouse, the member's eligible children are entitled to receive 27-18 $5,000, divided equally among those children; or 27-19 (3) if the member is not survived by an eligible 27-20 spouse or an eligible child, the $5,000 death benefit shall be 27-21 divided equally among the parents of the deceased member. 27-22 (f) A member in active service who dies, for purposes of 27-23 Subsection (a) of this section, shall be treated as having become 27-24 disabled because of the member's cause of death on the date of the 27-25 member's death. 27-26 (g) If a member in active service dies and does not leave an 27-27 eligible survivor, or the eligible survivors unanimously elect such 28-1 a benefit in lieu of any other death benefit, a lump-sum benefit 28-2 shall be paid in an amount equal to the refund, if any, to which 28-3 the member would have been entitled under Section 8 of this article 28-4 had the member terminated service on the date of the member's 28-5 death. That lump-sum benefit shall be paid to the eligible 28-6 survivors as provided by Subsection (a) of this section or, if 28-7 there are not any eligible survivors, to the member's designated 28-8 beneficiary. A member's beneficiary must be designated before the 28-9 member's death on a form approved by the board. If more than one 28-10 beneficiary is designated, the benefit shall be divided equally 28-11 among the beneficiaries unless a different allocation is provided 28-12 in the designation. If a member fails to properly designate a 28-13 beneficiary, the benefit provided by this subsection shall be 28-14 payable to the member's estate on application by the estate. Money 28-15 payable under this subsection may not escheat to the state. 28-16 (h) Death benefits are not payable under this article, 28-17 including benefits to any survivor, based on a member's service if 28-18 the board determines that the member's death resulted from suicide 28-19 or attempted suicide that occurred before the member completed two 28-20 years of participation or that the member's death resulted from a 28-21 disability arising out of an attempted suicide that occurred before 28-22 the member completed two years of participation. 28-23 (i) A benefit payable under this section to a member's 28-24 eligible child ceases when the child ceases to be an eligible 28-25 child. 28-26 (j) An eligible spouse is entitled to receive or continue to 28-27 receive survivor benefits on remarriage, except that a person who 29-1 is an eligible spouse of more than one member is entitled to 29-2 receive survivor benefits as the eligible spouse of only the member 29-3 whose survivor benefits provide the highest benefit to that 29-4 eligible spouse. 29-5 Sec. 8. DEFERRED PENSION AT AGE 50; REFUND OF CONTRIBUTIONS. 29-6 (a) A member who terminates active service for any reason other 29-7 than death with at least 10 years of participation, but less than 29-8 20 years of participation, is entitled to a monthly deferred 29-9 pension benefit, beginning at age 50, in an amount equal to 1.7 29-10 percent of the member's average monthly salary multiplied by the 29-11 amount of the member's years of participation. 29-12 (b) In lieu of the deferred pension benefit provided under 29-13 Subsection (a) of this section, a member who terminates active 29-14 service for any reason other than death with at least 10 years of 29-15 participation, but less than 20 years of participation, may elect 29-16 to receive a lump-sum refund of the member's contributions to the 29-17 fund with interest computed at five percent, not compounded. A 29-18 member's election to receive a refund of contributions must be made 29-19 on a form approved by the board. The member's refund shall be paid 29-20 as soon as administratively practicable after the member's election 29-21 is received. 29-22 (c) A member who terminates employment for any reason other 29-23 than death before the member has completed 10 years of 29-24 participation is entitled only to a refund of the member's 29-25 contributions without interest and is not entitled to a deferred 29-26 pension benefit under this section or to any other benefit under 29-27 this article. The member's refund shall be paid as soon as 30-1 administratively practicable after the effective date of the 30-2 member's termination of active service. 30-3 Sec. 9. PROOF OF CONTINUED DISABILITY. (a) The board may 30-4 at any time require a person receiving a disability pension or 30-5 receiving death benefits as a disabled child under this article to 30-6 undergo a medical examination by a physician appointed or selected 30-7 by the board for that purpose. 30-8 (b) A person retired for disability under Section 6(c) of 30-9 this article or a person receiving death benefits as a disabled 30-10 child under Section 7 of this article must file an annual report of 30-11 employment activities and earnings with the board. The board shall 30-12 establish the form of the report and the time for filing the 30-13 report. 30-14 (c) The result of the examination, the report by the 30-15 physician, and the report of employment activities and earnings 30-16 shall be considered by the board in determining whether the relief 30-17 in the case shall be continued, increased if less than the maximum 30-18 provided, decreased, or discontinued. The board may reduce or 30-19 entirely discontinue all benefits to a person receiving benefits 30-20 under this article who, after notice from the board, fails to 30-21 appear for a required medical examination or fails to file the 30-22 report of employment activities and earnings. 30-23 Sec. 10. NONSTATUTORY BENEFIT INCREASES. The benefits 30-24 provided by this article may be increased if: 30-25 (1) the increase is first approved by an actuary 30-26 selected by the board who, if an individual, is a Fellow of the 30-27 Society of Actuaries, a Fellow of the Conference of Actuaries in 31-1 Public Practice, or a member of the American Academy of Actuaries; 31-2 (2) a majority of the participating members of the 31-3 fund vote for the increase by a secret ballot; 31-4 (3) the increase does not deprive a member, without 31-5 the member's written consent, of a right to receive benefits that 31-6 have already become fully vested and matured in a member; and 31-7 (4) the State Pension Review Board approves the 31-8 increase, which approval may not be unreasonably withheld. 31-9 Sec. 11. GENERAL PROVISIONS FOR CALCULATION AND PAYMENT OF 31-10 BENEFITS. (a) A member, eligible survivor, or beneficiary of a 31-11 member is not entitled to receive payments from a fund under more 31-12 than one section of this article in a particular capacity. 31-13 However, a person may be entitled to benefits both as a member and 31-14 as a survivor or beneficiary of another member. 31-15 (b) After a member terminates active service, the amounts of 31-16 all benefits that the member or the member's beneficiaries may 31-17 become entitled to receive from the fund shall be computed on the 31-18 basis of the schedule of benefits in effect for the fund on the 31-19 effective date of the termination of the member's active service, 31-20 without adjustment for any subsequent increases of benefits unless 31-21 those increases are expressly made applicable to previously retired 31-22 members or their beneficiaries. 31-23 (c) The benefits, including survivor benefits, payable based 31-24 on the service of a member who completed 30 or more years of 31-25 participation, is or would have been at least 50 years old, or 31-26 received or is receiving an on-duty disability pension under 31-27 Section 6(c) of this article shall be increased by three percent in 32-1 October of each year and, if the benefit had not previously been 32-2 subject to that adjustment, in the month of the member's 50th 32-3 birthday. 32-4 (d) In computing a member's years of participation, time 32-5 served in the armed forces of the nation during war or national 32-6 emergency is considered continuous service. Except for that 32-7 military service, credit for prior service shall be given only if a 32-8 member returns to active service as a firefighter before the fifth 32-9 anniversary of a previous effective date of termination. 32-10 (e) A retired firefighter may be recalled to duty by the 32-11 chief of the fire department in case of great conflagration and 32-12 shall perform those duties the chief directs but does not have a 32-13 claim against a municipality or the fund of that municipality for 32-14 payment for the duty performed. 32-15 (f) A member, eligible survivor, or beneficiary who is 32-16 entitled to receive a benefit payment under this article is 32-17 entitled to receive the benefit beginning on the date the member 32-18 ceases to carry out the member's regular duties as a firefighter, 32-19 notwithstanding the fact that the member may remain on the payroll 32-20 of the member's fire department or receive sick leave, vacation, or 32-21 other pay after the effective date of termination of the member's 32-22 regular duties as a firefighter. If there is a delay in beginning 32-23 payment of benefits resulting from the requirements of Section 6(g) 32-24 of this article for disability pensions, the member or beneficiary 32-25 shall, when the disability pension is approved by the board, be 32-26 paid the full amount of the disability pension that has accrued 32-27 since the effective date of termination of the member's regular 33-1 duties as a firefighter. 33-2 (g) A member may designate a trustee to receive the benefit 33-3 payable to any eligible survivor or beneficiary other than the 33-4 member's eligible spouse or a spouse eligible to receive a benefit 33-5 under the DROP. Any such designation must be made on a form 33-6 approved by the board. 33-7 (h) A benefit payable under this article to a minor may be 33-8 made only to the guardian of the estate of the minor. If a benefit 33-9 becomes payable to any other person under a legal disability, 33-10 payment of that benefit may be made only to the conservator or the 33-11 guardian of that person's estate appointed by a court of competent 33-12 jurisdiction. A payment made in accordance with this section on 33-13 behalf of a minor or other person under a legal disability fully 33-14 discharges the fund's obligation to that person. 33-15 (i) Notwithstanding any other provision of this article, a 33-16 person entitled to receive benefit payments from the fund may: 33-17 (1) make a one-time election to receive a smaller 33-18 pension or survivor benefit than is otherwise provided under this 33-19 article; 33-20 (2) make a one-time election not to receive any future 33-21 annual increases in the pension or survivor benefits received by 33-22 the person or the person's beneficiary; or 33-23 (3) make a one-time election not to receive a specific 33-24 benefit enhancement. 33-25 (j) An election under Subsection (i) of this section must be 33-26 made in writing and submitted to the board for approval. On the 33-27 date the board grants approval of an election under Subsection (i) 34-1 of this section, the election becomes irrevocable. 34-2 (k) A benefit under this article may not be integrated with 34-3 benefits payable under the federal Social Security Act. In a 34-4 municipality in which firefighters are eligible to enroll for or 34-5 receive retirement benefits under the Social Security Act, benefits 34-6 that may be available to a member under the Social Security Act may 34-7 not be taken into account in determining the amount of benefits a 34-8 member may receive under this article. 34-9 (l) If the board determines that the amount in the fund is 34-10 insufficient to pay in full any pension or disability benefits, all 34-11 pension and disability benefits made after the date of the 34-12 determination shall be reduced pro rata for the period the 34-13 insufficiency exists. 34-14 (m) A benefit payable under this article because of the 34-15 death of a member or eligible beneficiary may not be paid to a 34-16 person convicted of causing that death but instead shall be paid as 34-17 if the convicted person predeceased the deceased member or 34-18 beneficiary. If no beneficiary is entitled to the benefit as a 34-19 result, the benefit shall be paid to the decedent's estate. Except 34-20 as otherwise permitted by this subsection with respect to 34-21 suspension of benefits, the board is not required to withhold 34-22 payment to a person convicted of causing the death of a member or 34-23 eligible beneficiary until the board receives actual notice of the 34-24 conviction of that person. The board may suspend payment of a 34-25 benefit payable on the death of a member or an eligible beneficiary 34-26 on the indictment of the person who would otherwise be entitled to 34-27 the benefit, and the suspension remains in effect until the board 35-1 determines that a final disposition of the charges relating to the 35-2 cause of death has occurred. If a benefit payment is suspended 35-3 under this subsection and the person is not convicted, the benefit 35-4 again becomes payable with interest computed at the rate earned by 35-5 the fund during the time the benefit payment was suspended. For 35-6 purposes of this subsection, a person has been convicted of causing 35-7 the death of a member or eligible beneficiary if: 35-8 (1) the person has pleaded guilty or nolo contendere 35-9 to, or the person has been found guilty by a court of, an offense 35-10 at the trial of which it is established that the person's 35-11 intentional or knowing act or omission caused the death of the 35-12 member or eligible beneficiary, regardless of whether sentence is 35-13 imposed or probated; and 35-14 (2) an appeal of the conviction is not pending, and 35-15 the time provided for appeal has expired. 35-16 Sec. 12. APPEALS OF BENEFIT DECISIONS. (a) A member who is 35-17 eligible for retirement for length of service or disability or who 35-18 has a claim for temporary disability, or any of the member's 35-19 beneficiaries, who is aggrieved by a decision or order of the 35-20 board, whether on the basis of rejection of a claim or of the 35-21 amount allowed, may appeal from the decision or order of the board 35-22 to a district court in the county in which the board is located by 35-23 giving written notice of the intention to appeal. The notice must 35-24 contain a statement of the intention to appeal, together with a 35-25 brief statement of the grounds and reasons the party feels 35-26 aggrieved. The notice must be served personally on the chair, 35-27 secretary, or treasurer of the board not later than the 20th day 36-1 after the date of the order or decision. After service of the 36-2 notice, the party appealing shall file with the district court a 36-3 copy of the notice of intention to appeal, together with the 36-4 affidavit of the party making service showing how, when, and on 36-5 whom the notice was served. 36-6 (b) Not later than the 30th day after the date of service of 36-7 the notice of intention to appeal on the board, the secretary or 36-8 treasurer of the board shall file with the district court a 36-9 transcript of all papers and proceedings in the case before the 36-10 board. When the copy of the notice of intention to appeal and the 36-11 transcript have been filed with the court, the appeal is considered 36-12 perfected, and the court shall docket the appeal, assign the appeal 36-13 a number, fix a date for hearing the appeal, and notify both the 36-14 appellant and the board of the date fixed for the hearing. 36-15 (c) At any time before issuing a decision on the appeal, the 36-16 court may require further or additional proof or information, 36-17 either documentary or under oath. On issuing a decision on the 36-18 appeal, the court shall give to each party to the appeal a copy of 36-19 the decision and shall direct the board as to the disposition of 36-20 the case. The final decision or order of the district court is 36-21 appealable in the same manner as are civil cases generally. 36-22 Sec. 13. MEMBERSHIP AND CONTRIBUTIONS. (a) Each person who 36-23 becomes a firefighter before age 36 becomes a member of the fund if 36-24 the person's application for membership is accepted by the board. 36-25 In accepting employment as a firefighter, and on becoming a member 36-26 of the fund, a firefighter agrees to make contributions required 36-27 under this article of members of the fund who are in active service 37-1 and is entitled to participate in the benefits of membership in the 37-2 fund as provided by this article. 37-3 (b) The board shall establish minimum physical requirements 37-4 for membership in the fund that may not exceed the physical 37-5 requirements established by the Fire Fighters' and Police Officers' 37-6 Civil Service Commission under Section 143.022, Local Government 37-7 Code, and that must be the same for all applicants. At the time 37-8 that physical examinations are administered on behalf of the 37-9 municipality, each applicant must be provided written notice that a 37-10 copy of the results of the examination will be forwarded to the 37-11 board to determine eligibility for membership in the fund and the 37-12 existence of any preexisting condition. Not later than the 10th 37-13 day after the date of a physical examination performed on an 37-14 applicant for a beginning position in the fire department as 37-15 required by Section 143.022, Local Government Code, the 37-16 municipality shall provide to the board a copy of all documents 37-17 resulting from the physical examination. The board may require 37-18 additional physical examinations if necessary to determine whether 37-19 the applicant meets the minimum physical requirements for 37-20 membership in the fund. The fund shall pay the cost of any 37-21 additional physical examination the board requires. Within a 37-22 reasonable time after receiving the examination reports of an 37-23 applicant, the board shall, on the basis of one or more physical 37-24 examinations, determine whether the applicant meets the minimum 37-25 physical requirements for membership in the fund. The board shall 37-26 notify the applicant and the chief of the fire department not later 37-27 than the 10th calendar day after the date of the board's decision 38-1 on the applicant's satisfaction of the minimum physical 38-2 requirements. If the board rejects the applicant, the applicant 38-3 may request further examination by a board of three physicians 38-4 appointed by the board at the expense of the applicant. If a 38-5 physician board finds that an applicant meets the minimum physical 38-6 requirements for membership in the fund, the board shall accept the 38-7 applicant for membership. If accepted by the board, the 38-8 applicant's membership in the fund is effective on being appointed 38-9 to the position of probationary firefighter. 38-10 (c) Each member in active service shall make contributions 38-11 to the fund in an amount equal to 7.7 percent of the member's 38-12 salary at the time of the contribution. The governing body of the 38-13 municipality shall deduct the contributions from the member's 38-14 salary and shall forward the contributions to the fund as soon as 38-15 practicable. 38-16 (d) The municipality shall make monthly contributions to the 38-17 fund in an amount equal to the product of the contribution rate 38-18 certified by the board and the aggregate salaries paid to members 38-19 of the fund during the month for which the contribution is made. 38-20 The board shall certify the municipality's contribution rate for 38-21 each year or portion of a year based on the results of actuarial 38-22 valuations made at least every three years. The municipality's 38-23 contribution rate shall be composed of the normal cost plus the 38-24 level percentage of salary payment required to amortize the 38-25 unfunded actuarial liability over a period of 40 years beginning on 38-26 January 1, 1983, computed on the basis of an acceptable actuarial 38-27 reserve funding method approved by the board. Notwithstanding any 39-1 other provision of this article, the contributions by the 39-2 municipality, when added to any contributions with respect to a 39-3 qualified governmental excess benefit arrangement maintained in 39-4 accordance with Section 14(c) of this article, may not be less than 39-5 twice the amount paid into the fund by contributions of the 39-6 members. 39-7 (e) Notwithstanding Subsection (d) of this section, if one 39-8 or more members of the fund are appointed to positions in the fire 39-9 department, and those appointments are not made based on the 39-10 results of a competitive examination, the minimum contribution rate 39-11 required of the municipality for any year is increased by an amount 39-12 equal to the difference, if any, between: 39-13 (1) the municipality's actuarially determined 39-14 contribution rate computed in accordance with Subsection (d) of 39-15 this section, without regard to the minimum contribution rate 39-16 specified, computed based on the actual monthly salary or 39-17 compensation for all members; and 39-18 (2) the municipality's actuarially determined 39-19 contribution rate computed in accordance with Subsection (d) of 39-20 this section, without regard to the minimum contribution rate 39-21 specified, but for each member so appointed, computed based, for 39-22 all months of participation after the date of appointment, on the 39-23 monthly salary or compensation being paid to the person who holds 39-24 the position the member held immediately before the member was 39-25 appointed to the new position. 39-26 (f) Money deducted from salaries or compensation as provided 39-27 by this section and the payments and contributions provided by this 40-1 section become a part of the fund of the municipality in which the 40-2 contributing member serves at the time of the contribution. In 40-3 accordance with Section 14(c) of this article, contributions under 40-4 any qualified governmental excess benefit arrangement do not become 40-5 part of the trust fund assets of the fund. 40-6 (g) On action of its governing body, a municipality may pick 40-7 up members' contributions prescribed under Subsection (c) of this 40-8 section for purposes of Section 414(h)(2) of the code. A member's 40-9 salary is affected by this subsection only as this subsection 40-10 relates to the computation of pension contributions and gross pay 40-11 for federal tax purposes. The computation of pension benefits, 40-12 severance pay, and other benefits is not affected. 40-13 (h) If the municipality's actuarially determined 40-14 contribution rate computed in accordance with Subsection (d) of 40-15 this section would exceed the minimum contribution rate specified, 40-16 the benefits payable under Sections 4(d), 4(e), and 7(e) of this 40-17 article may not be paid, an eligible spouse whose benefit is 40-18 reduced under Section 7(b) of this article may not be paid a 40-19 benefit if there are no other eligible survivors, and the 40-20 municipality's actuarially determined contribution rate shall be 40-21 recomputed on the basis of the assumption that those benefits are 40-22 suspended indefinitely. If the recomputation results in an 40-23 actuarially determined contribution rate less than the minimum 40-24 contribution rate specified, a portion of the benefits shall be 40-25 paid, as determined by the board, to the extent that, with the 40-26 payments determined, the two contribution rates are equal. This 40-27 subsection expires July 31, 1999, unless on that date the 41-1 municipality's actuarially determined contribution rate computed in 41-2 accordance with Subsection (d) of this section would exceed the 41-3 minimum contribution rate specified. 41-4 Sec. 14. INTERNAL REVENUE CODE LIMITATIONS. (a) 41-5 Notwithstanding any other provision of this article, a member may 41-6 not accrue a benefit or allowance under this article in excess of 41-7 an amount that, when added to all other pension benefits received 41-8 under plans of the municipality that are qualified under Section 41-9 401 of the code, results in an annual benefit in excess of the 41-10 applicable limits provided by Section 415 of the code. That 41-11 accrual limitation applies only as long as satisfaction of Section 41-12 415 of the code is necessary to maintain the tax-qualified status 41-13 of the fund under Section 401 of the code. Any benefit accruals 41-14 limited under this subsection must be certified by a qualified 41-15 actuary selected by the board. 41-16 (b) Notwithstanding any other provision of this article, the 41-17 fund shall be administered in a manner that complies with the code, 41-18 United States Treasury Department regulations, and Internal Revenue 41-19 Service rulings and notices applicable to public retirement 41-20 systems. The board shall adopt rules and amend or repeal 41-21 conflicting rules to ensure compliance with this subsection. 41-22 (c) The board may establish and maintain a qualified 41-23 governmental excess benefit arrangement, in accordance with Section 41-24 415(m) of the code, solely for the purpose of providing to members 41-25 the amount of each member's pension benefit otherwise payable under 41-26 the fund that exceeds the limitations on benefits imposed by 41-27 Section 415 of the code. The board may maintain a separate trust 42-1 solely for providing benefits under the arrangement or may maintain 42-2 the arrangement on an unfunded basis through municipal 42-3 contributions as benefits become payable. Benefits provided by 42-4 that arrangement may not be paid from the trust fund assets that 42-5 are available for payment of any other benefit under this article. 42-6 Benefits under any qualified governmental excess benefit 42-7 arrangement shall be paid or funded entirely through municipal 42-8 contributions in an amount approved by the board. An election may 42-9 not be provided at any time to a member, directly or indirectly, to 42-10 defer compensation under the arrangement. The operation and 42-11 administration of any qualified governmental excess benefit 42-12 arrangement is the responsibility of the board, which has the same 42-13 powers concerning the arrangement as are provided to the board 42-14 under this article concerning the fund. 42-15 Sec. 15. EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS. The 42-16 fund may not, either before or after its order of disbursement by 42-17 the board to a member, a spouse eligible to receive a benefit under 42-18 the DROP, an eligible spouse, the guardian of an eligible child, or 42-19 an eligible parent, be held, seized, subjected to, or levied on by 42-20 virtue of any execution, attachment, garnishment, injunction, or 42-21 other writ, order, or decree, or any process issued out of, or by, 42-22 any court for the payment or satisfaction of any debt, damage, 42-23 claim, demand, or judgment against a member, a spouse eligible to 42-24 receive a benefit under the DROP, an eligible spouse, the guardian 42-25 of an eligible child, or an eligible parent. The fund or any claim 42-26 against the fund may not be directly or indirectly assigned or 42-27 transferred, and any attempt to assign or transfer the fund or a 43-1 claim is void. The fund shall be sacredly held, kept, and 43-2 disbursed only for the purposes provided by this article. 43-3 Sec. 16. SERVICE CREDIT FOR MEMBERS PREVIOUSLY MEMBERS OF 43-4 SIMILAR FUNDS. (a) A person who becomes a firefighter in a 43-5 municipality to which this article applies may receive service 43-6 credit for prior employment with the fully paid fire department of 43-7 another municipality in this state with a similar fund benefiting 43-8 only firefighters of that municipality to which the firefighter 43-9 contributed if: 43-10 (1) the firefighter is under 36 years of age at the 43-11 time of applying to the fund; 43-12 (2) the firefighter passes a physical examination 43-13 taken at the firefighter's expense and performed by a physician 43-14 selected by the board; 43-15 (3) the firefighter pays into the fund an amount equal 43-16 to the total contribution the firefighter would have made had the 43-17 firefighter been employed by the municipality, at the 43-18 municipality's pay scale, instead of the municipality by which the 43-19 firefighter was previously employed, plus six percent interest, 43-20 compounded annually; 43-21 (4) the firefighter applies for that credit not later 43-22 than the 60th day after the date on which membership begins; and 43-23 (5) the firefighter has moved directly into employment 43-24 at the fire department from the fire department for which the prior 43-25 service credit is sought, without any intervening employment or 43-26 extended interruption. 43-27 (b) A member may receive credit for prior service in more 44-1 than one fire department under Subsection (a) of this section only 44-2 if there have not been interruptions in employment and each 44-3 preceding service meets the other requirements of Subsection (a) of 44-4 this section. 44-5 (c) The municipality to which the member has transferred 44-6 shall pay an amount equal to the amount it would have paid had the 44-7 member been employed by that municipality instead of the 44-8 municipality by which the firefighter was previously employed, 44-9 based on the municipality's pay scale, plus six percent interest, 44-10 compounded annually. Both the municipality's contribution and the 44-11 member's contribution must be paid promptly on approval of the 44-12 member's application for service credit. 44-13 (d) A firefighter may not participate under this section in 44-14 the fund of the municipality to which the firefighter has 44-15 transferred until the firefighter has fully complied with this 44-16 article and the municipality has complied with Subsection (c) of 44-17 this section. 44-18 (e) A firefighter eligible for prior service credit may 44-19 participate in the fund, subject to the other requirements of this 44-20 article, without obtaining that credit, and if the firefighter does 44-21 not comply with the provisions and time limits of this section, the 44-22 firefighter is ineligible for the credit. 44-23 Sec. 17. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS OR 44-24 BENEFICIARIES. (a) Information contained in records that are in 44-25 the custody of a fund established under this article concerning an 44-26 individual member, retiree, or beneficiary is confidential under 44-27 Chapter 552, Government Code, and may not be disclosed in a form 45-1 identifiable with a specific individual unless: 45-2 (1) the information is disclosed to: 45-3 (A) the individual; 45-4 (B) the individual's attorney, guardian, 45-5 executor, administrator, or conservator, or other person who the 45-6 board determines is acting in the interest of the individual or the 45-7 individual's estate; 45-8 (C) a spouse or former spouse of the individual 45-9 if the board determines that the information is relevant to the 45-10 spouse's or former spouse's interest in member accounts, benefits, 45-11 or other amounts payable by the fund; or 45-12 (D) a person with written authorization from the 45-13 individual to receive the information; or 45-14 (2) the information is disclosed under an 45-15 authorization of the board that specifies the reason for the 45-16 disclosure. 45-17 (b) This section does not prevent the disclosure of the 45-18 status or identity of an individual as a member, former member, 45-19 retiree, deceased member, or beneficiary of the fund. 45-20 (c) A determination and disclosure under Subsection (a)(2) 45-21 of this section may be made without notice to the individual 45-22 member, retiree, or beneficiary. 45-23 SECTION 2. (a) Article 6243e.2(1), Revised Statutes, as 45-24 added by this Act, restates and amends Chapter 432, Acts of the 45-25 64th Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil 45-26 Statutes), as that law existed before repeal by this Act, and 45-27 continues in effect each firemen's relief and retirement fund 46-1 established under that law. 46-2 (b) Notwithstanding Article 6243e.2(1), Revised Statutes, as 46-3 added by this Act, a member of the board of trustees of a 46-4 firefighters' relief and retirement fund in a municipality to which 46-5 that article applies serving on October 31, 1997, continues to 46-6 serve until the expiration of the term for which the member was 46-7 elected or appointed under Chapter 432, Acts of the 64th 46-8 Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes), 46-9 as that law existed before repeal by this Act, and that law is 46-10 continued in effect for that purpose. 46-11 SECTION 3. Chapter 432, Acts of the 64th Legislature, 1975 46-12 (Article 6243e.2, Vernon's Texas Civil Statutes), is repealed. 46-13 SECTION 4. This Act takes effect November 1, 1997. 46-14 SECTION 5. The importance of this legislation and the 46-15 crowded condition of the calendars in both houses create an 46-16 emergency and an imperative public necessity that the 46-17 constitutional rule requiring bills to be read on three several 46-18 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I certify that H.B. No. 3170 was passed by the House on April 30, 1997, by a non-record vote; and that the House concurred in Senate amendments to H.B. No. 3170 on May 21, 1997, by a non-record vote. _______________________________ Chief Clerk of the House I certify that H.B. No. 3170 was passed by the Senate, with amendments, on May 19, 1997, by the following vote: Yeas 31, Nays 0. _______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor